PROPERTY Arts-414-436 PDF

PROPERTY CASES FULL TEXT ARTS 414-436

TABLE OF CONTENTS
Chua vs Court of Appeals, G.R. No. 79021, May 17, 1993 84
Laurel vs Abregar, G.R. No. 155076, January 13, 2009 3 Peralta-Labrador vs Bagarin, G.R. No. 165177, August 25, 2005
85
Leung Yee vs Strong Machinery Co., G.R. No. 11658, February
15, 1918 6 Nuñez vs SLTEAS, G.R. No. 180542, April 12, 2010 87
Prudential Bank vs Panis, G.R. No. 50008, August 31, 1987 8 Dela Cruz vs Court of Appeals, G.R. NO. 139442, December 06,
2006 89
People’s Bank and Trust Co. vs Dahican Lumber Co., G. R. No.
L-17500, May 16, 1967 10 De La Paz vs Panis, G.R. No. 57023, June 22, 1995 94
Board of Assessment Appeals, QC vs Meralco, G. R. No. L-15334, Sarmiento vs Court of Appeals, 96

January 31, 1964 15
Ocampo vs Dionisio, G.R. No. 191101, October 01, 2014 99
Standard Oil Co. of New York vs Jaramillo, G.R. No. 20329,
March 16, 1923 17 Suarez vs Emboy, G.R. No. 187944, March 12, 2014 101
Serg’s Products, Inc. vs PCI Leasing and Finance, Inc., 18 Bokingo vs Court of Appeals, G.R. NO. 161739, May 04, 2006
106
Piansay vs David, G.R. No. L-19468, October 30, 1964 21
Hilario vs Salvador, G.R. NO. 160384, April 29, 2005 109
Caltex Philippine, Inc. vs Board of Assessment Appeals, G.R. No.
50466, May 31, 1982 23 Urieta vs Aguilar, G.R. No. 164402, July 05, 2010 111
Philippine Refining Co., Inc. vs Aboitiz & Co., G.R. No. 41506, Bongato vs Malvar, G.R. No. 141614, August 14, 2002 115
March 25, 1935 24
Encarnacion vs Amigo, G.R. NO. 169793, September 15, 2006
Sibal vs Valdez, G.R. No. 26278, August 04, 1927 25 117
Harty vs Municipality of Victoria, G.R. No. 5013, March 11, 1909 De Leon vs Court of Appeals, G.R. No. 96107, June 19, 1995 119
30
Manlapaz vs Court of Appeals, G.R. No. L-39430, December 03,
Manila International Airport Authority vs Court of Appeals, 1990 122
G.R. NO. 155650, July 20, 2006 32
Valdez, Jr vs Court of Appeals, G.R. NO. 132424, May 04, 2006
Bishop of Calbayog vs Director of Lands, G.R. No. L-23481, June 125
29, 1972 43
Caro vs Sucaldito, G.R. NO. 157536, May 16, 2005 127
Land Bank of the Philippines vs Director of Lands, G.R. No.
150824, February 04, 2008 46 PEZA vs Fernandez, G.R. No. 138971, June 06, 2001 130
Republic of the Philippines vs Court of Appeals and Naguit, G.R. Gasataya vs Mabasa, G.R. NO. 148147, February 16, 2007 133
NO. 144057, January 17, 2005 50
Idolor vs Court of Appeals, G.R. No. 141853, February 07, 2001
Ignacio vs Director of Lands, G.R. No. L-12958, May 30, 1960 53 135
Manila Lodge No 761 vs Court of Appeals, G.R. No. L-41001, Savellano vs Court of Appeals, G.R. No. 134343, January 30,
September 30, 1976 54 2001 137
Calapan Lumber Co. vs Community Sawmill Co., G.R. No. Federated Realty Corporation vs Court of Appeals, G.R. NO.
L-16351, June 30, 1964 60 127967, December 14, 2005 139
Cebu Oxygen and Acetylene Co., Inc. vs Bercilles, G.R. No. Limitless Potentials, Inc. vs Court of Appeals, G.R. NO. 164459,
L-40474, August 29, 1975 63 April 24, 2007 143
Perez vs Evite, G.R. No. L-16003, March 29, 1961 64 Canlas vs Court of Appeals, G.R. No. 77691, August 08, 1988 147
Olego vs Rebueno, G.R. No. L-39350, October 29, 1975 65 Vencilao vs Vano, G.R. No. L-25660, February 23, 1990 151
Nazareno vs Court of Appeals, G.R. No. 138842, October 18, Jetri Construction Corp. vs BPI, G.R. No. 171687, June 08, 2007
2000 68 156
E. Rommel Realty and Development Corporation vs Sta. Lucia A.G. Development Corp. vs Court of Appeals, G.R. No. 111662,
Realty, G.R. NO. 127636, November 24, 2006 73 October 23, 1997 158
Flancia vs Court of Appeals, G.R. NO. 146997, April 26, 2005 75 Maglente vs Baltazar-Padilla, G.R. NO. 148182, March 07, 2007
159
Vda. de Bautista vs Marcos, G.R. No. L-17072, October 31, 1961
78 Heirs of L. Vencilao Sr. vs Court of Appeals, G.R. No. 123713,
April 01, 1998 161
German Management and Services, Inc. vs Court of Appeals,
G.R. No. 76216, September 14, 1989 79 Pang-oden vs Leonen, G.R. NO. 138939, December 06, 2006 163
Republic vs Court of Appeals, G.R. No. L-43938, April 15, 1988 Heirs of Anastacio Fabela vs Court of Appeals, G.R. No. 142546,
80 August 09, 2001 165
Arabesque Industrial Philippines vs Court of Appeals, G.R. No. Republic vs Carrasco, G.R. NO. 143491, December 06, 2006 168
101431, December 14, 1992 83

© 2018 Based on the Syllabus of Atty Bathan-Lasco 1 of 201


Ramos-Balalio vs Ramos, G.R. NO. 168464, January 23, 2006

172
Republic vs Enriquez, G.R. NO. 160990, September 11, 2006174
Spouses Azana vs Lumbo, G.R. NO. 157593, March 22, 2007 177
Rumarate vs Hernandez, G.R. NO. 168222, April 18, 2006 179
Fule vs Legare, G.R. No. L-17951, February 28, 1963 184
Phil. Columbian Association vs Panis, G.R. No. 106528,

December 21, 1993 186
Garcia vs Court of Appeals, G.R. No. L-47553, January 31, 1981

188
Manila Railroad Company vs Velasquez, G.R. No. 10278,

November 23, 1915 191


Laurel vs Abregar, G.R. No. 155076, petitioner with theft of personal property since international long
distance calls and the business of providing telecommunication or
January 13, 2009 telephone services are not personal properties under Article 308 of
596 Phil. 45
the Revised Penal Code.
EN BANC
Respondent Philippine Long Distance Telephone Company (PLDT)
iled a Motion for Reconsideration with Motion to Refer the Case to
G.R. No. 155076, January 13, 2009
the Supreme Court En Banc. It maintains that the Amended
Information charging petitioner with theft is valid and suf icient;
LUIS MARCOS P. LAUREL, PETITIONER, VS. HON. ZEUS C. ABROGAR,
that it states the names of all the accused who were speci ically
PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, MAKATI CITY,
charged with the crime of theft of PLDT's international calls and
BRANCH 150, PEOPLE OF THE PHILIPPINES & PHILIPPINE LONG
business of providing telecommunication or telephone service on or
DISTANCE TELEPHONE COMPANY, RESPONDENTS.
about September 10 to 19, 1999 in Makati City by conducting ISR or
International Simple Resale; that it identi ies the international calls
DECISION
and business of providing telecommunication or telephone service
of PLDT as the personal properties which were unlawfully taken by
YNARES-SANTIAGO, J.:
the accused; and that it satis ies the test of suf iciency as it enabled
a person of common understanding to know the charge against him
and the court to render judgment properly.
On February 27, 2006, this Court's First Division rendered judgment
in this case as follows:
PLDT further insists that the Revised Penal Code should be
interpreted in the context of the Civil Code's de inition of real and
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
personal property. The enumeration of real properties in Article
assailed Orders of the Regional Trial Court and the Decision of the
415 of the Civil Code is exclusive such that all those not included
Court of Appeals are REVERSED and SET ASIDE. The Regional Trial
therein are personal properties. Since Article 308 of the Revised
Court is directed to issue an order granting the motion of the
Penal Code used the words "personal property" without
petitioner to quash the Amended Information.
quali ication, it follows that all "personal properties" as understood
in the context of the Civil Code, may be the subject of theft under
SO ORDERED.[1]
Article 308 of the Revised Penal Code. PLDT alleges that the
international calls and business of providing telecommunication or
By way of brief background, petitioner is one of the accused in
telephone service are personal properties capable of appropriation
Criminal Case No. 99-2425, iled with the Regional Trial Court of
and can be objects of theft.
Makati City, Branch 150. The Amended Information charged the
accused with theft under Article 308 of the Revised Penal Code,
PLDT also argues that "taking" in relation to theft under the Revised
committed as follows:
Penal Code does not require "asportation," the sole requisite being
that the object should be capable of "appropriation." The element of
On or about September 10-19, 1999, or prior thereto in Makati City,
"taking" referred to in Article 308 of the Revised Penal Code means
and within the jurisdiction of this Honorable Court, the accused,
the act of depriving another of the possession and dominion of a
conspiring and confederating together and all of them mutually
movable coupled with the intention, at the time of the "taking," of
helping and aiding one another, with intent to gain and without the
withholding it with the character of permanency. There must be
knowledge and consent of the Philippine Long Distance Telephone
intent to appropriate, which means to deprive the lawful owner of
(PLDT), did then and there willfully, unlawfully and feloniously take,
the thing. Thus, the term "personal properties" under Article 308 of
steal and use the international long distance calls belonging to PLDT
the Revised Penal Code is not limited to only personal properties
by conducting International Simple Resale (ISR), which is a method
which are "susceptible of being severed from a mass or larger
of routing and completing international long distance calls using
quantity and of being transported from place to place."
lines, cables, antenae, and/or air wave frequency which connect
directly to the local or domestic exchange facilities of the country
PLDT likewise alleges that as early as the 1930s, international
where the call is destined, effectively stealing this business from
telephone calls were in existence; hence, there is no basis for this
PLDT while using its facilities in the estimated amount of
Court's inding that the Legislature could not have contemplated the
P20,370,651.92 to the damage and prejudice of PLDT, in the said
theft of international telephone calls and the unlawful transmission
amount.
and routing of electronic voice signals or impulses emanating from
such calls by unlawfully tampering with the telephone device as
CONTRARY TO LAW.[2]
within the coverage of the Revised Penal Code.
Petitioner iled a "Motion to Quash (with Motion to Defer

According to respondent, the "international phone calls" which are
Arraignment)," on the ground that the factual allegations in the
"electric currents or sets of electric impulses transmitted through a
Amended Information do not constitute the felony of theft. The trial
medium, and carry a pattern representing the human voice to a
court denied the Motion to Quash the Amended Information, as well
receiver," are personal properties which may be subject of theft.
petitioner's subsequent Motion for Reconsideration.
Article 416(3) of the Civil Code deems "forces of nature" (which
includes electricity) which are brought under the control by science,
Petitioner's special civil action for certiorari was dismissed by the
are personal property.
Court of Appeals. Thus, petitioner iled the instant petition for
review with this Court.
In his Comment to PLDT's motion for reconsideration, petitioner
Laurel claims that a telephone call is a conversation on the phone or
In the above-quoted Decision, this Court held that the Amended
a communication carried out using the telephone. It is not
Information does not contain material allegations charging


synonymous to electric current or impulses. Hence, it may not be v. Carlos, and United States v. Tambunting, consistently ruled that
considered as personal property susceptible of appropriation. any personal property, tangible or intangible, corporeal or
Petitioner claims that the analogy between generated electricity incorporeal, capable of appropriation can be the object of theft.
and telephone calls is misplaced. PLDT does not produce or
generate telephone calls. It only provides the facilities or services Moreover, since the passage of the Revised Penal Code on December
for the transmission and switching of the calls. He also insists that 8, 1930, the term "personal property" has had a generally accepted
"business" is not personal property. It is not the "business" that is de inition in civil law. In Article 335 of the Civil Code of Spain,
protected but the "right to carry on a business." This right is what is "personal property" is de ined as "anything susceptible of
considered as property. Since the services of PLDT cannot be appropriation and not included in the foregoing chapter (not real
considered as "property," the same may not be subject of theft. property)." Thus, the term "personal property" in the Revised Penal
Code should be interpreted in the context of the Civil Code
The Of ice of the Solicitor General (OSG) agrees with respondent provisions in accordance with the rule on statutory construction
PLDT that "international phone calls and the business or service of that where words have been long used in a technical sense and have
providing international phone calls" are subsumed in the been judicially construed to have a certain meaning, and have been
enumeration and de inition of personal property under the Civil adopted by the legislature as having a certain meaning prior to a
Code hence, may be proper subjects of theft. It noted that the cases particular statute, in which they are used, the words used in such
of United States v. Genato,[3] United States v. Carlos[4] and United statute should be construed according to the sense in which they
States v. Tambunting,[5] which recognized intangible properties like have been previously used.[6] In fact, this Court used the Civil Code
gas and electricity as personal properties, are deemed incorporated de inition of "personal property" in interpreting the theft provision
in our penal laws. Moreover, the theft provision in the Revised Penal of the penal code in United States v. Carlos.
Code was deliberately couched in broad terms precisely to be
all-encompassing and embracing even such scenario that could not Cognizant of the de inition given by jurisprudence and the Civil
have been easily anticipated. Code of Spain to the term "personal property" at the time the old
Penal Code was being revised, still the legislature did not limit or
According to the OSG, prosecution under Republic Act (RA) No. qualify the de inition of "personal property" in the Revised Penal
8484 or the Access Device Regulations Act of 1998 and RA 8792 or Code. Neither did it provide a restrictive de inition or an exclusive
the Electronic Commerce Act of 2000 does not preclude prosecution enumeration of "personal property" in the Revised Penal Code,
under the Revised Penal Code for the crime of theft. The latter thereby showing its intent to retain for the term an extensive and
embraces unauthorized appropriation or use of PLDT's unquali ied interpretation. Consequently, any property which is not
international calls, service and business, for personal pro it or gain, included in the enumeration of real properties under the Civil Code
to the prejudice of PLDT as owner thereof. On the other hand, the and capable of appropriation can be the subject of theft under the
special laws punish the surreptitious and advanced technical means Revised Penal Code.
employed to illegally obtain the subject service and business. Even
assuming that the correct indictment should have been under RA The only requirement for a personal property to be the object of
8484, the quashal of the information would still not be proper. The theft under the penal code is that it be capable of appropriation. It
charge of theft as alleged in the Information should be taken in need not be capable of "asportation," which is de ined as "carrying
relation to RA 8484 because it is the elements, and not the away."[7] Jurisprudence is settled that to "take" under the theft
designation of the crime, that control. provision of the penal code does not require asportation or carrying
away.[8]
Considering the gravity and complexity of the novel questions of
law involved in this case, the Special First Division resolved to refer To appropriate means to deprive the lawful owner of the thing.[9]
the same to the Banc. The word "take" in the Revised Penal Code includes any act
intended to transfer possession which, as held in the assailed
We resolve to grant the Motion for Reconsideration but remand the Decision, may be committed through the use of the offenders' own
case to the trial court for proper clari ication of the Amended hands, as well as any mechanical device, such as an access device or
Information. card as in the instant case. This includes controlling the destination
of the property stolen to deprive the owner of the property, such as
Article 308 of the Revised Penal Code provides: the use of a meter tampering, as held in Natividad v. Court of
Appeals,[10] use of a device to fraudulently obtain gas, as held in
Art. 308. Who are liable for theft. - Theft is committed by any person United States v. Tambunting, and the use of a jumper to divert
who, with intent to gain but without violence against, or electricity, as held in the cases of United States v. Genato, United
intimidation of persons nor force upon things, shall take personal States v. Carlos, and United States v. Menagas.[11]
property of another without the latter's consent.
As illustrated in the above cases, appropriation of forces of nature
The elements of theft under Article 308 of the Revised Penal Code which are brought under control by science such as electrical
are as follows: (1) that there be taking of personal property; (2) that energy can be achieved by tampering with any apparatus used for
said property belongs to another; (3) that the taking be done with generating or measuring such forces of nature, wrongfully
intent to gain; (4) that the taking be done without the consent of the redirecting such forces of nature from such apparatus, or using any
owner; and (5) that the taking be accomplished without the use of device to fraudulently obtain such forces of nature. In the instant
violence against or intimidation of persons or force upon things. case, petitioner was charged with engaging in International Simple
Resale (ISR) or the unauthorized routing and completing of
Prior to the passage of the Revised Penal Code on December 8, international long distance calls using lines, cables, antennae,
1930, the de inition of the term "personal property" in the penal and/or air wave frequency and connecting these calls directly to the
code provision on theft had been established in Philippine local or domestic exchange facilities of the country where destined.
jurisprudence. This Court, in United States v. Genato, United States


As early as 1910, the Court declared in Genato that ownership over vendor, mortgagor, transferor, or assignor, shall be deemed to be a
electricity (which an international long distance call consists of), as sale and transfer in bulk, in contemplation of the Act. x x x.
well as telephone service, is protected by the provisions on theft of
the Penal Code. The pertinent provision of the Revised Ordinance of In Strochecker v. Ramirez,[12] this Court stated:
the City of Manila, which was involved in the said case, reads as
follows: With regard to the nature of the property thus mortgaged which is
one-half interest in the business above described, such interest is a
Injury to electric apparatus; Tapping current; Evidence. - No person personal property capable of appropriation and not included in the
shall destroy, mutilate, deface, or otherwise injure or tamper with enumeration of real properties in article 335 of the Civil Code, and
any wire, meter, or other apparatus installed or used for generating, may be the subject of mortgage.
containing, conducting, or measuring electricity, telegraph or
telephone service, nor tap or otherwise wrongfully de lect or take Interest in business was not speci ically enumerated as personal
any electric current from such wire, meter, or other apparatus. property in the Civil Code in force at the time the above decision
was rendered. Yet, interest in business was declared to be personal
No person shall, for any purpose whatsoever, use or enjoy the property since it is capable of appropriation and not included in the
bene its of any device by means of which he may fraudulently enumeration of real properties. Article 414 of the Civil Code
obtain any current of electricity or any telegraph or telephone provides that all things which are or may be the object of
service; and the existence in any building premises of any such appropriation are considered either real property or personal
device shall, in the absence of satisfactory explanation, be deemed property. Business is likewise not enumerated as personal property
suf icient evidence of such use by the persons bene iting thereby. under the Civil Code. Just like interest in business, however, it may
be appropriated. Following the ruling in Strochecker v. Ramirez,
It was further ruled that even without the above ordinance the acts business should also be classi ied as personal property. Since it is
of subtraction punished therein are covered by the provisions on not included in the exclusive enumeration of real properties under
theft of the Penal Code then in force, thus: Article 415, it is therefore personal property.[13]
Even without them (ordinance), the right of the ownership of As can be clearly gleaned from the above disquisitions, petitioner's
electric current is secured by articles 517 and 518 of the Penal acts constitute theft of respondent PLDT's business and service,
Code; the application of these articles in cases of subtraction of gas, committed by means of the unlawful use of the latter's facilities. In
a luid used for lighting, and in some respects resembling electricity, this regard, the Amended Information inaccurately describes the
is con irmed by the rule laid down in the decisions of the supreme offense by making it appear that what petitioner took were the
court of Spain of January 20, 1887, and April 1, 1897, construing international long distance telephone calls, rather than respondent
and enforcing the provisions of articles 530 and 531 of the Penal PLDT's business.
Code of that country, articles 517 and 518 of the code in force in
these islands. A perusal of the records of this case readily reveals that petitioner
and respondent PLDT extensively discussed the issue of ownership
The acts of "subtraction" include: (a) tampering with any wire, of telephone calls. The prosecution has taken the position that said
meter, or other apparatus installed or used for generating, telephone calls belong to respondent PLDT. This is evident from its
containing, conducting, or measuring electricity, telegraph or Comment where it de ined the issue of this case as whether or not
telephone service; (b) tapping or otherwise wrongfully de lecting or "the unauthorized use or appropriation of PLDT international
taking any electric current from such wire, meter, or other telephone calls, service and facilities, for the purpose of generating
apparatus; and (c) using or enjoying the bene its of any device by personal pro it or gain that should have otherwise belonged to
means of which one may fraudulently obtain any current of PLDT, constitutes theft."[14]
electricity or any telegraph or telephone service.
In discussing the issue of ownership, petitioner and respondent
In the instant case, the act of conducting ISR operations by illegally PLDT gave their respective explanations on how a telephone call is
connecting various equipment or apparatus to private respondent generated.[15] For its part, respondent PLDT explains the process
PLDT's telephone system, through which petitioner is able to resell of generating a telephone call as follows:
or re-route international long distance calls using respondent
PLDT's facilities constitutes all three acts of subtraction mentioned 38.The role of telecommunication companies is not limited to
above. merely providing the medium (i.e. the electric current) through
which the human voice/voice signal of the caller is transmitted.
The business of providing telecommunication or telephone service Before the human voice/voice signal can be so transmitted, a
is likewise personal property which can be the object of theft under telecommunication company, using its facilities, must irst break
Article 308 of the Revised Penal Code. Business may be down or decode the human voice/voice signal into electronic
appropriated under Section 2 of Act No. 3952 (Bulk Sales Law), impulses and subject the same to further augmentation and
hence, could be object of theft: enhancements. Only after such process of conversion will the
resulting electronic impulses be transmitted by a
Section 2. Any sale, transfer, mortgage, or assignment of a stock of telecommunication company, again, through the use of its facilities.
goods, wares, merchandise, provisions, or materials otherwise than Upon reaching the destination of the call, the telecommunication
in the ordinary course of trade and the regular prosecution of the company will again break down or decode the electronic impulses
business of the vendor, mortgagor, transferor, or assignor, or any back to human voice/voice signal before the called party receives
sale, transfer, mortgage, or assignment of all, or substantially all, of the same. In other words, a telecommunication company both
the business or trade theretofore conducted by the vendor, converts/reconverts the human voice/voice signal and provides the
mortgagor, transferor or assignor, or all, or substantially all, of the medium for transmitting the same.
ixtures and equipment used in and about the business of the


suf iciently apprised of the nature and cause of the charge against
39.Moreover, in the case of an international telephone call, once the him, and thus guaranteed of his rights under the Constitution.
electronic impulses originating from a foreign telecommunication
company country (i.e. Japan) reaches the Philippines through a local ACCORDINGLY, the motion for reconsideration is GRANTED. The
telecommunication company (i.e. private respondent PLDT), it is the assailed Decision dated February 27, 2006 is RECONSIDERED and
latter which decodes, augments and enhances the electronic SET ASIDE. The Decision of the Court of Appeals in CA-G.R. SP No.
impulses back to the human voice/voice signal and provides the 68841 af irming the Order issued by Judge Zeus C. Abrogar of the
medium (i.e. electric current) to enable the called party to receive Regional Trial Court of Makati City, Branch 150, which denied the
the call. Thus, it is not true that the foreign telecommunication Motion to Quash (With Motion to Defer Arraignment) in Criminal
company provides (1) the electric current which transmits the Case No. 99-2425 for theft, is AFFIRMED. The case is remanded to
human voice/voice signal of the caller and (2) the electric current the trial court and the Public Prosecutor of Makati City is hereby
for the called party to receive said human voice/voice signal. DIRECTED to amend the Amended Information to show that the
property subject of the theft were services and business of the
private offended party.
40.Thus, contrary to petitioner Laurel's assertion, once the
electronic impulses or electric current originating from a foreign SO ORDERED.
telecommunication company (i.e. Japan) reaches private respondent
PLDT's network, it is private respondent PLDT which decodes, Puno, C.J., Quisumbing, Carpio, Austria-Martinez, Carpio Morales,
augments and enhances the electronic impulses back to the human Azcuna, Chico-Nazario, Velasco, Jr., Nachura, Leonardo-De Castro,
voice/voice signal and provides the medium (i.e. electric current) to and Brion, JJ., concur.
enable the called party to receive the call. Without private Corona, J., see separate opinion.
respondent PLDT's network, the human voice/voice signal of the Tinga, J., please see concurring opinion.
calling party will never reach the called party.[16]
Leung Yee vs Strong Machinery Co., G.R.
In the assailed Decision, it was conceded that in making the
international phone calls, the human voice is converted into No. 11658, February 15, 1918
37 Phil. 644
electrical impulses or electric current which are transmitted to the
party called. A telephone call, therefore, is electrical energy. It was
also held in the assailed Decision that intangible property such as
electrical energy is capable of appropriation because it may be
taken and carried away. Electricity is personal property under
G.R. No. 11658, February 15, 1918
Article 416 (3) of the Civil Code, which enumerates "forces of nature
which are brought under control by science."[17]
LEUNG YEE, PLAINTIFF AND APPELLANT, VS. FRANK L. STRONG
MACHINERY COMPANY AND J. G. WILLIAMSON, DEFENDANTS AND
Indeed, while it may be conceded that "international long distance
APPELLEES.
calls," the matter alleged to be stolen in the instant case, take the
form of electrical energy, it cannot be said that such international
DECISION
long distance calls were personal properties belonging to PLDT
since the latter could not have acquired ownership over such calls.
CARSON, J.:
PLDT merely encodes, augments, enhances, decodes and transmits
said calls using its complex communications infrastructure and
facilities. PLDT not being the owner of said telephone calls, then it
The "Compañ ia Agricola Filipina" bought a considerable quantity of
could not validly claim that such telephone calls were taken without
rice-cleaning machinery from the defendant machinery company,
its consent. It is the use of these communications facilities without
and executed a chattel mortgage thereon to secure payment of the
the consent of PLDT that constitutes the crime of theft, which is the
purchase price. It included in the mortgage deed the building of
unlawful taking of the telephone services and business.
strong materials in which the machinery was installed, without any
reference to the land on which it stood. The indebtedness secured
Therefore, the business of providing telecommunication and the
by this instrument not having been paid when it fell due, the
telephone service are personal property under Article 308 of the
mortgaged property was sold by the sheriff, in pursuance of the
Revised Penal Code, and the act of engaging in ISR is an act of
terms of the mortgage instrument, and was bought in by the
"subtraction" penalized under said article. However, the Amended
machinery company. The mortgage was registered in the chattel
Information describes the thing taken as, "international long
mortgage registry, and the sale of the property to the machinery
distance calls," and only later mentions "stealing the business from
company in satisfaction of the mortgage was annotated in the same
PLDT" as the manner by which the gain was derived by the accused.
registry on December 29, 1913.
In order to correct this inaccuracy of description, this case must be
A few weeks thereafter, on or about the 14th of January, 1914, the
remanded to the trial court and the prosecution directed to amend
"Compañ ia Agricola Filipina" executed a deed of sale of the land
the Amended Information, to clearly state that the property subject
upon which the building stood to the machinery company, but this
of the theft are the services and business of respondent PLDT.
deed of sale, although executed in a public document, was not
Parenthetically, this amendment is not necessitated by a mistake in
registered. This deed makes no reference to the building erected on
charging the proper offense, which would have called for the
the land and would appear to have been executed for the purpose of
dismissal of the information under Rule 110, Section 14 and Rule
curing any defects which might be found to exist in the machinery
119, Section 19 of the Revised Rules on Criminal Procedure. To be
company's title to the building under the sheriff's certi icate of sale.
sure, the crime is properly designated as one of theft. The purpose
The machinery company went into possession of the building at or
of the amendment is simply to ensure that the accused is fully and
about the time when this sale took place, that is to say, the month of
December, 1913, and it has continued in possession ever since.


At or about the time when the chattel mortgage was executed in We conclude that the ruling in favor of the machinery company
favor of the machinery company, the mortgagor, the "Compañ ia cannot be sustained on the ground assigned by the trial judge. We
Agricola Filipina" executed another mortgage to the plaintiff upon are of opinion, however, that the judgment must be sustained on the
the building, separate and apart from the land on which it stood, to ground that the agreed statement of facts in the court below
secure payment of the balance of its indebtedness to the plaintiff discloses that neither the purchase of the building by plaintiff nor
under a contract for the construction of the building. Upon the his inscription of the sheriff's certi icate of sale in his favor was
failure of the mortgagor to pay the amount of the indebtedness made in good faith, and that the machinery company must be held
secured by the mortgage, the plaintiff secured judgment for that to be the owner of the property under the third paragraph of the
amount, levied execution upon the building, bought it in at the above cited article of the code, it appearing that the company irst
sheriff's sale on or about the 18th of December, 1914, and had the took possession of the property; and further, that the building and
sheriff's certi icate of sale duly registered in the land registry of the the land were sold to the machinery company long prior to ihe date
Province of Cavite. of the sheriff's sale to the plaintiff.
At the time when the execution was levied upon the building, the It has been suggested that since the provisions of article 1473 of the
defendant machinery company, which was in possession, iled with Civil Code require "good faith," in express terms, in relation to
the sheriff a sworn statement setting up its claim of title and "possession" and "title," but contain no express requirement as to
demanding the release of the property from the levy. Thereafter, ''good faith" in relation to the "inscription" of the property in the
upon demand of the sheriff, the plaintiff executed an indemnity registry, it must be presumed that good faith is not an essential
bond in favor of the sheriff in the sum of P12,000, in reliance upon requisite of registration in order that it may have the effect
which the sheriff sold the property at public auction to the plaintiff, contemplated in this article. We cannot agree with this contention.
who was the highest bidder at the sheriff's sale. It could not have been the intention of the legislator to base the
preferential right secured under this article of the code upon an
This action was instituted by the plaintiff to recover possession of inscription of title in bad faith. Such an interpretation placed upon
the building from the machinery company. the language of this section would open wide the door to fraud and
collusion. The public records cannot be converted into instruments
The trial judge, relying upon the terms of article 1473 of the Civil of fraud and oppression by one who secures an inscription therein
Code, gave judgment in favor of the machinery company,t on the in bad faith. The force and effect given by law to an inscription in a
ground that the company had its title to the building registered public record presupposes the good faith of him who enters such
prior to the date of registry of the plaintiff's certi icate. inscription; and rights created by statute, which are predicated
upon an inscription in a public registry, do not and cannot accrue
Article 1473 of the Civil Code is as follows: under an inscription "in bad faith," to the bene it of the person who
thus makes the inscription.
"If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have irst Construing the second paragraph of this article of the code, the
taken possession thereof in good faith, if it should be personal supreme court of Spain held in its sentencia of the 13th of May,
property. 1908, that:
"Should it be real property, it shall belong to the person. acquiring it "This rule is always to be understood on the basis of the good faith
who irst recorded it in. the registry. mentioned in the irst paragraph; therefore, it having been found
that the second purchasers who record their purchase had
"Should there be no entry, the property shall belong to the person knowledge of the previous sale, the question is to be decided in
who irst took possession of it in good faith, and, in the absence accordance with the following paragraph." (Note 2, art. 1473, Civ.
thereof, to the person who presents the oldest title, provided there Code, Medina and Marañ on [1911] edition.)
is good faith."
"Although article 1473, in its second paragraph, provides that the
The registry here referred to is of course the registry of real title of conveyance of ownership of the real property that is irst
property, and it must be apparent that the annotation or inscription recorded in the registry shall have preference, this provision must
of a deed of sale of real property in a chattel mortgage registry always be understood on the basis of the good faith mentioned in
cannot be given the legal effect of an inscription in the registry of the irst paragraph; the legislator could not have wished to strike it
real property. By its express terms, the Chattel Mortgage Law out and to sanction bad faith, just to comply with a mere formality
contemplates and makes provision for mortgages of personal which, in given cases, does not obtain even in real disputes between
property; and the sole purpose and object of the chattel mortgage third persons." (Note 2, art. 1473, Civ. Code, issued by the publishers
registry is to provide for the registry of "Chattel mortgages," that is of the La Revista de los Tribunales, 13th edition.)
to say, mortgages of personal property executed in the manner and
form prescribed in the statute. The building of strong materials in The agreed statement of facts clearly discloses that the plaintiff,
which the rice-cleaning machinery was installed by the "Compania when he bought the building at the sheriff's sale and inscribed his
Agricola Filipina" was real property, and the mere fact that the title in the land registry, was duiy noti ied that the machinery
parties seem to have dealt with it separate and apart from the land company had bought the building from plaintiff's judgment debtor;
on which it stood in no wise changed its character as real property. that it had gone into possession long prior to the sheriff's sale; and
It follows that neither the original registry in the chattel mortgage that it was in possession at the time when the sheriff executed his
registry of the instrument purporting to be a chattel mortgage of levy. The execution of an indemnity bond by the plaintiff in favor of
the building and the machinery installed therein, nor the annotation the sheriff, after the machinery company had iled its sworn claim of
in that registry of the sale of the mortgaged property, had any effect ownership, leaves no room for doubt in this regard. Having bought
whatever so far as the building was concerned. in the building at the sheriff's sale with full knowledge that at the


time of the levy and sale the building had already been sold to the absence of proof to the contrary. "Good faith, or the want of it, is not
machinery company by the judgment debtor, the plaintiff cannot be a visible, tangible fact that can be seen or touched, but rather a state
said to have been a purchaser in good faith; and of course, the or condition of mind which can only be judged of by actual or
subsequent inscription of the sheriff's certi icate of title must be fancied tokens or signs." (Wilder vs. Gilman, 55 Vt., 504, 505; Cf.
held to have been tainted with the same defect. Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet, Cypress
Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co.
Perhaps we should make it clear that in holding that the inscription vs. Bromley, 119 Mich., 8, 10, 17.)
of the sheriff's certi icate of sale to the plaintiff was not made in
good faith, we should not be understood as questioning, in any way, We conclude that upon the grounds herein set forth the disposing
the good faith and genuineness of plaintiff's claim against the part of the decision and judgment entered in the court below should
"Compania Agricola Filipina." The truth is that both the plaintiff and be af irmed with the costs of this instance against the appellant. So
the defendant company appear to have had just and righteous ordered.
claims against their common debtor. No criticism can properly be
made of the exercise of the utmost diligence by the plaintiff in Arellano, C. J., Johnson, Araullo, Street, and Malcolm, JJ., concur.
asserting and exercising his right to recover the amount of his claim
from the estate of the common debtor. We are strongly inclined to Torres, Avanceñ a, and Fisher, JJ., did not take part.
believe that in procuring the levy of execution upon the factory
building and in buying it at the sheriff's sale, he conceived that he Prudential Bank vs Panis, G.R. No. 50008,
was doing no more than he had a right to do under all the
circumstances, and it is highly possible and even probable that he August 31, 1987
237 Phil. 380
thought at that time that he would be able to maintain his position
in a contest with the machinery company. There was no collusion on
FIRST DIVISION
his part with the common debtor, and no thought of the
perpetration of a fraud upon the rights of another, in the ordinary
G.R. No. 50008, August 31, 1987
sense of the word. He may have hoped, and doubtless he did hope,
that the title of the machinery company would not stand the test of
PRUDENTIAL BANK, PETITIONER, VS. HONORABLE DOMINGO D.
an action in a court of law; and if later developments had con irmed
PANIS, PRESIDING JUDGE OF BRANCH III, COURT OF FIRST
his unfounded hopes, no one could question the legality or the
INSTANCE OF ZAMBALES AND OLONGAPO CITY; FERNANDO
propriety of the course he adopted.
MAGCALE & TEODULA BALUYUT-MAGCALE, RESPONDENTS.
But it appearing that he had full knowledge of the machinery
DECISION
company's claim of ownership when he executed the indemnity
bond and bought in the property at the sheriff's sale, and it
PARAS, J.:
appearing further that the machinery company's claim of
ownership was well founded, he cannot be said to have been an
This is a petition for review on certiorari of the November 13, 1978
innocent purchaser for value. He took the risk and must stand by
Decision* of the then Court of First Instance of Zambales and
the consequences; and it is in this sense that we ind that he was not
Olongapo City in Civil Case No. 2443-0 entitled "Spouses Fernando
a purchaser in good faith.
A. Magcale and Teodula Baluyut-Magcale vs. Hon. Ramon Y. Pardo
and Prudential Bank" declaring that the deeds of real estate
One who purchases real estate with knowledge of a defect or lack of
mortgage executed by respondent spouses in favor of petitioner
title in his vendor cannot claim that he has acquired title thereto in
bank are null and void.
good faith as against the true owner of the land or of an interest
therein; and the same rule must be applied to one who has
The undisputed facts of this case by stipulation of the parties are as
knowledge of facts which should have put him upon such inquiry
follows:
and investigation as might be necessary to acquaint him with the
defects in the title of his vendor. A purchaser cannot close his eyes
"x x x on November 19, 1971, plaintiffs-spouses Fernando A.
to facts which should put a reasonable man upon his guard, and
Magcale and Teodula Baluyut Magcale secured a loan in the sum of
then claim that he acted in good faith under the belief that there
P70,000.00 from the defendant Prudential Bank. To secure
was no defect in the title of the vendor. His mere refusal to believe
payment of this loan, plaintiffs executed in favor of 'defendant on
that such defect exists, or his willful closing of his eyes to the
the aforesaid date a deed of Real Estate Mortgage over the following
possibility of the existence of a defect in his vendor's title, will not
described properties:
make him an innocent purchaser for value, if it afterwards develops
that the title was in fact defective, and it appears that he had such
'1. A 2-STOREY, SEMI-CONCRETE, residential building with
notice of the defect as would have led to its discovery had he acted
warehouse spaces containing a total loor area of 263 sq. meters,
with that measure of precaution which may reasonably be required
more or less, generally constructed of mixed hard wood and
of a prudent man in a like situation. Good faith, or the lack of it, is in
concrete materials, under a roo ing of cor. g. i. sheets; declared and
its last analysis a question of intention; but in ascertaining the
assessed in the name of FERNANDO MAGCALE under Tax
intention by which one is actuated on a given occasion, we are
Declaration No. 21109, issued by the Assessor of Olongapo City with
necessarily controlled by the evidence as to the conduct and
an assessed value of P35,290.00. This building is the only
outward acts by which alone the inward motive may, with safety, be
improvement on the lot.
determined. So it is that "the honesty of intention," "the honest
lawful intent," which constitutes good faith implies a "freedom from
'2. THE PROPERTY hereby conveyed by way of MORTGAGE
knowledge and circumstances which ought to put a person on
includes the right of occupancy on the lot where the above property
inquiry," and so it is that proof of such knowledge overcomes the
is erected, and more particularly described and bounded, as follows:
presumption of good faith in which the courts always indulge in the


'A irst class residential land identi ied as Lot No. 720, (Ts-308, sale of the properties therein mortgaged to defendant as the highest
Olongapo Townsite Subdivision) Ardoin Street, East Bajac-Bajac, bidder in a public auction sale conducted by the defendant City
Olongapo City, containing an area of 465 sq. m., more or less; Sheriff on April 12, 1978 (Exhibit "E"). The auction sale aforesaid
declared and assessed in the name of FERNANDO MAGCALE under was held despite written request from plaintiffs through counsel,
Tax Declaration No. 19595 issued by the Assessor of Olongapo City dated March 29, 1978, for the defendant City Sheriff to desist from
with an assessed value of P1,860.00; bounded on the going with the scheduled public auction sale (Exhibit "D")."
(Decision, Civil Case No. 2443-0, Rollo, pp. 29-31).
NORTH : By No. 6, Ardoin Street
Respondent Court, in a Decision dated November 3, 1978 declared
SOUTH : By No. 2, Ardoin Street the deeds of Real Estate Mortgage as null and void (Ibid., p. 35).
EAST : By 37 Canda Street and On December 14, 1978, petitioner iled a Motion for
Reconsideration (Ibid., pp. 41-53), opposed by private respondents
WEST : By Ardoin Street.' on January 5, 1979 (Ibid., pp. 54-62), and in an Order dated January
10, 1979 (Ibid., p. 63), the Motion for Reconsideration was denied
All corners of the lot marked by conc. cylindrical monuments of the for lack of merit. Hence, the instant petition (Ibid., pp. 5-28).
Bureau of Lands as visible limits.' (Exhibit "A", also Exhibit "1" for
defendant). The First Division of this Court, in a Resolution dated March 9,
1979, resolved to require the respondents to comment (Ibid., p. 65),
Apart from the stipulations in the printed portion of the aforestated which order was complied with the Resolution dated May 18, 1979,
deed of mortgage, there appears a rider typed at the bottom of the (Ibid., p. 100), petitioner iled its Reply on June 2, 1979 (Ibid., pp.
reverse side of the document under the lists of the properties 101-112).
mortgaged which reads, as follows:
Thereafter, in the Resolution dated June 13, 1979, the petition was
'AND IT IS FURTHER AGREED that in the event the Sales Patent on given due course and the parties were required to submit
the lot applied for by the Mortgagors as herein stated is released or simultaneously their respective memoranda. (Ibid., p. 114).
issued by the Bureau of Lands, the Mortgagors hereby authorize the
Register of Deeds to hold the Registration of same until this On July 18, 1979, petitioner iled its Memorandum (Ibid., pp.
Mortgage is cancelled, or to annotate this encumbrance on the Title 116-144), while private respondents iled their Memorandum on
upon authority from the Secretary of Agriculture and Natural August 1, 1979 (Ibid., pp. 146-155).
Resources, which title with annotation, shall be released in favor of
the herein Mortgage.' In a Resolution dated August 10, 1979, this case was considered
submitted for decision (Ibid., p. 158).
From the aforequoted stipulation, it is obvious that the mortgagee
(defendant Prudential Bank) was at the outset aware of the fact that In its Memorandum, petitioner raised the following issues:
the mortgagors (plaintiffs) have already iled a Miscellaneous Sales
Application over the lot, possessory rights over which, were 1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE
mortgaged to it. ARE VALID; AND
Exhibit "A" (Real Estate Mortgage) was registered under the 2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF
Provisions of Act 3344 with the Registry of Deeds of Zambales on PRIVATE RESPONDENTS OF MISCELLANEOUS SALES PATENT NO.
November 23, 1971. 4776 ON APRIL 24, 1972 UNDER ACT NO. 730 AND THE COVERING
ORIGINAL CERTIFICATE OF TITLE NO. P-2554 ON MAY 15, 1972
On May 2, 1973, plaintiffs secured an additional loan from HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL ESTATE
defendant Prudential Bank in the Sum of P20,000.00. To secure MORTGAGE. (Memorandum for Petitioner, Rollo, p. 122).
payment of this additional loan, plaintiffs executed in favor of the
said defendant another deed of Real Estate Mortgage over the same This petition is impressed with merit.
properties previously mortgaged in Exhibit "A". (Exhibit "B"; also
Exhibit "2" for defendant). This second deed of real Estate The pivotal issue in this case is whether or not a valid real estate
Mortgage was likewise registered with the Registry of Deeds, this mortgage can be constituted on the building erected on the land
time in Olongapo City, on May 2, 1973. belonging to another.
On April 24, 1973, the Secretary of Agriculture issued Miscellaneous The answer is in the af irmative.
Sales Patent No. 4776 over the parcel of land, possessory rights over
which were mortgaged to defendant Prudential Bank, in favor of In the enumeration of properties under Article 415 of the Civil Code
plaintiffs. On the basis of the aforesaid Patent, and upon its of the Philippines, this Court ruled that, "it is obvious that the
transcription in the Registration Book of the Province of Zambales, inclusion of 'building' separate and distinct from the land, in said
Original Certi icate of Title No. P-2554 was issued in the name of provision of law can only mean that a building is by itself an
Plaintiff Fernando Magcale, by the Ex-O icio Register of Deeds of immovable property". (Lopez vs. Orosa, Jr., et al., L-10817-18, Feb.
Zambales, on May 15, 1972. 28, 1958; Associated Inc. and Surety Co., Inc. vs. Iya, et al.,
L-10837-38, May 30, 1958).
For failure of plaintiffs to pay their obligation to defendant Bank
after it became due, and upon application of said defendant, the Thus, while it is true that a mortgage of land necessarily includes, in
deeds of Real Estate Mortgage (Exhibits "A" and "B") were the absence of stipulation of the improvements thereon, buildings,
extrajudicially foreclosed. Consequent to the foreclosure was the still a building by itself may be mortgaged apart from the land on


which it has been built. Such a mortgage would be still a real estate "x x x Nonetheless, we apply our earlier rulings because we believe
mortgage for the building would still be considered immovable that as in pari delicto may not be invoked to defeat the policy of the
property even if dealt with separately and apart from the land State neither may the doctrine of estoppel give a validating effect to
(Leung Yee vs. Strong Machinery Co., 37 Phil. 644). In the same a void contract. Indeed, it is generally considered that as between
manner, this Court has also established that possessory rights over parties to a contract, validity cannot be given to it by estoppel if it is
said properties before title is vested on the grantee, may be validly prohibited by law or is against public policy (19 Am. Jur. 802). It is
transferred or conveyed as in a deed of mortgage (Vda. de Bautista not within the competence of any citizen to barter away what public
vs. Marcos, 3 SCRA 438 [1961]). policy by law seeks to preserve (Gonzalo Puyat & Sons, Inc. vs. De
los Amas and Alino, supra). x x x." (Arsenal vs. IAC, 143 SCRA 54
Coming back to the case at bar, the records show, as aforestated that [1986]).
the original mortgage deed on the 2-storey semi-concrete
residential building with warehouse and on the right of occupancy This pronouncement covers only the previous transaction already
on the lot where the building was erected, was executed on alluded to and does not pass upon an new contract between the
November 19, 1971 and registered under the provisions of Act 3344 parties (Ibid.), as in the case at bar. It should not preclude new
with the Register of Deeds of Zambales on November 23, 1971. contracts that may be entered into between petitioner bank and
Miscellaneous Sales Patent No. 4776 on the land was issued on April private respondents that are in accordance with the requirements
24, 1872, on the basis of which OCT No. 2554 was issued in the of the law. After all, private respondents themselves declare that
name of private respondent Fernando Magcale on May 15, 1972. It they are not denying the legitimacy of their debts and appear to be
is therefore without question that the original mortgage was open to new negotiations under the law (Comment; Rollo, pp.
executed before the issuance of the inal patent and before the 95-96). Any new transaction, however, would be subject to
government was divested of its title to the land, an event which whatever steps the Government may take for the reversion of the
takes effect only on the issuance of the sales patent and its land in its favor.
subsequent registration in the Of ice of the Register of Deeds
(Visayan Realty Inc. vs. Meer, 96 Phil. 515; Director of Lands vs. De PREMISES CONSIDERED, the decision of the Court of First Instance
Leon, 110 Phil. 28; Director of Lands vs. Jurado, L-14702, May 23, of Zambales & Olongapo City is hereby MODIFIED, declaring that
1961; Pena, "Law on Natural Resources, p. 49). Under the foregoing the Deed of Real Estate Mortgage for P70,000.00 is valid but ruling
considerations, it is evident that the mortgage executed by private that the Deed of Real Estate Mortgage for an additional loan of
respondent on his own building which was erected on the land P20,000.00 is null and void, without prejudice to any appropriate
belonging to the government is to all intents and purposes a valid action the Government may take against private respondents.
mortgage. SO ORDERED.
As to restrictions expressly mentioned on the face of respondents' Teehankee, C.J., Narvasa, Cruz, and Gancayco, JJ., concur.
OCT No. P-2554, it will be noted that Sections 121, 122 and 124 of
the Public Land Act, refer to land already acquired under the Public People’s Bank and Trust Co. vs Dahican
Land Act, or any improvement thereon and therefore have no
application to the assailed mortgage in the case at bar which was Lumber Co., G. R. No. L-17500, May 16, 1967
126 Phil. 354
executed before such eventuality. Likewise, Section 2 of Republic
Act No. 730, also a restriction appearing on the face of private
G. R. No. L-17500, May 16, 1967
respondent's title has likewise no application in the instant case,
despite its reference to encumbrance or alienation before the patent
PEOPLE'S BANK AND TRUST CO. AND ATLANTIC, GULF AND
is issued because it refers speci ically to encumbrance or alienation
PACIFIC CO. OF MANILA, PLAINTIFFS AND APPELLANTS, VS.
on the land itself and does not mention anything regarding the
DAHICAN LUMBER COMPANY, DAHICAN AMERICAN LUMBER
improvements existing thereon.
CORPORATION AND CONNELL BROS. CO. (PHIL.), DEFENDANTS
AND APPELLANTS.
But it is a different matter, as regards the second mortgage executed
over the same properties on May 2, 1973 for an additional loan of
DECISION
P20,000.00 which was registered with the Registry of Deeds of
Olongapo City on the same date. Relative thereto, it is evident that
DIZON, J.:
such mortgage executed after the issuance of the sales patent and of
the Original Certi icate of Title, falls squarely under the prohibitions
On September 8, 1948, Atlantic Gulf & Paci ic Company of Manila, a
stated in Sections 121, 122 and 124 of the Public Land Act and
West Virginia corporation licensed to do business in the Philippines,
Section 2 of Republic Act 730, and is therefore null and void.
- hereinafter referred to as ATLANTIC - sold and assigned all its
rights in the Dahican lumber concession to Dahican Lumber
Petitioner points out that private respondents, after physically
Company - hereinafter referred to as DALCO - for the total sum of
possessing the title for ive years, voluntarily surrendered the same
$500,000.00, of which only the amount of $50,000.00 was paid.
to the bank in 1977 in order that the mortgage may be annotated,
Thereafter, to develop the concession, DALCO obtained various
without requiring the bank to get the prior approval of the Ministry
loans from the People's Bank & Trust Company - hereinafter
of Natural Resources beforehand, thereby implicitly authorizing
referred to as the BANK - amounting, as of July 13, 1950, to
Prudential Bank to cause the annotation of said mortgage on their
P200,000.00. In addition, DAICO obtained, through the BANK, a
title.
loan of $250,000.00 from the Export-Import Bank of Washington
D.C., evidenced by ive promissory notes of $50,000.00 each,
However, the Court, in recently ruling on violations of Section 124
maturing on different dates, executed by both DALCO and the
which refers to Sections 118, 120, 122 and 123 of Commonwealth
Dahican American Lumber Corporation, a foreign corporation and a
Act 141, has held:
stockholder of DALCO, - hereinafter referred to as DAMCO, all
payable to the BANK or its order.


proceedings in the Court of First Instance of Camarines Norte

As security for the payment of the abovementioned loans, on July against DALCO and DAMCO. On the same date they iled an ex parte
13, 1950 DALCO executed in favor of the BANK - the latter acting for application for the appointment of a Receiver and/or for the
itself and as trustee for the Export-Import Bank of Washington D.C. - issuance of a writ of preliminary injunction to restrain DALCO from
a deed of mortgage covering ive parcels of land situated in the removing its properties. The court granted both remedies and
province of Camarines Norte, together with all the buildings and appointed George H. Evans as Receiver. Upon defendants' motion,
other improvements existing thereon and all the personal however, the court, in its order of February 21, 1953, discharged the
properties of the mortgagor located in its place of business in the Receiver.
municipalities of Mambulao and Capalonga, Camarines Norte
(Exhibit D). On the same date, DALCO executed a second mortgage On March 2, 1953, defendants iled their answer denying the
on the same properties in favor of ATLANTIC to secure payment of material allegations of the complaint and alleging several
the unpaid balance of the sale price of the lumber concession af irmative defenses and a counterclaim.
amounting to the sum of $450,000.00 (Exhibit G). Both deeds
contained the following provision extending the mortgage lien to On March 4 of the same year, CONNELL iled a motion for
properties to be subsequently acquired - referred to hereafter as intervention alleging that it was the owner and possessor of some of
"after acquired properties" - by the mortgagor: the equipments, spare parts and supplies which DALCO had
acquired subsequent to the execution of the mortgages sought to be
"All property of every nature and description taken in exchange or foreclosed and which plaintiffs claimed were covered by their lien.
replacement, and all buildings, machinery, ixtures, tools, equipment In its order of March 18, 1953 the Court granted the motion, as well
and other property which the Mortgagor may hereafter acquire, as plaintiffs' motion to set aside the order discharging the Receiver.
construct, install, attach, or use in, to, upon, or in connection with Consequently, Evans was reinstated.
the premises, shall immediately be and become subject to the lien of
this mortgage in the same manner and to the same extent as if now On April 1, 1953, CONNELL iled its answer denying the material
included therein, and the Mortgagor shall from time to time during averments of the complaint, and asserting af irmative defenses and
the existence of this mortgage furnish the Mortgagee with an a counterclaim.
accurate inventory of such substituted and subsequently acquired
property." Upon motion of the parties the Court, on September 30, 1953,
issued an order transferring the venue of the action to the Court of
Both mortgages were registered in the Of ice of the Register of First Instance of Manila where it was docketed as Civil Case No.
Deeds of Camarines Norte. In addition thereto DALCO and DAMCO 20987.
pledged to the BANK 7,296 shares of stock of DALCO and 9,286
shares of DAMCO to secure the same obligations. On August 30, 1958, upon motion of all the parties, the Court
ordered the sale of all the machineries, equipment and supplies of
Upon DALCO’s and DAMCO’s failure to pay the ifth promissory note DALCO, and the same were subsequently sold for a total
upon its maturity, the BANK paid the same to the Export-Import consideration of P175,000.00 which was deposited in court pending
Bank of Washington D.C. and the latter assigned to the former its inal determination of the action. By a similar agreement one half
credit and the irst mortgage securing it. Subsequently, the BANK (P87,500.00) of this amount was considered as representing the
gave DALCO and DAMCO up to April 1, 1953 to pay the overdue proceeds obtained from the sale of the "undebated properties"
promissory note. (those not claimed by DAMCO and CONNELL), and the other half as
representing those obtained from the sale of the "after acquired
After July 13, 1950, - the date of execution of the mortgages properties".
mentioned above - DALCO purchased various machineries,
equipment, spare parts and supplies in addition to, or in After due trial, the Court, on July 15, 1960, rendered judgment as
replacement of some of those already owned and used by it on the follows:
date aforesaid. Pursuant to the provision of the mortgage deeds
quoted heretofore regarding "after acquired properties", the BANK "IN VIEW WHEREOF, the Court:
requested DALCO to submit complete lists of said properties but the
latter failed to do so. In connection with these purchases, there 1. Condemns Dahican Lumber Co. to pay unto People's Bank the
appeared in the books of DALCO as due to Connell Bros. Company sum of P200,000.00 with 7% interest per annum from July 13,
(Philippines) - a domestic corporation who was acting as the 1950, plus another sum of P100,000.00 with 5% interest per annum
general purchasing agent of DALCO - hereinafter called CONNELL - from July 13, 1950; plus 10% on both principal sums as attorney's
the sum of P452,860.55 and to DAMCO, the sum of P2,151,678.34. fees;
On December 16, 1952, the Board of Directors of DALCO, in a special 2. Condemns Dahican Lumber Co. to pay unto Atlantic Gulf the sum
meeting called for the purpose, passed a resolution agreeing to of P900,000.00 with 4% interest per annum from July 13, 1950,
rescind the alleged sales of equipment, spare parts and supplies by plus 10% of the principal as attorney's fees;
CONNELL and DAMCO to it. Thereafter, the corresponding
agreements of rescission of sale were executed between DALCO and 3. Condemns Dahican Lumber Co. to pay unto Connell Bros, the sum
DAMCO, on the one hand, and between DALCO and CONNELL, on of P425,860.55, and to pay unto Dahican American Lumber Co. the
the other. sum of P2,151,678.34 both with legal interest from the date of the
iling of the respective answers of those parties, plus 10% of the
On January 23, 1953, the BANK, in its own behalf and that of principals as attorney's fees;
ATLANTIC, demanded that said agreements be cancelled but
CONNELL and DAMCO refused to do so. As a result, on February 12, 4. Orders that of the sum realized from the sale of the properties of
1953, ATLANTIC and the BANK, commenced foreclosure P175,000.00, after deducting the recognized expenses, one-half


thereof be adjudicated unto plaintiffs, the Court no longer by reason of the depreciation or loss in value of the "after acquired
specifying the share of each because of their announced intention properties" placed under receivership was damnum absque injuria
under the stipulation of facts to 'pool their resources'; as to the and, consequently, in not awarding to said parties the
other one half, the same should be adjudicated unto both plaintiffs, corresponding damages claimed in their counterclaim; lastly, in
and defendant Dahican American and Connell Bros, in the sentencing DALCO and DAMCO to pay attorney's fees and in
proportion already set forth on page 9, lines 21, 22 and 23 of the requiring DAMCO and CONNELL to pay the costs of the
body of this decision; but with the understanding that whatever Receivership, instead of sentencing plaintiffs to pay attorney's fees.
plaintiffs and Dahican American and Connell Bros. should receive
from the P175,000.00 deposited in the Court shall be applied to the Plaintiffs' brief as appellants submit six assignments of error, while
judgments particularly rendered in favor of each; that of defendants also as appellants submit a total of seventeen.
However, the multifarious issues thus before Us may be resolved,
5. No other pronouncement as to costs; but the costs of the directly or indirectly, by deciding the following issues:
receivership as to the debated properties shall be borne by People's
Bank, Atlantic Gulf, Connell Bros., and Dahican American Lumber Firstly, are the so-called "after acquired properties" covered by and
Co., pro-rata." subject to the deeds of mortgage subject of foreclosure?; secondly,
assuming that they are subject thereto, are the mortgages valid and
On the following day, the Court issued the following supplementary binding on the properties aforesaid inspite of the fact that they were
decision: not registered in accordance with the provisions of the Chattel
Mortgage Law?; thirdly, assuming again that the mortgages are valid
"IN VIEW WHEREOF, the dispositive part of the decision is hereby and binding upon the "after acquired properties", what is the effect
amended in order to add the following paragraph 6: thereon, if any, of the rescission of sales entered into, on the one
hand, between DALCO and DAMCO, and between DALCO and
6. If the sums mentioned in paragraphs 1 and 2 are not paid within CONNELL, on the other?; and lastly, was the action to foreclose the
ninety (90) days, the Court orders the sale at public auction of the mortgages premature?
lands object of the mortgages to satisfy the said mortgages and
costs of foreclosure." A. Under the fourth paragraph of both deeds of mortgage, it is
crystal clear that all property of every nature and description taken
From the above-quoted decision, all the parties appealed. in exchange or replacement, as well as all buildings, machineries,
ixtures, tools, equipments, and other property that the mortgagor
Main contentions of plaintiffs as appellants are the following: that may acquire, construct, install, attach, or use in, to, upon, or in
the "after acquired properties" were subject to the deeds of connection with the premises - that is, its lumber concession - "shall
mortgage mentioned heretofore; that said properties were acquired immediately be and become subject to the lien” of both mortgages
from suppliers other than DAMCO and CONNELL; that even granting in the same manner and to the same extent as if already included
that DAMCO and CONNELL were the real suppliers, the rescission of therein at the time of their execution. As the language thus used
the sales to DALCO could not prejudice the mortgage lien in favor of leaves no room for doubt as to the intention of the parties, We see
plaintiffs; that considering the foregoing, the proceeds obtained no useful purpose in discussing the matter extensively. Suf ice it to
from the sale of the "after acquired properties" as well as those say that the stipulation referred to is common, and We might say
obtained from the sale of the "undebated properties" in the total logical, in all cases where the properties given as collateral are
sum of P175,000.00 should have been awarded exclusively to perishable or subject to inevitable wear and tear or were intended
plaintiffs by reason of the mortgage lien they had thereon; that to be sold, or to be used - thus becoming subject to the inevitable
damages should have been awarded to plaintiffs against defendants, wear and tear - but with the understanding - express or implied -
all of them being guilty of an attempt to defraud the former when that they shall be replaced with others to be thereafter acquired by
they sought to rescind the sales already mentioned for the purpose the mortgagor. Such stipulation is neither unlawful nor immoral, its
of defeating their mortgage lien, and inally, that defendants should obvious purpose being to maintain, to the extent allowed by
have been made to bear all the expenses of the Receivership, costs circumstances, the original value of the properties given as security.
and attorney's fees. Indeed, if such properties were of the nature already referred to, it
would be poor judgment on the part of the creditor who does not
On the other hand, defendants-appellants contend that the trial see to it that a similar provision is included in the contract.
court erred: irstly, in not holding that plaintiffs had no cause of
action against them because the promissory note sued upon was B. But defendants contend that, granting without admitting, that the
not yet due when the action to foreclose the mortgages was deeds of mortgage in question cover the "after acquired properties"
commenced; secondly, in not holding that the mortgages aforesaid of DALCO, the same are void and ineffectual because they were not
were null and void as regards the "after acquired properties" of registered in accordance with the Chattel Mortgage Law. In support
DALCO because they were not registered in accordance with the of this and of the proposition that, even if said mortgages were
Chattel Mortgage Law, the court erring, as a consequence, in holding valid, they should not prejudice them, the defendants argue (1) that
that said properties were subject to the mortgage lien in favor of the deeds do not describe the mortgaged chattels speci ically, nor
plaintiffs; thirdly, in not holding that the provision of the fourth were they registered in accordance with the Chattel Mortgage Law;
paragraph of each of said mortgages did not automatically make (2) that the stipulation contained in the fourth paragraph thereof
subject to such mortgages the "after acquired properties", the only constitutes "mere executory agreements to give a lien" over the
meaning thereof being that the mortgagor was willing to constitute "after acquired properties" upon their acquisition; and (3) that any
a lien over such properties; fourthly, in not ruling that said mortgage stipulation concerning "after acquired properties" should
stipulation was void as against DAMCO and CONNELL and in not not prejudice creditors and other third persons - such as DAMCO
awarding the proceeds obtained from the sale of the "after acquired and CONNELL.
properties" to the latter exclusively; ifthly, in appointing a Receiver
and in holding that the damages suffered by DAMCO and CONNELL


The stipulation under consideration strongly belies defendants’ But defendants, invoking the case of Davao Sawmill Company vs.
contention. As adverted to hereinbefore, it states that all property Castillo, 61 Phil. 709, claim that the "after acquired properties" did
of every nature, buildings, machinery etc. taken in exchange or not become immobilized because DALCO did not own the whole
replacement by the mortgagor "shall immediately be and become area of its lumber concession all over which said properties were
subject to the lien of this mortgage in the same manner and to the scattered.
same extent as if now included therein". No clearer language could
have been chosen. The facts in the Davao Sawmill case, however, are not on all fours
with the ones obtaining in the present. In the former, the Davao
Conceding, on the other hand, that it is the law in this jurisdiction Sawmill Company, Inc. had repeatedly treated the machinery
that, to affect third persons, a chattel mortgage must be registered therein involved as personal property by executing chattel
and must describe the mortgaged chattels or personal properties mortgages thereon in favor of third parties, while in the present
suf iciently to enable the parties and any other person to identify case the parties had treated the "after acquired properties" as real
them, We say that such law does not apply to this case. properties by expressly and unequivocally agreeing that they shall
automatically become subject to the lien of the real estate
As the mortgages in question were executed on July 13, 1950 with mortgages executed by them. In the Davao Sawmill decision, it was,
the old Civil Code still in force, there can be no doubt that the in fact, stated that "the characterization of the property as chattels
provisions of said code must govern their interpretation and the by the appellant is indicative of intention and impresses upon the
question of their validity. It happens, however, that Articles 334 and property the character determined by the parties" (61 Phil. 712,
1877 of the old Civil Code are substantially reproduced in Articles Underlines supplied). In the present case, the characterization of
415 and 2127, respectively, of the new Civil Code. It is, therefore, the "after acquired properties" as real property was made not only
immaterial in this case whether we take the former or the latter as by one but by both interested parties. There is, therefore, more
guide in deciding the point under consideration. reason to hold that such consensus impresses upon the properties
the character determined by the parties who must now be held in
Article 415 does not de ine real property but enumerates what are estoppel to question it.
considered as such, among them being machinery, receptacles,
instruments or replacements intended by the owner of the Moreover, quoted in the Davao Sawmill case was that of Valdez vs.
tenement for an industry or works which may be carried on in a Central Altagracia Inc. (225 U.S. 58) where it was held that while
building or on a piece of land, and shall tend directly to meet the under the general law of Puerto Rico, machinery placed on property
needs of the said industry or works. by a tenant does not become immobilized, yet, when the tenant
places it there pursuant to contract that it shall belong to the owner,
On the strength of the above-quoted legal provisions, the lower it then becomes immobilized as to that tenant and even as against
court held that inasmuch as "the chattels were placed in the real his assignees and creditors who had suf icient notice of such
properties mortgaged to plaintiffs, they came within the operation stipulation. In the case at bar it is not disputed that DALCO
of Art. 415, paragraph 5 and Art. 2127 of the New Civil Code". purchased the "after acquired properties" to be placed on, and be
used in the development of its lumber concession, and agreed
We ind the above ruling in agreement with our decisions on the further that the same shall become immediately subject to the lien
subject: constituted by the questioned mortgages. There is also abundant
evidence in the record that DAMCO and CORNELL had full notice of
(1) In Berkenkotter vs. Cu Unjieng, 61 Phil. 663, We held that Article such stipulation and had never thought of disputing its validity until
334, paragraph 5 of the Civil Code (old) gives the character of real the present case was iled. Consequently, all of them must be
property to machinery, liquid containers, instruments or deemed barred from denying that the properties in question had
replacements intended by the owner of any building or land for use become immobilized.
in connection with any industry or trade being carried on therein
and which are expressly adapted to meet the requirements of such What We have said heretofore suf iciently disposes of all the
trade or industry. arguments adduced by defendants in support of their contention
that the mortgages under foreclosure are void, and, that, even if
(2) In Cu Unjieng e Hijos vs. Mabalacat Sugar Co. 58 Phil. 439, We valid, are ineffectual as against DAMCO and CONNELL.
held that a mortgage constituted on a sugar central includes not
only the land on which it is built but also the buildings, machinery Now to the question of whether or not DAMCO and CONNELL have
and accessories installed at the time the mortgage was constituted rights over the "after acquired properties" superior to the mortgage
as well as the buildings, machinery and accessories belonging to the lien constituted thereon in favor of plaintiffs. It is defendants'
mortgagor, installed after the constitution thereof. contention that in relation to said properties they are "unpaid
sellers"; that as such they had not only a superior lien on the "after
It is not disputed in the case at bar that the "after acquired acquired properties" but also the right to rescind the sales thereof
properties" were purchased by DALCO in connection with, and for to DALCO.
use in the development of its lumber concession and that they were
purchased in addition to, or in replacement of those already existing This contention - it is obvious - would have validity only if it were
in the premises on July 13, 1950. In law, therefore, they must be true that DAMCO and CONNELL were the suppliers or vendors of
deemed to have been immobilized, with the result that the real the "after acquired properties". According to the record, plaintiffs
estate mortgages involved herein - which were registered as such - did not know their exact identity and description prior to the iling
did not have to be registered a second time as chattel mortgages in of the case at bar because DALCO, in violation of its obligation under
order to bind the "after acquired properties" and affect third the mortgages, had failed and refused theretofore to submit a
parties. complete list thereof. In the course of the proceedings, however,
when defendants moved to dissolve the order of receivership and
the writ of preliminary injunction issued by the lower court, they


attached to their motion the lists marked as Exhibits 1, 2 and 3 and as the guaranty was plainly inadequate since the claim of
describing the properties aforesaid. Later on, the parties agreed to plaintiffs reached in the aggregate, P1,200,000 excluding interest
consider said lists as identifying and describing the "after acquired while the aggregate price of the 'after-acquired' chattels claimed by
properties", and engaged the services of auditors to examine the Connell under the rescission contracts was P1,614,675.94, Exh. 1,
books of DALCO so as to bring out the details thereof. The report of Exh. V, report of auditors, and as a matter of fact, almost all the
the auditors and its annexes (Exhibits V, V-1 - V-4) show that neither properties were sold afterwards for only P175,000.00, page 47, Vol.
DAMCO nor CONNELL had supplied any of the goods of which they IV, and the Court understanding that when the law permits the
respectively claimed to be the unpaid seller; that all items were debtor to enjoy the bene its of the period notwithstanding that he is
supplied by different parties, neither of whom appeared to be insolvent by his giving a guaranty for the debt, that must mean a
DAMCO or CONNELL; that, in fact, CONNELL collected a 5% service new and ef icient guaranty, must concede that the causes of action
charge on the net value of all items it claims to have sold to DALCO for collection of the notes were not premature."
and which, in truth, it had purchased for DALCO as the latter's
general agent; that CONNELL had to issue its own invoices in Very little need be added to the above. Defendants, however,
addition to those of the real suppliers in order to collect and justify contend that the lower court had no basis for inding that, when the
such service charge. action was commenced, DALCO was insolvent for purposes related
to Article 1198, paragraph 1 of the Civil Code. We ind, however,
Taking into account the above circumstances together with the fact that the inding of the trial court is suf iciently supported by the
that DAMCO was a stockholder and CONNELL was not only a evidence, particularly the resolution marked as Exhibit K which
stockholder but the general agent of DALCO, their claim to be the shows that on December 16, 1952 - in the words of the Chairman of
suppliers of the "after acquired properties" would seem to be the Board - DALCO was "without funds, neither does it expect to
preposterous. The most that can be claimed on the basis of the have any funds in the foreseeable future" (p. 64, record on appeal).
evidence is that DAMCO and CONNELL probably inanced some of
the purchases. But if DALCO still owes them any amount in this The remaining issues, namely, whether or not the proceeds
connection, it is clear that, as inanciers, they can not claim any right obtained from the sale of the "after acquired properties" should
over the "after acquired properties" superior to the lien constituted have been awarded exclusively to the plaintiffs or to DAMCO and
thereon by virtue of the deeds of mortgage under foreclosure. CONNELL, and if in law they should be distributed among said
Indeed, the execution of the rescission of sales mentioned parties, whether or not the distribution should be pro-rata or
heretofore appears to be but a desperate attempt to better or otherwise; whether or not plaintiffs are entitled to damages; and,
improve DAMCO and CONNELL's position by enabling them to lastly, whether or not the expenses incidental to the Receivership
assume the role of "unpaid suppliers" and thus claim a vendor's lien should be borne by all the parties on a pro-rata basis or exclusively
over the "after acquired properties". The attempt, of course, is by one or some of them are of a secondary nature as they are
utterly ineffectual, not only because they are not the "unpaid already impliedly resolved by what has been said heretofore.
sellers" they claim to be but also because there is abundant
evidence in the record showing that both DAMCO and CONNELL As regard the proceeds obtained from the sale of the "after acquired
had known and admitted from the beginning that the "after properties" and the "undebated properties", it is clear, in view of
acquired properties" of DALCO were meant to be included in the our opinion sustaining the validity of the mortgages in relation
irst and second mortgages under foreclosure. thereto, that said proceeds should be awarded exclusively to the
plaintiffs in payment of the money obligations secured by the
The claim that Belden, of ATLANTIC, had given his consent to the mortgages under foreclosure.
rescission, expressly or otherwise, is of no consequence and does
not make the rescission valid and legally effective. It must be stated On the question of plaintiffs right to recover damages from the
clearly, however, in justice to Belden, that, as a member of the Board defendants, the law (Articles 1313 and 1314 of the New Civil Code)
of Directors of DALCO, he opposed the resolution of December 16, provides that creditors are protected in cases of contracts intended
1952 passed by said Board and the subsequent rescission of the to defraud them, and that any third person who induces another to
sales. violate his contract shall be liable for damages to the other
contracting party. Similar liability is demandable under Arts. 20
Finally, defendants claim that the action to foreclose the mortgages and 21 - which may be given retroactive effect (Arts. 2252-53) - or
iled on February 12, 1953 was premature because the promissory under Arts. 1902 and 2176 of the Old Civil Code.
note sued upon did not fall due until April 1 of the same year,
concluding from this that, when the action was commenced, the The facts of this case, as stated heretofore, clearly show that DALCO
plaintiffs had no cause of action. Upon this question the lower court and DAMCO, after failing to pay the ifth promissory note upon its
says the following in the appealed judgment: maturity, conspired jointly with CONNELL to violate the provisions
of the fourth paragraph of the mortgages under foreclosure by
"The other is the defense of prematurity of the causes of action in attempting to defeat plaintiffs' mortgage lien on the "after acquired
that plaintiffs as a matter of grace, conceded an extension of time to properties". As a result, the plaintiffs had to go to court to protect
pay up to 1 April, 1953 while the action was iled on 12 February, their rights thus jeopardized. Defendants' liability for damages is
1953, but as to this, the Court taking it that there is absolutely no therefore clear.
debate that Dahican Lumber Co., was insolvent as of the date of the
iling of the complaint, it should follow that the debtor thereby lost However, the measure of the damages suffered by the plaintiffs is
the bene it to the period, not what the latter claim, namely, the difference between the alleged
total obligation secured by the mortgages amounting to around
‘. . . unless he gives a guaranty or security for the debt . . .' (Art. 1198, P1,200,000.00, plus the stipulated interest and attorney's fees, on
New Civil Code); the one hand, and the proceeds obtained from the sale of the "after
acquired properties", and of those that were not claimed neither by
DAMCO nor CONNELL, on the other. Considering that the sale of the


real properties subject to the mortgages under foreclosure has not "The irst steel tower is located in South Tatalon, Españ a Extension,
been effected, and considering further the lack of evidence showing Quezon City, The indings were as follows: the ground around one of
that the true value of all the properties already sold was not the four posts was excavated to a depth of about eight (8) feet, with
realized because their sale was under stress, We feel that We do not an opening of about one (1) meter in diameter, decreased to about a
have before Us the true elements or factors that should determine quarter1 of a meter as it went deeper until it reached the bottom of
the amount of damages that plaintiffs are entitled to recover from the post; at the bottom of the post were two parallel steel bars
defendants. It is, however, our considered opinion that, upon the attached to the leg by means of bolts; the tower proper was
facts established, all the expenses of the Receivership, which was attached to the leg by three bolts; with two. cross metals to prevent
deemed necessary to safeguard the rights of the plaintiffs, should be mobility; there was no cement foundation but there was adobe
borne by all the defendants, jointly and severally, in the same stone underneath; as the bottom of the excavation was covered with
manner that all of them should pay to the plaintiffs, jointly and water about three inches high, it could not be determined with
severally, the attorney's fees awarded in the appealed judgment. certainty as to whether said adobe stone was placed purposely or
nofcf as the place abounds with this kind of stone; and the tower
In consonance with the portion of this decision concerning the carried ive high voltage wires without caver or any insulating
damages that the plaintiffs are entitled to recover from the materials,
defendants, the record of this case shall be remanded below for the
corresponding proceedings. The second tower inspected was located in Kamuning Road, K-F,
Quezon City, on land covered owned by the petitioner
MODIFIED AS ABOVE INDICATED, the appealed judgment is approximately more than one kilometer from the irst tower. As in
af irmed in all other respects. With costs. the irst tower, the ground around one of the four legs was
Concepcion, C.J., Reyes, J.B.L., Regala, Makalintal, Bengzon, J.P., excavated from seven to eight (8) feet and one and a half (1-½)
Zaldivar, Sanchez, and Castro, JJ., concur. meters wide. There being very little water at the bottom, it was seen
that there was no concrete foundation, but there was soft adobe
Board of Assessment Appeals, QC vs beneath. The leg was likewise provided with two parallel steel bars
bolted to a square metal frame also bolted to each corner. Like the
Meralco, G. R. No. L-15334, January 31, irst one, the second tower is made up of metal rods joined together
1964 by means of bolts, so that by unscrewing the bolts, the tower could
119 Phil. 328 be dismantled and reassembled.
G. R. No. L-15334, January 31, 1964 The third tower examined is located along Kamias Road, Quezon
City. As in the irst two towers given above, the ground around the
BOARD OF ASSESSMENT APPEALS, ET AL., PETITIONERS, VS. two legs of the third tower was excavated to a depth about two or
MANILA ELECTRIC COMPANY, RESPONDENT. three inches beyond the outside level of the steel bar foundation. It
was found that there was no concrete foundation. Like the two
DECISION previous ones, the bottom arrangement of the legs thereof were
found to be resting on soft adobe, which, probably due to high
PAREDES, J.: humidity, looks like mud or clay. It was also found that the square
metal frame supporting the legs' were not attached to any material
From the stipulation of facts and evidence adduced during the or foundation.
hearing, the following appear:
On October 20, 1902, the Philippine Commission enacted Act No. On November 15, 1955, petitioner City Assessor of Quezon City
484 which authorized the Municipal Board of Manila to grant a declared the aforesaid steel towers for real property tax under Tax
franchise to construct, maintain and operate an electric street Declaration Nos. 31992 and 15549. After denying respondent's
railway and electric light, heat and power system in the City of petition to cancel these declarations, an appeal was taken by
Manila and its suburbs to the person or persons making the Most respondent to the Board of Assessment Appeals of Quezon City,
favorable bid. Charles M. Swift was awarded the said franchise on which required respondent to pay the amount of P11,651.86 as real
March 1903, the terms and conditions of which were embodied in property tax on the said steel towers for the years 1952 to 1956.
Ordinance No. 44 approved on March 24, 1903. Respondent Manila Respondent paid the amount under protest, and iled a petition for
Electric Co. (Meralco for short), became the transferee and owner of review in the Court of Tax Appeals (CTA for short) which rendered a
the franchise. decision on December 29, 1958, ordering the cancellation of the
said tax declarations and the petitioner City Treasurer of .Quezon
Meralco's electric power is generated by its hydro-electric plant City to refund to the respondent the sum of P11,651,86. The motion
located at Botocan Falls, Laguna and is transmitted to the City of for reconsideration having been denied, on April 22, 1959, the
Manila by means of electric transmission wires, running from the instant petition for review was iled:
province of Laguna to the said City. These electric transmission
wires which carry high voltage current, are fastened to insulators In upholding the cause of respondents, the CTA held that: (1) the
attached on steel towers constructed by respondent at intervals, steel towers come within the term "poles" which are declared
from its hydro-electric plant in the province of Laguna to the City of exempt from taxes under part II paragraph 9 of respondent's
Manila. The respondent Meralco has constructed 40 of these steel franchise; (2) the steel towers are personal properties and are not
towers within Quezon City, on land belonging to it. A photograph of subject to real property tax and (3) the City Treasurer of Quezon
one of these steel towers is attached to the petition for review, City is held responsible for the refund of the amount paid. These are
marked Annex A. Three steel towers were inspected by the lower assigned as errors by the petitioner in the brief.
court and the parties and the following were the descriptions given
thereof by said court: The tax exemption privilege of the petitioner is quoted hereunder:


two metal pieces being connected with criss-cross iron running

"Par. 9, The grantee shall be liable to pay the same taxes upon its from the bottom to the top, constructed like ladder and loaded with
real estate, buildings, plant (not including poles, wires, high voltage electricity. In form and structure, they are like the steel
transformers, and insulators), machinery and personal property as towers in question. (Salt River Valley Users' Ass'n. vs. Compton. 8 p.
other persons are or may be hereafter required by law to pay. * * * 2nd. 249-250.)
Said percentage shall be due and payable at the times stated in
paragraph nineteen of Part One hereof, * * * and shall be in lieu of all The term "poles" was used to denote the steel towers of an electric
taxes and assessments of whatsoever nature, and by whatsoever company engaged in the generation of hydro-electric power and
authority upon the privileges, earnings, income, franchise, and transmitting the power generated from its plant to the tower of
poles, wires, transformers, and insulators of the grantee from Oxford and City of Waterbury. These steel towers are about 15 feet
"which taxes and assessments the grantee is hereby expressly square at the base and extended to a height oil about 35 feet to a
exempted." (Par. 9, Part Two, Act No. 484, Respondent's Franchise; point, and are embedded in cement foundations sunk in the earth,
italics supplied.) the top of which extends above the surface of the soil in the tower of
Oxford, and to the towers are attached insulators, arms, and other
The word "Pole" means "a long, comparatively slender usually equipment capable of carrying wires for the transmission of electric
cylindrical piece of wood or timber, as typically, the stem of a small power (Connecticut Light and Power Co. vs. Oxford 101 Conn. 383,
tree stripped of its branches; also, by extension, a similar typically 126 Atl. p. 1).
cylindrical piece or object of metal or the like". The term also refers
to "an upright standard to the top of which something is af ixed or In a case, the defendant admitted that the structure on which a
by which something is supported; as a dovecote set on a pole; certain person met his death was built for the purpose of
telegraph poles; a tent pole; sometimes, speci ically, a vessel's mast." supporting a transmission wire used for carrying high-tension
(Webster's New International dictionary, 2nd Ed. p. 1907.) Along- electric power, but claimed that the steel towers on which it was
the streets, in the City of Manila, may be seen cylindrical metal carried were so large that their wire took its structure out of the
poles, cubical concrete poles, and poles of the PLDT Co. which are de inition of a pole line. It was held that in de ining the word pole,
made of two steel bars joined together by an interlacing metal rod. one should not be governed by the wire or material of the support
They are called "poles" notwithstanding the fact that they are not used, but was considering the danger from any elevated wire
made of wood. It must be noted from paragraph 9, above quoted, carrying electric current, and that regardless of the size or material
that the concept of the "poles" for which exemption is granted, is wire of its individual members, any continuous series of structures
not determined by their place or location, nor by the character of intended and used solely or primarily for the purpose of supporting
the electric current it carries, nor the material or form of which it is "wires carrying electric currents is a pole line (Inspiration
made, but the use to which they are dedicated. In accordance with Consolidation Cooper Co. vs. Bryan, 252 p. 1016).
the de initions, a pole is not restricted to a long cylindrical piece of
wood or metal, but includes "upright standards to the top of which It is evident, therefore, that the word "poles", as used in Act No. 484
something is af ixed or by which something is supported." As and incorporated in the petitioner's franchise, should not be given a
heretofore described, respondent's steel supports consist of a restrictive and narrow interpretation, is to defeat the very object for
framework of four steel bars or strips which are bound by steel which the franchise was granted. The poles as contemplated
cross-arms atop of which are cross-arms supporting ive high thereon, should be understood and taken as a part of the electric
voltage transmission wires (See Annex A) and their sole function is power system of the respondent Meralco, for the conveyance of
to support or carry such wires. electric current from the source thereof to its consumers. If the
respondent would be required to employ "wooden poles" or
The conclusion of the CTA that the steel supports in question are "rounded poles" as it used to do ifty years back, then one should
embraced in the term "poles" is not a novelty. Several courts of last admit that the Philippines is one century behind the age of space. It
resort in the United States have called these steel supports "steel should also be conceded by now that steel towers, like the ones in
towers", and they have denominated these steel supports or towers, question, for obvious reasons, can better effectuate the purposes for
as electric poles. In their decisions the words "towers" and "poles" which the respondent's franchise was granted.
were used interchangeably, and it is well understood in that
jurisdiction that a transmission tower or pole means the same Granting for the purpose of argument that the steel supports or
thing. towers in question are not embraced within the term poles, the
logical question posited is whether they constitute real properties,
In a proceeding to condemn land for the use of electric power wires, so that they can be subject to a real property tax. The tax law does
in which the law provided that wires shall be constructed upon not provide for a de inition of real property; but Article 415 of the
suitable poles, this term was construed to mean either wood or Civil Code does, by stating the following are immovable property :
metal poles and in view of the land being subject to over low, and
the necessary carrying of numerous wires and the distance between " (1) Land, buildings, roads, and constructions of all kinds adhered
poles, the statute was interpreted to include towers as poles. to the soil;
(Steamons vs. Dallas Power& Light Co. (Text) 212 S.W. 222, 224;
32-A.Words and Phrases p. 365.) * * * * * * *
The term "poles" was also used to denominate the steel supports or (3) Everything attached to an immovable in a ixed manner, in such
towers used by an association to convey its electric power furnished a way that it cannot be separated therefrom without breaking the
to subscribers and members, constructed for the purpose of material or deterioration of the object;
fastening high voltage and dangerous electric wires alongside public
highways. The steel supports or towers were made of iron or other * * * * * * *
metals consisting of two pieces running from the ground up some
thirty feet high, being wider at the bottom than at the top, the said


(5) Machinery, receptacles, instruments or implements intended by York, seeking a peremptory mandamus to compel the respondent to
the owner of the tenement for an industry or works which may be record in the proper register a document purporting to be a chattel
carried in a building- or on a piece of land, and which, tends directly mortgage executed in the City of Manila by Gervasia de la Rosa, Vda.
to meet the needs of the said industry or works;" de Vera, in favor of the Standard Oil Company of New York.
It appears from the petition that on November 27, 1922, Gervasia
* * * * * * * de la Rosa, Vda. de Vera, was the lessee of a parcel of land situated in
the City of Manila and owner of the house of strong materials built
The steel towers or supports in question, do not come within the thereon, upon which date she executed a document in the form of a
objects mentioned in paragraph 1, because they do not constitute chattel mortgage, purporting to convey to the petitioner by way of
buildings or constructions adhered to the soil. They are not mortgage both the leasehold interest in said lot and the building
constructions. analogous to buildings nor adhering to the soil. As which stands thereon.
per description, given by the lower court, they are removable and
merely attached to a square metal frame by means of bolts, which The clauses in said document describing the property intended to
when unscrewed could easily be dismantled and moved from place be thus mortgaged are expressed in the following words:
to place. They can not be included under paragraph 3, as they are
not attached to an immovable in a ixed manner, and they can be "Now, therefore, the mortgagor hereby conveys and transfers to the
separated without breaking the material or causing deterioration mortgagee, by way of mortgage, the following described personal
upon the object to which they are attached. Each of these steel property, situated in the City of Manila, and now in possession of
towers or supports consists of steel bars or metal strips, joined the mortgagor, to wit:
together by means of bolts, which can be assembled by unscrewing
the bolts and reassembled by screwing the same. These steel towers "(1) All of the right, title, and interest of the mortgagor in and to the
or supports do not also fall under paragraph 5, for they are not contract of lease hereinabove referred to, and in and to the premises
machineries or receptacles, instruments or implements, and even if the subject of the said lease;
they were, they are not intended for industry or works on the land.
Petitioner is not engaged in an industry or works on the land in "(2) The building, property of the mortgagor, situated on the
which the steel supports or towers are constructed. aforesaid leased premises."
It is inally contended that the CTA erred in ordering the City After said document had been duly acknowledged and delivered,
Treasurer of Quezon City to refund the sum of P11,651.86, despite the petitioner caused the same to be presented to the respondent,
the fact that Quezon City is not a party to the case. It is argued that Joaquin Jaramillo, as register of deeds of the City of Manila, for the
as the City Treasurer is not the real party in interest, but Quezon purpose of having the same recorded in the book of record of
City, which was not made a party to the suit, notwithstanding its chattel mortgages. Upon examination of the instrument, the
capacity to sue and be sued, he should not be ordered to effect the respondent was of the opinion that it was not a chattel mortgage,
refund. This question has not been raised in the court below and, for the reason that the interests therein mortgaged did not appear
therefore, it cannot properly be raised for the irst time on appeal. to be personal property, within the meaning of the Chattel Mortgage
The herein petitioner is indulging in legal technicalities and niceties Law, and registration was refused on this ground only.
which do not help him any; for, factually, it was he (City Treasurer)
who had insisted that respondent herein pay the real estate taxes, We are of the opinion that the position taken by the respondent is
which respondent paid under protest. Having acted in his of icial untenable; and it is his duty to accept the proper fee and place the
capacity as City Treasurer of Quezon City, he would surely know instrument on record. The duties of a register of deeds in respect to
what to do, under the circumstances. the registration of chattel mortgages are of a purely ministerial
character; and no provision of law can be cited which confers upon
In view hereof, the decision appealed from is hereby af irmed, with him any judicial or quasi-judicial power to determine the nature of
costs against the petitioners. any document of which registration is sought as a chattel mortgage.
Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, The original provisions touching this matter are contained in
J. B. L., Barrera and Regala, JJ., concur. section 15 of the Chattel Mortgage Law (Act No. 1508), as amended
by Act No. 2496; but these have been transferred to section 198 of
Standard Oil Co. of New York vs the Administrative Code, where they are now found. There is
nothing in any of these provisions conferring upon the register of
Jaramillo, G.R. No. 20329, March 16, 1923 deeds any authority whatever in respect to the "quali ication," as
44 Phil. 630
the term is used in Spanish law, of chattel mortgages. His duties in
respect to such instruments are ministerial only. The ef icacy of the
G.R. No. 20329, March 16, 1923
act of recording a chattel mortgage consists in the fact that it
operates as constructive notice of the existence of the contract, and
THE STANDARD OIL COMPANY OF NEW YORK, PETITIONER, VS.
the legal effects of the contract must be discovered in the
JOAQUIN JARAMILLO, AS REGISTER OF DEEDS OF THE CITY OF
instrument itself in relation with the fact of notice. Registration
MANILA, RESPONDENT.
adds nothing to the instrument, considered as a source of title, and
affects nobody's rights except as a species of notice.
DECISION
Articles 334 and 335 of the Civil Code supply no absolute criterion
STREET, J.:
for discriminating between real property and personal property for
purposes of the application of the Chattel Mortgage Law. Those
This cause is before us upon demurrer interposed by the
articles state rules which, considered as a general doctrine, are law
respondent, Joaquin Jaramillo, register of deeds of the City of
in this jurisdiction; but it must not be forgotten that under given
Manila, to an original petition of the Standard Oil Company of New


conditions property may have character different from that imputed Serg’s Products, Inc. vs PCI Leasing and
to it in said articles. It is undeniable that the parties to a contract
may by agreement treat as personal property that which by nature Finance, Inc.,
393 Phil. 158
would be real property; and it is a familiar phenomenon to see
things classed as real property for purposes of taxation which on
G.R. No. 137705, August 22, 2000
general principle might be considered personal property. Other
situations are constantly arising, and from time to time are
SERG’S PRODUCTS, INC., AND SERGIO T. GOQUIOLAY, PETITIONERS,
presented to this court, in which the proper classi ication of one
VS. PCI LEASING AND FINANCE, INC., RESPONDENT.
thing or another as real or personal property may be said to be
doubtful.
DECISION
The point submitted to us in this case was determined en
PANGANIBAN, J.:
September 8, 1914, in an administrative ruling promulgated by the
Honorable James A. Ostrand, now a Justice of this Court, but acting
After agreeing to a contract stipulating that a real or immovable
at that time in the capacity of Judge of the fourth branch of the
property be considered as personal or movable, a party is estopped
Court of First Instance of the Ninth Judicial District, in the City of
from subsequently claiming otherwise. Hence, such property is a
Manila; and little of value can be here added to the observations
proper subject of a writ of replevin obtained by the other
contained in said ruling. We accordingly quote therefrom as follows:
contracting party.
The Case
"It is unnecessary here to determine whether or not the property
described in the document in question is real or personal; the
Before us is a Petition for Review on Certiorari assailing the January
discussion may be con ined to the point as to whether a register of
6, 1999 Decision[1] of the Court of Appeals (CA)[2] in CA-GR SP No.
deeds has authority to deny the registration of a document
47332 and its February 26, 1999 Resolution[3] denying
purporting to be a chattel mortgage and executed in the manner
reconsideration. The decretal portion of the CA Decision reads as
and form prescribed by the Chattel Mortgage Law."
follows:
Then, after quoting section 5 of the Chattel Mortgage Law (Act No.
1508), his Honor continued:
“WHEREFORE, premises considered, the assailed Order dated
February 18, 1998 and Resolution dated March 31, 1998 in Civil
"Based principally upon the provisions of section quoted the
Case No. Q-98-33500 are hereby AFFIRMED. The writ of
Attorney-General of the Philippine Islands, in an opinion dated
preliminary injunction issued on June 15, 1998 is hereby
August 11, 1909, held that a register of deeds has no authority to
LIFTED.”[4]
pass upon the capacity of the parties to a chattel mortgage which is
presented to him for record. A fortiori a register of deeds can have
In its February 18, 1998 Order,[5] the Regional Trial Court (RTC) of
no authority to pass upon the character of the property sought to be
Quezon City (Branch 218)[6] issued a Writ of Seizure.[7] The March
encumbered by a chattel mortgage. Of course, if thg mortgaged
18, 1998 Resolution[8] denied petitioners’ Motion for Special
property is real instead of personal the chattel mortgage would no
Protective Order, praying that the deputy sheriff be enjoined “from
doubt be held ineffective as against third parties, but this is a
seizing immobilized or other real properties in (petitioners’) factory
question to be determined by the courts of justice and not by the
in Cainta, Rizal and to return to their original place whatever
register of deeds."
immobilized machineries or equipments he may have removed.”[9]
In Leung Yee vs. Frank L. Strong Machinery Co. and Williamson (37
The Facts
Phil., 644), this court held that where the interest conveyed is of the
nature of real property, the placing of the document on record in the
The undisputed facts are summarized by the Court of Appeals as
chattel mortgage register is a futile act; but that decision is not
follows:[10]
decisive of the question now before us, which has reference to the
function of the register of deeds in placing the document on record.
“On February 13, 1998, respondent PCI Leasing and Finance, Inc.
In the light of what has been said it becomes unnecessary for us to
(“PCI Leasing” for short) iled with the RTC-QC a complaint for [a]
pass upon the point whether the interests conveyed in the
sum of money (Annex ‘E’), with an application for a writ of replevin
instrument now in question are real or personal; and we declare it
docketed as Civil Case No. Q-98-33500.
to be the duty of the register of deeds to accept the estimate placed
upon the document by the petitioner and to register it, upon
“On March 6, 1998, upon an ex-parte application of PCI Leasing,
payment of the proper fee.
respondent judge issued a writ of replevin (Annex ‘B’) directing its
sheriff to seize and deliver the machineries and equipment to PCI
The demurrer is overruled; and unless within the period of ive days
Leasing after 5 days and upon the payment of the necessary
from the date of the noti ication hereof, the respondent shall
expenses.
interpose a suf icient answer to the petition, the writ of mandamus
will be issued, as prayed, but without costs. So ordered.
“On March 24, 1998, in implementation of said writ, the sheriff
Araullo, C.J., Malcolm, Avanceñ a, Ostrand, Johns, and Romualdez, JJ.,
proceeded to petitioner’s factory, seized one machinery with [the]
concur.
word that he [would] return for the other machineries.
“On March 25, 1998, petitioners iled a motion for special protective
order (Annex ‘C’), invoking the power of the court to control the


conduct of its of icers and amend and control its processes, praying of a writ of replevin. As a preliminary matter, the Court will also
for a directive for the sheriff to defer enforcement of the writ of address brie ly the procedural points raised by respondent.
replevin.
The Court’s Ruling
“This motion was opposed by PCI Leasing (Annex ‘F’), on the ground
that the properties [were] still personal and therefore still subject The Petition is not meritorious.
to seizure and a writ of replevin.
Preliminary Matter:Procedural Questions
“In their Reply, petitioners asserted that the properties sought to be
seized [were] immovable as de ined in Article 415 of the Civil Code, Respondent contends that the Petition failed to indicate expressly
the parties’ agreement to the contrary notwithstanding. They whether it was being iled under Rule 45 or Rule 65 of the Rules of
argued that to give effect to the agreement would be prejudicial to Court. It further alleges that the Petition erroneously impleaded
innocent third parties. They further stated that PCI Leasing [was] Judge Hilario Laqui as respondent.
estopped from treating these machineries as personal because the
contracts in which the alleged agreement [were] embodied [were] There is no question that the present recourse is under Rule 45.
totally sham and farcical. This conclusion inds support in the very title of the Petition, which
is “Petition for Review on Certiorari.”[13]
“On April 6, 1998, the sheriff again sought to enforce the writ of
seizure and take possession of the remaining properties. He was While Judge Laqui should not have been impleaded as a
able to take two more, but was prevented by the workers from respondent,[14] substantial justice requires that such lapse by itself
taking the rest. should not warrant the dismissal of the present Petition. In this
light, the Court deems it proper to remove, motu proprio, the name
“On April 7, 1998, they went to [the CA] via an original action for of Judge Laqui from the caption of the present case.
certiorari.”
Main Issue: Nature of the Subject Machinery
Ruling of the Court of Appeals
Petitioners contend that the subject machines used in their factory
Citing the Agreement of the parties, the appellate court held that the were not proper subjects of the Writ issued by the RTC, because
subject machines were personal property, and that they had only they were in fact real property. Serious policy considerations, they
been leased, not owned, by petitioners. It also ruled that the “words argue, militate against a contrary characterization.
of the contract are clear and leave no doubt upon the true intention
of the contracting parties.” Observing that Petitioner Goquiolay was Rule 60 of the Rules of Court provides that writs of replevin are
an experienced businessman who was “not unfamiliar with the issued for the recovery of personal property only.[15] Section 3
ways of the trade,” it ruled that he “should have realized the import thereof reads:
of the document he signed.” The CA further held:
“SEC. 3. Order. - Upon the iling of such af idavit and approval of the
“Furthermore, to accord merit to this petition would be to preempt bond, the court shall issue an order and the corresponding writ of
the trial court in ruling upon the case below, since the merits of the replevin describing the personal property alleged to be wrongfully
whole matter are laid down before us via a petition whose sole detained and requiring the sheriff forthwith to take such property
purpose is to inquire upon the existence of a grave abuse of into his custody.”
discretion on the part of the [RTC] in issuing the assailed Order and
Resolution. The issues raised herein are proper subjects of a On the other hand, Article 415 of the Civil Code enumerates
full-blown trial, necessitating presentation of evidence by both immovable or real property as follows:
parties. The contract is being enforced by one, and [its] validity is
attacked by the other – a matter x x x which respondent court is in
the best position to determine.” “ART. 415. The following are immovable property:
Hence, this Petition.[11] x x x....................................x x x....................................x x x
The Issues (5) Machinery, receptacles, instruments or implements intended by

the owner of the tenement for an industry or works which may be
In their Memorandum, petitioners submit the following issues for carried on in a building or on a piece of land, and which tend
our consideration: directly to meet the needs of the said industry or works;
x x x....................................x x x....................................x x x”
“A. Whether or not the machineries purchased and imported by
SERG’S became real property by virtue of immobilization. In the present case, the machines that were the subjects of the Writ
of Seizure were placed by petitioners in the factory built on their
B. Whether or not the contract between the parties is a loan or a own land. Indisputably, they were essential and principal elements
lease.”[12] of their chocolate-making industry. Hence, although each of them
was movable or personal property on its own, all of them have
In the main, the Court will resolve whether the said machines are become “immobilized by destination because they are essential and
personal, not immovable, property which may be a proper subject principal elements in the industry.”[16] In that sense, petitioners


are correct in arguing that the said machines are real, not personal, concerned.[22] Hence, while the parties are bound by the
property pursuant to Article 415 (5) of the Civil Code.[17] Agreement, third persons acting in good faith are not affected by its
stipulation characterizing the subject machinery as personal.[23] In
Be that as it may, we disagree with the submission of the petitioners any event, there is no showing that any speci ic third party would be
that the said machines are not proper subjects of the Writ of adversely affected.
Seizure.
Validity of the Lease Agreement
The Court has held that contracting parties may validly stipulate
that a real property be considered as personal.[18] After agreeing to In their Memorandum, petitioners contend that the Agreement is a
such stipulation, they are consequently estopped from claiming loan and not a lease.[24] Submitting documents supposedly
otherwise. Under the principle of estoppel, a party to a contract is showing that they own the subject machines, petitioners also argue
ordinarily precluded from denying the truth of any material fact in their Petition that the Agreement suffers from “intrinsic
found therein. ambiguity which places in serious doubt the intention of the parties
and the validity of the lease agreement itself.”[25] In their Reply to
Hence, in Tumalad v. Vicencio,[19] the Court upheld the intention of respondent’s Comment, they further allege that the Agreement is
the parties to treat a house as a personal property because it had invalid.[26]
been made the subject of a chattel mortgage. The Court ruled:
These arguments are unconvincing. The validity and the nature of
the contract are the lis mota of the civil action pending before the
“x x x. Although there is no speci ic statement referring to the RTC. A resolution of these questions, therefore, is effectively a
subject house as personal property, yet by ceding, selling or resolution of the merits of the case. Hence, they should be threshed
transferring a property by way of chattel mortgage out in the trial, not in the proceedings involving the issuance of the
defendants-appellants could only have meant to convey the house Writ of Seizure.
as chattel, or at least, intended to treat the same as such, so that
they should not now be allowed to make an inconsistent stand by Indeed, in La Tondeñ a Distillers v. CA,[27] the Court explained that
claiming otherwise.” the policy under Rule 60 was that questions involving title to the
subject property – questions which petitioners are now raising --
Applying Tumalad, the Court in Makati Leasing and Finance Corp. v. should be determined in the trial. In that case, the Court noted that
Wearever Textile Mills[20] also held that the machinery used in a the remedy of defendants under Rule 60 was either to post a
factory and essential to the industry, as in the present case, was a counter-bond or to question the suf iciency of the plaintiff’s bond.
proper subject of a writ of replevin because it was treated as They were not allowed, however, to invoke the title to the subject
personal property in a contract. Pertinent portions of the Court’s property. The Court ruled:
ruling are reproduced hereunder:
“In other words, the law does not allow the defendant to ile a
“x x x. If a house of strong materials, like what was involved in the motion to dissolve or discharge the writ of seizure (or delivery) on
above Tumalad case, may be considered as personal property for ground of insuf iciency of the complaint or of the grounds relied
purposes of executing a chattel mortgage thereon as long as the upon therefor, as in proceedings on preliminary attachment or
parties to the contract so agree and no innocent third party will be injunction, and thereby put at issue the matter of the title or right of
prejudiced thereby, there is absolutely no reason why a machinery, possession over the speci ic chattel being replevied, the policy
which is movable in its nature and becomes immobilized only by apparently being that said matter should be ventilated and
destination or purpose, may not be likewise treated as such. This is determined only at the trial on the merits.”[28]
really because one who has so agreed is estopped from denying the
existence of the chattel mortgage.” Besides, these questions require a determination of facts and a
presentation of evidence, both of which have no place in a petition
In the present case, the Lease Agreement clearly provides that the for certiorari in the CA under Rule 65 or in a petition for review in
machines in question are to be considered as personal property. this Court under Rule 45.[29]
Speci ically, Section 12.1 of the Agreement reads as follows:[21]
Reliance on the Lease Agreement
“12.1 The PROPERTY is, and shall at all times be and remain, It should be pointed out that the Court in this case may rely on the
personal property notwithstanding that the PROPERTY or any part Lease Agreement, for nothing on record shows that it has been
thereof may now be, or hereafter become, in any manner af ixed or nulli ied or annulled. In fact, petitioners assailed it irst only in the
attached to or embedded in, or permanently resting upon, real RTC proceedings, which had ironically been instituted by
property or any building thereon, or attached in any manner to respondent. Accordingly, it must be presumed valid and binding as
what is permanent.” the law between the parties.
Clearly then, petitioners are estopped from denying the Makati Leasing and Finance Corporation[30] is also instructive on
characterization of the subject machines as personal property. this point. In that case, the Deed of Chattel Mortgage, which
Under the circumstances, they are proper subjects of the Writ of characterized the subject machinery as personal property, was also
Seizure. assailed because respondent had allegedly been required “to sign a
printed form of chattel mortgage which was in a blank form at the
It should be stressed, however, that our holding -- that the machines time of signing.” The Court rejected the argument and relied on the
should be deemed personal property pursuant to the Lease Deed, ruling as follows:
Agreement – is good only insofar as the contracting parties are


“x x x. Moreover, even granting that the charge is true, such fact registered with the Register of Deeds of Manila on December 19,
alone does not render a contract void ab initio, but can only be a 1948; that on February 10, 1953, the mortgaged house was sold at
ground for rendering said contract voidable, or annullable pursuant public auction to satisfy the indebtedness to Claudia B. Vda. de Uy
to Article 1390 of the new Civil Code, by a proper action in court. Kim, and the house was sold to Claudia B. Vda. de Uy Kim in the said
There is nothing on record to show that the mortgage has been foreclosure proceedings; that on March 22, 1954, Claudia B. Vda. de
annulled. Neither is it disclosed that steps were taken to nullify the Uy Kim sold the same house to her co-plaintiff, Salvador Piansay for
same. x x x” the sum of P5,000.00; that on November 22, 1949, defendant
Conrado S. David mortgaged the said house to Marcos Mangubat,
Alleged Injustice Committed on the Part of Petitioners and on March 1, 1956, Marcos Mangubat iled a complaint against
Conrado S. David, Civil Case No. 29078, in the Court of First Instance
Petitioners contend that “if the Court allows these machineries to be of Manila, for the collection of the loan of P2,000; that on March 24,
seized, then its workers would be out of work and thrown into the 1956, the complaint was amended to include the plaintiffs herein
streets.”[31] They also allege that the seizure would nullify all Salvador Piansay and Claudia B. Vda. de Uy Kim as party defendants
efforts to rehabilitate the corporation. and praying that auction sale executed by the Sheriff on February
10, 1953, and the deed of absolute sale executed by Claudia B. Vda.
Petitioners’ arguments do not preclude the implementation of the de Uy Kim in favor of Salvador Piansay be annulled; that decision
Writ. As earlier discussed, law and jurisprudence support its was rendered in Civil Case No. 29078 ordering Conrado S. David to
propriety. Verily, the above-mentioned consequences, if they come pay the plaintiff the sum of P2,000, damages and attorney's fees,
true, should not be blamed on this Court, but on the petitioners for and dismissing the complaint with respect to Claudia B. Vda. de Uy
failing to avail themselves of the remedy under Section 5 of Rule 60, Kim, Leonardo Uy Kim and Salvador Piansay; that upon appeal, the
which allows the iling of a counter-bond. The provision states: Court of Appeals af irmed the decision but setting aside the award
of damages in favor of Claudia B. Vda. de Uy Kim; that in the
execution of Civil Case No. 29078 which was af irmed by the Court
“SEC. 5. Return of property. - If the adverse party objects to the of Appeals in CA-G. R. No. 21797-R, the house which had been
suf iciency of the applicant’s bond, or of the surety or sureties bought by Uy Kim at the foreclosure proceedings and sold by her to
thereon, he cannot immediately require the return of the property, Salvador Piansay was levied upon at the instance of the defendant
but if he does not so object, he may, at any time before the delivery Marcos Mangubat; that to prevent the sale at public auction of the
of the property to the applicant, require the return thereof, by iling house here in question, the plaintiffs herein iled a petition for
with the court where the action is pending a bond executed to the certiorari and mandamus with preliminary injunction in the Court
applicant, in double the value of the property as stated in the of Appeals, CA-G. R. No. 28974-R, entitled Claudia B. Vda. de Uy Kim
applicant’s af idavit for the delivery thereof to the applicant, if such and Salvador Piansay versus Hon. Judge Jesus Y. Perez, et al.; that
delivery be adjudged, and for the payment of such sum to him as acting upon the said petition, the Court of Appeals in its order of
may be recovered against the adverse party, and by serving a copy April 28, 1961, denied the petition to lift or discharge the writ of
bond on the applicant.” execution."
WHEREFORE, the Petition is DENIED and the assailed Decision of Thereupon, or on July 31, 1961, Piansay and Mrs. Uy Kim,
the Court of Appeals AFFIRMED. Costs against petitioners. hereinafter referred to as the plaintiffs, instituted the present
action, which was docketed as Civil Case No. 47664 of the Court of
SO ORDERED. First Instance of Manila, against David and Mangubat, hereinafter
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur. referred to as the defendants. In their complaint plaintiffs, after
averring the foregoing facts, allege that, in the proceedings for the
Piansay vs David, G.R. No. L-19468, execution of the decision in Civil Case No. 29078, David demanded
from Piansay the payment of rentals for the use and occupation of
October 30, 1964 the house aforementioned, which, Piansay claims, is his property,
120 Phil. 1014
and that the defendants are threatening to cause said house to be
levied upon and sold at public auction in violation of the alleged
G.R. No. L-19468, October 30, 1964
rights of the plaintiffs. Accordingly, plaintiffs prayed that a writ of
preliminary injunction to restrain said levy and sale at public
SALVADOR PIANSAY AND CLAUDIA B. VDA. DE UY KIM, PLAINTIFFS
auction be issued and that, after appropriate proceedings, judgment
AND APPELLANTS, VS. CONRADO S. DAVID AND MARCOS
be rendered declaring that Piansay is the true and lawful owner of
MANGUBAT, DEFENDANTS AND APPELLEES.
said house, sentencing the defendants to pay damages and making
the preliminary injunction permanent.
DECISION
Mangubat moved to dismiss said complaint, upon the theory that
CONCEPCION, J.:
the same is barred by the principle of res judicata and that plaintiffs
have no personality to bring this action or to question the levy upon
This is an appeal from an order of the Court of First Instance of
the house in question, because they have no interest therein. After
Manila in Civil Case No. 47664 thereof. The pertinent facts are set
due hearing the lower court issued the order appealed from
forth in said order from which we quote:
granting said motion and dismissing the complaint, with costs
against the plaintiffs. A reconsideration of said order having been
"It appears from the complaint that on December 11, 1943,
denied, plaintiffs interposed the present appeal directly to this
defendant herein Conrado S. David received a loan of P3,000 with
Court, only questions of law being raised in the appeal, namely: (1)
interest at 12% per annum from Claudia B. Vda. de Uy Kim, one of
applicability of the principle of res judicata; and (2) valility of the
the plaintiffs, and to secure the payment of the same, Conrado S.
chattel mortgage constituted in favor of Mrs. Uy Kim.
David executed a chattel mortgage on a house situated at 1259
Sande Street, Tondo, Manila; that the chattel mortgage was


With reference to the irst question, it should be noted that in case B. de Uy Kim, the said house continues to be the property of
CA-G.R. No. 21797-R, the Court of Appeals af irmed the decision in defendant Conrado S. David and can therefore be executed by the
Case No. 29078 of the Court of First Instance of Manila, stating: plaintiff to satisfy the judgment rendered against said defendant
David in favor of the plaintiff. The mere fact that the dispositive part
of the decision states that the complaint is dismissed with respect to
"In the case of Ladera, et al. vs. Hodges, et al. (CA-G. R. No. 8027-R, defendants Claudia B. de Uy Kim, Leonardo Uy Kim and Salvador
promulgated Sept. 23, 1952) this Court, thru Justice J. B. L. Reyes, Piansay is of no moment because the chattel mortgage executed by
said, among others: David in favor of Claudia B. de Uy Kim might not be annulled but it
did not transmit any right from defendant David to Claudia B. de Uy
Kim. The house in question can therefore be levied upon because it
'Since it is a rule in our law that buildings and constructions are had remained the property of defendant David" (italics supplied);
regarded as mere accessories to the land (following the Roman
maxim omne qued solo inedi icatur solo credit) it is logical that said that a reconsideration of this order of February 4, 1961 having been
accessories should partake of the nature of the principal thing, denied by Judge Perez, on February 25, 1961, plaintiffs instituted
which is the land, forming, as they do, but a single object (res) with case CA-G.R. No. 28974-R of the Court of Appeals, for a writ of
it in contemplation of law.' certiorari and mandamus to annul said orders of Judge Perez and to
compel him to release said house from the aforementioned levy;
'* * * While it is true that said document was correspondingly and that on March 3, 1961, the Court of Appeals denied said petition
registered in the Chattel Mortgage Register of Rizal, this Act for certiorari and mandamus "insofar as it prays that the order of
produced no effect whatsoever for where the interest conveyed is in respondent Judge denying the lifting and discharge of the writ of
the nature of real property, the registration of the document in the execution be set aside and revoked".
registry of chattels is merely a futile act. Thus the registration of the
chattel mortgage of a building of strong materials produced no In other words, in Civil Case No. 29078 of the Court of First Instance
effect as far as the building is concerned (Leung Yee vs. Strong of Manila, Piansay assailed the right of Mangubat to levy execution
Machinery Co., 37 Phil. 644). Nor can we give any consideration to upon the house in question alleging that the same belongs to him,
that contention of the surety that it has acquired ownership over he having bought it from Mrs. Uy Kim, who had acquired it at the
the property in question by reason of the sale conducted by the auction sale held in connection with the extrajudicial foreclosure of
Provincial Sheriff of Rizal for as this court has aptly pronounced: the chattel mortgage constituted in her favor by David. This
pretense was, however, overruled by Judge Perez, who presided said
court, in its order of February 4, 1961, upon the theory that the
'A mortgage creditor who purchases real properties at an chattel mortgage and sale in favor of Mrs. Uy Kim had been annulled
extra-judicial foreclosure sale thereof by virtue of a chattel in the original decision in said case, as af irmed by the Court of
mortgage constituted in his favor, which mortgage has been Appeals in CA-G.R. No. 21797-R. Regardless of whether this theory
declared null and void with respect to said real properties, acquires is accurate or not, the fact is that said order became inal and
no right thereto by virtue of said sale'. (De la Riva vs. Ah Kee, 60 executory upon the denial of the petition for certiorari and
Phil. 899). mandamus, to annul the same, in CA-G.R. No. 28974-R of the Court
of Appeals. Hence, plaintiffs are not barred from asserting that the
"Thus Mrs. Uy Kim had no right to foreclose the alleged chattel aforementioned chattel mortgage and sale are valid.
mortgage constituted in her favor, because it was in reality a mere
contract of an unsecured loan. It follows that the Sheriff was not At any rate, regardless of the validity of a contract constituting a
authorized to sell the house as a result of the foreclosure of such chattel mortgage on a house, as between the parties to said contract
chattel mortgage. And as Mrs. Uy Kim could not have acquired the (Standard Oil Co. of N.Y. vs. Jaramillo, 44 Phil. 632-633), the same
house when the Sheriff sold it at public auction, she could not, in the cannot and does not bind third persons, who are not parties to the
same token, have sold it validly to Salvador Piansay. Conceding that aforementioned contract or their privies (Leung Yes vs. Strong
the contract of sale between Mrs. Uy Kim and Salvador Piansay was Machinery Co., 37 Phil. 644; Evangelista vs. Alto Surety, 103 Phil.,
of no effect, we cannot nevertheless set it aside upon instance of 401; Navarro vs. Pineda, G. R. No. L-18456, November 30, 1963). As
Mangubat because, as the court below opined, he is not a party a consequence, the sale of the house in question in the proceedings
thereto nor has he any interest in the subject matter therein, as it for the extra-judicial foreclosure of said chattel mortgage, is null and
was never sold or mortgaged to him" (italics supplied). void insofar as defendant Mangubat is concerned, and did not
confer upon Mrs. Uy Kim, as buyer in said sale, any dominical right
that, thereafter, the records of the case was remanded to the Court in and to said house (De la Riva vs. Ah Yee, 60 Phil. 800), so that she
of First Instance of Manila, which caused the corresponding writ of could not have transmitted to her assignee, plaintiff Piansay, any
execution to be issued; that upon the request of Mangubat, the such right as against defendant Mangubat. In short, plaintiffs have
house in question was levied upon; that Piansay iled with the trial no cause of action against the defendants herein.
court, presided over by Hon. Jesus Y. Perez, Judge, a motion to set
aside said levy; that this motion was denied by said court, in an Wherefore, the orders appealed from are hereby af irmed, with
order dated February 4, 1961, upon the following ground: costs against plaintiffs Salvador Piansay and Claudia B. Vda. de Uy
Kim. It is so ordered.
"Considering that the decision rendered by the Court of Appeals in Bengzon, C. J., Bautista Angelo, Reyes, J. B. L., Barrera, Paredes,
this case when the same was elevated to said Court recognizes that Dizon, Regala, Makalintal, Bengzon, J. P., and Zaldivar, JJ., concur.
defendant Claudia B. de Uy Lim did not acquire the house of
defendant Conrado S. David under the chattel mortgage executed by
the latter in favor of said defendant so that defendant Salvador
Piansay did not likewise acquire said house from defendant Claudia


Caltex Philippine, Inc. vs Board of "The underground gasoline tank is attached to the shed by the steel
pipe to the pump, so with the water tank it is connected also by a
Assessment Appeals, G.R. No. 50466, May steel pipe to the pavement, then to the electric motor which electric
31, 1982 motor is placed under the shed. So to say that the gasoline pumps,
199 Phil. 487 water pumps and underground tanks are outside of the service
station, and to consider only the building as the service station is
SECOND DIVISION grossly erroneous." (pp. 58-60, Rollo).
G.R. No. 50466, May 31, 1982 The said machines and equipment are loaned by Caltex to gas
station operators under an appropriate lease agreement or receipt.
CALTEX (PHILIPPINES) INC., PETITIONER, VS. CENTRAL BOARD OF It is stipulated in the lease contract that the operators, upon
ASSESSMENT APPEALS AND CITY ASSESSOR OF PASAY, demand, shall return to Caltex the machines and equipment in good
RESPONDENTS. condition as when received, ordinary wear and tear excepted.
DECISION The lessor of the land, where the gas station is located, does not
become the owner of the machines and equipment installed therein.
AQUINO, J.: Caltex retains the ownership thereof during the term of the lease.
This case is about the realty tax on machinery and equipment The city assessor of Pasay City characterized the said items of gas
installed by Caltex ( Philippines) Inc. in its gas stations located on station equipment and machinery as taxable realty. The realty tax
leased land. on said equipment amounts to P4 ,541.10 annually (p. 52, Rollo).
The machines and equipment consist of underground tanks, The city board of tax appeals ruled that they are personalty. The
elevated tank, elevated water tanks, water tanks, gasoline pumps, assessor appealed to the Central Board of Assessment Appeals.
computing pumps, water pumps, car washer, car hoists, truck
hoists, air compressors and tire lators. The city assessor described The Board, which was composed of Secretary of Finance Cesar
the said equipment and machinery in this manner: Virata as chairman, Acting Secretary of Justice Catalino Macaraig, Jr.
and Secretary of Local Government and Community Development
Jose Roñ o, held in its decision of June 3, 1977 that the said machines
"A gasoline service station is a piece of lot where a building or shed and equipment are real property within the meaning of sections
is erected, a water tank if there is any is placed in one corner of the 3(k) & (m) and 38 of the Real Property Tax Code, Presidential
lot, car hoists are placed in an adjacent shed, an air compressor is Decree No. 464, which took effect on June 1, 1974, and that the
attached in the wall of the shed or at the concrete wall fence. de initions of real property and personal property in articles 415
and 416 of the Civil Code are not applicable to this case.
"The controversial underground tank, depository of gasoline or
crude oil, is dug deep about six feet more or less, a few meters away The decision was reiterated by the Board (Minister Vicente Abad
from the shed. This is done to prevent con lagration because Santos took Macaraig's place) in its resolution of January 12, 1978,
gasoline and other combustible oil are very in lammable. denying Caltex's motion for reconsideration, a copy of which was
received by its lawyer on April 2, 1979.
"This underground tank is connected with a steel pipe to the
gasoline pump and the gasoline pump is commonly placed or On May 2, 1979 Caltex iled this certiorari petition wherein it
constructed under the shed. The footing of the pump is a cement prayed for the setting aside of the Board's decision and for a
pad and this cement pad is imbedded in the pavement under the declaration that the said machines and equipment are personal
shed, an evidence that the gasoline underground tank is attached property not subject to realty tax (p. 16, Rollo).
and connected to the shed or building through the pipe to the pump
and the pump is attached and af ixed to the cement pad and The Solicitor General's contention that the Court of Tax Appeals has
pavement covered by the roof of the building or shed. exclusive appellate jurisdiction over this case is not correct. When
Republic Act No. 1125 created the Tax Court in 1954, there was as
"The building or shed, the elevated water tank, the car hoist under a yet no Central Board of Assessment Appeals. Section 7(3) of that
separate shed, the air compressor, the underground gasoline tank, law in providing that the Tax Court had jurisdiction to review by
neon lights signboard, concrete fence and pavement and the lot appeal decisions of provincial or city boards of assessment appeals
where they are all placed or erected, all of them used in the had in mind the local boards of assessment appeals but not the
pursuance of the gasoline service station business formed the entire Central Board of Assessment Appeals which under the Real
gasoline service station. Property Tax Code has appellate jurisdiction over decisions of the
said local boards of assessment appeals and is, therefore, in the
"As to whether the subject properties are attached and af ixed to the same category as the Tax Court.
tenement, it is clear they are, for the tenement we consider in this
particular case are (is) the pavement covering the entire lot which Section 36 of the Real Property Tax Code provides that the decision
was constructed by the owner of the gasoline station and the of the Central Board of Assessment Appeals shall become inal and
improvement which holds all the properties under question, they executory after the lapse of ifteen days from the receipt of its
are attached and af ixed to the pavement and to the improvement. decision by the appellant. Within that ifteen day period, a petition
for reconsideration may be iled. The Code does not provide for the
"The pavement covering the entire lot of the gasoline service review of the Board's decision by this Court.
station, as well as all the improvements, machines, equipments and
apparatus are all owned by Caltex (Philippines) Inc. x x x. Consequently, the only remedy available for seeking a review by this
Court of the decision of the Central Board of Assessment Appeals is


the special civil action of certiorari, the recourse resorted to herein Here, the question is whether the gas station equipment and
by Caltex (Philippines), Inc. machinery permanently af ixed by Caltex to its gas station and
pavement (which are indubitably taxable realty) should be subject
The issue is whether the pieces of gas station equipment and to the realty tax. This question is different from the issue raised in
machinery already enumerated are subject to realty tax. This issue the Davao Saw Mill case.
has to be resolved primarily under the provisions of the Assessment
Law and the Real Property Tax Code. Improvements on land are commonly taxed as realty even though
for some purposes they might be considered personalty (84 C.J.S.
Section 2 of the Assessment Law provides that the realty tax is due 181-2, Notes 40 and 41). "It is a familiar phenomenon to see things
"on real property, including land, buildings, machinery, and other classed as real property for purposes of taxation which on general
improvements" not speci ically exempted in section 3 thereof. This principle might be considered personal property" (Standard Oil Co.
provision is reproduced with some modi ication in the Real of New York vs. Jaramillo, 44 Phil. 630, 633).
Property Tax Code which provides:
This case is also easily distinguishable from Board of Assessment
Appeals vs. Manila Electric Co., 119 Phil. 328, where Meralco's steel
"SEC. 38. Incidence of Real Property Tax. - There shall be levied, towers were considered poles within the meaning of paragraph 9 of
assessed and collected in all provinces, cities and municipalities an its franchise which exempts its poles from taxation. The steel
annual ad valorem tax on real property, such as land, buildings, towers were considered personalty because they were attached to
machinery and other improvements af ixed or attached to real square metal frames by means of bolts and could be moved from
property not hereinafter speci ically exempted." place to place when unscrewed and dismantled.
The Code contains the following de initions in its section 3: Nor are Caltex's gas station equipment and machinery the same as
tools and equipment in the repair shop of a bus company which
were held to be personal property not subject to realty tax
"k) Improvements - is a valuable addition made to property or an (Mindanao Bus Co. vs. City Assessor, 116 Phil. 501).
amelioration in its condition, amounting to more than mere repairs
or replacement of waste, costing labor or capital and intended to The Central Board of Assessment Appeals did not commit a grave
enhance its value, beauty or utility or to adapt it for new or further abuse of discretion in upholding the city assessor's imposition of
purposes." the realty tax on Caltex's gas station and equipment.
"m) Machinery - shall embrace machines, mechanical contrivances, WHEREFORE, the questioned decision and resolution of the Central
instruments, appliances and apparatus attached to the real estate. Board of Assessment Appeals are af irmed. The petition for
It includes the physical facilities available for production, as well as certiorari is dismissed for lack of merit. No costs.
the installations and appurtenant service facilities, together with all
other equipment designed for or essential to its manufacturing, SO ORDERED.
industrial or agricultural purposes." (See sec. 3[f], Assessment
Law). Barredo, (Chairman), Guerrero, De Castro, and Escolin, JJ.,concur.
Concepcion, Jr., and Abad Santos, JJ., did not take part.
We hold that the said equipment and machinery, as appurtenances
to the gas station building or shed owned by Caltex (as to which it is Philippine Refining Co., Inc. vs Aboitiz &
subject to realty tax) and which ixtures are necessary to the
operation of the gas station, for without them the gas station would Co., G.R. No. 41506, March 25, 1935
61 Phil. 229
be useless, and which have been attached or af ixed permanently to
the gas station site or embedded therein, are taxable improvements
G.R. No. 41506, March 25, 1935
and machinery within the meaning of the Assessment Law and the
PHILIPPINE REFINING CO., INC., PLAINTIFF AND APPELLANT, VS.
Real Property Tax Code.
FRANCISCO JARQUE, JOSE COROMINAS, AND ABOITIZ & CO.,
DEFENDANTS. JOSE COROMINAS, IN HIS CAPACITY AS ASSIGNEE
Caltex invokes the rule that machinery which is movable in its
OF THE ESTATE OF THE INSOLVENT FRANCISCO JARQUE,
nature only becomes immobilized when placed in a plant by the
APPELLEE.
owner of the property or plant, but not when so placed by a tenant,
a usufructuary, or any person having only a temporary right, unless
DECISION
such person acted as the agent of the owner ( Davao Saw Mill Co. vs.
MALCOLM, J.:
Castillo, 61 Phil. 709).
First of all the reason why this case has been decided by the court in
That ruling is an interpretation of paragraph 5 of article 415 of the
bane needs explanation. A motion was presented by counsel for the
Civil Code regarding machinery that becomes real property by
appellant in which it was asked that the case be heard and
destination. In the Davao Saw Mill case the question was whether
determined by the court sitting,, in bane because the admiralty
the machinery mounted on foundations of cement and installed by
jurisdiction of the court was involved, and this motion was granted
the lessee on leased land should be regarded as real property for
in regular course. On further investigation it appears that this was
purposes of execution of a judgment against the lessee. The sheriff
error. The mere mortgage of a ship is a contract entered into by the
treated the machinery as personal property. This Court sustained
parties to it without reference to navigation or perils of ihe sea, and
the sheriff's action. (Compare with Machinery & Engineering
does not, therefore, confer admiralty jurisdiction. (Bogart vs.
Supplies, Inc. vs. Court of Appeals, 96 Phil. 70, where in a replevin
Steamboat John Jay [1854], 17 How., 399.)
case machinery was treated as realty).


Coming now to the merits, it appears that on varying dates the requisite for a good chattel mortgage by the Chattel Mortgage Law.
Philippine Re ining Co., Inc., and Francisco Jarque executed three Counsel would further have us disregard article 585 of the, Code of
mortgages on the motor vessels Pandan and Zaragoza. These Commerce, but no reason is shown for holding this article not in
documents were recorded in the record of transfers and force. Counsel would further have us revise doctrines heretofore
incumbrances of vessels for the port of Cebu and each was therein announced in a series of cases, which it is not desirable to do since
denominated a "chattel mortgage". Neither of the irst two those principles were con irmed after due deliberation and
mortgages had appended an af idavit of good faith. The third constitute a part of the commercial law of the Philippines. And
mortgage contained such an af idavit, but this mortgage was not inally counsel would have us make rulings on points entirely
registered in the customs house until May 17, 1932, or within the foreign to the issues of the case. As neither the facts nor the law
period of thirty days prior to the commencement of insolvency remains in doubt, the seven assigned errors will be overruled.
proceedings against Francisco Jarque; also, while the last mentioned
mortgage was subscribed by Francisco Jarque and M. N. Brink, there Judgment af irmed, the costs of this instance to be paid by the
was nothing to disclose in what capacity the said M. N. Brink signed. appellant.
A fourth mortgage was executed by Francisco Jarque and Ramon
Aboitiz on the motorship Zaragoza and was entered in the chattel Avanceñ a, C.J., Street, Villa-Real, Abad Santos, Hull Vickers, Imperial,
mortgage registry of the register of deeds on May 12, 1932, or again Butte, and Goddard, JJ., concur. Judgment af irmed.
within the thirty-day period before the institution of insolvency Sibal vs Valdez, G.R. No. 26278, August 04,
proceedings. These proceedings were begun on June 2, 1932, when
a petition was iled with the Court of First Instance of Cebu in which 1927
50 Phil. 512
it was prayed that Francisco Jarque be declared an insolvent debtor,
which soon thereafter was granted, with the result that an
G.R. No. 26278, August 04, 1927
assignment of all the properties of the insolvent was executed in
LEON SIBAL 1.°, PLAINTIFF AND APPELLANT, VS. EMILIANO J.
favor of Jose Corominas.
VALDEZ ET AL., DEFENDANTS. EMILIANO J. VALDEZ, APPELLEE.
On these facts, Judge Jose M. Hontiveros declined to order the
DECISION
foreclosure of the mortgages, but on the contrary sustained the
JOHNSON, J.:
special defenses of fatal defectiveness of the mortgages. In so doing
we believe that the trial judge acted advisedly.
This action was commenced in the Court of First Instance of the
Province of Tarlac on the 14th day of December, 1924. The facts are
Vessels are considered personal property under the civil law. (Code
about as con licting as it is possible for facts to be, in the trial of
of Commerce, article 585.) Similarly under the common law, vessels
causes.
are personal property although occasionally referred to as a
peculiar kind of personal property. (Reynolds vs. Nielson [1903], 96
As a irst cause of action the plaintiff alleged that the defendant
Am. Rep., 1000; Atlantic Maritime Co. vs. City of Gloucester [1917],
Vitaliano Mamawal, deputy sheriff of the Province of Tarlac, by
117 N. E., 924.) Since the term "personal property" includes vessels,
virtue of a writ of execution issued by the Court of First Instance of
they are subject to mortgage agreeably to the provisions of the
Pampanga, attached and sold to the defendant Emiliano J. Valdez the
Chattel Mortgage Law. (Act No. 1508, section 2.) Indeed, it has
sugar cane planted by the plaintiff and his tenants on seven parcels
heretofore been accepted without discussion that a mortgage on a
of land described in the complaint, in the third paragraph of the irst
vessel is in nature a chattel mortgage. (McMicking vs. Banco
cause of action; that within one year from the date of the
Espanol-Filipino [1909], 13 Phil., 429; Arroyo vs. Yu de Sane [1930],
attachment and sale the plaintiff offered to redeem said sugar cane
54 Phil., 511.) The only difference between a chattel mortgage of a
and tendered to the defendant Valdez the amount suf icient to cover
vessel and a chattel mortgage of other personalty is that it is not
the price paid by the latter, the interest thereon and any
now necessary for a chattel mortgage of a vessel to be noted in the
assessments or taxes which he may have paid thereon after the
registry of the register of deeds, but it is essential that a record of
purchase, and the interest corresponding thereto and that Valdez
documents affecting the title to a vessel be entered in the record of
refused to accept the money and to return the sugar cane to the
the Collector of Customs at the port of entry. (Rubiso and Gelito vs.
plaintiff.
Rivera [1917], 37 Phil., 72; Arroyo vs. Yu de Sane, supra.) Otherwise
a mortgage on a vessel is generally like other chattel mortgages as
As a second cause of action, the plaintiff alleged that the defendant
to its requisites and validity. (58 C. J., 92.)
Emiliano J. Valdez was attempting to harvest the palay planted in
four of the seven parcels mentioned in the irst cause of action; that
The Chattel Mortgage Law in its section 5, in describing what shall
he had harvested and taken possession of the palay in one of said
be deemed suf icient to constitute a good chattel mortgage, includes
seven parcels and in another parcel described in the second cause
the requirement of an af idavit of good faith appended to the
of action, amounting to 300 cavans; and that all of said palay
mortgage and recorded therewith. The absence of the af idavit
belonged to the plaintiff.
vitiates a mortgage as against creditors and subsequent
encumbrancers. (Giberson vs. A. N. Jureidini Bros. [1922], 44 Phil.,
Plaintiff prayed that a writ of preliminary injunction be issued
216; Benedicto de Tarrosa vs. F. M. Yap Tico & Co. and Provincial
against the defendant Emiliano J. Valdez, his attorneys and agents,
Sheriff of Occidental Negros [1923], 46 Phil., 753.) As a
restraining them (1) from disturbing him in the possession of the
consequence a chattel mortgage of a vessel wherein the af idavit of
parcels of land described in the complaint; (2) from taking
good faith required by the Chattel Mortgage Law is lacking, is
possession of, or harvesting the sugar cane in question; and (3)
unenforceable against third persons.
from taking possession, or harvesting the palay in said parcels of
land. Plaintiff also prayed that a judgment be rendered in his favor
In effect appellant asks us to ind that the documents appearing in
and against the defendants, ordering them to consent to the
the record do not constitute chattel mortgages or at least to gloss
redemption of the sugar carie in question, and that the defendant
over the failure to include the af idavit of good faith made a
Valdez be condemned to pay to the plaintiff the sum of P1,056, the


value of palay harvested by him in the two parcels

above-mentioned, with interest and costs. the value of 150 cavans of palay which the defendant was not able
to raise by reason of the injunction, at P4 cavan.
On December 27, 1924, the court, after hearing both parties and
upon approval of the bond for P6,000 iled by the plaintiff, issued From that judgment the plaintiff appealed and in his assignments of
the writ of preliminary injunction prayed for in the complaint. error contends that the lower court erred:
The defendant Emiliano J. Valdez, in his amended answer, denied (1) In holding that the sugar cane in question was personal
generally and speci ically each and every allegation of the complaint property and, therefore, not subject to redemption;
and set up the following defenses:
(2) In holding that parcels 1 and 2 of the complaint belonged to
(a) That the sugar cane in question had the nature of personal Valdez, as well as parcels 7 and 8, and that the palay therein was
property and was not, therefore, subject to redemption; planted by Valdez;
(b) That he was the owner of parcels 1, 2 and 7 described in the irst (3) In holding that Valdez, by reason of the preliminary injunction
cause of action of the complaint; failed to realize P6,757.40 from the sugar cane and P1,435.68 from
sugar-cane shoots (puntas de cañ a dulce);
(c) That he was the owner of the palay in parcels 1, 2 and 7; and
(4) In holding that, for failure of plaintiff to gather the sugar cane on
(d) That he never attempted to harvest the palay in parcels 4 and 5. time, the defendant was unable to raise palay on the land, which
would have netted him the sum of P600; and
The defendant Emiliano J. Valdez, by way of counterclaim, alleged
that by reason of the preliminary injunction he was unable to gather (5) In condemning the plaintiff and his sureties to pay to the
the sugar cane, sugar-cane shoots (puntas de cañ a dulce) and palay defendant the sum of P9,439.08.
in said parcels of land, representing a loss to him of P8,375.20 and
that, in addition thereto, he suffered damages amounting to It appears from the record:
P3,458.56. He prayed for a judgment (1) absolving him from all
liability under the complaint; (2) declaring him to be the absolute (1) That on May 11, 1923, the deputy sheriff of the Province of
owner of the sugar cane in question and of the palay in parcels 1, 2 Tarlac, by virtue of a writ of execution in civil case No. 20203 of the
and 7; and (3) ordering the plaintiff to pay to him the sum of Court of First Instance of Manila (Macondray & Co., Inc. vs. Leon
P11,833.76, representing the value of the sugar cane and palay in Sibal), levied an attachment on eight parcels of land belonging to
question, including damages. said Leon Sibal, situated in the Province of Tarlac, designated in the
record of attachment as parcels 1, 2, 3, 4, 5, 6, 7 and 8 (Exhibit B,
Upon the issue thus presented by the pleadings the cause was Exhibit 2-A).
brought on for trial. After hearing the evidence, and on April 28,
1926, the Honorable Cayetano Lukban, judge, rendered a judgment (2) That on July 30, 1923, Macondray & Co., Inc., bought said eight
against the plaintiff and in favor of the defendants— parcels of land, at the auction held by the sheriff of the Province of
Tarlac, for the sum of P4,273.93, having paid for the said parcels
(1) Holding that the sugar cane in question was personal property separately as follows (Exhibits C and 2-A):
and, as such, was not subject to redemption;
Parcel
(2) Absolving the defendants from all liability under the complaint; 1
and ........................................................................................
P1.00
(3) Condemning the plaintiff and his sureties Cenon de la Cruz, Juan
Sangalang and Marcos Sibal to jointly and severally pay to the 2
defendant Emiliano J. Valdez the sum of P9,439.08 as follows: ........................................................................................
2,000.00
(a)
P6,757.40, 3
........................................................................................
the value of the sugar cane; 120.93
(b)
1,435.68, 4
........................................................................................
the value of the sugar-cane shoots; 1,000.00
(c)
646.00, 5
........................................................................................
the value of palay harvested by plaintiff; 1.00
(d)
600.00, 6
___________ ........................................................................................
9,439.08 1.00
==========


7 said eight parcels, after payment by Leon Sibal of P2,000 on

with the house thereon..................................................... September 24, 1923, for the account of the redemption price, as
150.00 stated above. (Exhibits C and 2.)
8 The foregoing statement of facts shows:

........................................................................................
1,000.00 (1) That Emiliano J. Valdez bought the sugar cane in question,
located in the seven parcels of land described in the irst cause of
action of the complaint at public auction on May 9 and 10, 1924, for
P600.
_____________
(2) That on July 30, 1923, Macondray & Co. became the owner of
eight parcels of land situated in the Province of Tarlac belonging to
Leon Sibal and that on September 24, 1923, Leon Sibal paid to
4,273.93 Macondray & Co. P2,000 for the account of the redemption price of
============ said parcels.
(3) That within one year from the sale of said parcels of land, and on (3) That on June 25, 1924, Emiliano J. Valdez acquired from
the 24th day of September, 1923, the judgment debtor, Leon Sibal, Macondray & Co. all of its rights and interest in the said eight
paid P2,000, to Macondray & Co., Inc., for the account of the parcels of land.
redemption price of said parcels of land, without specifying the
particular parcels to which said amount was to be applied. The (4) That on the same date (June 25, 1924) Emiliano J. Valdez also
redemption price of said eight parcels was reduced, by virtue of said acquired all of the rights and interest which Leon Sibal had or might
transaction, to P2,579.97, including interest (Exhibits C and 2). have had on said eight parcels by virtue of the P2,000 paid by the
latter to Macondray.
The record further shows:
(5) That Emiliano J. Valdez became the absolute owner of said eight
(1) That on April 29, 1924, the defendant Vitaliano Mamawal, parcels of land.
deputy sheriff of the Province of Tarlac, by virtue of a writ of
execution in civil case No. 1301 of the Province of Pampanga The irst question raised by the appeal is, whether the sugar cane in
(Emiliano J. Valdez vs. Leon Sibal 1.°—the same parties in the question is personal or real property. It is contended that sugar
present case), attached the personal property of said Leon Sibal cane comes under the classi ication of real property as "ungathered
located in Tarlac, among which was included the sugar cane now in products" in paragraph 2 of article 334 of the Civil Code. Said
question in the seven parcels of land described in the complaint paragraph 2 of article 334 enumerates as real property the
(Exhibit A). following: "Trees, plants, and ungathered products, while they are
annexed to the land or form an integral part of any immovable
(2) That on May 9 and 10, 1924, said deputy sheriff sold at public property." That article, however, has received in recent years an
auction said personal properties of Leon Sibal, including the sugar interpretation by the Tribunal Supremo de Españ a, which holds
cane in question, to Emiliano J. Valdez, who paid therefor the sum of that, under certain conditions, growing crops may be considered as
P1,550, of which P600 was for the sugar cane (Exhibit A). personal property. (Decision of March 18, 1904, vol. 97, Civil
Jurisprudence of Spain.)
(3) That on April 29, 1924, said deputy sheriff, by virtue of said writ
of execution, also attached the real property of said Leon Sibal in Manresa, the eminent commentator of the Spanish Civil Code, in
Tarlac, including all of his rights, interest and participation therein, discussing section 334 of the Civil Code, in view, of the recent
which real property consisted of eleven parcels of land and a house decisions of the Supreme Court of Spain, admits that growing crops
and camarin situated in one of said parcels (Exhibit,A). are sometimes considered and treated as personal property. He
says:
(4) That on June 25, 1924, eight of said eleven parcels, including the
house and the camarin, were bought by Emiliano J. Valdez at the "No creemos, sin embargo, que esto excluya la excepcion que
auction held by the sheriff for the sum of P12,200. Said eight parcels muchos autores hacen tocante a la venta de toda cosecha o de parte
were designated in the certi icate of sale as parcels 1, 3, 4, 5, 6, 7, 10 de ella cuando aun no esta cogida (cosa frecuente con la uva y la
and 11. The house and camarin were situated on parcel 7 (Exhibit naranja), y a la de le ias, considerando ambas como muebles. El
A). Tribunal Supremo, en sentencia de 18 de marzo de 1904, al
entender sobre un contrato de arrendamiento de un predio rustico,
(5) That the remaining three parcels, indicated in the certi icate of resuelve que su terminacion por desahucio no extingue los
the sheriff as parcels 2, 12 and 13, were released from the derechos del arrendatario, para recolectar o percibir los frutos
attachment by virtue of claims presented by Agustin Cuyugan and correspondientes al añ o agricola, dentro del que nacieron aquellos
Domiciano Tizon (Exhibit A). derechos, cuando el arrendador ha percibido a su vez el importe de
la renta integra correspondiente, aun cuando lo haya sido por
(6) That on the same date, June 25, 1924, Macondray & Co. sold and precepto legal durante el curso del juicio, fundandose para ello, no
conveyed to Emiliano J. Valdez for P2,579.97 all of its rights and solo en que de otra suerte se daria al desahucio un alcance que no
interest in the eight parcels of land acquired by it at public auction tiene, sino en que, y esto es lo interesante a nuestro proposito, la
held by the deputy sheriff of Tarlac in connection with civil case No. consideracion de inmuebles que el articulo 334 del Codigo Civil
20203 of the Court of First Instance of Manila, as stated above. Said atribuye a los frutos pendientes, no les priva del caracter de
amount represented the unpaid balance of the redemption price of


productos pertenecientes, como tales, a quienes a ellos tenga result would be that it could not be sold under execution separate
derecho, llegado el momento de su recoleccion. and apart from the land. If a lessee obtain supplies to make his crop,
the factor's lien would not attach to the crop as a separate thing
* * * * * * * belonging to his debtor, but the land belonging to the lessor would
be affected with the recorded privilege. The law cannot be
"Mas actualmente y por virtud de la nueva edicion de la Ley construed so as to result in such absurd conser quences."
Hipotecaria, publicada en 16 de diciembre de 1909, con las
reformas introducidas por la de 21 de abril anterior, la hipoteca, In the case of Citizens' Bank vs. Wiltz (31 La. Ann., 244) the court
salvo pacto expreso que disponga lo contrario, y cualquiera que sea said:
la naturaleza y forma de la obligacion que garantice, no comprende
los frutos cualquiera que sea la situacion en que se encuentre." (3 "If the crop quoad the pledge thereof under the act of 1874 was an
Manresa, 5.a edicion, pags. 22, 23.) immovable, it would be destructive of the very objects of the act, it
From the foregoing it appears (1) that, under Spanish authorities, would render the pledge of the crop impossible, for if the crop was
pending fruits and ungathered products may be sold and an inseparable part of the realty possession of the latter would be
transferred as personal property; (2) that the Supreme Court of necessary to that of the former; but such is not the case. True, by
Spain, in a case of ejectment of a lessee of an agricultural land, held article 465 C. C. it is provided that 'standing crops and the fruits of
that the lessee was entitled to gather the products corresponding to trees not gathered and frees before they are cut down are likewise
the agricultural year, because said fruits did not go with the land but immovable and are considered as part of the land to which they are
belonged separately to the lessee; and (3) that under the Spanish attached;' but the immovability provided for is only one in abstracto
Mortgage Law of 1909, as amended, the mortgage of a piece of land and without reference to rights on or to the crop acquired by other
does not include the fruits and products existing thereon, unless the than the owners of the property to which the crop was attached.
contract expressly provides otherwise. The immovability of a growing crop is in the order of things
temporary, for the crop passes from the state of a growing to that of
An examination of the decisions of the Supreme Court of Louisiana a gathered one, from an immovable to a movable. The existence of a
may give us some light on the question which we are discussing. right on the growing crop is a mobilization by anticipation, a
Article 465 of the Civil Code of Louisiana, which corresponds to gathering as it were in advance, rendering the crop movable quoad
paragraph 2 of article 334 of our Civil Code, provides: "Standing the right acquired thereon. The provision of our Code is identical
crops and the fruits of trees not gathered, and trees before they are with the Napoleon Code, 520, and we may therefore obtain light by
cut down, are likewise immovable, and are considered as part of the an examination of the jurisprudence of France."
land to which they are attached." The rule above announced, not only by the Tribunal Supremo de
Españ a but by the Supreme Court of Louisiana, is followed in
The Supreme Court of Louisiana having occasion to interpret that practically every state of the Union.
provision, held that in some cases "standing crops" may be
considered and dealt with as personal property. In the case of From an examination of the reports and codes of the State of
Lumber Co. vs. Sheriff and Tax Collector (106 La., 418) the Supreme California and other states we ind that the settled doctrine
Court said: "True, by article 465 of the Civil Code it is provided that followed in said states in connection with the attachment of
'standing crops and the fruits of trees not gathered and trees before property and execution of judgment is, that growing crops raised by
they are cut down * * * are considered as part of the land to which yearly labor and cultivation are considered personal property. (6
they are attached,' but the immovability provided for is only one in Corpus Juris, p. 197; 17 Corpus Juris, p. 379; 23 Corpus Juris, p. 329;
abstracto and without reference to rights on or to the crop acquired Raventas vs. Green, 57 Cal., 254; Norris vs. Watson, 55 Am. Dec, 161;
by others than the owners of the property to which the crop is Whipple vs. Foot, 3 Am. Dec, 442; 1 Benjamin on Sales, sec 126;
attached. * * * The existence of a right on the growing crop is a McKenzie vs. Lampley, 31 Ala., 526; Crine vs. Tifts and Co., 65 Ga.,
mobilization by anticipation, a gathering, as it were in advance, 644; Gillitt vs. Truax, 27 Minn., 528; Preston vs. Ryan, 45 Mich., 174;
rendering the crop movable quoad the right acquired therein. Our Freeman on Execution, vol. 1, p. 438; Drake on Attachment, sec 249;
jurisprudence recognizes the possible mobilization of the growing Mechem on Sales, sees. 200 and 763.)
crop." (Citizens' Bank vs. Wiltz, 31 La. Ann., 244; Porche vs. Bodin,
28 La. Ann., 761; Sandel vs. Douglass, 27 La. Ann., 629; Lewis vs. Mr. Mechem says that a valid sale may be made of a thing, which
Klotz, 39 La. Ann., 267.) though not yet actually in existence, is reasonably certain to come
into existence as the natural increment or usual incident of
"It is true," as the Supreme Court of Louisiana said in the case of something already in existence, and then belonging to the vendor,
Porche vs. Bodin (28 La. An., 761) that "article 465 of the Revised and the title will vest in the buyer the moment the thing comes into
Code says that standing crops are considered as immovable and as existence. (Emerson vs. European Railway Co., 67 Me., 387; Cutting
part of the land to which they are attached, and article 466 declares vs. Packers Exchange, 21 Am. St. Rep., 63.) Things of this nature are
that the fruits of an immovable gathered or produced while it is said to have a potential existence. A man may sell property of which
under seizure are considered as making part thereof, and inure to he is potentially and not actually possessed. He may make a valid
the bene it of the person making the seizure. But the evident sale of the wine that a vineyard is expected to produce; or the grain
meaning of these articles is, where the crops belong to the owner of a ield may grow in a given time; or the milk a cow may yield during
the plantation, they form part of the immovable, and where it is the coming year; or the wool that shall thereafter grow upon sheep;
seized, the fruits gathered or produced inure to the bene it of the or what may be taken at the next cast of a isherman's net; or fruits
seizing creditor. to grow; or young animals not yet in existence; or the good will of a
trade and the like. The thing sold, however, must be speci ic and
"A crop raised on leased premises in no sense forms part of the identi ied. They must be also, owned at the time by the vendor. (Hull
immovable. It belongs to the lessee, and may be sold by him, vs. Hull, 48 Conn., 250 [40 Am. Rep., 165].)
whether it be gathered or not, and it may be sold by his-judgment
creditors. If it necessarily forms part of the leased premises the


It is contended on the part of the appellee that paragraph 2 of attempt to show that said two parcels belonged to Agustin Cuyugan
article 334 of the Civil Code has been modi ied by section 450 of the and were the identical parcel 2 which was excluded from the
Code of Civil Procedure as well as by Act No. 1508, the Chattel attachment and sale of real property of Sibal to Valdez on June 25,
Mortgage Law. Said section 450 enumerates the property of a 1924, as stated above. A comparison of the description of parcel 2 in
judgment debtor which may be subjected to execution. The the certi icate of sale by the sheriff (Exhibit A) and the description
pertinent portion of said section reads as follows: "All goods, of parcels 1 and 2 of the complaint will readily show that they are
chattels, moneys, and other property, both real and personal, * * * not the same.
shall be liable to execution." Said section 450 and most of the other
sections of the Code of Civil Procedure relating to the execution of The description of the parcels in the complaint is as follows:
judgments were taken from the Code of Civil Procedure of
California. The Supreme Court of California, under section 688 of "1. La cañ a dulce sembrada por los inquilinos del ejecutado Leon
the Code of Civil Procedure of that state (Pomeroy, p. 424) has held, Sibal 1.° en una parcela de terreno de la pertenencia del citado
without variation, that growing crops were personal property and ejecutado, situada en Libutad, Culubasa, Bamban, Tarlac, de unas
subject to execution. dos hectareas poco mas o menos de super icie.
Act No. 1508, the Chattel Mortgage Law, fully recognizes that "2. La cañ a dulce sembrada por el inquilino del ejecutado Leon Sibal
growing crops are personal property. Section 2 of said Act provides: 1.°, llamado Alejandro Policarpio, en una parcela de terreno de la
"All personal property shall be subject to mortgage, agreeably to the iffertenencia del ejecutado, situada en Dalayap, Culubasa, Bamban,
provisions of this Act, and a mortgage executed in pursuance Tarlac de unas dos hectareas de super icie poco mas o menos." The
thereof shall be termed a chattel mortgage." Section 7 in part description of parcel 2 given in the certi icate of sale (Exhibit A) is
provides: "If growing crops be mortgaged the mortgage may contain as follows:
an agreement stipulating that the mortgagor binds himself properly "2.a Terreno palayero situado en Culubasa, Bamban, Tarlac, de
to tend, care for and protect the crop while growing * * *." 177,090 metros cuadrados de super icie, linda al N. con Canuto
Sibal, Esteban Lazatin and Alejandro Dayrit; al E. con Francisco
It is clear from the foregoing provisions that Act No. 1508 was Dizon, Felipe Mañ u and others; al S. con Alejandro Dayrit, Isidoro
enacted on the assumption that "growing crops" are personal Santos and Melecio Mañ u; y al 0. con Alejandro Dayrit and Paulino
property. This consideration tends to support the conclusion Vergara. Tax No. 2854 valor amillarado P4,200 pesos."
hereinbefore stated, that paragraph 2 of article 334 of the Civil Code On the other hand the evidence for the defendant purported to
has been modi ied by section 450 of Act No. 190 and by Act No. show that parcels 1 and 2 of the complaint were included among
1508 in the sense that "ungathered products" as mentioned in said the parcels bought by Valdez from Macondray on June 25, 1924, and
article of the Civil Code have the nature of personal property. In corresponded to parcel 4 in the deed of sale (Exhibits B and 2), and
other words, the phrase "personal property" should be understood were also included among the parcels bought by Valdez at the
to include "ungathered products." auction of the real property of Leon Sibal on June 25, 1924, and
corresponded to parcel 3 in the certi icate of sale made by the
"At common law, and generally in the United States, all annual crops sheriff (Exhibit A), The description of parcel 4 (Exhibit 2) and parcel
which are raised by yearly manurance and labor, and essentially 3 (Exhibit A) is as follows:
owe their annual existence to cultivation by man, * * * may be
levied on as personal property." (23 C. J., p. 329.) On this question "Parcela No. 4.—Terreno palayero, ubicado en el barrio de Culubasa,
Freeman, in his treatise on the Law of Executions, says: "Crops, Bamban, Tarlac, I. F. de 145,000 metros cuadrados de super icie,
whether growing or standing in the ield ready to be harvested, are, lindante al Norte con Road of the barrio of Culubasa that goes to
when produced by annual cultivation, no part of the realty. They are, Concepcion; al Este con Juan Dizon; al Sur con Lucio Mañ o y Canuto
therefore, liable to voluntary transfer as chattels. It is equally well Sibal y al Oeste con Esteban Lazatin, su valor amillarado asciende a
settled that they may be seized and sold under execution." la suma de P2,990. Tax No. 2856."
(Freeman on Executions, vol. 1, p. 438.) As will be noticed, there is hardly any relation between parcels 1
and 2 of the complaint and parcel 4 (Exhibits 2 and B) and parcel 3
We may, therefore, conclude that paragraph 2 of article 334 of the (Exhibit A). But, inasmuch as the plaintiff did not care to appear at
Civil Code has been modi ied by section 450 of the Code of Civil the trial when the defendant offered his evidence, we are inclined to
Procedure and] by Act No. 1508, in the sense that, for the purposes give more weight to the evidence adduced by him than to the
of attachment and execution, and for the purposes of the Chattel evidence adduced by the plaintiff, with respect to the ownership of
Mortgage Law, "ungathered products" have the nature of personal parcels 1 and 2 of the complaint. We, therefore, conclude that
property. The lower court, therefore, committed no error in holding parcels 1 and 2 of the complaint belong to the defendant, having
that the sugar cane in question was personal property and, as such, acquired the same from Macondray & Co. on June 25, 1924, and
was not subject to redemption. from the plaintiff Leon Sibal on the same date.
All the other assignments of error made by the appellant, as above It appears, however, that the plaintiff planted the palay in said
stated, relate to questions of fact only. Before entering upon a parcels and harvested therefrom 190 cavans. There being no
discussion of said assignments of error, we deem it opportune to evidence of bad faith on his part, he is therefore entitled to one-half
take special notice of the failure of the plaintiff to appear at the trial of the crop, or 95 cavans. He should therefore be condemned to pay
during the presentation of evidence by the defendant. His absence to the defendant for 95 cavans only, at P3.40 a cavan, or the sum of
from the trial and his failure to cross-examine the defendant have P323, and not for the total of 190 cavans as held by the lower court.
lent considerable weight to the evidence then presented for the
defense. As to the ownership of parcel 7 of the complaint, the evidence
shows that said parcel corresponds to parcel 1 of the deed of sale of
Coming now to the ownership of parcels 1 and 2 described in the Macondray & Co. to Valdez (Exhibits B and 2), and to parcel 4 in the
irst cause of action of the complaint, the plaintiff made a futile certi icate of sale to Valdez of real property belonging to Sibal,


executed by the sheriff as above stated (Exhibit A). Valdez is In view of the foregoing, the judgment appealed from is hereby
therefore the absolute owner of said parcel, having acquired the modi ied. The plaintiff and his sureties Cenon de la Cruz, Juan
interest of both Macondray and Sibal in said parcel. Sangalang and Marcos Sibal are hereby ordered to pay to the
defendant jointly and severally the sum of P8,900.80, instead of
With reference to the parcel of land in Pacalcal, Tarlac, described in P9,439.08 allowed by the lower court, as follows:
paragraph 3 of the second cause of action, it appears from the
testimony of the plaintiff himself that said parcel corresponds to P6,757.40
parcel 8 of the deed of sale of Macondray to Valdez (Exhibits B and for the sugar cane;
2) and to parcel 10 in the deed of sale executed by the sheriff in 1,220.40
favor of Valdez (Exhibit A). Valdez is therefore the absolute owner of for the sugar cane shoots;
said parcel, having acquired the interest of both Macondray and 323.00
Sibal therein. for the palay harvested by plaintiff in parcels 1 and 2;
600.00
In this connection the following facts are worthy of mention: __________
for the palay which defendant could have raised.
Execution in favor of Macondray & Co., May 11, 1923. Eight parcels 8,900.80
of land were attached under said execution. Said parcels of land =========
were sold to Macondray & Co. on the 30th day of July, 1923. Rice
paid P4,273.93. On September 24, 1923, Leon Sibal paid to
Macondray & Co. P2,000 on the redemption of said parcels of land. In all other respects, the judgment appealed from is hereby
(See Exhibits B and C.) af irmed, with costs. So ordered.
Attachment, April 29, 1924, in favor of Valdez. Personal property of Street, Malcolm, Villamor, Romualdez, and Villa-Real, JJ., concur.
Sibal was attached, including the sugar cane in question. (Exhibit
A.) The said personal property so attached, sold at public auction Harty vs Municipality of Victoria, G.R. No.
May 9 and 10, 1924. April 29, 1924, the real property of Sibal was
attached under the execution in favor of Valdez (Exhibit A). June 25, 5013, March 11, 1909
13 Phil. 152
1924, said real property was sold and purchased by Valdez (Exhibit
A).
G.R. No. 5013, March 11, 1909
June 25, 1924, Macondray & Co. sold all of the land which they had
JEREMIAH J. HARTY, ROMAN CATHOLIC ARCHBISHOP OF MANILA,
purchased at public auction on the 30th day of July, 1923, to Valdez.
PLAINTIFF AND APPELLEE, VS. THE MUNICIPALITY OF VICTORIA,
PROVINCE OF TARLAC, DEFENDANT AND APPELLANT.
As to the loss of the defendant in sugar cane by reason of the
injunction, the evidence shows that the sugar cane in question
DECISION
covered an area of 22 hectares and 60 ares (Exhibits 8, 8-b and 8-c);
that said area would have yielded an average crop of 1039 picos and
TORRES, J.:
60 cates; that one-half of that quantity, or 519 picos and 80 cates
would have corresponded to the defendant, as owner; that during
On January 17, 1908, the representative of Mgr. Jeremiah J. Harty,
the season the sugar was selling at P13 a pico (Exhibits 5 and 5-A).
archbishop of the Roman Catholic Church, as the legal administrator
Therefore, the defendant, as owner, would have netted P6,757.40
of all the properties and rights of the Catholic Church within the
from the sugar cane in question. The evidence also shows that the
archbishopric of Manila, iled a written complaint in the Court of
defendant could have taken from the sugar cane 1,017,000
First Instance of Tarlac against the municipality of Victoria, alleging
sugar-cane shoots (puntas de cañ a) and not 1,170,000 as computed
that the parish of the said town had been and was then the owner of
by the lower court. During the season the shoots Were selling at
a parcel.of land within the said municipality, known as the plaza of
P1.20 a thousand (Exhibits 6 and 7). The defendant therefore would
the church of Victoria; that it had acquired said parcel of land more
have netted P1,220.40 from sugar-cane shoots and not P1,435.68 as
than sixty years previously, and had continued to possess the same
allowed by the lower court.
ever since up to 1901, in which year the defendant municipality
unlawfully and forcibly seized the said property, claiming to be
As to the palay harvested by the plaintiff in parcels 1 and 2 of the
entitled thereto and retaining it to the present day. For the
complaint, amounting to 190 cavans, one-half of said quantity
purposes of the complaint, a description of the metes and bounds of
should belong to the plaintiff, as stated above, and the other half to
the land in question was set forth in the writing, and plaintiff prayed
the defendant. The court erred in awarding the whole crop to the
that, in view of what was therein set forth, judgment be entered
defendant. The plaintiff should therefore pay the defendant for 95
holding that the said land was the property of the parish of Victoria,
cavans only, at P3.40 a cavan, or P323 instead of P646 as allowed by
of the Roman Catholic Apostolic Church, and that the defendant be
the lower court.
ordered to vacate the same and to pay the costs of the action.
The evidence also shows that the defendant was prevented by the
The defendant municipality answered the complaint through its
acts of the plaintiff from cultivating about 10 hectares of the land
attorney and offered a general denial of all the facts stated therein,
involved in the litigation. He expected to have raised about 600
especially of those numbered 4, 5, 6, and 7; in special defense it
cavans of palay, 300 cavans of which would have corresponded to
alleged that the plaza described in No. 4 of the complaint was
him as owner. The lower court has wisely reduced his share to 150
founded when the sitio denominated Canarum, a barrio of the town
cavans only. At P4 a cavan, the palay would have netted him P600.
of Tarlac, was converted into a civil town in 1855; that the parish of
Tarlac was established many years after the civil town, and that
therefore, it neither had then, nor has now any title to the plaza


claimed, and that the complaint injured the defendant, and for this capitan municipal, as has occurred in the foundation of all the towns
reason it prayed that judgment be entered absolving the defendant in these Islands, under the old administrative laws.
of the complaint with costs and damages against the plaintiff.
It may be true that the father of the witness Casimiro Tañ edo, who
Evidence was adduced by both parties, and the documents owned the space of land where the church and parish house were
exhibited, to one of which the plaintiff objected, were made of erected, had voluntarily donated it to the Catholic Church, the only
record; the trial court rendered judgment on the 15th of June, 1908, one known at the time, but proper proof is lacking that the donation
holding that the parish of Victoria of the Roman Catholic Apostolic af irmed by the said Tañ edo comprehended the whole of the large
Church, had a better right to the possession of the land described in tract which at the present time constitutes the plaza of the town.
the complaint, and sentenced the defendant to vacate the same and
to pay the costs. To said judgment the representative of the It was a custom observed by all the towns established
defendant excepted and moved for a new trial on the ground that it administratively in these Islands under the old Laws of the Indies,
was contrary to the weight of the evidence, and he noti ied the court that on their creation, a certain amount of land was always reserved
that, if his motion were overruled, he would appeal to the Supreme for plazas, commons, and special and communal property, and as it
Court. The motion for a new trial was overruled; the defendant is unquestionable that the said large space of land was left vacant in
excepted, and presented the corresponding bill of exceptions which, the center of the town of Victoria when it was constituted as a civil
after receipt of a copy had been acknowledged by the adverse party, town, more than twelve years prior to the appointment of a
was approved. On the 1st of September last, the appellant was permanent curate therein, there are good grounds to suppose that
ordered to furnish bond in the sum of P1,000 to insure the the late Vicente Tañ edo donated the land now occupied by the
ful illment of the judgment in the event that it should be totally or church and parish house in said municipality for religious purposes,
partially, af irmed. To said order the defendant excepted, but or to the church, but not to the parish curate, because at the time
furnished the bond as directed by the court. there was no curate at the new town of Victoria.
In view of the nature of the action brought by the plaintiff against Even though all the remaining space of land which now forms the
the municipality of Victoria, Province of Tarlac, the question that great plaza of the town of Victoria had been owned by the said
has arisen between the contending parties consists only in Tañ edo, it must be presumed that he waived his right thereto for the
determining who is the owner and proprietor of the parcel of land bene it of the townspeople, since from the creation or
that surrounds the parish church of the said town, and which is establishment of the town, down to the present day, all the
called the public plaza of the same. residents, including the curate of said town, have enjoyed the free
use of said plaza; it has not been satisfactorily shown that the
Article 339 of the Civil Code reads: municipality or the principales of the town of Victoria had donated
the whole of said land to the curate of Victoria or to the Catholic
"Property of public ownership is: Church, as alleged, nor could it have been so donated, it being a
public plaza destined to public use and was not of private
"1. That destined to the public use, such as roads, canals, rivers, ownership, or patrimony of the town of Victoria, or of the Province
torrents, ports, and bridges constructed by the State, and banks, of Tarlac.
shores, roadsteads, and that of a similar character."
Article 344 of said code also reads; It should be noted that, among other things, plazas destined to the
public use are not subject to prescription. (Art. 1936, Civil Code.)
"Property for public use in provinces and in towns comprises the
provincial and town roads, the squares, streets, fountains, and That both the curates and the gobernadorcillos of the said town
public waters, the promenades, and public works of general service procured fruit trees and plants to be set out in the plaza, does not
supported by the said towns or provinces." constitute an act of private ownership, but evidences the public use
From the evidence presented by both parties it appears that the thereof, or perhaps the intention to improve and embellish the said
town of Victoria, which was formerly only a barrio of the town of plaza for the bene it of the townspeople.
Tarlac and known as Canarum, was converted into a town in 1855,
and named Victoria; to this end they must have laid out the streets Certain it is that the plaintiff has not proven that the Catholic
and the plaza of the town, in the center of which were situated the Church or the parish of Victoria was the owner or proprietor of the
church and parish house from the commencement, and at the said extensive piece of land which now forms the public plaza of
expiration of about twelve years the parish of said town was said town, nor that it was in possession thereof under the form and
constituted and the priest who was to perform the of ice of curate conditions required by law, inasmuch as it has been fully proven
was appointed; that from the very beginning, the large tract of land that said plaza has been used without let or hindrance by the public
that surrounds the church and the parish house was known as a and the residents of the town of Victoria ever since its creation. For
public plaza, destined to the use of all the residents of the recently the above reasons it is our opinion that the judgment appealed from
founded town; public performances and religious processions were should be reversed, and that it should be held, as we do hereby hold,
held thereon without hindrance either on the part of the local that the whole of the land not occupied by the church of the town of
authorities or of the curate of said town. Victoria and its parish house, is a public plaza of the said town, of
public use, and that in consequence thereof, the defendant is
It must be assumed that the principal residents of the old barrio, absolved of the complaint without any special ruling as to the costs
being interested in the conversion of the barrio into a civil town, of both instances.
arranged in such a way that the barrio, as the center of the future
town which was subsequently called Victoria, should have streets Arellano, C. J., Mapa, Johnson, Carson, and Willard, JJ., concur.
and a public plaza, with its church and parish house, and also a
tribunal or building destined for the use of the municipality and the
local of icial at that time called the gobernadorcillo and later" on


Manila International Airport Authority *E-016-013-85 1998-2001 6,444,810.00 2,900,164.50 9,344,974.50
vs Court of Appeals, G.R. NO. 155650, July *E-016-01387 1998-2001 34,876,800.00 5,694,560.00 50,571,360.00
20, 2006 *E-016-01396 1998-2001 75,240.00 33,858.00 109,098.00

528 Phil. 181 GRAND P392,435,861.95 P232,070,863.47 P624,506,725.42
TOTAL
EN BANC
1992-1997 RPT was paid on Dec. 24, 1997 as per
G.R. NO. 155650, July 20, 2006 O.R.#9476102 for P4,207,028.75
#9476101 for P28,676,480.00
MANILA INTERNATIONAL AIRPORT AUTHORITY, PETITIONER, VS.
COURT OF APPEALS, CITY OF PARANAQUE, CITY MAYOR OF #9476103 for P49,115.00[6]
PARANAQUE, SANGGUNIANG PANGLUNGSOD NG PARANAQUE,
CITY ASSESSOR OF PARANAQUE, AND CITY TREASURER OF
PARANAQUE, RESPONDENTS. On 17 July 2001, the City of Parañ aque, through its City Treasurer,
issued notices of levy and warrants of levy on the Airport Lands and
DECISION Buildings. The Mayor of the City of Parañ aque threatened to sell at
public auction the Airport Lands and Buildings should MIAA fail to
CARPIO, J.: pay the real estate tax delinquency. MIAA thus sought a clari ication
of OGCC Opinion No. 061.
The Antecedents
On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC
Petitioner Manila International Airport Authority (MIAA) operates Opinion No. 061. The OGCC pointed out that Section 206 of the
the Ninoy Aquino International Airport (NAIA) Complex in Local Government Code requires persons exempt from real estate
Parañ aque City under Executive Order No. 903, otherwise known as tax to show proof of exemption. The OGCC opined that Section 21 of
the Revised Charter of the Manila International Airport Authority the MIAA Charter is the proof that MIAA is exempt from real estate
("MIAA Charter"). Executive Order No. 903 was issued on 21 July tax.
1983 by then President Ferdinand E. Marcos. Subsequently,
Executive Order Nos. 909[1] and 298[2] amended the MIAA Charter. On 1 October 2001, MIAA iled with the Court of Appeals an original
petition for prohibition and injunction, with prayer for preliminary
As operator of the international airport, MIAA administers the land, injunction or temporary restraining order. The petition sought to
improvements and equipment within the NAIA Complex. The MIAA restrain the City of Parañ aque from imposing real estate tax on,
Charter transferred to MIAA approximately 600 hectares of land,[3] levying against, and auctioning for public sale the Airport Lands and
including the runways and buildings ("Airport Lands and Buildings. The petition was docketed as CA-G.R. SP No. 66878.
Buildings") then under the Bureau of Air Transportation.[4] The
MIAA Charter further provides that no portion of the land On 5 October 2001, the Court of Appeals dismissed the petition
transferred to MIAA shall be disposed of through sale or any other because MIAA iled it beyond the 60-day reglementary period. The
mode unless speci ically approved by the President of the Court of Appeals also denied on 27 September 2002 MIAA's motion
Philippines.[5] for reconsideration and supplemental motion for reconsideration.
Hence, MIAA iled on 5 December 2002 the present petition for
On 21 March 1997, the Of ice of the Government Corporate Counsel review.[7]
(OGCC) issued Opinion No. 061. The OGCC opined that the Local
Government Code of 1991 withdrew the exemption from real estate Meanwhile, in January 2003, the City of Parañ aque posted notices of
tax granted to MIAA under Section 21 of the MIAA Charter. Thus, auction sale at the Barangay Halls of Barangays Vitalez, Sto. Niñ o,
MIAA negotiated with respondent City of Parañ aque to pay the real and Tambo, Parañ aque City; in the public market of Barangay La
estate tax imposed by the City. MIAA then paid some of the real Huerta; and in the main lobby of the Parañ aque City Hall. The City of
estate tax already due. Parañ aque published the notices in the 3 and 10 January 2003
issues of the Philippine Daily Inquirer, a newspaper of general
On 28 June 2001, MIAA received Final Notices of Real Estate Tax circulation in the Philippines. The notices announced the public
Delinquency from the City of Parañ aque for the taxable years 1992 auction sale of the Airport Lands and Buildings to the highest
to 2001. MIAA's real estate tax delinquency is broken down as bidder on 7 February 2003, 10:00 a.m., at the Legislative Session
follows: Hall Building of Parañ aque City.

TAX DECLARATION TAXABLE TAX DUE PENALTY TOTAL A day before the public auction, or on 6 February 2003, at 5:10 p.m.,
YEAR
MIAA iled before this Court an Urgent Ex-Parte and Reiteratory
E-016-01370 1992-2001 19,558,160.00 11,201,083.20 30,789,243.20 Motion for the Issuance of a Temporary Restraining Order. The
E-016-01374 1992-2001 111,689,424.90 68,149,479.59 179,838,904.49 motion sought to restrain respondents - the City of Parañ aque, City
Mayor of Parañ aque, Sangguniang Panglungsod ng Parañ aque, City
E-016-01375 1992-2001 20,276,058.00 12,371,832.00 32,647,890.00
Treasurer of Parañ aque, and the City Assessor of Parañ aque
E-016-01376 1992-2001 58,144,028.00 35,477,712.00 93,621,740.00 ("respondents") - from auctioning the Airport Lands and Buildings.
E-016-01377 1992-2001 18,134,614.65 11,065,188.59 29,199,803.24
E-016-01378 1992-2001 111,107,950.40 67,794,681.59 178,902,631.99

On 7 February 2003, this Court issued a temporary restraining
order (TRO) effective immediately. The Court ordered respondents
E-016-01379 1992-2001 4,322,340.00 2,637,360.00 6,959,700.00
to cease and desist from selling at public auction the Airport Lands
E-016-01380 1992-2001 7,776,436.00 4,744,944.00 12,521,380.00 and Buildings. Respondents received the TRO on the same day that


the Court issued it. However, respondents received the TRO only at
1:25 p.m. or three hours after the conclusion of the public auction.
We rule that MIAA's Airport Lands and Buildings are exempt from
On 10 February 2003, this Court issued a Resolution con irming real estate tax imposed by local governments.
nunc pro tunc the TRO.
First, MIAA is not a government-owned or controlled corporation
On 29 March 2005, the Court heard the parties in oral arguments. In but an instrumentality of the National Government and thus exempt
compliance with the directive issued during the hearing, MIAA, from local taxation. Second, the real properties of MIAA are owned
respondent City of Parañ aque, and the Solicitor General by the Republic of the Philippines and thus exempt from real estate
subsequently submitted their respective Memoranda. tax.
1.MIAA is Not a Government-Owned or Controlled Corporation
MIAA admits that the MIAA Charter has placed the title to the
Airport Lands and Buildings in the name of MIAA. However, MIAA Respondents argue that MIAA, being a government-owned or
points out that it cannot claim ownership over these properties controlled corporation, is not exempt from real estate tax.
since the real owner of the Airport Lands and Buildings is the Respondents claim that the deletion of the phrase "any
Republic of the Philippines. The MIAA Charter mandates MIAA to government-owned or controlled so exempt by its charter" in
devote the Airport Lands and Buildings for the bene it of the Section 234(e) of the Local Government Code withdrew the real
general public. Since the Airport Lands and Buildings are devoted to estate tax exemption of government-owned or controlled
public use and public service, the ownership of these properties corporations. The deleted phrase appeared in Section 40(a) of the
remains with the State. The Airport Lands and Buildings are thus 1974 Real Property Tax Code enumerating the entities exempt from
inalienable and are not subject to real estate tax by local real estate tax.
governments.
There is no dispute that a government-owned or controlled
MIAA also points out that Section 21 of the MIAA Charter corporation is not exempt from real estate tax. However, MIAA is
speci ically exempts MIAA from the payment of real estate tax. not a government-owned or controlled corporation. Section 2(13)
MIAA insists that it is also exempt from real estate tax under Section of the Introductory Provisions of the Administrative Code of 1987
234 of the Local Government Code because the Airport Lands and de ines a government-owned or controlled corporation as follows:
Buildings are owned by the Republic. To justify the exemption,
MIAA invokes the principle that the government cannot tax itself. SEC. 2. General Terms De ined. - x x x x
MIAA points out that the reason for tax exemption of public
property is that its taxation would not inure to any public (13) Government-owned or controlled corporation refers to any
advantage, since in such a case the tax debtor is also the tax creditor. agency organized as a stock or non-stock corporation, vested with
functions relating to public needs whether governmental or
Respondents invoke Section 193 of the Local Government Code, proprietary in nature, and owned by the Government directly or
which expressly withdrew the tax exemption privileges of through its instrumentalities either wholly, or, where applicable as
"government-owned and-controlled corporations" upon the in the case of stock corporations, to the extent of at least ifty-one
effectivity of the Local Government Code. Respondents also argue (51) percent of its capital stock: x x x. (Emphasis supplied)
that a basic rule of statutory construction is that the express
mention of one person, thing, or act excludes all others. An A government-owned or controlled corporation must be "organized
international airport is not among the exceptions mentioned in as a stock or non-stock corporation." MIAA is not organized as a
Section 193 of the Local Government Code. Thus, respondents stock or non-stock corporation. MIAA is not a stock corporation
assert that MIAA cannot claim that the Airport Lands and Buildings because it has no capital stock divided into shares. MIAA has no
are exempt from real estate tax. stockholders or voting shares. Section 10 of the MIAA Charter[9]
provides:
Respondents also cite the ruling of this Court in Mactan
International Airport v. Marcos[8] where we held that the Local SECTION 10. Capital. - The capital of the Authority to be contributed
Government Code has withdrawn the exemption from real estate by the National Government shall be increased from Two and
tax granted to international airports. Respondents further argue One-half Billion (P2,500,000,000.00) Pesos to Ten Billion
that since MIAA has already paid some of the real estate tax (P10,000,000,000.00) Pesos to consist of:
assessments, it is now estopped from claiming that the Airport
Lands and Buildings are exempt from real estate tax. (a) The value of ixed assets including airport facilities, runways and
equipment and such other properties, movable and immovable[,]
which may be contributed by the National Government or
The Issue transferred by it from any of its agencies, the valuation of which
shall be determined jointly with the Department of Budget and
Management and the Commission on Audit on the date of such
This petition raises the threshold issue of whether the Airport contribution or transfer after making due allowances for
Lands and Buildings of MIAA are exempt from real estate tax under depreciation and other deductions taking into account the loans
existing laws. If so exempt, then the real estate tax assessments and other liabilities of the Authority at the time of the takeover of
issued by the City of Parañ aque, and all proceedings taken pursuant the assets and other properties;
to such assessments, are void. In such event, the other issues raised
in this petition become moot. (b) That the amount of P605 million as of December 31, 1986
representing about seventy percentum (70%) of the unremitted
share of the National Government from 1983 to 1986 to be remitted
The Court's Ruling to the National Treasury as provided for in Section 11 of E. O. No.


903 as amended, shall be converted into the equity of the National Corporation Law, insofar as these powers are not inconsistent with
Government in the Authority. Thereafter, the Government the provisions of this Executive Order."[15]
contribution to the capital of the Authority shall be provided in the
General Appropriations Act. Likewise, when the law makes a government instrumentality
operationally autonomous, the instrumentality remains part of the
Clearly, under its Charter, MIAA does not have capital stock that is National Government machinery although not integrated with the
divided into shares. department framework. The MIAA Charter expressly states that
transforming MIAA into a "separate and autonomous body"[16] will
Section 3 of the Corporation Code[10] de ines a stock corporation make its operation more " inancially viable."[17]
as one whose "capital stock is divided into shares and x x x
authorized to distribute to the holders of such shares dividends x x Many government instrumentalities are vested with corporate
x." MIAA has capital but it is not divided into shares of stock. MIAA powers but they do not become stock or non-stock corporations,
has no stockholders or voting shares. Hence, MIAA is not a stock which is a necessary condition before an agency or instrumentality
corporation. is deemed a government-owned or controlled corporation.
Examples are the Mactan International Airport Authority, the
MIAA is also not a non-stock corporation because it has no Philippine Ports Authority, the University of the Philippines and
members. Section 87 of the Corporation Code de ines a non-stock Bangko Sentral ng Pilipinas. All these government instrumentalities
corporation as "one where no part of its income is distributable as exercise corporate powers but they are not organized as stock or
dividends to its members, trustees or of icers." A non-stock non-stock corporations as required by Section 2(13) of the
corporation must have members. Even if we assume that the Introductory Provisions of the Administrative Code. These
Government is considered as the sole member of MIAA, this will not government instrumentalities are sometimes loosely called
make MIAA a non-stock corporation. Non-stock corporations cannot government corporate entities. However, they are not
distribute any part of their income to their members. Section 11 of government-owned or controlled corporations in the strict sense as
the MIAA Charter mandates MIAA to remit 20% of its annual gross understood under the Administrative Code, which is the governing
operating income to the National Treasury.[11] This prevents MIAA law de ining the legal relationship and status of government
from qualifying as a non-stock corporation. entities.
Section 88 of the Corporation Code provides that non-stock A government instrumentality like MIAA falls under Section 133(o)
corporations are "organized for charitable, religious, educational, of the Local Government Code, which states:
professional, cultural, recreational, fraternal, literary, scienti ic,
social, civil service, or similar purposes, like trade, industry, SEC. 133. Common Limitations on the Taxing Powers of Local
agriculture and like chambers." MIAA is not organized for any of Government Units. - Unless otherwise provided herein, the exercise
these purposes. MIAA, a public utility, is organized to operate an of the taxing powers of provinces, cities, municipalities, and
international and domestic airport for public use. barangays shall not extend to the levy of the following:
Since MIAA is neither a stock nor a non-stock corporation, MIAA xxxx

does not qualify as a government-owned or controlled corporation.
What then is the legal status of MIAA within the National (o) Taxes, fees or charges of any kind on the National Government,
Government? its agencies and instrumentalities and local government units.
(Emphasis and underscoring supplied)
MIAA is a government instrumentality vested with corporate
powers to perform ef iciently its governmental functions. MIAA is Section 133(o) recognizes the basic principle that local
like any other government instrumentality, the only difference is governments cannot tax the national government, which historically
that MIAA is vested with corporate powers. Section 2(10) of the merely delegated to local governments the power to tax. While the
Introductory Provisions of the Administrative Code de ines a 1987 Constitution now includes taxation as one of the powers of
government "instrumentality" as follows: local governments, local governments may only exercise such power
"subject to such guidelines and limitations as the Congress may
SEC. 2. General Terms De ined. - x x x x provide."[18]
(10) Instrumentality refers to any agency of the National When local governments invoke the power to tax on national
Government, not integrated within the department framework, government instrumentalities, such power is construed strictly
vested with special functions or jurisdiction by law, endowed with against local governments. The rule is that a tax is never presumed
some if not all corporate powers, administering special funds, and and there must be clear language in the law imposing the tax. Any
enjoying operational autonomy, usually through a charter. x x x doubt whether a person, article or activity is taxable is resolved
(Emphasis supplied) against taxation. This rule applies with greater force when local
governments seek to tax national government instrumentalities.
When the law vests in a government instrumentality corporate
powers, the instrumentality does not become a corporation. Unless Another rule is that a tax exemption is strictly construed against the
the government instrumentality is organized as a stock or non-stock taxpayer claiming the exemption. However, when Congress grants
corporation, it remains a government instrumentality exercising not an exemption to a national government instrumentality from local
only governmental but also corporate powers. Thus, MIAA exercises taxation, such exemption is construed liberally in favor of the
the governmental powers of eminent domain,[12] police national government instrumentality. As this Court declared in
authority[13] and the levying of fees and charges.[14] At the same Maceda v. Macaraig, Jr.:
time, MIAA exercises "all the powers of a corporation under the


The reason for the rule does not apply in the case of exemptions ARTICLE 419. Property is either of public dominion or of private
running to the bene it of the government itself or its agencies. In ownership.
such case the practical effect of an exemption is merely to reduce
the amount of money that has to be handled by government in the ARTICLE 420. The following things are property of public dominion:
course of its operations. For these reasons, provisions granting
exemptions to government agencies may be construed liberally, in (1) Those intended for public use, such as roads, canals, rivers,
favor of non tax-liability of such agencies.[19] torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
There is, moreover, no point in national and local governments
taxing each other, unless a sound and compelling policy requires (2) Those which belong to the State, without being for public use,
such transfer of public funds from one government pocket to and are intended for some public service or for the development of
another. the national wealth. (Emphasis supplied)
There is also no reason for local governments to tax national ARTICLE 421. All other property of the State, which is not of the
government instrumentalities for rendering essential public character stated in the preceding article, is patrimonial property.
services to inhabitants of local governments. The only exception is
when the legislature clearly intended to tax government ARTICLE 422. Property of public dominion, when no longer
instrumentalities for the delivery of essential public services for intended for public use or for public service, shall form part of the
sound and compelling policy considerations. There must be express patrimonial property of the State.
language in the law empowering local governments to tax national
government instrumentalities. Any doubt whether such power No one can dispute that properties of public dominion mentioned in
exists is resolved against local governments. Article 420 of the Civil Code, like "roads, canals, rivers, torrents,
ports and bridges constructed by the State," are owned by the State.
Thus, Section 133 of the Local Government Code states that "unless The term "ports" includes seaports and airports. The MIAA Airport
otherwise provided" in the Code, local governments cannot tax Lands and Buildings constitute a "port" constructed by the State.
national government instrumentalities. As this Court held in Basco Under Article 420 of the Civil Code, the MIAA Airport Lands and
v. Philippine Amusements and Gaming Corporation: Buildings are properties of public dominion and thus owned by the
State or the Republic of the Philippines.
The states have no power by taxation or otherwise, to retard,
impede, burden or in any manner control the operation of The Airport Lands and Buildings are devoted to public use because
constitutional laws enacted by Congress to carry into execution the they are used by the public for international and domestic travel
powers vested in the federal government. (MC Culloch v. Maryland, and transportation. The fact that the MIAA collects terminal fees
4 Wheat 316, 4 L Ed. 579) and other charges from the public does not remove the character of
the Airport Lands and Buildings as properties for public use. The
This doctrine emanates from the "supremacy" of the National operation by the government of a tollway does not change the
Government over local governments. character of the road as one for public use. Someone must pay for
the maintenance of the road, either the public indirectly through the
"Justice Holmes, speaking for the Supreme Court, made reference to taxes they pay the government, or only those among the public who
the entire absence of power on the part of the States to touch, in actually use the road through the toll fees they pay upon using the
that way (taxation) at least, the instrumentalities of the United road. The tollway system is even a more ef icient and equitable
States (Johnson v. Maryland, 254 US 51) and it can be agreed that no manner of taxing the public for the maintenance of public roads.
state or political subdivision can regulate a federal instrumentality
in such a way as to prevent it from consummating its federal The charging of fees to the public does not determine the character
responsibilities, or even to seriously burden it in the of the property whether it is of public dominion or not. Article 420
accomplishment of them." (Antieau, Modern Constitutional Law, Vol. of the Civil Code de ines property of public dominion as one
2, p. 140, emphasis supplied) "intended for public use." Even if the government collects toll fees,
the road is still "intended for public use" if anyone can use the road
Otherwise, mere creatures of theState can defeat National policies under the same terms and conditions as the rest of the public. The
thru extermination of what local authorities may perceive to be charging of fees, the limitation on the kind of vehicles that can use
undesirable activities or enterprise using the power to tax as "a tool the road, the speed restrictions and other conditions for the use of
for regulation" (U.S. v. Sanchez, 340 US 42). the road do not affect the public character of the road.
The power to tax which was called by Justice Marshall as the "power The terminal fees MIAA charges to passengers, as well as the
to destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to landing fees MIAA charges to airlines, constitute the bulk of the
defeat an instrumentality or creation of the very entity which has income that maintains the operations of MIAA. The collection of
the inherent power to wield it. [20] such fees does not change the character of MIAA as an airport for
public use. Such fees are often termed user's tax. This means taxing
2.Airport Lands and Buildings of MIAA are Owned by the Republic those among the public who actually use a public facility instead of
taxing all the public including those who never use the particular
a. Airport Lands and Buildings are of Public Dominion public facility. A user's tax is more equitable " a principle of taxation
mandated in the 1987 Constitution.[21]
The Airport Lands and Buildings of MIAA are property of public
dominion and therefore owned by the State or the Republic of the The Airport Lands and Buildings of MIAA, which its Charter calls the
Philippines. The Civil Code provides: "principal airport of the Philippines for both international and
domestic air traf ic,"[22] are properties of public dominion because


they are intended for public use. As properties of public dominion, auction sale of the 600-hectare runway of the MIAA for
they indisputably belong to the State or the Republic of the non-payment of real estate tax.
Philippines.
Before MIAA can encumber[26] the Airport Lands and Buildings,
b. Airport Lands and Buildings are Outside the Commerce of Man the President must irst withdraw from public use the Airport
Lands and Buildings. Sections 83 and 88 of the Public Land Law or
The Airport Lands and Buildings of MIAA are devoted to public use Commonwealth Act No. 141, which "remains to this day the existing
and thus are properties of public dominion. As properties of public general law governing the classi ication and disposition of lands of
dominion, the Airport Lands and Buildings are outside the the public domain other than timber and mineral lands,"[27]
commerce of man. The Court has ruled repeatedly that properties of provide:
public dominion are outside the commerce of man. As early as
1915, this Court already ruled in Municipality of Cavite v. Rojas that SECTION 83. Upon the recommendation of the Secretary of
properties devoted to public use are outside the commerce of man, Agriculture and Natural Resources, the President may designate by
thus: proclamation any tract or tracts of land of the public domain as
reservations for the use of the Republic of the Philippines or of any
According to article 344 of the Civil Code: "Property for public use of its branches, or of the inhabitants thereof, in accordance with
in provinces and in towns comprises the provincial and town roads, regulations prescribed for this purposes, or for quasi-public uses or
the squares, streets, fountains, and public waters, the promenades, purposes when the public interest requires it, including
and public works of general service supported by said towns or reservations for highways, rights of way for railroads, hydraulic
provinces." power sites, irrigation systems, communal pastures or lequas
communales, public parks, public quarries, public ishponds,
The said Plaza Soledad being a promenade for public use, the working men's village and other improvements for the public
municipal council of Cavite could not in 1907 withdraw or exclude bene it.
from public use a portion thereof in order to lease it for the sole
bene it of the defendant Hilaria Rojas. In leasing a portion of said SECTION 88. The tract or tracts of land reserved under the
plaza or public place to the defendant for private use the plaintiff provisions of Section eighty-three shall be non-alienable and shall
municipality exceeded its authority in the exercise of its powers by not be subject to occupation, entry, sale, lease, or other disposition
executing a contract over a thing of which it could not dispose, nor until again declared alienable under the provisions of this Act or by
is it empowered so to do. proclamation of the President. (Emphasis and underscoring
supplied)
The Civil Code, article 1271, prescribes that everything which is not
outside the commerce of man may be the object of a contract, and Thus, unless the President issues a proclamation withdrawing the
plazas and streets are outside of this commerce, as was decided by Airport Lands and Buildings from public use, these properties
the supreme court of Spain in its decision of February 12, 1895, remain properties of public dominion and are inalienable. Since the
which says: "Communal things that cannot be sold because they are Airport Lands and Buildings are inalienable in their present status
by their very nature outside of commerce are those for public use, as properties of public dominion, they are not subject to levy on
such as the plazas, streets, common lands, rivers, fountains, etc." execution or foreclosure sale. As long as the Airport Lands and
(Emphasis supplied) [23] Buildings are reserved for public use, their ownership remains with
the State or the Republic of the Philippines.
Again in Espiritu v. Municipal Council, the Court declared that
properties of public dominion are outside the commerce of man: The authority of the President to reserve lands of the public domain
for public use, and to withdraw such public use, is reiterated in
xxx Town plazas are properties of public dominion, to be devoted to Section 14, Chapter 4, Title I, Book III of the Administrative Code of
public use and to be made available to the public in general. They 1987, which states:
are outside the commerce of man and cannot be disposed of or even
leased by the municipality to private parties. While in case of war or SEC. 14. Power to Reserve Lands of the Public and Private Domain
during an emergency, town plazas may be occupied temporarily by of the Government. - (1) The President shall have the power to
private individuals, as was done and as was tolerated by the reserve for settlement or public use, and for speci ic public
Municipality of Pozorrubio, when the emergency has ceased, said purposes, any of the lands of the public domain, the use of which is
temporary occupation or use must also cease, and the town of icials not otherwise directed by law. The reserved land shall thereafter
should see to it that the town plazas should ever be kept open to the remain subject to the speci ic public purpose indicated until
public and free from encumbrances or illegal private otherwise provided by law or proclamation;
constructions.[24] (Emphasis supplied)
The Court has also ruled that property of public dominion, being x x x x. (Emphasis supplied)
outside the commerce of man, cannot be the subject of an auction
sale.[25] There is no question, therefore, that unless the Airport Lands and
Buildings are withdrawn by law or presidential proclamation from
Properties of public dominion, being for public use, are not subject public use, they are properties of public dominion, owned by the
to levy, encumbrance or disposition through public or private sale. Republic and outside the commerce of man.
Any encumbrance, levy on execution or auction sale of any property
of public dominion is void for being contrary to public policy. c. MIAA is a Mere Trustee of the Republic
Essential public services will stop if properties of public dominion
are subject to encumbrances, foreclosures and auction sale. This MIAA is merely holding title to the Airport Lands and Buildings in
will happen if the City of Parañ aque can foreclose and compel the trust for the Republic. Section 48, Chapter 12, Book I of the


Administrative Code allows instrumentalities like MIAA to hold title The whereas clauses of the MIAA Charter explain the rationale for
to real properties owned by the Republic, thus: the transfer of the Airport Lands and Buildings to MIAA, thus:
SEC. 48. Of icial Authorized to Convey Real Property. - Whenever WHEREAS, the Manila International Airport as the principal airport
real property of the Government is authorized by law to be of the Philippines for both international and domestic air traf ic, is
conveyed, the deed of conveyance shall be executed in behalf of the required to provide standards of airport accommodation and
government by the following: service comparable with the best airports in the world;
(1) For property belonging to and titled in the name of the Republic WHEREAS, domestic and other terminals, general aviation and
of the Philippines, by the President, unless the authority therefor is other facilities, have to be upgraded to meet the current and future
expressly vested by law in another of icer. air traf ic and other demands of aviation in Metro Manila;
(2) For property belonging to the Republic of the Philippines but WHEREAS, a management and organization study has indicated that
titled in the name of any political subdivision or of any corporate the objectives of providing high standards of accommodation and
agency or instrumentality, by the executive head of the agency or service within the context of a inancially viable operation, will best
instrumentality. (Emphasis supplied) be achieved by a separate and autonomous body; and
In MIAA's case, its status as a mere trustee of the Airport Lands and WHEREAS, under Presidential Decree No. 1416, as amended by
Buildings is clearer because even its executive head cannot sign the Presidential Decree No. 1772, the President of the Philippines is
deed of conveyance on behalf of the Republic. Only the President of given continuing authority to reorganize the National Government,
the Republic can sign such deed of conveyance.[28] which authority includes the creation of new entities, agencies and
instrumentalities of the Government[.] (Emphasis supplied)
d. Transfer to MIAA was Meant to Implement a Reorganization
The transfer of the Airport Lands and Buildings from the Bureau of
The MIAA Charter, which is a law, transferred to MIAA the title to Air Transportation to MIAA was not meant to transfer bene icial
the Airport Lands and Buildings from the Bureau of Air ownership of these assets from the Republic to MIAA. The purpose
Transportation of the Department of Transportation and was merely to reorganize a division in the Bureau of Air
Communications. The MIAA Charter provides: Transportation into a separate and autonomous body. The Republic
remains the bene icial owner of the Airport Lands and Buildings.
SECTION 3. Creation of the Manila International Airport Authority. - MIAA itself is owned solely by the Republic. No party claims any
xxxx ownership rights over MIAA's assets adverse to the Republic.
The land where the Airport is presently located as well as the The MIAA Charter expressly provides that the Airport Lands and
surrounding land area of approximately six hundred hectares, are Buildings "shall not be disposed through sale or through any other
hereby transferred, conveyed and assigned to the ownership and mode unless speci ically approved by the President of the
administration of the Authority, subject to existing rights, if any. The Philippines." This only means that the Republic retained the
Bureau of Lands and other appropriate government agencies shall bene icial ownership of the Airport Lands and Buildings because
undertake an actual survey of the area transferred within one year under Article 428 of the Civil Code, only the "owner has the right to
from the promulgation of this Executive Order and the x x x dispose of a thing." Since MIAA cannot dispose of the Airport
corresponding title to be issued in the name of the Authority. Any Lands and Buildings, MIAA does not own the Airport Lands and
portion thereof shall not be disposed through sale or through any Buildings.
other mode unless speci ically approved by the President of the
Philippines. (Emphasis supplied) At any time, the President can transfer back to the Republic title to
the Airport Lands and Buildings without the Republic paying MIAA
SECTION 22. Transfer of Existing Facilities and Intangible Assets. - any consideration. Under Section 3 of the MIAA Charter, the
All existing public airport facilities, runways, lands, buildings and President is the only one who can authorize the sale or disposition
other property, movable or immovable, belonging to the Airport, of the Airport Lands and Buildings. This only con irms that the
and all assets, powers, rights, interests and privileges belonging to Airport Lands and Buildings belong to the Republic.
the Bureau of Air Transportation relating to airport works or air
operations, including all equipment which are necessary for the e. Real Property Owned by the Republic is Not Taxable
operation of crash ire and rescue facilities, are hereby transferred
to the Authority. (Emphasis supplied) Section 234(a) of the Local Government Code exempts from real
estate tax any "[r]eal property owned by the Republic of the
SECTION 25. Abolition of the Manila International Airport as a Philippines." Section 234(a) provides:
Division in the Bureau of Air Transportation and Transitory
Provisions. - The Manila International Airport including the Manila SEC. 234. Exemptions from Real Property Tax. - The following are
Domestic Airport as a division under the Bureau of Air exempted from payment of the real property tax:
Transportation is hereby abolished.
(a) Real property owned by the Republic of the Philippines or any of
x x x x. its political subdivisions except when the bene icial use thereof has
been granted, for consideration or otherwise, to a taxable person;
The MIAA Charter transferred the Airport Lands and Buildings to
MIAA without the Republic receiving cash, promissory notes or x x x. (Emphasis supplied)
even stock since MIAA is not a stock corporation.


This exemption should be read in relation with Section 133(o) of It is evident from the quoted provisions of the Local Government
the same Code, which prohibits local governments from imposing Code that the withdrawn exemptions from realty tax cover not just
"[t]axes, fees or charges of any kind on the National Government, its GOCCs, but all persons. To repeat, the provisions lay down the
agencies and instrumentalities x x x." The real properties owned by explicit proposition that the withdrawal of realty tax exemption
the Republic are titled either in the name of the Republic itself or in applies to all persons. The reference to or the inclusion of GOCCs is
the name of agencies or instrumentalities of the National only clari icatory or illustrative of the explicit provision.
Government. The Administrative Code allows real property owned
by the Republic to be titled in the name of agencies or The term "All persons" encompasses the two classes of persons
instrumentalities of the national government. Such real properties recognized under our laws, natural and juridical persons. Obviously,
remain owned by the Republic and continue to be exempt from real MIAA is not a natural person. Thus, the determinative test is not just
estate tax. whether MIAA is a GOCC, but whether MIAA is a juridical person at
all. (Emphasis and underscoring in the original)
The Republic may grant the bene icial use of its real property to an
agency or instrumentality of the national government. This happens The minority posits that the "determinative test" whether MIAA is
when title of the real property is transferred to an agency or exempt from local taxation is its status - whether MIAA is a juridical
instrumentality even as the Republic remains the owner of the real person or not. The minority also insists that "Sections 193 and 234
property. Such arrangement does not result in the loss of the tax may be examined in isolation from Section 133(o) to ascertain
exemption. Section 234(a) of the Local Government Code states that MIAA's claim of exemption."
real property owned by the Republic loses its tax exemption only if
the "bene icial use thereof has been granted, for consideration or The argument of the minority is fatally lawed. Section 193 of the
otherwise, to a taxable person." MIAA, as a government Local Government Code expressly withdrew the tax exemption of all
instrumentality, is not a taxable person under Section 133(o) of the juridical persons "[u]nless otherwise provided in this Code." Now,
Local Government Code. Thus, even if we assume that the Republic Section 133(o) of the Local Government Code expressly provides
has granted to MIAA the bene icial use of the Airport Lands and otherwise, speci ically prohibiting local governments from imposing
Buildings, such fact does not make these real properties subject to any kind of tax on national government instrumentalities. Section
real estate tax. 133(o) states:
However, portions of the Airport Lands and Buildings that MIAA SEC. 133. Common Limitations on the Taxing Powers of Local
leases to private entities are not exempt from real estate tax. For Government Units. - Unless otherwise provided herein, the exercise
example, the land area occupied by hangars that MIAA leases to of the taxing powers of provinces, cities, municipalities, and
private corporations is subject to real estate tax. In such a case, barangays shall not extend to the levy of the following:
MIAA has granted the bene icial use of such land area for a
consideration to a taxable person and therefore such land area is xxxx
subject to real estate tax. In Lung Center of the Philippines v.
Quezon City, the Court ruled: (o) Taxes, fees or charges of any kinds on the National Government,
its agencies and instrumentalities, and local government units.
Accordingly, we hold that the portions of the land leased to private (Emphasis and underscoring supplied)
entities as well as those parts of the hospital leased to private
individuals are not exempt from such taxes. On the other hand, the By express mandate of the Local Government Code, local
portions of the land occupied by the hospital and portions of the governments cannot impose any kind of tax on national government
hospital used for its patients, whether paying or non-paying, are instrumentalities like the MIAA. Local governments are devoid of
exempt from real property taxes.[29] power to tax the national government, its agencies and
instrumentalities. The taxing powers of local governments do not
3. Refutation of Arguments of Minority extend to the national government, its agencies and
instrumentalities, "[u]nless otherwise provided in this Code" as
The minority asserts that the MIAA is not exempt from real estate stated in the saving clause of Section 133. The saving clause refers
tax because Section 193 of the Local Government Code of 1991 to Section 234(a) on the exception to the exemption from real estate
withdrew the tax exemption of "all persons, whether natural or tax of real property owned by the Republic.
juridical" upon the effectivity of the Code. Section 193 provides:
The minority, however, theorizes that unless exempted in Section
SEC. 193. Withdrawal of Tax Exemption Privileges - Unless 193 itself, all juridical persons are subject to tax by local
otherwise provided in this Code, tax exemptions or incentives governments. The minority insists that the juridical persons exempt
granted to, or presently enjoyed by all persons, whether natural or from local taxation are limited to the three classes of entities
juridical, including government-owned or controlled corporations, speci ically enumerated as exempt in Section 193. Thus, the
except local water districts, cooperatives duly registered under R.A. minority states:
No. 6938, non-stock and non-pro it hospitals and educational
institutions are hereby withdrawn upon effectivity of this Code. x x x Under Section 193, the exemption is limited to (a) local water
(Emphasis supplied) districts; (b) cooperatives duly registered under Republic Act No.
6938; and (c) non-stock and non-pro it hospitals and educational
The minority states that MIAA is indisputably a juridical person. institutions. It would be belaboring the obvious why the MIAA does
The minority argues that since the Local Government Code not fall within any of the exempt entities under Section 193.
withdrew the tax exemption of all juridical persons, then MIAA is (Emphasis supplied)
not exempt from real estate tax. Thus, the minority declares:
The minority's theory directly contradicts and completely negates
Section 133(o) of the Local Government Code. This theory will


result in gross absurdities. It will make the national government,

which itself is a juridical person, subject to tax by local governments The exception to the exemption in Section 234(a) is the only
since the national government is not included in the enumeration of instance when the national government, its agencies and
exempt entities in Section 193. Under this theory, local governments instrumentalities are subject to any kind of tax by local
can impose any kind of local tax, and not only real estate tax, on the governments. The exception to the exemption applies only to real
national government. estate tax and not to any other tax. The justi ication for the
exception to the exemption is that the real property, although
Under the minority's theory, many national government owned by the Republic, is not devoted to public use or public
instrumentalities with juridical personalities will also be subject to service but devoted to the private gain of a taxable person.
any kind of local tax, and not only real estate tax. Some of the
national government instrumentalities vested by law with juridical The minority also argues that since Section 133 precedes Section
personalities are: Bangko Sentral ng Pilipinas,[30] Philippine Rice 193 and 234 of the Local Government Code, the later provisions
Research Institute,[31] Laguna Lake prevail over Section 133. Thus, the minority asserts:
Development Authority,[32] Fisheries Development Authority,[33] x x x Moreover, sequentially Section 133 antecedes Section 193 and
Bases Conversion Development Authority,[34] Philippine Ports 234. Following an accepted rule of construction, in case of con lict
Authority,[35] Cagayan de Oro Port Authority,[36] San Fernando the subsequent provisions should prevail. Therefore, MIAA, as a
Port Authority,[37] Cebu Port Authority,[38] and Philippine juridical person, is subject to real property taxes, the general
National Railways.[39] exemptions attaching to instrumentalities under Section 133(o) of
the Local Government Code being quali ied by Sections 193 and 234
The minority's theory violates Section 133(o) of the Local of the same law. (Emphasis supplied)
Government Code which expressly prohibits local governments
from imposing any kind of tax on national government The minority assumes that there is an irreconcilable con lict
instrumentalities. Section 133(o) does not distinguish between between Section 133 on one hand, and Sections 193 and 234 on the
national government instrumentalities with or without juridical other. No one has urged that there is such a con lict, much less has
personalities. Where the law does not distinguish, courts should not any one presented a persuasive argument that there is such a
distinguish. Thus, Section 133(o) applies to all national government con lict. The minority's assumption of an irreconcilable con lict in
instrumentalities, with or without juridical personalities. The the statutory provisions is an egregious error for two reasons.
determinative test whether MIAA is exempt from local taxation is
not whether MIAA is a juridical person, but whether it is a national First, there is no con lict whatsoever between Sections 133 and 193
government instrumentality under Section 133(o) of the Local because Section 193 expressly admits its subordination to other
Government Code. Section 133(o) is the speci ic provision of law provisions of the Code when Section 193 states "[u]nless otherwise
prohibiting local governments from imposing any kind of tax on the provided in this Code." By its own words, Section 193 admits the
national government, its agencies and instrumentalities. superiority of other provisions of the Local Government Code that
limit the exercise of the taxing power in Section 193. When a
Section 133 of the Local Government Code starts with the saving provision of law grants a power but withholds such power on
clause "[u]nless otherwise provided in this Code." This means that certain matters, there is no con lict between the grant of power and
unless the Local Government Code grants an express authorization, the withholding of power. The grantee of the power simply cannot
local governments have no power to tax the national government, exercise the power on matters withheld from its power.
its agencies and instrumentalities. Clearly, the rule is local
governments have no power to tax the national government, its Second, Section 133 is entitled "Common Limitations on the Taxing
agencies and instrumentalities. As an exception to this rule, local Powers of Local Government Units." Section 133 limits the grant to
governments may tax the national government, its agencies and local governments of the power to tax, and not merely the exercise
instrumentalities only if the Local Government Code expressly so of a delegated power to tax. Section 133 states that the taxing
provides. powers of local governments "shall not extend to the levy" of any
kind of tax on the national government, its agencies and
The saving clause in Section 133 refers to the exception to the instrumentalities. There is no clearer limitation on the taxing power
exemption in Section 234(a) of the Code, which makes the national than this.
government subject to real estate tax when it gives the bene icial
use of its real properties to a taxable entity. Section 234(a) of the Since Section 133 prescribes the "common limitations" on the
Local Government Code provides: taxing powers of local governments, Section 133 logically prevails
over Section 193 which grants local governments such taxing
SEC. 234. Exemptions from Real Property Tax - The following are powers. By their very meaning and purpose, the "common
exempted from payment of the real property tax: limitations" on the taxing power prevail over the grant or exercise
of the taxing power. If the taxing power of local governments in
(a) Real property owned by the Republic of the Philippines or any of Section 193 prevails over the limitations on such taxing power in
its political subdivisions except when the bene icial use thereof has Section 133, then local governments can impose any kind of tax on
been granted, for consideration or otherwise, to a taxable person. the national government, its agencies and instrumentalities - a
gross absurdity.
x x x. (Emphasis supplied)
Local governments have no power to tax the national government,
Under Section 234(a), real property owned by the Republic is its agencies and instrumentalities, except as otherwise provided in
exempt from real estate tax. The exception to this exemption is the Local Government Code pursuant to the saving clause in Section
when the government gives the bene icial use of the real property to 133 stating "[u]nless otherwise provided in this Code." This
a taxable entity. exception " which is an exception to the exemption of the Republic


from real estate tax imposed by local governments - refers to I submit that the de inition of "government-owned or controlled
Section 234(a) of the Code. The exception to the exemption in corporations" under the Administrative Code refer to those
Section 234(a) subjects real property owned by the Republic, corporations owned by the government or its instrumentalities
whether titled in the name of the national government, its agencies which are created not by legislative enactment, but formed and
or instrumentalities, to real estate tax if the bene icial use of such organized under the Corporation Code through registration with
property is given to a taxable entity. the Securities and Exchange Commission. In short, these are GOCCs
without original charters.
The minority also claims that the de inition in the Administrative
Code of the phrase "government-owned or controlled corporation" xxxx
is not controlling. The minority points out that Section 2 of the
Introductory Provisions of the Administrative Code admits that its It might as well be worth pointing out that there is no point in
de initions are not controlling when it provides: requiring a capital structure for GOCCs whose full ownership is
limited by its charter to the State or Republic. Such GOCCs are not
SEC. 2. General Terms De ined. - Unless the speci ic words of the empowered to declare dividends or alienate their capital shares.
text, or the context as a whole, or a particular statute, shall require a
different meaning: The contention of the minority is seriously lawed. It is not in accord
with the Constitution and existing legislations. It will also result in
xxxx gross absurdities.
The minority then concludes that reliance on the Administrative First, the Administrative Code de inition of the phrase
Code de inition is " lawed." "government-owned or controlled corporation" does not
distinguish between one incorporated under the Corporation Code
The minority's argument is a non sequitur. True, Section 2 of the or under a special charter. Where the law does not distinguish,
Administrative Code recognizes that a statute may require a courts should not distinguish.
different meaning than that de ined in the Administrative Code.
However, this does not automatically mean that the de inition in the Second, Congress has created through special charters several
Administrative Code does not apply to the Local Government Code. government-owned corporations organized as stock corporations.
Section 2 of the Administrative Code clearly states that "unless the Prime examples are the Land Bank of the Philippines and the
speci ic words x x x of a particular statute shall require a different Development Bank of the Philippines. The special charter[40] of the
meaning," the de inition in Section 2 of the Administrative Code Land Bank of the Philippines provides:
shall apply. Thus, unless there is speci ic language in the Local
Government Code de ining the phrase "government-owned or SECTION 81. Capital. - The authorized capital stock of the Bank shall
controlled corporation" differently from the de inition in the be nine billion pesos, divided into seven hundred and eighty million
Administrative Code, the de inition in the Administrative Code common shares with a par value of ten pesos each, which shall be
prevails. fully subscribed by the Government, and one hundred and twenty
million preferred shares with a par value of ten pesos each, which
The minority does not point to any provision in the Local shall be issued in accordance with the provisions of Sections
Government Code de ining the phrase "government-owned or seventy-seven and eighty-three of this Code. (Emphasis supplied)
controlled corporation" differently from the de inition in the
Administrative Code. Indeed, there is none. The Local Government Likewise, the special charter[41] of the Development Bank of the
Code is silent on the de inition of the phrase "government-owned or Philippines provides:
controlled corporation." The Administrative Code, however,
expressly de ines the phrase "government-owned or controlled SECTION 7. Authorized Capital Stock " Par value. " The capital stock
corporation." The inescapable conclusion is that the Administrative of the Bank shall be Five Billion Pesos to be divided into Fifty
Code de inition of the phrase "government-owned or controlled Million common shares with par value of P100 per share. These
corporation" applies to the Local Government Code. shares are available for subscription by the National Government.
Upon the effectivity of this Charter, the National Government shall
The third whereas clause of the Administrative Code states that the subscribe to Twenty-Five Million common shares of stock worth
Code "incorporates in a uni ied document the major structural, Two Billion Five Hundred Million which shall be deemed paid for by
functional and procedural principles and rules of governance." the Government with the net asset values of the Bank remaining
Thus, the Administrative Code is the governing law de ining the after the transfer of assets and liabilities as provided in Section 30
status and relationship of government departments, bureaus, hereof. (Emphasis supplied)
of ices, agencies and instrumentalities. Unless a statute expressly
provides for a different status and relationship for a speci ic Other government-owned corporations organized as stock
government unit or entity, the provisions of the Administrative Code corporations under their special charters are the Philippine Crop
prevail. Insurance Corporation,[42] Philippine International Trading
Corporation,[43] and the Philippine National Bank[44] before it was
The minority also contends that the phrase "government-owned or reorganized as a stock corporation under the Corporation Code. All
controlled corporation" should apply only to corporations these government-owned corporations organized under special
organized under the Corporation Code, the general incorporation charters as stock corporations are subject to real estate tax on real
law, and not to corporations created by special charters. The properties owned by them. To rule that they are not
minority sees no reason why government corporations with special government-owned or controlled corporations because they are not
charters should have a capital stock. Thus, the minority declares: registered with the Securities and Exchange Commission would
remove them from the reach of Section 234 of the Local
Government Code, thus exempting them from real estate tax.


Commissioner Blas F. Ople, proponent of the test of economic

Third, the government-owned or controlled corporations created viability, explained to the Constitutional Commission the purpose of
through special charters are those that meet the two conditions this test, as follows:
prescribed in Section 16, Article XII of the Constitution. The irst
condition is that the government-owned or controlled corporation MR. OPLE: Madam President, the reason for this concern is really
must be established for the common good. The second condition is that when the government creates a corporation, there is a sense in
that the government-owned or controlled corporation must meet which this corporation becomes exempt from the test of economic
the test of economic viability. Section 16, Article XII of the 1987 performance. We know what happened in the past. If a government
Constitution provides: corporation loses, then it makes its claim upon the taxpayers"
money through new equity infusions from the government and
SEC. 16. The Congress shall not, except by general law, provide for what is always invoked is the common good. That is the reason why
the formation, organization, or regulation of private corporations. this year, out of a budget of P115 billion for the entire government,
Government-owned or controlled corporations may be created or about P28 billion of this will go into equity infusions to support a
established by special charters in the interest of the common good few government inancial institutions. And this is all taxpayers"
and subject to the test of economic viability. (Emphasis and money which could have been relocated to agrarian reform, to
underscoring supplied) social services like health and education, to augment the salaries of
grossly underpaid public employees. And yet this is all going down
The Constitution expressly authorizes the legislature to create the drain.
"government-owned or controlled corporations" through special
charters only if these entities are required to meet the twin Therefore, when we insert the phrase "ECONOMIC VIABILITY"
conditions of common good and economic viability. In other words, together with the "common good," this becomes a restraint on
Congress has no power to create government-owned or controlled future enthusiasts for state capitalism to excuse themselves from
corporations with special charters unless they are made to comply the responsibility of meeting the market test so that they become
with the two conditions of common good and economic viability. viable. And so, Madam President, I reiterate, for the committee's
The test of economic viability applies only to government-owned or consideration and I am glad that I am joined in this proposal by
controlled corporations that perform economic or commercial Commissioner Foz, the insertion of the standard of "ECONOMIC
activities and need to compete in the market place. Being essentially VIABILITY OR THE ECONOMIC TEST," together with the common
economic vehicles of the State for the common good " meaning for good.[45]
economic development purposes " these government-owned or
controlled corporations with special charters are usually organized Father Joaquin G. Bernas, a leading member of the Constitutional
as stock corporations just like ordinary private corporations. Commission, explains in his textbook The 1987 Constitution of the
Republic of the Philippines: A Commentary:
In contrast, government instrumentalities vested with corporate
powers and performing governmental or public functions need not The second sentence was added by the 1986 Constitutional
meet the test of economic viability. These instrumentalities perform Commission. The signi icant addition, however, is the phrase "in the
essential public services for the common good, services that every interest of the common good and subject to the test of economic
modern State must provide its citizens. These instrumentalities viability." The addition includes the ideas that they must show
need not be economically viable since the government may even capacity to function ef iciently in business and that they should not
subsidize their entire operations. These instrumentalities are not go into activities which the private sector can do better. Moreover,
the "government-owned or controlled corporations" referred to in economic viability is more than inancial viability but also includes
Section 16, Article XII of the 1987 Constitution. capability to make pro it and generate bene its not quanti iable in
inancial terms.[46] (Emphasis supplied)
Thus, the Constitution imposes no limitation when the legislature
creates government instrumentalities vested with corporate powers Clearly, the test of economic viability does not apply to government
but performing essential governmental or public functions. entities vested with corporate powers and performing essential
Congress has plenary authority to create government public services. The State is obligated to render essential public
instrumentalities vested with corporate powers provided these services regardless of the economic viability of providing such
instrumentalities perform essential government functions or public service. The non-economic viability of rendering such essential
services. However, when the legislature creates through special public service does not excuse the State from withholding such
charters corporations that perform economic or commercial essential services from the public.
activities, such entities " known as "government-owned or
controlled corporations" " must meet the test of economic viability However, government-owned or controlled corporations with
because they compete in the market place. special charters, organized essentially for economic or commercial
objectives, must meet the test of economic viability. These are the
This is the situation of the Land Bank of the Philippines and the government-owned or controlled corporations that are usually
Development Bank of the Philippines and similar organized under their special charters as stock corporations, like
government-owned or controlled corporations, which derive their the Land Bank of the Philippines and the Development Bank of the
income to meet operating expenses solely from commercial Philippines. These are the government-owned or controlled
transactions in competition with the private sector. The intent of the corporations, along with government-owned or controlled
Constitution is to prevent the creation of government-owned or corporations organized under the Corporation Code, that fall under
controlled corporations that cannot survive on their own in the the de inition of "government-owned or controlled corporations" in
market place and thus merely drain the public coffers. Section 2(10) of the Administrative Code.
The MIAA need not meet the test of economic viability because the
legislature did not create MIAA to compete in the market place.


MIAA does not compete in the market place because there is no Introductory Provisions of the Administrative Code. More
competing international airport operated by the private sector. importantly, as long as MIAA renders essential public services, it
MIAA performs an essential public service as the primary domestic need not comply with the test of economic viability. Thus, MIAA is
and international airport of the Philippines. The operation of an outside the scope of the phrase "government-owned or controlled
international airport requires the presence of personnel from the corporations" under Section 16, Article XII of the 1987 Constitution.
following government agencies:
1.The Bureau of Immigration and Deportation, to document the The minority belittles the use in the Local Government Code of the
arrival and departure of passengers, screening out those without phrase "government-owned or controlled corporation" as merely
visas or travel documents, or those with hold departure orders; "clari icatory or illustrative." This is fatal. The 1987 Constitution
prescribes explicit conditions for the creation of
"government-owned or controlled corporations." The
2.The Bureau of Customs, to collect import duties or enforce the ban Administrative Code de ines what constitutes a
on prohibited importations; "government-owned or controlled corporation." To belittle this
phrase as "clari icatory or illustrative" is grave error.
3. The quarantine of ice of the Department of Health, to enforce To summarize, MIAA is not a government-owned or controlled
health measures against the spread of infectious diseases into the corporation under Section 2(13) of the Introductory Provisions of
country; the Administrative Code because it is not organized as a stock or
non-stock corporation. Neither is MIAA a government-owned or
controlled corporation under Section 16, Article XII of the 1987
4.The Department of Agriculture, to enforce measures against the Constitution because MIAA is not required to meet the test of
spread of plant and animal diseases into the country; economic viability. MIAA is a government instrumentality vested
with corporate powers and performing essential public services
pursuant to Section 2(10) of the Introductory Provisions of the
5.The Aviation Security Command of the Philippine National Police, Administrative Code. As a government instrumentality, MIAA is not
to prevent the entry of terrorists and the escape of criminals, as well subject to any kind of tax by local governments under Section
as to secure the airport premises from terrorist attack or seizure; 133(o) of the Local Government Code. The exception to the
exemption in Section 234(a) does not apply to MIAA because MIAA
is not a taxable entity under the Local Government Code. Such
6.The Air Traf ic Of ice of the Department of Transportation and exception applies only if the bene icial use of real property owned
Communications, to authorize aircraft to enter or leave Philippine by the Republic is given to a taxable entity.
airspace, as well as to land on, or take off from, the airport; and
Finally, the Airport Lands and Buildings of MIAA are properties
devoted to public use and thus are properties of public dominion.
7.The MIAA, to provide the proper premises - such as runway and Properties of public dominion are owned by the State or the
buildings - for the government personnel, passengers, and airlines, Republic. Article 420 of the Civil Code provides:
and to manage the airport operations.
Art. 420. The following things are property of public dominion:
All these agencies of government perform government functions
essential to the operation of an international airport. (1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
MIAA performs an essential public service that every modern State roadsteads, and others of similar character;
must provide its citizens. MIAA derives its revenues principally
from the mandatory fees and charges MIAA imposes on passengers (2) Those which belong to the State, without being for public use,
and airlines. The terminal fees that MIAA charges every passenger and are intended for some public service or for the development of
are regulatory or administrative fees[47] and not income from the national wealth. (Emphasis supplied)
commercial transactions.
The term "ports x x x constructed by the State" includes airports
MIAA falls under the de inition of a government instrumentality and seaports. The Airport Lands and Buildings of MIAA are
under Section 2(10) of the Introductory Provisions of the intended for public use, and at the very least intended for public
Administrative Code, which provides: service. Whether intended for public use or public service, the
Airport Lands and Buildings are properties of public dominion. As
SEC. 2. General Terms De ined. - x x x x properties of public dominion, the Airport Lands and Buildings are
owned by the Republic and thus exempt from real estate tax under
(10) Instrumentality refers to any agency of the National Section 234(a) of the Local Government Code.
Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with 4. Conclusion
some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. x x x Under Section 2(10) and (13) of the Introductory Provisions of the
(Emphasis supplied) Administrative Code, which governs the legal relation and status of
government units, agencies and of ices within the entire
The fact alone that MIAA is endowed with corporate powers does government machinery, MIAA is a government instrumentality and
not make MIAA a government-owned or controlled corporation. not a government-owned or controlled corporation. Under Section
Without a change in its capital structure, MIAA remains a 133(o) of the Local Government Code, MIAA as a government
government instrumentality under Section 2(10) of the instrumentality is not a taxable person because it is not subject to


"[t]axes, fees or charges of any kind" by local governments. The only portion of Lot 1, and the portions of Nalazon street and Anunciacion
exception is when MIAA leases its real property to a "taxable street traversing said Lot 1 and Lot 2, as public plaza and public
person" as provided in Section 234(a) of the Local Government thoroughfares, respectively, and hence not subject to registration.
Code, in which case the speci ic real property leased becomes
subject to real estate tax. Thus, only portions of the Airport Lands The petition for registration was iled by the Bishop of Calbayog, as
and Buildings leased to taxable persons like private parties are a corporation sole, on March 27, 1953, alleging open, continuous,
subject to real estate tax by the City of Parañ aque. exclusive and notorious possession, since the Spanish regime, of
three parcels of land known as Lot 1 and Lot 2 in the survey plan
Under Article 420 of the Civil Code, the Airport Lands and Buildings Exhibit D, dated September 14-15, 1951, and Lot 3 in the survey
of MIAA, being devoted to public use, are properties of public plan Exhibit E, the irst two lots situated in the poblacion of
dominion and thus owned by the State or the Republic of the Catarman, Samar, and the third in barrio Cawayan.
Philippines. Article 420 speci ically mentions "ports x x x Opposition to the application was iled by the Director of Lands
constructed by the State," which includes public airports and with respect to the three lots on October 1, 1953, and by the
seaports, as properties of public dominion and owned by the Municipality of Catarman with respect to Lot 2 during the survey
Republic. As properties of public dominion owned by the Republic, thereof.
there is no doubt whatsoever that the Airport Lands and Buildings On October 15, 1955 the lower court issued an order of general
are expressly exempt from real estate tax under Section 234(a) of default except as against the aforementioned oppositors. In the
the Local Government Code. This Court has also repeatedly ruled same order the Municipality of Catarman was given 5 days from
that properties of public dominion are not subject to execution or notice within which to submit in proper form its opposition with
foreclosure sale. respect to Lot 2. Copy of the order of general default was received
by the municipal secretary on October 18, 1955, and on October 21
WHEREFORE, we GRANT the petition. We SET ASIDE the assailed the Municipality of Catarman iled its formal opposition as ordered.
Resolutions of the Court of Appeals of 5 October 2001 and 27 On November 28, 1956 it iled an amended opposition, including
September 2002 in CA-G.R. SP No. 66878. We DECLARE the Airport therein the eastern portion of Lot 1 and portions of Nalazon street
Lands and Buildings of the Manila International Airport Authority and Anunciacion street traversing said Lot 1. A second amended
EXEMPT from the real estate tax imposed by the City of Parañ aque. opposition was iled on June 15, 1957, particularly describing Lot 1
We declare VOID all the real estate tax assessments, including the and Lot 2 and alleging that the eastern portion of Lot 1, being a
inal notices of real estate tax delinquencies, issued by the City of municipal plaza, was registrable in favor of the municipality.
Parañ aque on the Airport Lands and Buildings of the Manila After initial hearing the lower court, in an order dated June 15,
International Airport Authority, except for the portions that the 1957, denied the amendment on the ground that the proper
Manila International Airport Authority has leased to private parties. procedure, which was by means of petition for relief from the order
We also declare VOID the assailed auction sale, and all its effects, of of general default, had not been resorted to.
the Airport Lands and Buildings of the Manila International Airport After trial on the merits the lower court rendered its decision on
Authority. April 18, 1964 (1) ordering the applicant to segregate from Lot 1
Nalazon street and Anunciacion street as public thoroughfares and
No costs. the eastern portion of Lot 1, beginning from Nalazon street up to
Mendiola street, as public plaza of the Municipality of Catarman; (2)
SO ORDERED. con irming the imperfect title of the applicant over the remaining
portion of Lot 1, with all the improvements existing thereon, and
Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago, ordering that the same be registered in the name of the Bishop of
Sandoval-Gutierrez, Corona, Carpio-Morales, Chico-Nazario, Garcia, Calbayog as a corporation sole; (3) adjudicating Lot 2, together with
and Velasco, Jr. JJ., concur. all the improvements existing thereon, except the portion of
Austria-Martinez, Callejo, Sr., JJ., separate opinion. Nalazon street along the eastern boundary of the lot, in favor of the
Azcuna, J., on leave. Municipality of Catarman; and (4) con irming the applicant's title
Tinga, J., dissenting opinion. over Lot 3 and ordering that the same be registered in the name of
the Bishop of Calbayog.
Bishop of Calbayog vs Director of Lands, The Bishop of Calbayog appealed.
The evidence discloses the following pertinent facts: The survey
G.R. No. L-23481, June 29, 1972 plan presented by the applicant as Exhibit D, which was executed on
150-A Phil. 806
September 14-15, 1951, shows that the entire area of Lot 1 is
17,571 square meters, more or less. It is bounded on the north by a
G.R. No. L-23481, June 29, 1972
provincial road (now Rizal St.), on the east by Mendiola St., on the
BISHOP OF CALBAYOG, MONS. MIGUEL F. ACEBEDO, APPLICANT
south by Bonifacio St., and on the west by a national road (Trece
AND APPELLANT, VS. THE DIRECTOR OF LANDS AND THE
Martires del 1900 St.). Opposite Lot 1 to the northwest is Lot 2,
MUNICIPALITY OF CATARMAN, SAMAR, OPPOSITORS AND
which has an area of approximately 4,707 square meters. It is
APPELLEES.
bounded by the provincial road (Rizal St.) on the south, on the west
by the national road (Trece Martires der 1900 St.), on the north by
D E C I S I ON
Blumentrit St. and on the east by a municipal lot.
MAKALINTAL, J.:
The survey plan does not contain any other information or
markings. But from the undisputed actual observation by the lower
This is an appeal from the decision of the Court of First Instance of
court as well as from the description given by the witnesses for both
Samar in Land Registration Case No. 3448 involving three parcels of
parties, Nalazon St., which traverses the entire length of the
land located in Catarman, Samar (denominated as Lots 1, 2 and 3),
poblacion from south to north, crosses Jacinto and Real streets and
titles to which were sought to be con irmed and registered in favor
cuts across Lot 1 from Bonifacio St. to Rizal St., passing immediately
of the Bishop of Calbayog. The lower court adjudicated Lot 2 in
in front of the church and the convent. It extends across Lot 2 along
favor of the Municipality of Catarman and declared the eastern


its eastern boundary from Rizal St. to Blumentrit St. Thus, from (Exhibit F) for Lot 2 dated May 8, 1948 in the name of the Roman
actual observation Lot 2 appears bounded on the east by Nalazon Catholic Church. This tax declaration describes Lot 2 as being
St. and not by the municipal lot as described in the survey plan. bounded by Trece Martires del 1900 on the west, Nalazon St.
With respect to Lot 1, Nalazon St. divides the lot into the western (instead of the municipal lot as described in Exhibit D) on the east,
portion, which forms about 2/3 of the entire area, and the eastern Blumentrit St. on the north and Rizal St. on the south.
portion which comprises the other 1/3. All the permanent The testimony of Atty. Singzon was corroborated by Candido
improvements on Lot 1, which include the Roman Catholic church, Franzuela, a 63 year-old resident of Catarman and brother of Fr.
the belfry and convent, the St. Michael Academy building and a Franzuela of the same municipality as well as Salvadora Olmedo, an
nun's residence, are found on the western portion. Lot 2 has no 82 year-old local resident, who died after giving her direct
permanent improvements. The eastern portion of Lot 1, the area in testimony. Franzuela con irmed the existence on Lot 2 of camarins
contention, is an empty space except for concrete benches along the used as stables for the cattle owned by the church. He remembered
perimeter. A partly cemented path runs across this lot from east to that sometime in 1927 a group of Chinese asked permission from
west leading up to the front or entrance of the church and appears the parish priest to use the lot as a football ground, which they did
to be an extension of Anunciacion St., which runs from the bank of for 2 years. On cross-examination he admitted that before Nalazon
the Catarman river up to Mendiola St. In the middle of this path, St. was extended there was no visible boundary between Lot 2
half-way between Mendiola St. and the church, is a statue of the claimed by the Church and the municipal lot on which a public
Sacred Heart of Jesus. school building used to stand. Salvadora Olmedo also testi ied that
The Roman Catholic Church relies on the testimony of its witnesses when she was yet schooling a certain Fr. Troquillo had camarins on
to prove its ownership. Mariano Singzon, 59 years old and one-time Lot 2 which he used as stables for his cows and horses and that
municipal councilor of Catarman and also counsel in this case for whenever she and her classmates wanted to gather lowers on this
the applicant, was the principal witness. The following is his lot they asked permission from the priest.
testimony: Prior to 1910 the portions of Nalazon and Anunciacion The case for oppositors was presented by the following witnesses:
streets traversing Lot 1 and Lot 2 were merely trails used by the 1. Martin Evangelista, 65 years old and former municipal treasurer
parishioners in going to and from the church. A retracing (Exhibit of Catarman, declared that as property custodian of the
M) of a survey plan of the poblacion of Catarman executed in 1909 municipality before his retirement, he knew that Lot 2 was owned
shows that Anunciacion St. stopped at Calle Gar il (now Mendiola by the municipality. This lot was fenced by the municipality irst
St.) and that there was no other street traversing Lot 1. According with bamboos and then with barbed wire because the municipal
to Atty. Singzon, Nalazon St. was opened and improved by the prisoners were planting camotes on this lot. On February 21, 1952
municipality sometime in 1910 or 1911. Anunciacion St. was Fr. Franquela personally handed to him a letter (Exhibit I) asking
opened only about 2 years before the trial of the case. In 1920, the that he be allowed to use a portion of Lot 2 as playground for the
municipality planted acacia trees on both sides of Nalazon St. inside students of St. Michael Academy. He endorsed the letter to the
Lot 1 and along Mendiola St. bordering Lot 1, but these trees were municipal council of Catarman, which passed Resolution No. 19
recently cut down upon order of the priest, Fr. Ricalde, and all that (Exhibit 3), declaring Lot 2 as temporary public playground until
remain are stumps. The statue of the Sacred Heart found in the such time that the municipality was ready to construct a permanent
middle of Anunciacion St. was put up in 1927, but the base of the improvement thereon.
statue had been standing on that site even before 1905. The Roman 2. Eusebio Moore, 54, mayor of Catarman since 1948, declared that
Catholic Church had made no improvements on this eastern portion Lot 2 was owned by the municipality because when he was in the
of Lot 1, which at present is being used as a public playground, elementary grades he attended classes in a public school building
although a bandstand stood there for about three years after it was located on the municipal lot next to Lot 2 and did school gardening
constructed in 1926 by the members of an orchestra which was on Lot 2. When he was in Grade 6, as leader of the school football
organized by a Fr. Ranera and which used to give musical team he invited the Chinese team to play and he was the one who
performances on the bandstand. On the feast of Corpus Christi the asked permission from the municipal president to use Lots 2 as
parishioners would construct an altar on this lot and hold the their football ground. When he assumed of ice in 1948 he had the
procession there. lot fenced and planted to fruit trees and during iestas temporary
With respect to Lot 2, although the Church had made no sheds would be put up for rent to itinerant merchants. It was Fr.
improvements thereon, around the turn of the century there were Ortega who went to see him in 1949 regarding the fencing of Lot 2
camarins on this lot which were used as stables for the horses and by the municipality and together they discussed the matter with
cows owned by a Fr. Troquillo. In 1933 the municipal council Atty. Singzon, the lawyer for the Church, and the latter suggested to
passed a resolution (Exhibit G) asking the Bishop of Calbayog, then him that Lot 2 be exchanged with another lot owned by the
Mons. Hacbang, to donate a small portion of this lot for the municipality and he replied that it was up to the municipal council
construction of a monument in honor of the Trece Martires del to decide. In 1950 he had the lot declared for taxation purposes.
1900, but this request was denied by the Bishop. Gonzalo Olmedo, The tax declaration (Exhibit 5) covers the entire area of Lot 2
the municipal secretary of Catarman in 1933 whose signature claimed by the applicant as well as the uncontested municipal lot,
appears on Exhibit G, testi ied as to the authenticity of the from Trece Martires del 1900 on the west to Mendiola St. on the
resolution and even pointed to the western portion of Lot 2 as the east, Blumentrit St. on the north and Rizal St. on the south. This tax
subject-matter of the request. Mons. Desoloc, who acted as private declaration was marked on the reverse side as newly issued
secretary to the Bishop at the time, testi ied that the writing on the because according to him the old tax declaration could not be
lower right hand corner of Exhibit G, which reads "cont. negativ" is located as the public records had been destroyed during the war.
the handwriting of the Bishop and was meant to impart an order Mayor Moore denied the authenticity of Resolution No. 19 (Exh. G)
that the request contained in the resolution be denied. In 1949 sent by the municipal council to the Bishop in 1933 on the ground
Mayor Eusebio Moore of Catarman and Fr. Ortega asked him, Atty. that the document is in Spanish, a language not spoken either by the
Singzon, to draft a contract of exchange between Lot 2 and a lot municipal secretary who certi ied as to the correctness of the
owned by the municipality, but the exchange did not materialize resolution or by the municipal president, who supposedly dictated
because the lot intended to be bartered by the municipality had no its text. The witness produced the af idavits of Pelayo Saldo,
title, although he (the witness) found a copy of a tax declaration municipal councilor in 1933 and one of those listed as present when


the resolution was taken up, to the effect that Lot 2 is owned by the Church over Lot 2, and in 1949 the Church declared this lot for tax
municipality. He also produced a similar af idavit executed by purposes, the continuous use thereof enjoyed by the residents of
Antonio Oladive, a former municipal president of Catarman. To Catarman is admitted by all the witnesses. Thus, even the witnesses
further buttress the municipality's position the mayor produced a for the applicant testi ied that the Church had made no
letter dated February 29, 1952 by Matias Rodriguez, representing improvements on Lot 2 and that the same had been used primarily
the Northern Samar Academy, requesting that Lot 2 be used as as playground for schoolchildren. The municipality stands on the
playground for the school. The mayor disclosed that he knew same footing as the Church. The tax declaration in its name was
Rodriguez personally as he, the mayor, had been president of the issued only in 1950, when the present dispute was already
Northern Samar Academy. imminent. The letters of Fr. Franzuela and Mr. Matias Rodriguez
Nalazon St. and Anunciacion St., according to Mayor Moore, are asking permission to use this lot as a playground are not proof of
cleaned and maintained by the municipality. With respect to the municipal ownership, since after all the municipal government may
eastern portion of Lot 1 the same had always been regarded as be considered the administrator of public property, that is, property
owned by the municipality because the municipal building used to for public use.
face this lot, although when he assumed the of ice of Mayor he had In the case of Harty vs. Municipality of Victoria, 13 Phil. 152,
the backyard of the municipal building improved and the stairway involving the question as to the ownership of a parcel of land which
transferred there. surrounded the parish church of the town, this Court said:
3. Gaudencio Camposano, a 75 year-old resident of Catarman, "Even though all the remaining space of land which now forms the
testi ied that a bandstand was constructed on the eastern portion of great plaza of the town of Victoria had been owned by the said
Lot 1 in 1905 and it was not only the orchestra organized by Fr. Tañ edo, it must be presumed that he waived his right thereto for the
Ranera that used to play there but also the municipal band. He also bene it of the townspeople, since from the creation or
testi ied that when he was attending school in 1905 the school establishment of the town, down to the present day, all the
garden was located inside Lot 2, which he believed to be in the residents, including the curate of said town, have enjoyed the free
possession of the municipality because nobody owned it and when use of said plaza.
he became acting mayor he required the prisoners to clear Lot 2 *** ***
and had it planted to camotes and bananas. That both the curates and the gobernadorcillos of said town
The conclusion that may be drawn from the evidence on record is procured fruit trees and plants to be set out in the plaza, does not
that Lot 2, called the "town plaza" by oppositor, is a public plaza and constitute an act of private ownership, but evidences the public use
that Nalazon St., traversing Lot 1 and Lot 2, is a public thoroughfare thereof, or perhaps the intention to improve or embellish the said
and should therefore be excluded from the application for plaza for the bene it of the townspeople.
registration iled by the Church. *** ***
Admittedly Nalazon St. was originally merely a trail used by the Certain it is that the plaintiff has not proven that the Catholic
parishioners in going to and from the church. But since 1910, when Church or the parish of Victoria was the owner or proprietor of the
it was opened and improved as a public thoroughfare by the said extensive piece of land which now forms the public plaza of
municipality, it had been continuously used as such by the said town, nor that it was in possession thereof, under the form and
townspeople of Catarman without objection from the Church conditions required by law, inasmuch as it has been fully proven
authorities. The acacia trees along both sides of the street were that said plaza has been used without let or hindrance by the public
planted by the municipality in 1920, although these trees were cut and the residents of the town of Victoria ever since its creation.”
down recently upon order of the priest. There is no proof that the Since neither the Church nor the municipality could present
Church merely tolerated and limited the use of this street for the positive proof of ownership or exclusive possession for an
bene it of its parishioners, considering that the street traverses the appreciable period of time and the only indubitable fact is the free
entire length of the poblacion from south to north and that Lot 1, on and continuous use of Lot 2 by the residents of Catarman, coupled
which the church stands, is located almost at the center of the with the fact that the town has no public plaza to speak of other
poblacion. The street does not stop on Lot 1 but extends north than this disputed parcel of land, there is a strong presumption that
toward the sea, passing along the lot occupied by the Central the same was segregated as a public plaza upon the founding of the
Elementary School and the Northern Samar General Hospital. Thus municipality of Catarman.
it is clear that Nalazon St. inside Lot 1 is used by the residents not The municipality, as has been heretofore noted, was declared in
only in going to the church but also to the public school and the default with respect to Lot 1, and the default was never lifted.
general hospital north of Lot 1. Indeed the amended opposition of the municipality which
With respect to Lot 2, there is no evidence that either the Church or purported to include the eastern portion of said lot, was denied by
the municipality exercised clear acts of ownership or of exclusive the lower court. In any event, the municipality failed to establish its
possession over this lot. It is true that there were witnesses who allegation with respect to the said portion of Lot 1 and to the
testi ied that around the turn of the century there were camarins portion of Anunciacion St. within this lot. This portion is only a
inside this lot used as stables for the horses and cows owned by a path which is cemented from the corner of Mendiola St. to the
Fr. Troquillo. But these witnesses likewise testi ied that this lot had monument of the Sacred Heart, and asphalted from the monument
been used also as a playground as well as a school garden by the to the front of the church. There is no evidence that this path was
students of the public school located on the adjoining municipal lot. planted to acacia trees, unlike Nalazon St. and Mendiola St., where
This lot still serves as a public playground up to the present. The acacia stumps were observed by the lower court. The explanation
municipality also makes use of this lot during town iestas by offered by Mayor Moore as to the presence of this religious
constructing temporary sheds which are rented to itinerant monument in the middle of a public thoroughfare — that the
vendors. In 1949 the municipality constructed a fence around this residents of Catarman are religious — is not convincing. The statue
lot because the prisoners planted it to camotes. The Church, was enthroned only in 1927, when the separation of church and
however, objected to the putting up of the fence. state was already a con irmed legal principle. The statue was even
All these facts only show that neither the Church nor the recently improved with the construction of a platform beneath it.
municipality possessed Lot 2 exclusively. While it may be true that Its location shows that the path leading to it and to the front of the
as late as 1933 the municipality acknowledged the ownership of the church is not an extension of Anunciacion St. but was opened


mainly for the bene it of the parishioners. The eastern portion of OCT No. P-2823 was issued on September 26, 1969 in favor of one
Lot 1 itself is used for religious functions, such as the feast of Corpus Angelito C. Bugayong. Said mother title emanated from Sales Patent
Christi and the procession held on the occasion. It is admitted by No. 4576 issued in Bugayong’s name on September 22, 1969.[8] It
the municipality that the Church does not ask for a permit covered a parcel of land located in Bocana, Kabacan, Davao City,
whenever it uses this lot for such activities. with an area of 41,276 square meters. It was originally identi ied
On the other hand, there is no evidence that the municipality uses and surveyed as Lot No. 4159 under Plan SI-(VIII-1), 328-D. Marshy
this lot for its of icial activities to support its claim that this lot is a and under water during high tide, it used to be a portion of a dry
municipal plaza. The circumstance that the municipal band used to river bed near the mouth of Davao River.[9]
perform weekly on the "kiosko" found on this lot sometime in 1927
does not constitute an act of exclusive possession which could be The land was initially subdivided into four lots, viz.: Lot Nos.
the basis of a title. Moreover, the "kiosko" stood only for three years 4159-A, 4159-B, 4159-C and 4159-D under Subdivision Plan (LRC)
and the municipality has not adduced any evidence that it Psd-139511 approved by the Commissioner of Land Registration on
continued to use the lot after the "kiosko" was demolished. April 23, 1971.[10] Consequently, OCT No. P-2823 was cancelled
FOR THE FOREGOING REASONS, the appealed decision is hereby and new Transfer Certi icates of Title (TCTs) replaced it, all in the
modi ied in the sense that Lot 2, being a public plaza, and Nalazon name of Bugayong.
St., traversing Lot 1 and Lot 2, being a public thoroughfare, are not
subject to registration; and that the title of the Bishop of Calbayog Bugayong sold all of the four lots to different persons. Lot No.
with respect to the entire area of Lot 1, except the portion covered 4159-A, which was then under TCT No. T-32769, was sold to
by Nalazon St., and to Lot 3, is con irmed and ordered registered in spouses Lourdes and Candido Du. Accordingly, said TCT was
his name, as corporation sole. In all other respects the decision cancelled and replaced by TCT No. T-42166 in the name of spouses
appealed from is af irmed. No pronouncement as to costs. Du.[11]
Concepcion, CJ., Reyes, J.B.L., Zaldivar Ruiz Castro, Fernando,
Teehankee, Barredo, Makasiar, and Antonio, JJ., concur. Afterwards, the spouses Du further caused the subdivision of the
land covered by their TCT No. T-42166 into two (2) lots. They sold
Land Bank of the Philippines vs Director one of said lots to spouses Felix and Guadalupe Dayola, who were
issued TCT No. T-45586. The other remaining lot, registered under
of Lands, G.R. No. 150824, February 04, TCT No. T-45587, was retained by and registered in the names of
2008 spouses Du.[12]
567 Phil. 427
Subsequently, Du spouses’ TCT No. T-45587 was cancelled and was
THIRD DIVISION replaced by TCT No. T-57348 registered in the name of Lourdes
G.R. No. 150824, February 04, 2008 Farms, Inc. subject of this case. [13] Lourdes Farms, Inc. mortgaged
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. REPUBLIC OF this property to petitioner LBP on April 14, 1980.[14]
THE PHILIPPINES, REPRESENTED BY THE DIRECTOR OF LANDS,
RESPONDENT. The validity of OCT No. P-2823, as well as its derivative TCTs,
remained undisturbed until some residents of the land it covered,
DECISION particularly those along Bolton Diversion Road, iled a formal
REYES, R.T., J.: petition before the Bureau of Lands on July 15, 1981.[15]
FOREST lands are outside the commerce of man and unsusceptible Investigation and ocular inspection were conducted by the Bureau
of private appropriation in any form.[1] of Lands to check the legitimacy of OCT No. P-2823. They found out
that: (1) at the time Sales Patent No. 4576 was issued to Bugayong,
It is well settled that a certi icate of title is void when it covers the land it covered was still within the forest zone, classi ied under
property of public domain classi ied as forest, timber or mineral Project No. 1, LC-47 dated August 6, 1923; it was released as
lands. Any title issued covering non-disposable lots even in the alienable and disposable land only on March 25, 1981, pursuant to
hands of an alleged innocent purchaser for value shall be BFD Administrative Order No. 4-1585 and to the provisions of
cancelled.[2] The rule must stand no matter how harsh it may seem. Section 13, Presidential Decree (P.D.) No. 705;[16] (2) the land was
Dura lex sed lex.[3] Ang batas ay maaaring mahigpit subalit ito ang marshy and covered by sea water during high tide; and (3)
mananaig. Bugayong was never in actual possession of the land.[17]
Before Us is a petition for review on certiorari under Rule 45 iled In view of the foregoing indings, the Bureau of Lands resolved that
by petitioner Land Bank of the Philippines (LBP) appealing the: (1) the sales patent in favor of Bugayong was improperly and illegally
Decision[4] of the Court of Appeals (CA), dated August 23, 2001, in issued and that the Director of Lands had no jurisdiction to dispose
CA-G.R. CV No. 64121 entitled “Republic of the Philippines, of the subject land.[18]
represented by the Director of Lands v. Angelito Bugayong, et al.”;
and (2) Resolution[5] of the same Court, dated November 12, 2001, Upon recommendation of the Bureau of Lands, the Republic of the
denying LBP’s motion for reconsideration. Philippines represented by the Director of Lands, through the Of ice
of the Solicitor General (OSG), instituted a complaint[19] before the
The CA af irmed the Decision[6] of the Regional Trial Court (RTC), RTC in Davao, Branch 15, for the cancellation of title/patent and
dated July 9, 1996, declaring null and void Original Certi icate of reversion of the land covered by OCT No. P-2823 into the mass of
Title (OCT) No. P-2823, as well as other titles originating from it, on public domain. The complaint, as amended,[20] was ile against
the ground that at the time it was issued, the land covered was still Bugayong and other present owners and mortgagees of the land,
within the forest zone.[7] such as Lourdes Farms, Inc. and the latter’s mortgagee, petitioner
LBP.
The Facts


In its answer with cross-claim,[21] LBP claimed that it is a In a Decision[30] dated August 23, 2001, the CA ruled against the
mortgagee in good faith and for value. It prayed that should TCT No. appellants, [31] disposing thus:
T-57348 of Lourdes Farms, Inc. be annulled by the court, Lourdes WHEREFORE, premises considered, the present appeals are hereby
Farms, Inc. should be ordered to pay its outstanding obligations to DISMISSED and the Decision of the trial court in Civil Case No.
LBP or to provide a ne collateral security.[22] 17516 is hereby AFFIRMED.[32]The CA con irmed that the
“evidence for the plaintiff clearly established that the land covered
RTC Judgment by OCT No. P-2823 issued pursuant to a sales patent granted to
defendant Angelito C. Bugayong was still within the forestal zone at
Eventually, the RTC rendered its judgment [23] on July 9, 1996 the time of the grant of the said patent.”[33] It explained:
determining that: Forest lands or forest reserves, are incapable of private
x x x The mistakes and the laws in the granting of the title were appropriation and possession thereof, however long, cannot convert
made by the Bureau of Lands personnel more particularly the them into private properties. This is premised on the Regalian
Director of Lands who is the Of icer charged with the following the Doctrine enshrined not only in the 1935 and 1973 Constitutions but
provisions of the Public Land Law. x x x. also in the 1987 Constitution. Our Supreme Court has upheld this
rule consistently even in earlier cases. It has also been held that
It is clear that the mother Title, OCT–P-2823 in the name of whatever possession of the land prior to the date of release of
defendant Bugayong was issued at a time when the area was not yet forested land as alienable and disposable cannot be credited to the
released by the Bureau of Forestry to the Bureau of Lands. 30-year requirement (now, since June 12, 1945) under Section
48(b) of the Public Land Act. It is only from that date that the period
The area covered by OCT No. P. 2823 was not yet declared by the of occupancy for purposes of con irmation of imperfect or
Bureau of Lands alienable and disposable when the said OCT was incomplete title may be counted. Since the subject land was
issued. The subdivision of the lot covered by OCT P-2823 into 4 lots declared as alienable and disposable only on March 25, 1981,
covered by TCT Nos. T-32768, 32769, 32756 and 32771 did not appellants and their predecessors-in-interest could not claim any
cure the defect. x x x.[24]The RTC explained that titles issued to vested right thereon prior to its release from public forest zone.
private parties by the Bureau of Lands are void ab initio if the land
covered by it is a forest land.[25] It went further by stating that if The inclusion of forest land in a title, “whether title be issued during
the mother title is void, all titles arising from the mother title are the Spanish regime or under the Torrens system, nulli ies the title.”
also void.[26] It thus ruled in favor of the Republic with a fallo It is, of course, a well-recognized principle that the Director of
reading: Lands (now Land Management Bureau) is bereft of any jurisdiction
IN VIEW WHEREOF, judgment is hereby rendered declaring Original over public forest or any lands not capable of registration. It is the
Certi icate of Title No. P-2823 issued in the name of defendant Bureau of Forestry that has jurisdiction and authority over the
Angelito Bugayong null and void. The following Transfer Certi icate demarcation, protection, management, reproduction, occupancy
of Titles which were originally part of the lot covered by O.C.T. No. and use of all public forests and forest reservations and over the
P-2823 are likewise declared void: granting of licenses for the taking of products therefrom. And where
A. TCT No. 57348 in the name of defendant Lourdes Farms the land applied for is part of the public forest, the land registration
mortgaged to defendant Land Bank. court acquires no jurisdiction over the land, which is not yet
alienable and disposable.
B. TCT No. 84749 in the name of defendants Johnny and Catherine
Du mortgaged to defendant Development Bank of the Philippines. Thus, notwithstanding the issuance of a sales patent over the
subject parcel of land, the State may still take action to have the
C. TCT No. 37386 in the name of defendants spouses Pahamotang same land reverted to the mass of public domain and the certi icate
mortgaged to defendant Lourdes Du mortgaged with defendant of title covering said forest land declared null and void for having
Allied Bank. been improperly and illegally issued. Titles issued over
non-alienable public lands have been held as void ab initio. The
E. TCT Nos. 68154 and 32768 in the names of defendants/spouses defense of indefeasibility of title issued pursuant to such patent
Maglana Santamaria. does not lie against the State. Public land fraudulently included in
patents or certi icates of title may be recovered or reverted to the
State in accordance with Section 101 of the Public Land Act. In such
All private defendants shall give to the Davao City Register of Deeds cases, prescription does not lie against the State. Likewise, the
their titles, who shall cancel the Transfer Certi icate of Titles government is not estopped by such fraudulent or wrongful
mentioned in paragraph number one. issuance of a patent over public forest land inasmuch as the
principle of estoppel does not operate against the Government for
the acts of its agents. x x x.[34] (Citations omitted)With respect to
Lot No. 4159, Plan SI (VIII-1) 328-D covered by O.C.T. P-2823 is LBP’s contention[35] that it was a mortgagee in good faith and for
hereby REVERTED to the mass of public domain. value, the CA declared, citing Republic v. Reyes[36] that:
SO ORDERED.[27] (Underscoring supplied)Disagreeing with the “mortgagees of non-disposable lands where titles thereto were
RTC judgment, LBP appealed to the CA on October 31, 1996. It erroneously issued acquire no protection under the land
asserted in its appellant’s brief[28] that it validly acquired mortgage registration law. Appellants-mortgagees’ proper recourse therefore
interest or lien over the subject property because it was an innocent is to pursue their claims against their respective mortgagors and
mortgagee for value and in good faith.[29] It also emphasized that it debtors.”[37]
is a government inancial institution.
When LBP’s motion for reconsideration was denied, it resorted to
CA Disposition the petition at bar.
Issues


The contention that LBP has an interest over the subject land as a
LBP seeks the reversal of the CA disposition on the following mortgagee has no merit. The mortgagor, Lourdes Farms, Inc. from
grounds – which LBP supposedly obtained its alleged interest has never been
A. THE COURT OF APPEALS ERRED IN NOT FINDING THAT the owner of the mortgaged land. Acquisition of the subject land by
THE PETITIONER LAND BANK OF THE PHILIPPINES’ Lourdes Farms, Inc. is legally impossible as the land was released as
MORTGAGE RIGHT AND INTEREST AS AN INNOCENT alienable and disposable only on March 25, 1981. Even at present,
PURCHASER (MORTGAGEE) FOR VALUE AND IN GOOD no one could have possessed the same under a claim of ownership
FAITH OVER THE SUBJECT LAND COVERED BY TCT NO. for the period of thirty (30) years required under Section 48(b) of
T-57348 IS VALID AND SUBSISTING IN ACCORDANCE Commonwealth Act No. 141, as amended.[43] Hence, LBP acquired
WITH THE LAW AND EXISTING JURISPRUDENCE IN OUR no rights over the land.
COUNTRY.
B. THE COURT OF APPEALS ERRED IN NOT FINDING Under Article 2085 of the Civil Code, it is essential that the
PETITIONER LAND BANK OF THE PHILIPPINES’ mortgagor be the absolute owner of the thing mortgaged, to wit:
MORTGAGE RIGHT AND INTEREST OVER THE SUBJECT ARTICLE 2085. The following requisites are essential to the
LAND AS VALID AND SUBSISTING UNDER THE contracts of pledge and mortgage:
CONSTITUTIONAL GUARANTEE OF NON-IMPAIRMENT OF
OBLIGATION OF CONTRACTS. (1) That they be constituted to secure the ful illment of a principal
C. THE COURT OF APPEALS ERRED IN NOT AWARDING TO obligation;
PETITIONER LAND BANK OF THE PHILIPPINES THE
RELIEF PRAYED FOR UNDER ITS CROSS-CLAIM AGAINST (2) That the pledgor or mortgagor be the absolute owner of the
CO-DEFENDANT LOURDES FARMS, INC., THAT IS, thing pledged or mortgaged;
ORDERING SAID CO-DEFENDANT LOURDES FARMS, INC.
TO PAY ITS OUTSTANDING OBLIGATION TO THE LAND (3) That the persons constituting the pledge or mortgage have the
BANK COVERED BY THE SUPPOSED NULL AND VOID TCT free disposal of their property, and in the absence thereof, that they
NO. T-57348, OR TO PROVIDE A SUBSTITUTE be legally authorized for the purpose. (Emphasis ours)Since
COLLATERAL IN LIEU OF SAID TCT NO. T-57348.[38] Lourdes Farms, Inc. is not the owner of the land, it does not have the
(Underscoring supplied) capacity to mortgage it to LBP. In De la Cruz v. Court of Appeals,[44]
Our Ruling the Court declared:
While it is true that the mortgagees, having entered into a contract
LBP has no valid and subsisting mortgagee’s interest over the land with petitioner as mortgagor, are estopped from questioning the
covered by TCT No. T-57348. latter’s ownership of the mortgaged property and his concomitant
capacity to alienate or encumber the same, it must be considered
It has been established and admitted by LBP that: (1) the subject that, in the irst place, petitioner did not possess such capacity to
land mortgaged to it by Lourdes Farms, Inc. is covered by TCT No. encumber the land at the time for the stark reason that it had been
T-57348; and (2) the said TCT is derived from OCT No. P-2823 classi ied as a forest land and remained a part of the patrimonial
issued to Bugayong.[39] property of the State. Assuming, without admitting, that the
mortgagees cannot subsequently question the fact of ownership of
It was further ascertained by the courts below that at the time OCT petitioner after having dealt with him in that capacity, still,
No. P-2823 was issued to Bugayong on September 26, 1969, the petitioner was never vested with the proprietary power to
land it covered was still within the forest zone. It was declared as encumber the property. In fact, even if the mortgagees continued to
alienable and disposable only on March 25, 1981.[40] acknowledge petitioner as the owner of the disputed land, in the
eyes of the law, the latter can never be presumed to be owner.As
Despite these established facts, LBP argues that its alleged interest correctly pointed out by the OSG, mortgagees of non-disposable
as mortgagee of the subject land covered by TCT No. T-57348 must lands, titles to which were erroneously issued, acquire no
be respected. It avers that TCT No. T-57348 is a Torrens title which protection under the Land Registration Law.[45]
has no written indications of defect or vice affecting the ownership
of Lourdes Farms, Inc. Hence, it posits that it was not and could not Even assuming that LBP was able to obtain its own TCT over the
have been required to explore or go beyond what the title indicates property by means of its mortgage contract with Lourdes Farms,
or to search for defects not indicated in it. Inc., the title must also be cancelled as it was derived from OCT No.
P-2823 which was not validly issued to Bugayong. Forest lands
LBP cites cases where the Court ruled that a party is not required to cannot be owned by private persons. It is not registerable whether
explore further than what the Torrens title upon its face indicates in the title is a Spanish title or a Torrens title.[46] It is well settled that
quest of any hidden defect of an inchoate right that may a certi icate of title is void when it covers property of public domain
subsequently defeat his right to it; and that a bank is not required classi ied as forest or timber or mineral land. Any title issued
before accepting a mortgage to make an investigation of the title of covering non-disposable lots even in the hands of an alleged
the property being given as security. LBP submits that its right as a innocent purchaser for value shall be cancelled.[47]
mortgagee is binding against the whole world and may not be
disregarded. [41] Moreover, the Court has already addressed the same issue in its
Resolution of November 14, 2001 on the petition iled by the
It further argues that review or reopening of registration is Philippine National Bank (PNB) in G. R. No. 149568 entitled
proscribed, as the title has become incontrovertible pursuant to “Philippine National Bank v. Republic of the Philippines represented
Section 32 of P.D. No. 1529; and that its mortgage rights and interest by the Director of Lands,” which also appealed the subject CA
over the subject land is protected by the constitutional guarantee of decision. PNB, like LBP, is also a mortgagee of another derivative
non-impairment of contracts.[42] TCT of the same OCT No. 2823. Said resolution reads:


On September 22, 1969, Angelito C. Bugayong was issued a sales Court in Reyes v. Court of Appeals,[49] citing Republic v. Court of
patent covering a 41,276 square meter parcel of land in Bocana, Appeals,[50] held:
Barrio Kabacan, Davao City by the Bureau of Lands. On the basis of Petitioners’ contention that the government is now estopped from
the sales patent, the Register of Deeds of Davao City issued OCT No. questioning the validity of OCT No. 727 issued to them, considering
P-2823 to Bugayong. Bugayong later subdivided the land into four that it took the government 45 years to assail the same, is
lots, one of which (Lot No. 4159-B covered by TCT No. T-32770) was erroneous. We have ruled in a host of cases that prescription does
sold by him to the spouses Reynaldo Rogacion and Corazon not run against the government. In point is the case of Republic v.
Pahamotang. After obtaining TCT No. T-37786 in their names, the Court of Appeals, wherein we declared:
spouses mortgaged the lot to the Philippine National Bank (PNB). And in so far as the timeliness of the action of the Government is
As they defaulted in the payment of their loan, the PNB foreclosed concerned, it is basic that prescription does not run against the
the property and purchased it at the foreclosure sale as the highest State x x x. The case law has also been:When the government is the
bidder. Eventually, the PNB consolidated its title. real party in interest, and is proceeding mainly to assert its own
rights and recover its own property, there can be no defense on the
Sometime in 1981, upon the petition of the residents of the land, the ground of laches or limitation x x x.
Bureau of Lands conducted an investigation into the sales patent
issued in favor of Angelito C. Bugayong and found the sales patent to Public land fraudulently included in patents or certi icates of title
have been illegally issued because (1) the land was released as may be recovered or reverted to the State in accordance with
alienable and disposable only on March 25, 1981; previous to that, Section 101 of the Public Land Act. Prescription does not lie against
the land was within the forest zone; (2) the land is covered by sea the State in such cases for the Statute of Limitations does not run
water during high tide; and (3) the patentee, Angelito C. Bugayong, against the State. The right of reversion or reconveyance to the State
had never been in actual possession of the land. is not barred by prescription. (Emphasis ours)There is no
impairment of contract but a valid exercise of police power of the
Based on this investigation, the government instituted the present State.
suit in 1987 for cancellation of title/patent and reversion of the
parcel of land against Angelito C. Bugayong, the Rogacion spouses, The constitutional guarantee of non-impairment of contracts may
and the PNB, among others. not likewise be used by LBP to validate its interest over the land as
mortgagee. The State’s restraint upon the right to have an interest
On July 6, 1996, the trial court rendered a decision declaring OCT or ownership over forest lands does not violate the constitutional
No. P-2823 and all titles derived therefrom null and void and guarantee of non-impairment of contracts. Said restraint is a valid
ordering reversion of the subject property to the mass of the public exercise of the police power of the State. As explained by the Court
domain. On appeal, the Court of Appeals af irmed the trial court’s in Director of Forestry v. Muñ oz:[51]
decision. Hence, this petition. The view this Court takes of the cases at bar is but in adherence to
public policy that should be followed with respect to forest lands.
First. Petitioner contends that it had a right to rely on TCT No. Many have written much, and many more have spoken, and quite
T-37786 showing the mortgagors Reynaldo Rogacion and Corazon often, about the pressing need for forest preservation, conservation,
Pahamotang’s ownership of the property. protection, development and reforestation. Not without
justi ication. For, forests constitute a vital segment of any country's
The contention is without merit. It is well settled that a certi icate of natural resources. It is of common knowledge by now that absence
title is void when it covers property of public domain classi ied as of the necessary green cover on our lands produces a number of
forest or timber or mineral lands. Any title issued covering adverse or ill effects of serious proportions. Without the trees,
non-disposable lots even in the hands of an alleged innocent watersheds dry up; rivers and lakes which they supply are emptied
purchaser for value shall be cancelled (Republic v. Reyes, 155 SCRA of their contents. The ish disappear. Denuded areas become dust
313 (1987)). bowls. As waterfalls cease to function, so will hydroelectric plants.
With the rains, the fertile topsoil is washed away; geological erosion
(Republic v. Court of Appeals, 148 SCRA 480 (1987)). In this case, results. With erosion come the dreaded loods that wreak havoc and
petitioner does not dispute that its predecessor-in-interest, destruction to property – crops, livestock, houses and highways –
Angelito C. Bugayong, had the subject property registered in his not to mention precious human lives. Indeed, the foregoing
name when it was forest land. Indeed, even if the subject property observations should be written down in a lumberman’s decalogue.
had been eventually segregated from the forest zone, neither
petitioner nor its predecessors-in- interest could have possessed Because of the importance of forests to the nation, the State’s police
the same under claim of ownership for the requisite period of thirty power has been wielded to regulate the use and occupancy of forest
(30) years because it was released as alienable and disposable only and forest reserves.
on March 25, 1981.
To be sure, the validity of the exercise of police power in the name
Second. Petitioner’s contention that respondent’s action for of the general welfare cannot be seriously attacked. Our
reversion is barred by prescription for having been iled nearly two government had de inite instructions from the Constitution’s
decades after the issuance of Bugayong’s sales patent is likewise preamble to “promote the general welfare.” Jurisprudence has time
without merit. Prescription does not lie against the State for and again upheld the police power over individual rights, because of
reversion of property which is part of the public forest or of a forest the general welfare. Five decades ago, Mr. Justice Malcolm made it
reservation registered in favor of any party. Public land registered clear that the “right of the individual is necessarily subject to
under the Land Registration Act may be recovered by the State at reasonable restraint by general law for the common good” and that
any time (Republic v. Court of Appeals, 258 SCRA 223 the “liberty of the citizen may be restrained in the interest of public
(1996)).[48]Contrary to the argument of LBP, since the title is void, health, or of the public order and safety, or otherwise within the
it could not have become incontrovertible. Even prescription may proper scope of the police power.” Mr. Justice Laurel, about twenty
not be used as a defense against the Republic. On this aspect, the years later, af irmed the precept when he declared that “the state in


order to promote the general welfare may interfere with personal generally con ined only to errors of law. Questions of fact are not
liberty, with property, and with business and occupations” and that entertained.[59]
“[p]ersons and property may be subjected to all kinds of restraints
and burdens, in order to secure the general comfort, health, and Moreover, the failure to make a ruling on the cross-claim by the RTC
prosperity of the state.” Recently, we quoted from leading American was not assigned as an error in LBP’s appellant’s brief[60] before
case, which pronounced that “neither property rights nor contract the CA. Hence, the CA cannot be faulted for not making a ruling on
rights are absolute; for government cannot exist if the citizen may at it.
will use his property to the detriment of his fellows, or exercise his
freedom of contract to work them harm,” and that, therefore, As held in De Liano v. Court of Appeals,[61] appellant has to specify
“[e]qually fundamental with the private right is that of the public to in what aspect of the law or the facts the trial court erred. The
regulate it in the common interest.” (Emphasis ours and citations conclusion, therefore, is that appellant must carefully formulate his
omitted)In Edu v. Ericta,[52] the Court de ined police power as the assignment of errors. Its importance cannot be underestimated, as
authority of the state to enact legislation that may interfere with Section 8, Rule 51 of the Rules of Court will attest:
personal liberty or property in order to promote the general Questions that may be decided. – No error which does not affect the
welfare. It is the power to prescribe regulations to promote the jurisdiction over the subject matter or the validity of the judgment
health, morals, peace, education, good order or safety, and general appealed from or the proceedings therein will be considered unless
welfare of the people. It is that inherent and plenary power of the stated in the assignment of errors, or closely related to or
State which enables it to prohibit all things hurtful to the comfort, dependent on an assigned error and properly argued in the brief,
safety and welfare of society.[53] It extends to all the great public save as the court may pass upon plain errors and clerical
needs and is described as the most pervasive, the least limitable and errors.Apparently, the cross-claim was taken for granted not only by
the most demanding of the three inherent powers of the State, far the RTC but also by LBP. The cross-claim was not included as a
outpacing taxation and eminent domain.[54] It is a ubiquitous and subject or issue in the pre-trial order and instead of asking that the
often unwelcome intrusion. Even so, as long as the activity or the same be heard, LBP iled a motion[62] to submit the main case for
property has some relevance to the public welfare, its regulation resolution. The main case was thus resolved by the RTC without
under the police power is not only proper but necessary.[55] touching on the merits of the cross-claim.
Preservation of our forest lands could entail intrusion upon On the other hand, while the CA did not make a categorical ruling on
contractual rights as in this case but it is justi ied by the Latin LBP’s cross-claim, it pointed out that: (1) as found by the RTC, there
maxims Salus populi est suprema lex and Sic utere tuo ut alienum is a mortgage contract between LBP and Lourdes Farms, Inc., with
non laedas, which call for the subordination of individual interests LBP as mortgagee and Lourdes Farms, Inc. as mortgagor; and (2)
to the bene it of the greater number.[56] LBP’s proper recourse is to pursue its claim against Lourdes Farms,
Inc.[63]
While We sympathize with petitioner, We nonetheless cannot, in
this instance, yield to compassion and equity. The rule must stand The CA thus impliedly ruled that LBP’s cross-claim should not be
no matter how harsh it may seem.[57] included in this case. Instead of making a ruling on the same, it
recommended that LBP pursue its claim against Lourdes Farms, Inc.
We cannot resolve the cross-claim for lack of factual basis. The
cross-claim must be remanded to the RTC for further proceedings. All told, although the relationship between LBP and Lourdes Farms,
Inc. as mortgagee and mortgagor was established, the cross-claim of
LBP iled a cross-claim against Lourdes Farms, Inc. before the LBP against Lourdes Farms, Inc. was left unresolved.
RTC.[58] The cross-claim is for the payment of cross-defendant
Lourdes Farms, Inc.’s alleged obligation to LBP or its submission of a The Court is not in a position to resolve the cross-claim based on the
substitute collateral security in lieu of the property covered by TCT records. In order for the cross-claim to be equitably decided, the
No. T-57348. Court, not being a trier of facts, is constrained to remand the case to
the RTC for further proceedings. Remand of the case for further
However, the records do not show that Lourdes Farms, Inc. was proceedings is proper due to absence of a de initive factual
required by the RTC to ile an answer to the cross-claim. Likewise, determination regarding the cross-claim.[64]
Lourdes Farms, Inc. was not noti ied of the proceedings before the
CA. It was not also made a party to this petition. WHEREFORE, the appealed Decision of the Court of Appeals is
hereby AFFIRMED with the MODIFICATION that the cross-claim of
LPB now contends that the CA erred in not granting its cross-claim petitioner Land Bank of the Philippines against Lourdes Farms, Inc.
against Lourdes Farms, Inc. We are thus confronted with the is REMANDED to the Regional Trial Court, Branch 15, Davao City, for
question: Should We now order Lourdes Farms, Inc. to comply with further proceedings.
the demand of LBP?
SO ORDERED.
We rule in the negative. It may be true that Lourdes Farms, Inc. still
has an obligation to LBP but We cannot make a ruling regarding the
same for lack of factual basis. There is no evidence-taking on the Ynares-Santiago, (Chairperson), Austria-Martinez, Corona, and
cross-claim. No evidence was adduced before the RTC or the CA Nachura, JJ., concur.
regarding it. No factual inding or ruling was made by the RTC or the
CA about it. Republic of the Philippines vs Court of
It bears stressing that in a petition for review on certiorari, the Appeals and Naguit, G.R. NO. 144057,
scope of this Court's judicial review of decisions of the CA is January 17, 2005
489 Phil. 405


SECOND DIVISION ordering that the subject parcel be brought under the operation of
G.R. NO. 144057, January 17, 2005 the Property Registration Decree or Presidential Decree (P.D.) No.
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. THE 1529 and that the title thereto registered and con irmed in the
HONORABLE COURT OF APPEALS AND CORAZON NAGUIT, name of Naguit.[6]
RESPONDENTS.
The Republic of the Philippines (Republic), thru the Of ice of
DECISION the Solicitor General (OSG), iled a motion for reconsideration. The
TINGA, J.: OSG stressed that the land applied for was declared alienable and
disposable only on October 15, 1980, per the certi ication from
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Regional Executive Director Raoul T. Geollegue of the Department of
Rules of Civil Procedure, Seeking to review the Decision[1] of the Environment and Natural Resources, Region VI.[7] However, the
Sixth Division of the Court of Appeals dated July 12, 2000 in CA-G.R. court denied the motion for reconsideration in an order dated
SP No. 51921. The appellate court af irmed the decisions of both February 18, 1998.[8]
the Regional Trial Court (RTC),[2] Branch 8, of Kalibo, Aklan dated
February 26, 1999, and the 7th Municipal Circuit Trial Court Thereafter, the Republic appealed the decision and the order of the
(MCTC)[3] of Ibajay-Nabas, Aklan dated February 18, 1998, which MCTC to the RTC, Kalibo, Aklan, Branch 8. On February 26, 1999, the
granted the application for registration of a parcel of land of RTC rendered its decision, dismissing the appeal.[9]
Corazon Naguit (Naguit), the respondent herein.
Undaunted, the Republic elevated the case to the Court of Appeals
The facts are as follows: via Rule 42 of the 1997 Rules of Civil Procedure. On July 12, 2000,
the appellate court rendered a decision dismissing the petition iled
On January 5, 1993, Naguit, a Filipino citizen, of legal age and by the Republic and af irmed in toto the assailed decision of the
married to Manolito S. Naguit, iled with the MCTC of Ibajay-Nabas, RTC.
Aklan, a petition for registration of title of a parcel of land situated
in Brgy. Union, Nabas, Aklan. The parcel of land is designated as Lot Hence, the present petition for review raising a pure question of law
No. 10049, Cad. 758-D, Nabas Cadastre, AP – 060414-014779, and was iled by the Republic on September 4, 2000.[10]
contains an area of 31,374 square meters. The application Seeks
judicial con irmation of respondent’s imperfect title over the The OSG assails the decision of the Court of Appeals contending that
aforesaid land. the appellate court gravely erred in holding that there is no need for
the government’s prior release of the subject lot from the public
On February 20, 1995, the court held initial hearing on the domain before it can be considered alienable or disposable within
application. The public prosecutor, appearing for the government, the meaning of P.D. No. 1529, and that Naguit had been in
and Jose Angeles, representing the heirs of Rustico Angeles, possession of Lot No. 10049 in the concept of owner for the
opposed the petition. On a later date, however, the heirs of Rustico required period.[11]
Angeles iled a formal opposition to the petition. Also on February
20, 1995, the court issued an order of general default against the Hence, the central question for resolution is whether is necessary
whole world except as to the heirs of Rustico Angeles and the under Section 14(1) of the Property Registration Decree that the
government. subject land be irst classi ied as alienable and disposable before the
applicant’s possession under a bona ide claim of ownership could
The evidence on record reveals that the subject parcel of land was even start.
originally declared for taxation purposes in the name of Ramon
Urbano (Urbano) in 1945 under Tax Declaration No. 3888 until The OSG invokes our holding in Director of Lands v. Intermediate
1991.[4] On July 9, 1992, Urbano executed a Deed of Quitclaim in Appellate Court[12] in arguing that the property which is in open,
favor of the heirs of Honorato Maming (Maming), wherein continuous and exclusive possession must irst be alienable. Since
he renounced all his rights to the subject property and con irmed the subject land was declared alienable only on October 15, 1980,
the sale made by his father to Maming sometime in 1955 or Naguit could not have maintained a bona ide claim of ownership
1956.[5] Subsequently, the heirs of Maming executed a deed of since June 12, 1945, as required by Section 14 of the Property
absolute sale in favor of respondent Naguit who thereupon started Registration Decree, since prior to 1980, the land was not alienable
occupying the same. She constituted Manuel Blanco, Jr. as her or disposable, the OSG argues.
attorney-in-fact and administrator. The administrator introduced
improvements, planted trees, such as mahogany, coconut and Section 14 of the Property Registration Decree, governing original
gemelina trees in addition to existing coconut trees which were registration proceedings, bears close examination. It expressly
then 50 to 60 years old, and paid the corresponding taxes due on provides:
the subject land. At present, there are parcels of land surrounding SECTION 14. Who may apply.— The following persons may ile in
the subject land which have been issued titles by virtue of judicial the proper Court of First Instance an application for registration of
decrees. Naguit and her predecessors-in-interest have occupied the title to land, whether personally or through their duly authorized
land openly and in the concept of owner without any objection from representatives:
any private person or even the government until she iled her (1) those who by themselves or through their
application for registration. predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and
After the presentation of evidence for Naguit, the public prosecutor disposable lands of the public domain under a bona ide claim of
manifested that the government did not intend to present any ownership since June 12, 1945, or earlier.
evidence while oppositor Jose Angeles, as representative of the
heirs of Rustico Angeles, failed to appear during the trial despite (2) Those who have acquired ownership over private lands by
notice. On September 27, 1997, the MCTC rendered a decision prescription under the provisions of existing laws.


possession since 1908, it was only in 1972 that the lands in

.... question were classi ied as alienable and disposable. Thus, the bid
There are three obvious requisites for the iling of an application for at registration therein did not succeed. In Bracewell, the claimant
registration of title under Section 14(1) – that the property in had iled his application in 1963, or nine (9) years before the
question is alienable and disposable land of the public domain; that property was declared alienable and disposable. Thus, in this case,
the applicants by themselves or through their where the application was made years after the property had been
predecessors-in-interest have been in open, continuous, exclusive certi ied as alienable and disposable, the Bracewell ruling does not
and notorious possession and occupation, and; that such possession apply.
is under a bona ide claim of ownership since June 12, 1945 or
earlier. A different rule obtains for forest lands,[18] such as those which
form part of a reservation for provincial park purposes[19] the
Petitioner suggests an interpretation that the alienable and possession of which cannot ripen into ownership.[20] It is
disposable character of the land should have already been elementary in the law governing natural resources that forest land
established since June 12, 1945 or earlier. This is not borne out by cannot be owned by private persons. As held in Palomo v. Court of
the plain meaning of Section 14(1). “Since June 12, 1945,” as used in Appeals,[21] forest land is not registrable and possession thereof,
the provision, quali ies its antecedent phrase “under a bona ide no matter how lengthy, cannot convert it into private property,
claim of ownership.” Generally speaking, qualifying words restrict unless such lands are reclassi ied and considered disposable and
or modify only the words or phrases to which they are immediately alienable.[22] In the case at bar, the property in question was
associated, and not those distantly or remotely located.[13] Ad undisputedly classi ied as disposable and alienable; hence, the
proximum antecedents iat relation nisi impediatur sentencia. ruling in Palomo is inapplicable, as correctly held by the Court of
Appeals.[23]
Besides, we are mindful of the absurdity that would result if we
adopt petitioner’s position. Absent a legislative amendment, the It must be noted that the present case was decided by the lower
rule would be, adopting the OSG’s view, that all lands of the public courts on the basis of Section 14(1) of the Property Registration
domain which were not declared alienable or disposable before Decree, which pertains to original registration through ordinary
June 12, 1945 would not be susceptible to original registration, no registration proceedings. The right to ile the application for
matter the length of unchallenged possession by the occupant. Such registration derives from a bona ide claim of ownership going back
interpretation renders paragraph (1) of Section 14 virtually to June 12, 1945 or earlier, by reason of the claimant’s open,
inoperative and even precludes the government from giving it effect continuous, exclusive and notorious possession of alienable and
even as it decides to reclassify public agricultural lands as alienable disposable lands of the public domain.
and disposable. The unreasonableness of the situation would even
be aggravated considering that before June 12, 1945, the A similar right is given under Section 48(b) of the Public Land Act,
Philippines was not yet even considered an independent state. which reads:
Sec. 48. The following described citizens of the Philippines,
Instead, the more reasonable interpretation of Section 14(1) is that occupying lands of the public domain or claiming to own any such
it merely requires the property sought to be registered as already land or an interest therein, but those titles have not been perfected
alienable and disposable at the time the application for registration or completed, may apply to the Court of First Instance of the
of title is iled. If the State, at the time the application is made, has province where the land is located for con irmation of their claims
not yet deemed it proper to release the property for alienation or and the issuance of a certi icate of title therefor, under the Land
disposition, the presumption is that the government is still Registration Act, to wit:
reserving the right to utilize the property; hence, the need to
preserve its ownership in the State irrespective of the length of xxx xxx xxx
adverse possession even if in good faith. However, if the property
has already been classi ied as alienable and disposable, as it is in (b) Those who by themselves or through their predecessors in
this case, then there is already an intention on the part of the State interest have been in open, continuous, exclusive, and notorious
to abdicate its exclusive prerogative over the property. possession and occupation of agricultural lands of the public
domain, under a bona ide claim of acquisition of ownership, for at
This reading aligns conformably with our holding in Republic v. least thirty years immediately preceding the iling of the application
Court of Appeals.[14] Therein, the Court noted that “to prove that for con irmation of title except when prevented by war or force
the land subject of an application for registration is alienable, an majeure. These shall be conclusively presumed to have performed
applicant must establish the existence of a positive act of the all the conditions essential to a Government grant and shall be
government such as a presidential proclamation or an executive entitled to a certi icate of title under the provisions of this
order; an administrative action; investigation reports of Bureau of chapter.When the Public Land Act was irst promulgated in 1936,
Lands investigators; and a legislative act or a statute.”[15] In that the period of possession deemed necessary to vest the right to
case, the subject land had been certi ied by the DENR as alienable register their title to agricultural lands of the public domain
and disposable in 1980, thus the Court concluded that the alienable commenced from July 26, 1894. However, this period was amended
status of the land, compounded by the established fact that therein by R.A. No. 1942, which provided that the bona ide claim of
respondents had occupied the land even before 1927, suf iced to ownership must have been for at least thirty (30) years. Then in
allow the application for registration of the said property. In the 1977, Section 48(b) of the Public Land Act was again amended, this
case at bar, even the petitioner admits that the subject property was time by P.D. No. 1073, which pegged the reckoning date at June 12,
released and certi ied as within alienable and disposable zone in 1945. This new starting point is concordant with Section 14(1) of
1980 by the DENR.[16] the Property Registration Decree.
This case is distinguishable from Bracewell v. Court of Appeals,[17] Indeed, there are no material differences between Section 14(1) of
wherein the Court noted that while the claimant had been in the Property Registration Decree and Section 48(b) of the Public


Land Act, as amended. True, the Public Land Act does refer to revenues to the Government. Such an act strengthens one’s bona
“agricultural lands of the public domain,” while the Property ide claim of acquisition of ownership.[28]
Registration Decree uses the term “alienable and disposable lands
of the public domain.” It must be noted though that the Constitution Considering that the possession of the subject parcel of land by the
declares that “alienable lands of the public domain shall be limited respondent can be traced back to that of her
to agricultural lands.”[24] Clearly, the subject lands under Section predecessors-in-interest which commenced since 1945 or for
48(b) of the Public Land Act and Section 14(1) of the Property almost ifty (50) years, it is indeed beyond any cloud of doubt that
Registration Decree are of the same type. she has acquired title thereto which may be properly brought under
the operation of the Torrens system. That she has been in
Did the enactment of the Property Registration Decree and the possession of the land in the concept of an owner, open, continuous,
amendatory P.D. No. 1073 preclude the application for registration peaceful and without any opposition from any private person and
of alienable lands of the public domain, possession over which the government itself makes her right thereto undoubtedly settled
commenced only after June 12, 1945? It did not, considering Section and deserving of protection under the law.
14(2) of the Property Registration Decree, which governs and
authorizes the application of “those who have acquired ownership WHEREFORE, foregoing premises considered, the assailed Decision
of private lands by prescription under the provisions of existing of the Court of Appeals dated July 12, 2000 is hereby AFFIRMED.
laws.” No costs.
Prescription is one of the modes of acquiring ownership under the SO ORDERED.

Civil Code.[25] There is a consistent jurisprudential rule that
properties classi ied as alienable public land may be converted into Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario,
private property by reason of open, continuous and exclusive JJ., concur.
possession of at least thirty (30) years.[26] With such conversion,
such property may now fall within the contemplation of “private Ignacio vs Director of Lands, G.R. No.
lands” under Section 14(2), and thus susceptible to registration by
those who have acquired ownership through prescription. Thus, L-12958, May 30, 1960
108 Phil. 335
even if possession of the alienable public land commenced on a date
later than June 12, 1945, and such possession being been open,
G.R. No. L-12958, May 30, 1960
continuous and exclusive, then the possessor may have the right to
FAUSTINO IGNACIO, APPLICANT AND APPELLANT, VS. THE
register the land by virtue of Section 14(2) of the Property
DIRECTOR OF LANDS AND LAUREANO VALERIANO, OPPOSITORS
Registration Decree.
AND APPELLEES.
The land in question was found to be cocal in nature, it having been
DECISION
planted with coconut trees now over ifty years old.[27] The
MONTEMAYOR, J.:
inherent nature of the land but con irms its certi ication in 1980 as
alienable, hence agricultural. There is no impediment to the
Faustino Ignacio is appealing the decision of the Court of First
application of Section 14(1) of the Property Registration Decree, as
Instance of Rizal, dismissing his application for the registration of a
correctly accomplished by the lower courts.
parcel of land.
On January 25, 1950, Ignacio iled an application for the registration
The OSG posits that the Court of Appeals erred in holding that
of a parcel of land (mangrove), situated in barrio Gasac, Navotas,
Naguit had been in possession in the concept of owner for the
Rizal, with an area of 37,877 square meters. Later, he amended his
required period. The argument begs the question. It is again hinged
application by alleging among others that he owned the parcel
on the assertion—shown earlier to be unfounded—that there could
applied for by right of accretion. To the application, the Director of
have been no bona ide claim of ownership prior to 1980, when the
Lands, Laureano Valeriano and Domingo Gutierrez iled
subject land was declared alienable or disposable.
oppositions. Gutierrez later withdrew his opposition. The Director
of Lands claimed the parcel applied for as a portion of the public
We ind no reason to disturb the conclusion of both the RTC and the
domain, for the reason that neither the applicant nor his
Court of Appeals that Naguit had the right to apply for registration
predecessor-in-interest possessed suf icient title thereto, not having
owing to the continuous possession by her and her
acquired it either by composition title from the Spanish government
predecessors-in-interest of the land since 1945. The basis of such
or by possessory information title under the Royal Decree of
conclusion is primarily factual, and the Court generally respects the
February 13, 1894, and that he had not possessed the same openly,
factual indings made by lower courts. Notably, possession since
continuously and adversely under a bona ide claim of ownership
1945 was established through proof of the existence of 50 to
since July 26, 1894. In his turn, Valeriano alleged that he was
60-year old trees at the time Naguit purchased the property as well
holding the land by virtue of a permit granted him by the Bureau of
as tax declarations executed by Urbano in 1945. Although tax
Fisheries, issued on January 13, 1947, and approved by the
declarations and realty tax payment of property are not conclusive
President.
evidence of ownership, nevertheless, they are good indicia of the
It is not disputed that the land applied for adjoins a parcel owned by
possession in the concept of owner for no one in his right mind
the applicant which he had acquired from the Government by virtue
would be paying taxes for a property that is not in his actual or at
of a free patent title in 1936. It has also been established that the
least constructive possession. They constitute at least proof that the
parcel in question was formed by accretion and alluvial deposits
holder has a claim of title over the property. The voluntary
caused by the action of the Manila Bay which borders it on the
declaration of a piece of property for taxation purposes manifests
southwest. Applicant Ignacio claims that he had occupied the land
not only one’s sincere and honest desire to obtain title to the
since 1935, planting it with api-api trees, and that his possession
property and announces his adverse claim against the State and all
thereof had been continuous, adverse and public for a period of
other interested parties, but also the intention to contribute needed


twenty years until said possession was disturbed by oppositor Interpreting Article 4 of the Law of Waters of 1866, in the case of
Valeriano. Natividad vs. Director of Lands, (CA) 37 Off. Gaz., 2905, it was there
On the other hand, the Director of Lands sought to prove that the held that:
parcel is foreshore land% covered by the ebb and low of the tide "Article 4 of the Law of Waters of 1866 provides that when a portion
and, therefore, formed part of the public domain. of the shore is no longer washed by the waters of the sea and is not
After hearing, the trial court dismissed the application, holding that necessary for purposes of public utility, or for the establishment of
the parcel formed part of the public domain. In his appeal, Ignacio special industries, or for coastguard service, the government shall
assigns the following errors: declare it to be the property of the owners of the estates adjacent
"I. The lower court erred in holding that the land in question, altho thereto and as an increment thereof. We believe that only the
an accretion to the land of the applicant-appellant, does not belong executive and possibly the legislative departments have the
to him but forms part of the public domain. authority and the power to make the declaration that any land so
"II. Granting that the land in question forms part of the public gained by the sea, is not necessary for purposes of public utility, or
domain, the lower court nevertheless erred in not declaring the for the establishment of special industries, or for coast-guard
same to be the property of the applicant-appellant, the said land not service. If no such declaration has been made by said departments,
being necessary for any public use or purpose and in not ordering at the lot in question forms part of the public domain." (Natividad vs.
the same time its registration in the name of applicant-appellant in Director of Lands, supra.)
the present registration proceedings. The reason for this pronouncement, according to this Tribunal in
"III. The lower court erred in not holding that the land in question the case of Vicente Joven y Monteverde vs. Director of Lands, 93
now belongs to the applicant-appellant by virtue of acquisitive Phi]., 134, (cited in Velayo's Digest, Vol. I, p. 52).
prescription, the said land having ceased to be of the public domain "* * * is undoubtedly that the courts are neither primarily called
and became the private or patrimonial property of the State. upon, nor indeed in a position to determine whether any public land
"IV. The lower court erred in not holding that the oppositor Director are to be used for the purposes speci ied in Article 4 of the Law of
of Lands is now in estoppel from claiming the land in question as a Waters."
land of the public domain." Consequently, until a formal declaration on the part of the
Appellant contends that the parcel belongs to him by the law of Government, through the executive department or the Legislature,
accretion, having been formed by gradual deposit Inaction of the to the effect that the land in question is no longer needed for coast
Manila Bay, and he cites Article 457 of the New Civil Code (Article guard service, for public use or for special industries, they continue
366, Old Civil Code), which provides that: to be part of the public domain, not available for private
"To the owners of lands adjoining the banks of rivers belong the appropriation or ownership.
accretion which they gradually receive from the effects of the Appellant next contends that he had acquired the parcel in question
current of the waters." through acquisitive prescription, having possessed the same for
The article cited is clearly inapplicable because it refers to accretion over ten years. In answer, suf ice it to say that land of the public
or deposits on the banks of rivers, while the accretion in the present domain is not subject to ordinary prescription. In the case of Insular
case was caused by action of the Manila Bay. Government vs. Aldecoa & Co., 19 Phil., 505, this Court said:
Appellant next contends that Articles 1, 4 and 5 of the Law of "The occupation or material possession of any land formed upon
Waters are not applicable because they refer to accretions formed the shore by accretion, without previous permission from the
by the sea, and that Manila Bay cannot be considered as a sea. We proper authorities, although the occupant may have held the same
ind said contention untenable. A bay is a part of the sea, being a as owner for seventeen years and constructed a wharf on the land,
mere indentation of the same: is illegal and is a mere detainer, inasmuch as such land is outside of
"Bay.—An opening into the land where the water is shut in on all the sphere of commerce; it pertains to the national domain; it is
sides except at the entrance; an inlet of the sea; an arm of the sea, intended for public uses and for the bene it of those who live
distinct from a river, a bending or curbing of the shore of the sea or nearby."
of a lake." 7 C.J. 1013-1014 (Cited in Francisco, Philippine Law of We deem it unnecessary to discuss the other points raised in the
Waters and Water Rights p. 6) appeal.
Moreover, this Tribunal has in some cases applied the Law of In view of the foregoing, the appealed decision is hereby af irmed,
Waters on Lands bordering Manila Bay. (See the cases of Ker & Co. with costs.
vs. Cauden, 6 Phil., 732, involving a parcel of land bounded on the Paras, C. J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion,
sides by Manila Bay, where it was held that such land formed by the Barrera, and Gutierrez David, JJ., concur.
action of the sea is property of the State; Francisco vs. Government
of the P.I., 28 Phil., 505, involving a land claimed by a private person Manila Lodge No 761 vs Court of Appeals,
and subject to the ebb and low of the tides of the Manila Bay).
Then the applicant argues that granting that the land in question G.R. No. L-41001, September 30, 1976
165 Phil. 161
formed part of the public domain, having been gained from the sea,
the trial court should have declared the same no longer necessary
FIRST DIVISION
for any public use or purpose, and therefore, became disposable and
G.R. No. L-41001, September 30, 1976
available for private ownership. Article 4 of the Law of Waters of
MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER
1866 reads thus:
OF THE ELKS, INC., PETITIONER, VS. THE HONORABLE COURT OF
"Art. 4. Lands added to the shores by accretions and alluvial
APPEALS, CITY OF MANILA, AND TARLAC DEVELOPMENT
deposits caused by the action of the sea, form part of the public
CORPORATION, RESPONDENTS.
domain. When they are no longer washed by the waters of the sea
and are not necessary for purposes of public utility, or for the
[G.R. NO. L-41012. SEPTEMBER 30, 1976]
establishment of special industries, or for the coastguard service,
the Government shall declare them to be the property of the owners
TARLAC DEVELOPMENT CORPORATION, PETITIONER, VS.
of the estates adjacent thereto and as increment thereof."
HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO.


761, BENEVOLENT AND PROTECTIVE ORDER OF ELKS, INC., Manila to repurchase the property. This petition was granted on
RESPONDENTS. February 15, 1963.
On November 19, 1963 the BPOE sold for the sum of P4,700,000 the
DECISION land together with all the improvements thereon to the Tarlac
CASTRO, C.J.: Development Corporation (TDC, for short) which paid P1,700,000
as down payment and mortgaged to the vendor the same realty to
STATEMENT OF THE CASE AND STATEMENT OF THE FACTS secure the payment of the balance to be paid in quarterly
These two cases are petitions on certiorari to review the decision installments.[5] At the time of the sale, there was no annotation of
dated June 30, 1975 of the Court of Appeals in CA-G.R. No. 51590-R any subsisting lien on the title to the property. On December 12,
entitled "Tarlac Development Corporation vs. City of Manila, and 1963 TCT No. 73444 was issued to TDC over the subject land still
Manila Lodge No. 761, Benevolent and Protective Order of Elks, described as "UNA PARCELA DE TERRENO, que es parte de la
Inc.," af irming the trial court's inding in Civil Case No. 83009 that Luneta Extension, situada en el Distrito de Ermita x x x."
the property subject of the decision a quo is a "public park or plaza." In June 1964 the City of Manila iled with the Court of First Instance
On June 26, 1905 the Philippine Commission enacted Act No. 1360 of Manila a petition for the reannotation of its right to repurchase;
which authorized the City of Manila to reclaim a portion of Manila the court, after hearing, issued an order, dated November 19, 1964,
Bay. The reclaimed area was to form part of the Luneta extension. directing the Register of Deeds of the City of Manila to reannotate in
The Act provided that the reclaimed area "shall be the property of toto the entry regarding the right of the City of Manila to repurchase
the City of Manila" and that "the City of Manila is hereby authorized the property after ifty years. From this order TDC and BPOE
to set aside a tract of the reclaimed land formed by the Luneta appealed to this Court which on July 31, 1968 af irmed in G.R. Nos.
extension x x x at the north end not to exceed ive hundred feet by L-24557 and L-24469 the trial court's order of reannotation, but
six hundred feet in size, for a hotel site, and to lease the same, with reserved to TDC the right to bring another action for the
the approval of the Governor General, to a responsible person or clari ication of its rights.
corporation for a term not to exceed ninety-nine years." As a consequence of such reservation, TDC iled on April 28, 1971
Subsequently, the Philippine Commission passed on May 18, 1907 against the City of Manila and the Manila Lodge No. 761, BPOE, a
Act No. 1657, amending Act No. 1360, so as to authorize the City of complaint, docketed as Civil Case No. 83009 of the Court of First
Manila either to lease or to sell the portion set aside as a hotel site. Instance of Manila, containing three causes of action and praying --
The total area reclaimed was a little over 25 hectares. The City of "a) On the irst cause of action, that the plaintiff TDC be declared to
Manila applied for the registration of the reclaimed area, and on have purchased the parcel of land now in question with the
January 20, 1911, O.C.T. No. 1909 was issued in the name of the City buildings and improvements thereon from the defendant BPOE for
of Manila. The title described the registered land as "un terreno value and in good faith, and accordingly ordering the cancellation of
conocido con el nombre de Luneta Extension, situado en el distrito Entry No. 4608/T-1635 on Transfer Certi icate of Title No. 73444 in
de la Ermita x x x." The registration was "subject, however, to such the name of the Plaintiff;
of the incumbrances mentioned in Article 39 of said law (Land "b) On the second cause of action, ordering the defendant City of
Registration Act) as may be subsisting" and "sujeto a las Manila to pay the plaintiff TDC damages in the sum of not less than
disposiciones y condiciones impuestas en la Ley No. 1360; y sujeto one hundred thousand pesos (P100,000.00);
tambien a los contratos de venta, celebrados y otorgados por la "c) On the third cause of action, reserving to the plaintiff TDC the
Ciudad de Manila a favor del Army and Navy Club y la Manila Lodge right to recover from the defendant BPOE the amounts mentioned
No. 761, Benevolent and Protective Order of Elks, fechados in par. XVI of the complaint in accordance with Art. 1555 of the Civil
respectivamente, en 29 de Diciembre de 1908 y 16 de Enero de Code, in the remote event that the inal judgment in this case should
1909."[1] be that the parcel of land now in question is a public park; and
On July 13, 1911 the City of Manila, af irming a prior sale dated "d) For costs, and for such other and further relief as the Court may
January 16, 1909, conveyed 5,543.07 square meters of the deem just and equitable."[6]
reclaimed area to the Manila Lodge No. 761, Benevolent and Therein defendant City of Manila, in its answer dated May 19, 1971,
Protective Order of Elks of the U.S.A. (BPOE, for short) on the basis admitted all the facts alleged in the irst cause of action except the
of which TCT No. 2195[2] was issued to the latter over the "parcela allegation that TDC purchased said property "for value and in good
de terreno que es parte de la Luneta Extension, Situada en el faith," but denied for lack of knowledge or information the
Distrito de la Ermita x x x." At the back of this title was annotated allegations in the second and third causes of action. As special and
document 4608/T-1635, which in part reads as follows: "que la af irmative defense, the City of Manila claimed that TDC was not a
citada Ciudad de Manila tendrá derecho a su opció n, de recomprar purchaser in good faith for it had actual notice of the City's right to
la expresada propiedad para ines pú blicos solamente, en cualquier repurchase which was annotated at the back of the title prior to its
tiempo despué s de cincuenta añ os desde el 13 de Julio de 1911, cancellation, and that, assuming arguendo that TDC had no notice of
previo pago a la entidad compradora, o a sus sucesores del precio the right to repurchase, it was, nevertheless, under obligation to
de la venta de la misma propiedad, mas el valor que entonces investigate inasmuch as its title recites that the property is a part of
tengan las mejoras." the Luneta extension.[7]
For the remainder of the Luneta extension, that is, after segregating The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971,
therefrom the portion sold to the Manila Lodge No. 761, BPOE, a admitted having sold the land together with the improvements
new Certi icate of Title No. 2196[3] was issued on July 17, 1911 to thereon for value to therein plaintiff which was in good faith, but
the City of Manila. denied for lack of knowledge as to their veracity the allegations
Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 under the second cause of action. It furthermore admitted that TDC
square meters to the Elks Club, Inc., to which was issued TCT No. had paid the quarterly installments until October 15, 1964 but
67488.[4] The registered owner, "The Elks Club, Inc.," was later claimed that the latter failed without justi iable cause to pay the
changed by court order to "Manila Lodge No. 761, Benevolent and subsequent installments. It also asserted that it was a seller for
Protective Order of Elks, Inc." value in good faith without having misrepresented or concealed
In January 1963 the BPOE petitioned the Court of First Instance of facts relative to the title on the property. As counterclaim, Manila
Manila, Branch IV, for the cancellation of the right of the City of


Lodge No. 761 (BPOE) sought to recover the balance of the resolve several vital points stressed by the BPOE in its assigned
purchase price plus interest and costs.[8] errors.[14]
On June 15, 1971 TDC answered the aforesaid counterclaim, G.R. No. L-41012
alleging that its refusal to make further payments was fully The Tarlac Development Corporation, in its petition for review on
justi ied.[9] certiorari docketed as G.R. No. L-41012, relies on the following
After due trial the court a quo rendered on July 14, 1972 its decision grounds for the allowance of its petition:
inding the subject land to be part of the "public park or plaza" and, 1. that the Court of Appeals did not correctly interpret Act No. 1360,
therefore, part of the public domain. The court consequently as amended by Act No. 1657 of the Philippine Commission; and
declared that the sale of the subject land by the City of Manila to 2. that the Court of Appeals has departed from the accepted and
Manila Lodge No. 761, BPOE, was null and void; that plaintiff TDC usual course of judicial proceedings in that it did not make its own
was a purchaser thereof in good faith and for value from BPOE and indings but simply recited those of the lower court.[15]
can enforce its rights against the latter; and that BPOE is entitled to ISSUES AND ARGUMENTS
recover from the City of Manila whatever consideration it had paid FIRST ISSUE
the latter. The dispositive part of the decision reads: Upon the irst issue, both petitioners claim that the property subject
"WHEREFORE, the Court hereby declares that the parcel of land of the action, pursuant to the provisions of Act No. 1360, as
formerly covered by Transfer Certi icate of Title Nos. 2195 and amended by Act No. 1657, was patrimonial property of the City of
67488 in the name of BPOE and now by Transfer Certi icate of Title Manila and not a park or plaza.
No. 73444 in the name of Tarlac Development Corporation is a Arguments of Petitioners
public park or plaza, and, consequently, instant complaint is In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that
dismissed, without pronouncement as to costs. "there appears to be some logic in the conclusion" of the Court of
"In view of the reservation made by plaintiff Tarlac Development Appeals that "neither Act No. 1360 nor Act No. 1657 could have
Corporation to recover from defendant BPOE the amounts meant to supply the City of Manila the authority to sell the subject
mentioned in paragraph XVI of the complaint in accordance with property which is located at the south end -- not the north -- of the
Article 1555 of the Civil Code, the Court makes no pronouncement reclaimed area."[16] It argues, however, that when Act No. 1360, as
on this point."[10] amended, authorized the City of Manila to undertake the
From said decision the therein plaintiff TDC as well as the defendant construction of the Luneta extension by reclaiming land from the
Manila Lodge No. 761, BPOE, appealed to the Court of Appeals. Manila Bay, and declared that the reclaimed land shall be the
In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No. "property of the City of Manila," the State expressly granted the
761, BPOE, avers that the trial court committed the following errors, ownership thereof to the City of Manila which, consequently, could
namely: enter into transactions involving it; that upon the issuance of O.C.T.
1. In holding that the property subject of the action is not No. 1909, there could be no doubt that the reclaimed area owned by
patrimonial property of the City of Manila; and the City was its patrimonial property;[17] that the south end of the
2. In holding that the Tarlac Development Corporation may recover reclaimed area could not be for public use for, as argued by TDC, a
and enforce its right against the defendant BPOE.[11] street, park or promenade can be property for public use pursuant
The Tarlac Development Corporation, on the other hand, asserts to Article 344 of the Spanish Civil Code only when it has already
that the trial court erred: been so constructed or laid out, and the subject land, at the time it
1. In inding that the property in question is or was a public park was sold to the Elk's Club, was neither actually constructed as a
and in consequently nullifying the sale thereof by the City of Manila street, park or promenade nor laid out as a street, park or
to BPOE; promenade;[18] that even assuming that the subject property was
2. In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil. at the beginning property of public dominion, it was subsequently
602, and Government vs. Cabangis, 53 Phil. 112 to the case at bar; converted into patrimonial property pursuant to Art. 422 of the
and Civil Code, inasmuch as it had never been used, regarded, or utilized
3. In not holding that the plaintiff-appellant is entitled to recover since it was reclaimed in 1905 for purposes other than that of an
damages from the defendant City of Manila.[12] ordinary real estate for sale or lease; that the subject property had
Furthermore, TDC, as appellee regarding the second assignment of never been intended for public use, is further shown by the fact that
error raised by BPOE, maintained that it can recover and enforce its it was neither included as a part of the Luneta Park under Plan No.
right against BPOE in the event that the land in question is declared 30 of the National Planning Commission nor considered a part of
a public park or part thereof.[13] the Luneta National Park (now Rizal Park) by Proclamation No. 234
In its decision promulgated on June 30, 1975, the Court of Appeals dated December 19, 1955 of President Ramon Magsaysay or by
concurred in the indings and conclusions of the lower court upon Proclamation Order No. 274 dated October 4, 1967 of President
the ground that they are supported by the evidence and are in Ferdinand E. Marcos;[19] that, such being the case, there is no
accordance with law, and accordingly af irmed the lower court's reason why the subject property should not be considered as having
judgment. been converted into patrimonial property, pursuant to the ruling in
Hence, the present petitions for review on certiorari. Municipality vs. Roa, 7 Phil. 20, inasmuch as the City of Manila has
G.R. No. L-41001 considered it as its patrimonial property not only by bringing it
The Manila Lodge No. 761, BPOE, contends, in its petition for review under the operation of the Land Registration Act but also by
on certiorari docketed as G.R. No. L-41001, that the Court of disposing of it;[20] and that to consider now the subject property
Appeals erred in (1) disregarding the very enabling acts and/or as a public plaza or park would not only impair the obligations of
statutes according to which the subject property was, and still is, the parties to the contract of sale dated July 13, 1911, but also
patrimonial property of the City of Manila and could therefore be authorize deprivation of property without due process of law.[21]
sold and/or disposed of like any other private property; and (2) in G.R. No. L-41012
departing from the accepted and usual course of judicial In L-41012, the petitioner TDC stresses that the principal issue is
proceedings when it simply made a general af irmance of the court the interpretation of Act No. 1360, as amended by Act No. 1657 of
a quo's indings and conclusions without bothering to discuss or the Philippine Commission,[22] and avers that inasmuch as Section
6 of Act No. 1360, as amended by Act 1657, provided that the


reclamation of the Luneta extension was to be paid for out of the was cadastrally surveyed and registered as property of the Elks
funds of the City of Manila which was authorized to borrow Club, according to Manuel Añ onuevo; (4) the property was never
P350,000 "to be expended in the construction of Luneta Extension," used as a public park, for, since the issuance of T.C.T. No. 2195 on
the reclaimed area became "public land" belonging to the City of July 17, 1911 in the name of the Manila Lodge No. 761, the latter
Manila that spent for the reclamation, conformably to the holding in used it as private property, and as early as January 16, 1909 the City
Cabangis, [23] and consequently, said land was subject to sale and of Manila had already executed a deed of sale over the property in
other disposition; that the Insular Government itself considered the favor of the Manila Lodge No. 761; and (5) the City of Manila has not
reclaimed Luneta extension as patrimonial property subject to presented any evidence to show that the subject property has ever
disposition as evidenced by the fact that Sec. 3 of Act 1360 declared been proclaimed or used as a public park.[28]
that "the land hereby reclaimed shall be the property of the City of TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot
Manila;" that this property cannot be property for public use for, apply to the subject land, for Com. Act No. 141 took effect on
according to Article 344 of the Civil Code, the character of property December 1, 1936 and at that time the subject land was no longer
for public use can only attach to roads and squares that have part of the public domain.[29]
already been constructed or at least laid out as such, which TDC also stresses that its rights as a purchaser in good faith cannot
conditions did not obtain regarding the subject land; that Sec. 5 of be disregarded, for the mere mention in the certi icate of title that
Act 1360 authorized the City of Manila to lease the northern part of the lot it purchased was "part of the Luneta extension" was not a
the reclaimed area for hotel purposes; that Act No. 1657 suf icient warning that the title of the City of Manila was invalid;
furthermore authorized the City of Manila to sell the same;[24] that and that although the trial court, in its decision af irmed by the
the express statutory authority to lease or sell the northern part of Court of Appeals, found the TDC to have been an innocent purchaser
the reclaimed area cannot be interpreted to mean that the for value, the court disregarded the petitioner's rights as such
remaining area could not be sold inasmuch as the purpose of the purchaser that relied on a Torrens certi icate of title.[30]
statute was not merely to confer authority to sell the northern The Court, continues the petitioner TDC, erred in not holding that
portion but rather to limit the city's power of disposition thereof, to the latter is entitled to recover from the City of Manila damages in
wit: to prevent disposition of the northern portion for any purpose the amount of P100,000 caused by the City's petition for
other than for a hotel site;[25] that the northern and southern ends reannotation of its right to repurchase.
of the reclaimed area cannot be considered as extension of the DISCUSSION AND RESOLUTION OF FIRST ISSUE
Luneta for they lie beyond the sides of the original Luneta when It is a cardinal rule of statutory construction that courts must give
extended in the direction of the sea, and that is the reason why the effect to the general legislative intent that can be discovered from or
law authorized the sale of the northern portion for hotel purposes, is unraveled by the four corners of the statute,[31] and in order to
and, for the same reason, it is implied that the southern portion discover said intent, the whole statute, and not only a particular
could likewise be disposed of.[26] provision thereof, should be considered.[32] It is, therefore,
TDC argues likewise that there are several items of uncontradicted necessary to analyze all the provisions of Act No. 1360, as amended,
circumstantial evidence which may serve as aids in construing the in order to unravel the legislative intent.
legislative intent and which demonstrate that the subject property Act No. 1360 which was enacted by the Philippine Commission on
is patrimonial in nature, to wit: (1) Exhibits "J" and "J-1," or Plan No. June 26, 1905, as amended by Act No. 1657 enacted on May 18,
30 of the National Planning Commission showing the Luneta and its 1907, authorized the "construction of such rock and timber
vicinity, do not include the subject property as part of the Luneta bulkheads or sea walls as may be necessary for the making of an
Park; (2) Exhibit "K," which is the plan of the subject property extension to the Luneta" (Sec. 1 [a]), and the placing of the material
covered by TCT No. 67488 of BPOE, prepared on November 11, dredged from the harbor of Manila "inside the bulkheads
1963, indicates that said property is not a public park; Exhibit "T," constructed to inclose the Luneta extension above referred to" (Sec.
which is a certi ied copy of Proclamation No. 234 issued on 1 [c]). It likewise provided that the plan of Architect D.H. Burnham
December 15, 1955 by President Magsaysay, and Exhibit "U" which as "a general outline for the extension and improvement of the
is Proclamation Order No. 273 issued on October 4, 1967 by Luneta in the City of Manila" be adopted; that "the reclamation from
President Marcos, do not include the subject property in the Luneta the Bay of Manila of the land included in said projected Luneta
Park; Exhibit "W," which is the location plan of the Luneta National extension x x x is hereby authorized and the land thereby reclaimed
Park under Proclamations Nos. 234 and 273, further con irms that shall be the property of the City of Manila" (Sec. 3); that "the city of
the subject property is not a public park; and (5) Exhibit "Y," which Manila is hereby authorized to set aside a tract of the reclaimed
is a copy of O.C.T. No. 7333 in the name of the United States of land formed by the Luneta extension authorized by this Act at the
America covering the land now occupied by the American Embassy, north end of said tract, not to exceed ive hundred feet by six
the boundaries of which were delineated by the Philippine hundred feet in size, for a hotel site, and to lease the same with the
Legislature, states that the said land is bounded on the northwest by approval of the Governor General, x x x for a term not exceeding
properties of the Army and Navy Club (Block No. 321 ) and the Elks ninety-nine years;" that "should the Municipal Board x x x deem it
Club (Block No. 321), and this circumstance shows that even the advisable it is hereby authorized to advertise for sale to sell said
Philippine Legislature recognized the subject property as private tract of land x x x;" "that said tract shall be used for hotel purposes
property of the Elks Club.[27] as herein prescribed, and shall not be devoted to any other purpose
TDC furthermore contends that the City of Manila is estopped from or object whatever;" "that should the grantee x x x fail to maintain
questioning the validity of the sale of the subject property that it on said tract a irst-class hotel x x x then the title to said tract of land
executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for sold, conveyed, and transferred to the grantee shall revert to the
several reasons, namely: (1) the City's petition for the reannotation City of Manila, and said City of Manila shall thereupon become
of Entry No. 4608/T-1635 was predicated on the validity of said entitled to the immediate possession of said tract of land" (Sec. 5);
sale; (2) when the property was bought by the petitioner TDC it was that the construction of the rock and timber bulkheads or sea wall
not a public plaza or park as testi ied to by both Pedro Cojuangco, "shall be paid for out of the funds of the City of Manila, but the area
treasurer of TDC, and the surveyor, Manuel Añ onuevo, according to to be reclaimed by said proposed Luneta extension shall be illed,
whom the subject property was from all appearances private without cost to the City of Manila, with material dredged from
property as it was enclosed by fences; (3) the property in question Manila Bay at the expense of the Insular Government" (Sec. 6); and


that "the City of Manila is hereby authorized to borrow from the question. If the purpose of the law was to limit the City's power of
Insular Government x x x the sum of three hundred thousand pesos, disposition, then it is necessarily assumed that the City had already
to be expended in the construction of the Luneta extension the power to dispose, for if such power did not exist, how could it be
provided for by paragraph (a) of section one hereof" (Sec. 7). limited? It was precisely Act 1360 that gave the City the power to
The grant made by Act No. 1360 of the reclaimed land to the City of dispose -- for it was "hereby authorized" -- by lease or sale. Hence,
Manila is a grant of a "public" nature, the same having been made to the City of Manila had no power to dispose of the reclaimed land
a local political subdivision. Such grants have always been strictly had such power not been granted by Act No. 1360, and the purpose
construed against the grantee.[33] One compelling reason given for of the authorization was to empower the City to sell or lease the
the strict interpretation of a public grant is that there is in such northern part and not, as TDC claims, to limit only the power to
grant a gratuitous donation of public money or resources which dispose. Moreover, it is presumed that when the lawmaking body
results in an unfair advantage to the grantee and for that reason, the enacted the statute, it had full knowledge of prior and existing laws
grant should be narrowly restricted in favor of the public.[34] This and legislation on the subject of the statute and acted in accordance
reason for strict interpretation obtains relative to the aforesaid or with respect thereto.[39] If by another previous law, the City of
grant, for, although the City of Manila was to pay for the Manila could already dispose of the reclaimed area, which it could
construction of such work and timber bulkheads or sea walls as do if such area were given to it as its patrimonial property, would it
may be necessary for the making of the Luneta extension, the area then not be a super luity for Act No. 1360 to authorize the City to
to be reclaimed would be illed at the expense of the Insular dispose of the reclaimed land? Neither has petitioner TDC pointed
government and without cost to the City of Manila, with material to any other law that authorized the City to do so, nor have we come
dredged from Manila Bay. Hence, the letter of the statute should be across any. What we do know is that if the reclaimed land were
narrowed to exclude matters which if included would defeat the patrimonial property, there would be no need of giving special
policy of the legislation. authorization to the City to dispose of it. Said authorization was
The reclaimed area, an extension to the Luneta, is declared to be given because the reclaimed land was not intended to be
property of the City of Manila. Property, however, is either of public patrimonial property of the City of Manila, and without the express
ownership or of private ownership.[35] What kind of property of authorization to dispose of the northern portion, the City could not
the City is the reclaimed land? Is it of public ownership (dominion) dispose of even that part.
or of private ownership? Secondly, the reclaimed area is an "extension to the Luneta in the
We hold that it is of public dominion, intended for public use. City of Manila."[40] If the reclaimed area is an extension of the
Firstly, if the reclaimed area was granted to the City of Manila as its Luneta, then it is of the same nature or character as the old Luneta.
patrimonial property, the City could, by virtue of its ownership, Anent this matter, it has been said that a power to extend (or
dispose of the whole reclaimed area without need of authorization continue an act or business) cannot authorize a transaction that is
to do so from the lawmaking body. Thus Article 348 of the Civil Code totally distinct.[41] It is not disputed that the old Luneta is a public
of Spain provides that "ownership is the right to enjoy and dispose park or plaza and it is so considered by Section 859 of the Revised
of a thing without further limitations than those established by Ordinances of the City of Manila.[42] Hence the "extension to the
law."[36] The right to dispose (jus disponendi) of one's property is Luneta" must be also a public park or plaza and for public use.
an attribute of ownership. Act No. 1360, as amended, however, TDC, however, contends that the subject property cannot be
provides by necessary implication, that the City of Manila could not considered an extension of the old Luneta because it is outside of
dispose of the reclaimed area without being authorized by the the limits of the old Luneta when extended to the sea. This is a
lawmaking body. Thus the statute provides that "the City of Manila strained interpretation of the term "extension," for an "extension," it
is hereby authorized to set aside a tract x x x at the north end, for a has been held, "signi ies enlargement in any direction -- in length,
hotel site, and to lease the same x x x should the municipal board x x breadth, or circumstance."[43]
x deem it advisable, it is hereby authorized x x x to sell said tract of Thirdly, the reclaimed area was formerly a part of the Manila Bay. A
land x x x" (Sec. 5). If the reclaimed area were patrimonial property bay is nothing more than an inlet of the sea. Pursuant to Article 1 of
of the City, the latter could dispose of it without need of the the Law of Waters of 1866, bays, roadsteads, coast sea, inlets and
authorization provided by the statute, and the authorization to set shores are parts of the national domain open to public use. These
aside x x x lease x x x or sell x x x given by the statute would indeed are also property of public ownership devoted to public use,
be super luous. To so construe the statute as to render the term according to Article 339 of the Civil Code of Spain.
"authorize," which is repeatedly used by the statute, super luous When the shore or part of the bay is reclaimed, it does not lose its
would violate the elementary rule of legal hermeneutics that effect character of being property for public use, according to Government
must be given to every word, clause, and sentence of the statute and of the Philippine Islands vs. Cabangis.[44] The predecessor of the
that a statute should be so interpreted that no part thereof becomes claimants in this case was the owner of a big tract of land including
inoperative or super luous.[37] To authorize means to empower, to the lots in question. From 1896 said land began to wear away due to
give a right to act.[38] Act No. 1360 furthermore quali ies the verb the action of the waters of Manila Bay. In 1901 the lots in question
"authorize" with the adverb "hereby," which means "by means of became completely submerged in water in ordinary tides. It
this statute or section." Hence without the authorization expressly remained in such a state until 1912 when the Government
given by Act No. 1360, the City of Manila could not lease or sell even undertook the dredging of the Vitas estuary and dumped the sand
the northern portion; much less could it dispose of the whole and silt from estuary on the low lands completely submerged in
reclaimed area. Consequently, the reclaimed area was granted to the water, thereby gradually forming the lots in question. Tomas
City of Manila, not as its patrimonial property. At most, only the Cabangis took possession thereof as soon as they were reclaimed;
northern portion reserved as a hotel site could be said to be hence, the claimants, his successors in interest, claimed that the lots
patrimonial property, for, by express statutory provision it could be belonged to them. The trial court found for the claimants and the
disposed of, and the title thereto would revert to the City should the Government appealed. This Court held that when the lots in
grantee fail to comply with the terms provided by the statute. question were completely submerged and remained under water,
TDC, however, contends that the purpose of the authorization the owners having abandoned the same, said lots became a part of
provided in Act No. 1360 to lease or sell was really to limit the City's the shore. As they remained in that condition until reclaimed by the
power of disposition. To sustain such contention is to beg the illing done by the Government, they belonged to the public domain


for public use.[45] Hence, a part of the shore, and for that purpose, courts are undoubtedly not primarily called upon, and are not in a
a part of the bay, did not lose its character of being for public use position, to determine whether any public land is still needed for
after it was reclaimed. the purposes speci ied in Article 4 of the Law of Waters.[50]
Fourthly, Act 1360, as amended, authorized the lease or sale of the Having disposed of the petitioners' principal arguments relative to
northern portion of the reclaimed area as a hotel site. The subject the main issue, we now pass to the items of circumstantial evidence
property is not that northern portion authorized to be leased or which TDC claims may serve as aids in construing the legislative
sold; the subject property is the southern portion. Hence, applying intent in the enactment of Act No. 1360, as amended. It is
the rule of expresio unius est exclusio alterius, the City of Manila noteworthy that all these items of alleged circumstantial evidence
was not authorized to sell the subject property. The application of are acts far removed in time from the date of the enactment of Act
this principle of statutory construction becomes the more No. 1360 such that they cannot be considered contemporaneous
imperative in the case at bar inasmuch as not only must the public with its enactment. Moreover, it is not far-fetched that this mass of
grant of the reclaimed area to the City of Manila be, as above stated, circumstantial evidence might have been in luenced by the
strictly construed against the City of Manila, but also because a antecedent series of invalid acts, to wit: the City's having obtained
grant of power to a municipal corporation, as happens in this case over the reclaimed area OCT No. 1909 on January 20, 1911; the sale
where the city is authorized to lease or sell the northern portion of made by the City of the subject property to Manila Lodge No. 761;
the Luneta extension, is strictly limited to such as are expressly or and the issuance to the latter of T.C.T. No. 2195. It cannot be
impliedly authorized or necessarily incidental to the objectives of gainsaid that if the subsequent acts constituting the circumstantial
the corporation. evidence have been based on, or at least in luenced, by those
Fifthly, Article 344 of the Civil Code of Spain provides that "property antecedent invalid acts and Torrens titles, they can hardly be
of public use, in provinces and in towns, comprises the provincial indicative of the intent of the lawmaking body in enacting Act No.
and town roads, the squares, streets, fountains, and public waters, 1360 and its amendatory act.
the promenades, and public works of general service paid for by TDC claims that Exhs. "J," "J-1," "K," "T," "U," "W" and "Y" show that
such towns or provinces." A park or plaza, such as the extension to the subject property is not a park.
the Luneta, is undoubtedly comprised in said article. Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed
The petitioners, however, argue that, according to said Article 344, development" dated May 14, 1949, were prepared by the National
in order that the character of property for public use may be so Urban Planning Commission of the Of ice of the President. It cannot
attached to a plaza, the latter must be actually constructed or at be reasonably expected that this plan for development of the Luneta
least laid out as such, and since the subject property was not yet should show that the subject property occupied by the Elks Club is a
constructed as a plaza or at least laid out as a plaza when it was sold public park, for it was made 38 years after the sale to the Elks, and
by the City, it could not be property for public use. It should be after T.C.T. No. 2195 had been issued to Elks. It is to be assumed that
noted, however, that properties of provinces and towns for public the Of ice of the President was cognizant of the Torrens title of
use are governed by the same principles as properties of the same BPOE. That the subject property was not included as a part of the
character belonging to the public domain.[46] In order to be Luneta only indicates that the National Urban Planning Commission
property of public domain an intention to devote it to public use is that made the plan knew that the subject property was occupied by
suf icient.[47] The petitioners' contention refuted by Manresa Elks and that Elks had a Torrens title thereto. But this in no way
himself who said, in his comments[48] on Article 344, that: proves that the subject property was originally intended to be
"Las plazas, calles y paseos pú blicos corresponden, sin duda alguna, patrimonial property of the City of Manila or that the sale to Elks or
al dominio publico municipal, porque se hallan establecidos sobre that the Torrens title of the latter is valid.
suelo municipal y está n destinadas al uso de todos. Laurent Exhibit "K" is the "Plan of land covered by T.C.T. No.____, as prepared
presenta, tratando de las plazas, una cuestió n relativa a si deben for Tarlac Development Company." It was made on November 11,
conceptuarse como de dominio publico los lugares vacı́os, libres, 1963 by Felipe F. Cruz, private land surveyor. This surveyor is
que se encuentran en los Municipios rurales. x x x Laurent opina admittedly a surveyor for TDC.[51] This plan cannot be expected to
contra Proudhon, que toda vez que está n al servicio de todos esos show that the subject property is a part of the Luneta Park, for the
lugares, deben considerarse pú blicos y de dominio pú blico. plan was made to show the lot that "was to be sold to petitioner."
Realmente, para decidir el punto, bastará siempre ijarse en el This plan must have also assumed the existence of a valid title to the
destino real y efectivo de los citados lugares, y si este destino land in favor of Elks.
entrañ a un uso comú n de todos, no hay duda que son de dominio Exhibits "T" and "U" are copies of Presidential Proclamations No.
pú blico municipal si no patrimoniales." 234 issued on November 15, 1955 and No. 273 issued on October 4,
It is not necessary, therefore, that a plaza be already constructed or 1967, respectively. The purpose of the said Proclamations was to
laid out as a plaza in order that it be considered property for public reserve certain parcels of land situated in the District of Ermita, City
use. It is suf icient that it be intended to be such. In the case at bar, it of Manila, for park site purposes. Assuming that the subject
has been shown that the intention of the lawmaking body in giving property is not within the boundaries of the reservation, this cannot
to the City of Manila the extension to the Luneta was not a grant to it be interpreted to mean that the subject property was not originally
of patrimonial property but a grant for public use as a plaza. intended to be for public use or that it has ceased to be such.
We have demonstrated ad satietatem that the Luneta extension was Conversely, had the subject property been included in the
intended to be property of the City of Manila for public use. But, reservation, it would not mean, if it really were private property,
could not said property later on be converted, as the petitioners that the rights of the owners thereof would be extinguished, for the
contend, to patrimonial property? It could be. But this Court has reservation was "subject to private rights, if any there be." That the
already said, in Ignacio vs. The Director of Lands,[49] that it is only subject property was not included in the reservation only indicates
the executive and possibly the legislative department that has the that the Presidents knew of the existence of the Torrens titles
authority and the power to make the declaration that said property mentioned above. The failure of the Proclamations to include the
is no longer required for public use, and until such declaration is subject property in the reservation for park site could not change
made the property must continue to form part of the public domain. the character of the subject property as originally for public use and
In the case at bar, there has been no such explicit or unequivocal to form part of the Luneta Park. What has been said here applies to
declaration. It should be noted, furthermore, anent this matter, that


Exhibits "V," "V-1" to "V-3," and "W" which also refer to the area and the assigned errors, contrary to the mandate of the Judiciary
location of the reservation for the Luneta Park. Act.[57]
Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935, The Manila Lodge No. 761, in L-41001, likewise alleges, as one of
covering the lot where now stands the American Embassy the reasons warranting review, that the Court of Appeals departed
/Chancery/. It states that the property is "bounded x x x on the from the accepted and usual course of judicial proceedings by
Northwest by properties of Army and Navy Club (Block No. 321) simply making a general af irmance of the court a quo's indings
and Elks Club (Block No. 321)." Inasmuch as the said boundaries without bothering to resolve several vital points mentioned by the
were delineated by the Philippine Legislature in Act No. 4269, the BPOE in its assigned errors.[58]
petitioners contend that the Legislature "recognized and conceded COMMENTS ON SECOND ISSUE
the existence of the Elks Club property as a private property (the We have shown in our discussion of the irst issue that the decision
property in question) and not as a public park or plaza. This of the trial court is fully in accordance with law. It follows that when
argument is non sequitur, plain and simple. Said Original Certi icate such decision was af irmed by the Court of Appeals, the af irmance
of Title cannot be considered as an incontrovertible declaration that was likewise in accordance with law. Hence, no useful purpose will
the Elks Club was in truth and in fact the owner of such boundary be served in further discussing the second issue.
lot. Such mention as boundary owner is not a means of acquiring CONCLUSION
title nor can it validate a title that is null and void. ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012
TDC inally claims that the City of Manila is estopped from are denied for lack of merit, and the decision of the Court of Appeals
questioning the validity of the sale it executed on July 13, 1911 of June 30, 1975, is hereby af irmed, at petitioners' cost.
conveying the subject property to the Manila Lodge No. 761, BPOE. Makasiar, Muñ oz Palma, and Martin, JJ., concur.
This contention cannot be seriously defended in the light of the Teehankee, J., concurs in the result which is wholly consistent with
doctrine repeatedly enunciated by this Court that the Government is the basic rulings and judgment of this Court in its decision of July
never estopped by mistakes or errors on the part of its agents, and 31, 1968.
estoppel does not apply to a municipal corporation to validate a
contract that is prohibited by law or is against public policy, and the Calapan Lumber Co. vs Community
sale of July 13, 1911 executed by the City of Manila to Manila Lodge
was certainly a contract prohibited by law. Moreover, estoppel Sawmill Co., G.R. No. L-16351, June 30,
cannot be urged even if the City of Manila accepted the bene its of 1964
such contract of sale and the Manila Lodge No. 761 had performed 120 Phil. 344
its part of the agreement, for to apply the doctrine of estoppel
against the City of Manila in this case would be tantamount to G.R. No. L-16351, June 30, 1964
enabling it to do indirectly what it could not do directly.[52] CALAPAN LUMBER COMPANY, INC., PLAINTIFF AND APPELLEE, VS.
The sale of the subject property executed by the City of Manila to COMMUNITY SAWMILL COMPANY, ET AL., DEFENDANTS AND
the Manila Lodge No. 761, BPOE, was void and inexistent for lack of APPELLANTS.
subject matter.[53] It suffered from an incurable defect that could
not be rati ied either by lapse of time or by express rati ication. The DECISION
Manila Lodge No. 761 therefore acquired no right by virtue of the PADILLA, J.:
said sale. Hence to consider now the contract inexistent as it always
has been, cannot be, as claimed by the Manila Lodge No. 761, an This is an action for injunction, prohibition against defendant public
impairment of the obligations of contracts, for there was in of icers, compensatory, exemplary and nominal damages, attorney's
contemplation of law, no contract at all. fees and costs.
The inexistence of said sale can be set up against anyone who All the defendants prayed in their respective answers for the
asserts a right arising from it, not only against the irst vendee, the dismissal of the second amended complaint, in addition to their
Manila Lodge No. 761, BPOE, but also against all its successors, counterclaims.
including the TDC, which are not protected by law.[54] The doctrine After trial, the Court of First Instance of Oriental Mindoro rendered
of bona ide purchaser without notice, being claimed by the TDC, judgment, the dispositive part of which reads:
does not apply where there is a total absence of title in the vendor, Wherefore, this Court renders judgment:
and the good faith of the purchaser TDC cannot create title where 1. Finding:
none exists.[55] (a) That the road and bridge in question, known as the
The so-called sale of the subject property having been executed, the Biga-Communal Goob (from Km. 12.3S to 15.88) was constructed
restoration or restitution of what has been given is in order.[56] during the period from 1950 to 1952 by the plaintiff at its exclusive
SECOND ISSUE expense with the knowledge and consent of the Provincial Board of
The second ground alleged in support of the instant petitions for Oriental Mindoro;
review on certiorari is that the Court of Appeals has departed from (b) That before actual construction of said road and bridge the
the accepted and usual course of judicial proceedings as to call for personnel of the Of ice of the District Engineer surveyed the lay-out
an exercise of the power of supervision. TDC, in L-41012, argues of the road to be constructed, also at the expense of the plaintiff;
that the respondent Court did not make its own indings but simply (c) That before the actual construction of the road in question the
recited those of the lower court and made a general af irmance, plaintiff secured and used road-right-of-way agreements (Exhs. Y,
contrary to the requirements of the Constitution; that the Y-1 to Y-7 and Z-AA), executed in favor of the plaintiff by the owners
respondent Court made glaring and patent mistakes in recounting of the several portions of land traversed by said road;
even the copied indings, palpably showing lack of deliberate (d) That from the completion of the road up to the present the
consideration of the matters involved, as, for example, when said plaintiff has been contributing to the repair and maintenance of the
court said that Act No. 1657 authorized the City of Manila to set said road such as stones, gravel, sand and lumber at its own
aside a portion of the reclaimed land "formed by the Luneta expense;
Extension or to lease or sell the same for park purposes;" and that (c) That before the completion of the road in question, to the same
respondent Court, furthermore, did not resolve or dispose of any of has been used by the public without any restriction with the written
consent of the plaintiff as embodied in Resolution No. 222 (Exh. A)



and 119 (Exh- B) with the exception of logging and lumber concerns 2. That the parties agree as to the existence and authenticity of the
who might use the road with the permission of the plaintiff; following of icial communications, indorsements and letters re the
(f) Th«t Lao Kee (alias Lu Pong), Lee Cok, Tan. Hong, Tan Kiun, Co Biga-Communal-Goob read:
G«ac, Yan Ong Chi Hian, Tan Tak Tiap, Kiok Chia and the Community (a) Letter dated March 20, 1953 addressed to the Hon. Executive
Sawmill Company had used the road and bridge in question Secretary, signed l>y Rodolfo Naguit and Joe Ong, both
Bomctime before April 6. 1953, until the issuance of the writ of representatives of the Community Sawmill Company;
preliminary injunction of June 25. 1953, manifest bad faith; (b) 1st Indorsement of Assistant Executive Secretary Lucas
2. Declaring: Madumba, dated March 21. 11)53 (Annex "C", Third Amended
(a) That Resolution No. 186, series of 1953, marked Exh. C. is valid Complaint);
insofar as it repealed Resolution No. 222, series of 1953, marked (c) 2nd Indorsement of Governor Infantado dated March 23, 1963;
Exh. "A", and Resolution No. 119, series of 1953, marked Exh. B; (d) 3rd Indorsement of District Engineer C. C. Laurena dated Match
(b) That Resolution No. 186, series of 1953, marked Exh. C insofar 26, 1953;
as it declared that the road and bridge in question. public. is null (e) 4th Indorsement of Governor Infantado dated March 28, 1953;
and void the same being in violation of Sec. 2131 of the Revised (f) Letter of ltodolfo G. Naguit, representative of the Community
Administrative Code; Sawmill Company, dated May 4, 1953 and add leased to the
(c) That the road and bridge in question are of private ownership Assistant Executive Secretary, Of ice of the President;
belonging to the plaintiff; (g) Letter of Atty. Ferdinand E. Marcos, counsel for the plaintiff
(d) That the said defendant Lao Kee (alias Lu Pong). Lee Cok, Tan company addressed to Executive Secretary Marciano Roque, dated
Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tiik Tiao, Kiok May 21. 1953 (Annex "F", Third Amended Complaint) ;
Chia and Community Sawmill did not have the right to use the road (h) 7th Indorsement of Director of Public Works, Isaias Fernando,
and bridge in question; dated April 20, 1953 (Annex "D", Third Amended Complaint) ;
3. Ordering: (i) 8th Indorsement of Undersecretary Vicente Orosa, dated April
(a) That the writ of preliminary injunction issued against the 25, 1953;
Community Sawmill Company he made permanent, perpetually (j) 9th Indorsement of Executive Secretary Marciano Roque dated
restraining the said defendants Lao Kee (alias Lu Pong), Lee Cok, May 11, 1953 (Annex "E", Third Amended Complaint);
Tan Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tak Tiao. Kiok (k) 3rd Indorsement of Acting Executive Secretary Marciano Roque,
Chia and Community Sawmill Company, their agents, attorneys, or dated July 3, 11)53 and the 4th Indorsement of Undersecretary
other persons or entities from acting on their behalf; Vicente Orosa. dated July 16, 1953;
(b) The same defendants named in the immediately preceding (l) 1st Indorsement of Acting Executive Secretary Marciano Roque,
paragraph to pay jointly and severally to the plaintiff the sum of dated July 17, 1953.
P10,000.00 as attorney's fees and to pay the costs; Wherefore, the parties respectfully pray that the foregoing
4. Absolving from the third amended complaint the defendants stipulation of facts be admitted and approved by this Honorable
Marciuno Roque, Pablo Lorenzo, Isaias Fernando, Francisco Court, without prejudice to the parties adducing other evidence to
Infantado. Bernabe Jamilla and Cenon C. Laurena; prove their case not covered by this stipulation of facts.
6. Dismissing all the counterclaims iled by the defendants for lack XXX
of suf icient merits. (Civil case No. R-542) Resolution No. 222, adopted 4 December 1950, reads:
From the judgment thus rendered, the defendants Lao Kee (alias Lu Whereas, there is nt present an un inished provincial road in the
Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak barrio of Viga, of the municipality of Calapan, known as the
Tiao, Kiok Chia, all acting under the name and style of Community Biga-Communal Goob road, the construction of which could not be
Sawmill Company, appealed to this Court. They claim that the trial undertaken by the province due to insuf iciency of funds;
court committed the following errors: Whereas, the Calapan Lumber Co., Inc., through its President, Mr. D.
1. The lower court erred in holding that the road in question is a M. Gotauco, in a letter addressed to the Governor of this province
private road and that, therefore, plaintiff could legally deny Us use this made representation to undertake the construction of said road
to herein appellants. under certain conditions; and the province is willing to accede to
2. The lower court erred in ordering herein appellants to pay the request of the . Lumber Co. Inc. and to give it the sole right for its
plaintiff attorney's fees. use, provided that after a period of twenty (20) years, said company
3. The lower court erred in holding that plaintiff can recover shall donate lo the province the road it had constructed; provided
expenses of litigation under article 2208 of the Civil Code. further that during the said period of 20 years other concerns
4. The lower court erred in not dismissing the complaint and dealing in logs and/or lumber may use the same road upon
inding for herein appellants on their counterclaim. permission granted to them by the said Calapan Lumber Co., Inc..
At the trial, the parties submitted to the Court a stipulation of facts and provided inally that said road is open to all non-logging
which reads: concerns or individuals during the said period of 20 years; Now,
1. That the parties agree to the existence and authenticity of the therefore, be it:
following resolutions which were passed by the Provincial Board of RESOLVED , That the Provincial Board of Oriental Mindoro grants,
Oriental Mindoro, as follows: as hereby is granting, the Calapan Lumber Co., Inc. to undertake the
(a) Resolution No. 22,2. Series of 1950 (Annex "A" of the Third construction of the un inished provincial road to the barrio of Viga,
Amended Complaint), but not its regularity and validity, which must municipality of Calapan, known as the Viga-Connnunal-Goob-Road,
be proven; subject to the stipulation stated above; and
(b) Resolution No. 119, Series of 1953 (Annex "B" of the Third RESOLVED FURTHER , That copies of this resolution be furnished
Amended Complaint); the District Engineer and the Calapan Lumber Co., Inc., through its
(c) Resolution No. 186, Sertes of 1055, revoking Resolutions Nos. President, Mr. D. M. Gotauco, for the information.
222. Series of 1950 nnd 119, Series of 1953. of the Provincial Board, XXX
granting the Calapan Lumber Company the exclusive right under Resolution No. 119, adopted 6 April 1953, reads:
certain conditions to use the Viga-Communal Goob road for a period Whereas, under Resolution No. 222, series of 1950, the Provincial
of twenty (20) years, and declaring said road as a toll road. Board of Oriental Mindoro under the former administration,


granted the Calapan Lumber Co., Inc. the right to undertake the individual or entity which would discriminate against or exclude the
construction of the un inished Viga-Communal-Goob provincial general public from a reasonable use thereof, and therefore, the
road the sole right for its use, under the following conditions: resolution in question should be revoked:
(1) That after a period of twenty (20) years, said company shall In this connection, it should be stated that provincial roads are
donate to the province the road it had constructed; properties for public use and the provincial board may not grant the
(2) That during the said period of 2G years other concerns dealing exclusive use thereof to any private individual or entity or enter into
in logs and/or lumber may use the same road upon permission a contract or agreement which would tend to discriminate against
granted to them by the Calapan Lumber Co.. and or exclude the general public from a reasonable use thereof.
(3) That said road is open to all non-logging concerns or individuals Resolutions Nos. 222, series of 1950, and 119, series of 1953. of the
during the raid period of 20 years. Provincial Board, granting the Calapan Lumber Company an
Whereas, according to the records of the Provincial Board the said exclusive right to use the said road for a period of twenty (20) years
resolution has not been amended or modi ied up to the present, and to prohibit lumber or logging concerns from using the road in
and, therefore, the same is still in force and binding as per question without the company's permission, should therefore be
agreement stipulated therein; revoked. In consonance with the policy of the law, and as correctly
Whereas, this Board has received reliable information to the effect suggested by the Director of Public Works and the Undersecretary
that another certain lumber company is attempting to use, or has of Public Works and Communications, the portion of the
actually used the same road, by allowing to pass thru it its heavy Viga-Communal Road from Km. 12.38 to 15.88. having a length of
trucks and tractors without securing any permission from the 3.5 kilometers, should be declared a toll road in order to raise funds
Culapari Lumber Co., Inc. to the detriment and prejudice of the for its maintenance and with which to reimburse the Calapan
interests of the latter lumber company which shouldered the cost of Lumber Company for the expenses the latter had incurred in the
its completion in accordance with the rights granted to it by the construction of this portion of the road.
province; and Whereas, in view of the said ruling, this Board has been requested
Whereas, after a cartful consideration of the matter this Board is of to take immediate action on the matter, to declare the above-said
the opinion that the right of the Calapan Lumber Co., Inc., over the portion of the Viga-Communal-Goob provincial road as a toll road;
said road as stipulated in the conditions set forth in the resolution and
must be upheld for obvious reasons; Now, therefore, be it Whereas, according to an estimate made by the Of ice of the District
RESOLVED by the Provincial Board of Oriental Mindoro to Engineer the Calapan Lumber Company has spent for the
authorize, as it hereby authorizes, the Calapan Lumber Company. construction of the portion of the road in question having a length
Inc. to prohibit the use of the Viga-Cominunal-Goob provincial road, of 3.5 kilometers, the amount of P25,000.00 more or less; Now
from point Km. 12.38 up to Km. 15.88 of said road, by any other therefore, be it—
concern or company dealing in logs and/or lumber, without the RESOLVED, That Resolution Nos. 222, series of 1950, and 119,
permission or consent of the said Calapan Lumber Co., Inc., in series of 1953, of the Provincial Board, which grants the Calapan
accordance with one of the stipulations or conditions agreed upon Lumber Co., Inc., the exclusive right to use the Viga-Communal-Goob
in Resolution No. 222, series of 1950, of the Provincial Board; and provincial road a good period of 20 years, under certain conditions,
RESOLVED, FURTHER, That the District Engineer and the Calapan be, and hereby are, revoked;
Lumber Co., Inc. be furnished with copies of this resolution, for their RESOLVED, FURTHER, That portion of said Viga-Communal-Goob
information. provincial road, from Point Km. 12.38 up to Km. 15.88 thereof, be
XXX and hereby is, declared PROVINCIAL TOLL ROAD, under the
Resolution No. 186, adopted 19 June 1953, reads: provisions of Section 2131 of the Revised Administrative Code;
REVOKING RESOLUTIONS NOS. 222, SERIES OP 1950, AND 119. RESOLVED, FURTHER, That the following toll rates to be paid by any
SERIES OF 1953, OF THE PROVINCIAL BOARD, GRANTING THE motor vehicle for the use of the provincial road be, and hereby are,
CALAPAN LUMBER COMPANY THE EXCLUSIVE RIGHT UNDER ixed, effective today, June 19, 1953, the proceeds from which shall
CERTAIN CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB be used for the maintenance of the said road and the balance
PROVINCIAL ROAD FOR A PERIOD OF TWENTY (20) YEARS. thereof for the reimbursement to the said company for the expenses
Whereas, under Resolution No. 222, series of 1950, the Provincial it had incurred in the construction for said portion of the road:
Board of Oriental Mindoro, under the former provincial For every truck, one way .................................................... P1.00
administration, granted the Calapan Lumber Co., Inc., an authority For every weapon carrier, one way ..........................................60
to undertake the construction of the un inished Viga-Goob For every jeeney .....................................................................30
provincial road from Point Km. 12.38 to Km. 15.88. and the PROVIDED, however, that the portion of the road declared herein as
exclusive right for its use, under certain conditions; provincial toll road shall continue to be so up to and until the
Whereas, on April 6, 1953, this Board passed another resolution amount spent by the Calapan Lumber Company for its construction
(119) maintaining the right of the Calapan Lumber Co., Inc., over the shall have been covered by reimbursement to said company; and
said road under the conditions stipulated in the above-cited RESOLVED, FINALLY, That copies of this resolution be forwarded to
resolution No. 222, and forthwith authorized the said company to His Excellency, the President of the Philippines, thru the Director of
prohibit the use of the portion of said road constructed at its Public Works and the Honorable, the Secretary of Public Works and
expense by any other concern or company dealing in logs or lumber Communications, Manila.
without its permission; XXX
Whereas, in a 9th Indorsement dated May 11, 1953, the pertinent Resolution No. 169, adopted 21 April 1956, revoked Resolution No..
parts of which are quoted hereunder, the Honorable, the Executive 186 insofar an it declared Provincial Toll Road, that part of the road
Secretary, to whom the case regarding this matter was appealed for involved in this case.
decision, and upon the recommendation of the Director of Public There seems to be no doubt that Resolutions Nos. 222 and 119,
Works and with the concurrence of the Undersecretary of Public adopted by the Provincial Board of Oriental Mindoro quoted above,
Works and Communications, ruled that provincial roads are were ultra vires, because sections 2067 (f) and (g) on powers of the
considered as properties for public use and the Provincial Board provinces as political bodies corporate; 2102 (g) on powers of the
may not therefore grant the exclusive use thereof to any private provincial boards; 2106 (f) on powers of the provincial boards to be


exercised with the approval of the Department Head; and 2113 (a) during the enforcement of Resolution No. 186 which, as above
on road and bridge fund, of the Revised Administrative Code, do not stated, was unauthorized. The judgment appealed from making inal
authorize the Provincial Board of Oriental Mindoro to pass and the preliminary writ of injunction and ordering the appellants to
adopt said resolutions. The contention that the Provincial Board of pay the appellee the sum of P10,000 as attorney's fees, are reversed
Oriental Mindoro under section 2106 (g) invoked by the appellee is and set aside. The rest of the judgment appealed from not
authorized to pass the resolutions Nos. 222 and 119 quoted above, inconsistent with this opinion is af irmed, without pronouncement
is untenable, because said paragraph of the section authorizes the as to costs.
Provincial Board "to permit, upon favorable recommendation by the Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
Secretary of Public Works and Communications, and subject to such Paredes, Regala, and Makalintal, JJ., concur.
conditions as may properly protect the public interests, the
construction and maintenance, for private use, of railways, conduits, Cebu Oxygen and Acetylene Co., Inc. vs
and telephone lines across public thoroughfares, streets, roads, or
other public property, and in the province: Provided, That such Bercilles, G.R. No. L-40474, August 29, 1975
160 Phil. 1155
construction and private use shall not prevent or obstruct the public
use of such thoroughfare, streets, roads or other public property,
SECOND DIVISION
and that the permit granted shall at all times be subject to
G.R. No. L-40474, August 29, 1975
revocation by the Secretary of the Interior, if, in the judgment of that
CEBU OXYGEN & ACETYLENE CO., INC., PETITIONER, VS. HON.
of icial, the public interest requires it." Consequently, Resolution No.
PASCUAL A. BERCILLES, PRESIDING JUDGE, BRANCH XV, 14TH
186 revoking the two previous resolutions was in order.
JUDICIAL DISTRICT, AND JOSE L. ESPELETA, ASSISTANT
The road known as the Viga-Communal-Goob connecting two
PROVINCIAL FISCAL, PROVINCE OF CEBU, REPRESENTING THE
inished or completed parts of the provincial road, from kilometer
SOLICITOR GENERAL'S OFFICE AND THE BUREAU OF LANDS,
12.38 to 15.88, as laid out by the personnel of the of ice of the
RESPONDENTS.
District Engineer was planned or intended to be laid out and
constructed by the Provincial Government of Oriental Mindoro to
DECISION
complete said road. The fact that the survey, lay-out and actual
CONCEPCION, JR., J.:
construction of the un inished part of the road were done at the
appellee's expense, does not convert said road after construction
This is a petition for the review of the order of the Court of First
into a private road, for it does not appear that the parts of the land
Instance of Cebu dismissing petitioner's application for registration
where the road was laid out and constructed belong to or are
of title over a parcel of land situated in the City of Cebu.
owned by the appellee. The evidence shows that the owners of such
parts of land ceded their parts of the land owned by them without
The parcel of land sought to be registered was originally a portion
any consideration because of their desire to have the road
of M. Borces Street, Mabolo, Cebu City. On September 23, 1968, the
completed or to connect the ends of two completed parts of the
City Council of Cebu, through Resolution No. 2193, approved on
road. It may be conceded that the appellee built the road in question
October 3, 1968, declared the terminal portion of M. Borces Street,
in good faith; and such being the case, it may be argued that the
Mabolo, Cebu City, as an abandoned road, the same not being
appellee is entitled to keep or have possession of the road until after
included in the City Development Plan.[1] Subsequently, on
it shall have been reimbursed of the expenses it had incurred in
December 19, 1968, the City Council of Cebu passed Resolution No.
constructing and maintaining the road in good condition. The
2755, authorizing the Acting City Mayor to sell the land through a
provisions of the Civil Code on the right of a builder in good faith on
public bidding.[2] Pursuant thereto, the lot was awarded to the
a private land [1] cannot be invoked and applied to the road in
herein petitioner being the highest bidder and on March 3, 1969,
quest on, because public interest is involved and the people living in
the City of Cebu, through the Acting City Mayor, executed a deed of
that part of the province are entitled to use the road. It is true that
absolute sale to the herein petitioner for a total consideration of
that part of the Resolution No. 186 above quoted converting the
P10,800.00.[3] By virtue of the aforesaid deed of absolute sale, the
road in question into toll road contravenes section 2131 of the
petitioner iled an application with the Court of First Instance of
Revised Administrative Code, because in the case of road the
Cebu to have its title to the land registered.[4]
recommendation of the Secretary of Public Works and
Communications and the authorization of the President of the
On June 26, 1974, the Assistant Provincial Fiscal of Cebu iled a
Philippines had to be secured and such recommendation and
motion to dismiss the application on the ground that the property
authorization had not been obtained.
sought to be registered being a public road intended for public use
Upon the foregoing considerations, this Court is of the opinion, and
is considered part of the public domain and therefore outside the
so holds, that the road involved in this case cannot be declared
commerce of man. Consequently, it cannot be subject to registration
private property, and for that reason the Provincial Board of
by any private individual.[5]
Oriental Mindoro may elect between paying the appellee the total
cost of the construction of the road and together with lawful
After hearing the parties, on October 11, 1974 the trial court issued
interest from the date of actual disbursement by the appellee to the
an order dismissing the petitioner's application for registration of
date of payment by the Province of Oriental Mindoro within a
title.[6] Hence, the instant petition for review.
reasonable period not to exceed one year from the date this
judgment shall become inal; or upon securing the recommendation
For the resolution of this case, the petitioner poses the following
of the Secretary of Pubic Works and Communications and
questions:
authorization of the President of the Philippines to designate such
road and toll road, to raise the necessary fund to reimburse the
Does the City Charter of Cebu City (Republic Act No. 3857) under
appellee of the total cost of construction of the read, together with
Section 31, paragraph 34, give the City of Cebu the valid right to
lawful interest from tho date of actual disbursement by the appellee
declare a road as abandoned? and
to the date of payment by the Province of Oriental Mindoro, and the
latter is ordered to refund the amount paid for is by the appellee


Does the declaration of the road, as abandoned, make it the SO ORDERED.

patrimonial property of the City of Cebu which may be the subject
of a common contract? Makalintal, C.J., Fernando, (Chairman), Barredo, and Aquino, JJ.,
concur.
(1) The pertinent portions of the Revised Charter of Cebu City
provides: Perez vs Evite, G.R. No. L-16003, March 29,
"Section 31. Legislative Powers. Any provision. of law and 1961
111 Phil. 564
executive order to the contrary notwithstanding, the City Council
shall have the following legislative powers:
G.R. No. L-16003, March 29, 1961
CESAREO PEREZ AND MAMERTA ALCANTARA, PLAINTIFFS AND
xxx xxx
APPELLANTS, VS. VICENTE EVITE, AND SUSANA MANIGBAS,
xxx
DEFENDANTS AND APPELLEES.
DECISION
(34) x x x; to close any city road, street or alley, boulevard, avenue,
BARRERA, J.:
park or square. Property thus withdrawn from public servitude
may be used or conveyed for any purpose for which other real
In an action to quiet title brought by the spouses Cesareo Perez and
property belonging to the City may be lawfully used or conveyed."
Mamerta Alcantara against Vicente Evite and Susana Manigbas
From the foregoing, it is undoubtedly clear that the City of Cebu is
(Civil Case No. 643), involving a parcel of land 11 meters wide and
empowered to close a city road or street. In the case of Favis vs.
37 meters long, or with a total area of 407 square meters, the Court
City of Baguio,[7] where the power of the City Council of Baguio City
of First Instance of Batangas rendered judgment dated November 9,
to close city streets and to vacate or withdraw the same from public
1955, the dispositive portion of which reads as follows:
use was similarly assailed, this Court said:
"Wherefore, judgment is hereby rendered as follows:
"(1) Dismissing the complain of the plaintiffs; and
"5. So it is, that appellant may not challenge the city council's act of
"(2) Declaring the defendants the owners of the land in question;
withdrawing a strip of Lapu-Lapu Street at its dead end from public
that is, the are measured 8.92 meters westward from the cacawate
use and converting the remainder thereof into an alley. These are
tree standing on the northwestern corner of the land (which
acts well within the ambit of the power to close a city street. The
cacawate tree is 35.11 meters from the edge of the land bordering
city council, it would seem to us, is the authority competent to
the provincial road) by 11 meters southward to the point on the
determine whether or not a certain property is still necessary for
southwestern corner which is also 35.11 meters from the edge of
public use.
the land bordering the provincial road on the east.
"Without pronouncement as to costs."
"Such power to vacate a street or alley is discretionary. And the
On appeal by therein plaintiffs, the Court of Appeals, on March 31,
discretion will not ordinarily be controlled or interfered with by the
1958, af irmed the decision in toto.
courts, absent a plain case of abuse or fraud or collusion.
The decision having become inal, the court of origin, upon
Faithfulness to the public trust will be presumed. So the fact that
application by the defendants, ordered its execution. The writ of
some private interests may be served incidentally will not invalidate
execution, actually issued on February 25, 1959, commanded the
the vacation ordinance."
Provincial Sheriff of Batangas "to deliver the ownership of the
(2) Since that portion of the city street subject of petitioner's
portion of the land in litigation to the defendant Vicente Evite, of
application for registration of title was withdrawn from public use,
Rosario, Batangas, pursuant to the terms and conditions contained
it follows that such withdrawn portion becomes patrimonial
in the above-quoted decision."
property which can be the object of an ordinary contract.
Plaintiffs moved to quash the aforesaid writ on the ground that, as
the decision sought to be executed merely declared defendants
Article 422 of the Civil Code expressly provides that "Property of
owners of the property, and did not order its delivery to said
public dominion, when no longer intended for public use or for
parties, the writ putting them in possession thereof was at variance
public service, shall form part of the patrimonial property of the
with the decision and consequently, null and void.
State."
This motion was denied by order of the court of February 28, 1959.
Plaintiffs then iled an urgent ex-parte motion "for clari ication
Besides, the Revised Charter of the City of Cebu heretofore quoted,
and/or to declare null and void the Sheriff's execution",
in very clear and unequivocal terms, states that: "Property thus
complaining that notwithstanding the iling of their motion to
withdrawn from public servitude may be used or conveyed for any
quash, the Clerk of Court and the Provincial Sheriff placed
purpose for which other real property belonging to the City may be
defendants in possession of the property. After hearing the motion,
lawfully used or conveyed."
during which the complained of icials testi ied and explained their
actuations, the court declared the same with legal effect and valid,
Accordingly, the withdrawal of the property in question from public
and dismissed plaintiffs' motion.
use and its subsequent sale to the petitioner is valid. Hence, the
This incident was followed by defendants' praying the court to
petitioner has a registerable title over the lot in question.
declare plaintiffs in contempt for resisting its lawful order (to
deliver possession of the land), which precipitated the issuance of
WHEREFORE, the order dated October 11, 1974, rendered by the
an order, dated June 30, 1959, allowing defendants "to surround
respondent court in Land Reg. Case No. N-948, LRC Rec. No.
their property with a fence and any act or acts by other persons or
N-44531 is hereby set aside, and the respondent court is hereby
parties including the plaintiffs to intervene may be considered as an
ordered to proceed with the hearing of the petitioner's application
act of contempt."
for registration of title.
Plaintiffs moved to set aside the above order. The same having been
denied on July 11, 1959, plaintiffs instituted the instant appeal


assailing the legality of the orders of June 30 (ordering the fencing to remain therein, they must submit to court litigation anew. Thus,
of the lot) and July 11, 1959 (denying their motion to set aside said in the Mencias case, supra, we said:
previous order). "Apparently, respondent Judge, in refusing to issue the writ of
Plaintiffs-appellants, in resisting the trial court's orders upon the demolition to petitioner, was of the belief that the latter has another
theory that the adjudication of ownership does not include remedy, namely, by resorting to ordinary civil actions in the regular
possession of the property, rely upon two (2) cases decided by this courts, such as that of forcible entry and detainer, or the recovery of
Court. The irst is Talens vs. Garcia (87 Phil., 173), where, after possession, in which instants, said courts would then be competent
quoting Section 45 of Rule 39, the Court said: to issue said writ. Such a situation, in our opinion, could not have
"It may be admitted that the judgment absolving defendant Talens been intended by the law. To require a successful litigant in a hind
was in effect a declaration that the sale to him was valid. It may also registration case to institute another action for the purpose of
be admitted, though with some reluctance or reservation, that it obtaining possession of the land adjudged to him, would be a
was a declaration of ownership of the lot. But it is doubtful whether cumbersome process. It would foster unnecessary and expensive
it also included a direction to surrender it to him. Although it is true litigations and result in multiplying of suits, which our judicial
that the owner is generally entitled to possession, it is equally true system abhors.
that there may be cases where the actual possessor has some rights * * * * * * *
which must be respected or de ined. A lessee is not the owner; yet a "* * *. Pursuant to the provision just quoted (Sec. 6, Rule 124),
declaration of ownership in another person does not necessarily respondent Judge has the power to issue all auxiliary writs,
mean his ouster." including the writ of demolition sought by petitioner, processes and
In the second case (Jabon, et al., vs. Alo, et al., 91 Phil., 750; 48 Off. other means necessary to carry into effect the jurisdiction conferred
Gaz., 3348), the following pronouncement is found: upon it by law in land registration cases to issue a writ of
"* * *. In the absence of any other declaration, can we consider a possession to the successful litigant, the petitioner herein." (Italics
mere declaration of ownership as necessarily including the supplied.)
possession of the property adjudicated? We do not believe so, for In view of the foregoing considerations, the orders appealed from
ownership is different from possession. A person may be declared are hereby af irmed, with costs against appellants. So ordered.
owner, but he may not be entitled to possession. The possession Bengzon, Acting C. J., Padilla, Bautista Angelo, Labrador, Concepcion,
may be in the hands of another either as a lessee or a tenant. A Reyes, J. B. L., Paredes, and Dizon, JJ., concur.
person may have improvements thereon of which he may not be
deprived without due hearing. He may have other valid defenses to Olego vs Rebueno, G.R. No. L-39350,
resist surrender of possession. We, therefore, hold that a judgment
for ownership, does not necessarily include possession as a October 29, 1975
160-A Phil. 592
necessary incident."
It may be observed that in both decisions, this Court underscored
SECOND DIVISION
the possibility that the actual possessor has some rights which must
G.R. No. L-39350, October 29, 1975
be respected and de ined. It is thus evident that the pronouncement
CENONA OLEGO, PETITIONER, VS. HON. ALFREDO REBUENO,
was made having in mind cases wherein the actual possessor has a
JUDGE OF THE COURT OF FIRST INSTANCE OF CAMARINES SUR,
valid right over the property enforceable even against the owner
BRANCH IV AND ATTY. PEDRO SERVANO, RESPONDENTS.
thereof. As example, we gave the cases of tenants and lessees.
However, it is our view that the above doctrines may not be invoked
DECISION
in instances where no such right may be appreciated in favor of the
AQUINO, J.:
possessor. In the instant case there appears in the appealed order of
June 30, 1959, the speci ic inding of the trial court that "the
On October 13, 1962 Pedro D. Servano, a lawyer from Naga City,
plaintiffs have not given any reason why they are retaining the
iled a complaint against Cenona Olego in the Court of First Instance
possession of the property", (p. 57, Record on Appeal.) This factual
of Camarines Sur, Tigaon Branch IV. In that complaint he asked for a
inding can not be reviewed in this instance as the appeal has been
declaration as to the legality of his title to a residential lot with an
taken to us directly only on a question of law. (p. 72, Record on
area of 1,225 square meters located at Sta. Cruz Street, Lagonoy,
Appeal.)
Camarines Sur, supposedly covered by a tax declaration in his name
Under Section 45 of Rule 39, Rules of Court, which reads:
(its number was not speci ied).
"Sec. 45. What is deemed to have been adjudged.—That only is
deemed to have been adjudged in a former judgment which appears
He alleged that he acquired the lot by purchase in November, 1960;
upon its face to have been so adjudged, or which was actually and
that he and his predecessors had possessed it en concepto de dueñ o
necessarily included therein or necessary thereto," (Italics supplied)
since time immemorial and that after he had acquired the lot, his
a judgment is not con ined to what appears upon the face of the
possession was disturbed by Cenona Olego, who claimed to be the
decision, but also those necessarily included therein or necessary
owner of the lot, "thereby casting a cloud of doubt" on his title and
thereto. Thus, in a land registration case[1] wherein ownership was
rendering it necessary that his "title and possession" "be declared
adjudged, we allowed the issuance of a writ of demolition (to
legal". He also averred that Cenona Olego's claim of ownership
remove the improvement existing on the land), for being necessarily
caused him damages in the sum of P300 as attorney's fees and P120
included in the judgment. Considering that herein
annually as rentals which he was not able to collect because of her
plaintiffs-appellants have no other claim to possession of the
"unjusti ied claim of ownership".
property apart from their claim of ownership which was rejected by
the lower court and, consequently, has no right to remain thereon
He prayed that his "title" be declared "legal", that he be adjudged as
after such ownership was adjudged to defendants-appellees, the
the absolute owner of the land, entitled to its "peaceful possession",
delivery of possession of the land should be considered included in
and that Cenona Olego be ordered to pay him the above-mentioned
the decision. Indeed, it would be defeating the ends of justice should
damages (Civil Case No. T-17).
we require that for herein appellees to obtain possession of the
property duly adjudged to be theirs, from those who have no right


Cenona Olego in her answer denied that Servano owned and Assisted by:
possessed any land located at Sta. Cruz Street, Lagonoy. She
pleaded the defense that she was the "absolute owner and lawful (Sgd.)
possessor" of the land located at Sta. Cruz Street, Lagonoy with an Illegible
area of 1,390 square meters, covered by Tax Declaration No. 255 in
the name of Santiago Olego. (It is now covered by Tax Declaration
No. 9882 in her name and the area indicated therein is 1,090 square ERIBERTO FANTE
maters.) Counsel for the Defendant"
She averred that if Servano's complaint referred to that land, then The lower court approved the compromise in its decision of the
he had "absolutely no right whatsoever over the land"; that he had same date, January 8, 1964. There is a notation in the original of the
never possessed it nor manifested his claim of ownership; that she decision that copies thereof were sent by registered mail on January
inherited the land from her late father, Santiago Olego (in 1920); 11, 1964 to plaintiff Servano and Atty. Eriberto Fante, defendant's
that she and her predecessors had been in actual possession of the counsel. There are also notations in that original that Servano
land en concepto de dueñ o since time immemorial, and that received copies of the compromise agreement and the decision on
Servano's claim was "unfounded and without any legal basis". She January 10, 1964 while Atty. Fante received his copies on January
iled a counter-claim for P3,000 as actual and moral damages and 16, 1964.
P300 as attorney's fees.
The record shows that there was no further proceeding in the case
The case was set for hearing on February 19, April 15, May 28, more than ten years after the alleged compromise settlement was
August 13, September 24 and November 19, 1963. The irst two concluded.
hearings were postponed at Atty. Servano's instance. One
postponement was made at the instance of Cenona Olego's lawyer What transpired after that decade of inactivity was that on February
who was not ready for trial. Two hearings were cancelled by 19, 1974 Servano iled in the lower court a "petition for contempt"
agreement of the parties. against Cenona Olego and her children, Segundo Rivero and Rosita
Rivero, wherein he alleged that he (Servano) was the prevailing
The case was set for hearing for the seventh time on January 8, party and Cenona Olego the defeated party in the decision of
1964. On that date the parties submitted the following January 8, 1964 which allegedly was "immediately executory"; that
compromise: Cenona Olego and her children prevented Servano from having "the
peaceful use and enjoyment" of the said land; that they branded the
"AMICABLE AGREEMENT decision as "fake" and "not worthy of respect", and that they
occupied a portion of the land and disturbed Servano's "property
rights".
"The parties, the plaintiff in his own behalf and the defendant
represented by her counsel Atty. Eriberto J. Fante hereby agreed to Servano prayed that Cenona Olego and her children be punished for
compromise this case as follows: contempt of court and ordered to pay damages to him. His petition,
which was already veri ied, was accompanied by his af idavit (not
"That the defendant admits the allegation of the plaintiffs complaint incorporated in the petition) wherein he alleged that Cenona Olego
as to his claim of ownership of the land described therein in said and her two children prevented him and his agents from enjoying
complaint and that judgment be rendered declaring the plaintiff the "the peaceful use and possession" of the said land (not merely a part
owner thereof; thereof). The af idavit echoed the other allegations of the petition.
The record does not show that respondents Cenona Olego and her
"That the plaintiff waived his claim for attorney's fees and all other two children were served copies of the petition which was dated
damages against the defendant. February 19, 1974 and set for hearing two days later, or on
February 21.
"WHEREFORE, it is respectfully prayed that decision be rendered in
accordance with the foregoing stipulation and without On February 21, the scheduled date for hearing the petition for
pronouncement as to costs. contempt, Judge Alfredo S. Rebueno issued the following order:
"Tigaon, Camarines Sur, January 8, 1964. "When this case was called for trial this morning, the respondents
did not appear but in the afternoon they voluntarily appeared
before this Court and explained that they did not leave the property
(Sgd.) because they believe that the property is still theirs. The Court
Right Thumbmark explained to them that by virtue of the decision of Judge Sison dated
(Sgd.) January 8, 1964 which is based upon the amicable settlement
Illegible entered into between the plaintiff and the defendant Cenona Olego
which decision is already long inal and executory they have no
CENONA OLEGO more right to remain in the property and the Court is disposed) to
give them three (3) months within which to leave the premises with
PEDRO D. SERVANO the warning that if after three (3) months they have not complied
with the order of this Court to leave the premises, the complaint for
Defendant contempt will proceed to be tried.
Plaintiff "In the meantime, the hearing of the petition for contempt is held in
abeyance."


Copies of the order were served on Cenona Olego and her two He reasoned out that inasmuch as Cenona Olego had not disputed
children. During the hearing they were not assisted by their the validity of the decision on the ground of fraud or mistake during
counsel, Atty. Fante. In fact, no copy of the petition was served on the period of more than ten years "her right of action to impugn its
him. How Cenona Olego and her children learned of the petition, validity" had already prescribed; that that the judgment, which was
when the record does not show that they were served copies res judicata, was "self-executing", and that the "violation thereof
thereof, is not indicated in the record. They were not given any may be enforced by contempt proceedings notwithstanding that no
chance to hire counsel and to answer the petition. writ of execution was issued".
On March 23, 1974 plaintiff Servano iled an ex parte motion for the The counsel of Cenona Olego in his motion for reconsideration
amendment of the aforementioned order. He asked that Cenona alleged that no safeguards were taken when she, an illiterate party,
Olego and her children, who, despite Judge Rebueno's explanation, thumbmarked the alleged compromise and that it was possible for
still persisted in not recognizing the lower court's decision and who Atty. Servano and Atty. Fante "to conspire with each other to commit
had threatened to injure the persons who would dispossess them of fraud for their mutual bene it". Judge Rebueno denied the motion.
the land, be given only ifteen days to remove their "small nipa
huts". Acting on that ex parte motion, Judge Rebueno ordered On August 17, 1974 Cenona Olego iled the instant special civil
Cenona Olego and her children to appear in court "on April 4, 1974 action of certiorari against Atty. Servano and Judge Rebueno,
at 8:30 a. m. in a manner intransferable" (sic). Subpoenas were praying that the orders setting the contempt charge for hearing be
issued to them for their "intransferable" appearance on April 4. set aside and that the case should be dismissed because the lower
court had no more jurisdiction over it.
On that date Cenona Olego through a new counsel, Atty. Abel G.
Flores, iled a motion to dismiss the contempt charge. The motion Claiming to be a sickly widow over seventy years old, without
was based on the grounds (a) that the amicable settlement was means of support and dependent on her relatives for her
obtained through fraud and misrepresentation, (b) that the subsistence, she was allowed to litigate in forma pauperis.
execution of the judgment was barred by the statute of limitations,
and (c) that the court had lost jurisdiction over the case. Atty. Fante was asked to comment on the allegations of the petition
that he and Atty. Servano on January 8, 1964 conspired to deceive
It was pointed out in the motion that the judgment does not require Cenona Olego and were able to make her af ix her thumbmark to a
Cenona Olego to vacate the land or deliver its possession to compromise on the misrepresentation that it was a motion for
Servano; that, being illiterate, she was unaware that she had signed postponement. Atty. Fante alleged that there was a pre-trial in the
an amicable settlement; that she was never furnished with copies of morning of January 8, 1974; that Atty. Servano exhibited the deed of
both the amicable settlement and the "decision" of January 8, 1964; sale for the land in question executed in his favor by Sabas Aran and
that she was made to understand that what she was signing was a the prewar tax declarations and tax receipts in the name of Sabas
motion for postponement, and that, being ignorant of the decision, Aran; that, on the other hand, Cenona Olego was able to present a
she never vacated the land and she thought that the case was still to tax declaration in her father's name; that she had allegedly not paid
be tried. the realty taxes for the said land; that the amicable settlement was
arrived at upon the suggestion of the Presiding Judge on condition
Atty. Flores further alleged in his motion to dismiss that Servano did that Atty. Servano should waive his claim for damages, and that
nothing to implement the decision within the ten-year period for Cenona Olego was given a copy of the compromise agreement. Atty.
enforcing it; that he never occupied any portion of the land, and that Fante denied that he conspired with Atty. Servano to deceive
Cenona Olego came to know of the decision when she was being Cenona Olego.
charged with contempt of court. Atty. Flores contended that the
lower court had no more jurisdiction over the case in view of the On the other hand, Atty. Servano in his comment alleged that the
expiration of the ten-year period for enforcing its judgment. decision of January 8, 1964 was "self-executory"; that Cenona Olego
delivered the possession of the lot to him and that she and her
Atty. Servano interposed an "objection" to the motion to dismiss his children later reentered the lot.
"petition for contempt". He contended that the decision in his favor
was based on an agreed statement of facts as contemplated in Atty. Flores, in his reply to the comments of Attys. Fante and
section 2, Rule 30 of the Rules of Court (formerly section 2, Rule Servano, alleged that the land in question was sold in 1960 to Atty.
33); that inasmuch as his ownership of the disputed land is Servano by Sabas Aran (Arrans), the uncle and guardian of Cenona
recognized in the compromise and decision, there was no need for a Olego; that in 1956 Cenona Olego iled with the Register of Deeds of
writ of execution "to place" him "in the material possession of the Camarines Sur a document known as "Declaration of Ownership",
land"; that he was provoked to ile the "petition for contempt" wherein she af irmed that she inherited the said lot in 1930 (or
because Cenona Olego and her children had told certain persons 1920) from her father, Santiago Olego, to whom Tax Declaration No.
that the decision was "not worthy of respect for being false"; that 255 was issued; that Tax Declaration No. 8606, which cancelled Tax
his "petition for contempt had never prescribed"; that the allegation Declaration No. 235, was issued to Cenona Olego for the said lot,
as to fraud and misrepresentation in the rendition of the decision and that she possessed tax receipts covering her payment of realty
was "childish"; that it was hard to believe that Cenona Olego had not taxes. Atty. Flores particularized on the circumstances constituting
known of the decision during the past ten years, and that she was the fraud perpetrated on Cenona Olego.[1]
bound by that decision.
The issues are (a) whether Cenona Olego could be held in contempt
Judge Rebueno in his order of June 3, 1974 denied the motion and of court for not vacating the land involved in the compromise and
set the contempt charge for hearing "in a manner intransferable" on (b) whether the lower court's decision should be set aside on the
June 15, 1974. ground of fraud or could be enforced after the expiration of more
than ten years from the date of its inality.


We hold that Cenona Olego's failure to vacate the lot could not be ive years from the inality of the decision. Thereafter, he could
the basis of a contempt proceeding against her. The orders citing enforce his right by action within the next ive years (Sec. 6, Rule 39
her for contempt are oppressive, unjust and unwarranted. of the Rules of Court; Art. 1144, Civil Code).
In the compromise agreement and in the decision approving it, she Atty. Servano did not enforce his right to possess the land within the
was not ordered to vacate the lot. It was stipulated in the ten-year period. To enforce the judgment in his favor by means of a
compromise that she admitted Atty. Servano's ownership of the lot contempt proceeding after the expiration of the ten-year period
and "that judgment be rendered declaring" him to be the owner would be a circumvention of the statute of limitations. What the law
thereof. The decision approving the compromise followed the usual prohibits directly should not be allowed to be done indirectly.
pattern of judgments in such cases: ordering the parties to comply
with the terms and stipulations of the compromise. Mr. Justice Antonio believes that the judgment against Cenona
Olego, which had become unenforceable by reason of prescription,
The rule is that an order or judgment which declares the rights of is a dormant judgment. The dormancy of a judgment destroys its
the parties without any express command or prohibition is not one legal force and effect (Stanley C. Hanks Co. vs. Scherer, 27 ALR 2d
which may be the basis of a contempt proceeding (Hammock vs. 832). It is inert and incapable of any effective manifestations of
Hammock, 209 Ga. 751 S.E. 2d 15). A violation of the rights of legal life (First National Branch of Norton vs. E. E. Harper, 166 ALR
ownership does not constitute contempt of court, even though they 761). Indeed, proceedings for the enforcement of a dormant
have been ascertained and declared by judgment, unless it consists judgment have been declared a nullity (Berg vs. Torgerson, 100 N.W.
in doing something that was prohibited, or in failing to do 2d, 153, 77 ALR 2d 1060). Mr. Justice Barredo concurs in that view.
something that was required, by the terms of the judgment
(Hotaling vs. Superior Court, 191 501, 217 Pac. 73, 29 ALR 127). Considering that the judgment against Cenona Olego is no longer
enforceable and taking into account her imputation that the
Where there is no decree or order commanding accused or anyone compromise, on which the said judgment was based, was vitiated by
else to do or refrain from doing something or anything, fraud and mistake, the said judgment cannot possibly affect her
disobedience of it is impossible (17C.J.S. 30). Hence, Cenona Olego possession of the disputed land. Nor can it destroy the legal
could not be held guilty of contempt of court. presumption in her favor that as possessor of the land in the
concept of owner she has a just title thereto (Art. 541, Civil Code).
With respect to the validity or enforceability of the lower court's
judgment approving the compromise, Cenona Olego raised the issue WHEREFORE, the lower court's order of February 21 and June 3,
of fraud. A compromise may be annulled on the ground of fraud and 1974, citing Cenona Olego for contempt of court, are set aside. The
mistake (Art. 2038, Civil Code. See Arts. 24, 1330, 1332, 1338 and lower court's judgment of January 8, 1964 can no longer be
1390, Civil Code). A judicial compromise may be set aside if fraud enforced against Cenona Olego because it had already prescribed.
vitiated the consent of a party thereof (Serrano vs. Miave, L-14678, Costs against respondent Servano.
March 31, 1965, 13 SCRA 461, 466).
SO ORDERED.
The extrinsic fraud, which nulli ies a compromise, likewise
invalidates the decision approving it. (As to the meaning of extrinsic Antonio, Concepcion, Jr., and Martin*, JJ., concur.
fraud, see Soriano vs. Asi, 100 Phil. 785, 788; Brady vs. Beams, 132
F. 2d 985; 49 C.J.S. 743; Crouch vs. McGaw, 138 S.W. 2d 94; Heirs of Barredo, (Acting Chairman), J., to be more exact, his view is that the
Celestino vs. Court of Appeals, L-38690, September 12, 1975; 2 compromise itself has completely lost already any legal force and
Moran's Comment on the Rules of Court, 1970 Ed., pp. 246-247). effect it might have been intended to leave.
As to the enforceability of the lower court's decision, it should be Fernando, J., on leave.
noted that assuming arguendo that that decision is valid, it becomes
necessary to ind out whether the decision includes the delivery of * Designated to sit in the Second Division.
the possession of the land to Atty. Servano. The decision was based
on Cenona Olego's supposed admission that Atty. Servano is the Nazareno vs Court of Appeals, G.R. No.
owner of the land in question.[2]
138842, October 18, 2000
397 Phil. 707
Does Cenona Olego's acknowledgement of Servano's ownership
include the obligation to deliver the possession of the land to him?
SECOND DIVISION
The general rule is that the adjudication of ownership does not
G.R. No. 138842, October 18, 2000
include the possession of the property (Talens vs. Garcia, 87 Phil.
NATIVIDAD P. NAZARENO, MAXIMINO P. NAZARENO, JR.,
173; Jabon vs. Alo, 91 Phil. 750).
PETITIONERS, VS. COURT OF APPEALS, ESTATE OF MAXIMINO A.
NAZARENO, SR., ROMEO P. NAZARENO AND ELIZA NAZARENO,
The exception is that the adjudication of ownership would include
RESPONDENTS.
the delivery of possession if the defeated party has not shown any
right to possess the land independently of his claim of ownership
DECISION
which was rejected (Perez and Alcantara vs. Evite and Manigbas,
MENDOZA, J.:
111 Phil. 564).
This is a petition for review on certiorari of the decision[1] of the

But then in such a case a writ of execution would be required if the
Court of Appeals in CA-GR CV No. 39441 dated May 29, 1998
defeated party does not surrender the possession of the property.
af irming with modi ications the decision of the Regional Trial
The owner should enforce his right to possess the land (as an
Court, Branch 107, Quezon City, in an action for annulment of sale
incident of his ownership) by asking for a writ of execution within
and damages.


The facts are as follows: of beginning; containing an area of TWO HUNDRED TEN SQUARE
Maximino Nazareno, Sr. and Aurea Poblete were husband and wife. METERS AND SIXTY SQUARE DECIMETERS (210.60). All points
Aurea died on April 15, 1970, while Maximino, Sr. died on December referred to are indicated on the plan and are marked on the ground
18, 1980. They had ive children, namely, Natividad, Romeo, Jose, by B.L. Cyl. Conc. Mons. 15 x 60 cm.; bearings true; date of the
Paci ico, and Maximino, Jr. Natividad and Maximino, Jr. are the original survey, Nov. 10, 1920 and Jan. 31-March 31, 1924 and that
petitioners in this case, while the estate of Maximino, Sr., Romeo, of the subdivision survey, February 1 to September 30, 1954. Date
and his wife Eliza Nazareno are the respondents. approved - March 9, 1962."
During their marriage, Maximino Nazareno, Sr. and Aurea Poblete "TRANS. CERT. OF TITLE NO. 118885"
acquired properties in Quezon City and in the Province of Cavite. It "A parcel of land (Lot No. 10, of the consolidation and subdivision
is the ownership of some of these properties that is in question in plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
this case. No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
It appears that after the death of Maximino, Sr., Romeo iled an Record No. 917), situated in the District of Cubao, Quezon City,
intestate case in the Court of First Instance of Cavite, Branch XV, Island of Luzon. Bounded on the NE., by Lot No. 4 of the
where the case was docketed as Sp. Proc. No. NC-28. Upon the consolidation and subdivision plan; on the SE., by Lot No. 11 of the
reorganization of the courts in 1983, the case was transferred to the consolidation and subdivision plan; on the SW., by Lot No. 3 of the
Regional Trial Court of Naic, Cavite. Romeo was appointed consolidation and subdivision plan; and on the NW., by Lot No. 9 of
administrator of his father's estate. the consolidation and subdivision plan. Beginning at a point marked
In the course of the intestate proceedings, Romeo discovered that "1" on the plan, being S. 7 deg. 26'W., 4269.90 m. more or less from
his parents had executed several deeds of sale conveying a number B.L.L.M. No. 1, Mp. of Mariquina;
of real properties in favor of his sister, Natividad. One of the deeds thence S. 25 deg. 00'E., 12.00 m. to point "2";
involved six lots in Quezon City which were allegedly sold by thence S. 64 deg. 59'W., 29.99 m. to point "3";
Maximino, Sr., with the consent of Aurea, to Natividad on January thence N. 25 deg. 00'W., 12.00 m to point "4";
29, 1970 for the total amount of P47,800.00. The Deed of Absolute thence N. 64 deg. 59'E., 29.99 m. to the point of
Sale reads as follows: beginning; containing an area of THREE HUNDRED SIXTY SQUARE
DEED OF ABSOLUTE SALE METERS (360), more or less. All points referred to are indicated on
KNOW ALL MEN BY THESE PRESENTS: the plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60
I, MAXIMINO A. NAZARENO, Filipino, married to Aurea cm.; bearings true; declination 0 deg. 50'E., date of the original
Poblete-Nazareno, of legal age and a resident of the Mun. of Naic, survey, April 8 to July 15, 1920, and that of the consolidation and
Prov. of Cavite, Philippines, - subdivision survey, April 24 to 26, 1941." "TRANS. CERT. OF TITLE
WITNESSETH- NO. 118886"
That I am the absolute registered owner of six (6) parcels of land "A parcel of land (Lot No. 11, of the consolidation and subdivision
with the improvements thereon situated in Quezon City, Philippines, plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
which parcels of land are herewith described and bounded as No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
follows, to wit: Record No. 917), situated in the District of Cubao, Quezon City,
"TRANS. CERT. OF TITLE NO. 140946" Island of Luzon. Bounded on the NE., by Lot No. 4 of the
"A parcel of land (Lot 3-B of the subdivision plan Psd-47404, being a consolidation and subdivision plan; on the SE., by Lot No. 12 of the
portion of Lot 3, Block D-3 described on plan Bsd-10642, G.L.R.O. consolidation and subdivision plan; on the SW., by Lot No. 3 of the
Record No.) situated in the Quirino District, Quezon City. Bounded consolidation and subdivision plan; on the NW., by Lot No. 10 of the
on the N., along line 1-2 by Lot 15, Block D-3 of plan Bsd - 10642; consolidation and subdivision plan. Beginning at a point marked "1"
along line 2-3 by Lot 4, Block D-3 of plan Bsd-10642; along line 3-4 on plan, being S. 79 deg. 07'W., 4264.00 m. more or less from
by Aurora Boulevard (Road Lot-1, Bsd-10642); and along line 4-1 by B.L.L.M. No. 1, Mp. of Mariquina;
Lot 3-D of the subdivision plan. Beginning at a point marked "1" on thence S. 64 deg. 59'W., 29.99 m. to point "2";
plan, being S.29 deg. 26'E., 1156.22 m. from B.L.L.M. 9, Quezon City, thence N. 25 deg. 00'W., 12.00 m. to point "3";
thence N. 79 deg. 53'E., 12.50 m. to point 2; thence N. 64 deg. 59'E., 29.99 m. to point "4";
thence S. 10 deg. 07'E., 40.00 m. to point 3; thence S. 26 deg. 00'E., 12.00 m. to the point of
thence S. 79 deg. 53'W., 12.50 m. to point 4; beginning; containing an area of THREE HUNDRED SIXTY SQUARE
thence N. 10 deg. 07'W., 40.00 m. to the point METERS (360), more or less. All points referred to are indicated on
of beginning; containing an area of FIVE HUNDRED (500) SQUARE the plan and on the ground, are marked by P.L.S. Conc. Mons. 15 x
METERS. All points referred to are indicated on the plan and are 60 cm.; bearings true; declination 0 deg. 50'E.; date of the original
marked on the ground as follows: points "1" and "4" by P.L.S. Cyl. survey, April 8 to July 15, 1920, and that of the consolidation and
Conc. Mons. bearings true; date of the original survey, April 8-July subdivision survey, April 24 to 26, 1941."
15, 1920 and that of the subdivision survey, March 25, 1956." thence S. 64 deg. 59'W., 29.99 m. to point "2";
"TRANS. CERT. OF TITLE NO. 132019" thence N. 25 deg. 00'W., 12.00 m. to point "3";
"A parcel of land (Lot 3, Block 93 of the subdivision plan Psd-57970 thence N. 64 deg. 59'E., 29.99 m. to point "4";
being a portion of Lot 6, Pcs-4786, G.L.R.O. Rec. No. 917) situated in thence S. 26 deg. 00'E., 12.00 m. to the point of
Quirino District Quezon City. Bounded on the NW., along line 1-2, by "A parcel of land (Lot No. 13 of the consolidation and subdivision
Lot 1, Block 93; on the NE., along line 2-3, by Road Lot 101; on the plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
SE., along line 3-4, by Road Lot 100; on the SW., along line 4-1, by No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
Lot 4, Block 93; all of the subdivision plan. Beginning at point Record No. 917), situated in the District of Cubao, Quezon City,
marked "1" on plan, being S. 65 deg. 40' 3339.92 m. from B.L.L.M. Island of Luzon. Bounded on the NE., by Lot No. 4 of the
No. 1, Marikina, Rizal; consolidation and subdivision plan; on the SE., by Lot No. 14, of the
thence N. 23 deg. 28 min. E., 11.70 m. to point "2"; consolidation; and subdivision plan; on the SW., by Lot No. 3 of the
thence S. 66 deg. 32 min. E., 18.00 m. to point "3"; consolidation and subdivision plan; and on the NW., by Lot No. 12,
thence S. 23 deg. 28 min. W., 11.70 m. to point "4"; of the consolidation and subdivision plan. Beginning at the point
thence N. 66 deg. 32. min. W., 18.00 m. to the point


marked "1" on plan, being S.78 deg. 48'W., 4258.20 m. more or less Among the lots covered by the above Deed of Sale is Lot 3-B which
from B.L.L.M. No. 1, Mp. of Mariquina; is registered under TCT No. 140946. This lot had been occupied by
thence S. 64 deg. 58'W., 30.00 m. to point "2"; Romeo, his wife Eliza, and by Maximino, Jr. since 1969. Unknown to
thence N. 25 deg. 00'W., 12.00 m. to point "3"; Romeo, Natividad sold Lot 3-B on July 31, 1982 to Maximino, Jr.,[8]
thence N. 64 deg. 59'E., 29.99 m. to point "4"; for which reason the latter was issued TCT No. 293701 by the
thence S.25 deg. 00'E., 12.00 m. to point of Register of Deeds of Quezon City.[9]
beginning; containing an area of THREE HUNDRED SIXTY SQUARE When Romeo found out about the sale to Maximino, Jr., he and his
METERS (360, more or less. All points referred to are indicated on wife Eliza locked Maximino, Jr. out of the house. On August 4, 1983,
the plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60 Maximino, Jr. brought an action for recovery of possession and
cm.; bearings true; declination 0 deg. 50'E., date of the original damages with prayer for writs of preliminary injunction and
survey, April 8 to July 15, 1920, and that of the consolidation and mandatory injunction with the Regional Trial Court of Quezon City.
subdivision survey, April 24 to 26, 1941." On December 12, 1986, the trial court ruled in favor of Maximino, Jr.
"A parcel of land (Lot No. 14, of the consolidation and subdivision In CA-G.R. CV No. 12932, the Court of Appeals af irmed the decision
plan Pcs-988, being a portion of the consolidated Lot No. 26, Block of the trial court.[10]
No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. On June 15, 1988, Romeo in turn iled, on behalf of the estate of
Record No. 917), situated in the District of Cubao, Quezon City, Maximino, Sr., the present case for annulment of sale with damages
Island of Luzon. Bounded on the NE., by Lot No. 4 of the against Natividad and Maximino, Jr. The case was iled in the
consolidation and subdivision plan; on the SE., by Lot No. 15, of the Regional Trial Court of Quezon City, where it was docketed as Civil
consolidation and subdivision plan; on the SW., by Lot No. 3 of the Case No. 88-58.[11] Romeo sought the declaration of nullity of the
consolidation and subdivision plan; and on the NW., by Lot No. 13 of sale made on January 29, 1970 to Natividad and that made on July
the consolidation and subdivision plan. Beginning at the point 31, 1982 to Maximino, Jr. on the ground that both sales were void
marked "1" on plan, being S.78 deg. 48'W., 4258.20 m. more or less for lack of consideration.
from B.L.L.M. No. 1, Mp. of Mariquina; On March 1, 1990, Natividad and Maximino, Jr. iled a third-party
thence S. 25 deg. 00'E., 12.00 m. to point "2"; complaint against the spouses Romeo and Eliza.[12] They alleged
thence S. 65 deg. 00'W., 30.00 m. to point "3"; that Lot 3, which was included in the Deed of Absolute Sale of
thence S. 65 deg. 00'W., 12.00 m. to point "4"; January 29, 1970 to Natividad, had been surreptitiously
thence N.64 deg. 58'E., 30.00 m. to the point of appropriated by Romeo by securing for himself a new title (TCT No.
beginning; containing an area of THREE HUNDRED SIXTY SQUARE 277968) in his name.[13] They alleged that Lot 3 is being leased by
METERS (360), more or less. All points referred to are indicated on the spouses Romeo and Eliza to third persons. They therefore
the plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60 sought the annulment of the transfer to Romeo and the cancellation
cm.; bearings true; declination 0 deg. 50'E., date of the original of his title, the eviction of Romeo and his wife Eliza and all persons
survey, April 8 to July 15, 1920, and that of the consolidation and claiming rights from Lot 3, and the payment of damages.
subdivision survey, April 24 to 26, 1941." The issues having been joined, the case was set for trial. Romeo
That for and in consideration of the sum of FORTY THREE presented evidence to show that Maximino and Aurea Nazareno
THOUSAND PESOS (P43,000.00) PHILIPPINE CURRENCY, to me in never intended to sell the six lots to Natividad and that Natividad
hand paid by NATIVIDAD P. NAZARENO, Filipino, single, of legal age was only to hold the said lots in trust for her siblings. He presented
and a resident of the Mun. of Naic, Prov. of Cavite, Philippines, the the Deed of Partition and Distribution dated June 28, 1962 executed
receipt whereof is acknowledged to my entire satisfaction, I do by Maximino Sr. and Aurea and duly signed by all of their children,
hereby CEDE, SELL, TRANSFER, CONVEY and ASSIGN unto the said except Jose, who was then abroad and was represented by their
Natividad P. Nazareno, her heirs, administrators and assigns, all my mother, Aurea. By virtue of this deed, the nine lots subject of this
title, rights, interests and participations to the abovedescribed Deed of Partition were assigned by raf le as follows:
parcels of land with the improvements thereon, with the exception Romeo - Lot 25-L (642 m2)
of LOT NO. 11 COVERED BY T.C.T. NO. 118886, free of any and all Natividad - Lots 23 (312 m2) and 24 (379 m2)
liens and encumbrances; and Maximino, Jr. - Lots 6 (338 m2) and 7 (338 m2)
That for and in consideration of the sum of FOUR THOUSAND Paci ico - Lots 13 (360 m2) and 14 (360 m2)
EIGHT HUNDRED PESOS (P4,800.00) PHILIPPINE CURRENCY, to me Jose - Lots 10 (360 m2) and 11 (360 m2)
in hand paid by NATIVIDAD P. NAZARENO, Filipino, single, of legal Romeo received the title to Lot 25-L under his name,[14] while
age and a resident of the Mun. of Naic, Prov. of Cavite, Philippines, Maximino, Jr. received Lots 6 and 7 through a Deed of Sale dated
the receipt whereof is acknowledged to my entire satisfaction, I do August 16, 1966 for the amount of P9,500.00.[15] Paci ico and
hereby CEDE, SELL, TRANSFER, CONVEY and ASSIGN unto the said Jose's shares were allegedly given to Natividad, who agreed to give
Natividad P. Nazareno, her heirs, administrators and assigns, all my Lots 10 and 11 to Jose, in the event the latter came back from
title, rights, interests and participations in and to Lot No. 11 covered abroad. Natividad's share, on the other hand, was sold to third
by T.C.T. No. 118886 above-described, free of any and all liens and persons[16] because she allegedly did not like the location of the
encumbrances, with the understanding that the title to be issued in two lots. But, Romeo said, the money realized from the sale was
relation hereto shall be separate and distinct from the title to be given to Natividad.
issued in connection with Lots Nos. 13 and 14, although covered by Romeo also testi ied that Lot 3-B was bought for him by his father,
the same title. while Lot 3 was sold to him for P7,000.00 by his parents on July 4,
IN WITNESS WHEREOF, I have hereunto signed this deed of 1969.[17] However, he admitted that a document was executed by
absolute sale in the City of Manila, Philippines, this 29th day of his parents transferring six properties in Quezon City, i.e., Lots 3,
January, 1970.[2] 3-B, 10, 11, 13, and 14, to Natividad.
By virtue of this deed, transfer certi icates of title were issued to Romeo further testi ied that, although the deeds of sale executed by
Natividad, to wit: TCT No. 162738 (Lot 3-B),[3] TCT No. 162739 his parents in their favor stated that the sale was for a
(Lot 3),[4] TCT No. 162735 (Lot 10),[5] TCT No. 162736 (Lot consideration, they never really paid any amount for the supposed
11),[6] and TCT No. 162737 (Lots 13 and 14),[7] all of the Register sale. The transfer was made in this manner in order to avoid the
of Deeds of Quezon City. payment of inheritance taxes.[18] Romeo denied stealing Lot 3 from


his sister but instead claimed that the title to said lot was given to On appeal to the Court of Appeals, the decision of the trial court was
him by Natividad in 1981 after their father died. modi ied in the sense that titles to Lot 3 (in the name of Romeo
Natividad and Maximino, Jr. claimed that the Deed of Partition and Nazareno) and Lot 3-B (in the name of Maximino Nazareno, Jr.), as
Distribution executed in 1962 was not really carried out. Instead, in well as to Lots 10 and 11 were cancelled and ordered restored to
December of 1969, their parents offered to sell to them the six lots the estate of Maximino Nazareno, Sr. The dispositive portion of the
in Quezon City, i.e., Lots 3, 3-B, 10, 11, 13 and 14. However, it was decision dated May 29, 1998 reads:
only Natividad who bought the six properties because she was the WHEREFORE, the appeal is GRANTED. The decision and the order
only one inancially able to do so. Natividad said she sold Lots 13 in question are modi ied as follows:
and 14 to Ros-Alva Marketing Corp.[19] and Lot 3-B to Maximino, Jr. The Deed of Absolute Sale dated 29 January 1970 and the Deed of
for P175,000.00.[20] Natividad admitted that Romeo and the Absolute Sale dated 31 July 1982 are hereby declared null and void;
latter's wife were occupying Lot 3-B at that time and that she did Except as to Lots 13 and 14 ownership of which has passed on to
not tell the latter about the sale she had made to Maximino, Jr. third persons, it is hereby declared that Lots 3, 3-B, 10 and 11 shall
Natividad said that she had the title to Lot 3 but it somehow got lost. form part of the estate of the deceased Maximino Nazareno, Sr.;
She could not get an original copy of the said title because the The Register of Deeds of Quezon City is hereby ordered to restore
records of the Registrar of Deeds had been destroyed by ire. She TCT No. 140946 (covering Lot 3-B), TCT No. 132019 (covering Lot
claimed she was surprised to learn that Romeo was able to obtain a 3), TCT No. 118885 (covering Lot 10), and TCT No. 118886
title to Lot 3 in his name. (covering Lot 11).[23]
Natividad insisted that she paid the amount stated in the Deed of Petitioners iled a motion for reconsideration but it was denied in a
Absolute Sale dated January 29, 1970. She alleged that their parents resolution dated May 27, 1999. Hence this petition.
had sold these properties to their children instead of merely giving Petitioners raise the following issues:
the same to them in order to impose on them the value of hardwork. WHETHER OR NOT THE UNCORROBORATED TESTIMONY OF
Natividad accused Romeo of iling this case to harass her after PRIVATE RESPONDENT ROMEO P. NAZARENO CAN DESTROY THE
Romeo lost in the action for recovery of possession (Civil Case No. FULL FAITH AND CREDIT ACCORDED TO NOTARIZED DOCUMENTS
Q-39018) which had been brought against him by Maximino, Jr. It LIKE THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970
appears that before the case iled by Romeo could be decided, the (EXH. 1) EXECUTED BY THE DECEASED SPOUSES MAXIMINO A.
Court of Appeals rendered a decision in CA-GR CV No. 12932 NAZARENO, SR. AND AUREA POBLETE IN FAVOR OF PETITIONER
af irming the trial court's decision in favor of Maximino, Jr. NATIVIDAD P. NAZARENO.
On August 10, 1992, the trial court rendered a decision, the WHETHER OR NOT THE RESPONDENT COURT GROSSLY
dispositive portion of which states: MISAPPRECIATED THE FACTS OF THE CASE WITH RESPECT TO
WHEREFORE, judgment is hereby rendered declaring the nullity of THE VALIDITY OF THE SAID DEED OF ABSOLUTE SALE DATED
the Deed of Sale dated January 29, 1970. Except as to Lots 3, 3-B, 13 JANUARY 29, 1970 (EXH. 1) IN THE LIGHT OF THE FOLLOWING:
and 14 which had passed on to third persons, the defendant A) THE DOCUMENTARY EVIDENCE, ALL OF WHICH ARE
Natividad shall hold the rest in trust for Jose Nazareno to whom the NOTARIZED, EXECUTED BY THE DECEASED SPOUSES DURING
same had been adjudicated. The Register of Deeds of Quezon City is THEIR LIFETIME INVOLVING SOME OF THEIR CONJUGAL
directed to annotate this judgment on Transfer Certi icate of Titles PROPERTIES.
Nos. 162735 and 162736 as a lien in the titles of Natividad P. B) THE EXECUTION OF AN EXTRA-JUDICIAL PARTITION WITH
Nazareno. WAIVER OF RIGHTS AND CONFIRMATION OF SALE DATED MAY 24,
The defendants' counterclaim is dismissed. Likewise, the 1975 (EXH. 14A) OF THE ESTATE OF AUREA POBLETE BY THE
third-party complaint is dismissed. DECEASED MAXIMINO A. NAZARENO, SR. AND THEIR CHILDREN
The defendants are hereby directed to pay to the plaintiff jointly and INVOLVING THE ONLY REMAINING ESTATE OF AUREA POBLETE
severally the sum of P30,000 as and for attorney's fees. Likewise, THUS IMPLIEDLY ADMITTING THE VALIDITY OF PREVIOUS
the third-party plaintiff is directed to pay the third-party DISPOSITIONS MADE BY SAID DECEASED SPOUSES ON THEIR
defendant's attorney's fees of P20,000. CONJUGAL PROPERTIES, HALF OF WHICH WOULD HAVE BECOME
All other claims by one party against the other are dismissed. A PART OF AUREA POBLETE'S ESTATE UPON HER DEMISE.
SO ORDERED.[21] C) THE ADMISSION MADE BY MAXIMINO A. NAZARENO, SR. IN HIS
Natividad and Maximino, Jr. iled a motion for reconsideration. As a TESTIMONY IN OPEN COURT ON AUGUST 13, 1980 DURING HIS
result, on October 14, 1992 the trial court modi ied its decision as LIFETIME IN CIVIL CASE NO. NC-712 (EXH. 81, 81B) THAT HE HAD
follows: WHEREFORE, the plaintiff's Partial Motion for SOLD CERTAIN PROPERTIES IN FAVOR OF NATIVIDAD P.
Reconsideration is hereby granted. The judgment dated August 10, NAZARENO THUS BELYING THE CLAIM OF ROMEO P. NAZARENO
1992 is hereby amended, such that the irst paragraph of its THAT THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970 IS
dispositive portion is correspondingly modi ied to read as follows: ONE AMONG THE DOCUMENTS EXECUTED BY THE DECEASED
"WHEREFORE, judgment is hereby rendered declaring the nullity of SPOUSES TO BE WITHOUT CONSIDERATION.
the Deeds of Sale dated January 29, 1970 and July 31, 1982. "Except D) THE ADMISSIONS MADE BY ROMEO P. NAZARENO HIMSELF
as to Lots 3, 13 and 14 which had passed on to third person, the CONTAINED IN A FINAL DECISION OF THE RESPONDENT COURT
defendant Natividad shall hold the rest OF THE PROPERTIES IN CA-GR CV NO. 12932 DATED AUGUST 31, 1992 AND AN ANNEX
COVERED BY THE DEED OF SALE DATED JANUARY 29, 1970 (LOTS APPEARING IN HIS ANSWER TO THE COMPLAINT IN CIVIL CASE
10 and 11) in trust for Jose Nazareno to whom the same had been NO. Q-39018 (EXH. 11-B) INVOLVING LOT 3B, ONE OF THE
adjudicated. PROPERTIES IN QUESTION THAT THE SAID PROPERTY IS OWNED
"The Register of Deeds of Quezon City is directed to annotate this BY PETITIONER NATIVIDAD P. NAZARENO.
judgment on Transfer Certi icates of Title No. 162735 and 162736 E) THE PARTIAL PROJECT OF PARTITION DATED MAY 24, 1995
as a lien on the titles of Natividad P. Nazareno. WHICH WAS APPROVED BY THE INTESTATE COURT IN SP. PROC.
"LIKEWISE, THE SAID REGISTER OF DEEDS IS DIRECTED TO NO. NC-28 AND EXECUTED IN ACCORDANCE WITH THE LATTER
CANCEL TCT NO. 293701 (formerly 162705) OVER LOT 3-B AND COURT'S FINAL ORDER DATED JULY 9, 1991 DETERMINING WHICH
RESTORE TCT NO. 140946 IN THE NAME OF MAXIMINO WERE THE REMAINING PROPERTIES OF THE ESTATE.
NAZARENO SR. AND AUREA POBLETE."[22]


WHETHER OR NOT THE DEED OF ABSOLUTE SALE DATED under the care and in the name of Natividad P. Nazareno, their
JANUARY 29, 1970 EXECUTED BY THE DECEASED SPOUSES eldest living sister who was still single, to be divided upon their
MAXIMINO A. NAZARENO, SR. AND AUREA POBLETE DURING demise to all the compulsory heirs, has not progressed beyond mere
THEIR LIFETIME INVOLVING THEIR CONJUGAL PROPERTIES IS AN speculation. His barefaced allegation on the point not only is
INDIVISIBLE CONTRACT? AND IF SO WHETHER OR NOT UPON without any corroboration but is even belied by documentary
THEIR DEATH, THE ESTATE OF MAXIMINO A. NAZARENO, SR. evidence. The deed of absolute sale (Exhibit "B"), being a public
ALONE CAN SEEK THE ANNULMENT OF SAID SALE? document (Rule 132, Secs. 19 and 23, Revised Rules on Evidence), is
WHETHER OR NOT THE SALE OF LOT 3 UNDER THE DEED OF entitled to great weight; to contradict the same, there must be
ABSOLUTE SALE DATED JANUARY 29, 1970 IN FAVOR OF evidence that is clear, convincing and more than merely
PETITIONER NATIVIDAD P. NAZARENO, IS VALID CONSIDERING preponderant (Yturralde vs. Aganon, 28 SCRA 407; Favor vs. Court
THAT AS PER THE ORDER OF THE LOWER COURT DATED of Appeals, 194 SCRA 308). Defendants-appellants' own conduct
NOVEMBER 21, 1990. ROMEO NAZARENO ADMITTED THAT HE disproves their claim of co-ownership over the property in
DID NOT PAY THE CONSIDERATION STATED IN THE DEED OF question. Being themselves the owner of a ten-unit apartment
ABSOLUTE SALE DATED JULY 4, 1969 EXECUTED BY THE building along Stanford St., Cubao Quezon City,
DECEASED SPOUSES IN HIS FAVOR (EXH. M-2). defendants-appellants, in a letter of demand to vacate addressed to
WHETHER OR NOT AS A CONSEQUENCE, THE TITLE ISSUED IN their tenants (Exhibits "P", "P-1" and "P-2") in said apartment,
THE NAME OF ROMEO P. NAZARENO, TCT NO. 277968 (EXH. M) admitted that the house and lot located at No. 979 Aurora Blvd.,
SHOULD BE CANCELLED AND DECLARED NULL AND VOID AND A Quezon City where they were residing did not belong to them. Also,
NEW ONE ISSUED IN FAVOR OF NATIVIDAD P. NAZARENO when they applied for a permit to repair the subject property in
PURSUANT TO THE DEED OF ABSOLUTE SALE EXECUTED IN THE 1977, they stated that the property belonged to and was registered
LATTER'S FAVOR ON JANUARY 29, 1970 BY THE DECEASED in the name of Natividad P. Nazareno. Among the documents
SPOUSES.[24] submitted to support their application for a building permit was a
We ind the petition to be without merit. copy of TCT No. 162738 of the Registry of Deeds of Quezon City in
First. Petitioners argue that the lone testimony of Romeo is the name of Natividad Nazareno (Exhibit "O" and submarkings; tsn
insuf icient to overcome the presumption of validity accorded to a March 15, 1985, pp. 4-5).[27]
notarized document. To be sure, that case was for recovery of possession based on
To begin with, the indings of fact of the Court of Appeals are ownership of Lot 3-B. The parties in that case were Maximino, Jr., as
conclusive on the parties and carry even more weight when these plaintiff, and the spouses Romeo and Eliza, as defendants. On the
coincide with the factual indings of the trial court. This Court will other hand, the parties in the present case for annulment of sale are
not weigh the evidence all over again unless there is a showing that the estate of Maximino, Sr., as plaintiff, and Natividad and Maximino,
the indings of the lower court are totally devoid of support or are Jr., as defendants. Romeo and Eliza were named third-party
clearly erroneous so as to constitute serious abuse of defendants after a third-party complaint was iled by Natividad and
discretion.[25] The lone testimony of a witness, if credible, is Maximino, Jr. As already stated, however, this third-party complaint
suf icient. In this case, the testimony of Romeo that no concerned Lot 3, and not Lot 3-B.
consideration was ever paid for the sale of the six lots to Natividad The estate of a deceased person is a juridical entity that has a
was found to be credible both by the trial court and by the Court of personality of its own.[28] Though Romeo represented at one time
Appeals and it has not been successfully rebutted by petitioners. the estate of Maximino, Sr., the latter has a separate and distinct
We, therefore, have no reason to overturn the indings by the two personality from the former. Hence, the judgment in CA-GR CV No.
courts giving credence to his testimony. 12932 regarding the ownership of Maximino, Jr. over Lot 3-B binds
The fact that the deed of sale was notarized is not a guarantee of the Romeo and Eliza only, and not the estate of Maximino, Sr., which
validity of its contents. As held in Suntay v. Court of Appeals:[26] also has a right to recover properties which were wrongfully
Though the notarization of the deed of sale in question vests in its disposed.
favor the presumption of regularity, it is not the intention nor the Furthermore, Natividad's title was clearly not an issue in the irst
function of the notary public to validate and make binding an case. In other words, the title to the other ive lots subject of the
instrument never, in the irst place, intended to have any binding present deed of sale was not in issue in that case. If the irst case
legal effect upon the parties thereto. The intention of the parties resolved anything, it was the ownership of Maximino, Jr. over Lot
still and always is the primary consideration in determining the true 3-B alone.
nature of a contract. Third. Petitioners allege that, as shown by several deeds of sale
Second. Petitioners make capital of the fact that in C.A.-G.R. CV No. executed by Maximino, Sr. and Aurea during their lifetime, the
12932, which was declared inal by this Court in G.R. No. 107684, intention to dispose of their real properties is clear. Consequently,
the Court of Appeals upheld the right of Maximino, Jr. to recover they argue that the Deed of Sale of January 29, 1970 should also be
possession of Lot 3-B. In that case, the Court of Appeals held: deemed valid.
As shown in the preceding disquisition, Natividad P. Nazareno This is a non-sequitur. The fact that other properties had allegedly
acquired the property in dispute by purchase in 1970. She was been sold by the spouses Maximino, Sr. and Aurea does not
issued Transfer Certi icate of Title No. 162738 of the Registry of necessarily show that the Deed of Sale made on January 29, 1970 is
Deeds of Quezon City. When her parents died, her mother Aurea valid.
Poblete-Nazareno in 1970 and her father Maximino A. Nazareno, Sr. Romeo does not dispute that their parents had executed deeds of
in 1980, Natividad P. Nazareno had long been the exclusive owner of sale. The question, however, is whether these sales were made for a
the property in question. There was no way therefore that the consideration. The trial court and the Court of Appeals found that
aforesaid property could belong to the estate of the spouses the Nazareno spouses transferred their properties to their children
Maximino Nazareno, Sr. and Aurea Poblete. The mere fact that by ictitious sales in order to avoid the payment of inheritance taxes.
Romeo P. Nazareno included the same property in an inventory of Indeed, it was found both by the trial court and by the Court of
the properties of the deceased Maximino A. Nazareno, Sr. will not Appeals that Natividad had no means to pay for the six lots subject
adversely affect the ownership of the said realty. Appellant Romeo P. of the Deed of Sale.
Nazareno's suspicion that his parents had entrusted all their assets


All these convince the Court that Natividad had no means to pay for parents executed the Deed of Sale in favor of Natividad because the
all the lots she purportedly purchased from her parents. What is latter was the only "female and the only unmarried member of the
more, Romeo's admission that he did not pay for the transfer to him family."[34] She was thus entrusted with the real properties in
of lots 3 and 25-L despite the considerations stated in the deed of behalf of her siblings. As she herself admitted, she intended to
sale is a declaration against interest and must ring with resounding convey Lots 10 and 11 to Jose in the event the latter returned from
truth. The question is, why should Natividad be treated any abroad. There was thus an implied trust constituted in her favor.
differently, i.e., with consideration for the sale to her, when she is Art. 1449 of the Civil Code states:
admittedly the closest to her parents and the one staying with them There is also an implied trust when a donation is made to a person
and managing their affairs? It just seems without reason. Anyway, but it appears that although the legal estate is transmitted to the
the Court is convinced that the questioned Deed of Sale dated donee, he nevertheless is either to have no bene icial interest or
January 29, 1970 (Exh. "A" or "1") is simulated for lack of only a part thereof.
consideration, and therefore ineffective and void.[29] There being an implied trust, the lots in question are therefore
In af irming this ruling, the Court of Appeals said: subject to collation in accordance with Art. 1061 which states:
Facts and circumstances indicate badges of a simulated sale which Every compulsory heir, who succeeds with other compulsory heirs,
make the Deed of Absolute Sale dated 29 January 1970 void and of must bring into the mass of the estate any property or right which
no effect. In the case of Suntay vs. Court of Appeals (251 SCRA 430 he may have received from the decedent, during the lifetime of the
[1995]), the Supreme Court held that badges of simulation make a latter, by way of donation, or any other gratuitous title, in order that
deed of sale null and void since parties thereto enter into a it may be computed in the determination of the legitime of each
transaction to which they did not intend to be legally bound. heir, and in the account of the partition.
It appears that it was the practice in the Nazareno family to make As held by the trial court, the sale of Lots 13 and 14 to Ros-Alva
simulated transfers of ownership of real properties to their children Marketing, Corp. on April 20, 1979[35] will have to be upheld for
in order to avoid the payment of inheritance taxes. Per the Ros-Alva Marketing is an innocent purchaser for value which relied
testimony of Romeo, he acquired Lot 25-L from his parents through on the title of Natividad. The rule is settled that "every person
a ictitious or simulated sale wherein no consideration was paid by dealing with registered land may safely rely on the correctness of
him. He even truthfully admitted that the sale of Lot 3 to him on 04 the certi icate of title issued therefor and the law will in no way
July 1969 (Deed of Absolute Sale, Records, Vol. II, p. 453) likewise oblige him to go behind the certi icate to determine the condition of
had no consideration. This document was signed by the spouses the property."[36]
Max, Sr. and Aurea as vendors while defendant-appellant Natividad WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
signed as witness.[30] SO ORDERED.
Fourth. Petitioners argue further: Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur.
The Deed of Absolute Sale dated January 29, 1970 is an indivisible Buena, J., no part.
contract founded on an indivisible obligation. As such, it being
indivisible, it can not be annulled by only one of them. And since E. Rommel Realty and Development
this suit was iled only by the estate of Maximino A. Nazareno, Sr.
without including the estate of Aurea Poblete, the present suit must Corporation vs Sta. Lucia Realty, G.R. NO.
fail. The estate of Maximino A. Nazareno, Sr. can not cause its 127636, November 24, 2006
annulment while its validity is sustained by the estate of Aurea 537 Phil. 822
Poblete.[31]
An obligation is indivisible when it cannot be validly performed in SECOND DIVISION
parts, whatever may be the nature of the thing which is the object G.R. NO. 127636, November 24, 2006
thereof. The indivisibility refers to the prestation and not to the E. ROMMEL REALTY AND DEVELOPMENT CORPORATION, AS
object thereof.[32] In the present case, the Deed of Sale of January SUBROGEE OF ANTONINA GUIDO, MAURO CASTANEDA,
29, 1970 supposedly conveyed the six lots to Natividad. The MARGARITA GUIDO, GRACIANO L. AMANTE, FELIZA GUIDO,
obligation is clearly indivisible because the performance of the ANTONIO AQUINO, CRISANTA GUIDO, BUENAVENTURA B.
contract cannot be done in parts, otherwise the value of what is ENRIQUEZ, CANDIDA GUIDO, JACOB ASSAD, ESPERANZA GUIDO,
transferred is diminished. Petitioners are therefore mistaken in ANGEL BENITO, ALFREDO GUIDO, CLARA MINDA ANSELMO,
basing the indivisibility of a contract on the number of obligors. EUFRONIA GUIDO, JOSE LORENO, PRISCILLA GUIDO VDA. DE
In any case, if petitioners' only point is that the estate of Maximino, ESGUERRA, BENEDICTO LOPEZ, PROFETIZA GUIDO, AIDA DEL
Sr. alone cannot contest the validity of the Deed of Sale because the CARMEN, BUENSUCESO GUIDO, HERMINIA VILLAREAL, CARLOS
estate of Aurea has not yet been settled, the argument would GUIDO, AMANDA C. RIVERA, JOSE A. ROJAS AND EMILIAN M.
nonetheless be without merit. The validity of the contract can be ROJAS,* PETITIONER, VS. STA. LUCIA REALTY DEVELOPMENT
questioned by anyone affected by it.[33] A void contract is CORPORATION,** RESPONDENT.
inexistent from the beginning. Hence, even if the estate of
Maximino, Sr. alone contests the validity of the sale, the outcome of DECISION
the suit will bind the estate of Aurea as if no sale took place at all. CORONA, J.:
Fifth. As to the third-party complaint concerning Lot 3, we ind that
this has been passed upon by the trial court and the Court of This is a petition for review on certiorari[1] of the September 19,
Appeals. As Romeo admitted, no consideration was paid by him to 1996 decision[2] and November 15, 1996 resolution[3] of the Court
his parents for the Deed of Sale. Therefore, the sale was void for of Appeals in CA-G.R. SP No. 41305.
having been simulated. Natividad never acquired ownership over
the property because the Deed of Sale in her favor is also void for This controversy stemmed from a case decided by this Court
being without consideration and title to Lot 3 cannot be issued in entitled Republic v. CA[4] which is already in its execution stage in
her name. the court of origin. Given that the resolution of the present dispute
Nonetheless, it cannot be denied that Maximino, Sr. intended to give will inevitably take into consideration our pronouncements in said
the six Quezon City lots to Natividad. As Romeo testi ied, their case, a brief background is in order.


In 1979, the Republic of the Philippines, through the Solicitor project located within the land covered by TCT No. 23377. It claims
General, iled a complaint for declaration of nullity of Decree No. to have obtained its title from the heirs of Francisco and Honorata
6145, the owner's duplicate copy of Transfer Certi icate of Title de la Cruz.[23]
(TCT) No. 23377 in the names of Francisco and Hermogenes
Guido[5] and all titles derived from the decree.[6] This case was Pursuant to our decision, the Regional Trial Court (RTC) of Pasig
docketed as Civil Case No. 34242 of the former Court of First City, Branch 155, issued on July 21, 1994 a writ of possession
Instance[7] of Rizal.[8] These documents covered a vast area of land directing the branch sheriff to place Guido, et al. in possession of
called "Hacienda Angono" located in Binangonan, Rizal.[9] The "portions of the property which were not occupied either by bona
Republic alleged that said documents were false, spurious, ide occupants with registered titles or bona ide occupants with
fabricated and never issued by virtue of judicial proceedings for the lengths of possession which had ripened to ownership and the
registration of land.[10] The trial court dismissed the complaint and portions occupied by squatters."[24]
declared Decree No. 6145 and TCT No. 23377 genuine and
authentic.[11] This was af irmed by the CA.[12] It appears that respondent was in possession of a certain parcel of
land[25] situated in front of the Greenridge Executive Village where
In his motion for reconsideration, the Solicitor General prayed for its main gate is located, linking the subdivision to the national
an alternative judgment declaring the decree and its derivative titles highway.[26] On February 29, 1996, a notice to vacate was served
authentic except with respect to such portions of the property on respondent giving it ive days to vacate this parcel of land.
which were either: (1) possessed and owned by bona ide Consequently, on April 11, 1996, respondent iled an urgent motion
occupants who had already acquired indefeasible titles thereto or to quash the writ of possession dated July 21, 1994 claiming that it
(2) possessed and owned by bona ide occupants and their families had been a bona ide occupant and possessor of the 29,999 sq. m.
with lengths of possession which lot for a period of time which, by itself and through its
amounted to ownership.[13] This motion was denied.[14] predecessors-in-interest, had already ripened into ownership.[27]
When elevated to us, the same prayer for alternative judgment was The RTC, in an order dated July 12, 1996, denied this motion, along
presented.[15] This time, all the private respondents therein with the other motions iled by other entities.[28] It held that
accepted the alternative prayer of the Solicitor General.[16] respondent should ventilate its claim in an appropriate proceeding
separate and distinct from the case (Civil Case No. 34242) where
In our decision in Republic v. CA,[17] we upheld the indings of the the writ of possession was issued.[29] It stated that its duty to
courts below that Decree No. 6145 and TCT No. 23377 were execute the decision in Republic v. CA, as the court of origin, was
authentic.[18] However, we also took into consideration the fact purely ministerial and it could not, on mere motion of respondent,
that the private respondents therein unanimously accepted the interpret or qualify such decision. Accordingly, on July 15, 1996, a
alternative prayer of the Solicitor General: second alias writ of possession and second notice to vacate were
Moreover, conscious of the resulting "[large-scale] dispossession issued.[30]
and social displacement of several hundreds of bona ide occupants
and their families" which the Solicitor General pointed out, the Aggrieved, respondent iled a petition for certiorari and prohibition
private respondent[s] agreed unanimously to accept the alternative with the CA. It was granted in a decision promulgated on September
prayer of the petitioner in their joint memorandum. This agreement 19, 1996. In this ruling, it appears that the CA agreed with the RTC
by private respondents takes the form of a waiver. Though a valid that the rights of respondent had to be decided in an independent
and clear right over the property exists in their [favor], they and separate proceeding and could not simply be addressed in the
seemingly have voluntarily abandoned the same in favor of: 1) those proceeding for execution.[31] However, it held that in the execution
who possessed and actually occupied speci ic portions and obtained of the judgment, the RTC deprived respondent of its right to present
torrens certi icates of titles, and 2) those who possessed certain evidence in order to prove the character of its possession of the land
speci ic portions for such lengths of time as to amount to full in dispute.[32] As a result, the CA set aside and declared null and
ownership. The waiver, not being contrary to law, morals, good void the July 12, 1996 order (denying respondent's urgent motion
customs and good policy, is valid and binding on the private to quash the writ of possession) and July 15, 1996 second alias writ
respondents. of possession.[33]
However, with respect to the second set of possessors, whose Hence, this petition.
alleged bona ide occupancy of speci ic portions of the property is
not evidenced by Torrens Titles, it is imperative that their At its core, this controversy boils down to one main issue: whether
claims/occupancy be duly proven in an appropriate or not petitioner was entitled to a writ of possession of the 29,999
proceeding.[19]Thus, the dispositive portion of the decision read: sq. m. lot (hereinafter referred to as "the property") possessed and
ACCORDINGLY, the decision of the [CA] in CA-G.R. No. 12933 is claimed by respondent.
AFFIRMED subject to the herein declared superior rights of bona
ide occupants with registered titles within the area covered by the To resolve this issue, there is a need to revisit our ruling in Republic
questioned decree and bona ide occupants therein with length of v. CA. As already stated, we ruled there that, as Decree No. 6145 and
possession which had ripened to ownership, the latter to be TCT No. 23377 were authentic documents, Guido et al. had
determined in an appropriate proceeding. incontrovertible title to the land. Nevertheless, Guido et al., through
their waiver, were also considered to have abandoned their right in
SO ORDERED.[20]This present petition was brought to us by favor of two sets of occupants: (1) those who possessed and actually
petitioner E. Rommel Realty and Development Corporation which is occupied speci ic portions and obtained Torrens Certi icates of
claiming to be the subrogee of the rights and interests of Antonina Titles and (2) those who possessed certain speci ic portions for
Guido, et al.[21] Respondent Sta. Lucia Realty and Development such a length of time as to amount to full ownership, to be
Corporation is the owner-developer of Greenridge Executive determined in an appropriate proceeding.[34]
Village,[22] a subdivision


Petitioner argues that it was entitled to a writ of possession because property before the writ of possession was implemented, possessed
respondent was not able to prove in appropriate proceedings that it it as owner of the property. It can thus rightfully assert its right of
fell within the second set of quali ied occupants. It asserts that what possession which is among the bundle of rights enjoyed by an
the Republic v. CA decision contemplated was a inal and executory owner of a property under Art. 428 of the New Civil Code.[48]
judgment declaring respondent's possession to be bona ide and to
have ripened into ownership as of March 29, 1976.[35] Hence, respondent can rightfully claim the superior rights we
acknowledged in Republic v. CA and the CA correctly nulli ied
Respondent, on the other hand, admits that it did not yet have a petitioner's writ of possession insofar as it affected the property in
certi icate of title over the property. [36] But it contends that the possession of respondent.
through its predecessors-in-interest, it had already established, in
an appropriate application for registration of title, that it was within WHEREFORE, the petition is hereby DENIED.
the second set of possessors. It claims that its
predecessors-in-interest, the heirs of de la Cruz, had instituted this Costs against petitioner.
application docketed as L.R.C. No. 049-B before RTC, Binangonan,
Rizal, Branch 69.[37] The Land Registration Authority submitted to SO ORDERED.
the land registration court a supplementary report dated October
10, 1992 recommending the segregation of the lot of the heirs of de Puno, (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ.,
la Cruz from TCT No. M-00850 (derived from TCT No. 23377)[38] concur.
and the issuance of a new certi icate of title in their favor.[39] On
March 18, 1993, the land registration court issued a resolution [40] Flancia vs Court of Appeals, G.R. NO.
declaring the vested right of the heirs of de la Cruz (whose length of
possession was peaceful, notorious and in the concept of an owner 146997, April 26, 2005
496 Phil. 693
from 1940 up to the promulgation of the decision) had ripened into
ownership.[41]
THIRD DIVISION
G.R. NO. 146997, April 26, 2005
We uphold the ruling of the CA that the writ of possession of the
SPOUSES GODOFREDO & DOMINICA FLANCIA, PETITIONERS, VS.
disputed property should be nulli ied.
COURT OF APPEALS & WILLIAM ONG GENATO, RESPONDENTS.
In order to execute our decision in Republic v. CA, which has long
DECISION
become inal and executory, petitioner, as alleged subrogee of Guido
CORONA, J.:
et al., was issued a writ of possession over the land covered by TCT
No. 23377. Indisputably, in upholding the authenticity of the
Before us is a petition for review under Rule 45 of the Rules of
certi icate of title, we recognized Guido, et al.'s right of ownership
Court, seeking to set aside the October 6, 2000 decision[1] of the
over the land. However, at the same time, our decision also very
Court of Appeals in CA-G.R. CV No. 56035.
clearly imposed a limitation to their right over the land. We stated
that:
The facts as outlined by the trial court[2] follow.This is an action to
Though a valid and clear right over the property exists in their
declare null and void the mortgage executed by defendant Oakland
[favor], they seemingly have voluntarily abandoned the same in
Development Resources Corp. xxx in favor of defendant William Ong
favor of: 1) those who possessed and actually occupied speci ic
Genato over the house and lot plaintiffs spouses Godofredo and
portions and obtained torrens certi icates of titles, and 2) those who
Dominica Flancia purchased from defendant corporation.
possessed certain speci ic portions for such lengths of time as to
amount to full ownership. The waiver, not being contrary to law,
In the complaint, plaintiffs allege that they purchased from
morals, good customs and good policy, is valid and binding on the
defendant corporation a parcel of land known as Lot 12, Blk. 3,
private respondents.[42]Thus, in the dispositive portion of the
Phase III-A containing an area of 128.75 square meters situated in
decision, we af irmed that TCT No. 23377 was authentic but
Prater Village Subd. II located at Brgy. Old Balara, Quezon City; that
"subject to the herein declared superior rights of bona ide
by virtue of the contract of sale, defendant corporation authorized
occupants with registered titles within the area covered by the
plaintiffs to transport all their personal belongings to their house at
questioned decree and bona ide occupants therein with length of
the aforesaid lot; that on December 24, 1992, plaintiffs received a
possession which had ripened to ownership, the latter to be
copy of the execution foreclosing [the] mortgage issued by the RTC,
determined in an appropriate proceeding."[43]
Branch 98 ordering defendant Sheriff Sula to sell at public auction
several lots formerly owned by defendant corporation including
We agree that respondent had already proven its claim in an
subject lot of plaintiffs; that the alleged mortgage of subject lot is
appropriate proceeding. In L.R.C. No. 049-B, initiated by the heirs of
null and void as it is not authorized by plaintiffs pursuant to Art.
de la Cruz (the predecessors of respondent), it was shown that the
2085 of the Civil Code which requires that the mortgagor must be
possession of applicant heirs had already ripened to ownership[44]
the absolute owner of the mortgaged property; that as a
as of March 29, 1976.[45] This ruling inured to respondent's
consequence of the nullity of said mortgage, the execution
bene it.
foreclosing [the] mortgage is likewise null and void; that plaintiffs
advised defendants to exclude subject lot from the auction sale but
The records do not show that respondent ever obtained a certi icate
the latter refused. Plaintiffs likewise prayed for damages in the sum
of title over the disputed property. [46] Nevertheless, the right of
of P50,000.00.
ownership of respondent's predecessors-in-interest had been
recognized. As the purchaser of the property, respondent became
Defendant William Ong Genato iled a motion to dismiss the
the owner of the property and acquired the right to exercise all the
complaint which was opposed by the plaintiffs and denied by the
attributes of ownership, including the right to possession (jus
Court in its Order dated February 16, 1993.
possidendi).[47] Respondent, who was in actual possession of the


Defendant Genato, then iled his answer averring that on May 19, Dismissing defendant corporation’s counterclaim;
1989 co-defendant Oakland Development Resources Corporation
mortgaged to Genato two (2) parcels of land covered by TCT Nos.
356315 and 366380 as security and guaranty for the payment of a Dismissing defendant Genato’s counterclaim.[5]
loan in the sum of P2,000,000.00; that it appears in the complaint On motion for reconsideration, the regular presiding judge set aside
that the subject parcel of land is an unsubdivided portion of the the judgment of the assisting judge and rendered a new one on
aforesaid TCT No. 366380 which covers an area of 4,334 square November 27, 1996, the decretal portion of which
meters more or less; that said real estate mortgage has been duly read:WHEREFORE, premises considered, the Motion for
annotated at the back of TCT No. 366380 on May 22, 1989; that for Reconsideration is hereby GRANTED. The decision dated August 16,
non-payment of the loan of P2,000,000.00 defendant Genato iled 1996 is hereby set aside and a new one entered in favor of the
an action for foreclosure of real estate mortgage against plaintiffs, declaring the subject mortgage and the foreclosure
co-defendant corporation; that after [trial], a decision was rendered proceedings held thereunder as null and void insofar as they affect
by the Regional Trial Court of Quezon City, Branch 98 against the superior right of the plaintiffs over the subject lot, and ordering
defendant corporation which decision was af irmed by the as follows:
Honorable Court of Appeals; that the decision of the Court of Defendant Oakland Development Resources to pay to plaintiffs the
Appeals has long become inal and thus, the Regional Trial Court, amount of P20,000.00 for litigation-related expenses;
Brach 98 of Quezon City issued an Order dated December 7, 1992
ordering defendant Sheriff Ernesto Sula to cause the sale at public Ordering defendant Sheriff Ernesto L. Sula to desist from
auction of the properties covered by TCT No. 366380 for failure of conducting further proceedings in the extra-judicial foreclosure
defendant corporation to deposit in Court the money judgment insofar as they affect the plaintiffs, or, in the event that title has been
within ninety (90) days from receipt of the decision of the Court of consolidated in the name of defendant William O. Genato, ordering
Appeals; that plaintiffs have no cause of action against defendant said defendant to reconvey to plaintiffs the title corresponding to
Genato; that the alleged plaintiffs’ Contract to Sell does not appear Lot 12, Blk. 3, Phase III-A of Prater Village [Subd. II], located in Old
to have been registered with the Register of Deeds of Quezon City Balara, Quezon City, containing an area of 128.75 square meters;
to affect defendant Genato and the latter is thus not bound by the and
plaintiffs’ Contract to Sell; that the registered mortgage is superior
to plaintiffs’ alleged Contract to Sell and it is suf icient for defendant Dismissing the counterclaims of defendants Oakland and Genato
Genato as mortgagee to know that the subject TCT No. 366380 was and with costs against them.[6]
clean at the time of the execution of the mortgage contract with On appeal, the Court of Appeals issued the assailed
defendant corporation and defendant Genato is not bound to go order:Wherefore, foregoing premises considered, the appeal having
beyond the title to look for laws in the mortgagor’s title; that merit in fact and in law is hereby GRANTED and the decision of the
plaintiffs’ alleged Contract to Sell is neither a mutual promise to buy Trial Court dated 27 November 1996 hereby SET ASIDE and
and sell nor a Contract of Sale. Ownership is retained by the seller, REVERSED, and its judgment dated August 16, 1996 REINSTATED
regardless of delivery and is not to pass until full payment of the and AFFIRMED IN TOTO. No Costs.
price; that defendant Genato has not received any advice from
plaintiffs to exclude the subject lot from the auction sale, and by way SO ORDERED.[7]
of counterclaim, defendant Genato prays for P150,000.00 moral
damages and P20,000.00 for attorney’s fees. Hence, this petition.
On the other hand, defendant Oakland Development Resources For resolution before us now are the following issues:
Corporation likewise iled its answer and alleged that the complaint
states no cause of action; xxx Defendant corporation also prays for (1) whether or not the registered mortgage constituted over the
attorney’s fees of P20,000.00 in its counterclaim.[3]After trial, the property was valid;
assisting judge[4] of the trial court rendered a decision dated
August 16, 1996, the decretal portion of which provided:Wherefore, (2) whether or not the registered mortgage was superior to the
premises considered, judgment is hereby rendered. contract to sell; and
Ordering defendant Oakland Dev’t. Resources Corporation to pay
plaintiffs: (3) whether or not the mortgagee was in good faith.Under the Art.
2085 of the Civil Code, the essential requisites of a contract of
mortgage are: (a) that it be constituted to secure the ful illment of a
the amount of P10,000.00 representing payment for the ‘option to principal obligation; (b) that the mortgagor be the absolute owner
purchase lot’; of the thing mortgaged; and (c) that the persons constituting the
the amount of P140,000.00 representing the irst downpayment of mortgage have the free disposal of their property, and in the
the contract price; absence thereof, that they be legally authorized for the purpose.
the amount of P20,520.80 representing ive monthly amortizations
for February, March, April, May and June 1990; All these requirements are present in this case.
the amount of P3,000.00 representing amortization for November
1990; all plus legal interest from the constitution of the mortgage FIRST ISSUE: WAS THE REGISTERED MORTGAGE VALID?
up to the time the instant case was iled.
As to the irst essential requisite of a mortgage, it is undisputed that
Ordering said defendant corporation to pay further to plaintiffs the the mortgage was executed on May 15, 1989 as security for a loan
sum of P30,000.00 for moral damages, P10,000.00 for exemplary obtained by Oakland from Genato.
damages and P20,000.00 for and as reasonable attorney’s fees plus
cost; As to the second and third requisites, we need to discuss the
difference between a contract of sale and a contract to sell.


SECOND ISSUE: WAS THE REGISTERED MORTGAGE SUPERIOR TO

In a contract of sale, title to the property passes to the vendee upon THE CONTRACT TO SELL?
the delivery of the thing sold; in a contract to sell, ownership is, by
agreement, reserved by the vendor and is not to pass to the vendee In their memorandum, petitioners cite our ruling in State
until full payment of the purchase price. Investment House, Inc. v. Court of Appeals [13] to the effect that an
unregistered sale is preferred over a registered mortgage over the
Otherwise stated, in a contract of sale, the vendor loses ownership same property. The citation is misplaced.
over the property and cannot recover it unless and until the
contract is resolved or rescinded; in a contract to sell, title is This Court in that case explained the rationale behind the rule:The
retained by the vendor until full payment of the price.[8] unrecorded sale between respondents-spouses and SOLID is
preferred for the reason that if the original owner xxx had parted
In the contract between petitioners and Oakland, aside from the fact with his ownership of the thing sold then he no longer had
that it was denominated as a contract to sell, the intention of ownership and free disposal of that thing as to be able to mortgage
Oakland not to transfer ownership to petitioners until full payment it again.State Investment House is completely inapplicable to the
of the purchase price was very clear. Acts of ownership over the case at bar. A contract of sale and a contract to sell are worlds apart.
property were expressly withheld by Oakland from petitioner. All State Investment House clearly pertained to a contract of sale, not to
that was granted to them by the “occupancy permit” was the right to a contract to sell which was what Oakland and petitioners had. In
possess it. State Investment House, ownership had passed completely to the
buyers and therefore, the former owner no longer had any legal
Speci ically, the contract between Oakland and petitioners stated: right to mortgage the property, notwithstanding the fact that the
xxx xxx xxx new owner-buyers had not registered the sale. In the case before
us, Oakland retained absolute ownership over the property under
7. That the BUYER/S may be allowed to enter into and take the contract to sell and therefore had every right to mortgage it.
possession of the property upon issuance of Occupancy Permit by
the OWNER/DEVELOPER exclusively, although title has not yet In sum, we rule that Genato’s registered mortgage was superior to
passed to the BUYER/S, in which case his possession shall be that of petitioner’s contract to sell, subject to any liabilities Oakland may
a possessor by mere tolerance Lessee, subject to certain restrictions have incurred in favor of petitioners by irresponsibly mortgaging
contained in this deed. the property to Genato despite its commitments to petitioners
under their contract to sell.
xxx xxx xxx
THIRD ISSUE: WAS THE MORTGAGE IN GOOD FAITH?
13. That the BUYER/S cannot sell, mortgage, cede, transfer, assign
or in any manner alienate or dispose of, in whole or in part, the The third issue involves a factual matter which should not be raised
rights acquired by and the obligations imposed on the BUYER/S by in this petition. Only questions of law may be raised in a Rule 45
virtue of this contract, without the express written consent of the petition. This Court is not a trier of facts. The resolution of factual
OWNER/DEVELOPER. issues is the function of the lower courts. We therefore adopt the
factual indings of the Court of Appeals and uphold the good faith of
xxx xxx xxx the mortgagee Genato.
24. That this Contract to Sell shall not in any way [authorize] the RELIANCE ON WHAT APPEARS IN THE TITLE
BUYER/S to occupy the assigned house and lot to them.[9]
Just as an innocent purchaser for value may rightfully rely on what
xxx xxx xxx appears in the certi icate of title, a mortgagee has the right to rely
Clearly, when the property was mortgaged to Genato in May 1989, on what appears in the title presented to him. In the absence of
what was in effect between Oakland and petitioners was a contract anything to arouse suspicion, he is under no obligation to look
to sell, not a contract of sale. Oakland retained absolute ownership beyond the certi icate and investigate the title of the mortgagor
over the property. appearing on the face of the said certi icate. [14]
Ownership is the independent and general power of a person over a We agree with the indings and conclusions of the trial court
thing for purposes recognized by law and within the limits regarding the liabilities of Oakland in its August 16, 1996 decision,
established thereby.[10] According to Art. 428 of the Civil Code, this as af irmed by the Court of Appeals:Anent [plaintiffs’] prayer for
means that:The owner has the right to enjoy and dispose of a thing, damages, the Court inds that defendant corporation is liable to
without other limitations than those established by law. return to plaintiffs all the installments/payments made by plaintiffs
consisting of the amount of P10,000.00 representing payment for
xxx xxx xxx the ‘option to purchase lot’; the amount of P140,000.00 which was
Aside from the jus utendi and the jus abutendi [11] inherent in the the irst downpayment; the sum of P20,520.80 representing ive
right to enjoy the thing, the right to dispose, or the jus disponendi, is monthly amortizations for February, March, April, May and June
the power of the owner to alienate, encumber, transform and even 1990 and the amount of P3,000.00 representing amortization for
destroy the thing owned.[12] November 1990 plus legal interest from the time of the mortgage up
to the time this instant case was iled. Further, considering that
Because Oakland retained all the foregoing rights as owner of the defendant corporation wantonly and fraudulently mortgaged the
property, it was entitled absolutely to mortgage it to Genato. Hence, subject property without regard to [plaintiffs’] rights over the same,
the mortgage was valid. said defendant should pay plaintiffs moral damages in the
reasonable amount of P30,000.00. xxx Furthermore, since
defendant [corporation’s] acts have compelled the plaintiffs to


litigate and incur expenses to protect their interest, it should in their motion to dismiss, and alleging as well that the real contract
likewise be adjudged to pay plaintiffs attorney’s fees of P20,000.00 between the parties was an antichresis and not a mortgage. Pre-trial
under Article 2208 paragraph two (2) of the Civil of the case followed, after which the lower court rendered judgment
Code.[15]WHEREFORE, the petition for review is hereby DENIED. inding the mortgage valid to the extent of the mortgagor's
The decision of the Court of Appeals reinstating the August 16, 1996 pro-indiviso share of 15,333 square meters in the land in question,
decision of the trial court is hereby AFFIRMED. on the theory that the Public Land Law does not apply in this ease
because the mortgage in question was executed before patent was
SO ORDERED. issued over the land in question; that the agreement of the parties
could not be an antichresis because the deed Exhibit "A" clearly
Panganiban, (Chairman), Sandoval-Gutierrez, Carpio-Morales and shows a mortgage with usufruct in favor of the mortgagee; and
Garcia, JJ., concur. ordered the payment of the mortgage loan of P2,000 to plaintiff or,
upon defendant's failure to do so, the foreclosure of plaintiff's
Vda. de Bautista vs Marcos, G.R. No. mortgage on defendant Brigida Marcos' undivided share in the land
in question. From this judgment, defendants Brigida Marcos and her
L-17072, October 31, 1961 husband Osmondo Apolonio appealed to this Court.
113 Phil. 421
There is merit in the appeal.
The right of plaintiff-appellee to foreclose her mortgage on the land
G.R. No. L-17072, October 31, 1961
in question depends not so much oh whether she could take said
CRISTINA MARCELO VDA. DE BAUTISTA, PLAINTIFF AND
land within the prohibitive period of ive years from the issuance of
APPELLEE, VS. BRIGIDA MARCOS, ET AL., DEFENDANTS AND
defendant's patent for the satisfaction of the indebtedness in
APPELLANTS.
question, but on whether the deed of mortgage Exhibit "A" is at all
valid and enforceable, since the land mortgaged was apparently still
DECISION
part of the public domain when the deed of mortgage was
REYES, J.B.L., J.:
constituted. As it is an essential requisite for the validity of a
mortgage that the mortgagor be the absolute owner of the thing
The main question in this appeal is whether or not a mortgagee may
mortgaged (Art. 2085), the mortgage here in question is void and
foreclose a mortgage cm a piece of land covered by a free patent
ineffective because at the time it was constituted, the mortgagor
wljere the mortgage was executed before the patent was Issued and
was not yet the owner of the land mortgaged and could not, for that
is sought to be fore closed within ive years from its issuance.
reason, encumber the same to plaintiff-appellee. Nor could the
The facts of the case appear to be as follows:
subsequent acquisition by the mortgagor of title over said land
On May 17, 1954, defendant Brigida Marcos obtained a loan in the
through the issuance of a free patent validate and legalize the deed
amount of P2,000 from plaintiff Cristina Marcelo Vda. de Bautista
of mortgage under the doctrine of estoppel (cf. Art. 1434, New Civil
and to secure payment thereof conveyed to the latter by way of
Code [1]), since upon the issuance of said patent, the land in
mortgage a two (2) hectare portion of an unregistered parcel of land
question was thereby brought under the operation of the Public
situated in Sta. Ignacia, Tarlac. The deed of mortgage, Exhibit "A",
Land Law that prohibits the taking of said land for the satisfaction
provided that it was to last for three years, that possession of the
of debts contracted prior to the expiration of ive years from the
land mortgaged was to be turned over to the mortgagee by way of
date of the issuance of the patent (sec. 118, C.A. No. 141). This
usufruct, but with no obligation on her part to apply the harvests to
prohibition should include not only debts contracted during the
the principal obligation; that said mortgage would be released only
ive-year period immediately following the issuance of the patent
upon payment of the principal loan of P2,000 without any Interest;
but also those contracted before such issuance, if the purpose and
and that the mortgagor promised to defend and warrant the
policy of the law, which is "to preserve and keep in the family of the
mortgagee's rights over the land mortgaged.
homesteader that portion of public land which the State has
Subsequently, or in July, 1956, mortgagor Brigida Marcos iled, in
gratuitously given to him" (Pascua vs. Talens, 80 Phil., 792; 45 Off.
behalf of the heirs of her deceased mother Victoriana Cainglet (who
Gaz., No. 9 (Supp.) 413; De los Santos vs. Roman Catholic Church of
are Brigida herself and her three sisters,), an application for the
Midsayap, 94 Phil., 405; 50 Off. Gaz., [4] 1588, is to be upheld.
issuance of a free patent over the Iand in question, on the strength
The invalidity of the mortgage Exhibit "A" does not, however, imply
of the cultivation and occupation of said land by them and their
the concomitant invalidity of the collateral agreement in the same
predecessor since July, 1915. As a result, Free Patent No. V-64358
deed of mortgage whereby possession of the land mortgaged was
was issued to the applicants on January 25, 1957, and on February
transferred to plaintiff-appellee in usufruct, without any obligation
22, 1957, it was registered in their names under Ordinal Certi icate
on her part to account for its harvests or deduct them from
of Title No. P-888 of the of ice of the Register of Deeds for the
defendants' indebtedness of P2,000. Defendant Brigida Marcos,
province of Tarlac.
who, together with her sisters, was in possession of said land by
Defendant Brigida Marcos indebtedness of P2,000 to plaintiff
herself and through her deceased mother before her since 1915,
having regained unpaid up to 1959, the latter, on March 4, 1959,
had possessory rights over the same even before title vested in her
iled the present action against Brigida and her husband (Civil Case
as co-owner by the issuance of the free patent to her and her sisters,
No. 3382) in the court below for the payment thereof or in default
and these possessory rights, she could validly transfer and convey
of the debtors to pay, for the foreclosure of her mortgage on the land
to plaintiff-appellee, as she did in the deed of mortgage Exhibit "A".
given as security. Defendants moved to dismiss the action, pointing
The latter, upon the other hand, believing Tier mortgagor to be the
out that the land in question is covered by a free patent and could
owner of the land mortgaged and not being aware of any law which
not, therefore, under the Public Land Law, be taken Within ive
invalidated her mode of acquisition, was a possessor in good faith
years from the issuance of the patent for the payment of any debts
(Art.-526, N.C.C.), and as such had the right to all the fruits received
of the patentees contracted prior to the expiration of said ive-year
during the entire period of her possession in good faith (Art. 544,
period; but the lower court denied the motion to dismiss on the
N.C.C.). She is, therefore, entitled to the full payment of her credit of
ground that the law cited does not apply because the mortgage
P2,000 from defendants, without any obligation to account for the
sought to be foreclosed was executed before the patent was issued.
fruits or bene its obtained by her from the land in question.
Defendants then ifed their answer, reiterating the defense invoked


Wherefore, the judgment appealed from is reversed insofar as it respective farmholdings in violation of P.D. Nos. 316, 583, 815, and
orders the foreclosure of the mortgage in question, but af irmed in 1028.[1]
all other respects. Costs against defendant-appellants.
Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, On January 7, 1985, the Municipal Trial Court dismissed private
Paredes, and De Leon, JJ., concur. respondents’ complaint for forcible entry.[2] On appeal, the
Regional Trial Court of Antipolo, Rizal, Branch LXXI sustained the
German Management and Services, Inc. dismissal by the Municipal Trial Court.[3]
vs Court of Appeals, G.R. No. 76216, Private respondents then iled a petition for review with the Court
September 14, 1989 of Appeals. On July 24, 1986, said court gave due course to their
258 Phil. 289 petition and reversed the decisions of the Municipal Trial Court and
the Regional Trial Court.[4]
THIRD DIVISION
G.R. No. 76216, September 14, 1989 The Appellate Court held that since private respondents were in
GERMAN MANAGEMENT & SERVICES, INC., PETITIONER, VS. HON. actual possession of the property at the time they were forcibly
COURT OF APPEALS AND ORLANDO GERNALE, RESPONDENTS. ejected by petitioner, private respondents have a right to commence
an action for forcible entry regardless of the legality or illegality of
[G.R. No. 76217] possession.[5] Petitioner moved to reconsider but the same was
denied by the Appellate Court in its resolution dated September 26,
GERMAN MANAGEMENT & SERVICES, INC., PETITIONER, VS. HON. 1986.[6]
COURT OF APPEALS AND ERNESTO VILLEZA, RESPONDENTS.
Hence, this recourse.
DECISION
FERNAN, C.J,: The issue in this case is whether or not the Court of Appeals denied
due process to petitioner when it reversed the decision of the court
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of a quo without giving petitioner the opportunity to ile its answer
Pennsylvania, Philadelphia, USA are the owners of a parcel of land and whether or not private respondents are entitled to ile a forcible
situated in Sitio Inarawan, San Isidro, Antipolo, Rizal, with an area entry case against petitioner.[7]
of 232,942 square meters and covered by TCT No. 50023 of the
Register of Deeds of the province of Rizal issued on September 11, We af irm. The Court of Appeals need not require petitioner to ile
1980 which canceled TCT No. 56762/T-560. The land was originally an answer for due process to exist. The comment iled by petitioner
registered on August 5, 1948 in the Of ice of the Register of Deeds of on February 26, 1986 has suf iciently addressed the issues
Rizal as OCT No. 19, pursuant to a Homestead Patent granted by the presented in the petition for review iled by private respondents
President of the Philippines on July 27, 1948, under Act No. 141. before the Court of Appeals. Having heard both parties, the
Appellate Court need not await or require any other additional
On February 26, 1982, the spouses Jose executed a special power of pleading. Moreover, the fact that petitioner was heard by the Court
attorney authorizing petitioner German Management Services to of Appeals on its motion for reconsideration negates any violation
develop their property covered by TCT No. 50023 into a residential of due process.
subdivision. Consequently, petitioner on February 9, 1983 obtained
Development Permit No. 00424 from the Human Settlements Notwithstanding petitioner's claim that it was duly authorized by
Regulatory Commission for said development. Finding that part of the owners to develop the subject property, private respondents, as
the property was occupied by private respondents and twenty other actual possessors, can commence a forcible entry case against
persons, petitioner advised the occupants to vacate the premises petitioner because ownership is not in issue. Forcible entry is
but the latter refused. Nevertheless, petitioner proceeded with the merely a quieting process and never determines the actual title to
development of the subject property which included the portions an estate. Title is not involved.[8]
occupied and cultivated by private respondents.
In the case at bar, it is undisputed that at the time petitioner entered
Private respondents iled an action for forcible entry against the property, private respondents were already in possession
petitioner before the Municipal Trial Court of Antipolo, Rizal, thereof. There is no evidence that the spouses Jose were ever in
alleging that they are mountainside farmers of Sitio Inarawan, San possession of the subject property. On the contrary, private
Isidro, Antipolo, Rizal and members of the Concerned Citizens of respondents’ peaceable possession was manifested by the fact that
Farmer's Association; that they have occupied and tilled their they even planted rice, corn and fruit bearing trees twelve to ifteen
farmholdings some twelve to ifteen years prior to the promulgation years prior to petitioners’ act of destroying their crops.
of P. D. No. 27; that during the irst week of August 1983, petitioner,
under a permit from the Of ice of the Provincial Governor of Rizal, Although admittedly petitioner may validly claim ownership based
was allowed to improve the Barangay Road at Sitio Inarawan, San on the monuments of title it presented, such evidence does not
Isidro, Antipolo, Rizal at its expense, subject to the condition that it responsively address the issue of prior actual possession in a
shall secure the needed right of way from the owners of the lot to forcible entry case. It must be stated that regardless of the actual
be affected; that on August 15, 1983 and thereafter, petitioner condition of the title to the property, the party in peaceable quiet
deprived private respondents of their property without due process possession shall not be turned out by a strong hand, violence or
of law by: (1) forcibly removing and destroying the barbed wire terror.[9] Thus, a party who can prove prior possession can recover
fence enclosing their farmholdings without notice; (2) bulldozing such possession even against the owner himself. Whatever may be
the rice, corn, fruit bearing trees and other crops of private the character of his prior possession, if he has in his favor priority in
respondents by means of force, violence and intimidation, in time, he has the security that entitles him to remain in the property
violation of P. D. 1038 and (3) trespassing, coercing and threatening
to harass, remove and eject private respondents from their



until he is lawfully ejected by a person having better right by accion was divided into 9 lots and covered by plan Psu-225009. According
publicana or accion reividicatoria.[10] to the application. Lots 1-5 were sold to Jose de la Rosa and Lots 6-9
to his children by Mamaya Balbalio and Jaime Alberto, respectively,
Both the Municipal Trial Court and the Regional Trial Court have in 1964.[2]
rationalized petitioner's drastic action of bulldozing and destroying
the crops of private respondents on the basis of the doctrine of The application was separately opposed by Benguet Consolidated,
self-help enunciated in Article 429 of the New Civil Code.[11] Such Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to portions of
justi ication is unavailing because the doctrines of self-help can only Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines,
be exercised at the time of actual or threatened dispossession which through the Bureau of Forestry Development, as to Lots 1-9.[3]
is absent in the case at bar. When possession has already been lost,
the owner must resort to judicial process for the recovery of In support of the application, both Balbalio and Alberto testi ied
property. This is clear from Article 536 of the Civil Code which that they had acquired the subject land by virtue of prescription.
states, "(i)n no case may possession be acquired through force or Balbalio claimed to have received Lots 1-5 from her father shortly
intimidation as long as there is a possessor who objects thereto. He after the Liberation. She testi ied she was born in the land, which
who believes that he has an action or right to deprive another of the was possessed by her parents under claim of ownership.[4] Alberto
holding of a thing, must invoke the aid of the competent court, if the said he received Lots 6-9 in 1961 from his mother, Bella Alberto,
holder should refuse to deliver the thing." who declared that the land was planted by Jaime and his
predecessors-in-interest to bananas, avocado, nangka and camote,
WHEREFORE, the Court resolved to DENY the instant petition. The and was enclosed with a barbed-wire fence.
decision of the Court of Appeals dated July 24, 1986 is hereby
AFFIRMED. Costs against petitioner. She was corroborated by Felix Marcos, 67 years old at the time, who
recalled the earlier possession of the land by Alberto's father.[5]
SO ORDERED. Balbalio presented her tax declaration in 1956 and the realty tax
receipts from that year to 1964,[6] Alberto his tax declaration in
Bidin and Cortes, JJ., concur. 1961 and the realty tax receipts from that year to 1964.[7]
Gutirrez, Jr., J., in the result.
Feliciano, J., on leave. Benguet opposed on the ground that the June Bug mineral claim
covering Lots 1-5 was sold to it on September 22, 1934, by the
Republic vs Court of Appeals, G.R. No. successors-in-interest of James Kelly, who located the claim in
September 1909 and recorded it on October 14, 1909. From the
L-43938, April 15, 1988 date of its purchase, Benguet had been in actual, continuous and
243 Phil. 381
exclusive possession of the land in concept of owner, as evidenced
by its construction of adits, its af idavits of annual assessment, its
FIRST DIVISION
geological mappings, geological samplings and trench side cuts, and
G.R. No. L-43938, April 15, 1988
its payment of taxes on the land.[8]
REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST
DEVELOPMENT,) PETITIONER, VS. HON. COURT OF APPEALS
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots
(THIRD DIVISION) AND JOSE Y. DE LA ROSA, RESPONDENTS.
6-9 were covered by the Emma and Fredia mineral claims located
by Harrison and Reynolds on December 25, 1930, and recorded on
[G.R. NO. L-44081]
January 2, 1931, in the of ice of the mining recorder of Baguio.
These claims were purchased from these locators on November 2,
BENGUET CONSOLIDATED. INC., PETITIONER, VS. HON. COURT OF
1931, by Atok, which has since then been in open, continuous and
APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN AND
exclusive possession of the said lots as evidenced by its annual
EDUARDO, ALL SURNAMED DE LA ROSA, REPRESENTED BY THEIR
assessment work on the claims, such as the boring of tunnels, and
FATHER JOSE Y. DE LA ROSA, RESPONDENTS.
its payment of annual taxes thereon.[9]
[G.R. NO. L-44092]

The location of the mineral claims was made in accordance with
Section 21 of the Philippine Bill of 1902 which provided that:
ATOK-BIG WEDGE MINING COMPANY, PETITIONER, VS. HON.
"SEC. 21. All valuable mineral deposits in public lands in the
COURT OF APPEALS. JOSE Y. DE LA ROSA. VICTORIA, BENJAMIN
Philippine Islands both surveyed and unsurveyed are hereby
AND EDUARDO. ALL SURNAMED DE LA ROSA, REPRESENTED BY
declared to be free and open to exploration, occupation and
THEIR FATHER. JOSE Y. DE LA ROSA, RESPONDENTS.
purchase and the land in which they are found to occupation and
purchase by the citizens of the United States, or of said islands."The
DECISION
Bureau of Forestry Development also interposed its objection,
CRUZ, J.:
arguing that the land sought to be registered was covered by the
Central Cordillera Forest Reserve under Proclamation No. 217 dated
The Regalian doctrine reserves to the State all natural wealth that
February 16, 1929. Moreover, by reason of its nature, it was not
may be found in the bowels of the earth even if the land where the
subject to alienation under the Constitutions of 1935 and 1973.[10]
discovery is made be private.[1] In the cases at bar, which have been
consolidated because they pose a common issue, this doctrine was
The trial court** denied the application, holding that the applicants
not correctly applied.
had failed to prove their claim of possession and ownership of the
land sought to be registered.[11] The applicants appealed to the
These cases arose from the application for registration of a parcel of
respondent court,*** which reversed the trial court and recognized
land iled on February 11, 1965, by Jose de la Rosa on his own
the claims of the applicant, but subject to the rights of Benguet and
behalf and on behalf of his three children, Victoria, Benjamin and
Atok respecting their mining claims.[12] In other words, the Court
Eduardo. The land, situated in Tuding, Itogon, Benguet Province,


of Appeals af irmed the surface rights of the de la Rosas over the locator the bene icial ownership of the claim and the right to a
land while at the same time reserving the sub-surface rights of patent therefor upon compliance with the terms and conditions
Benguet and Atok by virtue of their mining claims. prescribed by law.'Where there is a valid location of a mining claim,
the area becomes segregated from the public domain and the
Both Benguet and Atok have appealed to this Court, invoking their property of the locator.' (St. Louis Mining & Milling Co. v. Montana
superior right of ownership. The Republic has iled its own petition Mining Co.. 171 U.S. 650; 655; 43 Law ed., 320. 322.) 'When a
for review and reiterates its argument that neither the private location of a mining claim is perfected it has the effect of a grant by
respondents nor the two mining companies have any valid claim to the United States of the right of present and exclusive possession,
the land because it is not alienable and registerable. with the right to the exclusive enjoyment of all the surface ground
as well as of all the minerals within the lines of the claim, except as
It is true that the subject property was considered forest land and limited by the extralateral right of adjoining locators; and this is the
included in the Central Cordillera Forest Reserve, but this did not locator's right before as well as after the issuance of the patent.
impair the rights already vested in Benguet and Atok at that time. While a lode locator acquires a vested property right by virtue of his
The Court of Appeals correctly declared that: location made in compliance with the mining laws, the fee remains
"There is no question that the 9 lots applied for are within the June in the government until patent issues.' (18 R.C.L. 1152;' (Gold Creek
Bug mineral claims of Benguet and the 'Fredia and Emma' mineral Mining Corporation v. Hon. Eulogio Rodriguez. Sec. of Agriculture
claims of Atok. The June Bug mineral claim of plaintiff Benguet was and Commerce, and Quirico Abadilla, Director of the Bureau of
one of the 16 mining claims of James E. Kelly, an American and Mines, 66 Phil. 259. 265-266)."It is of no importance whether
mining locator. He iled his declaration of the location of the June Benguet and Atok had secured a patent for as held in the Gold Creek
Bug mineral and the same was recorded in the Mining Recorder's Mining Corp. Case, for all physical purposes of ownership, the
Of ice on October 14. 1909. All of the Kelly claims had owner is not required to secure a patent as long as he complies with
subsequently-been acquired by Benguet Consolidated. Inc. the provisions of the mining laws; his possessory right, for all
Benguet's evidence is that it had made improvements on the June practical purposes of ownership, is as good as though secured by
Bug mineral claim consisting of mine tunnels prior to 1935. It had patent.
submitted the required af idavit of annual assessment. After World
War II. Benguet introduced improvements on mineral claim June "We agree likewise with the oppositors that having complied with
Bug. and also conducted geological mappings, geological sampling all the requirements of the mining laws, the claims were removed
and trench side cuts. In 1948. Benguet redeclared the 'June Bug' for from the public domain, and not even the government of the
taxation and had religiously paid the taxes. Philippines can take away this right from them. The reason is
obvious. Having become the private properties of the oppositors.
"The Emma and Fredia claims were two of the several claims of they cannot be deprived thereof without due process of
Harrison registered in 1931. and which Atok representatives law."[13]Such rights were not affected either by the stricture in the
acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Commonwealth Constitution against the alienation of all lands of
Emma and Fredia mineral claims of Atok Big Wedge Mining the public domain except those agricultural in nature for this was
Company. made subject to existing rights. Thus, in its Article XIII, Section 1, it
was categorically provided that:
"The June Bug mineral claim of Benguet and the Fredia and Emma "SEC. 1. All agricultural, timber and mineral lands of the public
mineral claims of Atok having been perfected prior to the approval domain, waters, minerals, coal, petroleum and other mineral oils, all
of the Constitution of the Philippines of 1935. they were removed forces of potential energy and other natural resources of the
from the public domain and had become private properties of Philippines belong to the State, and their disposition, exploitation,
Benguet and Atok. development, or utilization shall be limited to citizens of the
'it is not disputed that the location of the mining claim under Philippines or to corporations or associations at least 60% of the
consideration was perfected prior to November 15, 1935. when the capital of which is owned by such citizens, subject to any existing
Government of the Commonwealth was inaugurated: and according right, grant, lease or concession at the time of the inauguration of
to the laws existing at that time, as construed and applied by this the government established under this Constitution. Natural
court in McDuniel v. Apacihle and Cuisia (42 Phil. 749). a valid resources with the exception of public agricultural lands, shall not
location of a mining claim segregated the area from the public be alienated, and no license, concession, or lease for the
domain. Said the court in that case: 'The moment the locator exploitation, development or utilization of any of the natural
discovered a valuable mineral deposit on the lands located, and resources shall be granted for a period exceeding 25 years, except
perfected his location in accordance with law. the power of the as to water rights for irrigation, water supply, isheries, or industrial
United States Government to deprive him of the exclusive right to uses other than the development of water power, in which case
the possession and enjoyment of the located claim was gone, the bene icial use may be the measure and the limit of the
lands had become mineral lands and they were exempted from grant."Implementing this provision, Act No. 4268, approved on
lands that could be granted to any other person. The reservations of November 8, 1935, declared:
public lands cannot be made so as to include prior mineral "Any provision of existing laws, executive order, proclamation to the
perfected locations: and. of course, il a valid mining location is made contrary notwithstanding, all locations of mining claim made prior
upon public lands afterwards included in a reservation, such to February 8, 1935 within lands set apart as forest reserve under
inclusion or reservation does not affect the validity of the former Sec. 1826 of the Revised Administrative Code which would be valid
location. By such location and perfection, the land located is and subsisting location except to the existence of said reserve are
segregated from the public domain even as against the Government. hereby declared to be valid and subsisting locations as of the date of
(Union Oil Co. v. Smith. 249 U.S. 337; Van Mess v. Roonet. 160 Cal. their respective locations."The perfection of the mining claim
131; 27 Cyc 546). converted the property to mineral land and under the laws then in
force removed it from the public domain.[14] By such act, the
'The legal effect of a valid location of a mining claim is not only to locators acquired exclusive rights over the land, against even the
segregate the area from the public domain, but to grant to the government, without need of any further act such as the purchase of


the land or the obtention of a patent over it.[15] As the land had if only partly so, because it was enclosed with a fence and was
become the private property of the locators, they had the right to cultivated by those who were unlawfully occupying the surface.
transfer the same, as they did, to Benguet and Atok.
What must have misled the respondent court is Commonwealth Act
It is true, as the Court of Appeals observed, that such private No. 137, providing as follows:
property was subject to the "vicissitudes of ownership." or even to "Sec. 3. All mineral lands of the public domain and minerals belong
forfeiture by non-user or abandonment or, as the private to the State, and their disposition, exploitation, development or
respondents aver, by acquisitive prescription. However, the method utilization, shall be limited to citizens of the Philippines, or to
invoked by the de la Rosas is not available in the case at bar, for two corporations, or associations, at least 60% of the capital of which is
reasons. owned by such citizens, subject to any existing right, grant, lease or
concession at the time of the inauguration of government
First, the trial court found that the evidence of open, continuous, established under the Constitution."
adverse and exclusive possession submitted by the applicants was
insuf icient to support their claim of ownership. They themselves "SEC. 4. The ownership of. and the right to the use of land for
had acquired the land only in 1964 and applied for its registration agricultural, industrial, commercial, residential, or for any purpose
in 1965, relying on the earlier alleged possession of their other than mining does not include the ownership of. nor the right
predecessors-in-interest.[16] The trial judge, who had the to extract or utilize, the minerals which may be found on or under
opportunity to consider the evidence irst-hand and observe the the surface."
demeanor of the witnesses and test their credibility wr. not
convinced. We defer to his judgment in the absence of a showing "SEC. 5. The ownership of. and the right to extract and utilize the
that it was reached with grave abuse of discretion or without minerals included within all areas for which public agricultural land
suf icient basis.[17] patents are granted are excluded and e.xcepted from all such
patents."
Second, even if it be assumed that the predecessors-in-interest of
the de la Rosas had really been in possession of the subject "SEC. 6. The ownership of. and the right to extract and utilize. the
property, their possession was not in the concept of owner of the minerals included within all areas for which Torrens titles are
mining claim but of the property as agricultural land, which it was granted are excluded and excepted from all such titles."This is an
not. The property was mineral land, and they were claiming it as application of the Regalian doctrine which, as its name implies, is
agricultural land. They were not disputing the rights of the mining intended for the bene it of the Stale, not of private persons. The rule
locators nor were they seeking to oust them as such and to replace simply reserves to the State all minerals that may be found in public
them in the mining of the land. In fact, Balbalio testi ied that she and even private land devoted to "agricultural, industrial,
was aware of the diggings being undertaken "down below"[18] but commercial, residential or (for) an purpose other than mining."
she did not mind, much less protest, the same although she claimed Thus, if a person is the owner of agricultural land in which minerals
to be the owner of the said land. are discovered, his ow netship of such land does not give him the
right to extract or ulili/e the said minerals without the permission
The Court of Appeals justi ied this by saying there is "no con lict of of the State to which such minerals belong.
interest" between the owners of the surface rights and the owners
of the sub-surface rights. This is rather strange doctrine, for it is a The law in the reasoning of the respondent court is in supposing
well-known principle that the owner of a piece of land has rights that the rights over the land could be used for both mining and
not only to its surface but also to everything underneath and the non-mining purposes simultaneously. The correct interpretation is
airspace above it up to a reasonable height.[19] Under the aforesaid that once minerals are discovered in the land, whatever the use to
ruling, the land is classi ied as mineral underneath and agricultural which it is being devoted at the time, such use may be discontinued
on the surface, subject to separate claims of title. This is also by the State to enable it to extract the minerals therein in the
dif icult to understand, especially in its practical application. exercise of its sovereign prerogative. The land is thus converted to
mineral land and may not be used by any-private party, including
Under the theory of the respondent court, the surface owner will be the registered owner thereof, for any other purpose that will
planting on the land while the mining locator will be boring tunnels impede the mining operations to be undertaken therein. For the loss
underneath. The farmer cannot dig a well because he may interfere sustained by such owner, he is of course entitled to just
with the mining operations below and the miner cannot blast a compensation under the Mining Laws or in appropriate
tunnel lest he destroy the crops above. How deep can the farmer, expropriation proceedings.[21]
and how high can the miner, go without encroaching on each other's
rights? Where is the dividing line between the surface and the Our holding is that Benguet and Atok have exclusive rights to the
sub-surface rights? property in question by virtue of their respective mining claims
which they validly acquired before the Constitution of 1935
The Court feels that the rights over the land are indivisible and that prohibited the alienation of all lands of the public domain except
the land itself cannot be half agricultural and half mineral. The agricultural lands, subject to vested rights existing at the time of its
classi ication must be categorical; the land must be either adoption. The land was not and could not have been transferred to
completely mineral or completely agricultural. In the instant case, the private respondents by virtue of acquisitive prescription, nor
as already observed, the land which was originally classi ied as could its use be shared simultaneously by them and the mining
forest land ceased to be so and became mineral — and completely companies for agricultural and mineral purposes.
mineral — once the mining claims were perfected.[20]
WHEREFORE, the decision of the respondent court dated April 30,
As long as mining operations were being undertaken thereon, or 1976, is SET ASIDE and that of the trial court dated March 11, 1969,
underneath, it did not cease to be so and become agricultural, even is REINSTATED, without any pronouncement as to costs.


SO ORDERED. on 23 November 1990, the amended complaint was admitted upon

a inding that there was no alteration of the cause of action.
Teehankee, C.J., Narvasa, Gancayco, and Griñ o-Aquino, JJ., concur. On 26 November 1990, upon AIPI posting a bond of P1 Million, and
considering the answer of PDEC admitting the ownership of the
Arabesque Industrial Philippines vs boat by AIPI, the court granted the replevin and ordered the return
of the boat to AIPI.
Court of Appeals, G.R. No. 101431, On 29 November 1990, PDEC iled an “Urgent Motion to Annul,
December 14, 1992 Revoke, Recall and Lift the Order Admitting the Amended Complaint
dated November 23, 1990 and Order of Seizure dated November 26,
1990”.
FIRST DIVISION Meanwhile, on 14 December 1990, the sheriffs enforcing the writ of
G.R. No. 101431, December 14, 1992 replevin took possession of the boat and delivered the same to AIPI.
ARABESQUE INDUSTRIAL PHILIPPINES, INC., PETITIONER, VS. After denial of the motion of PDEC on 20 March 1991, it iled a
COURT OF APPEALS AND PNOC DOCKYARD AND ENGINEERING petition for certiorari and prohibition with the Court of Appeals
CORPORATION, RESPONDENTS. under Rule 65 seeking to set aside the orders of the trial court of 23
November 1990, 26 November 1990, and 20 March 1991 admitting
RESOLUTION the amended complaint, granting the writ of replevin, and denying
BELLOSILLO, J.: the urgent motion of PDEC, respectively.
On 19 July 1991, the Court of Appeals set aside the order of 26
Although iled as a special civil action for certiorari under Rule 65, November 1990 and directed the return of the boat to PDEC on the
this petition is actually in the nature of a petition for review under ground that the chattel was not wrongfully detained but possessed
Rule 45 praying for the reversal of a decision of the Court of in the exercise of PDEC of a mechanic’s lien for its unpaid repair
Appeals; hence, We treat it under the latter Rule. bills. The procedural lapse of the court a quo in granting without
The records show that on 19 April 1989, Arabesque Industrial hearing AIPI’s leave to ile amended complaint was cured by PDEC’s
Philippines, Inc. (AIPI), bought at public auction the tugboat MT “Urgent Motion to Annul, Revoke and Lift the Order Admitting the
Rover of respondent PNOC Dockyard and Engineering Corp. (PDEC). Amended Complaint, etc.” Invoking the doctrine in Portugal v.
Despite notice by PDEC that it was imposing lay day charges if the Reantaso,[1] the Court of Appeals ruled that lack of due process is
boat was not removed from its premises by 9 May 1989, AIPI did not absence of previous notice but absolute absence of opportunity
not remove the boat; instead, it engaged PDEC to repair it. The bill to be heard. As regards admission of the amended complaint, the
for the repair rose to P1,681,896.30. Petitioner AIPI paid only appellate court held that what are barred by Sec. 3, Rule 10, of the
P329,115.00 leaving a balance of P1,352,781.30. After evaluating Rules of Court are amendments which substantially change the
the repair work, AIPI expressed willingness to pay only an cause of action or the theory of the case, hence, the addition of the
additional of P494,593.60. prayer for a writ of replevin, being implied from the main cause of
On 7 September 1990, AIPI received from Atty. Rosendo Chaves, a action, may be allowed.
notary public, a notice for the sale of the boat at public auction AIPI now questions the decision of the Court of Appeals. It argues
slated for 14 September 1990, pursuant to Arts. 2241 (5), 2243 and that respondent appellate court should not have set aside the writ
2212 of the Civil Code. Under Art. 2241, credits for the marking, of replevin because AIPI is the owner of the boat and that the right
repairs, safekeeping or preservation of personal property, on the of an owner is superior to that of a mere lien holder. AIPI contends
movable-made, repaired, kept or possessed constitutes ifth in the that lay day fees are incurred by it for continuous possession of the
order of preference (par. 5), such credit being considered under Art. boat by PDEC, and that AIPI should not be made to suffer for PDEC’s
2245 as a mortgage or lien within the purview of the legal refusal to release the boat. Moreover, the return of the boat to PDEC
provisions governing insolvency. From the time of judicial demand, should have been refused as it has not posted a counterbond. AIPI
the interest due on such credit shall earn legal interest according to argues that the petition should have been dismissed by the
Art. 2212 although the obligation may be silent on this point. appellate court and remanded the case to the court a quo as it
Subsequently, AIPI sued PDEC and Notary Public Rosendo Chaves involved factual issues, like the determination of reasonable
for the nulli ication of the public auction sale plus accounting, with expenses for the repair. Finally, AIPI disputes the resolution of
prayer for preliminary injunction before RTC, Branch 147, Makati, respondent appellate court on the challenge to the interlocutory
contending that Arts. 2241 and 2243 of the Civil Code cited by PDEC orders of the court a quo because such orders are unappealable.
were not applicable as AIPI was not yet judicially declared Private respondent PDEC, in its comment, points to the admission
insolvent, AIPI praying for immediate injunction of the auction sale by AIPI of delivering the boat to PDEC for repair as fatal to the
and for PDEC to accept P494,593.60 as reasonable and complete instant petition. PDEC asserts its right to retain possession of the
payment of its services. chattel until the repair fees are fully settled, pursuant to Arts. 1731,
On 12 September 1990, Judge Teo ilo Guadiz, Jr., of the Regional 2098, 2105, 2112 and 2122 of the Civil Code. In its reply, AIPI
Trial Court, Makati, enjoined PDEC and Notary Public Chaves from reiterates the arguments in its petition, and adds that Art. 1731 of
holding the slated public auction sale until after its hearing set 1 the Civil Code, which states that he who has executed works on a
October 1990. movable has the right to retain it by way of pledge until paid, does
On 20 September 1990, PDEC iled an omnibus motion in not apply because it actually remitted payments to PDEC.
opposition of the injunction and praying for the lifting of the TRO, Simply stated, the principal issues before Us are whether the writ of
for summary judgment upon admission of AIPI of the liability of replevin was properly issued by the court a quo, and whether the
P494,593.60, and for the dismissal of the complaint. AIPI opposed interlocutory orders issued herein are appealable.
the motion. On the irst issue, respondent Court of Appeals correctly set aside
On 3 October 1990, upon iling by AIPI of a bond of P100,000.00, the writ of replevin. Such writ cannot be properly directed against a
the trial court issued a preliminary injunction against the sale of the lawful possessor of a chattel, and the matter of ownership as well as
boat. incurring of additional lay day fees by the continued detention of
On 19 October 1990, PDEC iled an answer, amended on 28 October the boat by PDEC is therefore inconsequential. The requirement of
1990. AIPI moved to amend the complaint, which was granted, and



posting a counterbond to reacquire possession of the chattel subject an order dated May 19, 1986, the Regional Trial Court of Cebu
of the writ, does not apply in the case at bar because that Branch VIII denied the motion for reconsideration and directed the
presupposes a previous valid writ. In the case before Us, however, delivery of the subject vehicle to petitioner. Not satis ied, herein
the chattel was ordered returned to PDEC because the writ was private respondents iled with the Court of Appeals a Petition for
improperly issued. De initely, it was not issued on the basis of the Certiorari and Prohibition praying for the nulli ication of the orders
non-posting of a counterbond. dated April 18, 1986 and May 19, 1986.
As regards the second issue, interlocutory orders, because they do Meanwhile, a case for Carnapping docketed as I.S. No. 86-185,
not dispose of the case on the merits, are not appealable; entitled "Alex De Leon, Complainant, vs. Romeo Chua, Respondent"
consequently, they were correctly made subject of a petition for pending preliminary investigation before the Of ice of the City Fiscal
certiorari/prohibition before the Court of Appeals under Rule 65 of of Cebu City was provisionally dismissed upon motion of Romeo
the Rules of Court. Chua with the following reservation: "without prejudice to its
WHEREFORE, inding no reversible error committed by respondent reopening once the issue of ownership is resolved", (Rollo, p. 62).
Court of Appeals, We RESOLVE to DENY DUE COURSE to the In a decision dated May 7, 1987, the Court of Appeals reversed the
Petition. Regional Trial Court of Cebu City Branch VIII, and nulli ied the
SO ORDERED. questioned orders. The appellate court ordered the dismissal of the
Cruz, (Chairman), Padilla, and Griñ o-Aquino, JJ., concur. Replevin action, and directed that possession of the subject vehicle
be restored to Canoy. It applied the ruling in the case of
Chua vs Court of Appeals, G.R. No. 79021, Pagkalinawan vs. Gomez (21 SCRA 1275 [1967]) which held:
"Once a Court of First Instance has been informed that a search
May 17, 1993 warrant has been issued by another court of irst instance, it cannot
require a sheriff or any proper of icer of the court to take the
THIRD DIVISION
property subject of the replevin action, if theretofore it came into
G.R. No. 79021, May 17, 1993
custody of another public of icer by virtue of a search warrant. Only
ROMEO S. CHUA, PETITIONER, VS. THE HON. COURT OF APPEALS,
the court of irst instance that issued such a search warrant may
DENNIS CANOY, AND ALEX DE LEON, RESPONDENTS.
order its release."
Furthermore, it was also pointed out in the same case that the
DECISION
validity of a search warrant may only be questioned in the same
BIDIN, J.:
court that issued it.
Petitioner moved for a reconsideration of the decision, but the
This is a petition for review on certiorari under Rule 45 of the
respondent court denied the same. Thus, petitioner iled this appeal
Revised Rules of Court assailing the decision of the Court of Appeals
by certiorari. The parties submitted their respective memoranda,
dated May 7, 1987 which nulli ied the orders dated April 18, 1986
and thereafter the case was deemed submitted for decision.
and May 19, 1986 of the Regional Trial Court of Cebu City Branch
The issue presented before the Court is whether or not the validity
VIII.
of a seizure made pursuant to a search warrant issued by a court
The facts of the case are not disputed. On April 12, 1986, Judge
can be questioned in another branch of the same court, where the
Lauro V. Francisco of the Regional Trial Court of Cebu City Branch
criminal action iled in connection with which the search warrant
XIII, after examining 2Lt. Dennis P. Canoy and two (2) other
was issued, had been dismissed provisionally.
witnesses, issued a search warrant directing the immediate search
At the outset, it must be pointed out that the ruling made by the
of the premises of R.R. Construction located at M.J. Cuenco Avenue,
Of ice of the City Fiscal in the complaint for carnapping was
Cebu City, and the seizure of an Isuzu dump truck with plate
erroneous. It held: "x x x the preliminary investigation of that case is
number GAP-175. At twelve noon of the same date, respondent
premature until such time that the issue of ownership will be
Canoy seized the aforesaid vehicle and took custody thereof.
resolved by the Court of Appeals, so that the instant case is hereby
On April 14, 1986, a civil action for Replevin/Sum of Money for the
dismissed provisionally without prejudice to its reopening once the
recovery of possession of the same Isuzu dump truck was iled by
issue of ownership is resolved in favor of complainant,"
petitioner against respondent Canoy and one "John Doe" in the
(underscoring supplied).
Regional Trial Court of Cebu City Branch VIII, presided by Judge
A criminal prosecution for carnapping need not establish the fact
Leonardo B. Cañ ares and docketed thereat as Civil Case No. CEB
that complainant therein is the absolute owner of the motor vehicle.
4384 alleging among other things, petitioner's lawful ownership
What is material is the existence of evidence which would show that
and possession of the subject vehicle; that he has not sold the
respondent took the motor vehicle belonging to another. The
subject vehicle to anyone; that he has not stolen nor carnapped it,
Anti-Carnapping Law or Republic Act No. 6539 punishes as
and that he has never been charged of the crime of carnapping or
carnapping the taking with intent to gain, of a motor vehicle
any other crime for that matter. Further, petitioner questioned the
belonging to another person, without the latter's consent or by
validity of the search warrant and the subsequent seizure of the
means of violence or intimidation of person or by using force upon
subject vehicle on the strength of the aforesaid search warrant.
things.
On the same date, April 14, 1986, Judge Cañ ares of the Regional
Another aspect which needs to be stressed is the fact that since a
Trial Court of Cebu City Branch VIII directed the issuance of a writ
preliminary investigation is not part of the trial, the dismissal of a
of replevin upon the posting of a bond in the amount of one
case by the iscal will not constitute double jeopardy and hence
hundred thousand pesos (P100,000.00). The writ of replevin was
there is no bar to the iling of another complaint for the same
also issued on the same date, and the subject vehicle was seized on
offense (People vs. Medted, 68 Phil 435).
15 April 1986 by Deputy Sheriff Galicano V. Fuentes.
We ind no merit in the main issue presented before Us. Petitioner
On April 16, 1986, respondent Canoy iled a motion for the
seeks a reversal of a decision of the Court of Appeals which relied
dismissal of the complaint and for the quashal of the writ of
on the decision in Pagkalinawan vs. Gomez (supra).
replevin. The motion was opposed by petitioner. The motion to
The principle followed among courts in the dispensation of justice
dismiss and to quash the writ of replevin was denied in an Order
is that a judge who presides in a branch of a court cannot modify or
dated April 18, 1986. A motion for reconsideration of the
annul the orders issued by another branch of the same court, since
aforementioned Order was iled and was opposed by petitioner. In


the two (2) courts are of the same rank, and act independently but (underscoring supplied), or the criminal information has actually
coordinately (Montesa vs. Manila Cordage Co., 92 Phil 25 [1952]). been commenced, or iled, and actually prosecuted, and there are
It is a basic tenet of civil procedure that replevin will not lie for con licting claims over the property seized, the proper remedy is to
property in custodia legis. A thing is in custodia legis when it is question the validity of the search warrant in the same court which
shown that it has been and is subjected to the of icial custody of a issued it and not in any other branch of the said court.
judicial executive of icer in pursuance of his execution of a legal writ Thus, the Regional Trial Court of Cebu Branch VIII erred when it
(Bagalihog vs. Fernandez, 198 SCRA 614 [1991]). The reason ordered the transfer of possession of the property seized to
posited for this principle is that if it was otherwise, there would be petitioner when the latter iled the action for replevin. It should
interference with the possession before the function of the law had have dismissed the case since by virtue of the "provisional
been performed as to the process under which the property was dismissal" of the carnapping case there is still a probability that a
taken. Thus, a defendant in an execution or attachment cannot criminal case would be iled, hence a con lict in jurisdiction could
replevy goods in the possession of an of icer under a valid process, still arise. The basic principle that a judge who presides in one court
although after the levy is discharged, an action to recover cannot annul or modify the orders issued by another branch of the
possession will lie (Francisco, Revised Rules of Court in the same court because they are co-equal and independent bodies
Philippines: Provisional Remedies, p. 402 [1985]). acting coordinately, must always be adhered to.
The Court had occasion to rule on this issue in the case of Vlasons WHEREFORE, the petition is denied. The decision of the Court of
Enterprises Corporation vs. Court of Appeals (155 SCRA 186 Appeals dated May 7, 1987 is AFFIRMED.
[1987]). In the aforementioned case, two (2) propeller pieces were SO ORDERED.
seized on the strength of a search warrant issued by the Court of
First Instance of Manila Branch XVIII. After the seizure, criminal Feliciano, (Chairman), Davide, Jr., Romero, and Melo, JJ., concur.
complaints were iled against the alleged thieves. However, the
complaints were later on dismissed. Five (5) months later, a civil Peralta-Labrador vs Bagarin, G.R. No.
action for the recovery of the possession of the propellers were iled
in the Court of First Instance of Manila Branch XXIX. The latter court 165177, August 25, 2005
505 Phil. 409
granted the motion for repossession of the propellers. On appeal
this Court held:
FIRST DIVISION
"The proceeding for the seizure of the property in virtue of a search
G.R. NO. 165177, August 25, 2005
warrant does not end with the actual taking of the property x x x
LILIA V. PERALTA-LABRADOR, PETITIONER, VS. SILVERIO
and its delivery x x x, to the court x x x. It is merely the irst step in
BUGARIN, SUBSTITUTED BY HIS WIDOW, CONSOLACION
the process to determine the character of the seized property. That
BUGARIN,[1] RESPONDENT.
determination is done in the criminal action involving the crime or
crimes in connection with which the search warrant was issued.
DECISION
Hence, such a criminal action should be prosecuted, or commenced
if not yet instituted, and prosecuted. The outcome of the criminal
action will dictate the disposition of the seized property." (Vlasons
Challenged in this petition for review on certiorari is the March 12,
Enterprises Corp. vs. Court of Appeals, supra.
2004 decision[2] of the Court of Appeals in CA-G.R. SP No. 57475,
In the Vlasons case, the Court differentiated the case brought before
which af irmed with modi ication the January 26, 2000 judgment[3]
it therein, from the Pagkalinawan case. It stated that in the
of the Regional Trial Court (RTC) of Iba, Zambales, Branch 71, in
Pagkalinawan case, there was a con lict in jurisdiction. On the other
Civil Case No. RTC-1590-I, which in turn af irmed the decision[4]
hand, in the Vlasons case, it was certain that no criminal case would
dated May 16, 1999 of the Municipal Trial Court (MTC) of San
ensue subsequent to or in connection with the search warrant,
Felipe, Zambales, in Civil Case No. 328, and its September 6, 2004
hence no con lict in jurisdiction or in the ultimate disposition of the
resolution[5] denying reconsideration thereof.
property could arise. Thus, where personal property is seized under
a search warrant and it appears that the seizure will not be followed
On January 18, 1996, petitioner Lilia V. Peralta-Labrador iled a case
by the iling of any criminal action, but there are con licting claims
for "Recovery of Possession and Ownership," docketed as Civil Case
asserted over the seized property, the appropriate remedy is the
No. 328, with the MTC of San Felipe, Zambales. She alleged that she
institution of an ordinary civil action by any interested party, or of
is the owner of Cadastral Lot No. 2650, with an area of 400 sq. m.
an interpleader action by the Government itself, in the proper
located at Sitio Caarosipan, Barangay Manglicmot, San Felipe,
competent court to which the seizing court shall transfer custody of
Zambales, having purchased the same in 1976 from spouses
the articles. Another branch of the same court, in an action to
Artemio and Angela Pronto. In 1977, she was issued Tax Declaration
recover said property and during the pendency thereof, cannot
No. 10462 and paid the taxes due thereon.[6]
order the delivery of said personal property to therein plaintiff
pendente lite.
In 1990, the Department of Public Works and Highways constructed
Construing the Pagkalinawan case together with the Vlasons case,
a road which traversed Cadastral Lot No. 2650 thereby separating
we rule that where personal property is seized under a search
108 sq. m. from the rest of petitioner's lot, for which she was issued
warrant and there is reason to believe that the seizure will not
Tax Declaration No. 02-2460R in 1991.[7]
anymore be followed by the iling of a criminal action, and there are
con licting claims over the seized property, the proper remedy is the
Sometime in 1994, respondent Silverio Bugarin forcibly took
iling of an action for replevin, or an interpleader iled by the
possession of the 108 sq. m. lot and refused to vacate the same
Government in the proper court, not necessarily the same one
despite the pleas of petitioner. Hence, on January 18, 1996, she
which issued the search warrant; however, where there is still a
instituted a complaint for recovery of possession and ownership
probability that the seizure will be followed by the iling of a
against respondent.
criminal action, as in the case at bar where the case for carnapping
was "dismissed provisionally, without prejudice to its reopening
In his Answer with Counterclaims,[8] respondent contended that
once the issue of ownership is resolved in favor of complainant"
the area claimed by petitioner is included in the 4,473 square meter


lot, covered by the Original Certi icate of Title (OCT) No. P-13011; accrual of the cause of action or from the unlawful withholding of
and that he has been in continuous possession and occupation possession of the realty independently of title. Likewise, the case
thereof since 1955. In his Amended Answer with Counterclaim,[9] may be instituted before the same court as an accion
however, respondent failed to allege that the questioned lot is reivindicatoria, which is an action to recover ownership as well as
covered by the OCT No. P-13011, and instead asserted that he possession.[14]
planted fruit bearing trees in the property. Respondent further
pleaded the defenses of lack of cause of action and prescription. Corrollarily, jurisdiction of a court is determined by the allegations
of the complaint. Thus, in ascertaining whether or not the action
On May 16, 1999, the court a quo ruled in favor of respondent falls within the exclusive jurisdiction of the inferior courts, the
declaring him as the owner of the controverted lot on the basis of averments of the complaint and the character of the relief sought
the OCT No. P-13011. The complaint was dismissed for failure of are to be examined.[15]
petitioner to prove prior physical possession and ownership
thereof. The dispositive portion thereof, reads: In the instant case, petitioner's complaint alleges that:
WHEREFORE, all the foregoing premises considered and for failure That plaintiff is the owner of a parcel of land denominated as
on the part of the plaintiff to establish the preponderance of Cadastral lot No. 2650, San Felipe Cadastre, situated at sitio
evidence of prior actual physical possession and present title over Caarosipan, Barangay Manglicmot, San Felipe, Zambales which she
the lot in her favor, let the instant case be ordered DISMISSED, and bought in 1976 from Spouses Artemio Pronto and Angela Merano
the defendant be awarded the rightful possession and ownership of when she was still a widow, with the following boundaries: North,
the same and the plaintiff is hereby ordered to pay FIFTEEN Alipio Abad, East, Antonio Cueva, South, Juan Borja, and West, Old
THOUSAND (P15,000.00) PESOS as reasonable Attorney's fee and Provincial Road, containing an area of 108 square meters, declared
FIVE THOUSAND (P5,000.00) PESOS as appearance fee plus costs. under Tax Declaration No. 002-1860R and assessed at P1,120.00;
SO ORDERED.[10]The RTC af irmed the assailed decision,[11] hence

petitioner iled a petition for review before the Court of Appeals That plaintiff has been in open, continuous, exclusive and adverse as
which was however denied for insuf iciency of evidence to prove well as notorious possession of the said lot and in the concept of an
ownership or prior actual physical possession. The appellate court owner since she [acquired] it in 1976 until the time when defendant
deleted the monetary awards in favor of respondent as well as the took possession forcibly, two years ago;
declaration of the MTC that respondent is the owner of the
questioned lot on the ground that the OCT No. P-13011, relied upon
by said court was not formally offered in evidence, hence, cannot be That in or before 1990 the land was traversed by a new National
considered by the court. The decretal portion thereof, states: Highway and the land was segregated from a bigger portion of the
WHEREFORE, in view of the foregoing discussion, the instant land, the western portion is now the land in question and since the
petition is hereby PARTIALLY GRANTED. The assailed Decision new provincial road which traversed the whole land of the plaintiff,
dated January 26, 2000, in Civil Case No. RTC 1590 I of the Regional the old highway which is west of Lot 2650 shall belong to the
Trial Court (RTC), Branch 71, Iba, Zambales, and Decision dated May plaintiff in compensation of the portion of her lot traversed by the
16, 1999, in Civil Case No. 328 of the Municipal Trial Court of San new highway, said old highway is also taken by defendant
Felipe, Zambales are MODIFIED by deleting the declaration of unlawfully;[16]
ownership as to the disputed 108 square meters and the monetary It is clear that petitioner's averment make out a case for forcible
award in favor of respondent Silverio Bugarin. However, the entry because she alleged prior physical possession of the subject
dismissal of the complaint is AFFIRMED. lot way back in 1976, and the forcible entry thereon by respondent.
Considering her allegation that the unlawful possession of
SO ORDERED.[12]The motion for reconsideration iled by petitioner respondent occurred two years[17] prior to the iling of the
was denied. Hence the instant petition. complaint on January 18, 1996, the cause of action for forcible entry
has prescribed and the MTC had no jurisdiction to entertain the
Pertinent portion of Section 1, Rule 70 of the Revised Rules of Civil case. Petitioner's complaint therefore should have been iled with
Procedure, provides: the proper RTC.
SECTION 1. Who may institute proceedings, and when. -... a person
deprived of the possession of any land or building by force, It is settled that jurisdiction over the subject matter cannot be
intimidation, threat, strategy, or stealth, ... may at any time within waived by the parties or cured by their silence, acquiescence or
one (1) year after such unlawful deprivation or withholding of even express consent.[18] Hence, the failure of respondent to insist
possession, bring an action in the proper Municipal Trial Court on the defenses of lack of cause of action and prescription stated in
against the person or persons unlawfully withholding or depriving his Amended Answer with Counterclaim will not vest the MTC with
of possession, or any person or persons claiming under them, for jurisdiction over the case.
the restitution of such possession, together with the damages and
costs. (Emphasis supplied)In Lopez v. David Jr.,[13] it was held that On this point, the Court held in Bongato v. Malvar[19] that:
an action for forcible entry is a quieting process and the one year It is wise to be reminded that forcible entry is a quieting process,
time bar for iling a suit is in pursuance of the summary nature of and that the restrictive time bar is prescribed to complement the
the action. Thus, we have nulli ied proceedings in the MTCs when it summary nature of such process. Indeed, the one-year period
improperly assumed jurisdiction of a case in which the unlawful within which to bring an action for forcible entry is generally
deprivation or withholding of possession had exceeded one year. counted from the date of actual entry to the land. However, when
After the lapse of the one year period, the suit must be commenced entry is made through stealth, then the one-year period is counted
in the RTC via an accion publiciana, a suit for recovery of the right to from the time the plaintiff learned about it. After the lapse of the
possess. It is an ordinary civil proceeding to determine the better one-year period, the party dispossessed of a parcel of land may ile
right of possession of realty independently of title. It also refers to either an accion publiciana, which is a plenary action to recover the
an ejectment suit iled after the expiration of one year from the


right of possession; or an accion reivindicatoria, which is an action HUBERT NUNEZ, PETITIONER, VS. SLTEAS PHOENIX SOLUTIONS,
to recover ownership as well as possession. INC., THROUGH ITS REPRESENTATIVE, CESAR SYLIANTENG
RESPONDENT,
On the basis of the foregoing facts, it is clear that the cause of action
for forcible entry iled by respondents had already prescribed when DECISION
they iled the Complaint for ejectment on July 10, 1992. Hence, even PEREZ, J.:
if Severo Malvar may be the owner of the land, possession thereof
cannot be wrested through a summary action for ejectment of The determination of the jurisdiction of irst level courts over
petitioner, who had been occupying it for more than one (1) year. ejectment cases is at the heart of this Petition for Review on
Respondents should have presented their suit before the RTC in an Certiorari iled pursuant to Rule 45 of the 1997 Rules of Civil
accion publiciana or an accion reivindicatoria, not before the MTCC Procedure, which seeks the nulli ication and setting aside of the 31
in summary proceedings for forcible entry. Their cause of action for July 2007 Decision rendered by the Special Twelfth Division of the
forcible entry had prescribed already, and the MTCC had no more Court of Appeals in CA-G.R. SP No. 91771. [1]
jurisdiction to hear and decide it.
The Facts
...
The subject matter of the instant suit is a 635.50 square meter
Further, a court's lack of jurisdiction over the subject matter cannot parcel of land situated at Calle Solana, Intramuros, Manila and
be waived by the parties or cured by their silence, acquiescence or registered in the name of respondent SLTEAS Phoenix Solutions,
even express consent. A party may assail the jurisdiction of the Inc. under Transfer Certi icate of Title (TCT) No. 87556 of the
court over the action at any stage of the proceedings and even on Manila City Registry of Deeds. Despite having acquired the same
appeal. That the MTCC can take cognizance of a motion to dismiss thru the 4 June 1999 Deed of Assignment executed in its favor by
on the ground of lack of jurisdiction, even if an answer has been the Spouses Ong Tiko and Emerenciana Sylianteng,[2] it appears
belatedly iled we likewise held in Bayog v. Natino[.]Moreover, even that respondent was constrained to leave the subject parcel idle and
if the MTC has jurisdiction over the subject matter, the complaint unguarded for some time due to important business concerns. In
should still be dismissed because petitioner failed to prove that the October 2003, an ocular inspection conducted by respondent's
controverted 108 sq. m. lot is part of Cadastral Lot No. 2650. representatives revealed that the property was already occupied by
Petitioner admitted that she has never seen the Cadastral Map of petitioner Hubert Nuñ ez and 21 other individuals.[3] Initially
San Felipe, Zambales, and relied only on the Survey Noti ication faulting one Vivencia Fidel with unjusti ied refusal to heed its verbal
Card[20] from the Bureau of Lands,[21] with a sketch of Cadastral demands to vacate the subject parcel, respondent iled its 5
Lot No. 2650. Said card, however, does not re lect the 108 sq. m. lot December 2003 complaint for forcible entry which was docketed as
subject of this case. Neither did petitioner cause the survey of Civil Case No. 177060 before Branch 4 of the Metropolitan Trial
Cadastral Lot No. 2650 after the construction of a new road to prove Court (MeTC) of Manila.[4]
that the segregated portion on the western side is part thereof. Ei
incumbit probotio qui dicit, non qui negat. He who asserts, not he Additionally impleading petitioner and the rest of the occupants of
who denies, must prove.[22] Failing to discharge this burden, the the property, respondent iled its 9 January 2004 amended
dismissal of the complaint is proper. complaint, alleging, among other matters, that thru its
representatives and predecessors-in-interest, it had continuously
In the same vein, ownership of the lot in question cannot be possessed the subject realty, over which it exercised all attributes of
awarded to respondent considering that OCT No. P-13011,[23] and ownership, including payment of real property taxes and other
the Survey Plan[24] were not formally offered in evidence. While sundry expenses; that without the bene it of any lease agreement or
the issue of ownership may be passed upon in ejectment cases for possessory right, however, petitioners and his co-defendants have
the sole purpose of determining the nature of possession,[25] no succeeded in occupying the property by means of strategy and
evidence conclusively show that the lot in question is covered by stealth; and, that according to reliable sources, the latter had been
said OCT No. P-13011 or any other title of respondent. in occupancy of the same parcel since 1999. Together with the
ejectment of the occupants of the subject premises, respondent
WHEREFORE, the May 16, 1999 decision of the Municipal Trial prayed for the grant of its claims for reasonable rentals, attorney's
Court of San Felipe, Zambales, the January 26, 2000 decision of the fees, litigation expenses and the costs.[5]
Regional Trial Court, Branch 71, Iba, Zambales, and the March 12,
2004 decision of the Court of Appeals, are ANNULLED and SET Speci ically denying the material allegations of the foregoing
ASIDE for lack of jurisdiction. The complaint in Civil Case No. 328 is amended complaint in his 14 February 2004 Answer, petitioner
DISMISSED. averred that the property occupied by him is owned by one Maria
Ysabel Potenciano Padilla Sylianteng, with whom he had concluded
SO ORDERED. a subsisting lease agreement over the same, and that, in addition to
respondent's lack of cause of action against him, the MeTC had no
Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., jurisdiction over the case for lack of prior demand to vacate and
concur. referral of the controversy to the barangay authorities for a possible
amicable settlement.[6] Likewise questioning the MeTC's
Nuñez vs SLTEAS, G.R. No. 180542, April 12, jurisdiction over the case, the rest of the defendants iled a Motion
to Dismiss[7] which they adopted as their answer subsequent to its
2010 27 February 2004 denial upon the inding that a suf icient cause of
632 Phil. 143
action can be gleaned from the allegations of the complaint.[8]
SECOND DIVISION
After an ocular inspection conducted on 9 June 2004, it appears that
G.R. No. 180542, April 12, 2010
the MeTC concluded that the crowding of the residential units on


the subject parcel rendered the determination of its exact metes and the Assessor's Of ice or the Of ice of the City Engineer. However,
bounds impossible.[9] Unable to present his lessor's title, petitioner when he took no action after failing to obtain the survey from said
also appears to have agreed to the use of TCT No. 87556 as basis for of ices, his consequent failure to secure, on his own, the services of
determining the exact measurement of respondent's property.[10] an impartial surveyor to determine and rebut respondent's
With the parties' further failure to abide by their agreement to allegation, he did so on his own accord and had no other person but
cause a survey of the property thru an impartial surveyor from the himself to blame.[16]
Of ice of the City Assessor or City Engineer, the record shows that The Issues
respondent submitted a survey plan prepared by Geodetic Engineer
Joseph Padilla who determined that petitioner was, indeed, Upon receipt of the Court of Appeals' 4 November 2007 Resolution
occupying a portion of the subject parcel.[11] Relying on said denying his motion for reconsideration of the aforequoted
report, the MeTC went on to render a Decision dated 23 November decision,[17] petitioner iled the petition at bench on the following
2004,[12] resolving the complaint in the following wise: grounds:
Wherefore, premises considered, judgment is hereby rendered in I

favor of the plaintiff and against all the defendants and ordering the
latter to: THE COURTS HAVE NO JURISDICTION TO TRY THE INSTANT CASE
CONSIDERING THAT THE ELEMENTS OF FORCIBLE ENTRY ARE
1. vacate the subject premises located at Lot 11, Block 45, Solana St., NOT PRESENT AND ADDITIONALLY THERE IS A QUESTION OF
Intramuros, Manila; OWNERSHIP.
2. for each [defendant], to pay Php5,000.00 a month counted from II

October 2003 until defendants vacate the subject property;
THE PETITIONER SHOULD NOT VACATE THE LEASED PREMISES
3. to pay Php15,000.00 as and for attorney's fees; and CONSIDERING THAT THERE IS AN EXISTING LEASE CONTRACT
WITH THE OWNER WHICH IS IN VIOLATION OF THE PROVISION
4. to pay the costs of suit.[13] OF ARTICLE 1671 OF THE NEW CIVIL CODE.[18]
On appeal, the foregoing decision was af irmed in toto in the 14 July The Court's Ruling
2005 Order issued by the Regional Trial Court (RTC) of Manila in
Civil Case No. 05-112490.[14] Dissatis ied with said Order, We ind the petition bereft of merit.
petitioner elevated the case to the Court of Appeals by way of a
petition for review iled pursuant to Section 1, Rule 42 of the 1997 Designed to provide an expeditious means of protecting actual
Rules of Civil Procedure.[15] Finding that the allegations in possession or the right to possession of the property involved,[19]
respondent's amended complaint suf iciently made out a cause of there can be no gainsaying the fact that ejectment cases fall within
action for forcible entry against petitioner, the Court of Appeals the original and exclusive jurisdiction of irst level courts[20] by
rendered the herein assailed decision, dismissing said petition for express provision of Section 33 of Batas Pambansa Blg. 129, in
review upon the following indings and conclusions: relation to Sec. 1, Rule 70 of the 1997 Rules of Civil Procedure.[21]
In addition to being conferred by law,[22] however, a court's
Parenthetically, although the dispossession took place more than jurisdiction over the subject matter is determined by the allegations
one year from the illegal entry of petitioner and his co-defendants, of the complaint[23] and the character of the relief sought,[24]
knowledge of the same was only acquired by petitioner in 2003 irrespective of whether or not the plaintiff is entitled to recover all
when the ocular inspection was made. While ordinarily, the or some of the claims asserted therein.[25] In much the same way
one-year prescriptive period should be reckoned from the date of that it cannot be made to depend on the exclusive characterization
the actual entry on the land, the same however, does not hold true of the case by one of the parties,[26] jurisdiction cannot be made to
when entry was made through stealth, in which case, the one year depend upon the defenses set up in the answer, in a motion to
period is counted from the time the plaintiff learned thereof. dismiss or in a motion for reconsideration.[27]
Neither may petitioner seek refuge in the alleged demand letter The rule is no different in actions for forcible entry where the
dated 31 July 1996 sent by respondent's counsel which sought his following requisites are essential for the MeTC's acquisition of
ouster from the subject premises. Not only was the existence of this jurisdiction over the case, viz.: (a) the plaintiffs must allege their
letter immaterial to the issue of illegal entry into the subject prior physical possession of the property; (b) they must assert that
premises but the same cannot bind respondent who has no they were deprived of possession either by force, intimidation,
participation therein. Moreover, it also bears stressing that not once threat, strategy or stealth; and, (c) the action must be iled within
did petitioner refute the lack of knowledge on the part of one (1) year from the time the owners or legal possessors learned
respondent of the alleged lease contract and their usurpation of the of their deprivation of the physical possession of the property.[28]
disputed property. Verily, granting that a lease contract truly As it is not essential that the complaint should expressly employ the
existed, respondent's lack of knowledge of the lease contract and language of the law, it is considered a suf icient compliance of the
the failure to register the same in the Register of Deeds cannot bind requirement where the facts are set up showing that dispossession
third parties like respondent and therefore, withhold respondent's took place under said conditions.[29] The one-year period within
right to institute the action for ejectment. which to bring an action for forcible entry is generally counted from
the date of actual entry on the land, except that when the entry is
As to the identity of the premises occupied by petitioner Nuñ ez, We through stealth, the one-year period is counted from the time the
ind that the RTC committed no reversible error in admitting the plaintiff learned thereof.[30]
evidence of respondent which consists of the plan prepared by
Geodetic Engineer Padilla. Suf ice it to state that petitioner, during Even prescinding from the fact that the parties had admitted the
the proceedings below, agreed to secure an impartial survey from MeTC's jurisdiction,[31] our perusal of the record shows that


respondent's 9 January 2004 amended complaint was able to make

out a cause of action for forcible entry against petitioner. As the A similar dearth of merit may be said of the exceptions petitioner
registered owner of the subject parcel, respondent distinctly alleged continues to take against the MeTC's reliance on the survey plan
that, by its representatives and thru its predecessors-in-interest, it prepared by Geodetic Engineer Joseph Padilla to the effect that that
had been in possession of the subject parcel and had exercised over the premises occupied by petitioner lies within the metes and
the same all attributes of ownership, including the payment of bounds of respondent's property. As mere allegation is not
realty taxes and other expenses; that an ocular inspection evidence,[43] the rule is settled that plaintiff has the burden of
conducted in October 2003 revealed that petitioner and his proving the material allegations of the complaint which are denied
co-defendants have succeeded in occupying the property by means by the defendant, and the defendant has the burden of proving the
of stealth and strategy; and, that its subsequent demands to vacate material allegations in his case where he sets up a new matter.[44]
had been unheeded by said interlopers.[32] Considering that the Given the parties' failure to make good on their agreement to cause
test for determining the suf iciency of the allegations in the a survey of the property thru an impartial surveyor from the Of ice
complaint is whether, admitting the facts alleged, the court can of the City Assessor or City Engineer, respondent's submission of
render a valid judgment in accordance with the prayer of the said report was evidently for the purpose discharging the onus of
plaintiff,[33] we ind that the Court of Appeals correctly ruled that proving petitioner's encroachment on the subject parcel, as alleged
the MeTC had jurisdiction over the case. in the complaint. As the party asserting the contrary proposition,
petitioner cannot expediently disparage the admissibility and
Then as now, petitioner argues that, aside from the admission in the probative value of said survey plan to compensate for his failure to
complaint that the subject parcel was left idle and unguarded, prove his own assertions.
respondent's claim of prior possession is clearly negated by the fact
that he had been in occupancy thereof since 1999. While prior Petitioner is, inally, out on a limb in faulting the Court of Appeals
physical possession is, admittedly, an indispensable requirement in with failure to apply the irst paragraph of Article 1676 of the Civil
forcible entry cases, the dearth of merit in petitioner's position is, Code of the Philippines[45] in relation to the lease he claims to have
however, evident from the principle that possession can be acquired concluded with one Maria Ysabel Potenciano Padilla Sylianteng. In
not only by material occupation, but also by the fact that a thing is the absence of proof of his lessor's title or respondent's prior
subject to the action of one's will or by the proper acts and legal knowledge of said contract of lease, petitioner's harping over the
formalities established for acquiring such right.[34] Because same provision simply amounts to an implied admission that the
possession can also be acquired by juridical acts to which the law premises occupied by him lie within the metes and bounds of the
gives the force of acts of possession, e.g., donations, succession, subject parcel. Even then, the resolution of said issue is clearly
execution and registration of public instruments, inscription of inappropriate since ejectment cases are summary actions intended
possessory information titles and the like, it has been held that one to provide an expeditious manner for protecting possession or right
need not have actual or physical occupation of every square inch of to possession without involvement of title.[46] Moreover, if a
the property at all times to be considered in possession.[35] defendant's mere assertion of ownership in an ejectment case will
not oust the MeTC of its summary jurisdiction,[47] we fail to see
In this case, the subject parcel was acquired by respondent by virtue why it should be any different in this case where petitioner merely
of the 4 June 1999 Deed of Assignment executed in its favor by the alleged his lessor's supposed title over the subject parcel.
Spouses Ong Tiko and Emerenciana Sylianteng. Although it did not
immediately put the same to active use, respondent appears to have WHEREFORE, the petition is DENIED for lack of merit.
additionally caused the property to be registered in its name as of
27 February 2002[36] and to have paid the real property taxes due SO ORDERED.
thereon[37] alongside the sundry expenses incidental thereto.
Viewed in the light of the foregoing juridical acts, it consequently Carpio, (Chairperson), Brion, Del Castillo, and Mendoza*, JJ., concur.
did not matter that, by the time respondent conducted its ocular
inspection in October 2003, petitioner had already been occupying Dela Cruz vs Court of Appeals, G.R. NO.
the land since 1999. Ordinarily reckoned from the date of actual
entry on the land, the one year period is counted from the time the 139442, December 06, 2006
539 Phil. 158
plaintiff acquired knowledge of the dispossession when, as here, the
same had been effected by means of stealth.[38]
THIRD DIVISION
G.R. NO. 139442, December 06, 2006
Petitioner had, of course, endeavored to establish that respondent's
LOURDES DELA CRUZ, PETITIONER, VS. HON. COURT OF APPEALS
predecessors-in-interest had served him a demand to vacate the
AND MELBA TAN TE, RESPONDENTS.
subject parcel as early as 31 July 1996.[39] Correctly brushed aside
by the Court of Appeals on the ground, among others, that
DECISION
respondent had no participation in its preparation, we ind said
VELASCO, JR., J.:
demand letter of little or no use to petitioner's cause in view of its
non-presentation before the MeTC. However, much as it may now be
expedient for petitioner to anchor his cause thereon, said demand
For unto every one that hath shall be given, and he shall have
letter was irst introduced in the record only as an attachment to his
abundance: but from him that hath not shall be taken away even
reply to respondent's comment to the motion for reconsideration of
that which he hath.
the 14 July 2005 order issued by the RTC.[40] The rule is settled,
however, that points of law, theories, issues and arguments not
—Holy Bible, Matthew 25:29
brought to the attention of the trial court will not be and ought not
to be considered by a reviewing court, as these cannot be raised for
The Case
the irst time on appeal.[41] Basic consideration of due process
impels this rule.[42]


This petition for review seeks to nullify the April 30, 1999 Decision Ordering the defendant and all persons claiming right under her to
and the July 16, 1999 Resolution of the Court of Appeals in CA-G.R. vacate the premises situated at 1332 Lacson Street (formerly Gov.
SP No. 49097, which reversed the Decision of the Manila Regional Forbes Street), Sampaloc, Manila and peacefully return possession
Trial Court (RTC), Branch 35, in Civil Case No. 98-89174, and thereof to plaintiff;
reinstated the Decision of the Manila Metropolitan Trial Court
(MeTC), Branch 20, which ordered petitioner Dela Cruz to vacate
the subject lot in favor of respondent Tan Te.[1] Ordering the defendant to pay the plaintiff the amount of P360.00 a
month from December 1996 to November 1997; P432.00 a month
The Facts from December 1997 to November 1998, plus 20% for each
subsequent year until the premises shall have been vacated and
The Reyes family, represented by Mr. Lino Reyes, owned the lot turned over to the plaintiff;
located at No. 1332 Lacson Street (formerly Gov. Forbes Street),
Sampaloc, Manila. Petitioner Lourdes Dela Cruz was one of their
lessees, and she religiously paid rent over a portion of the lot for Ordering the defendant to pay the plaintiff the amount of
well over 40 years. Sometime in 1989, a ire struck the premises P10,000.00 as attorney's fees; and, the costs of the suit.
and destroyed, among others, petitioner's dwelling. After the ire, SO ORDERED.[3]
petitioner and some tenants returned to the said lot and rebuilt The Ruling of the Regional Trial Court
their respective houses; simultaneously, the Reyes family made
several verbal demands on the remaining lessees, including Unconvinced, petitioner Dela Cruz appealed the Decision of the
petitioner, to vacate the lot but the latter did not comply. On MeTC in the Manila RTC and the appeal was docketed as Civil Case
February 21, 1994, petitioner was served a written demand to No. 98-89174. On September 1, 1998, the RTC rendered its
vacate said lot but refused to leave. Despite the setback, the Reyes judgment setting aside the April 3, 1998 Decision of the Manila
family did not initiate court proceedings against any of the lessees. MeTC and dismissed respondent Tan Te's Complaint on the ground
that it was the RTC and not the MeTC which had jurisdiction over
On November 26, 1996, the disputed lot was sold by the Reyeses to the subject matter of the case. The RTC believed that since Tan Te's
respondent Melba Tan Te by virtue of the November 26, 1996 Deed predecessor-in-interest learned of petitioner's intrusion into the lot
of Absolute Sale. Respondent bought the lot in question for as early as February 21, 1994, the ejectment suit should have been
residential purposes. Despite the sale, petitioner Dela Cruz did not iled within the one-year prescriptive period which expired on
give up the lot. February 21, 1995. Since the Reyes did not ile the ejectment suit
and respondent Tan Te iled the action only on September 8, 1997,
On January 14, 1997, petitioner was sent a written demand to then the suit had become an accion publiciana cognizable by the
relinquish the premises which she ignored, prompting respondent RTC.
Tan Te to initiate conciliation proceedings at the barangay level.
While respondent attempted to settle the dispute by offering The Ruling of the Court of Appeals
inancial assistance, petitioner countered by asking PhP 500,000.00
for her house. Respondent rejected the counter offer which she Disappointed at the turn of events, respondent Tan Te appealed the
considered unconscionable. As a result, a certi icate to ile action adverse Decision to the Court of Appeals (CA) which was docketed
was issued to Tan Te. as CA-G.R. SP No. 49097. This time, the CA rendered a Decision in
favor of respondent Tan Te reversing the Manila RTC September 1,
On September 8, 1997, respondent Tan Te iled an ejectment 1998 Decision and reinstated the Manila MeTC April 3, 1998
complaint with damages before the Manila MeTC, entitled Melba Decision.
Tan Te v. Lourdes Dela Cruz and docketed as Civil Case No.
156730-CV. The complaint averred that: (1) the previous owners, Petitioner tried to have the CA reconsider its Decision but was
the Reyeses were in possession and control of the contested lot; (2) rebutted in its July 16, 1999 Resolution.
on November 26, 1996, the lot was sold to Tan Te; (3) prior to the
sale, Dela Cruz forcibly entered the property with strategy and/or Unyielding to the CA Decision and the denial of her request for
stealth; (4) the petitioner unlawfully deprived the respondent of reconsideration, petitioner Dela Cruz now seeks legal remedy
physical possession of the property and continues to do so; and, (5) through the instant Petition for Review on Certiorari before the
the respondent sent several written demands to petitioner to vacate Court.
the premises but refused to do so.
The Issues
On October 24, 1997, petitioner iled her answer and alleged that:
(1) the MeTC had no jurisdiction over the case because it falls Petitioner Dela Cruz claims two (2) reversible errors on the part of
within the jurisdiction of the RTC as more than one year had the appellate court, to wit:
elapsed from petitioner's forcible entry; (2) she was a rent-paying A
tenant protected by PD 20;[2] (3) her lease constituted a legal
encumbrance upon the property; and (4) the lot was subject of THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT
expropriation. BEYOND THE ISSUES OF THE CASE AND CONTRARY TO THOSE OF
THE TRIAL COURT.
The Ruling of the Manila MeTC
B
On April 3, 1998, the MeTC decided as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN
as follows: REVERSING THE DECISION OF THE RTC AND IN EFFECT,


REINSTATING THE DECISION OF THE [MeTC] WHICH IS strategy, or stealth. Third, the action must be iled within one (1)
CONTRADICTED BY THE EVIDENCE ON RECORD.[4] year from the time the owners or legal possessors learned of their
The Court's Ruling deprivation of physical possession of the land or building.
Discussion on Rule 45 The other kind of ejectment proceeding is unlawful detainer

(desahucio), where one unlawfully withholds possession of the
Before we dwell on the principal issues, a few procedural matters subject property after the expiration or termination of the right to
must irst be resolved. possess. Here, the issue of rightful possession is the one decisive;
for in such action, the defendant is the party in actual possession
Petitioner Dela Cruz asks the Court to review the indings of facts of and the plaintiff's cause of action is the termination of the
the CA, a course of action proscribed by Section 1, Rule 45. Firm is defendant's right to continue in possession.[7] The essential
the rule that indings of fact of the CA are inal and conclusive and requisites of unlawful detainer are: (1) the fact of lease by virtue of
cannot be reviewed on appeal to this Court provided they are a contract express or implied; (2) the expiration or termination of
supported by evidence on record or substantial evidence. the possessor's right to hold possession; (3) withholding by the
Fortunately for petitioner, we will be liberal with her petition lessee of the possession of the land or building after expiration or
considering that the CA's factual indings contradict those of the termination of the right to possession; (4) letter of demand upon
RTC, and there was an asseveration that the court a quo went lessee to pay the rental or comply with the terms of the lease and
beyond the issues of the case. Indeed, these grounds were vacate the premises; and (5) the action must be iled within one (1)
considered exceptions to the factual issue bar rule. year from date of last demand received by the defendant.
Secondly, the petition unnecessarily impleaded the CA in violation A person who wants to recover physical possession of his real
of Section 4, Rule 45. We will let this breach pass only because there property will prefer an ejectment suit because it is governed by the
is a need to entertain the petition due to the con licting rulings Rule on Summary Procedure which allows immediate execution of
between the lower courts; however, a repetition may result to the judgment under Section 19, Rule 70 unless the defendant
sanctions. perfects an appeal in the RTC and complies with the requirements
to stay execution; all of which are nevertheless bene icial to the
The actual threshold issue is which court, the Manila RTC or the interests of the lot owner or the holder of the right of possession.
Manila MeTC, has jurisdiction over the Tan Te ejectment suit. Once
the jurisdictional issue is settled, the heart of the dispute is whether On the other hand, Section 19, of Chapter II of B.P. No. 129 on
or not respondent is entitled to the ejectment of petitioner Dela Regional Trial Courts provides:
Cruz from the premises. Section 19. Jurisdiction in civil cases.–Regional Trial Courts shall
exercise exclusive original jurisdiction:
However, the petition is bereft of merit.
xxxx
On the Issue of Jurisdiction
(2) In all civil actions which involve the title to, or possession of, real
Jurisdiction is the power or capacity given by the law to a court or property, or any interest therein, except actions for forcible entry
tribunal to entertain, hear and determine certain controversies.[5] into and unlawful detainer of lands or buildings, original
Jurisdiction over the subject matter is conferred by law. jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts.Two (2)
Section 33 of Chapter III -- on Metropolitan Trial Courts, Municipal kinds of action to recover possession of real property which fall
Trial Courts, and Municipal Circuit Trial Courts of B. P. No. 129[6] under the jurisdiction of the RTC are: (1) the plenary action for the
provides: recovery of the real right of possession (accion publiciana) when
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal the dispossession has lasted for more than one year or when the
Trial Courts and Municipal Circuit Trial Courts in civil action was iled more than one (1) year from date of the last
cases.–Metropolitan Trial Courts, Municipal Trial Courts, and demand received by the lessee or defendant; and (2) an action for
Municipal Circuit Trial Courts shall exercise: the recovery of ownership (accion reivindicatoria) which includes
xxxx the recovery of possession.
(2) Exclusive original jurisdiction over cases of forcible entry and These actions are governed by the regular rules of procedure and
unlawful detainer: Provided, That when, in such cases, the adjudication takes a longer period than the summary ejectment
defendant raises the question of ownership in his pleadings and the suit.
question of possession cannot be resolved without deciding the
issue of ownership, the issue of ownership shall be resolved only to To determine whether a complaint for recovery of possession falls
determine the issue of possession.Thus exclusive, original under the jurisdiction of the MeTC ( irst level court) or the RTC
jurisdiction over ejectment proceedings (accion interdictal) is (second level court), we are compelled to go over the allegations of
lodged with the irst level courts. This is clari ied in Section 1, Rule the complaint. The general rule is that what determines the nature
70 of the 1997 Rules of Civil Procedure that embraces an action for of the action and the court that has jurisdiction over the case are the
forcible entry (detentacion), where one is deprived of physical allegations in the complaint. These cannot be made to depend upon
possession of any land or building by means of force, intimidation, the defenses set up in the answer or pleadings iled by the
threat, strategy, or stealth. In actions for forcible entry, three (3) defendant.[8]
requisites have to be met for the municipal trial court to acquire
jurisdiction. First, the plaintiffs must allege their prior physical This general rule however admits exceptions. In Ignacio v. CFI of
possession of the property. Second, they must also assert that they Bulacan, it was held "that while the allegations in the complaint
were deprived of possession either by force, intimidation, threat, make out a case for forcible entry, where tenancy is averred by way


of defense and is proved to be the real issue, the case should be

dismissed for lack of jurisdiction as the case should properly be
iled with the then Court of Agrarian Relations."[9] For more than four decades now, defendant has been and still is a
rent-paying tenant of the subject land occupied by their residential
The cause of action in a complaint is not what the designation of the house, dating back to the original owner-lessor, the Dimayuga
complaint states, but what the allegations in the body of the family. Her lease with no de inite duration, commenced with a rent
complaint de ine and describe. The designation or caption is not at P60.00 per month until it was gradually increased in the ensuing
controlling, more than the allegations in the complaint themselves years. As of November 1996, it stood at P300.00 a month;
are, for it is not even an indispensable part of the complaint.[10]
Let us refer to the allegations of the complaint iled in the Manila In this circumstances [sic], defendant enjoys the protective mantle
MeTC in Civil Case No. 98-89174, which we quote verbatim: of P.D. 20 and the subsequent rental control status against
That plaintiff is the absolute and registered owner of a parcel of dispossession. She cannot be ejected other than for causes
land located at No. 1332, Lacson Street, Sampaloc, Manila now prescribed under B.P. Blg. 25. Further, in case of sale of the land, she
being occupied by defendant; has the right of irst refusal under the express provision of P.D.
1571;
That plaintiff purchased the above-said parcel of land together with

its improvements from the legal heirs of the late EMERLINDA Throughout the years of her tenancy, defendant has been updated in
DIMAYUGA REYES on November 26, 1996, under and by virtue of a her rental payment until the collector of the original owner-lessor
Deed of Absolute Sale x x x; no longer came around as she has done theretofore;
7.1. As a result, she was compelled to ile a petition for consignation
of rent before the Metropolitan Trial Court of Manila;
That pursuant to the said deed of sale, the title to the land and all its A bona ide tenant within the ambit if [sic] P.D. 20 and the
improvements was transferred in plaintiff's name as evidenced by subsequent rental control status, including B.P. Blg. 25, under its
Transfer Certi icate of Title No. 233273 issued by the Register of terms, cannot be ousted on a plea of expiration of her monthly
Deeds of Manila on April 22, 1997 x x x; lease;
That prior to said sale, the previous owners, represented by Mr. Her lease constitutes a legal encumbrance upon the property of the
Lino Reyes, husband of the said deceased Emerlinda D. Reyes and lessor/owner and binds the latter's successor-in-interest who is
the administrator of her estate, was in possession and control of the under obligation to respect it;
property subject of this complaint;
The land at bench is the subject of a pending expropriation

That also prior to said sale, defendant, without the knowledge and proceedings;
consent of Mr. Lino Reyes, surreptitiously and by means of stealth
and strategy entered, used and occupied the said premises thus
depriving the former of rightful possession thereof; Plaintiff being a married woman cannot sue or be sued without
being joined by her husband;[12]
Undeniably, the aforequoted allegations of the complaint are vague
That on February 21, 1994, Mr. Lino Reyes, through Atty. Alejo and iffy in revealing the nature of the action for ejectment.
Sedico, his lawyer, furnished the defendants a letter formally
demanding that defendant vacate the premises x x x; The allegations in the complaint show that prior to the sale by Lino
Reyes, representing the estate of his wife Emerlinda Reyes, he was
in possession and control of the subject lot but were deprived of
That, however, defendant failed and refused to vacate despite just said possession when petitioner, by means of stealth and strategy,
and legal demand by Mr. Lino Reyes; entered and occupied the same lot. These circumstances imply that
he had prior physical possession of the subject lot and can make up
a forcible entry complaint.
That after the sale to plaintiff of said premises, plaintiff has several
times demanded of defendants to vacate the premises, the last On the other hand, the allegation that petitioner Dela Cruz was
demand having been made on them personally and in writing on served several demands to leave the premises but refused to do so
January 14, 1997 x x x; would seem to indicate an action for unlawful detainer since a
written demand is not necessary in an action for forcible entry. It is
a fact that the MeTC complaint was iled on September 8, 1997
That defendant failed and refused and still fails and refuses to within one (1) year from the date of the last written demand upon
vacate the premises without legal cause or justi iable reason petitioner Dela Cruz on January 14, 1997.
whatsoever;[11]
The answer of petitioner averred: As previously discussed, the settled rule is jurisdiction is based on
The Court has no jurisdiction over the case, having been iled by the allegations in the initiatory pleading and the defenses in the
plaintiff more than the reglementary one year period to commence answer are deemed irrelevant and immaterial in its determination.
forcible entry case, which is reckoned from the date of the alleged However, we relax the rule and consider the complaint at bar as an
unlawful entry of defendant by the use of stealth and strategy into exception in view of the special and unique circumstances present.
the premises; First, as in Ignacio v. CFI of Bulacan,[13] the defense of lack of


jurisdiction was raised in the answer wherein there was an an action desahucio for the possession of the property and in a
admission that petitioner Dela Cruz was a lessee of the former separate actions for the rents due and damages, etc.[14]The concept
owners of the lot, the Reyeses, prior to the sale to respondent Tan of possession by tolerance in unlawful detainer cases was further
Te. The fact that petitioner was a tenant of the re ined and applied in pertinent cases submitted for decision by
predecessors-in-interest of respondent Tan Te is material to the 1966. The rule was articulated as follows:
determination of jurisdiction. Since this is a judicial admission Where despite the lessee's failure to pay rent after the irst demand,
against the interest of petitioner, such admission can be considered the lessor did not choose to bring an action in court but suffered the
in determining jurisdiction. Second, the ejectment suit was iled lessee to continue occupying the land for nearly two years, after
with the Manila MeTC on September 8, 1997 or more than nine (9) which the lessor made a second demand, the one-year period for
years ago. To dismiss the complaint would be a serious blow to the bringing the detainer case in the justice of the peace court should be
effective dispensation of justice as the parties will start anew and counted not from the day the lessee refused the irst demand for
incur additional legal expenses after having litigated for a long time. payment of rent but from the time the second demand for rents and
Equitable justice dictates that allegations in the answer should be surrender of possession was not complied with.[15]In Calubayan v.
considered to aid in arriving at the real nature of the action. Lastly, Pascual, a case usually cited in subsequent decisions on ejectment,
Section 6, Rule 1 of the Rules of Court clearly empowers the Court to the concept of possession by tolerance was further elucidated as
construe Rule 70 and other pertinent procedural issuances "in a follows:
liberal manner to promote just, speedy, and inexpensive disposition In allowing several years to pass without requiring the occupant to
of every action and proceeding." vacate the premises nor iling an action to eject him, plaintiffs have
acquiesced to defendant's possession and use of the premises. It has
Based on the complaint and the answer, it is apparent that the Tan been held that a person who occupies the land of another at the
Te ejectment complaint is after all a complaint for unlawful detainer. latter's tolerance or permission, without any contract between
It was admitted that petitioner Dela Cruz was a lessee of the them, is necessarily bound by an implied promise that he will vacate
Reyeses for around four (4) decades. Thus, initially petitioner as upon demand, failing which a summary action for ejectment is the
lessee is the legal possessor of the subject lot by virtue of a contract proper remedy against them. The status of the defendant is
of lease. When ire destroyed her house, the Reyeses considered the analogous to that of a lessee or tenant whose term of lease has
lease terminated; but petitioner Dela Cruz persisted in returning to expired but whose occupancy continued by tolerance of the owner.
the lot and occupied it by strategy and stealth without the consent In such a case, the unlawful deprivation or withholding of
of the owners. The Reyeses however tolerated the continued possession is to be counted from the date of the demand to
occupancy of the lot by petitioner. Thus, when the lot was sold to vacate.[16] (Emphasis supplied.)From the foregoing jurisprudence,
respondent Tan Te, the rights of the Reyeses, with respect to the lot, it is unequivocal that petitioner's possession after she intruded into
were transferred to their subrogee, respondent Tan Te, who for a the lot after the ire–was by tolerance or leniency of the Reyeses and
time also tolerated the stay of petitioner until she decided to eject hence, the action is properly an unlawful detainer case falling under
the latter by sending several demands, the last being the January 14, the jurisdiction of the Manila MeTC.
1997 letter of demand. Since the action was iled with the MeTC on
September 8, 1997, the action was instituted well within the one (1) Even if we concede that it is the RTC and not the MeTC that has
year period reckoned from January 14, 1997. Hence, the nature of jurisdiction over the Tan Te complaint, following the reasoning that
the complaint is one of unlawful detainer and the Manila MeTC had neither respondent nor her predecessor-in-interest iled an
jurisdiction over the complaint. ejectment suit within one (1) year from February 21, 1994 when
the Reyeses knew of the unlawful entry of petitioner, and hence, the
Thus, an ejectment complaint based on possession by tolerance of complaint is transformed into an accion publiciana, the Court
the owner, like the Tan Te complaint, is a specie of unlawful detainer deems it fair and just to suspend its rules in order to render
cases. ef icient, effective, and expeditious justice considering the nine (9)
year pendency of the ejectment suit. More importantly, if there was
As early as 1913, case law introduced the concept of possession by uncertainty on the issue of jurisdiction that arose from the
tolerance in ejectment cases as follows: averments of the complaint, the same cannot be attributed to
It is true that the landlord might, upon the failure of the tenant to respondent Tan Te but to her counsel who could have been
pay the stipulated rents, consider the contract broken and demand confused as to the actual nature of the ejectment suit. The lawyer's
immediate possession of the rented property, thus converting a apparent imprecise language used in the preparation of the
legal possession into illegal possession. Upon the other hand, complaint without any participation on the part of Tan Te is
however, the landlord might conclude to give the tenant credit for suf icient special or compelling reason for the grant of relief.
the payment of the rents and allow him to continue inde initely in
the possession of the property. In other words, the landlord might The case of Barnes v. Padilla[17] elucidates the rationale behind the
choose to give the tenant credit from month to month or from year exercise by this Court of the power to relax, or even suspend, the
to year for the payment of their rent, relying upon his honesty of his application of the rules of procedure:
inancial ability to pay the same. During such period the tenant Let it be emphasized that the rules of procedure should be viewed
would not be in illegal possession of the property and the landlord as mere tools designed to facilitate the attainment of justice. Their
could not maintain an action of desahucio until after he had taken strict and rigid application, which would result in technicalities that
steps to convert the legal possession into illegal possession. A mere tend to frustrate rather than promote substantial justice, must
failure to pay the rent in accordance with the contract would justify always be eschewed. Even the Rules of Court re lect this principle.
the landlord, after the legal notice, in bringing an action of The power to suspend or even disregard rules can be so pervasive
desahucio. The landlord might, however, elect to recognize the and compelling as to alter even that which this Court itself has
contract as still in force and sue for the sums due under it. It would already declared to be inal x x x.
seem to be clear that the landlord might sue for the rents due and
[unpaid, without electing to terminate the contract of tenancy;] The emerging trend in the rulings of this Court is to afford every
[w]hether he can declare the contract of tenancy broken and sue in party litigant the amplest opportunity for the proper and just


determination of his cause, free from the constraints of Even granting for the sake of argument that we entertain the issue,
technicalities. Time and again, this Court has consistently held that we rule that the intended expropriation of respondent's lot (TCT
rules must not be applied rigidly so as not to override substantial No. 233273) by the city government of Manila will not affect the
justice.[18]Moreover, Section 8, Rule 40 authorizes the RTC–in case resolution of this petition. For one thing, the issue can be raised by
of af irmance of an order of the municipal trial court dismissing a petitioner in the appropriate legal proceeding. Secondly, the
case without trial on the merits and the ground of dismissal is lack intended expropriation might not even be implemented since it is
of jurisdiction over the subject matter–to try the case on the merits clear from the ordinance that the City Mayor will still locate
as if the case was originally iled with it if the RTC has jurisdiction available funds for project, meaning the said expense is not a
over the case. In the same vein, this Court, in the exercise of its regular item in the budget.
rule-making power, can suspend its rules with respect to this
particular case (pro hac vice), even if initially, the MeTC did not have WHEREFORE, this petition is DENIED for lack of merit. The April 30,
jurisdiction over the ejectment suit, and decide to assume 1999 Decision of the Court of Appeals reinstating the April 3, 1998
jurisdiction over it in order to promptly resolve the dispute. MeTC Decision in Civil Case No. 156730-CV and the July 16, 1999
Resolution in CA-G.R. SP No. 49097 are hereby AFFIRMED IN TOTO.
The issue of jurisdiction settled, we now scrutinize the main issue.
No costs.
At the heart of every ejectment suit is the issue of who is entitled to
physical possession of the lot or possession de facto. SO ORDERED.
We rule in favor of respondent Tan Te for the following reasons: Quisumbing, (Chairperson), Carpio, Carpio-Morales, and Tinga, JJ.,
Petitioner admitted in her Answer that she was a rent-paying tenant concur.
of the Reyeses, predecessors-in-interest of respondent Tan Te. As
such, she recognized the ownership of the lot by respondent, which De La Paz vs Panis, G.R. No. 57023, June
includes the right of possession.
22, 1995
315 Phil. 238
After the ire raged over the structures on the subject lot in late
THIRD DIVISION
1989 the contracts of lease expired, as a result of which Lino Reyes
G.R. No. 57023, June 22, 1995
demanded that all occupants, including petitioner, vacate the lot but
RAYMUNDO DE LA PAZ, PLACIDO DE LA PAZ, JOSE DE LA PAZ JR.,
the latter refused to abandon the premises. During the duration of
ILOINA DE LA PAZ, NORITA DE LA PAZ, LEONORA DE LA PAZ, AND
the lease, petitioner's possession was legal but it became unlawful
VICTORIA DE LA PAZ, PETITIONERS, VS. HON. DOMINGO D. PANIS,
after the ire when the lease contracts were deemed terminated and
PRESIDING JUDGE, COURT OF FIRST INSTANCE OF ZAMBALES AND
demands were made for the tenants to return possession of the lot.
OLONGAPO CITY, BRANCH III, JOSE RAMIREZ, EUGENIO LAAO,
GOMERCINDO BOLANTE, CARLOS BATUNGBAKAL, JACOBO ISIP,
BAYANI RAMIREZ, ALFREDO QUILAQUIL, AGUSTIN DEL ROSARIO,
Petitioner's possession is one by the Reyeses' tolerance and
ROMAN DE VERA JR., MIGUEL ALFONSO, GREGORIO FELLORIN,
generosity and later by respondent Tan Te's.
RODITO MARABE, ALFREDO PANUGAO, ALFREDO CORONEL JR.,
Petitioner fully knows that her stay in the subject lot is at the
DOMINGO BARTOLO, ADRIANO VALDEZ JR., AND ALBERTO DE
leniency and magnanimity of Mr. Lino Reyes and later of respondent
GUZMAN, RESPONDENTS.
Tan Te; and her acquiescence to such use of the lot carries with it an
implicit and assumed commitment that she would leave the
DECISION
premises the moment it is needed by the owner. When respondent
ROMERO, J.:
Tan Te made a last, written demand on January 14, 1997 and
petitioner breached her promise to leave upon demand, she lost her
This petition for certiorari and mandamus began in 1972 as a
right to the physical possession of the lot. Thus, respondent Tan Te
complaint for recovery of possession iled by the petitioners in the
should now be allowed to occupy her lot for residential purposes, a
then Court of First Instance of Zambales, Branch III, Olongapo City.
dream that will inally be realized after nine (9) years of litigation.
Docketed as Civil Case No. 1133-0, it involves a dispute over a
7,531-square meter parcel of land in Subic, Zambales, being claimed
Petitioner raises the ancillary issue that on March 15, 1998, the
by the petitioners as communal owners on the strength of their
Manila City Council passed and approved Ordinance No. 7951:
Transfer Certi icate of Title No. T-14807 of the Registry of Deeds of
[a]uthorizing the Manila City Mayor to acquire either by negotiation
Zambales, and by the private respondents as actual possessors.
or expropriation certain parcels of land covered by Transfer
Certi icates of Title Nos. 233273, 175106 and 140471, containing
The petitioners alleged in their complaint that sometime in 1970 or
an area of One Thousand Four Hundred Twenty Five (1,425) square
1971 the private respondents illegally entered portions of the said
meters, located at Maria Clara and Governor Forbes Streets, Sta.
property, established possession thereof, and introduced illegal
Cruz, Manila, for low cost housing and award to actual bona ide
improvements. In their answer, the private respondents admitted
residents thereat and further authorizing the City Mayor to avail for
that they indeed entered into the said property, but averred that
that purpose any available funds of the city and other existing
they did so in the honest belief that it was part of the public domain;
funding facilities from other government agencies x x x.[19]It
that they introduced the improvements without objection from any
readily appears that this issue was not presented before the Court
party; and that they have been in peaceful, open, and uninterrupted
of Appeals in CA-G.R. SP No. 49097 despite the fact that the
material possession thereof for more than ten years.
respondent's petition was iled on September 25, 1998, six months
after the ordinance was passed. Thus, this issue is proscribed as are
During the pre-trial conference, some of the private respondents
all issues raised for the irst time before the Court are proscribed.
represented by Atty. Jose S. Sarte did not deny petitioners' title to
the subject property, in effect admitting such fact. The parties then


limited the questions to be resolved during the trial to the following respondent judge to issue a writ of execution enforcing the
issues: (a) the identity and extent of the land claimed by the compromise agreement approved by the Court in G.R. No. L-38773.
petitioners; (b) whether or not the area respectively occupied by
defendants are within the limits of the said land; and (c) whether or Private respondents argue in their comment and memorandum that
not the parties are entitled to damages.[1] since the petitioners "had not yet entered the land in question (at
the time of iling of the complaint), they had not lost any possession,
Atty. Sarte was later substituted by Atty. Nicolas C. Adolfo who and the civil case they iled for recovery of possession was wrong as
attempted during the trial to ask questions which delved into his no possession had been lost by them."
predecessor's pre-trial admission. When this line of questioning
was blocked by the respondent judge, private respondents iled a This argument is untenable. It amounts to a recognition by the
petition for certiorari and prohibition with preliminary injunction private respondents of petitioners' equal, if not greater, right to
with this Court, which was assigned G.R. No. L-38773. possess the land in question. It even con irms the absence of any
past or present tenancy relationship between the parties, which in
On November 15, 1974, the Court resolved the said petition by turn proves the propriety of the course of action taken by the
declaring that the only issue between the parties is whether or not petitioners.
the land occupied by the private respondents is included in TCT No.
14807 of the petitioners, and approved a compromise agreement Private respondents further aver that G.R. No. L-38773 "cannot be
dated October 18, 1974, whereby the parties agreed, among others, enforced as all proceedings of Civil Case No. 1133-0 of the Court of
to have a relocation survey made upon the property in question, the First Instance of Zambales, Branch III, Olongapo City, were null and
result of which shall be respected by them. void as the hearing was done by a judge without jurisdiction to try
it."
The Court also ordered "the parties, including the respondent judge
or whomsoever is acting in his place," to comply with the said This contention is likewise unacceptable. Judge Panis dismissed the
compromise agreement. In other words, the issue of petitioners' action on the assumption that it is one for ejectment cognizable by
title to the land was made to depend upon the results of the the municipal court. Such supposition is erroneous.
relocation survey.
Ejectment may be effected only through an action for forcible entry
On June 3, 1977, the court-appointed geodetic engineer, Sera in J. or unlawful detainer. Forcible entry is a summary action to recover
Garcia, submitted his report which con irmed in part the allegation material or physical possession of real property when the person
of the petitioners that the private respondents were occupying who originally held it was deprived of possession by "force,
certain portions of their titled land. intimidation, threat, strategy, or stealth." An action for unlawful
detainer, on the other hand, may be iled when possession by "a
This report notwithstanding, a decision was reached in Civil Case landlord, vendor, vendee, or other person against whom the
No. 1133-0 on January 19, 1981 (received by the petitioners on possession of any land or building is unlawfully withheld after the
January 30, 1981), disposing of the case in this wise: expiration or termination of the right to hold possession, by virtue
of any contract, express or implied."[2] Both actions may be iled
"WHEREFORE, judgment is hereby rendered dismissing the with the municipal courts within one year after the unlawful
plaintiffs' (petitioners herein) complaint against all the defendants deprivation or withholding of possession. Their main difference lies
(private respondents herein). The counterclaims of defendants (1) in the time when possession became unlawful - in forcible entry, it
Jose Ramirez, (2) Eugenio Laao, (3) Gomercindo Bolante, (4) Carlos is from the time of entry, while in unlawful detainer, possession
Batungbakal, (5) Jacobo Isip, (6) Bayani Ramirez, (7) Alfredo which is at irst lawful later becomes illegal, as when the lease
Quilaquil, (8) Agustin del Rosario, (9) Roman de Vera, Jr., (10) contract has expired and the lessee refuses to vacate the premises
Miguel Alfonso, are hereby likewise dismissed. despite demand.
On the counterclaim of defendants (1) Gregorio Fellorin, (2) Rodito We must rule out forcible entry; there is no allegation in the
Marabe, (3) Alfredo Panugao, (4) Alfredo Coronel, Jr., (5) Domingo complaint that petitioners were denied possession of the land in
Bartolo, (6) Adriano Valdez, Jr., and (7) Alfredo de Guzman, question through any of the methods stated in Section 1, Rule 70 of
judgment is hereby rendered ordering plaintiffs to jointly and the Rules of Court, although private respondents' prior possession
severally pay each of the said defendants the sum of One Thousand was clearly alleged. Neither is the action one for unlawful detainer;
Pesos (P1,000.00) as and by way of attorney's fees and expenses of it was noted earlier that there is no lease contract between the
litigation. parties, and the demand to vacate made upon the private
respondents did not make them tenants of the petitioners.
SO ORDERED."
In order to gain possession of the land occupied by the private
Judge Panis observed that while the complaint was one for recovery respondents, the proper remedy adopted by the petitioners was the
of possession, it was "in reality one for ejectment or illegal detainer." plenary action of recovery of possession before the then Court of
On February 5, 1981, petitioners iled a motion for reconsideration First Instance. Respondent judge, therefore, had jurisdiction over
maintaining that their action was for recovery of possession and the case and should not have dismissed it on the ground of lack
was not an ejectment case. thereof.
This was denied by the respondent judge in an order dated March 5, Respondent judge should have stuck to the issues de ined by the
1981, received by the petitioners on April 10, 1981. parties during pre-trial, namely, the identity and extent of the land
claimed by the petitioners; whether or not the area occupied by the
In this petition for certiorari, the petitioners pray for an order private respondents is within the limits of the said land; and
nullifying the decision dated January 19, 1981, and compelling the whether or not the parties are entitled to damages. Trial of the case


should have been limited to these three issues. As we held in the did; and (c) by ignoring the survey report of the geodetic engineer
early case of Permanent Concrete Products, Inc. v. Teodoro:[3] whom he himself had appointed.
"One of the objectives of pre-trial procedure is to take trial of cases It must be understood that this petition for certiorari and
out of the realm of surprise and maneuvering. Pre-trial is primarily mandamus seeks not a review of the lower court's decision but its
intended to make certain that all issues necessary to the disposition nulli ication for having been rendered in excess of jurisdiction. It is
of a cause are properly raised. Thus, to obviate the element of not concerned with the wisdom or legal soundness of the decision,
surprise, parties are expected to disclose at a pre-trial conference but insists that jurisdiction is properly laid in the CFI (now RTC),
all issues of law and fact which they intend to raise at the trial, and is asking said court to exercise it in this case. It must be noted
except such as may involve privilege or impeaching matter." that the complaint of petitioners was dismissed on the ground that
The determination of the irst two issues were delegated to the it was the MTC which had jurisdiction over the case.
geodetic engineer appointed by the court to conduct the relocation
survey sought and accepted by the parties in their compromise To correct the situation, petitioner rightly iled the instant petition,
agreement. a special civil action under Rule 65 of the Rules of Court, which may
be iled within a reasonable period from the time the petitioners
Ignoring the result of the survey, Judge Panis instead concluded that received notice of the denial of their motion for reconsideration.
petitioners' action is actually one for ejectment. This conclusion is Inasmuch as a period of three (3) months is considered
totally without basis, for the private respondents never alleged in reasonable,[6] the iling of the petition after 45 days from notice is
their answers that the complaint should be dismissed on the ground de initely within the allowable period. The petition must perforce
of lack of jurisdiction, the action being cognizable by the municipal be given due course.
court. The only reference made in the separate answers regarding
the jurisdiction - or the lack of it - of the respondent judge alleges The issue of damages was, however, correctly disposed of by
that the lands occupied by the private respondents are portions of respondent judge who found "no basis for the award of any form of
the alienable and disposable lands of the public domain, an damages" in favor of the private respondents who were actually
allegation neither proved nor pursued at the trial. occupying portions of the petitioners' land, according to the
relocation survey result. This, as well as the inding that the
Finally, the private respondents claim that the petition was iled out respondents who were found not to be occupying the said land
of time and that the lower court's decision has gained inality. should be entitled to attorney's fees in the amount of P1,000.00
each, should not be disturbed.
Petitioners received a copy of the decision on January 30, 1981, and
iled their motion for reconsideration on February 5, 1981. The WHEREFORE, in view of the foregoing, the decision dated January
running of the reglementary period to appeal was suspended upon 19, 1981 in Civil Case No. 1133-0 is hereby nulli ied and set aside,
such iling and resumed only when the petitioners received on April except the portions dismissing the private respondents'
10, 1981, the trial court's resolution denying their motion. The old counterclaim and granting the aforementioned attorney's fees,
Rules of Court, allowing an appeal from an adverse judgment of the which are af irmed. Respondent judge, or whoever is acting in his
then Court of First Instance to the Court of Appeals to be taken stead or behalf, is hereby directed to issue the writ of execution
within 30 days from notice, applies in this case considering that prayed for by the petitioners in connection with the Court's
Batas Pambansa Blg. 129,[4] which uniformly shortened the Resolution in G.R. No. L-38773 dated November 15, 1974, and in
reglementary period to ifteen [15] days, took effect only on August keeping with the relocation survey report submitted by Engineer
10, 1981. Under this set of facts, the petitioners had 24 more days Sera in J. Garcia on June 3, 1977.
from April 10, 1981, or until May 4, 1981, within which to appeal
the adverse decision to the Court of Appeals. SO ORDERED.
Instead of appealing, petitioners iled, on May 29, 1981, the instant Feliciano, (Chairman), Vitug, and Francisco, JJ., concur.
petition for certiorari and mandamus. Melo, J., see dissenting opinion.
The Revised Rules of Court, under Section 1 of Rule 65, states that Sarmiento vs Court of Appeals,
the special civil action of certiorari will lie only when "there is no 320 Phil. 146
appeal, nor any plain, speedy, and adequate remedy in the ordinary SECOND DIVISION
course of law." Hence, we reiterate here the rule that the civil action G.R. No. 116192, November 16, 1995
of certiorari (or mandamus, for that matter) cannot be allowed EUFEMIA SARMIENTO, PETITIONER, VS. COURT OF APPEALS AND
when a party to a case fails to appeal a judgment to the proper GENEROSA S. CRUZ, RESPONDENTS.
forum despite the availability of that remedy. In other words,
certiorari may not be used as a substitute for a lost appeal.[5]
This procedural rule cannot, however, be strictly enforced when to DECISION

do so would result in a miscarriage of justice, especially when, as in REGALADO, J.:
this case, the petition is really meritorious and the trial judge
indeed committed a grave abuse of discretion. The judgment promulgated on February 28, 1994 by respondent
Court of Appeals in CA-G.R. SP No. 32263[1] reversing the decision
In the case at bar, respondent judge's grave abuse of discretion was of the regional trial court, as well as its resolution of June 29, 1994
manifested in three ways: (a) by utterly disregarding the denying herein petitioner's motion for reconsideration, are assailed
compromise agreement of the parties approved by this Court; (b) by in this petition for review on certiorari.
holding himself without jurisdiction over the case when in fact he


This case originated from a complaint for ejectment with damages On January 21, 1993, the trial court, on motion, issued an order
iled by herein private respondent Generosa S. Cruz, as plaintiff, giving the defendant therein an extension of ive days within which
against herein petitioner Eufemia Sarmiento, as defendant, in the to ile her answer to the complaint.[3] This was opposed by the
Municipal Circuit Trial Court of Dinalupihan-Hermosa, Bataan as plaintiff therein on the ground that Section 15(e) of the Rule on
Civil Case No. 899, which complaint alleges these material facts: Summary Procedure does not allow the iling of motions for
extension of time to ile pleadings, af idavits or any other papers.[4]
x x x xxx xxx Nonetheless, defendant iled on January 29, 1993 her "Answer with
Motion to Dismiss."[5] Plaintiff iled an ex parte motion reiterating
2. That the plaintiff acquired by purchase a parcel of land known as her contention that the iling by defendant of her aforesaid answer
Lot No. 2-A of the subd. plan, Psd-03-0345 being a portion of Lot 2, with motion was barred for the reason that her preceding motion
covered by TCT No. T-147219, located at Bo. Mabuco, Hermosa, for extension of time to ile an answer is a prohibited pleading.[6]
Bataan, containing as area of 280 square meters, xerox copy of the On February 4,1993, the trial court, inding merit in plaintiff's ex
title is hereto attached as Annex "A" hereof and for taxation parte motion, ordered that defendant's answer be stricken from the
purposes, the same is declared in the name of the plaintiff, xerox records for having been iled out of time.[7] The case was then
copy of the tax declaration is hereto attached as Annex "B" of this submitted for decision.
complaint;
On February 18, 1993, the trial court rendered its decision, with the
3. That the adjacent lot of plaintiff is still owned by the family of following decretal portion:
Atty. Gonzalo Nuguid but the same is being used and occupied by
the defendant where a house was constructed thereon; WHEREFORE, judgment is hereby rendered in favor of the plaintiff
and against the defendant, ordering the latter:
4. That when the plaintiff caused the relocation of her lot herein
mentioned, it was found out by the Geodetic Engineer that the 1. To vacate the area being encroached (upon) by the defendant and
defendant is encroaching on her lot for about 71 square meters, allowing the plaintiff to remove the old fence permanently and (to)
copy of the relocation sketch by said surveyor is hereto attached as make the necessary enclosure of the area pertaining to the herein
Annex "C" hereof, plaintiff containing an area of 280 square meters, more or less;
5. That when the plaintiff talked to the defendant that she would 2. Ordering the defendant to pay the plaintiff the sum of P1,500.00
like to remove the old fence so that she could construct a new fence as attorney's fees. No pronouncement as to damages;
which will cover the true area of her property, the defendant
vehemently refused to let the plaintiff remov(e) the said fence and 3. To pay the cost(s) of this suit.[8] (Corrections in parentheses
menacingly alleged that if plaintiff remove(d) the said fence to supplied.)
construct a new one, she would take action against the plaintiff
legally or otherwise; Defendant iled a motion for the reconsideration of said judgment,
but the same was denied by the trial court for lack of merit in its
6. For fear that plaintiff may be charged in court should she insist order dated March 2, 1993.[9]
on removing the fence encroaching on her property, plaintiff now
seeks judicial relief; On appeal to the Regional Trial Court of Dinalupihan Bataan, Branch
5, in Civil Case No. DH-121-93, defendant assailed the jurisdiction of
7. That plaintiff refer(red) this matter to the Katarungang the court a quo. On June 21, 1993, said lower appellate court
Pambarangay of Mabuco for settlement, however, the efforts of the rendered judgment, stating in part as follows:
Lupon Tagapamayapa turned futile, as evidenced by a certi ication
to ile action issued by the Lupon secretary and attested by the A perusal of the records of the case and the memorandum of appeal
Lupon Chairman, copy of the certi ication to ile action is hereto of the adversaries led this court to the opinion that the court a quo
attached as Annex "D" hereof; did not acquire jurisdiction to hear, try and decide the instant
appealed case based on (the) reason that the said case should be
8. Plaintiff as much as possible would like to avoid court litigation one of question of ownership or accion rei(vin)dicatoria rather than
because she is poor but nevertheless she consulted the undersigned that of forcible entry as the(re) was no allegation of prior
counsel and a demand letter was sent to the defendant for possession by the plaintiff (of) the disputed lot as required by law
conference and/or settlement but the defendant stood pat that she and jurisprudence. Absence of allegations and proof by the plaintiff
will not allow the removal of the fence, thus depriving the plaintiff in forcible entry case of prior possession of the disputed lot (sic)
of the use and possession of the said portion of her lot (71 square cannot be said that defendant dispossesses her of the same, thus,
meters) which is being occupied by the defendant for several years, the legal remedy sought by the plaintiff is not the proper one as it
xerox copy of the demand letter is hereto attached as Annex "E" of should have been accion publiciana or accion rei(vin)dicatoria, as
this complaint; the case may be, and the forum of which is the Regional Trial Court.
9. That by virtue of the willful refusal of the defendant to allow the This Court declines to venture into other issues raised by the
plaintiff to have the fence dismantled and/or to be removed, the defendant/appellant considering that the resolution on jurisdiction
plaintiff is deprived of the possession and she was forced to hire the renders the same moot and academic."[10] (Corrections in
services of counsel for which she contracted to pay the sum of parentheses ours.)
P2,000.00 plus acceptance of P1,000.00 until the termination of this
case before this Honorable Court.[2] Therein plaintiff's motion for reconsideration having been denied in
said lower court's order dated August 12, 1993,[11] she elevated
x x x xxx xxx the case to the Supreme Court through a petition for review on
certiorari, purportedly on pure questions of law. This Court, treating


the petition as a special civil action for certiorari, referred the case detainer. Neither was it alleged that the possession of the disputed
to respondent Court of Appeals for proper determination and portion of said lot was acquired by petitioner through force,
disposition pursuant to Section 9(1) of Batas Pambansa Blg. intimidation, threat, strategy or stealth to make out a case of
129.[12] forcible entry.
On February 28, 1994, the Court of Appeals rendered judgment in Private respondent cannot now belatedly claim that petitioner's
CA-G.R. SP No. 32263[13] reversing the decision of the regional trial possession of the controverted portion was by mere tolerance since
court and reinstating that of the municipal circuit trial court, hence that fact was never alleged in the former's basic complaint, and this
the present petition. argument was raised in her later pleadings more as an afterthought.
Also, it would be absurd to argue that private respondent tolerated
The chief issue for our resolution is whether or not the court of a state of affairs of which she was not even then aware. Finally, to
origin had jurisdiction over the ejectment case. Well-settled is the categorize a cause of action as one constitutive of unlawful detainer,
rule that the jurisdiction of the court, as well as the nature of the plaintiff's supposed acts of tolerance must have been present right
action, are determined by the averments in the complaint.[14] from the start of the possession which is later sought to be
Accordingly, the issue in the instant case can only be properly recovered.[17]
resolved by an examination and evaluation of the allegations in the
complaint in Civil Case No. 899 of said trial court. Indeed, and this was de initely not the situation that obtained in
and gave rise to the ejectment suit, to hold otherwise would
A careful reading of the facts averred in said complaint iled by espouse a dangerous doctrine, for two reasons: First. Forcible
herein private respondent reveals that the action is neither one of entry into the land is an open challenge to the right of the lawful
forcible entry nor of unlawful detainer but essentially involves a possessor, the violation of which right authorizes the speedy
boundary dispute which must be resolved in an accion redress in the inferior court provided for in the Rules. If a period of
reivindicatoria on the issue of ownership over the disputed 71 one year from the forcible entry is allowed to lapse before suit is
square meters involved. iled, then the remedy ceases to be speedy and the aggrieved
possessor is deemed to have waived his right to seek relief in the
Forcible entry and unlawful detainer cases are two distinct actions inferior court. Second. If a forcible entry action in the inferior court
de ined in Section 1, Rule 70 of the Rules of Court. In forcible entry, is allowed after the lapse of a number of years, then the result may
one is deprived of physical possession of land or building by means well be that no action of forcible entry can really prescribe. No
of force, intimidation, threat, strategy, or stealth. In unlawful matter how long such defendant is in physical possession, plaintiff
detainer, one unlawfully withholds possession thereof after the will merely make a demand, bring suit in the inferior court — upon
expiration or termination of his right to hold possession under any a plea of tolerance to prevent prescription from setting in — and
contract, express or implied. In forcible entry, the possession is summarily throw him out of the land. Such a conclusion is
illegal from the beginning and the basic inquiry centers on who has unreasonable, especially if we bear in mind the postulates that
the prior possession de facto. In unlawful detainer, the possession proceedings of forcible entry and unlawful detainer are summary in
was originally lawful but became unlawful by the expiration or nature, and that the one year time-bar to the suit is but in
termination of the right to possess, hence the issue of rightful pursuance of the summary nature of the action.[18]
possession is decisive for, in such action, the defendant is in actual
possession and the plaintiff's cause of action is the termination of To give the court jurisdiction to effect the ejectment of an occupant
the defendant's right to continue in possession.[15] or deforciant on the land, it is necessary that the complaint should
embody such a statement of facts as brings the party clearly within
What determines the cause of action is the nature of defendant's the class of cases for which the statutes provide a remedy, as these
entry into the land. If the entry is illegal, then the action which may proceedings are summary in nature.[19] The complaint must show
be iled against the intruder within one year therefrom is forcible enough on its face to give the court jurisdiction without resort to
entry. If, on the other hand, the entry is legal but the possession parol testimony.[20]
thereafter became illegal, the case is one of unlawful detainer which
must be iled within one year from the date of the last demand.[16] The jurisdictional facts must appear on the face of the complaint.
When the complaint fails to aver facts constitutive of forcible entry
In the case at bar, the complaint does not characterize herein or unlawful detainer, as where it does not state how entry was
petitioner's alleged entry into the land, that is, whether the same effected or how and when dispossession started, as in the case at
was legal or illegal. It does not state how petitioner entered upon bar, the remedy should either be an accion publiciana or an accion
the land and constructed the house and the fence thereon. It is also reivindicatoria in the proper regional trial court.[21]
silent on whether petitioner's possession became legal before
private respondent made a demand on her to remove the fence. The If private respondent is indeed the owner of the premises subject of
complaint merely avers that the lot being occupied by petitioner is this suit and she was unlawfully deprived of the real right of
owned by a third person, not a party to the case, and that said lot is possession or the ownership thereof, she should present her claim
enclosed by a fence which private respondent claims is an before the regional trial court in an accion publiciana or an accion
encroachment on the adjacent lot belonging to her. reivindicatoria, and not before the municipal trial court in a
summary proceeding of unlawful detainer or forcible entry. For
Furthermore, it is also alleged and admitted in the complaint that even if one is the owner of the property, the possession thereof
the said fence was already in existence on that lot at the time cannot be wrested from another who had been in the physical or
private respondent bought her own lot and it was only after a material possession of the same for more than one year by resorting
relocation survey was made that it was found out that petitioner is to a summary action for ejectment. This is especially true where his
allegedly encroaching on the lot of the former. Consequently, there possession thereof was not obtained through the means or held
is here no contract, express or implied, between petitioner and under the circumstances contemplated by the rules on summary
private respondent as would qualify it as a case of unlawful ejectment.


We have held that in giving recognition to the action of forcible Dionisio died on September 27, 1997. Consequently, on July 3, 1998,
entry and unlawful detainer, the purpose of the law is to protect the the heirs of Dionisio (respondents), iled a complaint[9] for
person who in fact has actual possession, and in case of a recovery of possession with the MTC, docketed as Civil Case No.
controverted proprietary right, the law requires the parties to 98-0006 (recovery of possession case), against the spouses Mario
preserve the status quo until one or the other sees it to invoke the and Carmelita (petitioners). The respondents sought to recover the
decision of a court of competent jurisdiction upon the question of same portion of the parcel of land subject of Civil Case No. 96-0031.
ownership.[22]
The respondents averred that the subject property was acquired by
On the foregoing premises and with these conclusions, it is Dionisio on February 10, 1945 when he purchased the same from
unnecessary to pass upon the other issues raised in the petition at Isabelo Capistrano. That Dionisio thereafter took possession of the
bar. subject property and was able to obtain a free patent covering the
subject property. OCT No. M-4559 was subsequently issued in the
ACCORDINGLY, the instant petition is GRANTED, and the judgment name of Dionisio on December 22, 1987. The respondents further
of the Court of Appeals in CA-G.R. SP No. 32263 is hereby claimed that sometime in 1995, Mario constructed a piggery on a
REVERSED and SET ASIDE. The judgment of the Regional Trial portion of the subject property without their consent.[10]
Court of Dinalupihan, Bataan, Branch 5, in Civil Case No. DH-121-93
is REINSTATED, without pronouncement as to costs. In their answer,[11] the petitioners maintained that the subject
parcel of land is owned by Carmelita, having acquired the same
SO ORDERED. through inheritance and that they have been in possession thereof
since 1969. Additionally, the petitioners claimed that the
Narvasa, (Chairman), Puno, and Mendoza, JJ., concur. respondents' complaint for recovery of possession of the subject
Francisco, J., on leave. property is barred by res judicata in the light of the inality of the
decision in the forcible entry case.
Ocampo vs Dionisio, G.R. No. 191101,
On February 18, 2008, the MTC rendered a decision[12] dismissing
October 01, 2014 the complaint for recovery of possession iled by the respondents
on the ground of res judicata. Thus:
THIRD DIVISION
G.R. No. 191101, October 01, 2014
The Court has taken cognizance of the fact that the earlier case for
SPOUSES MARIO OCAMPO AND CARMELITA F. OCAMPO,
forcible entry docketed as Civil Case No. 96-0031 was iled by
PETITIONERS, VS. HEIRS OF BERNARDINO U. DIONISIO,
Bernardino U. Dionisio against the same defendant Mario Ocampo
REPRESENTED BY ARTEMIO SJ. DIONISIO, RESPONDENTS.
before this Court on August 28, 1996, and a decision based on the
merit was rendered on September 12, 1997 where this Court ruled
DECISION
to dismiss the complaint for failure on the part of the plaintiff to
REYES, J.:
establish their prior possession of the land and suf icient evidence
to establish cause of action by preponderance of evidence.
Before this Court is a petition for review on certiorari[1] under Rule
45 of the Rules of Court seeking to annul and set aside the
xxxx
Decision[2] dated July 2, 2009 and Resolution[3] dated January 27,
2010 issued by the Court of Appeals (CA) in CA-G.R. SP No. 106064,
Hence, the present complaint must be dismissed on ground of res
which af irmed the Decision[4] dated September 3, 2008 of the
judicata.
Regional Trial Court (RTC) of Binangonan, Rizal, Branch 69, in SCA
Case No. 08-014.
The material fact or question in issue in the forcible entry is for
recovery of possession which was conclusively settled in the
The Facts
decision dated September 12, 1997, such fact or question may not
again be litigated in the present action for accion publiciana,
On August 28, 1996, Bernardino U. Dionisio (Dionisio) iled a
although covered by ordinary civil proceeding, but technically has
complaint[5] for forcible entry with the Municipal Trial Court (MTC)
the same purpose, a suit for recovery of the right to possess.[13]
of Cardona, Rizal, docketed as Civil Case No. 96-0031 (forcible entry
case), against Mario Ocampo (Mario) and Felix Ocampo (Felix).
On appeal, the RTC rendered a Decision[14] on September 3, 2008,
Dionisio sought to recover the possession of a portion of his
the decretal portion of which reads:
property, covered by Original Certi icate of Title (OCT) No. M-4559,
situated in Dalig, Cardona, Rizal, alleging that Mario and Felix built a
WHEREFORE, premises considered, the appealed decision of
piggery thereon without his consent. In his answer,[6] Mario denied
Municipal Trial Court of Cardona, Rizal, dated February 8, 2008, is
Dionisio's allegation, claiming that the disputed parcel of land is
hereby REVERSED and SET ASIDE and a new one rendered in favor
owned by his wife, Carmelita Ocampo (Carmelita), who inherited
of the plaintiffs-appellants as follows:
the same from her father. Mario further claimed that they have been
Declaring plaintiffs-appellants as entitled to possession for being
in possession of the said parcel of land since 1969.
the lawful owners of the lands described under paragraph II of the
complaint and covered by Original Certi icate of Title No. M-4559.
On September 12, 1997, the MTC rendered a decision,[7] which
dismissed the complaint for forcible entry iled by Dionisio. The
MTC opined that Dionisio failed to establish his prior possession of
Ordering the defendants-appellees and all persons claiming rights
the disputed parcel of land. Dionisio's notice of appeal was denied
under them to vacate the parcel of land located at Dalig, Cardona,
by the MTC in its Order[8] dated January 26, 1998 for having been
Rizal with an area of 225 square meters covered by Original
iled beyond the reglementary period.


certi icate of Title No. M-4559 in the name of Bernardino Dionisio possession; (2) whether the respondents were able to establish
and more particularly described under paragraph 2 of the their ownership of the subject property; and (3) whether the
complaint, to remove the improvements thereon and deliver its respondents' cause of action is already barred by laches.
possession to the plaintiffs.
The Ruling of the Court
Ordering the defendants-appellees to pay plaintiffs-appellants The petition is denied.

PI0,000.00 as attorney's fees and litigation expenses of P5,000.
SO ORDERED.[15] First Issue: Res Judicata
The RTC ruled that the MTC erred in dismissing the respondents'
complaint for recovery of possession of the subject property solely The doctrine of res judicata is laid down under Section 47, Rule 39
on the ground of res judicata. The RTC opined that the forcible entry of the Rules of Court, which pertinently provides that:
case, only involves the question of who has a better right to the
possession of the subject property while the recovery of possession Sec. 47. Effect of judgments or inal orders. — The effect of a
case not only involves the right to the possession of the subject judgment or inal order rendered by a court of the Philippines,
property, but the ownership thereof as well. The RTC stressed that a having jurisdiction to pronounce the judgment or inal order, may
judgment rendered in a forcible entry case will not bar an action for be as follows:
recovery of possession based on title or ownership since there is no
identity of cause of action as between the two cases. xxxx
Further, the RTC held that the respondents were able to establish (b) In other cases, the judgment or inal order is, with respect to the
that the subject property is indeed part of the parcel of land covered matter directly adjudged or as to any other matter that could have
by OCT No. M-4559 registered in the name of Dionisio. Considering been raised in relation thereto, conclusive between the parties and
that OCT No. M-4559 is registered under the name of Dionisio, the their successors in interest by title subsequent to the
RTC opined that the respondents, as sucessors-in-interest of commencement of the action or special proceeding, litigating for the
Dionisio, are entitled to the possession of the subject property as an same thing and under the same title and in the same capacity; and
attribute of their ownership over the same. On the other hand, the
RTC averred that the petitioners failed to adduce suf icient evidence (c) In any other litigation between the same parties of their
to support their claim that they indeed own the subject property. successors in interest, that only is deemed to have been adjudged in
a former judgment or inal order which appears upon its face to
Unperturbed, the petitioners iled a petition for review with the CA, have been so adjudged, or which was actually and necessarily
alleging that the RTC erred in setting aside the MTC Decision dated included therein or necessary thereto.
February 18, 2008. They maintained that the inality of the decision This provision comprehends two distinct concepts of res judicata:
in the forcible entry case constitutes res judicata, which would (1) bar by former judgment and (2) conclusiveness of
warrant the outright dismissal of the respondents' complaint for judgment.[18] In Judge Abelita III v. P/Supt. Doria, et al.,[19] the
recovery of possession; that the respondents were not able to Court explained the two aspects of res judicata, thus:
suf iciently prove their ownership of the subject property. The
petitioners further contended that OCT No. M-4559 registered in There is "bar by prior judgment" when, as between the irst case
the name of Dionisio was irregularly issued. They likewise claimed where the judgment was rendered and the second case that is
that respondents' cause of action in the recovery of possession case sought to be barred, there is identity of parties, subject matter, and
is already barred by laches. causes of action. In this instance, the judgment in the irst case
constitutes an absolute bar to the second action. Otherwise put, the
On July 2, 2009, the CA rendered the herein assailed decision,[16] judgment or decree of the court of competent jurisdiction on the
which af irmed the RTC Decision dated September 3, 2008. The CA merits concludes the litigation between the parties, as well as their
held that the doctrine of res judicata cannot be applied in this case privies, and constitutes a bar to a new action or suit involving the
since there is no identity of cause of action as between the forcible same cause of action before the same or other tribunal.
entry case and the recovery of possession case. The CA likewise
af irmed the RTC's inding that the respondents, as But where there is identity of parties in the irst and second cases,
successors-in-interest of Dionisio, have suf iciently established their but no identity of causes of action, the irst judgment is conclusive
ownership of the subject property and, hence, are entitled to the only as to those matters actually and directly controverted and
possession thereof. Further, the CA held that the respondents' cause determined and not as to matters merely involved therein. This is
of action is not barred by laches. the concept of res judicata known as "conclusiveness of judgment."
Stated differently, any right, fact or matter in issue directly
The petitioners sought a reconsideration of the Decision dated July adjudicated or necessarily involved in the determination of an
2, 2009, but it was denied by the CA in its Resolution[17] dated action before a competent court in which judgment is rendered on
January 27, 2010. the merits is conclusively settled by the judgment therein and
cannot again be litigated between the parties and their privies
Hence, the instant petition. whether or not the claim, demand, purpose, or subject matter of the
two actions is the same.[20]
Issues For res judicata under the irst concept, bar by prior judgment, to
apply, the following requisites must concur, viz: (a) inality of the
Essentially, the issues set forth by the petitioners for this Court's former judgment; (b) the court which rendered it had jurisdiction
resolution are the following: (1) whether the inality of the decision over the subject matter and the parties; (c) it must be a judgment on
in the forcible entry case constitutes res judicata, which would the merits; and (d) there must be, between the irst and second
warrant the dismissal of the respondents' complaint for recovery of actions, identity of parties, subject matter and causes of action.[21]


Between the petitioners' unsubstantiated and self-serving claim

The irst three requisites are present in this case. The Decision that the subject property was inherited by Carmelita from her
dated September 12, 1997 in the forcible entry case rendered by the father and OCT No. M-4559 registered in Dionisio's name, the latter
MTC, a court which has jurisdiction over the subject property and must prevail. The respondents' title over the subject property is
the parties, had long become inal. The said MTC decision is an evidence of their ownership thereof. That a certi icate of title serves
adjudication on the merits. However, the fourth requisite is not as evidence of an indefeasible and incontrovertible title to the
present. Although there is identity of parties and subject matter as property in favor of the person whose name appears therein and
between the forcible entry case and recovery of possession case, that a person who has a Torrens title over a land is entitled to the
there is no identity of causes of action. possession thereof are fundamental principles observed in this
jurisdiction.[25]
As correctly found by the RTC and the CA, the forcible entry case
only involves the issue of possession over the subject property Further, it is settled that a Torrens Certi icate of Title is indefeasible
while the recovery of possession case puts in issue the ownership of and binding upon the whole world unless and until it has been
the subject property and the concomitant right to possess the same nulli ied by a court of competent jurisdiction. Under existing
as an attribute of ownership. statutory and decisional law, the power to pass upon the validity of
such certi icate of title at the irst instance properly belongs to the
In an action for forcible entry and detainer, the only issue is Regional Trial Courts in a direct proceeding for cancellation of
possession in fact, or physical possession of real property, title.[26] Accordingly, the petitioners may not assail the validity of
independently of any claim of ownership that either party may put the issuance of OCT No. M-4559 in the name of Dionisio in their
forth in his pleading. If plaintiff can prove prior physical possession answer to the complaint iled by the respondents for recovery of
in himself, he may recover such possession even from the owner, possession of the subject property; it is a collateral attack to the
but, on the other hand, if he cannot prove such prior physical validity of OCT No. M-4559, which the RTC and the CA aptly
possession, he has no right of action for forcible entry and detainer disregarded.
even if he should be the owner of the property.[22]
Third Issue: Laches
Thus, even the MTC, in its Decision dated September 12, 1997 in the
forcible entry case, stressed that its determination is only limited to Equally untenable is the petitioners' claim that the respondents'
the issue of who has "actual prior possession" of the subject right to recover the possession of the subject property is already
property regardless of the ownership of the same.[23] barred by laches. As owners of the subject property, the
respondents have the right to recover the possession thereof from
On the other hand, the recovery of possession case is actually an any person illegally occupying their property. This right is
accion reinvindicatoria or a suit to recover possession of a parcel of imprescriptible. Assuming arguendo that the petitioners indeed
land as an element of ownership. A perusal of the complaint iled by have been occupying the subject property for a considerable length
the respondents in the recovery of possession case shows that the of time, the respondents, as lawful owners, have the right to
respondents, as successors-in-interest of Dionisio, are asserting demand the return of their property at any time as long as the
ownership of the subject property and are seeking the recovery of possession was unauthorized or merely tolerated, if at all.
possession thereof.
Jurisprudence consistently holds that "prescription and laches can
A judgment rendered in a forcible entry case will not bar an action not apply to registered land covered by the Torrens system" because
between the same parties respecting title or ownership because "under the Property Registration Decree, no title to registered land
between a case for forcible entry and an accion reinvindicatoria, in derogation to that of the registered owner shall be acquired by
there is no identity of causes of action.[24] Such determination does prescription or adverse possession."[27]
not bind the title or affect the ownership of the land; neither is it
conclusive of the facts therein found in a case between the same WHEREFORE, in consideration of the foregoing disquisitions, the
parties upon a different cause of action involving possession. petition is DENIED. The Decision dated July 2, 2009 and Resolution
dated January 27, 2010 of the Court of Appeals in CA-G.R. SP No.
The decision in the forcible entry case is conclusive only as to the 106064 are hereby AFFIRMED.
MTC's determination that the petitioners are not liable for forcible
entry since the respondents failed to prove their prior physical SO ORDERED.
possession; it is not conclusive as to the ownership of the subject
property. Besides, Section 18, Rule 70 of the Rules of Court Velasco, (Chairperson), Peralta, Villarama, Jr., Reyes, and Jardeleza,
expressly provides that a "judgment rendered in an action for JJ., concur.
forcible entry or detainer shall be conclusive with respect to the
possession only and shall in no wise bind the title or affect the Suarez vs Emboy, G.R. No. 187944, March
ownership of the land."
12, 2014
Second Issue: Ownership of the Subject Property
FIRST DIVISION
G.R. No. 187944, March 12, 2014
The respondents were able to prove that they have a superior right
CARMENCITA SUAREZ, PETITIONER, VS. MR. AND MRS. FELIX E.
over the subject property as against the petitioners. It is undisputed
EMBOY, JR. AND MARILOU P. EMBOY-DELANTAR, RESPONDENTS.
that the subject property is indeed covered by OCT No. M-4559,
which is registered in the name of Dionisio, the respondents'
DECISION
predecessor-in-interest.
REYES, J.:


For review in the instant Petition[1] is the Decision[2] rendered on records pertaining to the subject lot and uncovered possible
March 19, 2009 and Resolution[3] issued on May 5, 2009 by the anomalies, i.e., forged signatures and alterations, in the execution of
Court of Appeals (CA) in CA-G.R. SP No. 03489. The CA granted the a series of deeds of partition relative to Lot No. 1907-A. On August
Petition for Review[4] iled by Mr. and Mrs. Felix Emboy, Jr. (Felix) 13, 2004, they iled before the RTC of Cebu City a complaint[13] for
and Marilou Emboy-Delantar (Marilou) (respondents), seeking to nulli ication of the partition and for the issuance of new TCTs
reverse the decisions of the Regional Trial Court (RTC), Branch covering the heirs’ respective portions of Lot No. 1907-A.[14]
12,[5] and Municipal Trial Court in Cities (MTCC), Branch 3,[6] of
Cebu City, rendered on February 26, 2008 in Civil Case No. On December 8, 2004, Carmencita iled before the MTCC and
CEB-33328,[7] and on September 25, 2006 in Civil Case No. against the respondents a complaint for unlawful detainer, the
R-49832, respectively. The RTC af irmed the MTCC in upholding the origin of the instant petition. She alleged that she bought the
claims of Carmencita Suarez (Carmencita) in her complaint for subject lot from Remedios, Moreno, Veronica and Dionesia,[15] the
unlawful detainer instituted against the respondents. registered owners thereof and the persons who allowed the
respondents to occupy the same by mere tolerance. As their
Antecedents successor-in-interest, she claimed her entitlement to possession of
the subject lot and the right to demand from the respondents to
At the center of the dispute is a 222-square meter parcel of land, vacate the same.[16]
designated as Lot No. 1907-A-2 (subject lot) of the subdivision
plan Psd-165686, situated in Barangay Duljo, Cebu City, and covered The MTCC upheld Carmencita’s claims in its decision rendered on
by Transfer Certi icate of Title (TCT) No. T-174880 issued in the September 25, 2006. The respondents were ordered to vacate the
name of Carmencita on February 9, 2005. The subject lot used to be subject lot and remove at their expense all the improvements they
a part of Lot No. 1907-A,[8] which was partitioned in the following had built thereon. They were likewise made solidarily liable to pay
manner among the heirs of Spouses Carlos Padilla (Carlos) and Carmencita Php 20,000.00 as attorney’s fees.[17]
Asuncion Pacres (Asuncion):[9]
In the Decision dated February 26, 2008, the RTC af irmed in its
entirety the MTCC ruling.[18]
Lot No. TCT No. Heirs
1907-A-1 T-54359 Spouses Rogelio and Praxedes The respondents challenged the MTCC and RTC judgments through
a Petition for Review[19] iled before the CA.
Padilla
1907-A-2 T-54360 Heirs of Vicente Padilla (Vicente), The respondents argued that they have been occupying the subject
namely: (1) Azucena Padilla, lot in the concept of owners for several decades. Carmencita, on the
other hand, was a buyer in bad faith for having purchased the
married to Felly Carrera; (2) property despite the notice of lis pendens clearly annotated on the
Remedios Padilla (Remedios), subject lot’s title. Even her complaint for unlawful detainer was
iled on December 8, 2004 subsequent to the respondents’
married to Oscar Dimay; (3) institution on August 13, 2004 of a petition for nulli ication of the
Veronica Padilla (Veronica);[10] and partition. Citing Sarmiento v. CA,[20] the respondents emphasized
that “even if one is the owner of the property, the possession thereof
(4) Moreno Padilla (Moreno),
cannot be wrested from another who had been in the physical or
married to Teresita Curso (Teresita) material possession of the same for more than one year by resorting
1907-A-3 T-54361 Cresencio Padilla to a summary action of ejectment.”[21] The respondents also
invoked the doctrine enunciated in Amagan v. Marayag[22] that the
1907-A-4 T-54362 Fructousa Baricuatro pendency of another action anchored on the issue of ownership
1907-A-5 T-54363 Claudia Padilla-Emboy (Claudia) justi ies the suspension of an ejectment suit involving the same real
property. The foregoing is especially true in the case at bar where
the issue of possession is so interwoven with that of ownership.
A house, which is occupied by respondents Felix and Marilou,
Besides, the resolution of the question of ownership would
stands in the subject lot. The respondents claim that their mother,
necessarily result in the disposition of the issue of possession.
Claudia, had occupied the subject lot during her lifetime and it was
earmarked to become her share in Lot No. 1907-A. They had
The respondents also stressed that the deed of sale dated April 1,
thereafter stayed in the subject lot for decades after inheriting the
2004, which was attached to the complaint for unlawful detainer,
same from Claudia, who had in turn succeeded her own parents,
bore tell-tale signs of being spurious. First, Atty. Pareja’s demand
Carlos and Asuncion.[11]
letter sent to the respondents instead referred to a deed of sale
dated February 12, 2004. Secondly, Teresita, who now lives in Luzon
In 2004, respondents Felix and Marilou were asked by their cousins,
and has been estranged from Moreno since the 1980s, was a
who are the Heirs of Vicente, to vacate the subject lot and to transfer
signatory in the deed of sale. Thirdly, a certain Veronida Padilla, a
to Lot No. 1907-A-5, a landlocked portion sans a right of way. They
ictitious person, also signed the deed of sale as among the vendors,
refused to comply insisting that Claudia’s inheritance pertained to
but she, too, was impleaded as a co-defendant in the ejectment suit.
Lot No. 1907-A-2.[12]
Fourthly, the deed was only registered the following year after its
supposed execution.
Not long after, the respondents received from Carmencita’s counsel,
Atty. Jufelenito R. Pareja (Atty. Pareja), a demand letter, dated
The respondents insisted that the Heirs of Vicente, who had
February 23, 2004, requiring them to vacate the subject lot. They
allegedly sold the subject lot to Carmencita, had never physically
were informed that Carmencita had already purchased on February
occupied the same. Hence, there was no basis at all for Carmencita’s
12, 2004 the subject lot from the former’s relatives. However, the
respondents did not heed the demand. Instead, they examined the


claim that the respondents’ possession of the subject lot was by the prior possession de facto. In unlawful detainer, the possession
mere tolerance of the alleged owners. was originally lawful but became unlawful by the expiration or
termination of the right to possess, hence the issue of rightful
The respondents also presented before the CA a newly discovered possession is decisive for, in such action, the defendant is in actual
evidence, which they found in an old wooden chest in their possession and the plaintiffs cause of action is the termination of
ancestral home. A duly notarized document captioned as an the defendant’s right to continue in possession.
“Agreement,”[23] dated February 23, 1957, showed that Vicente and
his spouse, Dionesia, had waived their hereditary rights to Lot No. What determines the cause of action is the nature of defendant’s
1907-A. The document stated that Vicente obtained a loan from the entry into the land. If the entry is illegal, then the action which may
Philippine National Bank using Lot No. 1907-A as a collateral. The be iled against the intruder within one (1) year therefrom is
loan was paid by Carlos and Asuncion and the waiver must have forcible entry. If, on the other hand, the entry is legal but the
been executed in order to be fair to Vicente’s siblings. Prescinding possession thereafter became illegal, the case is one of unlawful
from the above, the Heirs of Vicente no longer had ownership rights detainer which must be iled within one (1) year from the date of
over the subject lot to convey to Carmencita. the last demand.A close perusal of [Carmencita’s] complaint a quo
reveals that the action was neither one of forcible entry nor
The respondents also averred that Carmencita’s complaint lacked a unlawful detainer but essentially involved an issue of ownership
cause of action. The certi ication to ile an action was issued by the which must be resolved in an accion reivindicatoria. It did not
of icials of Barangay Duljo in the name of James Tan Suarez, characterize [the respondents’] alleged entry into the land: whether
Carmencita’s brother, who had no real rights or interests over the the same was legal or illegal. It did not state how [the respondents]
subject lot. Further, while Carmencita based her claim over the entered the land and constructed a house thereon. It was also silent
subject lot by virtue of a deed of sale executed on April 1, 2004, no on whether [the respondents’] possession became legal before
demand to vacate was made upon the respondents after that date. [Carmencita] demanded from them to vacate the land. The
The absence of such demand rendered the complaint fatally complaint merely averred that their relatives previously owned the
defective, as the date of its service should be the reckoning point of lot [the respondents] were occupying and that after [Carmencita]
the one-year period within which the suit can be iled. purchased it[,] she, as its new owner, demanded [for the
respondents] to vacate the land. Moreover, it is undisputed that [the
In support of the respondents’ prayer for the issuance of injunctive respondents] and their ancestors have been occupying the land for
reliefs, they argued that their loss would be irreparable. Moreover, several decades already. There was no averment as to how or when
the resolution of the respondents’ petition for nulli ication of the [Carmencita’s] predecessors tolerated [the respondents’]
partition of Lot No. 1907-A, in which Carmencita was likewise possession of the land. Consequently, there was no contract to
impleaded as a defendant, would be rendered useless in the event speak of, whether express or implied, between [the respondents],
that the latter’s complaint for unlawful detainer would be granted on one hand, and [Carmencita] or her predecessors, on the other, as
and the former’s ancestral house demolished. would qualify [the respondents’] possession of the land as a case of
unlawful detainer. Neither was it alleged that [the respondents]
The Ruling of the CA took possession of the land through force, intimidation, threat,
strategy or stealth to make out a case of forcible entry. In any event,
On March 19, 2009, the CA rendered the herein assailed Decision [Carmencita] cannot legally assert that [the respondents’]
reversing the disquisitions of the courts a quo and dismissing possession of the land was by mere tolerance. This is because
Carmencita’s complaint for unlawful detainer. The CA explained: [Carmencita’s] predecessors-in-interest did not yet own the
property when [Claudia] took possession thereof. Take note that
Section 1, Rule 70 of the Rules of Court provides: [Carmencita’s] predecessors-in-interest merely stepped into the
Section 1. Who may institute proceedings, and when.—Subject to shoes of their parents who were also co-heirs of [Claudia]. Finally,
the provisions of the next succeeding section, a person deprived of to categorize a cause of action as one constitutive of unlawful
the possession of any land or building by force, intimidation, threat, detainer, plaintiff’s supposed acts of tolerance must have been
strategy, or stealth, or a lessor, vendor, vendee, or other person present from the start of the possession which he later seek[s] to
against whom the possession of any land or building is unlawfully recover. This is clearly wanting in the case at bar.
withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the Indeed, when the complaint fails to aver facts constitutive of forcible
legal representatives or assigns of any such lessor, vendor, vendee, entry or unlawful detainer, as where it does not state how entry was
or other person, may, at any time within one (1) year after such effected or how and when dispossession started, as in the case at
unlawful deprivation or withholding of possession, bring an action bar, the remedy should either be an accion publiciana or an accion
in the proper Municipal Trial Court against the person or persons reivindicatoria in the proper RTC. If [Carmencita] is truly the owner
unlawfully withholding or depriving of possession, or any person of the subject property and she was unlawfully deprived of the real
or persons claiming under them, for the restitution of such right of possession or ownership thereof, she should present her
possession, together with damages and costs.The distinction claim before the RTC in an accion publiciana or an accion
between forcible entry and unlawful detainer was lucidly explained reivindicatoria, and not before the municipal trial court in a
in Sarmiento vs. Court of Appeals,: summary proceeding of unlawful detainer or forcible entry.
Forcible entry and unlawful detainer cases are two distinct actions
de ined in Section 1, Rule 70 of the Rules of Court. [In] forcible Munoz vs. Court of Appeals enunciated:
entry, one is deprived of physical possession of land or building by For even if he is the owner, possession of the property cannot be
means of force, intimidation, threat, strategy, or stealth. In unlawful wrested from another who had been in possession thereof for more
detainer, one unlawfully withholds possession thereof after the than twelve (12) years through a summary action for ejectment.
expiration or termination of his right to hold possession under any Although admittedly[,] petitioner may validly claim ownership
contract, express or implied. In forcible entry, the possession is based on the muniments of title it presented, such evidence does
illegal from the beginning and the basic inquiry centers on who has not responsibly address the issue of prior actual possession raised


in a forcible entry case. It must be stated that regardless of actual

condition of the title to the property, the party in peaceable quiet The Respondents’ Arguments
possession shall not be turned out by a strong hand, violence or
terror. Thus, a party who can prove prior possession can recover In their Comment[33] to the instant petition, the respondents stress
such possession even against the owner himself. Whatever may be that Carmencita’s complaint for unlawful detainer was
the character of his prior possession, if he has in his favor priority in fundamentally inadequate. There was practically no speci ic
time, he has the security that entitles him to remain on the property averment as to when and how possession by tolerance of the
until he is lawfully ejected by a person having a better right by respondents began. In the complaint, Carmencita made a general
accion publiciana or accion reivindicatoria.[24] (Citations omitted claim that the respondents possessed “the property by mere
and underscoring supplied) tolerance ‘with the understanding that they would voluntarily
In Carmencita’s Motion for Reconsideration[25] iled before the CA, vacate the premises and remove their house(s) thereon upon
she alleged that the case of Sarmiento cited by the respondents is demand by the owners’.”[34] In Spouses Valdez, Jr. v. CA,[35] the
not applicable to the present controversy since it involves a Court ruled that the failure of the complainants to allege key
boundary dispute, which is properly the subject of an accion jurisdictional facts constitutive of unlawful detainer is fatal and
reivindicatoria and over which the MTCC has no jurisdiction. She deprives the MTCC of jurisdiction over the action.
claimed that Rivera v. Rivera[26] inds more relevance in the case at
bar. In Rivera, the contending parties were each other’s relatives In their rejoinder,[36] the respondents likewise argue that the
and the Court ruled that in an unlawful detainer case, prior physical issues of possession and ownership are inseparably linked in the
possession by the complainant is not necessary.[27] Instead, what case at bar. Carmencita’s complaint for ejectment was based solely
is required is a better right of possession. Further, the MTCC cannot on her spurious title, which is already the subject of the
be divested of jurisdiction just because the defendants assert respondents’ petition for nulli ication of partition of Lot No. 1907-A.
ownership over the disputed property.
Our Disquisition
In the herein assailed Resolution dated May 5, 2009, the CA denied
Carmencita’s Motion for Reconsideration. The instant petition lacks merit.
In essence, the instant petition presents the following issues: Carmencita had not amply alleged
and proven that all the requisites for
I unlawful detainer are present in the
case at bar.
Whether or not Carmencita’s complaint against the respondents
had suf iciently alleged and proven a cause of action for unlawful “Without a doubt, the registered owner of real property is entitled
detainer. to its possession. However, the owner cannot simply wrest
possession thereof from whoever is in actual occupation of the
II property. To recover possession, he must resort to the proper
judicial remedy and, once he chooses what action to ile, he is
Whether or not the pendency of the respondents’ petition for required to satisfy the conditions necessary for such action to
nulli ication of partition of Lot No. 1907-A and for the issuance of prosper.”[37]
new certi icates of title can abate Carmencita’s ejectment suit.
Carmencita’s Allegations In Spouses Valdez, Jr.,[38] the Court is instructive anent the three
kinds of actions available to recover possession of real property, viz:
In support of the petition, Carmencita reiterates that she purchased
the subject lot from the Heirs of Vicente, who were then the (a) accion interdictal; (b) accion publiciana; and (c) accion
registered owners thereof. At the time of the sale, respondents Felix reivindicatoria.
and Marilou were occupying the subject lot. Thus, Atty. Pareja, in
Carmencita’s behalf, demanded that they vacate the property. The Accion interdictal comprises two distinct causes of action, namely,
respondents’ refusal to comply with the demand turned them into forcible entry (detentacion) and unlawful detainer (desahuico) [sic].
deforciants unlawfully withholding the possession of the subject lot In forcible entry, one is deprived of physical possession of real
from Carmencita, the new owner, whose recourse was to ile a property by means of force, intimidation, strategy, threats, or stealth
complaint for unlawful detainer. whereas in unlawful detainer, one illegally withholds possession
after the expiration or termination of his right to hold possession
Further, Carmencita insists that a certi icate of title shall not be under any contract, express or implied. The two are distinguished
subject to a collateral attack[28] and the issue of ownership cannot from each other in that in forcible entry, the possession of the
be resolved in an action for unlawful detainer. A pending suit defendant is illegal from the beginning, and that the issue is which
involving the question of ownership of a piece of real property will party has prior de facto possession while in unlawful detainer,
not abate an ejectment complaint as the two are not based on the possession of the defendant is originally legal but became illegal
same cause of action and are seeking different reliefs.[29] due to the expiration or termination of the right to possess.
Additionally, Carmencita invokes the doctrine in Eastern Shipping The jurisdiction of these two actions, which are summary in nature,
Lines, Inc. v. CA[30] that the registered owner of a property is lies in the proper municipal trial court or metropolitan trial court.
entitled to its possession. In Arcal v. CA,[31] the Court also Both actions must be brought within one year from the date of
explained that the occupation of a property not by its registered actual entry on the land, in case of forcible entry, and from the date
owner but by others depends on the former’s tolerance, and the of last demand, in case of unlawful detainer. The issue in said cases
occupants are bound by an implied promise to vacate upon demand, is the right to physical possession.
failing at which, a suit for ejectment would be proper.[32]


Accion publiciana is the plenary action to recover the right of As a general rule, therefore, a pending civil action involving
possession which should be brought in the proper regional trial ownership of the same property does not justify the suspension of
court when dispossession has lasted for more than one year. It is an ejectment proceedings. “The underlying reasons for the above
ordinary civil proceeding to determine the better right of ruling were that the actions in the Regional Trial Court did not
possession of realty independently of title. In other words, if at the involve physical or de facto possession, and, on not a few occasions,
time of the iling of the complaint more than one year had elapsed that the case in the Regional Trial Court was merely a ploy to delay
since defendant had turned plaintiff out of possession or disposition of the ejectment proceeding, or that the issues
defendant’s possession had become illegal, the action will be, not presented in the former could quite as easily be set up as defenses
one of the forcible entry or illegal detainer, but an accion publiciana. in the ejectment action and there resolved.”
On the other hand, accion reivindicatoria is an action to recover
ownership also brought in the proper regional trial court in an Only in rare instances is suspension allowed to await the outcome of
ordinary civil proceeding.[39] (Citations omitted) the pending civil action. One such exception is Vda. de Legaspi v.
In a complaint for unlawful detainer, the following key jurisdictional Avendañ o, wherein the Court declared:
facts must be alleged and suf iciently established:
“x x x. Where the action, therefore, is one of illegal detainer, as
(1) distinguished from one of forcible entry, and the right of the plaintiff
initially, possession of property by the defendant was by contract to recover the premises is seriously placed in issue in a proper
with or by tolerance of the plaintiff; judicial proceeding, it is more equitable and just and less productive
(2) of confusion and disturbance of physical possession, with all its
eventually, such possession became illegal upon notice by plaintiff concomitant inconvenience and expenses. For the Court in which
to defendant of the termination of the latter’s right of possession; the issue of legal possession, whether involving ownership or not, is
(3) brought to restrain, should a petition for preliminary injunction be
thereafter, the defendant remained in possession of the property iled with it, the effects of any order or decision in the unlawful
and deprived the plaintiff of the enjoyment thereof; and detainer case in order to await the inal judgment in the more
(4) substantive case involving legal possession or ownership. It is only
within one year from the last demand on defendant to vacate the where there has been forcible entry that as a matter of public policy
property, the plaintiff instituted the complaint for ejectment.[40] the right to physical possession should be immediately set at rest in
favor of the prior possession regardless of the fact that the other
In the case at bar, the irst requisite mentioned above is markedly party might ultimately be found to have superior claim to the
absent. Carmencita failed to clearly allege and prove how and when premises involved, thereby to discourage any attempt to recover
the respondents entered the subject lot and constructed a house possession thru force, strategy or stealth and without resorting to
upon it.[41] Carmencita was likewise conspicuously silent about the the courts.”
details on who speci ically permitted the respondents to occupy the
lot, and how and when such tolerance came about.[42] Instead, xxxx
Carmencita cavalierly formulated a legal conclusion, sans factual Indisputably, the execution of the MCTC Decision would have
substantiation, that (a) the respondents’ initial occupation of the resulted in the demolition of the house subject of the ejectment suit;
subject lot was lawful by virtue of tolerance by the registered thus, by parity of reasoning, considerations of equity require the
owners, and (b) the respondents became deforciants unlawfully suspension of the ejectment proceedings. We note that, like Vda. de
withholding the subject lot’s possession after Carmencita, as Legaspi, the respondent’s suit is one of unlawful detainer and not of
purchaser and new registered owner, had demanded for the former forcible entry. And most certainly, the ejectment of petitioners
to vacate the property.[43] It is worth noting that the absence of the would mean a demolition of their house, a matter that is likely to
irst requisite assumes even more importance in the light of the create the “confusion, disturbance, inconveniences and expenses”
respondents’ claim that for decades, they have been occupying the mentioned in the said exceptional case.
subject lot as owners thereof.
Necessarily, the af irmance of the MCTC Decision would cause the
Again, this Court stresses that to give the court jurisdiction to effect respondent to go through the whole gamut of enforcing it by
the ejectment of an occupant or deforciant on the land, it is physically removing the petitioners from the premises they claim to
necessary that the complaint must suf iciently show such a have been occupying since 1937. (Respondent is claiming
statement of facts as to bring the party clearly within the class of ownership only of the land, not of the house.) Needlessly, the
cases for which the statutes provide a remedy, without resort to litigants as well as the courts will be wasting much time and effort
parol testimony, as these proceedings are summary in nature. In by proceeding at a stage wherein the outcome is at best temporary,
short, the jurisdictional facts must appear on the face of the but the result of enforcement is permanent, unjust and probably
complaint. When the complaint fails to aver facts constitutive of irreparable.
forcible entry or unlawful detainer, as where it does not state how
entry was effected or how and when dispossession started, the We should stress that respondent’s claim to physical possession is
remedy should either be an accion publiciana or accion based not on an expired or a violated contract of lease, but allegedly
reivindicatoria.[44] on “mere tolerance.” Without in any way prejudging the
proceedings for the quieting of title, we deem it judicious under the
As an exception to the general rule, the respondents’ petition for present exceptional circumstances to suspend the ejectment
nulli ication of the partition of Lot No. 1907-A can abate case.[45] (Citations omitted)
Carmencita’s suit for unlawful detainer. The Court then quoted with favor the following portion of the
Decision dated July 8, 1997, penned by Associate Justice Artemio G.
In Amagan, the Court is emphatic that: Tuquero in CA-G.R. No. 43611-SP, from which the Amagan case
sprang:


“ONE. Private respondent Teodorico T. Marayag anchors his action Bokingo vs Court of Appeals, G.R. NO.
for unlawful detainer on the theory that petitioners’ possession of
the property in question was by mere tolerance. However, in 161739, May 04, 2006
523 Phil. 186
answer to his demand letter dated April 13, 1996 x x x, petitioners
categorically denied having any agreement with him, verbal or
FIRST DIVISION
written, asserting that they are ‘owners of the premises we are
G.R. NO. 161739, May 04, 2006
occupying at 108 J.P. Rizal Street, San Vicente, Silang, Cavite.’ In
ALFREDO BOKINGO, PETITIONER, VS. THE HONORABLE COURT OF
other words, it is not merely physical possession but ownership as
APPEALS, THE HEIRS OF CELESTINO BUSA, REPRESENTED BY
well that is involved in this case.[”]
FELICIDAD BUSA-PANAL AND ERNESTO M. CAMPOS,
RESPONDENTS.
“TWO. In fact, to protect their rights to the premises in question,
petitioners iled an action for reconveyance, quieting of title and
DECISION
damages against private respondents, docketed as Civil Case No.
CALLEJO, SR., J.:
TG-1682 of the Regional Trial Court, Branch 18, Tagaytay City. The
issue of ownership is squarely raised in this action. Undoubtedly,
Before the Court is the petition for review on certiorari iled by
the resolution of this issue will be determinative of who is entitled
Alfredo Bokingo seeking to reverse and set aside the Decision[1]
to the possession of the premises in question.[”]
dated December 17, 2003 of the Court of Appeals (CA) in CA-G.R. SP
No. 71510 which dismissed his petition for certiorari iled
“THREE. The immediate execution of the judgment in the unlawful
therewith.
detainer case will include the removal of the petitioners’ house
[from] the lot in question.[”]
The factual and procedural antecedents are as follows:
“To the mind of the Court it is injudicious, nay inequitable, to allow
Petitioner Alfredo Bokingo is one of the defendants in the complaint
demolition of petitioners’ house prior to the determination of the
for injunction and damages iled by Ernesto Campos, the Heirs of
question of ownership [of] the lot on which it stands.”[46] (Citation
Celestino Busa,[2] the Heirs of Felicidad Busa-Panal[3] and the
omitted)
Heirs of Concordia Busa.[4] The complaint was iled with the
We ind the doctrines enunciated in Amagan squarely applicable to
Regional Trial Court (RTC) of Butuan City, Branch 3 thereof, and
the instant petition for reasons discussed hereunder.
docketed as Civil Case No. 1003. The complaint alleged as follows:
CAUSE OF ACTION
Carmencita’s complaint for unlawful detainer is anchored upon the
Plaintiffs [herein respondents] are co-owners of the land subject
proposition that the respondents have been in possession of the
matter. By virtue of the right of representation, the heirs of
subject lot by mere tolerance of the owners. The respondents, on
FELICIDAD BUSA-PANAL and CONCORDIA S. BUSA and REYNALDO
the other hand, raise the defense of ownership of the subject lot and
S. BUSA, respectively;
point to the pendency of Civil Case No. CEB-30548, a petition for
nulli ication of the partition of Lot No. 1907-A, in which
Carmencita and the Heirs of Vicente were impleaded as parties.
Defendants in this case are heirs of MIGUEL BOKINGO;
Further, should Carmencita’s complaint be granted, the
respondents’ house, which has been standing in the subject lot for
decades, would be subject to demolition. The foregoing
Defendants ALFREDO BOKINGO [herein petitioner], WENCESLAO B.
circumstances, thus, justify the exclusion of the instant petition
AMBRAY, JR., ROSA B. AMBRAY, CELIA A. ALMORA and JOSELITO B.
from the purview of the general rule.
AMBRAY, iled an application for titling of a parcel of land before the
Department of Environment and Natural Resources, Of ice of the
All told, we ind no reversible error committed by the CA in
CENRO, Ochoa Avenue, Butuan City;
dismissing Carmencita’s complaint for unlawful detainer. As
discussed above, the jurisdictional requirement of possession by
mere tolerance of the owners had not been amply alleged and
The land subject matter of the application of defendants is a parcel
proven. Moreover, circumstances exist which justify the abatement
of land located at Baan (Buhangin), Butuan City, containing an area
of the ejectment proceedings. Carmencita can ventilate her
of 2.1600 hectares, more or less;
ownership claims in an action more suited for the purpose. The
respondents, on other hand, need not be exposed to the risk of
having their house demolished pending the resolution of their
The land subject matter of the application for titling of defendants is
petition for nulli ication of the partition of Lot No. 1907-A, where
a parcel of land inherited by plaintiffs from their father, the late
ownership over the subject lot is likewise presented as an issue.
CELESTINO BUSA. This parcel of land is described particularly as:
IN VIEW OF THE FOREGOING, the instant petition is DENIED. The
Decision rendered on March 19, 2009 and Resolution issued on May
TAX DECLARATION NO. GR.-10-002-0189-A"A parcel of land
5, 2009 by the Court of Appeals in CA-G.R. SP No. 03489 are
covered by Tax Declaration No. GR-10-002-0189-A, situated in
AFFIRMED.
Buhangin, Butuan City, containing an area of 2.1600 HAS., more or
less. Bounded on the North - Elisa Busa, South - Pastor Ago, East -
SO ORDERED.
Ho. Miguel Bokingo and on the West - Baan River."
When plaintiffs knew of defendants' application, plaintiffs iled a
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and
protest against defendants' application on February 5, 1996.
Villarama, Jr., JJ., concur.
Attached as Annex A is the Protest;


On November 24, 1998, the Provincial Environment and Natural 1) Enjoin permanently the illegal acts of defendants of preventing
Resources Of icer, HUGO I. BANOSIA, resolved the Protest in favor of the survey of the land subject matter of this case by ENGR.
Plaintiffs-the protestant in the DENR case. Attached as Annex B is ERNESTO M. CAMPOS;
the order;
2) Order defendants to pay plaintiffs the sum of P10,000.00 as
attorney's fees, P10,000.00 as litigation expenses;
On January 6, 1999, the Provincial Environment and Natural
Resources Of icer, HUGO T. BANOSIA, issued a certi ication stating 3) Order defendants to pay damages to plaintiff;
that the order dated November 24, 1998 has become inal and
executory. Attached as Annex C is the machine copy of the 4) Such other reliefs just and reasonable under the
Certi ication; circumstances.[5]Petitioner Bokingo, as one of the defendants in the
above complaint, iled with the court a quo a motion to dismiss
alleging that the latter has no jurisdiction over the subject matter of
On September 9, 1999, the same DENR Of icer HUGO T. BANOSIA the claim. Speci ically, petitioner Bokingo contended that it could be
issued an Order of Execution which states that: gleaned from the complaint that the issue between the parties
In complying herewith, the Land Management Of icer III concerned involved the possession of the land. As such, the assessed value of
should be instructed to set forth the whole proceeding in writing the land was crucial to determine the court's jurisdiction over the
signed by the parties and witnesses, if possible, submit and return subject matter in accordance with either Section 19(2)[6] or Section
to this Of ice within sixty (60) days from receipt hereof, to be used 33(3)[7] of Batasang Pambansa Blg. 129[8] as amended by Republic
as evidence should it be necessary to institute any action, criminal Act No. 7691. If the assessed value thereof is P20,000.00 or less,
or otherwise, against any party who may refuse to obey the same. then the Municipal Trial Court (MTC) has jurisdiction over the
subject matter. Otherwise, jurisdiction is with the RTC.
SO ORDERED, Butuan City, September 9, 1999.
Plaintiffs requested on June 23, 1999, for a Survey Authority to Petitioner Bokingo pointed out in his Motion to Dismiss that the
survey the land subject matter of this case before the CENRO Of ice assessed value of the land subject matter of the complaint was not
of Butuan City. Attached as Annex D is the Survey Application; indicated. Nonetheless, he proffered that based on his father's tax
On July 30, 1999, A Survey Authority was issued by the CENRO of declaration covering the subject land, its assessed value was only
Butuan City, authorizing plaintiff ENGR. ERNESTO M. CAMPOS, JR., P14,410.00. Consequently, it was allegedly clear that the court a
to survey the land subject matter of the DENR case and the case at quo, a Regional Trial Court, had no jurisdiction over the subject
bar. Attached as Annex E is the Survey Authority; matter of the complaint iled by the respondents. Rather, in view of
the assessed value of the subject land which was allegedly less than
the P15,000.00, jurisdiction properly belonged to the MTC.
On November 18, 1999 at 11:00 A.M., FELICIDAD BUSA-PANAL,
MILAGROS BUSA SIMOGAN, TERESITA BUSA LINAO, JIMMY Petitioner Bokingo thus urged the court a quo to dismiss the
BUSA-PANAL, son of Felicidad Busa-Panal, ALFREDO BUSA-PANAL, complaint iled by the respondents for lack of jurisdiction over the
son-in-law of Concordia S. Busa, personnel of the Butuan PNP and subject matter thereof.
the personnel of ENGR. ERNESTO M. CAMPOS went to the area
subject matter of this case to survey the land. Unfortunately, Acting thereon, the court a quo issued the Order dated March 13,
Defendant SPO3 FERDINAND B. DACILLO and Defendant ALFREDO 2002 denying the motion to dismiss. It pointed out that the
BOKINGO, representatives of defendants, told the survey group to complaint's allegation is that the respondents, as plaintiffs, are
stop and not to enter the area subject matter of this case. Attached entitled to have the subject land surveyed after petitioner Bokingo's
as Annex F is the report of CENRO Of icer who [was] present during and his co-claimants' application for the titling of the subject land
the November 18, 1999 survey which was stopped by SPO3 was dismissed by the Provincial Environment and Natural
FERDINAND B. DACILLO and ALFREDO BOKINGO; Resources Of icer (PENRO) and the respondents were declared to
have a better right to ile a public land application covering the
same. Further, the relief being sought in the complaint is injunction
Plaintiff[s] availed of the Barangay Justice System to resolve the in order that the respondents' right to survey the subject land
controversy regarding the survey but to no avail, defendants still would not be defeated.
refused to allow plaintiffs to survey the area. Thus, a Certi icate to
File Action was issued by the Lupong Tagapamayapa. Copy of the Based on these allegations, the court a quo held that it had
same is hereto attached as Annex G; jurisdiction over the subject matter of the claim under Section 2 of
Rule 58 of the Rules of Court which provides in part that "[a]
preliminary injunction may be granted by the court where the
The defendants did not exercise honesty and good faith in their acts action or proceeding is pending." It accordingly denied petitioner
which is a violation of Article 19 of the New Civil Code, and which Bokingo's motion to dismiss the complaint for lack of jurisdiction.
entitles the plaintiffs for damages;
Petitioner Bokingo forthwith iled with the Court of Appeals a
petition for certiorari alleging grave abuse of discretion on the part
The acts of defendants constrained the plaintiff[s] to litigate and to of the court a quo in denying his motion to dismiss.
incur attorney's fees in the amount of PhP10,000.00 plus litigation
expenses estimated at PhP10,000.00. On December 17, 2003, the CA rendered the assailed Decision
PRAYER dismissing the said petition for lack of merit, in fact and in law. It
Wherefore, premises considered, it is respectfully prayed that after ruled that the remedy of certiorari is unavailing to petitioner
hearing, this Honorable Court: Bokingo because "an order denying a motion to dismiss is


interlocutory and cannot be the subject of the extraordinary land. However, petitioner Bokingo, through his representatives,
petition for certiorari or mandamus."[9] unjustly prevented the conduct of the said survey. Even when the
matter regarding the survey was submitted to the Lupong
It was noted that the records fail to disclose that petitioner Bokingo Tagapamayapa, petitioner Bokingo still allegedly refused to allow
iled a motion for reconsideration of the order of the court a quo. the respondents to survey the subject land. Hence, the Complaint
According to the CA, such omission warranted the outright for Injunction iled by the respondents where the principal relief
dismissal of the petition for certiorari. Finally, it was not shown or sought is to enjoin permanently the illegal acts of the defendants
even alleged in the petition that the court a quo, in issuing the therein, including petitioner Bokingo, of preventing the survey of
assailed order, acted with grave abuse of discretion amounting to the land subject matter of the case.
lack of jurisdiction. The issue raised by petitioner Bokingo, the CA
held, was proper for an appeal but not a petition for certiorari. In this connection, it is well to note that the Court had the occasion
to explain that "in determining whether an action is one the subject
Aggrieved, petitioner Bokingo now comes to the Court seeking the matter of which is not capable of pecuniary estimation, the nature
reversal of the said decision of the CA which dismissed his petition of the principal action, or remedy sought must irst be ascertained.
for certiorari iled therewith. He insists that the complaint iled by If it is primarily for the recovery of a sum of money, the claim is
the respondents with the court a quo is a possessory action. To considered capable of pecuniary estimation, and jurisdiction over
determine which court, the RTC or MTC, has primary jurisdiction, the action will depend on the amount of the claim. However, where
petitioner Bokingo theorizes that it is necessary that the assessed the basic issue is something other than the right to recover a sum of
value of the land be alleged in the initiatory complaint. Absent such money, where the money claim is purely incidental to, or a
allegation, the court where the case was iled should allegedly consequence of, the principal relief sought, the action is one where
preliminarily determine the assessed value of the subject property the subject of litigation may not be estimated in terms of money,
to determine whether or not it has jurisdiction over the subject which is cognizable exclusively by Regional Trial Courts."[13]
matter of the claim. In the present case, according to petitioner
Bokingo, the assessed value of the subject land is only P14,410.00; As gleaned from the complaint, the principal relief sought by the
hence, jurisdiction thereof properly belongs to the MTC in respondents in their complaint is for the court a quo to issue an
accordance with Section 19(2) or 33(3) of BP Blg. 129 as amended injunction against petitioner Bokingo and his representatives to
by RA 7691. permanently enjoin them from preventing the survey of the subject
land. For clarity, the prayer of the complaint reads:
The petition is bereft of merit. Wherefore, premises considered, it is respectfully prayed that after
hearing, this Honorable Court:
Preliminarily, the Court inds no reversible error in the dismissal by
the CA of petitioner Bokingo's petition for certiorari iled therewith. 1) Enjoin permanently the illegal acts of defendants of preventing
As correctly held by the CA, the mere fact that he failed to move for the survey of the land subject matter of this case by ENGR.
the reconsideration of the court a quo's order denying his motion to ERNESTO M. CAMPOS;
dismiss was suf icient cause for the outright dismissal of the said
petition. Certiorari as a special civil action will not lie unless a 2) Order defendants to pay plaintiffs the sum of P10,000.00 as
motion for reconsideration is irst iled before the respondent court attorney's fees, P10,000.00 as litigation expenses;
to allow it an opportunity to correct its errors, if any.[10] Petitioner
Bokingo did not proffer any compelling reason to warrant deviation 3) Order defendants to pay damages to plaintiff;
by the CA from this salutary rule. As further observed by the CA,
petitioner Bokingo failed to even allege grave abuse of discretion on 4) Such other reliefs just and reasonable under the
the part of the court a quo in rendering the order denying his circumstances.[14]Contrary to the view posited by petitioner
motion to dismiss. Bokingo, the cause of action of the respondents' complaint is not, as
yet, to recover the possession of the subject land. There are three
In any case, the present petition lacks substantive merit. It is kinds of actions to judicially recover possession of real property and
axiomatic that the nature of the action and which court has original these are distinguished in this wise:
and exclusive jurisdiction over the same is determined by the What really distinguishes an action for unlawful detainer from a
material allegations of the complaint, the type of relief prayed for by possessory action (accion publiciana) and from a reinvindicatory
the plaintiff, and the law in effect when the action is iled, action (accion reinvindicatoria) is that the irst is limited to the
irrespective of whether the plaintiffs are entitled to some or all of question of possession de facto. An unlawful detainer suit (accion
the claims asserted therein.[11] The caption of the complaint is not interdictal) together with forcible entry are the two forms of an
determinative of the nature of the action. Nor does the jurisdiction ejectment suit that may be iled to recover possession of real
of the court depend upon the answer of the defendant or agreement property. Aside from the summary action of ejectment, accion
of the parties, or to the waiver or acquiescence of the parties.[12] publiciana or the plenary action to recover the right of possession
and accion reinvindicatoria or the action to recover ownership
A careful perusal of the respondents' complaint, quoted earlier, which includes recovery of possession, make up the three kinds of
shows that it alleges that per the Order dated November 24, 1998 of actions to judicially recover possession.[15]Signi icantly, the
PENRO of Butuan City, petitioner Bokingo's and his co-claimants' respondents' complaint has not sought to recover the possession or
application for titling of the subject land was rejected. On the other ownership of the subject land. Rather, it is principally an action to
hand, in the same order it was declared that the respondents, if enjoin petitioner Bokingo and his representatives from committing
quali ied, may ile an appropriate public land application covering acts that would tend to prevent the survey of the subject land. It
the same land. It was further alleged that the said order became cannot be said therefore that it is one of a possessory action. The
inal and executory, and in connection therewith, the respondents respondents, as plaintiffs in the court a quo, to be entitled to the
were authorized by the City Environment and Natural Resources injunctive relief sought, need to establish the following
Of icer (CENRO) of Butuan City to conduct a survey on the subject requirements: (1) the existence of a right to be protected; and (2)


that the acts against which the injunction is to be directed are

violative of the said right. As such, the subject matter of litigation is That, to reach a possible amicable settlement, the plaintiffs brought
incapable of pecuniary estimation and properly cognizable the matter to the Lupon of Barangay Sawang, to no avail, evidenced
exclusively by the court a quo, a Regional Trial Court under Section by the CERTIFICATE TO FILE ACTION hereto attached as ANNEX B;
19 (1) of BP Blg. 129, as amended by RA 7691:
SEC. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall That, the unjusti ied refusal of the defendant to vacate the property
exercise exclusive original jurisdiction: has caused the plaintiffs to suffer shame, humiliation, wounded
feelings, anxiety and sleepless nights;
(1) In all civil actions in which the subject of the litigation is
incapable of pecuniary estimation; That, to protect their rights and interest, plaintiffs were constrained
x x xHence, the court a quo did not err in denying petitioner to engage the services of a lawyer.[3]
Bokingo's motion to dismiss. The petitioners prayed that, after due proceedings, judgment be
rendered in their favor, thus:WHEREFORE, it is prayed of this
WHEREFORE, premises considered, the petition is DENIED and the Honorable Court that after due process (sic), an order be issued for
assailed Decision dated December 17, 2003 of the Court of Appeals the defendant to vacate and peacefully turn over to the plaintiffs the
in CA-G.R. SP No. 71510 is AFFIRMED in toto. occupied property and that defendant be made to pay plaintiffs:
actual damages, as follows:a.1. transportation expenses in
SO ORDERED. connection with the projected settlement of the case amounting to
P1,500.00 and for the subsequent attendance to the hearing of this
Panganiban, C. J., (Chairperson), Ynares-Santiago, Austria-Martinez, case at P1,500.00 each schedule;
and Chico-Nazario, JJ., concur.
a.2. attorney’s fees in the amount of P20,000.00 and P500.00 for
Hilario vs Salvador, G.R. NO. 160384, April every court appearance;
moral and exemplary damages in such amount incumbent upon the
29, 2005 Honorable Court to determine; and
497 Phil. 327
such other relief and remedies just and equitable under the
SECOND DIVISION
premises.[4]
G.R. NO. 160384, April 29, 2005
The private respondent iled a motion to dismiss the complaint on
CESAR T. HILARIO, FOR HIMSELF AND AS ATTORNEY-IN-FACT OF
the ground of lack of jurisdiction over the nature of the action, citing
IBARRA, NESTOR, LINA AND PRESCILLA, ALL SURNAMED HILARIO,
Section 33 of Batas Pambansa (B.P.) Blg. 129, as amended by Section
PETITIONERS, VS. ALLAN T. SALVADOR, RESPONDENT.
3(3) of Republic Act (R.A.) No. 7691.[5] He averred that –(1) the
complaint failed to state the assessed value of the land in dispute;
HEIRS OF SALUSTIANO SALVADOR, NAMELY, REGIDOR M.
(2) the complaint does not suf iciently identify and/or describe
SALVADOR AND VIRGINIA SALVADOR-LIM,
the parcel of land referred to as the subject-matter of this
RESPONDENTS-INTERVENORS.
action;both of which are essential requisites for determining the
jurisdiction of the Court where the case is iled. In this case,
DECISION
however, the assessed value of the land in question is totally absent
CALLEJO, SR., J.:
in the allegations of the complaint and there is nothing in the relief
prayed for which can be picked-up for determining the Court’s
This is a petition for review on certiorari under Rule 45 of the
jurisdiction as provided by law.
Revised Rules of Court of the Decision[1] of the Court of Appeals
(CA) in CA-G.R. CV No. 63737 as well as its Resolution[2] denying
In the face of this predicament, it can nevertheless be surmised by
the motion for the reconsideration of the said decision.
reading between the lines, that the assessed value of the land in
question cannot exceed P20,000.00 and, as such, it falls within the
The Antecedents
jurisdiction of the Municipal Trial Court of Romblon and should
have been iled before said Court rather than before the RTC.
On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and
…[6]The petitioners opposed the motion.[7] They contended that
Prescilla, all surnamed Hilario, iled a complaint with the Regional
the RTC had jurisdiction over the action since the court can take
Trial Court (RTC) of Romblon, Romblon, Branch 71, against private
judicial notice of the market value of the property in question,
respondent Allan T. Salvador. They alleged therein, inter alia, as
which was P200.00 per square meter and considering that the
follows:
property was 14,797 square meters, more or less, the total value
That, the plaintiffs are co-owners by inheritance from Concepcion
thereof is P3,500,000.00. Besides, according to the petitioners, the
Mazo Salvador of a parcel of land designated as Cad. Lot No.
motion to dismiss was premature and “the proper time to interpose
3113-part, located at Sawang, Romblon, Romblon, which property
it is when the [petitioners] introduced evidence that the land is of
was [adjudged] as the hereditary share of their father, Brigido M.
such value.”
Hilario, Jr. when their father was still single, and which adjudication
was known by the plaintiffs[’] father’s co-heirs;
On November 7, 1996, the RTC issued an Order[8] denying the
motion to dismiss, holding that the action was incapable of
That, sometime in 1989, defendant constructed his dwelling unit of
pecuniary estimation, and therefore, cognizable by the RTC as
mixed materials on the property of the plaintiffs’ father without the
provided in Section 19(1) of B.P. Blg. 129, as amended.
knowledge of the herein plaintiffs or their predecessors-in-interest;
After the denial of the motion to dismiss, the private respondent
That, demands have been made of the defendant to vacate the
iled his answer with counterclaim.[9] Traversing the material
premises but the latter manifested that he have (sic) asked the prior
allegations of the complaint, he contended that the petitioners had
consent of their grandmother, Concepcion Mazo Salvador;


no cause of action against him since the property in dispute was the The petitioners maintain that the RTC has jurisdiction since their
conjugal property of his grandparents, the spouses Salustiano action is an accion reinvindicatoria, an action incapable of
Salvador and Concepcion Mazo-Salvador. pecuniary estimation; thus, regardless of the assessed value of the
subject property, exclusive jurisdiction falls within the said court.
On April 8, 1997, Regidor and Virginia Salvador iled their Besides, according to the petitioners, in their opposition to
Answer-in-Intervention[10] making common cause with the private respondent’s motion to dismiss, they made mention of the increase
respondent. On her own motion, however, Virginia Salvador was in the assessed value of the land in question in the amount of P3.5
dropped as intervenor.[11] million. Moreover, the petitioners maintain that their action is also
one for damages exceeding P20,000.00, over which the RTC has
During trial, the petitioners adduced in evidence Tax Declaration exclusive jurisdiction under R.A. No. 7691.
No. 8590-A showing that in 1991 the property had an assessed
value of P5,950.00.[12] The petition has no merit.
On June 3, 1999, the trial court rendered judgment inding in favor It bears stressing that the nature of the action and which court has
of the petitioners. The dispositive portion of the decision original and exclusive jurisdiction over the same is determined by
reads:WHEREFORE, as prayed for, judgment is rendered: the material allegations of the complaint, the type of relief prayed
for by the plaintiff and the law in effect when the action is iled,
Ordering the defendant to vacate and peacefully turn over to the irrespective of whether the plaintiffs are entitled to some or all of
plaintiffs the occupied property; and the claims asserted therein.[18] The caption of the complaint is not
determinative of the nature of the action. Nor does the jurisdiction
Dismissing defendant’s counterclaim. of the court depend upon the answer of the defendant or agreement
of the parties or to the waiver or acquiescence of the parties.
SO ORDERED.[13]Aggrieved, the private respondent and
respondent-intervenor Regidor Salvador appealed the decision to We do not agree with the contention of the petitioners and the
the CA, which rendered judgment on May 23, 2003 reversing the ruling of the CA that the action of the petitioners in the RTC was an
ruling of the RTC and dismissing the complaint for want of accion reinvindicatoria. We ind and so rule that the action of the
jurisdiction. The fallo of the decision is as follows:IN VIEW OF THE petitioners was an accion publiciana, or one for the recovery of
FOREGOING, the appealed decision is REVERSED, and the case possession of the real property subject matter thereof. An accion
DISMISSED, without prejudice to its re illing in the proper court. reinvindicatoria is a suit which has for its object the recovery of
possession over the real property as owner. It involves recovery of
SO ORDERED.[14]The CA declared that the action of the petitioners ownership and possession based on the said ownership. On the
was one for the recovery of ownership and possession of real other hand, an accion publiciana is one for the recovery of
property. Absent any allegation in the complaint of the assessed possession of the right to possess. It is also referred to as an
value of the property, the Municipal Trial Court (MTC) had exclusive ejectment suit iled after the expiration of one year after the
jurisdiction over the action, conformably to Section 33[15] of R.A. occurrence of the cause of action or from the unlawful withholding
No. 7691. of possession of the realty.[19]
The petitioners iled a motion for reconsideration of the said The action of the petitioners iled on September 3, 1996 does not
decision, which the appellate court denied.[16] Hence, they iled the involve a claim of ownership over the property. They allege that
instant petition, with the following assignment of errors: they are co-owners thereof, and as such, entitled to its possession,
I and that the private respondent, who was the defendant,
constructed his house thereon in 1989 without their knowledge and
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE refused to vacate the property despite demands for him to do so.
REVERSIBLE ERROR IN HOLDING THAT THE INSTANT CASE, They prayed that the private respondent vacate the property and
ACCION REINVINDICATORIA, FALLS WITHIN THE EXCLUSIVE restore possession thereof to them.
ORIGINAL JURISDICTION OF THE MUNICIPAL TRIAL COURT OF
ROMBLON, AND NOT WITH THE REGIONAL TRIAL COURT OF When the petitioners iled their complaint on September 3, 1996,
ROMBLON. R.A. No. 7691 was already in effect. Section 33(3) of the law
provides:Sec. 33. Jurisdiction of Metropolitan Trial Courts,
II Municipal Trial Courts and Municipal Circuit Trial Courts in Civil
Cases. – Metropolitan Trial Courts, Municipal Trial Courts and
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS Municipal Circuit Trial Courts shall exercise:
REVERSIBLE ERROR IN ORDERING THE REFILING OF THE CASE IN
THE [PROPER] COURT, INSTEAD OF DECIDING THE CASE ON THE …
MERITS BASED ON THE COMPLETE RECORDS ELEVATED BEFORE
SAID APPELLATE COURT AND IN NOT AFFIRMING IN TOTO THE (3) Exclusive original jurisdiction in all civil actions which involve
DECISION OF THE TRIAL COURT.[17] title to, or possession of, real property, or any interest therein where
The Ruling of the Court the assessed value of the property or interest therein does not
exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in
The lone issue for our resolution is whether the RTC had Metro Manila, where such assessed value does not exceed Fifty
jurisdiction over the action of the petitioners, the plaintiffs in the Thousand Pesos (P50,000.00) exclusive of interest, damages of
RTC, against the private respondent, who was the defendant whatever kind, attorney’s fees, litigation expenses and costs:
therein. Provided, That in cases of land not declared for taxation purposes,
the value of such property shall be determined by the assessed
value of the adjacent lots.Section 19(2) of the law, likewise, provides


that:Sec. 19. Jurisdiction in civil cases. – The Regional Trial Court P20,000.00, then the RTC had original jurisdiction over their
shall exercise exclusive original jurisdiction: actions. Section 33(3) of B.P. Blg. 129, as amended, quoted earlier,
explicitly excludes from the determination of the jurisdictional
… amount the demand for “interest, damages of whatever kind,
attorney’s fees, litigation expenses, and costs.” This Court issued
(2) In all civil actions, which involve the title to, or possession of, Administrative Circular No. 09-94 setting the guidelines in the
real property, or any interest therein, where the assessed value of implementation of R.A. No. 7691, and paragraph 2 thereof states
the property involved exceeds Twenty Thousand Pesos that –2. The exclusion of the term “damages of whatever kind” in
(P20,000.00) or, for civil actions in Metro Manila, where such value determining the jurisdictional amount under Section 19(8) and
exceeds Fifty Thousand Pesos (P50,000.00) except actions for Section 33(1) of B.P. Blg. 129, as amended by R.A. 7691, applies to
forcible entry into and unlawful detainer of lands or buildings, cases where the damages are merely incidental to or a consequence
original jurisdiction over which is conferred upon the Metropolitan of the main cause of action. However, in cases where the claim for
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial damages is the main cause of action, or one of the causes of action,
Courts.The jurisdiction of the court over an action involving title to the amount of such claim shall be considered in determining the
or possession of land is now determined by the assessed value of jurisdiction of the court.Neither may the petitioners ind comfort
the said property and not the market value thereof. The assessed and solace in Section 19(8) of B.P. Blg. 129, as amended, which
value of real property is the fair market value of the real property states:SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts
multiplied by the assessment level. It is synonymous to taxable shall exercise exclusive original jurisdiction:
value.[20] The fair market value is the price at which a property
may be sold by a seller, who is not compelled to sell, and bought by a …
buyer, who is not compelled to buy.
(8) In all other cases in which the demand, exclusive of interest,
Even a cursory reading of the complaint will show that it does not damages of whatever kind, attorney's fees, litigation expenses, and
contain an allegation stating the assessed value of the property costs or the value of the property in controversy exceeds One
subject of the complaint.[21] The court cannot take judicial notice Hundred Thousand Pesos (P100,000.00) or, in such other cases in
of the assessed or market value of lands.[22] Absent any allegation Metro Manila, where the demand, exclusive of the above-mentioned
in the complaint of the assessed value of the property, it cannot thus items exceeds Two Hundred Thousand Pesos (P200,000.00).The
be determined whether the RTC or the MTC had original and said provision is applicable only to “all other cases” other than an
exclusive jurisdiction over the petitioners’ action. action involving title to, or possession of real property in which the
assessed value is the controlling factor in determining the court’s
We note that during the trial, the petitioners adduced in evidence jurisdiction. The said damages are merely incidental to, or a
Tax Declaration No. 8590-A, showing that the assessed value of the consequence of, the main cause of action for recovery of possession
property in 1991 was P5,950.00. The petitioners, however, did not of real property.[26]
bother to adduce in evidence the tax declaration containing the
assessed value of the property when they iled their complaint in Since the RTC had no jurisdiction over the action of the petitioners,
1996. Even assuming that the assessed value of the property in all the proceedings therein, including the decision of the RTC, are
1991 was the same in 1995 or 1996, the MTC, and not the RTC had null and void. The complaint should perforce be dismissed.[27]
jurisdiction over the action of the petitioners since the case involved
title to or possession of real property with an assessed value of less WHEREFORE, the petition is DENIED. The assailed Decision and
than P20,000.00.[23] Resolution of the Court of Appeals in CA-G.R. CV No. 63737 are
AFFIRMED. Costs against the petitioners.
We quote with approval, in this connection, the CA’s
disquisition:The determining jurisdictional element for the accion SO ORDERED.
reinvindicatoria is, as RA 7691 discloses, the assessed value of the
property in question. For properties in the provinces, the RTC has Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ.,
jurisdiction if the assessed value exceeds P20,000, and the MTC, if concur.
the value is P20,000 or below. An assessed value can have reference
only to the tax rolls in the municipality where the property is Urieta vs Aguilar, G.R. No. 164402, July 05,
located, and is contained in the tax declaration. In the case at bench,
the most recent tax declaration secured and presented by the 2010
637 Phil. 131
plaintiffs-appellees is Exhibit B. The loose remark made by them
that the property was worth 3.5 million pesos, not to mention that
FIRST DIVISION
there is absolutely no evidence for this, is irrelevant in the light of
G.R. No. 164402, July 05, 2010
the fact that there is an assessed value. It is the amount in the tax
ASUNCION URIETA VDA. DE AGUILAR, REPRESENTED BY
declaration that should be consulted and no other kind of value, and
ORLANDO U. AGUILAR, PETITIONER, VS. SPOUSES EDERLINA B.
as appearing in Exhibit B, this is P5,950. The case, therefore, falls
ALFARO AND RAUL ALFARO, RESPONDENTS.
within the exclusive original jurisdiction of the Municipal Trial
Court of Romblon which has jurisdiction over the territory where
DECISION
the property is located, and not the court a quo.[24]It is elementary
DEL CASTILLO, J.:
that the tax declaration indicating the assessed value of the
property enjoys the presumption of regularity as it has been issued
In an action for recovery of possession of realty, who has the better
by the proper government agency.[25]
right of possession, the registered owner armed with a Torrens title
or the occupants brandishing a notarized but unregistered deed of
Unavailing also is the petitioners’ argumentation that since the
sale executed before the land was registered under the Torrens
complaint, likewise, seeks the recovery of damages exceeding
system?


thereon where he is presently residing; and, that his mother, herein

As we previously ruled in similar cases,[1] we resolve the question petitioner, denied having sold the property or having signed any
in favor of the titleholder. document for that matter.
Factual Antecedents Zenaida also testi ied that in 1981, her father (Ignacio) and Ederlina
had a confrontation before the barangay during which her father
On August 3, 1995, petitioner iled a Complaint for Recovery of denied having conveyed any portion of Lot 83 to anybody. She
Possession and Damages[2] before the Regional Trial Court (RTC) of further testi ied that she is familiar with the signature of her father
San Jose, Occidental Mindoro. She alleged that on May 16, 1977, her and that the signature appearing on the Kasulatan sa Bilihan is not
husband Ignacio Aguilar (Ignacio) was issued Original Certi icate of her father's signature.
Title (OCT) No. P-9354[3] over a 606-square meter parcel of land
designated as Lot 83 situated in Brgy. Buenavista, Sablayan, For their part, respondents offered in evidence the testimonies of
Occidental Mindoro. Prior thereto, or in 1968, Ignacio allowed Estrella Bermudo Alfaro (Estrella), Ederlina, and Jose Tampolino
petitioner's sister, Anastacia Urieta (Anastacia), mother of (Jose). Estrella declared that she was present when Ignacio and the
respondent Ederlina B. Alfaro (Ederlina), to construct a house on petitioner af ixed their signatures on the Kasulatan sa Bilihan,
the southern portion of said land and to stay therein temporarily. which was acknowledged before Notary Public Juan Q. Dantayana
on April 17, 1973. She narrated that her mother actually purchased
In 1994, Ignacio died and his heirs decided to partition Lot 83. the property in 1954, but it was only in 1973 when the vendor
Petitioner thus asked the respondents, who took possession of the executed the deed of sale. In fact, her father Francisco Bermudo was
premises after the death of Anastacia, to vacate Lot 83. They did not able to secure a permit to erect a house on the disputed property
heed her demand. from the Of ice of the Mayor of Sablayan, Occidental Mindoro in
1954.[8] She was surprised to learn though that their property is
Thus, petitioner iled a case for accion publiciana praying that still registered in the name of the petitioner.
respondents be ordered to vacate subject property, and to pay
moral, temperate, and exemplary damages, as well as attorney's Ederlina corroborated the declarations of Estrella. She also alleged
fees and the costs of suit. that her parents occupied the property in 1954 when they built a
hut there, then later on, a house of strong materials.
In their Answer with Counterclaims and Af irmative Defenses,[4]
respondents did not dispute that Ignacio was able to secure title Jose corroborated the declarations of the other witnesses for the
over the entire Lot 83. However, they asserted that on April 17, respondents that the disputed portion of Lot 83 is owned by
1973, Ignacio and herein petitioner sold to their mother Anastacia Anastacia.
the southern portion of Lot 83 consisting of 367.5 square meters as
shown by the Kasulatan sa Bilihan[5] which bears the signatures of Ruling of the Regional Trial Court
petitioner and Ignacio. Since then, they and their mother have been
in possession thereof. Respondents also presented several Tax In its Decision[9] dated September 21, 1998, the court a quo
Declarations[6] in support of their allegations. ordered the respondents to vacate subject premises and denied
their counterclaim for reconveyance on the grounds of prescription
Respondents also raised the defense of prescription. They pointed and laches. It held that the prescriptive period for reconvenyance of
out that accion publiciana or an action to recover the real right of fraudulently registered real property is 10 years reckoned from the
possession independent of ownership prescribes in 10 years. date of the issuance of the certi icate of title. In this case, however,
However, it took petitioner more than 25 years before she asserted it is not disputed that OCT No. P-9354 covering the entire Lot 83
her rights by iling accion publiciana. As alleged in the complaint, was issued to Ignacio in 1977. The trial court likewise held that
they took possession of the disputed portion of Lot 83 as early as respondents are guilty of laches and that the reconveyance of the
1968, but petitioner iled the case only in 1995. disputed property in their favor would violate the rule on
indefeasibility of Torrens title.
By way of counterclaim, respondents prayed that petitioner be
directed to execute the necessary documents so that title to the The dispositive portion of the trial court's Decision reads:
367.5-square meter portion of Lot 83 could be issued in their name.
They likewise prayed for the dismissal of the complaint and for WHEREFORE, and in the light of all the foregoing considerations,
award of moral and exemplary damages, as well as attorney's fees. judgment is hereby rendered in favor of plaintiff and against the
defendants, to wit:
In her Reply and Answer to Counterclaim,[7] petitioner denied
having signed the Kasulatan sa Bilihan and averred that her Ordering the defendants and any person claiming right under them
signature appearing thereon is a forgery. She presented an to vacate the premises in question and surrender the possession
unsworn written declaration dated January 28, 1994 where her thereof to plaintiff;
husband declared that he did not sell the property in question to To pay the amount of Ten Thousand Pesos (P10,000.00) as and for
anyone. As to the issue of prescription, she asserted that reasonable attorney's fees;
respondents' occupation of subject property cannot ripen into To pay the costs of this suit.
ownership considering that the same is by mere tolerance of the
owner. Besides, the purported Kasulatan sa Bilihan was not SO ORDERED.[10]
registered with the proper Registry of Deeds. Ruling of the Court of Appeals
During the trial, petitioner presented the testimonies of Orlando On June 7, 2004, the CA promulgated its Decision[11] reversing the
Aguilar (Orlando) and Zenaida Baldeo (Zenaida). Orlando testi ied trial court's Decision and dismissing the complaint, as well as
that he has been staying in Lot 83 since 1960 and had built a house respondents' counterclaim. The CA upheld the validity of the


Kasulatan sa Bilihan since it is a notarized document and disputably petitioner, however, it is clear that she is asking this Court to
presumed to be authentic and duly executed. In addition, witness examine and weigh again the evidence on record.
Estrella categorically declared that she was present when petitioner
and Ignacio signed the Kasulatan sa Bilihan. The CA elaborated that Our Ruling
in order to disprove the presumption accorded to a notarized
document, the party contesting its authenticity and due execution We grant the petition.
must present a clear and convincing evidence to the contrary, which
the petitioner failed to do. This case falls under the exceptions
where the Supreme Court may review
The CA likewise disagreed with the court a quo that respondents' factual issues.
counterclaim should be dismissed on the ground of indefeasibility
of title. It emphasized that the Torrens system was adopted to As a rule, only questions of law may be raised in petitions for review
protect innocent third parties for value and not to protect fraud. on certiorari.[15] It is settled that in the exercise of the Supreme
Nonetheless, the CA did not grant the relief sought in respondents' Court's power of review, the court is not a trier of facts and does not
counterclaim considering that not all interested parties were normally undertake the re-examination of the evidence presented
impleaded in the case. by the contending parties during the trial of the case.[16] This rule,
however, is subject to a number of exceptions,[17] one of which is
The dispositive portion of the CA's Decision reads: when the indings of the appellate court are contrary to those of the
trial court, like in the present case.
IN VIEW OF THE FOREGOING, the decision appealed from is
REVERSED, and a new one ENTERED dismissing the complaint and Nature and purpose of accion publiciana.
counterclaim.
Also known as accion plenaria de posesion,[18] accion
SO ORDERED.[12] publiciana is anordinary civil proceeding to determine the better
Issue right of possession of realty independently of title.[19] It refers to
Without seeking reconsideration of the CA's Decision, petitioner accrual of the cause of action or from the unlawful withholding of
interposed the present recourse raising the sole issue of: possession of the realty.[20]
WHETHER X X X THE HONORABLE COURT OF APPEALS ERRED IN The objective of the plaintiffs in accion publiciana is to recover
UPHOLDING THE VALIDITY/GENUINENESS AND DUE EXECUTION possession only, not ownership.[21] However, where the parties
OF THE PURPORTED DEED OF SALE OF THE PORTION OF THE LOT raise the issue of ownership, the courts may pass upon the issue to
DESPITE THE VEHEMENT DENIAL OF THE ALLEGED determine who between the parties has the right to possess the
VENDORS.[13] property. This adjudication, however, is not a inal and binding
Petitioner contends that the CA grievously erred in upholding the determination of the issue of ownership; it is only for the purpose of
validity and genuineness of the Kasulatan sa Bilihan. She alleges resolving the issue of possession, where the issue of ownership is
that she wanted to take the witness stand to disclaim in open court inseparably linked to the issue of possession. The adjudication of
her purported signature appearing on respondents' Kasulatan sa the issue of ownership, being provisional, is not a bar to an action
Bilihan, but could not do so because she is too old, bed-ridden and between the same parties involving title to the property.[22] The
has to bear a tortuous ive-hour drive to reach the court. adjudication, in short, is not conclusive on the issue of
Nevertheless, she executed a sworn statement declaring that she ownership.[23]
and her husband never sold any portion of Lot 83 and that their
signatures appearing on said deed were forged. She avers that the Guided by the foregoing jurisprudential guideposts, we shall now
assistance of an expert witness is not even necessary to detect the resolve the arguments raised by the parties in this petition.
patent dissimilarities between said forged signatures and their
authentic signatures. As against petitioner's Torrens title,
respondents' Kasulatan sa Bilihan
Petitioner likewise argues that the CA erred in taking into cannot confer better right to possess.
consideration the appearance and condition of the paper where the
Kasulatan sa Bilihan is written. She posits that the fabrication of an It is settled that a Torrens title is evidence of indefeasible title to
ancient-looking document nowadays is no longer dif icult. She also property in favor of the person in whose name the title appears.[24]
points to several circumstances which cast doubt on the It is conclusive evidence with respect to the ownership of the land
authenticity and due execution of the Kasulatan sa Bilihan, but described therein.[25] It is also settled that the titleholder is
which the CA inexplicably ignored entitled to all the attributes of ownership of the property, including
possession.[26] Thus, in Arambulo v. Gungab,[27] this Court
Furthermore, petitioner maintains that her title is indefeasible. And declared that the "age-old rule is that the person who has a Torrens
while there are exceptions to the rule on indefeasibility of title,[14] title over a land is entitled to possession thereof."
she emphasizes that respondents never disputed her title. With
regard to the tax declarations presented by respondents, petitioner In the present case, there is no dispute that petitioner is the holder
asserts that it has been the consistent ruling of this Court that tax of a Torrens title over the entire Lot 83. Respondents have only
declarations are not necessarily proof of ownership. their notarized but unregistered Kasulatan sa Bilihan to support
their claim of ownership. Thus, even if respondents' proof of
In their comment, respondents assert that in petitions iled under ownership has in its favor a juris tantum presumption of
Rule 45 of the Rules of Court, only questions of law can be raised. authenticity and due execution, the same cannot prevail over
Factual issues are prohibited. From the arguments advanced by the


petitioner's Torrens title. This has been our consistent ruling which modi ied, or canceled except in a direct proceeding in accordance
we recently reiterated in Pascual v. Coronel,[28] viz: with law.
Even if we sustain the petitioners' arguments and rule that the A collateral attack transpires when, in another action to obtain a
deeds of sale are valid contracts, it would still not bolster the different relief and as an incident to the present action, an attack is
petitioners' case. In a number of cases, the Court had upheld the made against the judgment granting the title.[30] This manner of
registered owners' superior right to possess the property. In Co v. attack is to be distinguished from a direct attack against a judgment
Militar, the Court was confronted with a similar issue of which granting the title, through an action whose main objective is to
between the certi icate of title and an unregistered deed of sale annul, set aside, or enjoin the enforcement of such judgment if not
should be given more probative weight in resolving the issue of who yet implemented, or to seek recovery if the property titled under
has the better right to possess. There, the Court held that the court the judgment had been disposed of.[31] Thus, in Magay v.
a quo correctly relied on the transfer certi icate of title in the name Estiandan,[32] therein plaintiff-appellee iled an accion publiciana.
of petitioner, as opposed to the unregistered title in the name of In his defense, defendant-appellant alleged among others that
respondents. The Court stressed therein that the Torrens System plaintiff-appellee's Transfer Certi icate of Title No. 2004 was issued
was adopted in this country because it was believed to be the most under anomalous circumstances. When the case reached this Court,
effective measure to guarantee the integrity of land titles and to we rejected defendant-appellant's defense on the ground that the
protect their indefeasibility once the claim of ownership is issue on the validity of said title can only be raised in an action
established and recognized. expressly instituted for that purpose. Also, in Co v. Court of
Appeals[33] we arrived at the same conclusion and elaborated as
Likewise, in the recent case of Umpoc v. Mercado, the Court follows:
declared that the trial court did not err in giving more probative
weight to the TCT in the name of the decedent vis-×�-vis the In their reply dated September 1990, petitioners argue that the
contested unregistered Deed of Sale. Later in Arambulo v. Gungab, issues of fraud and ownership raised in their so-called compulsory
the Court held that the registered owner is preferred to possess the counterclaim partake of the nature of an independent complaint
property subject of the unlawful detainer case. The age-old rule is which they may pursue for the purpose of assailing the validity of
that the person who has a Torrens Title over a land is entitled to the transfer certi icate of title of private respondents. That theory
possession thereof. (Citations omitted.) will not prosper.
As the titleholder, therefore, petitioner is preferred to possess the
entire Lot 83. Besides, there are telltale signs which cast doubt on While a counterclaim may be iled with a subject matter or for a
the genuineness of the Kasulatan. To cite a few: relief different from those in the basic complaint in the case, it does
not follow that such counterclaim is in the nature of a separate and
The date of its execution unbelievably coincides with the date the independent action in itself. In fact, its allowance in the action is
buyer, Anastacia, died; subject to explicit conditions, as above set forth, particularly in its
required relation to the subject matter of opposing party's claim.
Failing in that respect, it cannot even be iled and pursued as an
Despite its alleged execution on April 17, 1973, respondents altogether different and original action.
brought up the Kasulatan only when petitioner asked them to
vacate the disputed premises. Prior thereto, they neither asserted It is evident that the objective of such claim is to nullify the title of
their rights thereunder nor registered the same with the proper private respondents to the property in question, which thereby
Registry of Deeds; challenges the judgment pursuant to which the title was decreed.
This is apparently a collateral attack which is not permitted under
the principle of indefeasibility of a Torrens title. It is well settled
The lawyer who notarized the Kasulatan sa Bilihan, as well as the that a Torrens title cannot be collaterally attacked. The issue on the
witnesses thereto, was not presented in court; and, validity of title, i.e., whether or not it was fraudulently issued, can
only be raised in an action expressly instituted for that purpose.
Hence, whether or not petitioners have the right to claim ownership
The District Land Of icer who signed OCT No. P-9354 by authority of the land in question is beyond the province of the instant
of the President is a public of icer who has in his favor the proceeding. That should be threshed out in a proper action.
presumption of regularity in issuing said title. The lower courts cannot pass upon or grant respondents'
counterclaim for lack of jurisdiction.
Torrens certi icate of title cannot be the subject of collateral attack.
Both the trial court and the appellate court considered respondents'
Moreover, respondents' attack on the validity of petitioner's title by counterclaim as a petition for reconveyance. In which case, it should
claiming that their mother became the true owner of the southern be treated merely as a permissive counterclaim because the
portion of Lot 83 even before the issuance of OCT No. P-9354 evidence required to prove their claim differs from the evidence
constitutes as a collateral attack on said title. It is an attack needed to establish petitioner's demand for recovery of possession.
incidental to their quest to defend their possession of the property Being a permissive counterclaim, therefore, respondents should
in an accion publiciana, not in a direct action whose main objective have paid the corresponding docket fees.[34] However, there is no
is to impugn the validity of the judgment granting the title.[29] This proof on record that respondents paid the required docket fees. The
cannot be allowed. Under Section 48 of Presidential Decree No. of icial receipts were neither attached to nor annotated on
1529, otherwise known as the Property Registration Decree, a respondents' Answer with Counterclaims and Af irmative
certi icate of title cannot be the subject of collateral attack. Thus: Defenses[35] which was iled via registered mail[36] on August 19,
1995. It has been our consistent ruling that it is not simply the
SEC. 48. Certi icate not subject to collateral attack. - A certi icate of iling of the complaint or appropriate initiatory pleading, but the
title shall not be subject to collateral attack. It cannot be altered, payment of the full amount of the prescribed docket fee, that vests a


trial court with jurisdiction over the subject matter or nature of the The factual antecedents of the case are summarized by the Court of
action.[37] The same rule applies to permissive counterclaims, Appeals as follows:
third-party claims and similar pleadings, which shall not be “The spouses Severo and Trinidad Malvar iled a complaint for
considered iled until and unless the iling fee prescribed therefor is forcible entry against petitioner Teresita Bongato, alleging that
paid.[38] petitioner Bongato unlawfully entered a parcel of land covered by
TCT No. RT-16200 belonging to the said spouses and erected
On a inal note, and as discussed above, we stress that our ruling in thereon a house of light materials. The petitioner iled a motion for
this case is limited only to the issue of determining who between extension of time to ile an answer which the MTCC denied; it being
the parties has a better right to possession. This adjudication is not proscribed under the Rule on Summary Procedure, and likewise
a inal and binding determination of the issue of ownership. As containing no notice of hearing. With a new counsel, Atty. Viador C.
such, this is not a bar for the parties to ile an action for the Viajar, petitioner iled an answer which the MTCC disregarded, the
determination of the issue of ownership where the validity of the same having been iled beyond the ten-day reglementary period.
Kasulatan sa Bilihan and of OCT No. P-9354 can be properly Later, with still another counsel, Atty. Jesus G. Chavez of the Public
threshed out. Attorney’s Of ice, petitioner iled a motion to dismiss which the
MTCC denied as being contrary to the Rule on Summary Procedure.
WHEREFORE, the petition is GRANTED. The assailed Decision of “Thereafter, the MTCC rendered a decision ordering petitioner to
the Court of Appeals dated June 7, 2004 is REVERSED and SET vacate the land in question, and to pay rentals, attorney’s fees, and
ASIDE and the September 21, 1998 Decision of Regional Trial Court, the costs of the suit. The decision was af irmed by respondent RTC
Branch 46, San Jose, Occidental Mindoro, insofar as it orders the judge. Petitioner iled a motion for reconsideration.
respondents to vacate the premises is REINSTATED and AFFIRMED. “On March 4, 1994, respondent Judge issued an order granting the
motion for reconsideration ‘only insofar as to determine the
SO ORDERED. location of the houses involved in this civil case so that the Court
will know whether they are located on one and the same lot or a lot
Corona, C.J., (Chairperson), Velasco, Jr., Leonardo-De Castro, and different from that involved in the criminal case for Anti-Squatting.’
Perez, JJ. , concur. In the same order, respondent Judge disallowed any extension and
warned that if the survey is not made, the court might consider the
Bongato vs Malvar, G.R. No. 141614, same abandoned and the writ of execution would be issued.
“The criminal case for anti-squatting (Crim. Case No. 4659) was
August 14, 2002 iled by private respondents Malvar against petitioner Bongato. The
436 Phil. 109
case is still pending with the Regional Trial Court, Branch I, Butuan
City.
THIRD DIVISION
“On March 28, 1994, petitioner iled a motion for extension of the
G.R. No. 141614, August 14, 2002
March 29, 1994 deadline for the submission of the relocation survey
TERESITA BONGATO, PETITIONER, VS. SPOUSES SEVERO A.
and to move the deadline to April 15, 1994, as the engineer
MALVAR AND TRINIDAD MALVAR, RESPONDENTS.
concerned, Engr. Lumarda, could not conduct his survey during the
Holy Week, he being a lay minister and parish council member.
DECISION
“On April 7, 1994, respondent Judge noted that no survey report
PANGANIBAN, J.:
was submitted and ordered the record of the case returned to the
court of origin for disposal.”[5] (Citations omitted)
An action for forcible entry is a quieting process that is summary in
Ruling of the Court of Appeals
nature. It is designed to recover physical possession in speedy
The CA held that the lot referred to in the present controversy was
proceedings that are restrictive in nature, scope and time limits. The
different from that involved in the anti-squatting case.[6] It further
one-year bar within which to bring the suit is prescribed to
ruled that the Municipal Trial Court in Cities (MTCC) had
complement its summary nature. Thus, after the one-year period
jurisdiction, and that it did not err in rejecting petitioner’s Motion
has lapsed, plaintiffs can no longer avail themselves of the summary
to Dismiss. The appellate court reasoned that the MTCC had passed
proceedings in the municipal trial court but must litigate, in the
upon the issue of ownership of the property merely to determine
normal course, in the regional trial court in an ordinary action to
possession -- an action that did not oust the latter of its
recover possession, or to recover both ownership and possession.
jurisdiction.[7]
Statement of the Case
Unsatis ied with the CA Decision, petitioner lodged this Petition.[8]
Before us is a Petition for Review on Certiorari under Rule 45 of the
Issues
Rules of Court, assailing the December 16, 1998 Decision[1] and the
In her Memorandum, petitioner raises the following issues for this
September 1, 1999 Resolution[2] of the Court of Appeals (CA) in
Court’s consideration:
CA-GR SP No. 34204. The decretal portion of the Decision reads:
I
“WHEREFORE, the petition is hereby dismissed for lack of merit.
“Whether or not the Court of Appeals gravely abused its discretion
Costs against petitioner.”[3]
in not inding that the trial court lacked jurisdiction since the
The assailed Resolution denied petitioner’s Motion for
Complaint was iled beyond the one-year period from date of
Reconsideration.
alleged entry;
The CA sustained the Decision of the Regional Trial Court (RTC) of
II
Butuan City (Branch 4), which had disposed thus:
“Whether or not the Court of Appeals gravely abused its discretion
“WHEREFORE, in view of all the foregoing, the Court hereby af irms
in ruling that the Motion to Dismiss was a prohibited pleading.”[9]
the decision of the Municipal Trial Court in Cities, Branch 2 penned
This Court’s Ruling
by the Honorable Santos Rod. Cedro and the Writ of Execution
The Petition is meritorious.
issued on the 24th day of August 1993 upon order of the Honorable
First Issue:
Rosarito F. Dabalos (Record, p. 42, Folio II) can now be served on
MTCC Jurisdiction
the defendant.”[4]
The Facts


Petitioner claims that the MTCC had no jurisdiction, because the TCT No. RT-15993[30] and registered under the name of Severo
Complaint for forcible entry was iled only in 1992 or beyond the Malvar also. However, we cannot ignore the Decision[31] dated
one-year period provided under the Rules of Civil Procedure.[10] April 30, 1996 in Criminal Case No. 4659 for violation of PD 772; or
She avers that in Criminal Case No. 4659 for anti-squatting, the Decision[32] dated November 26, 1997 in Criminal Case No.
Respondent Severo Malvar alleged in his Sworn Statement that 5734 for violation of PD 1096. The property involved in these two
petitioner had illegally entered his land “sometime in the irst week criminal cases and in the instant case for forcible entry is one and
of January 1987.” [11] the same -- petitioner’s house.
On the other hand, respondents contend that the subject of the The allegation of petitioner that there is only one house involved in
anti-squatting case is different from the parcel of land involved these three cases has not been controverted by respondents.
here.[12] Neither was there evidence presented to prove that, indeed, she had
Before tackling the issue directly, it is worthwhile to restate three constructed one house on Lot 1 and another on Lot 10-A. On the
basic legal principles. First, in forcible entry, one employs force, contrary, she correctly points out that the house involved in these
intimidation, threat, strategy or stealth to deprive another of three cases is found on one and the same location. Verily, in his
physical possession of land or building.[13] Thus, the plaintiff must Sworn Statement[33] submitted in Criminal Case No. 4659,
allege and prove prior physical possession of the property in Respondent Severo Malvar stated that petitioner’s house was
litigation until deprived thereof by the defendant.[14] This “located in front of the Museum and just behind the City Hall.” On
requirement implies that the possession of the disputed land by the the other hand, in the Complaint[34] for forcible entry, the subject
latter was unlawful from the beginning.[15] The sole question for property was said to be “located along Doongan Road and right in
resolution hinges on the physical or material possession front of the Regional National Museum and not far behind the City
(possession de facto) of the property. Neither a claim of juridical Hall of Butuan City.” Lastly, the Decision[35] in Criminal Case No.
possession (possession de jure) nor an averment of ownership[16] 5734 stated that the building inspector, Engineer Margarita Burias,
by the defendant can outrightly prevent the court from taking had “responded to a verbal complaint involving a structure built
cognizance of the case.[17] Ejectment cases proceed independently near the Museum in Upper Doongan, Butuan City.”
of any claim of ownership, and the plaintiff needs merely to prove Based on these factual antecedents, there is cogent basis for
prior possession de facto and undue deprivation thereof.[18] petitioner’s contention that the MTCC lacked jurisdiction in this
Second, as a general rule, courts do not take judicial notice of the case.
evidence presented in other proceedings, even if these have been First, respondents allege that the subject house was built by
tried or are pending in the same court or before the same judge.[19] petitioner on Lot 10-A covered by TCT No. 16200. This allegation is
There are exceptions to this rule. Ordinarily, an appellate court belied by the sketch plan[36] dated June 16, 1994, submitted by
cannot refer to the record in another case to ascertain a fact not Engineer Regino A. Lomarda Jr. To recall, in an Order[37] dated
shown in the record of the case before it,[20] yet, it has been held March 4, 1994, the RTC had required petitioner to submit a
that it may consult decisions in other proceedings, in order to look relocation survey of Lot 10-A to determine the location of the house
for the law that is determinative of or applicable to the case under and to ascertain if it was the same house involved in Criminal Case
review.[21] In some instances, courts have also taken judicial notice No. 4659 for anti-squatting. However, because of the Holy Week,
of proceedings in other cases that are closely connected to the petitioner failed to submit the relocation survey within the period
matter in controversy.[22] These cases “may be so closely provided by the RTC. In the said sketch plan that was offered in
interwoven, or so clearly interdependent, as to invoke” a rule of evidence as Exhibit “5” in the anti-squatting case, Engineer
judicial notice.[23] Lomarda Jr. certi ied that “the hut of Teresita Bongato is not within
Third, factual indings of trial courts, especially when af irmed by Lot 10-A as shown in this plan as relocated by the undersigned
the Court of Appeals, are binding on the Supreme Court. Indeed, the based [o]n TCT No. RT-1576 of Benjamin Eva, et al. and [o]n TCT No.
review of such indings is not a function that this Court normally RT-16200 of Lot 10-A of Severo Malvar.”
undertakes.[24] However, this Rule is not absolute; it admits of Second, according to the Decision in Criminal Case No. 4659,
exceptions, such as (1) when the indings are grounded entirely on petitioner’s house is actually located on Lot 1, the parcel of land
speculation, surmises or conjectures; (2) when a lower court’s previously covered by TCT No. RT-15993 and subject of the
inference from its factual indings is manifestly mistaken, absurd or anti-squatting case. The RTC Judge in said case ruled:
impossible; (3) when there is grave abuse of discretion in the “The lot on which accused’s house is standing was formerly covered
appreciation of facts; (4) when the indings of the appellate court go by Transfer Certi icate of Title No. RT-15993 dated January 24, 1983
beyond the issues of the case, run contrary to the admissions of the in the name of Severo Malvar, and superseded by Transfer
parties to the case, or fail to notice certain relevant facts which -- if Certi icate of Title No. RT-24589 dated December 3, 1991 in the
properly considered -- will justify a different conclusion; (5) when name of Butuan Land Developers Group, Inc.”[38]
there is a misappreciation of facts; (6) when the indings of fact are Third, petitioner’s house had actually been in existence prior to
conclusions without mention of the speci ic evidence on which they February 1992, the alleged date of illegal entry. Thus, in Criminal
are based, are premised on the absence of evidence, or are Case No. 5734 for violation of PD 1096, the RTC Judge opined as
contradicted by evidence on record.[25] follows:
Respondents in the present Petition iled three cases against “Firstly, the prosecution has not proven that the accused had
petitioner: (1) Criminal Case No. 4659 for violation of PD No. constructed or for that matter was constructing the questioned
772[26] ( iled on October 2, 1991), in which petitioner was house in February of 1992, since it was never stated that when the
acquitted on the ground of good faith; (2) Civil Case No. 5681 for complaint was lodged with the City Engineer’s Of ice, that the house
forcible entry ( iled on July 10, 1992) which was resolved by the occupied by the accused was under construction or under
MTCC on October 26, 1992.[27] (3) Criminal Case No. 5734 for renovation. The fact that Engr. Burias even admitted that she had no
Violation of PD No. 1096[28] ( iled on July 15, 1993), wherein knowledge of when the structure was built implicitly indicates that
petitioner was again acquitted. the same was completely erected or constructed before Engr.
We agree with respondents that Lot 10-A, covered by Transfer Burias’ visit, or even for that matter, before the complaint was
Certi icate of Title (TCT) No. RT-16200[29] and registered under the iled.”[39]
name of Severo Malvar, is different from Lot 1 which is covered by


That the house of petitioner had been constructed by her father and proprio, upon the failure of a defendant to ile an answer within the
that she had merely continued to reside therein was upheld by the reglementary period.[53] However, as forcible entry and detainer
Decision, which we quote: cases are summary in nature and involve disturbances of the social
“Suf ice it to state, however, that We are convinced, given the order, procedural technicalities should be carefully avoided[54] and
testimonial evidence offered that the house in question was not should not be allowed to override substantial justice.[55]
built by the accused, but by her father, Jacinto Bongato sometime in Pursuant to Section 36[56] of BP 129,[57] the Court on June 16,
1935; that accused merely lived in the house as a member of Jacinto 1983, promulgated the Rule on Summary Procedure in Special
Bongato’s family until the death of her parents, whereupon, she Cases.[58] Under this Rule, a motion to dismiss or quash is a
continued to reside in the said house and now claims to be its prohibited pleading. Under the 1991 Revised Rule on Summary
owner.”[40] Procedure, however,[59] a motion to dismiss on the ground of lack
Fourth, Respondent Severo Malvar admitted in Criminal Case No. of jurisdiction over the subject matter is an exception to the rule on
4659 that he had knowledge of petitioner’s house since January prohibited pleadings:
1987. We quote from his testimony: “SEC. 19. Prohibited pleadings and motions. – The following
“Q Earlier, Judge Malvar, you told this Honorable Court that you pleadings, motions, or petitions shall not be allowed in the cases
discovered sometime in January 1987, the accused was occupying covered by this Rule:
your property consisting of 348 square meters. What did you do (a) Motion to dismiss the complaint or to quash the complaint or
upon discovering that the accused already occupied a portion of information except on the ground of lack of jurisdiction over the
your property without your knowledge? subject matter, or failure to comply with the preceding section;
A. I want to demolish her house. I told her that I am the owner of the x x x x x x x x x”
land and she is looking for the ¼ hectare that was not sold by her Further, a court’s lack of jurisdiction over the subject matter cannot
father to me. be waived by the parties or cured by their silence, acquiescence or
“Q And upon being informed by Teresita Bongato that they were even express consent.[60] A party may assail the jurisdiction of the
looking for the ¼ hectare lot which was not sold to you by her court over the action at any stage of the proceedings and even on
father, what did you say to her? appeal.[61] That the MTCC can take cognizance of a motion to
A. I told her to remove her house. Then after that, I was so busy with dismiss on the ground of lack of jurisdiction, even if an answer has
the squatters along Satorre Street of the Malvar Village that kept me been belatedly iled we likewise held in Bayog v. Natino:[62]
so busy. It was only last year that we were able to attend to “The Revised Rule on Summary Procedure, as well as its
this.”[41] predecessor, do not provide that an answer iled after the
It is wise to be reminded that forcible entry is a quieting process, reglementary period should be expunged from the records. As a
and that the restrictive time bar is prescribed to complement the matter of fact, there is no provision for an entry of default if a
summary nature of such process.[42] Indeed, the one-year period defendant fails to answer. It must likewise be pointed out that
within which to bring an action for forcible entry is generally MAGDATO’s defense of lack of jurisdiction may have even been
counted from the date of actual entry to the land. However, when raised in a motion to dismiss as an exception to the rule on
entry is made through stealth, then the one-year period is counted prohibited pleadings in the Revised Rule on Summary Procedure.
from the time the plaintiff learned about it.[43] After the lapse of Such a motion is allowed under paragraph (a) thereof, x x x.”
the one-year period, the party dispossessed of a parcel of land may In the case at bar, the MTCC should have squarely ruled on the issue
ile either an accion publiciana, which is a plenary action to recover of jurisdiction, instead of erroneously holding that it was a
the right of possession; or an accion reivindicatoria, which is an prohibited pleading under the Rule on Summary Procedure.[63]
action to recover ownership as well as possession.[44] Because the Complaint for forcible entry was iled on July 10, 1992,
On the basis of the foregoing facts, it is clear that the cause of action the 1991 Revised Rule on Summary Procedure was applicable.
for forcible entry iled by respondents had already prescribed when Finally, the MTCC should have taken into account petitioner’s
they iled the Complaint for ejectment on July 10, 1992.[45] Hence, Answer,[64] in which she averred that she had been “in constant
even if Severo Malvar may be the owner of the land, possession occupation on said land in question since birth on March 17, 1941
thereof cannot be wrested through a summary action for ejectment up to the present, being an heir of the late Emiliana Eva-Bongato,
of petitioner, who had been occupying it for more than one (1) who inherited said property from her father Raymundo Eva with
year.[46] Respondents should have presented their suit before the considerable improvements thereon.” It should have heard and
RTC in an accion publiciana or an accion reivindicatoria, not before received the evidence adduced by the parties for the precise
the MTCC in summary proceedings for forcible entry.[47] Their purpose of determining whether or not it possessed jurisdiction
cause of action for forcible entry had prescribed already, and the over the subject matter.[65] And after such hearing, it could have
MTCC had no more jurisdiction to hear and decide it.[48] dismissed the case for lack of jurisdiction.[66] In this way, the long,
Second Issue: drawn out proceedings that took place in this case could have been
Motion to Dismiss avoided.[67]
Petitioner further argues that a motion to dismiss based on lack of WHEREFORE, the Petition is GRANTED and the assailed Decision
jurisdiction over the subject matter is not a prohibited pleading, but ANNULLED and SET ASIDE. The Complaint for forcible entry is
is allowed under Sec. 19(a) of the Revised Rule on Summary DISMISSED for lack of jurisdiction. No pronouncement as to costs.
Procedure.[49] We agree. SO ORDERED.
The Rule on Summary Procedure was promulgated speci ically to Puno, (Chairman), and Carpio, JJ., concur.
achieve “an expeditious and inexpensive determination of Sandoval-Gutierrez, J., on leave.
cases.”[50] The speedy resolution of unlawful detainer cases is a
matter of public policy,[51] and the Rule should equally apply with Encarnacion vs Amigo, G.R. NO. 169793,
full force to forcible entry cases, in which possession of the
premises is already illegal from the start.[52] For this reason, the September 15, 2006
533 Phil. 466
Rule frowns upon delays and prohibits altogether the iling of
motions for extension of time. Consistently, Section 6 was added to
FIRST DIVISION
give the trial court the power to render judgment, even motu
G.R. NO. 169793, September 15, 2006


VICTORIANO M. ENCARNACION, PETITIONER, VS. NIEVES AMIGO,

RESPONDENT. COSTS against the defendant.
DECISION SO ORDERED.[8]
YNARES-SANTIAGO, J.: On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20,
ruled as follows:
This petition for review assails the June 30, 2005 Decision[1] of the WHEREFORE, judgment is hereby rendered dismissing the case on
Court of Appeals in CA-G.R. SP No. 73857, ordering the remand of the ground that as the Municipal Court had no jurisdiction over the
Civil Case No. Br. 20-1194 to the Regional Trial Court of Cauayan, case, this Court acquired no appellate jurisdiction thereof. Costs
Isabela, Branch 20, for further proceedings. against plaintiff-appellee.
The antecedent facts are as follows: SO ORDERED.[9]Aggrieved, petitioner iled a petition for review[10]
under Rule 42 of the Rules of Court before the Court of Appeals
Petitioner Victoriano M. Encarnacion is the registered owner of Lot which promulgated the assailed Decision remanding the case to the
No. 2121-B-1, consisting of 100 square meters and covered by TCT Regional Trial Court. The dispositive portion thereof reads:
No. T-256650; and Lot No. 2121-B-2 consisting of 607 square WHEREFORE, premises considered, this case is hereby REMANDED
meters with TCT No. T-256651, located at District 1, National to Branch 20, Regional Trial Court of Cauayan, Isabela for further
Hi-way, Cauayan, Isabela. Said two lots originally form part of Lot proceedings.
No. 2121, a single 707 square meter track of land owned by Rogelio
Valiente who sold the same to Nicasio Mallapitan on January 18, No costs.
1982. On March 21, 1985, Mallapitan sold the land to Victoriano
Magpantay. After the death of the latter in 1992, his widow, Anita N. SO ORDERED.[11]
Magpantay executed an Af idavit of Waiver[2] on April 11, 1995
waving her right over the property in favor of her son-in-law, herein Hence the present petition raising the sole issue:
petitioner, Victoriano Encarnacion. Thereafter, the latter caused the
subdivision of the land into two lots[3] and the issuance of titles in [WHETHER] THE COURT OF APPEALS ERRED IN HOLDING THAT
his name on July 18, 1996. [4] THE PROPER ACTION IN THIS CASE IS ACCION PUBLICIANA AND
NOT UNLAWFUL DETAINER AS DETERMINED BY THE
Respondent Nieves Amigo allegedly entered the premises and took ALLEGATIONS IN THE COMPLAINT FILED BY PETITIONER.[12]
possession of a portion of the property sometime in 1985 without
the permission of the then owner, Victoriano Magpantay. Said The petition lacks merit.In this jurisdiction, the three kinds of
occupation by respondent continued even after TCT Nos. T-256650 actions for the recovery of possession of real property are:
and T-256651 were issue to petitioner. Accion interdictal, or an ejectment proceeding which may be either
that for forcible entry (detentacion) or unlawful detainer
Consequently, petitioner, through his lawyer sent a letter [5] dated (desahucio), which is a summary action for recovery of physical
Febuary 1, 2001 demanding that the respondent vacate the subject possession where the dispossession has not lasted for more than
property. As evidenced by the registry return receipt, the demand one year, and should be brought in the proper inferior court;
letter was delivered by registered mail to the respondent on
February 12, 2001. Notwithstanding receipt of the demand letter,
respondent still refused to vacate the subject property. Thereafter, Accion publiciana or the plenary action for the recovery of the real
on March 2, 2001, petitioner iled a complaint[6] for ejectment, right of possession, which should be brought in the proper Regional
damages with injunction and prayer for restraining order with the Trial Court when the dispossession has lasted for more than one
Municipal Trial Court in Cities of Isabela which was docketed as year; and
CV-01-030. In his Answer, respondent alleged that he has been in
actual possession and occupation of a portion of the subject land
since 1968 and that the issuance of Free Patent and titles in the Accion reinvindicatoria or accion de reivindicacion, which is an
name of petitioner was tainted with irregularities.[7] action for the recovery of ownership which must be brought in the
proper Regional Trial Court.[13]
On October 24, 2001, the Municipal Trial Court in Cities rendered Based on the foregoing distinctions, the material element that
judgment, which reads: determines the proper action to be iled for the recovery of the
WHERE[FO]RE, there being a preponderance of evidence, a possession of the property in this case is the length of time of
JUDGMENT is hereby rendered in favor of the plaintiff VICTORIANO dispossession. Under the Rules of Court, the remedies of forcible
M. ENCARNACION and against the defendant NIEVES AMIGOE (sic) entry and unlawful detainer are granted to a person deprived of the
as follows: possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person
a) ORDERING the defendant to vacate the portion of the parcels of against whom the possession of any land or building is unlawfully
land described in Transfer Certi icates of Title Nos. T-256650 and withheld after the expiration or termination of the right to hold
T-256651 he is now occupying and surrender it to the plaintiff; possession by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or
b) ORDERING the defendant to pay the plaintiff the sum of FIVE other person. These remedies afford the person deprived of the
THOUSAND PESOS (P5,000) as attorney's fees, and possession to ile at any time within one year after such unlawful
deprivation or withholding of possession, an action in the proper
c) ORDERING the defendant to pay rentals equivalent [to] P500.00 Municipal Trial Court against the person or persons unlawfully
per month from February, 2001 until the portion of the land withholding or depriving of possession, or any person or persons
occupied by him is surrendered to the plaintiff. claiming under them, for the restitution of such possession,


together with damages and costs.[14] Thus, if the dispossession has The respondent's actual entry on the land of the petitioner was in
not lasted for more than one year, an ejectment proceeding is 1985 but it was only on March 2, 2001 or sixteen years after, when
proper and the inferior court acquires jurisdiction. On the other petitioner iled his ejectment case. The respondent should have iled
hand, if the dispossession lasted for more than one year, the proper an accion publiciana case which is under the jurisdiction of the
action to be iled is an accion publiciana which should be brought to RTC.However, the RTC should have not dismissed the case.
the proper Regional Trial Court.
Section 8, Rule 40 of the Rules of Court provides:
After a careful evaluation of the evidence on record of this case, we
ind that the Court of Appeals committed no reversible error in SECTION 8. Appeal from orders dismissing case without trial; lack
holding that the proper action in this case is accion publiciana; and of jurisdiction. - If an appeal is taken from an order of the lower
in ordering the remand of the case to the Regional Trial Court of court dismissing the case without a trial on the merits, the Regional
Cauayan, Isabela, Branch 20, for further proceedings. Trial Court may af irm or reverse it, as the case may be. In case of
af irmance and the ground of dismissal is lack of jurisdiction over
Well settled is the rule that jurisdiction of the court over the subject the subject matter, the Regional Trial Court, if it has jurisdiction
matter of the action is determined by the allegations of the thereover, shall try the case on the merits as if the case was
complaint at the time of its iling, irrespective of whether or not the originally iled with it. In case of reversal, the case shall be
plaintiff is entitled to recover upon all or some of the claims remanded for further proceedings.
asserted therein. What determines the jurisdiction of the court is
the nature of the action pleaded as appearing from the allegations If the case was tried on the merits by the lower court without
in the complaint. The averments therein and the character of the jurisdiction over the subject matter, the Regional Trial Court on
relief sought are the ones to be consulted.[15] On its face, the appeal shall not dismiss the case if it has original jurisdiction
complaint must show enough ground for the court to assume thereof, but shall decide the case in accordance with the preceding
jurisdiction without resort to parol testimony.[16] section, without prejudice to the admission of amended pleadings
and additional evidence in the interest of justice.The RTC should
From the allegations in the complaint, it appears that the petitioner have taken cognizance of the case. If the case is tried on the merits
became the owner of the property on April 11, 1995 by virtue of the by the Municipal Court without jurisdiction over the subject matter,
waiver of rights executed by his mother-in-law. He iled the the RTC on appeal may no longer dismiss the case if it has original
complaint for ejectment on March 2, 2001 after his February 1, jurisdiction thereof. Moreover, the RTC shall no longer try the case
2001 letter to the respondent demanding that the latter vacate the on the merits, but shall decide the case on the basis of the evidence
premises remained unheeded. While it is true that the demand presented in the lower court, without prejudice to the admission of
letter was received by the respondent on February 12, 2001, the amended pleadings and additional evidence in the interest of
thereby making the iling of the complaint for ejectment fall within justice.[19]WHEREFORE, the petition is DENIED. The Decision of
the requisite one year from last demand for complaints for unlawful the Court of Appeals dated June 30, 2005 in CA-G.R. SP No. 73857
detainer, it is also equally true that petitioner became the owner of ordering the remand of Civil Case No. Br. 20-1194 to the Regional
the subject lot in 1995 and has been since that time deprived Trial Court of Cauayan, Isabela, Branch 20, for further proceedings,
possession of a portion thereof. From the date of the petitioner's is AFFIRMED.
dispossession in 1995 up to his iling of his complaint for ejectment
in 2001, almost 6 years have elapsed. The length of time that the No costs.
petitioner was dispossessed of his property made his cause of
action beyond the ambit of an accion interdictal and effectively SO ORDERED.
made it one for accion publiciana. After the lapse of the one- year
period, the suit must be commenced in the Regional Trial Court via Panganiban, C. J., (Chairperson), Austria-Martinez, Callejo, Sr., and
an accion publiciana which is a suit for recovery of the right to Chico-Nazario, JJ., concur.
possess. It is an ordinary civil proceeding to determine the better
right of possession of realty independently of title. It also refers to De Leon vs Court of Appeals, G.R. No.
accrual of the cause of action or from the unlawful withholding of 96107, June 19, 1995
315 Phil. 140
possession of the realty.[17]
THIRD DIVISION
Previously, we have held that if the owner of the land knew that
G.R. No. 96107, June 19, 1995
another person was occupying his property way back in 1977 but
CORAZON JALBUENA DE LEON, PETITIONER, VS. HON. COURT OF
the said owner only iled the complaint for ejectment in 1995, the
APPEALS (SPECIAL SECOND DIVISION) AND ULDARICO INAYAN,
proper action would be one for accion publiciana and not one under
RESPONDENTS.
the summary procedure on ejectment. As explained by the Court:
We agree with the Court of Appeals that if petitioners are indeed the
DECISION
owners of the subject lot and were unlawfully deprived of their
ROMERO, J.:
right of possession, they should present their claim before the
regional trial court in an accion publiciana or an accion
In this petition for review, we are asked to set aside the amended
reivindicatoria, and not before the metropolitan trial court in a
decision of the Court of Appeals dated November 8, 1990 in
summary proceeding for unlawful detainer or forcible entry. For
"Corazon Jalbuena de Leon v. Uldarico Inayan," (CA-G.R. CV No.
even if one is the owner of the property, the possession thereof
19777)[1] which reversed its original decision dated May 24,
cannot be wrested from another who had been in physical or
1990.[2]
material possession of the same for more than one year by resorting
to a summary action for ejectment.[18]Hence, we agree with the
The subject property in the case at bench involves two parcels of
Court of Appeals when it declared that:
irrigated riceland covering an area of 117,785 square meters


located in Barangays Guintas and Bingke, Napnod, Leganes, Iloilo. 5. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon
Jesus Jalbuena, the owner of the land, entered into a verbal lease the sum of P3,000.00 as attorney's fees; P1,000.00 as litigation
contract in 1970 with Uldarico Inayan, for one year renewable for expenses, and P2,000.00 as moral damages, plus costs; and
the same period. Inayan, private respondent herein, bound himself
to deliver 252 cavans of palay each year as rental to be paid during 6. Dismissing defendant's counterclaim for lack of merit."[4]
the irst ten days of January. Private respondent who was a godson On appeal to the Court of Appeals, private respondent raised the
of Jesus Jalbuena, was allowed to continue with the lease from year sole issue of jurisdiction and alleged that the lower court, acting as
to year. Court of Agrarian Relations, had no jurisdiction over the action.
Petitioner Corazon Jalbuena de Leon is the daughter of Jesus The respondent appellate court, on May 24, 1990, af irmed the trial
Jalbuena and the transferee of the subject property. court's decision, disposing as follows:
Although private respondent cultivated the subject property "WHEREFORE, premises considered, the decision appealed from
through hired men, the cavans of palay were paid annually until should be, as it is hereby AFFIRMED, with a MODIFICATION that the
1983 when Inayan ceased paying the agreed rental and instead, period within which appellant should be ordered to pay the rentals
asserted dominion over the land. When asked by the petitioner to in arrears now covers the years 1983 to 1990. Costs against
vacate the land, he refused to do so, prompting the latter to bring an appellant."[5]
action in court. It held that while jurisdiction must exist as a matter of law, private
respondent's attack on the jurisdiction of the lower court must fail
In March 1984, herein petitioner iled a complaint against private for he is guilty of estoppel.[6] Despite several opportunities to
respondent before the Regional Trial Court of Iloilo City for question the jurisdiction of the lower court, he failed to do so.
"Termination of Civil Law Lease; Recovery of Possession; Recovery Moreover, it was he who insisted, through his misrepresentations,
of Unpaid Rentals and Damages." that the case, involving, as it does, purely agrarian issues, should be
referred to the Ministry of Agrarian Reform.[7] Finally, the appellate
Private respondent, in his Answer, claimed that the land had been court held that since regional trial courts, by express provision of
tenanted by his father since 1938 and that he has already been B.P. 129, Section 24, now have exclusive original jurisdiction over
issued Certi icates of Land Transfer (CLT) for the subject property. agrarian cases, but still applying the special rules of agrarian
These Certi icates of Land Transfer were subsequently cancelled by procedure, it was no error for the court below, even if acting as an
the then Ministry of Agrarian Reform on November 22, 1983 upon a agrarian court, to resolve a controversy involving a civil lease.[8]
inding that said lands were owned by Jesus Jalbuena and that the
CLTs were erroneously issued.[3] Private respondent's motion to reconsider the above decision was
granted by the Court of Appeals on November 8, 1990. Respondent
On April 11, 1984, the lower court issued an order adopting the court then set aside its earlier decision and dismissed the civil case
procedure in agrarian cases. iled by petitioner below (Civil Case No. 15628) for want of
jurisdiction. In its amended decision, the appellate court held that
The dispositive portion of the trial court's decision dated February petitioner's complaint below was anchored on acció n interdictal, a
26, 1988 in favor of petitioner De Leon reads: summary action for recovery of physical possession that should
have been brought before the proper inferior court. To make
"WHEREFORE, Premises considered, judgment is hereby rendered: private respondent a deforciant so that the unlawful detainer suit
may be properly iled, it is necessary to allege when demand to pay
1. Declaring the lease contract between plaintiff and defendant as a rent and to vacate were made. The court found that this requisite
civil law lease, and that the same has already been terminated due was not speci ically met in petitioner's complaint below. Such
to defendant's failure to pay his rentals from 1983 up to the failure on her part is fatal to her cause since the one-year period
present; within which a detainer suit may be instituted had not yet elapsed
when Civil Case No. 15628 was iled. Therefore, the court below was
2. Ordering defendant Uldarico Inayan and his privies and devoid of jurisdiction to entertain the case.[9]
successors-in-interest to immediately vacate the land
subject-matter of this complaint and to return possession thereof to Hence this petition for review.
plaintiff;
It is petitioner's contention that the Court of Appeals erred in
3. Ordering defendant Uldarico Inayan to pay plaintiff Corazon holding that the case below is an unlawful detainer action. Since
Jalbuena de Leon, one thousand two hundred sixty (1,260) cavans the parties did not con ine themselves to issues pertaining solely to
of palay representing unpaid rentals from 1983 up to 1987, or its possession but also to the nature of the lease contract, the case is
money equivalent computed at the current market price of palay, not one of unlawful detainer but one incapable of pecuniary
less whatever amount may have been deposited by defendant with estimation.
the Court during the pendency of this case, which deposit should be
released in favor of plaintiff; Next, petitioner argues that the issue of lack of jurisdiction should
not have been resolved in favor of private respondent who had
4. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon voluntarily submitted to the jurisdiction of the court a quo and
the sum of P38,501.28 representing the unpaid irrigation fees, and raised the issue only after an adverse decision was rendered against
all fees thereafter until possession of the land has ben transferred to him.
the plaintiff;
Aside from emphasizing the correctness of respondent court's
ruling that the case below was a mere ejectment case, private
respondent raises the issue of res judicata in his comment.


Acció n reivindicatoria, which is an action to recover ownership,

Private respondent Inayan claims that the issue in the instant including the recovery of possession, should also be iled in the
petition, i.e. whether or not the trial court, acting as an agrarian regional trial court.
court, had jurisdiction over the unlawful detainer suit iled by
petitioner, had already been ruled upon by the Court of Appeals in Petitioner's complaint was for "Termination of Civil Law Lease;
CA G.R. SP No. 15700 entitled "Uldarico Inayan v. Hon. Alonsagay Recovery of Possession; Recovery of Unpaid Rentals and
and Corazon Jalbuena" and the petition for review of said decision Damages."[23] After alleging the facts regarding the lease of the
had already been denied by this Court in G.R. No. 89312.[10] subject property, including Inayan's refusal to pay rent and to
vacate, petitioner prayed that the trial court declare the civil law
The petition is impressed with merit. lease (and not "tenancy or agricultural lease") terminated. Plaintiff
likewise prayed that defendant be ordered to vacate the premises,
The primary issue presented here revolves around the jurisdiction pay back rentals, unpaid irrigation fees, moral and exemplary
of the trial court, then acting as a court of agrarian relations damages and litigation fees.
employing agrarian procedure, to try the suit iled by petitioner.
Clearly, the case involves more than just the issue of possession. It
Jurisdiction of the court over the subject matter is conferred only by was necessary for the trial court below to determine whether the
the Constitution or by law.[11] It is determinable on the basis of lease was civil and not an agricultural or tenancy relationship and
allegations in the complaint.[12] whether its termination was in order. More speci ically, the
complaint emphasized, in paragraph 4:
An error in jurisdiction can be raised at any time and even for the
irst time on appeal.[13] Barring highly meritorious and exceptional "That in entering into the contract, Jesus Jalbuena and defendant
circumstances,[14] neither estoppel nor waiver may be raised as Uldarico Inayan de initely agreed that the contract was to be CIVIL
defenses to such an error.[15] LAW LEASE NOT TENANCY OR AGRICULTURAL LEASE, for a period
of one (1) year renewable for the same period at the option and
In order to determine whether the court below had jurisdiction, it is agreement of the parties;"[24]
necessary to irst ascertain the nature of the complaint iled before As correctly determined by the trial court, one of the issues in the
it. case below was whether or not the contract entered into by the
plaintiff and defendant was a civil law lease or an agricultural lease.
A study of the complaint instituted by petitioner in the lower court If the former, the next issue was whether the lease contract between
reveals that the case is, contrary to the indings of the respondent the parties had been terminated in 1983 for failure of defendant to
appellate court, not one of unlawful detainer. pay his annual rental.[25]
An unlawful detainer suit (acció n interdictal) together with forcible A detainer suit exclusively involves the issue of physical possession.
entry are the two forms of an ejectment suit that may be iled to The case below, however, did not concern merely the issue of
recover possession of real property. Aside from the summary action possession but as well, the nature of the lease contracted by
of ejectment, acció n publiciana or the plenary action to recover the petitioner's predecessor-in-interest and private respondent. It
right of possession and acció n reivindicatoria or the action to likewise involved the propriety of terminating the relationship
recover ownership which includes recovery of possession, make up contracted by said parties, as well as the demand upon defendant to
the three kinds of actions to judicially recover possession.[16] deliver the premises and pay unpaid rentals, damages and
incidental fees.
Illegal detainer consists in withholding by a person from another of
the possession of a land or building to which the latter is entitled Where the issues of the case extend beyond those commonly
after the expiration or termination of the former's right to hold involved in unlawful detainer suits, such as for instance, the
possession by virtue of a contract, express or implied.[17] An respective rights of parties under various contractual arrangements
ejectment suit is brought before the proper inferior court to recover and the validity thereof, the case is converted from a mere detainer
physical possession only or possession de facto and not possession suit to one "incapable of pecuniary estimation," thereby placing it
de jure, where dispossession has lasted for not more than one year. under the exclusive original jurisdiction of the regional trial courts
Forcible entry and unlawful detainer are quieting processes and the (formerly the courts of irst instance).[26]
one-year time bar to the suit is in pursuance of the summary nature
of the action.[18] The use of summary procedure in ejectment cases Not being merely a case of ejectment, the regional trial court
is intended to provide an expeditious means of protecting actual possessed jurisdiction to try and resolve the case.
possession or right to possession of the property. They are not
processes to determine the actual title to an estate. If at all, inferior Still on the question of jurisdiction, private respondent Inayan, as
courts are empowered to rule on the question of ownership raised appellant before the respondent court, claimed that the trial court,
by the defendant in such suits, only to resolve the issue of acting as a court of agrarian relations, did not have jurisdiction over
possession.[19] Its determination on the ownership issue is, the complaint iled by petitioner because the latter did not concern
however, not conclusive. itself with tenancy or agrarian matters. The Court of Appeals, in its
original decision, ruled that private respondent was guilty of
Acció n publiciana is the plenary action to recover the right of estoppel. Accordingly, he can not successfully raise the issue.
possession when dispossession has lasted for more than one year or
when dispossession was effected by means other than those In the past, the principle of estoppel has been used by the courts to
mentioned in Rule 70.[20] Under these circumstances, a plenary avoid a clear case of injustice. Its use as a defense to a jurisdictional
action[21] may be brought before the regional trial court.[22] error is more of an exception rather than the rule. The
circumstances outlining estoppel must be unequivocal and
intentional, for it is an exception to standard legal norms and is


generally applied only in highly exceptional and justi iable the same. In the latter, the issue involved execution pending appeal
cases.[27] granted by the trial court judge to petitioner Jalbuena De Leon. The
Court of Appeals[31] enjoined the respondent judge from enforcing
We ind that the situation in the case at bench falls within the ambit the execution pending appeal after having found no valid and
of justi iable cases where estoppel may be applied. The trial court's compelling reason to justify said execution. Then too, private
recourse to agrarian procedure was undoubtedly provoked by respondent asserted, and the appellate court found, that an agrarian
private respondent Inayan's insistence on the existence of a tenancy court has no jurisdiction in a case where there exists no tenancy
relationship with petitioner. Private respondent cannot now use relation between the parties. The court said:
these same misrepresentations to assert the court's lack of
jurisdiction. He cannot invoke the court's jurisdiction to secure "In any event, the matter of jurisdiction of respondent court having
af irmative relief against petitioner and, after failing to obtain such been impugned and said issue permeating and going as it does into
relief, repudiate or question that same jurisdiction.[28] the very competence of the trial court to act on CAR Case No. 15628,
it behooves us to tread softly and give the bene it of the doubt to
Participation in judicial proceedings where the court was devoid of petitioner, for should execution pending appeal be allowed and the
jurisdiction is not normally considered as estoppel because the judgment is later ordered vacated on the ground that the trial court
jurisdiction of a court is mandated by law. Estoppel is likewise not had no jurisdiction to hear the case, then it would be well-nigh
appreciated where a mistaken belief in the court's jurisdiction is impossible to restore petitioner to his former status."[32]
maintained. From the foregoing quote, we ind that the decision of the appellate
court did not categorically rule on the matter of jurisdiction but
But private respondent's case is different for it does not involve an only made mention of it in passing and in ruling upon the real issue
honest mistake. He is directly responsible for the trial court's use of of the correctness of execution pending appeal ordered by the
the special rules of agrarian procedure. His insistence brought respondent judge. The decision in CA-G.R. SP No. 15700 became
about the want of jurisdiction he conveniently asserted before the inal after the petition for review of said decision was dismissed by
appellate court, and only after an adverse decision was levelled the Court for failure to pay the prescribed legal fees and to attach
against him. Private respondent cannot be allowed to seek refuge duplicate original or certi ied true copies of the questioned
under the protective mantle of the law after he has abused and decision.[33]
made a mockery of it. He is, therefore, considered estopped from
asserting the court's want of jurisdiction to try the case. In sum, we have concluded that the case iled by petitioner below,
not being one of unlawful detainer, the regional trial court had
Moreover, the case was ostensibly one that involved agrarian jurisdiction to hear and try the case.
matters, as alleged by private respondent. Hence the trial court
cannot be faulted for its use of agrarian procedure. Moreover, as shown in the foregoing paragraphs, private
respondent is estopped from asserting the lower court's lack of
The respondent court also correctly held: jurisdiction.
"Finally, and more importantly, while it is true that when the trial WHEREFORE, the petition is GRANTED. The amended decision of
court decreed that the procedure outlined in P.D. 946 was to be the Court of Appeals dated November 8, 1990 in CA G.R. CV No.
observed at the trial of the case at bar, it, in effect assumed its 19777 ("Corazon Jalbuena de Leon v. Uldarico Inayan") is SET
character as an agrarian court which is a court of limited ASIDE and the original decision dated May 24, 1990 is REINSTATED.
jurisdiction, and that since agrarian matters are solely cognizable by
agrarian courts in the exercise of their limited jurisdiction Costs against private respondent.
(Depositario vs. Herbas 121 SCRA 756) conversely, agrarian courts
have no jurisdiction in cases where there is no tenancy relation SO ORDERED.
between the parties (Dumlao vs. De Guzman, 1 SCRA 144). We
believe, however, that the dictum enunciated in the Dumlao case Feliciano, (Chairman) and Vitug, JJ., concur.
obtains only when, as before, the then C.F.I. and C.A.R. are two Melo and Francisco, JJ., no part.
separate and distinct entities. Consequently, the foregoing legal
principle no longer inds much relevance under the present system, Manlapaz vs Court of Appeals, G.R. No.
said agrarian courts having been integrated into the Regional Trial
Courts which, by express mandate of Section 24 of B.P. 129, shall L-39430, December 03, 1990
270 Phil. 15
have exclusive original jurisdiction over agrarian cases although
they are ordained to continue applying the special rules of
SECOND DIVISION
procedure provided for said cases. This being the case, it is no error
G.R. No. L-39430, December 03, 1990
for the court below, acting as an agrarian court, to resolve a
FRANCISCO MANLAPAZ, DELFIN SANGCAP, DOMINGO SANGCAP,
controversy involving a civil lease since it is already a settled rule
PEDRO CUNANAN, FAUSTO DE LA PENA AND HONORATA DE LA
that inasmuch as the RTC is a court of general jurisdiction, whether
PENA, PETITIONERS, VS. HON. COURT OF APPEALS, HON. JUDGE
a particular matter should be resolved by it in the exercise of its
LORENZO R. MOSQUEDA, HON. JUDGE VIRGILIO CANIVEL,
general jurisdiction, or in its limited jurisdiction, is not a
TEODORO RIVERA, PABLO RIVERA, RENATO RIVERA AND
jurisdictional question but a procedural question involving a mode
BONIFACIO RIVERA, RESPONDENTS.
of practice which, therefore, may be waived (Manalo vs. Mariano,
L-33850, Jan. 22, 1976; Santos vs. Banayo, L-31854, Sept. 9,
DECISION
1982)."[29] (Underscoring ours.)
REGALADO, J.:
On the matter of res judicata raised by private respondent, we
conclude that the same does not ind application in instant petition.
The issues herein and in the petition in G.R. No. 89312[30] are not


Through this special civil action for certiorari and mandamus with a Petitioners iled a motion for reconsideration which allegedly has
prayer for preliminary injunction, petitioners would have us reverse not been resolved by respondent court and by reason of which the
and set aside the decision of the Court of Appeals[1] which af irmed respondent lower courts issued a writ of execution,[7] hence the
the order of the former Court of First Instance of Pampanga, Branch petition at bar.[8]
VII, authorizing the immediate execution of the judgment rendered We ind petitioners’ present recourse devoid of merit.
by the former Municipal Court of Candaba, Pampanga in Civil Case The writ of execution was properly issued pending appeal in the
No. 425 for ejectment. case. Respondent judge had neither abused his discretion nor
On October 20, 1971, herein private respondents, as plaintiffs, iled committed an error of judgment, but merely complied with his
an ejectment case in the Municipal Court of Candaba, Pampanga ministerial duty under the Rules of Court when he granted private
against herein petitioners as defendants, docketed therein as Civil respondents’ motion for immediate execution of the judgments in
Case No. 425, alleging that on or about September 1, 1971 herein their favor for failure of petitioners to ile a supersedeas bond.
petitioners, thru force, intimidation and threats and with the use of Section 8, Rule 70 of the Rules of Court provides in part that:
guns, forciby ousted the private respondents from Lots 32, 36, 37, "If judgment is rendered against the defendant, execution shall
38, 39, 40 and 41, Block 21 of Bahay Pare, Pampanga, which private issue immediately, unless an appeal has been perfected and the
respondents had been occupying and cultivating peacefully, defendant to stay execution iles a suf icient bond, approved by the
notoriously and continually for more than ten (10) years. justice of the peace or municipal court and executed to the plaintiff
Petitioners resisted the ejectment case alleging lack of jurisdiction to enter the action in the Court of First Instance and to pay the
due to the pendency of Civil Case No. 79371 in the then Court of rents, damages, and costs accruing down to the time of the
First Instance of Manila, and denied all other material allegations in judgment appealed from, and unless, during the pendency of the
the complaint. appeal, he deposits with the appellate court the amount of rent due
Thereafter, the parties entered into a stipulation of facts wherein from time to time under the contract, if any, as found by the
they agreed that: judgment of the justice of the peace or municipal court to exist. In
1. The lots under litigation are Lots 32, 36, 37, 38, 39, 40 and 41 the absence of a contract, he shall deposit with the court the
of Block 21 of the Bahay Pare Estate, Candaba, Pampanga;2. The reasonable value of the use and occupation of the premises for the
said lots belong to the Land Authority;3. Both parties had iled preceding month or period at the rate determined by the judgment,
their respective applications to purchase said lots from the on or before the tenth day of each succeeding month or period. x x
Government;4. On May 20, 1968, the Land Authority rendered x.”
its decision dismissing the applications of petitioners;5. On Under this rule, to stay the immediate execution of judgment in an
appeal to the Of ice of the President, the decision of the Land ejectment proceeding it is required that the defendant-appellant
Authority was reversed and the awards in favor of private must (a) perfect his appeal, (b) ile a supersedeas bond, and (c)
respondents were cancelled;6. Private respondents seasonably periodically deposit the rentals falling due during the pendency of
petitioned for judicial review and for annulment of said decision of the appeal. Failure to comply with said requirements is a ground for
the Of ice of the President before the Court of First Instance of the outright execution of the judgment upon petition of the
Manila, docketed as Civil Case No. 79371;7. During the pendency prevailing party.[9]
of Civil Case No. 79371, the Land Authority issued Orders of Award It has been repeatedly held that the requirement for the iling of a
to petitioners on September 21, 1970;8. The ejectment case was supersedeas bond is mandatory and cannot be dispensed with by
iled by private respondents during the pendency of said Civil Case the courts. When the supersedeas bond is not iled, the duty of the
No. 79371 of the Court of First Instance of Manila;9. Private court to order the execution of the appealed decision is ministerial
respondents have been regularly harvesting an average one and imperative and the execution of the judgment shall then issue
hundred (100) cavans per hectare from the land in dispute; and10. immediately,[10] without prejudice to the appeal taking its
On September 1, 1971, private respondents discovered petitioners’ course.[11]
intrusion over subject property;[2] In the instant case, petitioners’ failure to ile a supersedeas bond
On February 27, 1974, the Municipal Court of Candaba rendered necessary to stay execution pending appeal made or rendered the
judgment in favor of private respondents, ordering petitioners to original decision executory and gave private respondents the right
vacate the lots and restore possession thereof to private to immediate execution of the judgment which the court is bound to
respondents, and to pay as rentals twenty- ive (25) cavans per grant and enforce.
hectare for each year from May, 1971 until they shall have vacated The claim of petitioners that the order of execution is contrary to
the controverted lots.[3] the doctrine laid down and reiterated in the cases of Rallon vs. Ruiz,
Petitioners duly appealed the said decision to the Court of First Jr., et al.,[12] Realiza vs. Duarte,[13] and Hernandez, et al. vs. Clapis,
Instance of Macabebe, Pampanga, docketed therein as Civil Case No. et al.[14] is without merit.
73-70-M. During the pendency of said appeal, a motion for The aforementioned cases stand on different factual settings, hence
execution pending appeal was iled by private respondents for the common dictum therein is not applicable in the case at bar. In
failure of petitioners to ile a supersedeas bond. On April 2, 1974, those cases, the order of the executive department, giving the
the Court of First Instance of Candaba, Pampanga issued an order defendant in the ejectment case preferential right over the land in
granting the same.[4] dispute, was already inal and executory. The rights of the
Petitioners iled a petition for certiorari with the Court of Appeals, defendants therein over the property that they claimed were
docketed therein as CA-G.R. No. SP-02996, and obtained therefrom a already settled and not contested by the adverse parties.
writ of preliminary injunction on a cash bond of P2,000.00.[5] In the present case, the right of petitioners over the land in
However, on June 3, 1974, respondent court rendered a decision, controversy is doubtful. The decision of the Of ice of the President
the dispositive part of which reads: giving petitioners preferential rights to own the questioned lots,
"IN VIEW WHEREOF, this Court is constrained to dismiss, as it now setting aside the decision of the Land Authority awarding the same
dismisses, and denies certiorari; with costs, and preliminary to private respondents, was questioned by the latter before the
injunction issued by this Court on 30 April, 1974 is set aside.IT IS Court of First Instance of Manila in Civil Case No. 79371. In fact, on
SO ORDERED.”[6] November 17, 1972, the Secretary of Agrarian Reform, upon
learning of the pendency of said case, ordered the suspension of the


processing of all papers relative to the disputed lots and the holding Therefore, where a person supposes himself to be the owner of a
in abeyance of further action on said papers until Civil Case No. piece of land and desires to vindicate his ownership against the
79371 shall have been terminated.[15] In addition, on August 10, party actually in possession, it is incumbent upon him to institute
1977, private respondents submitted to the Court a copy of the an action to this end in a court of competent jurisdiction; and he can
decision in Civil Case No. 79371 of the Court of First Instance of not be permitted, by invading the property and excluding the actual
Manila, dated April 28, 1977, declaring the letter decision of the possessor to place upon the latter the burden of instituting an
Of ice of the President dated October 4, 1968 and its letter order of action to try the property right.[21] In no case may possession be
February 27, 1970 as null and void, and declaring private acquired through force or intimidation as long as there is a
respondents Hernando, Teodoro, Pablo, Renato, and Bonifacio, all possessor who objects thereto. He who believes that he has an
surnamed Rivera, as quali ied applicants of the questioned lots.[16] action or a right to deprive another of the holding of a thing, must
Moreover, in the present case the decision is not yet inal but invoke the aid of the competent court, if the holder should refuse to
became executory by reason of the very act of herein petitioners in deliver the thing.[22] When a person is in possession of the land
not iling a supersedeas bond necessary to stay execution pending and has maintained that possession for years, he cannot be forcibly
appeal as required by Section 8, Rule 70 of the Rules of Court. dispossessed thereof, even by the owner.[23]
Herein petitioners could have prevented the execution of said Further, the authority given to the Bureau of Lands over the
decision by simply complying with the rules but they opted not to disposition of public lands does not exclude the courts from their
do so, hence they have only themselves to blame. jurisdiction over possessory actions, the public character of the land
On the issue of jurisdiction, it is the contention of petitioners that notwithstanding. The exercise by the courts of such jurisdiction is
the Municipal Court of Candaba has no jurisdiction over the not an interference with the alienation, disposition and control of
ejectment case for two reasons, namely, (1) a civil case for public lands.[24] The determination of the respective rights or rival
annulment of the decision of the Of ice of the President is still claimants to public lands is different from the determination of who
pending inal determination in the Court of First Instance of Manila, has the actual possession or occupation with a view to protecting
and (2) there was no compliance with Presidential Decree No. 316 the same and preventing disorder and breaches of the peace. A
requiring prior referral of the ejectment case to the Department of judgment of the court ordering restitution of a parcel of land to the
Agrarian Reform. actual occupant, who has been deprived thereof by another through
We reject these pretensions. the use of force or another illegal manner, can never be prejudicial
Firmly settled is the rule that a municipal court has jurisdiction over interference with the disposition or alienation of public lands. On
forcible entry or unlawful detainer cases even if the ownership of the contrary, if courts were deprived of jurisdiction over the cases
the property is in dispute.[17] A resume of the basic legal principles involving con licts of possession, the threat of judicial action against
in point would be apropos. breaches of peace committed on public lands would be eliminated,
In an action for forcible entry and detainer, the main issue is one of and a state of lawlessness would probably be produced between
priority of possession. The legal right thereto is not essential to the applicants, occupants, or squatters, where force or might, not right
possessor's cause of action, for no one may take law into his own or justice, would rule.[25]
hands and forcibly eject another or deprive him of his possession by It is, therefore, clear that the municipal court correctly assumed
stealth, even if his title thereto were questionable or actually jurisdiction over the case below as the complaint iled before it
disputed in another case.[18] If the plaintiff can prove prior physical suf iciently avers that private respondents seek to recover
possession in himself, he may recover such possession even from possession of the lots from petitioners. The pendency of Civil Case
the owner, but on the other hand, if he cannot prove such prior No. 79371, wherein the question of ownership was raised, is of no
physical possession, he has no right of action for forcible entry and moment. Pending inal adjudication of ownership, the municipal
detainer even if he should be the owner of the property.[19] court has jurisdiction to determine in the meantime the right of
An action for recovery of possession is totally distinct and different possession over the land.[26]
from an action for recovery of title or ownership. In fact, a judgment Prior referral of this case to the Department of Agrarian Reform
rendered in a case for recovery of possession is conclusive only on under the provisions of Section 2 of Presidential Decree No. 316, in
the question of possession and not that of ownership. It does not in relation to Presidential Decree No. 27, is not necessary. The said
any way bind the title or affect the ownership of the land or laws are not applicable to the case at bar. There is here no allegation
building.[20] Section 7 of Rule 70 expressly states that: in the pleadings nor any showing in the records that a tenancy
"The judgment rendered in an action for forcible entry or detainer relation exists between petitioners and private respondents. Both
shall be effective with respect to the possession only and in no wise groups are claiming a right of possession in the concept of an owner.
bind the title or affect the ownership of the land or building. Such The referral provisions of Presidential Decree No. 316 apply only in
judgment shall not bar an action between the same parties cases wherein the parties are landlords and tenants and not when
respecting title to the land or building, nor shall it be held they are applicants of a public land claiming preferential right over
conclusive of the facts therein found in a case between the same it, as in this case.
parties upon a different cause of action not involving possession." As we ruled in Castro, et al. vs. Court of Appeals, et al.[27]:
We have held that in giving recognition to the action of forcible "x x x for the lands subject of the action to come under Operation
entry and detainer the purpose of the law is to protect the person Land Transfer under Pres. Decree No. 27, there must irst be a
who in fact has actual possession; and in case of controverted right, showing that they are tenanted lands and for the action to come
it requires the parties to preserve the status quo until one or the within the referral provisions of Pres. Decree Nos. 316 and 946, it
other of them sees it to invoke the decision of a court of competent must irst be established that the action involves tenants. The
jurisdiction upon the question of ownership. It is obviously just that aforecited decrees speci ically speak of ‘tenant–farmer’, ‘sharecrop
the person who has irst acquired possession should remain in or lease tenancy’, ‘tenant’, and ‘tenant–tiller’."
possession pending this decision; and the parties cannot be WHEREFORE, the instant petition is hereby DISMISSED and the
permitted meanwhile to engage in a petty warfare over the writs prayed for are DENIED. The temporary restraining order
possession of the property which is the subject of dispute. To permit issued by the Court on May 16, 1975 is hereby lifted.
this would be highly dangerous to individual security and SO ORDERED.
disturbing to social order.


Melencio-Herrera, (Chairman), Paras, Padilla, and Sarmiento, JJ.,

concur.
That by reason of the deliberate, malicious and unfounded refusal of
Valdez, Jr vs Court of Appeals, G.R. NO. the defendants to vacate/surrender the premises in question, the
herein plaintiffs were constrained to engage the professional
132424, May 04, 2006 services of counsel thus incurring expenses amounting to TEN
523 Phil. 39
THOUSAND PESOS (P10,000.00) representing acceptance fee and
additional ONE THOUSAND PESOS (P1,000.00) per appearance,
FIRST DIVISION
who on July 12, 1994 sent a formal demand was likewise ignored,
G.R. NO. 132424, May 04, 2006
(sic) copy of which is hereto attached as Annex "D";
SPOUSES BONIFACIO R. VALDEZ, JR. AND VENIDA M. VALDEZ,
PETITIONERS, VS. HON. COURT OF APPEALS, SPOUSES GABRIEL
FABELLA AND FRANCISCA FABELLA, RESPONDENTS.
That likewise by virtue of the adamant refusal of the defendants to
DECISION
vacate/surrender the said premises in question, plaintiff[s] suffered
CHICO-NAZARIO, J.:
serious anxiety, sleepless nights, mental torture and moral erosion;
x x x[2]
This petition for review under Rule 45 of the Rules of Court, iled by
In their answer, private respondents contended that the complaint
petitioners spouses Bonifacio R. Valdez, Jr. and Venida M. Valdez,
failed to state that petitioners had prior physical possession of the
seeks to nullify and set aside the 22 April 1997 decision[1] and 30
property or that they were the lessors of the former. In the
January 1998 resolution of the Court of Appeals in CA-G.R. SP No.
alternative, private respondents claimed ownership over the land
43492, which reversed the judgment, dated 8 January 1997, of the
on the ground that they had been in open, continuous, and adverse
Regional Trial Court of Antipolo, Rizal, Branch 74, in Civil Case No.
possession thereof for more than thirty years, as attested by an
3607, which, in turn, af irmed in toto the decision rendered by the
ocular inspection report from the Department of Environment and
Municipal Trial Court of Antipolo, Rizal, Branch II, in Civil Case No.
Natural Resources. They also stressed that the complaint failed to
2547.
comply with Supreme Court Circular No. 28-91 regarding af idavits
against non-forum shopping.
This case originated from a complaint for unlawful detainer iled by
petitioners Bonifacio and Venida Valdez against private respondents
The Municipal Trial Court (MTC) rendered a decision in favor of the
Gabriel and Francisca Fabella before the Municipal Trial Court of
petitioners, ordering private respondents to vacate the property
Antipolo, Rizal. The complaint alleges these material facts:
and to pay rent for the use and occupation of the same plus
That plaintiffs are the registered owner[s] of a piece of residential
attorney's fees.
lot denominated as Lot [N]o. 3 Blk 19 located at Carolina Executive
Village, Brgy. Sta. Cruz, Antipolo, Rizal which [they] acquired from
Private respondents appealed the MTC's decision to the Regional
Carolina Realty, Inc. Sometime [i]n November 1992 by virtue of
Trial Court (RTC). The RTC, in a decision dated 8 January 1997,
Sales Contract, xerox copy of which is hereto attached marked as
af irmed in toto the decision of the MTC.
Annex "A" and the xerox copy of the Torrens Certi icate of Title in
her name marked as Annex "B";
Undeterred, the private respondents iled a petition for review with
the Court of Appeals on 10 March 1997 questioning the decision of
the RTC.
That defendants, without any color of title whatsoever occupie[d]

In a decision dated 22 April 1997, the Court of Appeals reversed
the said lot by building their house in the said lot thereby depriving
and set aside the decision of the RTC. It held that petitioners failed
the herein plaintiffs rightful possession thereof;
to make a case for unlawful detainer because they failed to show
that they had given the private respondents the right to occupy the
premises or that they had tolerated private respondents' possession
of the same, which is a requirement in unlawful detainer cases. It
That for several times, plaintiffs orally asked the herein defendants
added that the allegations in petitioners' complaint lack
to peacefully surrender the premises to them, but the latter
jurisdictional elements for forcible entry which requires an
stubbornly refused to vacate the lot they unlawfully occupied;
allegation of prior material possession. The Court of Appeals
ratiocinated thus:
An examination of the complaint reveals that key jurisdictional
allegations that will support an action for ejectment are
That despite plaintiffs' referral of the matter to the Barangay,
conspicuously lacking. In particular, an allegation of prior material
defendants still refused to heed the plea of the former to surrender
possession is mandatory in forcible entry, xxx and the complaint is
the lot peacefully;
de icient in this respect. On the other hand, neither does there
appear to be a case of unlawful detainer, since the private
respondents failed to show that they had given the petitioners the
right to occupy the premises, which right has now [been]
That because of the unfounded refusal of the herein defendants to
extinguished.
settle the case amicably, the Barangay Captain was forced to issue
the necessary Certi ication to File Action in favor of the herein
xxx
plaintiffs in order that the necessary cause of action be taken before
the proper court, xerox copy of which is hereto attached marked as
In light of the foregoing, the conclusion is inevitable that the
Annex "C";
Municipal Trial Court before which the action for ejectment was


iled had no jurisdiction over the case. Consequently, the dismissal court when dispossession has lasted for more than one year.[12] It
thereof is in order. is an ordinary civil proceeding to determine the better right of
possession of realty independently of title.[13] In other words, if at
WHEREFORE, the Petition is hereby GIVEN DUE COURSE, and the time of the iling of the complaint more than one year had
GRANTED. The decision dated 08 January 1997 rendered by the elapsed since defendant had turned plaintiff out of possession or
respondent court is hereby REVERSED and SET ASIDE, and defendant's possession had become illegal, the action will be, not
judgment is hereby rendered DISMISSING the complaint in Civil one of the forcible entry or illegal detainer, but an accion publiciana.
Case No. 2547 of the Municipal Trial Court of Antipolo, Rizal for lack On the other hand, accion reivindicatoria is an action to recover
of jurisdiction.[3]Petitioners iled a motion for reconsideration ownership also brought in the proper regional trial court in an
which was denied in a resolution dated 30 January 1998.[4] ordinary civil proceeding.[14]
Hence, the instant petition. To justify an action for unlawful detainer, it is essential that the
plaintiff's supposed acts of tolerance must have been present right
Petitioners submit the following issues for the Court's from the start of the possession which is later sought to be
consideration[5]: recovered.[15] Otherwise, if the possession was unlawful from the
WHETHER OR NOT THE ALLEGATIONS OF THE COMPLAINT start, an action for unlawful detainer would be an improper
CLEARLY MADE OUT A CASE FOR UNLAWFUL DETAINER. remedy.[16] As explained in Sarona v. Villegas[17]:
But even where possession preceding the suit is by tolerance of the
owner, still, distinction should be made.
WHETHER OR NOT BASED ON THE ALLEGATION(S) OF THE
COMPLAINT, THE MUNICIPAL TRIAL COURT OF ANTIPOLO, RIZAL, If right at the incipiency defendant's possession was with plaintiff's
CLEARLY HAS ORIGINAL JURISDICTION OVER THE INSTANT tolerance, we do not doubt that the latter may require him to vacate
COMPLAINT FILED BEFORE IT. the premises and sue before the inferior court under Section 1 of
Since the two issues are closely intertwined, they shall be discussed Rule 70, within one year from the date of the demand to vacate.
together.
xxxx
In the main, petitioners claim that the averments of their complaint
make out a case for unlawful detainer having alleged that private A close assessment of the law and the concept of the word
respondents unlawfully withheld from them the possession of the "tolerance" con irms our view heretofore expressed that such
property in question, which allegation is suf icient to establish a tolerance must be present right from the start of possession sought
case for unlawful detainer. They further contend that the summary to be recovered, to categorize a cause of action as one of unlawful
action for ejectment is the proper remedy available to the owner if detainer - not of forcible entry. Indeed, to hold otherwise would
another occupies the land at the former's tolerance or permission espouse a dangerous doctrine. And for two reasons: First. Forcible
without any contract between the two as the latter is bound by an entry into the land is an open challenge to the right of the possessor.
implied promise to vacate the land upon demand by the owner. Violation of that right authorizes the speedy redress - in the inferior
court - provided for in the rules. If one year from the forcible entry
The petition is not meritorious. is allowed to lapse before suit is iled, then the remedy ceases to be
speedy; and the possessor is deemed to have waived his right to
Under existing law and jurisprudence, there are three kinds of seek relief in the inferior court. Second, if a forcible entry action in
actions available to recover possession of real property: (a) accion the inferior court is allowed after the lapse of a number of years,
interdictal; (b) accion publiciana; and (c) accion reivindicatoria.[6] then the result may well be that no action of forcible entry can really
prescribe. No matter how long such defendant is in physical
Accion interdictal comprises two distinct causes of action, namely, possession, plaintiff will merely make a demand, bring suit in the
forcible entry (detentacion) and unlawful detainer (desahuico).[7] inferior court - upon a plea of tolerance to prevent prescription to
In forcible entry, one is deprived of physical possession of real set in - and summarily throw him out of the land. Such a conclusion
property by means of force, intimidation, strategy, threats, or stealth is unreasonable. Especially if we bear in mind the postulates that
whereas in unlawful detainer, one illegally withholds possession proceedings of forcible entry and unlawful detainer are summary in
after the expiration or termination of his right to hold possession nature, and that the one year time-bar to suit is but in pursuance of
under any contract, express or implied.[8] The two are the summary nature of the action.[18] (Underlining supplied)It is
distinguished from each other in that in forcible entry, the the nature of defendant's entry into the land which determines the
possession of the defendant is illegal from the beginning, and that cause of action, whether it is forcible entry or unlawful detainer. If
the issue is which party has prior de facto possession while in the entry is illegal, then the action which may be iled against the
unlawful detainer, possession of the defendant is originally legal but intruder is forcible entry. If, however, the entry is legal but the
became illegal due to the expiration or termination of the right to possession thereafter becomes illegal, the case is unlawful detainer.
possess.[9]
Indeed, to vest the court jurisdiction to effect the ejectment of an
The jurisdiction of these two actions, which are summary in nature, occupant, it is necessary that the complaint should embody such a
lies in the proper municipal trial court or metropolitan trial statement of facts as brings the party clearly within the class of
court.[10] Both actions must be brought within one year from the cases for which the statutes provide a remedy, as these proceedings
date of actual entry on the land, in case of forcible entry, and from are summary in nature.[19] The complaint must show enough on its
the date of last demand, in case of unlawful detainer.[11] The issue face the court jurisdiction without resort to parol testimony.[20]
in said cases is the right to physical possession.
The jurisdictional facts must appear on the face of the complaint.
Accion publiciana is the plenary action to recover the right of When the complaint fails to aver facts constitutive of forcible entry
possession which should be brought in the proper regional trial or unlawful detainer, as where it does not state how entry was


affected or how and when dispossession started, the remedy should the start of a possession that is later sought to be recovered.[25]In
either be an accion publiciana or an accion reivindicatoria in the the instant case, the allegations in the complaint do not contain any
proper regional trial court.[21] Thus, in Go, Jr. v. Court of averment of fact that would substantiate petitioners' claim that they
Appeals,[22] petitioners iled an unlawful detainer case against permitted or tolerated the occupation of the property by
respondent alleging that they were the owners of the parcel of land respondents. The complaint contains only bare allegations that
through intestate succession which was occupied by respondent by "respondents without any color of title whatsoever occupies the
mere tolerance of petitioners as well as their deceased mother. land in question by building their house in the said land thereby
Resolving the issue on whether or not petitioners' case for unlawful depriving petitioners the possession thereof." Nothing has been said
detainer will prosper, the court ruled[23]: on how respondents' entry was effected or how and when
Petitioners alleged in their complaint that they inherited the dispossession started. Admittedly, no express contract existed
property registered under TCT No. C-32110 from their parents; that between the parties. This failure of petitioners to allege the key
possession thereof by private respondent was by tolerance of their jurisdictional facts constitutive of unlawful detainer is fatal.[26]
mother, and after her death, by their own tolerance; and that they Since the complaint did not satisfy the jurisdictional requirement of
had served written demand on December, 1994, but that private a valid cause for unlawful detainer, the municipal trial court had no
respondent refused to vacate the property. x x x jurisdiction over the case.[27] It is in this light that this Court inds
that the Court of Appeals correctly found that the municipal trial
It is settled that one whose stay is merely tolerated becomes a court had no jurisdiction over the complaint.
deforciant illegally occupying the land the moment he is required to
leave. It is essential in unlawful detainer cases of this kind, that WHEREFORE, the petition is DENIED and the judgment of the Court
plaintiff's supposed acts of tolerance must have been present right of Appeals dismissing the complaint in Civil Case No. 2547 of the
from the start of the possession which is later sought to be MTC Antipolo, Rizal for lack of jurisdiction is hereby AFFIRMED.
recovered. This is where petitioners' cause of action fails. The
appellate court, in full agreement with the MTC made the No pronouncement as to costs.
conclusion that the alleged tolerance by their mother and after her
death, by them, was unsubstantiated. x x x SO ORDERED.
The evidence revealed that the possession of defendant was illegal Panganiban, C. J., (Chairperson), Ynares-Santiago, Austria-Martinez,
at the inception and not merely tolerated as alleged in the and Callejo, Sr., JJ., concur.
complaint, considering that defendant started to occupy the subject
lot and then built a house thereon without the permission and Caro vs Sucaldito, G.R. NO. 157536, May 16,
consent of petitioners and before them, their mother. xxx Clearly,
defendant's entry into the land was effected clandestinely, without 2005
497 Phil. 879
the knowledge of the owners, consequently, it is categorized as
possession by stealth which is forcible entry. As explained in Sarona
SECOND DIVISION
vs. Villegas, cited in Muñ oz vs. Court of Appeals [224 SCRA 216
G.R. NO. 157536, May 16, 2005
(1992)] tolerance must be present right from the start of possession
MELCHOR CARO, PETITIONER, VS. SUSANA SUCALDITO,
sought to be recovered, to categorize a cause of action as one of
RESPONDENT.
unlawful detainer not of forcible entry x x x.And in the case of Ten
Forty Realty and Development Corp. v. Cruz,[24] petitioner's
DECISION
complaint for unlawful detainer merely contained the bare
CALLEJO, SR., J.:
allegations that (1) respondent immediately occupied the subject
property after its sale to her, an action merely tolerated by
This is a petition for review on certiorari under Rule 45 of the Rules
petitioner; and (2) her allegedly illegal occupation of the premises
of Court, assailing the Decision[1] of the Court of Appeals (CA) in
was by mere tolerance. The court, in inding that the alleged
CA-G.R. CV No. 45503, af irming the dismissal of Civil Case No.
tolerance did not justify the action for unlawful detainer, held:
15529 by the Regional Trial Court (RTC) of Iloilo City, Branch 39, as
To justify an action for unlawful detainer, the permission or
well as the resolution denying the motion for reconsideration
tolerance must have been present at the beginning of the
thereof.
possession. x x x
The antecedent facts are as follows:

xxxx
Gregorio Caro bought a parcel of land known as Assessor's Lot No.

In this case, the Complaint and the other pleadings do not recite any
160 from Ruperto Gepilano as evidenced by a Deed of Sale[2] dated
averment of fact that would substantiate the claim of petitioner that
October 21, 1953. The said lot was situated in Sitio Bangyan, Barrio
it permitted or tolerated the occupation of the property by
Calaya, Municipality of Nueva Valencia, Iloilo City, consisting more
Respondent Cruz. The complaint contains only bare allegations that
or less of 17.9849 hectares. Thereafter, Gregorio Caro sold a portion
1) respondent immediately occupied the subject property after its
of the said lot to his son Melchor Caro, consisting of 70,124 square
sale to her, an action merely tolerated by petitioner; and 2) her
meters, and now identi ied as Lot No. 4512 of the Cadastral survey
allegedly illegal occupation of the premises was by mere tolerance.
of Nueva Valencia, Pls-775. Father and son executed a Deed of
De inite Sale[3] dated January 31, 1973 covering Lot No. 4512.
These allegations contradict, rather than support, petitioner's
theory that its cause of action is for unlawful detainer. First, these
On August 1, 1974, Melchor Caro applied for a free patent before the
arguments advance the view that respondent's occupation of the
Bureau of Lands, District Land Of ice No. 6-1, covering the said area
property was unlawful at its inception. Second, they counter the
of the property which he bought from his father. The application
essential requirement in unlawful detainer cases that petitioner's
was, however, opposed by Deogracias de la Cruz. On November 6,
supposed act of sufferance or tolerance must be present right from


1980, the Regional Director rendered a Decision[4] canceling the possession of the said property, the Bureau of Lands did not award
said application, thusly: it to him.
This is a claim of Deogracias de la Cruz to Lot No. 4512, Pls-775 of
Calaya, Nueva Valencia, Guimaras, covered by the above-noted Caro further alleged that since the issuance of the free patent over
application of Melchor Caro. the subject lot in favor of Sucaldito was wrongful and fraudulent,
she had no right whatsoever over the subject lot. Hence, as a
In the investigation, respondent claims preferential rights over the "trustee of a constructive trust," she was obliged to return the same
land as he acquired it through sale from his father Gregorio Caro to him as the lawful owner. The complaint contained the following
who had likewise bought the land from Ruperto Cepellano (sic) in prayer:
1953. On the other hand, protestant De la Cruz testi ied that the WHEREFORE, it is prayed that judgment be rendered:
land in controversy was bought by him from Cipriano Gallego in Ordering the annulment and voiding of the decision of the Bureau of
1965; that he thereafter occupied, possessed and improved the land Lands, the free patent and the Original Certi icate of Title No.
by planting coconut trees; and that in 1968 he was forcibly driven F-27162 or in the alternative;
out by Gregorio Caro from the land in question.
Veri ication of the records disclosed that the land which was Ordering defendant to reconvey the ownership and in the event she
actually sold to Gregorio Caro by Ruperto Gepellano (sic) is wrests possession from plaintiff then, also the possession of Lot
Assessor's Lot No. 160. The description and physical identity of Lot 4512 PLS-775 of Nueva Valencia, Guimaras Cadastre, back to
No. 160 is basically different and distinct from Lot No. 4512, the plaintiff;
land in question. This could be clearly seen in the Certi ied True
Copy of the Sketch Plan from the Assessor's Of ice of Assessor's Lot
No. 160 and the Sketch Plan marked as Exhibit 9 of the Declaring plaintiff as the lawful owner and possessor of Lot 4512
Respondent-Applicant. It has been established that Assessor's Lot PLS-775 of Nueva Valencia, Guimaras Cadastre and ordering the
No. 160 corresponds to Lot No. 4511 and not Lot No. 4512 claimed issuance of a free patent or a torrens title in favor of plaintiff;
by the protestant. Moreover, Ruperto Cepellano (sic) in his af idavit
testi ied that what he sold to Gregorio Caro is a land distinct and
different from the land in question. Ordering defendant to pay the plaintiff P50,000.00 as moral
damages, P2,000.00 as attorney's fees and P2,000.00 as expenses on
IN VIEW OF THE FOREGOING FINDINGS, it is ordered that the F.P.A. litigation plus exemplary damages in an amount at the discretion of
No. (VI-1)8548 of applicant-respondent Melchor Caro be, as hereby this Court.
it is, cancelled. Protestant Deogracias de la Cruz if quali ied, is given Plaintiff further prays for such other relief just and equitable in the
one hundred twenty (120) days from the inality of this decision to premises.[12]In her answer with counterclaim, Sucaldito
ile an appropriate public land application otherwise he shall lose interposed, as a special af irmative defense, the fact that she
his preferential right thereto. intervened in the proceedings on Caro's application for a free patent
over Lot No. 4512 before the Bureau of Lands having bought the
SO ORDERED.[5]Caro iled a notice of appeal before the Regional subject land from De la Cruz. Moreover, contrary to the allegations
Land Of ice in Iloilo City, docketed as MNR Case No. 5207. However, of the petitioner, Lot No. 989 and Lot No. 4512 were one and the
the appeal was dismissed in an Order[6] dated June 29, 1982, on the same lot, as per the indings of the Bureau of Lands.
ground of failure to ile an appeal memorandum within the
reglementary period therefor. The parties thereafter presented evidence to prove their respective
claims. In a Decision[13] dated December 7, 1993, the trial court
On August 29, 1982, Susana R. Sucaldito, as the buyer of Lot No. ruled in favor of the respondent and dismissed the petitioner's
4512, iled an Application for a Free Patent[7] covering the said lot, complaint. The dispositive portion reads:
and was issued Free Patent No. 597599. Consequently, the Register WHEREFORE, premises considered, the complaint iled by plaintiff
of Deeds of Iloilo City issued Original Certi icate of Title (OCT) No. is dismissed. The counterclaim of defendant which is merely the
F-27162 in her favor. Sucaldito then iled a Petition for Writ of result of the iling of the complaint, is likewise dismissed.
Possession[8] before the RTC of Iloilo City, which was granted in an
Order[9] dated May 7, 1984. Costs against the plaintiff.
Thereafter, on February 20, 1984, Caro iled a Complaint[10] SO ORDERED.[14]Citing the case of Maximo v. Court of First
against Sucaldito for "Annulment of Title, Decision, Free Patent Instance of Capiz, Br. III,[15] the trial court ruled that Caro had no
and/or Recovery of Ownership and/or Possession with Damages" personality to ile the action for the annulment of the free patent
before the RTC of Iloilo City. He later iled an amended issued in favor of Sucaldito, which could only be brought by the
complaint,[11] alleging that he was the owner of the subject lot, and Solicitor General. It held that "an applicant for a free patent who is
had been in possession of the same "since 1953 and/or even prior not the owner of a parcel of land cannot bring an action in court to
thereto in the concept of owner, adversely, openly, continuously and recover the land, for the court may not usurp the authority of the
notoriously." He further alleged that the said lot had been declared Director of Lands and the Secretary of Agriculture to dispose lands
for tax purposes in his name and that of his of the public domain through administrative proceedings under the
predecessors-in-interest, and that the corresponding land taxes had Public Land Act,"[16] or Commonwealth Act No. 141, as amended.
been paid therefor. He claimed that Assessor's Lot No. 160 had The trial court further stressed that the remedy of a rival-applicant
actually been divided into two lots, namely, Lot No. 4511 and Lot for a free patent over the same land was through administrative
No. 4512; Sucaldito had actually been claiming Lot No. 989 (Lot No. channels, not judicial, because even if the oppositor succeeds in
4512), which was located two kilometers away. He lamented that annulling the title of the applicant, the former does not thereby
despite the overwhelming evidence proving his ownership and become the owner of the land in dispute.[17]


The trial court also declared that contrary to Caro's claims, the Section 32 of Presidential Decree No. 1529 does not apply where
evidence clearly showed that Lot No. 4512, with an area of 70,677 the registered owner, or the successor-in-interest, knew that the
square meters, was not included in Assessor's Lot No. 160, thus: property described in the title actually belongs to another, as in this
Assessor's Lot 160 is Cadastral Lot 4511, which has an original area case. The petitioner cites Vital v. Anore, et al.[25] to bolster his
of around 17 hectares, more or less, later on, increased to 21 claim. The petitioner also cites Director of Lands v. Abanilla[26]
hectares. If we add Lot 4512 to Lot 4511 following the contention of where the Court stressed that any false statement in the application,
the plaintiff, then the area would be more than 28 hectares. Thus, which is an essential condition of the patent or title under Section
belying the claim of plaintiff that Lot 4512 was formerly a part of 91 of Commonwealth Act No. 141, "shall ipso facto produce the
Assessor's Lot 160. cancellation of the concession, title or permit granted."
The contention of the plaintiff that the defendant is claiming Lot In her comment, the respondent points out that the decision of the
989 which is owned by Felix Galabo and located at Brgy. Olacon, is Bureau of Lands itself would show that the petitioner is not the true
not well taken, because the identi ication of the lot as stated in the and lawful owner of the subject lot; as such, the argument that he
tax declaration is not binding and conclusive. What is binding and has the legal personality to ile the action for annulment of patent
conclusive is what is stated in the title of the land and its technical based on constructive trust is untenable. The respondent further
description. In the technical description as found in the title of the contends that the CA did not err in upholding the ruling of the RTC.
defendant [Sucaldito], it is clearly stated therein that the lot is Lot
4512 and is located at Brgy. Calaya and not Brgy. Olacon, Nueva The petitioner merely reiterated his previous arguments in his
Valencia, Guimaras.[18]Aggrieved by the trial court's ruling, Caro Reply dated December 30, 2003.
elevated the case to the CA on the following grounds:
I The Court agrees with the ruling of the RTC and the CA, and holds
that the petitioner has no personality to ile a suit for reconveyance
THE COURT A QUO ERRED IN RULING THAT PLAINTIFF HAS NO of the subject property.
PERSONALITY TO BRING THE ACTION;
The Court notes that the petitioner's complaint before the RTC
II prays for the annulment of the free patent issued in the
respondent's favor. Considering that the ultimate relief sought is for
THE COURT A QUO ERRED IN RULING THAT EVEN IF THE the respondent to "return" the subject property to him, it is in
PLANTIFF HAS THE PERSONALITY TO BRING THE ACTION STILL reality an action for reconveyance. In De Guzman v. Court of
HE CANNOT RECOVER THE LOT IN QUESTION, CAD. LOT NO. 4512; Appeals,[27] the Court held that "[t]he essence of an action for
reconveyance is that the decree of registration is respected as
III incontrovertible but what is sought instead is the transfer of the
property which has been wrongfully or erroneously registered in
THE COURT ERRED IN NOT ORDERING THE DEFENDANT TO another person's name, to its rightful owner or to one with a better
RECONVEY THE LAND IN QUESTION TO PLAINTIFF AND TO PAY right."[28] Indeed, in an action for reconveyance iled by a private
DAMAGES.[19]The CA dismissed the petition in its Decision[20] individual, the property does not go back to the State.[29]
dated July 31, 2002. The appellate court agreed with the ruling of
the RTC that the petitioner had no personality to ile the action Reversion, on the other hand, is an action where the ultimate relief
under Section 101 of Commonwealth Act No. 141, considering sought is to revert the land back to the government under the
further that he was a mere applicant for a free patent. Citing several Regalian doctrine. Considering that the land subject of the action
cases,[21] the appellate court ruled that the indings of fact made by originated from a grant by the government, its cancellation is a
administrative agencies which are supported by substantial matter between the grantor and the grantee.[30]
evidence must be respected, particularly where the question
demands the exercise of sound administrative discretion requiring Under Section 2, Rule 3 of the Rules of Court,[31] every action must
special knowledge and experience.[22] be prosecuted or defended in the name of the real party-in-interest,
or one "who stands to be bene ited or injured by the judgment in
Caro iled a motion for reconsideration of the said decision, which the suit." Corollarily, legal standing has been de ined as a personal
the appellate court denied in a Resolution[23] dated February 7, and substantial interest in the case, such that the party has
2003. sustained or will sustain direct injury as a result of the challenged
act. Interest means a material interest in issue that is affected by the
Caro, now the petitioner, assails the ruling of the appellate court on questioned act or instrument, as distinguished from a mere
the following grounds: incidental interest in the question involved.[32]
THAT THE HONORABLE APPELLATE COURT COMMITTED AN
ERROR IN HOLDING THAT PETITIONER HAS NO LEGAL Clearly then, a suit iled by one who is not a party-in-interest must
PERSONALITY TO FILE THIS ACTION; be dismissed. In this case, the petitioner, not being the owner of the
disputed property but a mere applicant for a free patent, cannot
THAT THE HONORABLE APPELLATE COURT ERRED IN DISMISSING thus be considered as a party-in-interest with personality to ile an
THE APPEAL INTERPOSED BY PETITIONER ON THE GROUND THAT action for reconveyance. The Court, citing several of its holdings,
ONLY THE SOLICITOR GENERAL CAN FILE AN ACTION FOR expounded on this doctrine in Tankiko v. Cezar[33] as follows:
RECONVEYANCE OF PROPERTY ACQUIRED BY PATENT.[24]The ... Thus, in Lucas v. Durian [102 Phil. 1157 (1957)], the Court
petitioner insists that contrary to the ruling of the CA, he has the af irmed the dismissal of a Complaint iled by a party who alleged
legal personality to bring and institute the present action against that the patent was obtained by fraudulent means and,
the respondent, considering that title issued on the basis of a patent consequently, prayed for the annulment of said patent and the
is annullable on the ground of fraud. Furthermore, the one-year cancellation of a certi icate of title. The Court declared that the
period within which to ile an action to cancel a torrens title under proper party to bring the action was the government, to which the


property would revert. Likewise af irming the dismissal of a action which would have the effect of cancelling a free patent and
Complaint for failure to state a cause of action, the Court in Nebrada the corresponding certi icate of title issued on the basis thereof,
v. Heirs of Alivio [104 Phil. 126 (1958)] noted that the plaintiff, with the result that the land covered thereby will again form part of
being a mere homestead applicant, was not the real the public domain. Furthermore, there is another reason for
party-in-interest to institute an action for reconveyance. ... withholding legal personality from Sumail. He does not claim the
land to be his private property. In fact, by his application for a free
... patent, he had formally acknowledged and recognized the land to be
a part of the public domain; this, aside from the declaration made by
Verily, the Court stressed that " ... [i]f the suit is not brought in the the cadastral court that lot 3633 was public land. Consequently,
name of or against the real party-in-interest, a motion to dismiss even if the parcel were declared reverted to the public domain,
may be iled on the ground that the complaint states no cause of Sumail does not automatically become the owner thereof. He is a
action [Travel Wide v. CA, 199 SCRA 205, 209 (1991), per Cruz, J. mere public land applicant like others who may apply for the same.
See also Suguister v. Tamayo, 176 SCRA 579, August 21, 1989]. In To reiterate, the petitioner is not the proper party to ile an action
fact, a inal judgment may be invalidated if the real for reconveyance that would result in the reversion of the land to
parties-in-interest are not included. This was underscored by the the government.[41] The petitioner has no personality to "recover"
Court in Arcelona v. CA [280 SCRA 20, October 2, 1997], in which a the property as he has not shown that he is the rightful owner
inal judgment was nulli ied because indispensable parties were not thereof.[42]
impleaded.
WHEREFORE, premises considered, the petition is DENIED for lack
In the present dispute, only the State can ile a suit for reconveyance of merit. The Decision of the Court of Appeals in CA-G.R. CV No.
of a public land. Therefore, not being the owners of the land but 45503 and the Resolution dated February 7, 2003 are AFFIRMED.
mere applicants for sales patents thereon, respondents have no
personality to ile the suit. Neither will they be directly affected by SO ORDERED.
the judgment in such suit.[34]In De la Peñ a v. Court of Appeals,[35]
the Court, in dismissing the petitioner's imputation of fraud in Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ.,
securing a free patent and title over a parcel of land, declared that concur.
reconveyance is a remedy granted only to the owner of the property
alleged to be erroneously titled in another's name.[36] The Court PEZA vs Fernandez, G.R. No. 138971, June
further expounded:
Persons who have not obtained title to public lands could not 06, 2001
411 Phil. 107
question the titles legally issued by the State [Reyes v. Rodriguez, 62
Phil. 771, 776 (1936)]. In such cases, the real party-in-interest is the
THIRD DIVISION
Republic of the Philippines to whom the property would revert if it
G.R. No. 138971, June 06, 2001
is ever established, after appropriate proceedings, that the free
PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), PETITIONER,
patent issued to the grantee is indeed vulnerable to annulment on
VS. HON. RUMOLDO R. FERNANDEZ, REGIONAL TRIAL COURT OF
the ground that the grantee failed to comply with the conditions
LAPU-LAPU CITY (BRANCH 54); AND THE HEIRS OF THE
imposed by the law. Not being an applicant, much less a grantee,
DECEASED SPOUSES JUAN CUIZON AND FLORENTINA RAPAYA,
petitioner cannot ask for reconveyance.[37]In VSC Commercial
RESPONDENTS.
Enterprises, Inc. v. Court of Appeals,[38] where the private
respondents therein were mere lessees of the property in question,
DECISION
the Court ruled that as mere lessees, they had "no present
PANGANIBAN, J.:
substantial and personal interest with respect to issues involving
ownership of the disputed property." The Court went on to declare:
An action for reconveyance of land, an equitable remedy recognized
... The only interest they have, in the event the petitioner's title over
under our land registration laws, is subject to the applicable rules
the subject property is cancelled and ownership reverts to the State,
on prescription. Moreover, the right to pursue such reivindicatory
is the hope that they become quali ied buyers of the subject parcel
action may be defeated when the property sought to be recovered
of land. Undoubtedly, such interest is a mere expectancy. Even the
has been conveyed to an innocent purchaser for value.
private respondents themselves claim that in case of reversion of
ownership to the State, they only have "pre-emptive rights" to buy
The Case
the subject property; that their real interest over the said property
is contingent upon the government's consideration of their
Before this Court is a Petition for Review on Certiorari under Rule
application as buyers of the same. It is settled that a suit iled by a
45 of the Rules of Court, seeking to set aside the June 8, 1999
person who is not a party-in-interest must be dismissed.[39]In fact,
Decision[1] of the Court of Appeals (CA) in CA-GR SP No. 47575. In
Section 101 of Commonwealth Act No. 141 states –
the said Decision, the CA sustained the January 12, 1998[2] and the
Section 101. All actions for the reversion to the government of lands
March 31, 1998[3] Orders of the Regional Trial Court of Lapu-Lapu
of the public domain or improvements thereon shall be instituted
City (Branch 54) in Civil Case No. 4534-L, which denied petitioner's
by the Solicitor General or the of icer acting in his stead, in the
Motion to Dismiss and Motion for Reconsideration, respectively.
proper courts, in the name of the Commonwealth [now Republic] of
The dispositive portion of the CA Decision reads as follows:
the Philippines.This provision was applied and discussed in Sumail
v. Judge of the Court of First Instance of Cotabato, et al.,[40] a case
"WHEREFORE, [there being] no abuse of discretion committed by
on all fours with the present one, as follows:
respondent court, the instant petition is hereby DISMISSED."
The Facts
Under Section 101 of the above reproduced, only the Solicitor
General or the of icer acting in his stead may bring the action for
reversion. Consequently, Sumail may not bring such action or any


The subject of the present controversy is Lot No. 4673 of the Opon `Frisca' Booc, heirs of deceased Jorg[e]a Igot-Soronio and heirs of
Cadastre situated in Lapu-Lapu City, covered by Original Certi icate Felix Cuizon committed a breach of trust which enabled them to
of Title (OCT) No. RO-2537 (May 19, 1982) and registered in the execute a Deed of Extrajudicial Partition[,] Special Power of
names of Florentina Rapaya, Victorino Cuizon, Isidro Cuizon, Ursula Attorney and Deed of Absolute Sale in favor of EPZA to the prejudice
Cuizon, Benito Lozano, Isabel Lozano, Pelagia Lozano, Augusto of the plaintiffs as their co-heirs. Therefore, in an action like this
Lozano, Valeriano Ybañ ez, Jesus Ybañ ez, Numeriano Ybañ ez, case, the private respondents may be ordered to make reconveyance
Martino Ybañ ez, Eutiquio Patalinghug, Celedonio Patalinghug, of the property to the person rightfully entitled to it.
Santiago Patalinghug and Silvino Patalinghug. The lot has an area of
11,345 square meters, more or less. "It is undeniable that defendants defrauded plaintiffs by falsely
representing that they were the only heirs of deceased Juan Cuizon
On May 15, 1982, Jorgea Igot-Soroñ o, Frisca Booc and Felix Cuizon and Florentina Rapaya, succeeded in having the original title
executed an Extrajudicial Partition, in which they declared cancelled and enabling them to appropriate the land in favor of
themselves as the only surviving heirs of the registered owners of EPZA and a new one issued in the name of the latter (EPZA). This
the aforesaid lot. Consequently, they were issued TCT No. 12467 on way of acquiring title create[s] what is called `constructive trust' in
July 8, 1982. favor of the defrauded party and grants the latter the right to
vindicate [itself] x x x regardless of the lapse of time. Thus, it has
Considering that the said lot was among the objects of been held that if a person obtain(s) a legal title to the property by
expropriation proceedings docketed as Civil Case No 510-L and fraud or concealment, courts of equity will impress upon the title a
pending before it, Branch XVI of the Regional Trial Court (RTC) of so called `trust' in favor of the defrauded party. In fact, it has long
Lapu-Lapu City rendered a partial Decision on August 11, 1982. In been held that a co-heir who through fraud, succeeds in obtaining a
that Decision, the RTC approved the Compromise Agreement certi icate of title in his name to the prejudice of his co-heirs, is
entered into between the Export Processing Zone Authority (EPZA) deemed to hold the land in trust for the latter. The excluded heir's
and the new registered owners of Lot No. 4673; namely, Jorgea action is imprescriptible.
Igot-Soroñ o, Frisca Booc and Felix Cuizon. In accordance with the
approved Compromise Agreement, EPZA would pay P68,070 as just "And if the action involve(s) the declaration of the nullity or
compensation for the expropriation of the subject property, which inexistence of a void or inexistent contract which became the basis
was to be used for an export processing zone to be established in for the fraudulent registration of the subject property, then the
Lapu-Lapu City. action is imprescriptible. This inds codal support in Article 1410 of
the Civil Code, which declares that the action or defense for the
As a consequence of the RTC Decision, petitioner acquired title over declaration of the inexistence of a void contract does not prescribe.
Lot No. 4673 and the corresponding Transfer Certi icate of Title
(TCT) No. 12788 issued by the Register of Deeds of Lapu-Lapu City "As to the constructive notice rule alleged by the petitioner, (the)
on October 13, 1982. Supreme Court in the case of Juan vs. Zuniga, citing Sevilla vs.
Angeles, has this to say:
On July 29, 1996, private respondents iled with the RTC of
Lapu-Lapu City a Complaint for Nullity of Documents, Redemption 'While this ruling is correct as applied to ordinary actions by
and Damages against petitioner and Jorgea-Igot Soroñ o et al. recovery of real property which is covered by a torrens title upon
Docketed as Civil Case No. 4534-L, the Complaint alleged that herein the theory that its registration under our registration system has
private respondents had been excluded from the extrajudicial the effect of constructive notice to the whole world, the same cannot
settlement of the estate. It likewise sought the nulli ication of be applied x x x when the purpose of the action is to compel a
several documents, including TCT No. 12788 dated October 13, trustee to convey the property registered in his name for the bene it
1992, issued in the name of herein petitioner. of the cestui que trust. In other words, the defense of prescription
cannot be set up in an action whose purpose is to recover property
On February 17, 1997, petitioner iled a Motion to Dismiss the held by a person for the bene it of another.'
Complaint on the ground of prescription. This Motion was denied The Issues
by respondent judge in the Order dated January 12, 1998. A Motion
for Reconsideration thereof was likewise denied in the Order dated
March 31, 1998. Petitioner interposes the following issues for the consideration of
this Court:
On April 30, 1998, petitioner elevated the matter to the Court of
Appeals through a Petition for Certiorari. As earlier noted, the CA "I
dismissed the Petition.
Whether or not the appellate court erred in not holding that private
Hence, this recourse.[4] respondents' claim against expropriated property had prescribed.
The CA Ruling "II
Whether or not the appellate court erred in not holding that

In denying the Petition, the CA ratiocinated as follows: reconveyance does not lie against the expropriated property."[5]
"Civil Case No. 4534-L although instituted in the guise of a The Court's Ruling
complaint for Nullity of Documents, Redemption and Damages is in
effect an action for reconveyance of the property to plaintiffs of a
portion which rightfully belong to them. It would be against good The Petition is meritorious.
reason and conscience not to hold that defendants, Francisca


First Issue: "While it may be true that an extrajudicial partition is an ex parte

Prescription proceeding, yet after its registration under the Torrens system and
the annotation on the new certi icate of title of the contingent
liability of the estate for a period of two years as prescribed in Rule
Petitioner avers that private respondents' claim against the subject 74, Section 4, of the Rules of Court, by operation of law a
property has already prescribed, because the two-year period constructive notice is deemed made to all the world, so that upon
within which an unduly excluded heir may seek a new settlement of the expiration of said period all third persons should be barred
the estate had already lapsed by the time private respondents iled [from going] after the particular property, except where title thereto
their action with the trial court. Petitioner further argues that still remains in the names of the alleged heirs who executed the
private respondents received constructive notice in view of the partition tainted with fraud, or their transferees who may not
registration of the extrajudicial partition with the Registry of Deeds. qualify as `innocent purchasers for value'. If the liability of the
According to petitioner, the two-year period commenced from July registered property should extend inde initely beyond that period,
8, 1982, the date of inscription of the extrajudicial settlement on then such constructive notice which binds the whole world by
OCT No. 2537. virtue of registration would be meaningless and illusory. x x x."[7]
(Emphasis supplied)
The pertinent provisions of Section 4, Rule 74 of the Rules of Court, The only exception to the above-mentioned prescription is when
are reproduced for easy reference, as follows: the title remains in the hands of the heirs who have fraudulently
caused the partition of the subject property or in those of their
"Section 4. Liability of distributees and estate. - If it shall appear at transferees who cannot be considered innocent purchasers for
any time within two (2) years after the settlement and distribution value.
of an estate in accordance with the provisions of either of the irst
two sections of this rule, that an heir or other person has been In this regard, title to the property in the present case was no longer
unduly deprived of his lawful participation in the estate, such heir in the name of the allegedly fraudulent heirs, but already in that of
or such other person may compel the settlement of the estate in the an innocent purchaser for value - the government. Moreover, the
courts in the manner hereinafter provided for the purpose of government is presumed to have acted in good faith in the
satisfying such lawful participation. And if within the same time of acquisition of the lot, considering that title thereto was obtained
two (2) years, it shall appear that there are debts outstanding through a Compromise Agreement judicially approved in proper
against the estate which have not been paid, or that an heir or other expropriation proceedings.
person has been unduly deprived of his lawful participation payable
in money, the court having jurisdiction of the estate may, by order Even assuming that there was in fact fraud on the part of the other
for that purpose, after hearing, settle the amount of such debts or heirs, private respondents may proceed only against the defrauding
lawful participation and order how much and in what manner each heirs, not against petitioner which had no participation in or
distributee shall contribute in the payment thereof, and may issue knowledge of the alleged fraud. The fact that the co-heirs' title to
execution, if circumstances require, against the bond provided in the property was fraudulently secured cannot prejudice the rights
the preceding section or against the real estate belonging to the of petitioner which, absent any showing that it had knowledge or
deceased, or both. Such bond and such real estate shall remain participation in the irregularity, is considered a purchaser in good
charged with a liability to creditors, heirs, or other persons for the faith and for value.[8]
full period of two (2) years after such distribution, notwithstanding
any transfers of real estate that may have been made." (Emphasis The remedy of an owner alleged to have been prejudiced or
supplied) fraudulently deprived of property that was subsequently sold to an
A perusal of the foregoing provision will show that persons unduly innocent purchaser for value is an action for damages against the
deprived of their lawful participation in a settlement may assert person or persons who perpetrated the fraud.[9]
their claim only within the two-year period after the settlement and
distribution of the estate. This prescription period does not apply, Second Issue:
however, to those who had no part in or had no notice of the Limitations on Reconveyance
settlement. Section 4, Rule 74 of the Rules of Court, is not meant to
be a statute of limitations. Moreover, by no reason or logic can one The law recognizes the right of a person, who, by adjudication or
contend that an extrajudicial partition, being merely an ex parte con irmation of title obtained by actual fraud, is deprived of an
proceeding, would affect third persons who had no knowledge estate or an interest therein.[10] Although a review of the decree of
thereof.[6] Be that as it may, it cannot be denied, either, that by its registration is no longer possible after the one-year period from its
registration in the manner provided by law, a transaction may be entry expires, still available is an equitable remedy to compel the
known actually or constructively. reconveyance of property to those who may have been wrongfully
deprived of it.[11] This equitable remedy afforded by law is not
In the present case, private respondents are deemed to have been without limitations, however.
constructively noti ied of the extrajudicial settlement by reason of
its registration and annotation in the certi icate of title over the An action for reconveyance resulting from fraud prescribes four
subject lot. From the time of registration, private respondents had years from the discovery of the fraud; such discovery is deemed to
two (2) years or until July 8, 1984, within which to ile their have taken place upon the issuance of the certi icate of title over the
objections or to demand the appropriate settlement of the estate. property. Registration of real property is considered a constructive
notice to all persons and, thus, the four-year period shall be counted
On the matter of constructive notice vis-à -vis prescription of an therefrom.[12] Clearly then, private respondents' action for
action to contest an extrajudicial partition, a leading authority on reconveyance based on fraud has already prescribed, considering
land registration elucidates as follows: that title to said property had been issued way back on August 11,
1982, while the reivindicatory suit was instituted only on July 29,
1996.


and the said Civil Case, as against petitioner, is DISMISSED. No

Even an action for reconveyance based on an implied or a costs.
constructive trust would have already prescribed just the same,
because such action prescribes ten (10) years from the alleged SO ORDERED.
fraudulent registration or date of issuance of the certi icate of title
over the property.[13] The imprescriptibility of an action for Melo, (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ.,
reconveyance based on implied or constructive trust applies only concur.
when the plaintiff or the person enforcing the trust is in possession
of the property. In effect, the action for reconveyance is an action to Gasataya vs Mabasa, G.R. NO. 148147,
quiet the property title, which does not prescribe.[14] Undisputedly,
private respondents are not in possession of the disputed property. February 16, 2007
545 Phil. 14
In fact, they do not even claim to be in possession of it, even if to do
so would enable them to justify the imprescriptibility of their
FIRST DIVISION
action.
G.R. NO. 148147, February 16, 2007
JESSIE GASATAYA, PETITIONER, EDITHA MABASA, RESPONDENT.
Accordingly, the CA Decision's reliance on Juan v. Zuñ iga,[15].as
regards the imprescriptibility of an action for reconveyance based
DECISION
on implied or constructive trust, is utterly misplaced in the light of
CORONA, J.:
the foregoing rulings of the Court declaring a ten-year period of
prescription for such action. Moreover, the principle enunciated
Before us is an appeal by certiorari under Rule 45 of the 1997 Rules
therein has no application to the instant case, considering that the
of Civil Procedure assailing the decision[1] of the Court of Appeals
supposed "trustee" herein has effectively repudiated the so-called
(CA) in CA-G.R. CV No. 55055 which, in turn, af irmed the decision
"trust" by directly performing an act of ownership; that is, by
of the Regional Trial Court (RTC) of Lanao del Norte, Branch 7.[2]
conveying the property to the government through expropriation.
An action to compel, for the bene it of the cestui que trust, the
The facts follow.
conveyance of property registered in the trustee's name does not
prescribe unless the trustee repudiates the trust.[16].Thus, private
Respondent Editha Mabasa’s father, Buenaventura Mabasa, was
respondents cannot invoke the imprescriptibility of their action for
granted a homestead patent on Lots 279, 272 and 972 located in
reconveyance, irrespective of their basis for it.
Lala, Lanao del Norte. Buenaventura Mabasa mortgaged these lots
to secure a loan from the Development Bank of the Philippines
Finally, it must be remembered that reconveyance is a remedy of
(DBP). Because of his failure to pay his indebtedness, DBP
those whose property has been wrongfully or erroneously
foreclosed on the lots and sold them at public auction where it
registered in the name of another. Such recourse, however, cannot
emerged as the highest bidder. DBP then obtained titles to the lots:
be availed of once the property has passed to an innocent purchaser
Lot 279 under TCT No. T-2247 and consolidated Lots 272 and 972
for value. For an action for reconveyance to prosper, the property
under TCT No. T-2448.
should not have passed into the hands of an innocent purchaser for
value.[17]
When Buenaventura Mabasa died, respondent’s siblings authorized
her to negotiate with DBP for the repurchase of the lots. DBP
Indubitably, we ind that the property has already been conveyed to
allowed respondent to reacquire the foreclosed properties
the government in appropriate expropriation proceedings, the
through a deed of conditional sale for P25,875.[3]
regularity or validity of which has not been questioned. Petitioner
should, therefore, enjoy the security afforded to innocent third
Subsequently, respondent entered into an agreement with
persons under our registration laws. Equally important, its title to
petitioner’s father, Sabas Gasataya, for the latter to assume payment
the property must be rightfully preserved.
of her obligation to DBP. They further agreed that Sabas Gasataya
would take possession of the lots for 20 years and develop them
Hence, private respondents' action to recover the subject property
into a ishpond. As consideration thereof, respondent received
from the government cannot be maintained, not only because of the
P10,000 cash, in addition to the P25,000 that Sabas Gasataya had to
prescription of the action, but on account of the protection given to
pay DBP on her behalf.
innocent purchasers for value granted under our land registration
laws. Indeed, the inevitable consequences of the Torrens system of
Upon representation by Sabas Gasataya that respondent’s
land registration must be upheld in order to give stability to it and
obligation to DBP had already been settled, they entered into
provide inality to land disputes.
another agreement denominated as “Deed of Sale of Fishpond
Lands with Right to Repurchase.”
This ruling notwithstanding, private respondents are not without
recourse. They may sue for damages their co-heirs who have
Eight years after the execution of the above deed of sale with right
allegedly perpetrated fraud in Civil Case No. 4534-L pending before
to repurchase, respondent discovered that Sabas Gasataya had
the RTC. The right and the extent of damages to be awarded to
stopped paying DBP. As a result, DBP revoked her right to
private respondents shall be determined by the trial court, subject
repurchase the subject lots.
to the evidence duly established during the proceedings.
DBP later on held a public auction of the properties where

WHEREFORE, the Petition is hereby GRANTED and the assailed
petitioner participated and bid the highest price of P27,200.
Decision of the Court of Appeals REVERSED. The Orders of the
Eventually, he acquired titles to the lots for which he was issued TCT
Regional Trial Court of Lapu-Lapu City (Branch 54) in Civil Case No.
No. T-11720 in lieu of TCT No. T-2447 (Lot 279) and TCT No.
4534-L, dated January 12, 1998 and March 31, 1998, are SET ASIDE
T-11721 for TCT No. T-2448 (Lots 272 and 972).


Respondent then iled a complaint in the RTC for reconveyance of

titles of lands with damages[4] against petitioner and Sabas Before us, petitioner contests the CA decision af irming the trial
Gasataya (Gasatayas). She claimed that the latter deliberately court’s order to reconvey his titles on the disputed lots to
reneged on his commitment to pay DBP to: (1) revoke her right to respondent who, according to him, is not the owner thereof.
repurchase the lots under the deed of conditional sale and (2)
subject the properties to another public auction where petitioner We af irm the CA.
could bid.
Reconveyance is available not only to the legal owner of a property
Petitioner and his father denied the allegations saying that the deed but also to the person with a better right than the person under
of conditional sale assumed by the latter from respondent was whose name said property was erroneously registered.[8] While
rendered ineffective by DBP’s refusal to accept payments thereon. respondent is not the legal owner of the disputed lots, she has a
better right than petitioner to the contested lots on the following
The trial court ruled in favor of respondent inding that the grounds: irst, the deed of conditional sale executed by DBP vested
Gasatayas failed to controvert her claim that they defrauded her just on her the right to repurchase the lots and second, her right to
so petitioner could acquire the lots at public auction.[5] According repurchase them would have subsisted had they (the Gasatayas) not
to the trial court, the Gasatayas failed to prove that DBP indeed defrauded her.
rejected payments from Sabas Gasataya. The trial court ruled:
WHEREFORE, judgment is hereby rendered in favor of the The trial court’s indings, as af irmed by the CA, that petitioner and
[respondent] and against [the Gasatayas] ordering [them] to wit: his father deceived respondent to acquire the disputed lots bind us.
Ordering [petitioner] to reconvey to [respondent] TCT. Well-settled is the rule that factual conclusions of the trial court
No.[T-11720] and TCT No. T-11721, both of the Registry of Deeds deserve respect and become irrefutable especially when af irmed by
for the Province of Lanao del Norte, upon tender to and receipt by the CA.[9] Absent any evidence that the CA overlooked salient
[petitioner] of the amount of P37,200.00 Philippine money; matters that could justify a reversal of the outcome of this case, we
decline to disturb such factual conclusions.
Ordering the Registrar of Deeds for the Province of Lanao del Norte Petitioner, however, insists that respondent had no right to the
to procure and cause the transfer and registration of the aforesaid disputed lots since the conditional sale agreement where such right
transfer certi icates of title in favor and in the name of herein was based had long been cancelled by DBP. According to petitioner,
[respondent] Editha S. Mabasa; a void and inexistent deed cannot override his right as registered
owner of the lots.
Ordering [the Gasatayas] to cede, transfer and reconvey to We disagree.

[respondent] the physical possession and occupancy of Lot 279, 272
and Lot 972…as covered by the aforesaid certi icates of title; Petitioner cannot discredit the deed of conditional sale just so he
can to keep his titles to the lots. Petitioner should be reminded that
DBP revoked respondent’s right to repurchase the lots under said
Ordering [the Gasatayas] to pay [respondent] the sum of P5,000.00 deed because of the deceitful maneuverings that he and his father
for attorney’s fees; P5,000.00 as litigation expenses; employed. If we were to sustain petitioner’s argument, then we
would, in effect, reward him for his misdeed.
Ordering [the Gasatayas] to pay costs of this proceeding[s]. Neither can this Court uphold petitioner’s contention that his titles
are unsullied on the mere fact that he purchased the properties at
SO ORDERED.[6] public auction. Fraud overthrows the presumption that the public
Petitioner and his father appealed to the CA which af irmed the sale was attended with regularity. The public sale did not vest
RTC’s decision and dismissed their appeal for lack of merit. The CA petitioner with any valid title to the properties since it was but the
declared: consequence of his and his father’s fraudulent schemes.
The contention of [respondent] that [the Gasatayas] deliberately
chose not to pay DBP as agreed, in order for them to acquire said The registration of the properties in petitioner’s name did not
properties in a fraudulent and treacherous manner, was not fully obliterate the fact that fraud preceded and facilitated such
controverted by [them]. [The Gasatayas] failed to produce evidence registration. Actual or positive fraud proceeds from an intentional
to support their defenses. deception practiced by means of misrepresentation of material
facts,[10] which in this case was the conscious representation by
xxx xxx xxx petitioner’s father (Sabas Gasataya) that respondent’s obligation to
DBP had already been settled. It is fraud to knowingly omit or
Moreover, [the Gasatayas] are in possession of said land[s] by virtue conceal a fact, upon which bene it is obtained, to the prejudice of
of a Deed of Sale with a Right to Repurchase and not because the another.[11] Consequently, fraud is a ground for reconveyance.[12]
DBP granted it to them…[T]o facilitate their acquisition of the land
in question, [they] deliberately defaulted in the payment of the Moreover, the law only protects an innocent purchaser for value and
assumed obligation to the damage and prejudice of [respondent]. not one who has knowledge of and participation in the employment
Consequently, the lands in question were subjected to public of fraud. An innocent purchaser for value is one who buys the
bidding wherein [petitioner] participated and eventually won…[the property of another without notice that some other person has a
Gasatayas] committed a breach of trust amounting to fraud which right to or interest in that same property, and who pays a full and
would warrant an action for reconveyance.[7]Petitioner alone came fair price at the time of the purchase or before receiving any notice
to us via this appeal by certiorari seeking the reversal of the CA of another person’s claim.[13] Obviously, petitioner was not an
decision. innocent purchaser for value.


Na ako si Teresita V. Idolor of legal age ay nakahiram ng halagang

As a inal point, the Court takes signi icant note of the fact that P520,000.00 noong September 20, 1994.
respondent’s father originally acquired the subject lots through
homestead grant. Commonwealth Act 141 (Public Land Act) aims to Na ang nasabing halaga ay may nakasanlang titulo ng lupa (TCT No.
con ine and preserve to the homesteader and his kin the homestead 25659) under Registry receipt 3420 dated July 15, 1996.
lots. We, therefore, agree with the CA’s disquisition that courts
should “lend a stout shoulder to help keep a homestead in the Na ako si Teresita V. Idolor ay humihingi ng 90 days palugit (grace
homesteader’s family” for the stern reality cannot be belied that period) to settle the said amount.
“homesteaders and their families are generally in the lower stratum
of life” and most likely, when they alienate the homestead, it is “out Failure to settle the above account on or before December 21, 1996,
of dire necessity.”[14] According to the CA, desperation does not I agree to execute a deed of sale with the agreement to repurchase
allow much of a choice, hence homesteaders and their kin should be without interest within one year.
given every opportunity to repurchase their homestead.
Total amount of P1,233,288.23 inclusive of interest earned.
WHEREFORE, the assailed decision of the Court of Appeals in
CA-G.R. CV No. 55055 is hereby AFFIRMED. At nangangako kami na tutupad na tunay at matapat sa mga
katakdaan ng pag-aayos na inilahad sa itaas."Petitioner failed to
Costs against petitioner. comply with her undertaking; thus private respondent Gumersindo
iled a motion for execution before the Of ice of the Barangay
SO ORDERED. captain who subsequently issued a certi ication to ile action.
Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ., On March 21, 1997, respondent Gumersindo De Guzman iled an
concur. extra judicial foreclosure of the real estate mortgage pursuant to the
parties agreement set forth in the real estate mortgage dated March
Idolor vs Court of Appeals, G.R. No. 141853, 21, 1994.
February 07, 2001 On May 23, 1997, the mortgaged property was sold in a public
404 Phil. 220
auction to respondent Gumersindo, as the highest bidder and
consequently, the Sheriff's Certi icate of Sale was registered with
THIRD DIVISION
the Registry of Deeds of Quezon City on June 23, 1997.
G.R. No. 141853, February 07, 2001
TERESITA V. IDOLOR, PETITIONER, VS. HON. COURT OF APPEALS,
On June 25, 1998, petitioner iled with the Regional Trial Court of
SPS. GUMERSINDO DE GUZMAN AND ILUMINADA DE GUZMAN AND
Quezon City, Branch 220, a complaint for annulment of Sheriff's
HON. PRUDENCIO CASTILLO, JR., PRESIDING JUDGE, REGIONAL
Certi icate of Sale with prayer for the issuance of a temporary
TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH
restraining order (TRO) and a writ of preliminary injunction against
220, QUEZON CITY, RESPONDENTS.
private respondents, Deputy Sheriffs Marino Cachero and Rodolfo
Lescano and the Registry of Deeds of Quezon City alleging among
DECISION
others alleged irregularity and lack of notice in the extra-judicial
GONZAGA-REYES, J.:
foreclosure proceedings subject of the real estate mortgage. In the
meantime, a temporary restraining order was issued by the trial
This is a petition for review on certiorari iled by petitioner Teresita
court.
Idolor which seeks to set aside the decision[1] of the respondent
Court of Appeals which reversed the Order[2]of the Regional Trial
On July 28, 1998, the trial court issued a writ of preliminary
Court of Quezon City[3]granting Idolor's prayer for the issuance of a
injunction enjoining private respondents, the Deputy Sheriffs and
writ of preliminary injunction and the resolution denying
the Registry of Deeds of Quezon City from causing the issuance of a
petitioner's motion for reconsideration.[4]
inal deed of sale and consolidation of ownership of the subject
property in favor of the De Guzman spouses. The trial court denied
On March 21, 1994, to secure a loan of P520,000.00, petitioner
the motion for reconsideration iled by the de Guzman spouses.
Teresita Idolor executed in favor of private respondent Gumersindo
De Guzman a Deed of Real Estate Mortgage with right of
Spouses de Guzman iled with the respondent Court of Appeals a
extra-judicial foreclosure upon failure to redeem the mortgage on or
petition for certiorari seeking annulment of the trial court's order
before September 20, 1994. The object of said mortgage is a
dated July 28, 1998 which granted the issuance of a preliminary
200-square meter property with improvements located at 66 Ilocos
injunction.
Sur Street, Barangay Ramon Magsaysay, Quezon City covered by
TCT No. 25659.
On September 28, 1999, the respondent court granted the petition
and annulled the assailed writ of preliminary injunction. Teresita
On September 21, 1996, private respondent Iluminada de Guzman,
Idolor iled her motion for reconsideration which was denied in a
wife of Gumersindo de Guzman, iled a complaint against petitioner
resolution dated February 4, 2000.
Idolor before the Of ice of the Barangay Captain of Barangay Ramon
Magsaysay, Quezon City, which resulted in a "Kasunduang
Hence this petition for review on certiorari iled by petitioner
Pag-aayos" which agreement is quoted in full[5]:
Teresita V. Idolor. The issues raised by petitioner are: whether or
"Kami, ang (mga) may sumbong at (mga) ipinagsusumbong sa
not the respondent Court of Appeals erred in ruling (I) that
usaping binabanggit sa itaas, ay nagkakasundo sa pamamagitan nito
petitioner has no more proprietary right to the issuance of the writ
na ayusin ang aming alitan gaya ng sumusunod:
of injunction, (2) that the "Kasunduang Pag-aayos" did not ipso
facto result in novation of the real estate mortgage, (3) that the


"Kasunduang Pag-aayos" is merely a promissory note of petitioner Petitioner`s allegation regarding the invalidity of the sheriff's sale
to private respondent spouses; and (4) that the questioned writ of dwells on the merits of the case; We cannot rule on the same
preliminary injunction was issued with grave abuse of discretion. considering that the matter should be resolved during the trial on
the merits.
The core issue in this petition is whether or not the respondent
Court erred in inding that the trial court committed grave abuse of Petitioner next contends that the execution of the "Kasunduang
discretion in enjoining the private and public respondents from Pag-aayos" dated September 21, 1996 between her and spouses de
causing the issuance of a inal deed of sale and consolidation of Guzman before the Of ice of the Lupon Tagapamayapa showed the
ownership of the subject parcel of land in favor of private express and unequivocal intention of the parties to novate or
respondents. modify the real estate mortgage; that a comparison of the real
estate mortgage dated March 21, 1994 and the "Kasunduang
Petitioner claims that her proprietary right over the subject parcel Pag-aayos" dated September 21, 1996 revealed the irreconciliable
of land was not yet lost since her right to redeem the subject land incompatibility between them, i.e., that under the irst agreement,
for a period of one year had neither lapsed nor run as the sheriff's the amount due was ive hundred twenty thousand (P520,000)
certi icate of sale was null and void; that petitioner and the general pesos only payable by petitioner within six (6) months, after which
public have not been validly noti ied of the auction sale conducted it shall earn interest at the legal rate per annum and non-payment
by respondent sheriffs; that the newspaper utilized in the of which within the stipulated period, private respondents have the
publication of the notice of sale was not a newspaper of general right to extra-judicially foreclose the real estate mortgage while
circulation. under the second agreement, the amount due was one million two
hundred thirty three thousand two hundred eighty eight and
We do not agree. 23/100 (P1,233,288.23) inclusive of interest, payable within 90
days and in case of non payment of the same on or before December
Injunction is a preservative remedy aimed at protecting substantive 21, 1996, petitioner should execute a deed of sale with right to
rights and interests.[6] Before an injunction can be issued, it is repurchase within one year without interest; that the second
essential that the following requisites be present: 1) there must be a agreement "Kasunduang Pag-aayos" was a valid new contract as it
right in esse or the existence of a right to be protected; 2) the act was duly executed by the parties and it changed the principal
against which the injunction is to be directed is a violation of such conditions of petitioner's original obligations. Petitioner insists that
right.[7] Hence the existence of a right violated, is a prerequisite to the "Kasunduang Pag-aayos" was not a mere promissory note
the granting of an injunction. Injunction is not designed to protect contrary to respondent court's conclusion since it was entered by
contingent or future rights. Failure to establish either the existence the parties before the Lupon Tagapamayapa which has the effect of
of a clear and positive right which should be judicially protected a inal judgment.[13]
through the writ of injunction or that the defendant has committed
or has attempted to commit any act which has endangered or tends We are not persuaded.
to endanger the existence of said right, is a suf icient ground for
denying the injunction.[8] The controlling reason for the existence Novation is the extinguishment of an obligation by the substitution
of the judicial power to issue the writ is that the court may thereby or change of the obligation by a subsequent one which terminates it,
prevent a threatened or continuous irremediable injury to some of either by changing its objects or principal conditions, or by
the parties before their claims can be thoroughly investigated and substituting a new debtor in place of the old one, or by subrogating
advisedly adjudicated.[9] It is to be resorted to only when there is a a third person to the rights of the creditor.[14] Under the law,
pressing necessity to avoid injurious consequences which cannot be novation is never presumed. The parties to a contract must
remedied under any standard of compensation.[10] expressly agree that they are abrogating their old contract in favor
of a new one.[15] Accordingly, it was held that no novation of a
In the instant case, we agree with the respondent Court that contract had occurred when the new agreement entered into
petitioner has no more proprietary right to speak of over the between the parties was intended to give life to the old one.[16]
foreclosed property to entitle her to the issuance of a writ of
injunction. It appears that the mortgaged property was sold in a A review of the "Kasunduang Pag-aayos" which is quoted earlier
public auction to private respondent Gumersindo on May 23, 1997 does not support petitioner's contention that it novated the real
and the sheriff's certi icate of sale was registered with the Registry estate mortgage since the will to novate did not appear by express
of Deeds of Quezon City on June 23, 1997. Petitioner had one year agreement of the parties nor the old and the new contracts were
from the registration of the sheriff's sale to redeem the property but incompatible in all points. In fact, petitioner expressly recognized in
she failed to exercise her right on or before June 23, 1998, thus the Kasunduan the existence and the validity of the old obligation
spouses de Guzman are now entitled to a conveyance and where she acknowledged her long overdue account since
possession of the foreclosed property. When petitioner iled her September 20, 1994 which was secured by a real estate mortgage
complaint for annulment of sheriff's sale against private and asked for a ninety (90) days grace period to settle her
respondents with prayer for the issuance of a writ of preliminary obligation on or before December 21, 1996 and that upon failure to
injunction on June 25, 1998, she failed to show suf icient interest or do so, she will execute a deed of sale with a right to repurchase
title in the property sought to be protected as her right of without interest within one year in favor of private respondents.
redemption had already expired on June 23, 1998, i.e. two (2) days Where the parties to the new obligation expressly recognize the
before the iling of the complaint. It is always a ground for denying continuing existence and validity of the old one, where, in other
injunction that the party seeking it has insuf icient title or interest words, the parties expressly negated the lapsing of the old
to sustain it, and no claim to the ultimate relief sought - in other obligation, there can be no novation.[17] We ind no cogent reason
words, that she shows no equity.[11] The possibility of irreparable to disagree with the respondent court's pronouncement as follows:
damage without proof of actual existing right is not a ground for an "In the present case, there exists no such express abrogation of the
injunction.[12] original undertaking. The agreement adverted to (Annex 2 of
Comment, p.75 Rollo) executed by the parties on September 21,


1996 merely gave life to the March 21, 1994 mortgage contract MAXIMO A. SAVELLANO, PETITIONER, VS. COURT OF APPEALS,
which was then more than two years overdue. Respondent NENA DE GUZMAN, BEN DE GUZMAN AND CECILIO CRUZ,
acknowledged therein her total indebtedness in the sum of RESPONDENTS.
P1,233,288.23 including the interests due on the unpaid mortgage
loan which amount she promised to liquidate within ninety (90) DECISION
days or until December 21, 1996, failing which she also agreed to BELLOSILLO, J.:
execute in favor of the mortgagee a deed of sale of the mortgaged
property for the same amount without interest. Evidently, it was This is a petition for review seeking to set aside the 14 November
executed to facilitate easy compliance by respondent mortgagor 1997 Decision[1]of the Court of Appeals nullifying the 20 June 1996
with her mortgage obligation. It (the September 21, 1996 Order[2] of the Regional Trial Court, Br. 75, San Mateo, Rizal, which
agreement) is not incompatible and can stand together with the directed the issuance of a Writ of Preliminary Prohibitory and
mortgage contract of March 21, 1994. Mandatory Injunction against private respondents requiring them
and all persons claiming under them to vacate the three (3) parcels
A compromise agreement clarifying the total sum owned by a buyer of land subject matter of the case, to desist from further entering
with the view that he would ind it easier to comply with his the property, and to allow petitioner to take full possession and
obligations under the Contract to Sell does not novate said Contract control of the property as registered owner thereof. Petitioner
to Sell (Rillo v. Court of Appeals, 274 SCRA 461 [1997]). likewise seeks the review of the 28 April 1997 Resolution of the
Court of Appeals denying his Motion for Reconsideration.
Respondent correctly argues that the compromise agreement has
the force and effect of a inal judgment. That precisely is the reason The facts: On 26 May 1993 petitioner Maximo A. Savellano Jr. iled a
why petitioner resorted to the foreclosure of the mortgage on complaint[3]for "Recovery of Possession of Real Property with
March 27, 1997, after her failure to comply with her obligation Prayer for the Issuance of a Temporary Restraining Order and Writs
which expired on December 21, 1996. of Preliminary Prohibitory and Mandatory Injunction" against
private respondents Nena de Guzman, Ben de Guzman, Cecilio Cruz
Reliance by private respondent upon Section 417 of the New Local and John Doe. Petitioner claimed that he was the registered owner
Government Code of 1991, which requires the lapse of six (6) of three (3) parcels of land situated in Sitio Labahan, San Mateo,
months before the amicable settlement may be enforced, is Rizal, covered by Transfer Certi icates of Title Nos. 459007, 459008
misplaced. The instant case deals with extra judicial foreclosure and 459166 portions of which were allegedly occupied by the de
governed by ACT No. 3135 as amended."Notably, the provision in Guzmans, Cruz and other John Does without his knowledge and
the "Kasunduang Pag-aayos" regarding the execution of a deed of consent for at least a year prior to the institution of his complaint.
sale with right to repurchase within one year would have the same
effect as the extra-judicial foreclosure of the real estate mortgage In their Answer,[4] private respondents denied the allegations
wherein petitioner was given one year from the registration of the stating that they had been in the peaceful possession of the
sheriff's sale in the Registry of property to redeem the property, i.e., property since 1976 or for more than seventeen (17) years prior to
failure to exercise the right of redemption would entitle the the institution of this complaint. In support thereof Nena de
purchaser to possession of the property. It is not proper to consider Guzman presented real property tax declarations and tax receipts
an obligation novated by unimportant modi ications which do not issued by the Municipal Treasurer of San Mateo in her favor. Private
alter its essence.[18] It bears stress that the period to pay the total respondents further claimed that the certi icates of title offered in
amount of petitioner's indebtedness inclusive of interest amounted evidence by Maximo Savellano did not cover the premises being
to P1,233,288.23 expired on December 21, 1996 and petitioner occupied by them.
failed to execute a deed of sale with right to repurchase on the said
date up to the time private respondents iled their petition for To resolve this issue, the trial court, upon agreement of the parties,
extra-judicial foreclosure of real estate mortgage. The failure of issued an order directing the surveyor of the Bureau of Lands to
petitioner to comply with her undertaking in the "kasunduan" to conduct a survey of the property, with the manifestation from
settle her obligation effectively delayed private respondents' right counsel of private respondents that they would vacate the property
to extra-judicially foreclose the real estate mortgage which right if it be shown that they were occupying petitioner's property.
accrued as far back as 1994. Thus, petitioner has not shown that she
is entitled to the equitable relief of injunction. In compliance therewith, Engr. Andres L. Valencia, Chief of the
Control Section, Surveys Division, Land Management Bureau,
WHEREFORE, the petition is DENIED. The decision of the DENR-Region IV, conducted a ground survey of the property
respondent Court of Appeals dated September 28, 1999 is hereby covered by TCT Nos. 459007, 459008, 459166. Thereafter, Engr.
AFFIRMED. Valencia submitted his narrative report with the following indings:
"3.4. that there are three houses within the claim of the plaintiff; 3.5.
SO ORDERED. that lot 11-A (LRC) Psd-88304 was encrouch (sic) by the concrete
fence at its eastern part; and 3.6. that corners 1 and 2 of lot 11-E
Melo (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ., (LRC) Psd 99304 and corners 5 & 6 of Lot 11-C-1 (LRC) Psd-206834
concur. were not monumented."[5]
Savellano vs Court of Appeals, G.R. No. Meanwhile, petitioner Maximo Savellano presented evidence in
support of his application for the issuance of the writs of
134343, January 30, 2001 preliminary prohibitory and mandatory injunction. Likewise,
403 Phil. 488
private respondents presented evidence to refute the issuance of
the writ. Subsequently, they moved that they be given until 20 May
SECOND DIVISION
1996 within which to ile their Formal Offer of Evidence, which the
G.R. No. 134343, January 30, 2001
trial court granted.


Injunctions, like other equitable remedies, will issue only at the

On 23 May 1996 petitioner Maximo Savellano iled an Urgent instance of a suitor who has suf icient interest or title in the right or
Motion praying that the right of private respondents to present property sought to be protected x x x x It is always a ground for
documentary evidence be deemed waived. On 7 June 1996 the denying injunction that the party seeking it has insuf icient title or
lower court granted the motion. Private respondents thereafter interest to sustain it, and no claim to the ultimate relief sought - in
moved for reconsideration but it was denied. other words, that he shows no equity x x x x The complainant's right
or title, moreover, must be clear and unquestioned, for equity, as a
After a consideration of the evidence presented, the trial court rule, will not lend its preventive aid by injunction where the
issued the assailed Order stating in part that petitioner Savellano complainant's title or right is doubtful or disputed.The rationale for
had clearly established his right to a preliminary prohibitory and the rule as enunciated in Devesa v. Arbes[11] is -
mandatory injunction. The court heavily relied on Santos v. Court of To hold otherwise would be to render practically of no effect the
Appeals[6] which held that the general rule prohibiting the use of ordinary actions, and the enforcement of judgment in such action. If
injunction to transfer possession or control of property from one a complainant could secure relief by injunction in every case where
party to the other does not obtain when (a) the applicant has clearly the defendant is doing or threatens or is about to do, or is procuring
established his rights over the disputed property, and (b) the or suffering to be done, some act probably in violation of the
defendant is merely an intruder; or (c) where the action seeks to plaintiff's rights and could enforce the judgment granting the
prevent a purchaser at an auction sale from molesting the rights of a injunction by the summary contempt proceedings x x x x he would
debtor's co-owner whose rights have not been affected by the sale. seldom elect to enforce his rights in such cases by the ordinary
remedies, involving as they do the dif iculty and oftentimes fruitless
Upon inding that petitioner Maximo Savellano was the registered labor of enforcing jugments obtained therein by execution.In the
owner of the property, the trial court ordered the issuance of a writ case before us, the preliminary prohibitory and mandatory
of Preliminary Prohibitory and Mandatory Injunction against injunction issued by the trial court practically granted the main
private respondents. relief prayed for even before the hearing of the case on the merits
and solely on the basis of a narrative report the accuracy and
Forthwith, private respondents moved for reconsideration. They validity of which are seriously questioned by private respondents. A
argued against the accuracy and correctness of Engr. Valencia's punctilious perusal of the records leads us to the conclusion that the
narrative report inasmuch as: (a) only the monument check was accuracy and validity of the report are at best debatable and should
used in the setting of the monuments and relocation survey in be ventilated during the trial on the merits before a de inite
violation of Sec. 363 of the Surveyors' Manual of the Philippines; (b) determination can be reached. As succinctly put by the appellate
Engr. Valencia disregarded the natural boundaries in the survey, court, "the report cannot be the sole basis of the court to inally rule
such as the Susugin Creek; (c) the report was not approved by the that the premises occupied by the petitioners are within the subject
Executive Director of Region IV of the DENR; and, (d) despite property owned by private respondent."[12]
serious objections, Engr. Valencia used only one of the three (3)
relative positions in plotting the plan submitted to the court.[7] More so, the pronouncement of the lower court in its assailed Order
to the effect that private respondents were "mere intruders or
On 18 October 1996 petitioner iled an Ex-Parte Motion for Release squatters" constitutes a prejudgment of the case and a reversal of
and Enforcement of Writ of Injunction, which was granted on 22 the rule on burden of proof, since it would assume the proposition
October 1996. In turn, on 17 February 1997, private respondents which petitioner still has the burden of proving. Such conclusion,
iled an Omnibus Motion praying for the immediate resolution of right or wrong, could only be made after the parties have completed
their motion for reconsideration. In due time, the lower court issued the presentation of their respective evidence. In short, such a
an order denying their motion. inding was premature.
On a petition for review on certiorari iled after initially issuing a It should further be noted that the lower court was not being asked
restraining order, the Court of Appeals nulli ied the Order of the to rule with inality on the issue of whether private respondents
trial court holding that the resolution to vacate granted in the writ were indeed squatting on petitioner's property, but only to
of preliminary injunction was patently erroneous since it determine tentatively if petitioner was indeed entitled to the
preempted the decision that would have been rendered by the issuance of an injunction.
lower court after trial on the merits. The appellate court further
held that the conclusion that private respondents were mere Anent the lower court's reliance on Santos v. Court of Appeals,[13]
squatters on Maximo Savellano's property should have been we ind it misplaced. True, we made a pronouncement that,
threshed out not in the hearing on the application for issuance of a exceptionally and as an equitable concession, an injunction may be
writ of preliminary injunction but after trial on the merits.[8] granted to take property out of the possession or control of one
party and place it into that of another; yet, it must be pointed out
Failing to obtain a reconsideration, Savellano iled this petition for that in that case the government's title to the property had been
review on certiorari raising issues that, in ine, centered on whether shown to be clear, well-de ined and certain and that there was an
compelling reasons existed to justify the trial court's grant of urgent need for its issuance in order to prevent social unrest in the
preliminary prohibitory and mandatory injunction. community for having been deprived of the use and enjoyment of
waters found in the reservoir located in the subject premises.[14] In
We ind the petition devoid of merit. The well-settled principle, contrast, petitioner, to our mind, has not clearly established his title
buttressed by a long line of cases[9] is that injunctions, as a rule, to the property in question nor has he clearly shown that private
will not be granted to take property out of the possession or control respondents were indeed "mere intruders or squatters thereon." As
of one party and place it into that of another whose title has not such, the exception enunciated in Santos v. Court of Appeals does
been clearly established by law. In Angela Estate, Inc. v. Court of not apply.
Appeals,[10] we held -


In ine, petitioner has not made out a clear case, free from any taint law and payment of just compensation.[1] Any arm of the State that
of doubt or dispute, to warrant the issuance of a prohibitory exercises such power must wield the same with circumspection and
mandatory injunction. It is true that he possesses certi icates of title utmost regard for procedural requirements.[2]
in his name covering several parcels of land located in San Mateo,
Rizal. But inasmuch as it relates solely to the issuance of a writ of This is a petition for review on certiorari under Rule 45 of the Rules
injunction, the issue is not one of ownership but, as correctly noted of Court iled by Federated Realty Corporation (FRC) against the
by the appellate court, "whether or not the titles of (petitioner) Republic of the Philippines through the Armed Forces of the
cover the premises being occupied by the (private respondents)." Philippines-Visayas Command (AFP-VISCOMM) and several of its
men.[3]
Private respondents vigorously maintain that the property being
occupied by them lies outside of the property covered by The operative facts, together with a historical background of the
petitioner's certi icates of title. While it may have been desirable for property involved, follow. Knowing the history of the property is
them to produce certi icates of title over the property which they essential to understanding the case.
occupy, the absence thereof for purposes of the issuance of the writ
does not militate against them. And if the defense interposed by Petitioner FRC is the registered owner of a 543-square meter lot in
them is successfully established at the trial, the complaint will have Apas, Lahug, Cebu City, covered by Transfer Certi icate of Title
to be dismissed. (TCT) No. 119929 of the Registry of Deeds of Cebu City. The lot
adjoins a military reservation, Camp Lapu-Lapu, where the
The effect of the preliminary prohibitory and mandatory Command Headquarters of the Armed Forces of the
injunctions issued by the lower court is to dispose of the main case Philippines-Visayas Command (AFP-VISCOMM) is situated.
without trial. Private respondents will have to be hurled off into the
streets, their houses built on the premises demolished and their The lot in question used to be a portion of Lot No. 933 containing an
plantings destroyed without affording them the opportunity to area of 37,126 square meters and formed part of the Banilad Friar
prove their right of possession in court. In view of the rights to be Lands Estate. In 1932, Lot No. 933 was registered in the names of
affected through the issuance of injunctions, courts should at best Francisco Racaza, Pantaleon Cabrera and Jose ina Martinez per TCT
be reminded that "(t)here is no power the exercise of which is more No. RT 2533 (T-13) issued on 30 August 1932.
delicate which requires greater caution, deliberation and sound
discretion, or which is more dangerous in a doubtful case, than the Sometime in 1938, Lot No. 933 was one of 18 lots subjected to
issuing of an injunction."[15] expropriation proceedings by the government before the Court of
First Instance (CFI) of Cebu in the case entitled Commonwealth of
WHEREFORE, inding no reversible error in the Decision sought to the Philippines v. Borromeo, et al. (Commonwealth case), docketed
be reviewed, the instant petition is DENIED, and the 14 November as Civil Case No. 781, for the purpose of establishing a military
1997 Decision of the Court of Appeals in CA-G.R. SP No. 44320 reservation.[4] Pursuant to the CFI Order dated 19 October 1938,
(nullifying the 20 June 1996 Order of the RTC-Br. 75, San Mateo, the Republic deposited P9,500.00 with the Philippine National Bank
Rizal, granting the writ of Preliminary Prohibitory and Mandatory as a precondition for entry to the lots sought to be expropriated.
Injunction against private respondents Nena de Guzman, Ben de
Guzman and Cecilio Cruz) is AFFIRMED. On 14 May 1940, the CFI rendered a Decision[5] condemning Lot
No. 933 along with the 17 other adjacent lots of the Banilad Friar
Forthwith, let the records of this case be remanded to the trial court Lands Estate in favor of the Republic. In 1947, the whole military
for further proceedings. reservation was converted into a national airport by virtue of a
Presidential Proclamation and, by virtue thereof, turned over to the
SO ORDERED. National Airports Corporation.
Mendoza, Quisumbing, and De Leon, Jr., JJ., concur. The Decision in the Commonwealth case notwithstanding, the legal
Buena, J., no part, signatory to CA decision. ownership of the expropriated lands was mired in controversy. This
Court has had two occasions to rule on the question of ownership
Federated Realty Corporation vs Court of involving two of the lots. Valdehueza v. Republic,[6] decided in
1966, concerned Lot Nos. 932 and 939 of the Banilad Friar Lands
Appeals, G.R. NO. 127967, December 14, Estate, while Lot No. 932 was likewise the subject of Republic v.
2005 Lim,[7] decided earlier this year. In both cases, the Court found that
514 Phil. 93 by the very admission of the government, there was no record of
payment of compensation by the government to the landowners.
SECOND DIVISION Thus, the Court ruled in both cases that there was no transfer of the
G.R. NO. 127967, December 14, 2005 lots involved in favor of the government. The decisions, however,
FEDERATED REALTY CORPORATION, PETITIONER, VS. HON. did not touch on the state of ownership of Lot No. 933 which was
COURT OF APPEALS AND REPUBLIC OF THE PHILIPPINES, not involved in the cases.
THROUGH THE COMMANDING GENERAL OF THE ARMED FORCES
OF THE PHILIPPINES VISAYAS COMMAND (AFP-VISCOM), Beginning in 1940, Lot No. 933 had been subdivided. Part of it was
RESPONDENTS. segregated as Lot 933-B under TCT No. 49999 in the name of
Francisco Racaza who sold the same to the Cebu Agro Development
DECISION Corporation (Cebu Agro) on 11 March 1974.[8] Cebu Agro had Lot
TINGA, J.: 933-B further subdivided into three farm lots to expand its rabbit
farm. TCT No. 108002 was issued for Lot 933-B-1 by the Register of
Eminent domain is one of the fundamental powers inherent to the Deeds of Cebu City on 05 April 1989 while TCT No. 108001 was
State as a sovereign. It is the authority and right of the State to take issued for Lot 933-B-2. On 08 April 1992, TCT No. 119740 was
private property for public use upon observance of due process of



issued for Lot 3, with an area of 543 square meters, which is a

portion of the consolidation of Lots 933-B-1 and 933-B-2. All three Aggrieved, the Republic iled with the Court of Appeals (CA) on 24
titles were registered in the names of Arturo Mercader, the November 1995 a petition for certiorari under Rule 65 with an
President-General Manger of Cebu Agro, and his wife Evangeline urgent prayer for TRO and/or preliminary injunction seeking to set
Mercader, who religiously paid the real property taxes for the three aside the 12 October 1995 Order of the trial court.[18] It justi ied
lots.[9] its immediate recourse to the appellate court on the basis of
urgency and the perceived futility of iling a motion for
On 27 April 1992, FRC bought Lot 3 from the Mercader spouses and reconsideration with the lower court, thereby leaving it with no
was issued TCT No. 119929 therefor by the Register of Deeds.[10] other plain, speedy and adequate remedy in the ordinary course of
law except through the petition.[19]
FRC hired workers to fence the said lot in preparation for the
construction of a commercial building thereon. However, the fence As per Resolution[20] dated 29 November 1995, the CA gave due
construction was halted on 03 June 1992 when Captain Rogelio course to the petition and temporarily restrained the
Molina arrived with a jeepload of fully-armed men from the implementation of the trial court's questioned order pending full
AFP-VISCOMM, and ordered FRC's workers to stop building the consideration of the Republic's petition.
structure per instructions of AFP-VISCOMM Commanding General
Romeo Zulueta. Intimidated, FRC's men stopped working. When On 12 September 1996, the CA promulgated its assailed
they resumed work the following day, Captain Molina returned with Decision[21] granting the Republic's petition for certiorari, setting
his armed men and again ordered them to stop the construction. A aside the trial court's 12 October 1995 Order, and making
similar incident occurred on 08 July 1992, with Captain Molina permanent the writ of preliminary injunction it issued against the
asserting that the lot in question formed part of the military implementation of the trial court's decision. It further ordered the
reservation. All three incidents were recorded in the blotter of trial court to dismiss Civil Case No. CEB-12290.
Police Station 2, Mabolo, Cebu City.[11]
The appellate court ratiocinated that FRC does not have a clear and
On 22 July 1992, FRC iled a Complaint[12] for injunction and unmistakable right over the subject property on the ground that
damages with the Regional Trial Court (RTC) of Cebu against "the subject lot not only adjoins military structures, but the main
Captain Rogelio Molina and six John Does. The complaint was later entrance thereof carries the arch of the AFP-VISCOMM identifying
amended to implead the Republic of the Philippines (Republic) beyond peradventure of doubt that one is entering the premises of
through the AFP-VISCOMM and its Commanding General Romeo the AFP, a government entity."[22] It likewise held that the damage
Zulueta. FRC sought the issuance of a temporary restraining order which FRC may suffer in enjoining it from undertaking any
(TRO) and/or writ of preliminary injunction, to order the improvements on the subject property "pales in comparison with
respondents to cease, desist and refrain from threatening, what the [Republic] stands to suffer in the event of a permanent
intimidating and harassing the workers constructing its fence and injunction against it – the integrity of its military premises."[23] It
to cease, desist and refrain from committing acts of intrusion into concluded that not until FRC's title to the land is upheld by inal
and deprivation of subject land, and to cease, desist and refrain judgment may a writ of injunction properly issue to prevent the
from harassing, disturbing and interfering with its peaceful and Republic from disallowing FRC to fence the lot and introduce any
lawful possession and enjoyment thereof. FRC also prayed that improvement thereon.
after trial, (i) the injunction be made permanent, (ii) respondents
adjudged without any legal right to or interest whatsoever in the FRC then iled a motion for reconsideration[24] but the same was
parcel of land in litigation, (iii) respondents ordered to pay denied by the CA in a Resolution[25] dated 31 January 1997. The
compensatory and exemplary damages, attorney's fees and appellate court found the trial court in grave abuse of discretion
expenses of litigation. when it disregarded the fact that the subject lot had been
expropriated by the government a long time ago in the
On the same day, the trial court issued the TRO[13] prayed for with Commonwealth case.
a duration of 20 days, and set the hearing of the application for
preliminary injunction. Hence, this petition.
In their Answer,[14] respondents admitted that Captain Rogelio The core issue in this case is whether or not injunction lies in favor
Molina ordered FRC's workers to desist from fencing the land in of FRC to prevent the Republic from interfering in the exercise of its
dispute on the ground that said lot is government property. rights of ownership over the subject property.
However, they denied that he and his armed men threatened and/or
harassed the said workers. In a long line of cases, this Court has held that injunction is a
preservative remedy aimed at protecting substantive rights and
In an Omnibus Order[15] dated 26 August 1992, the trial court interests.[26] The very foundation of the jurisdiction to issue a writ
granted FRC's application for preliminary injunction which writ it of injunction rests in the existence of a cause of action and in the
later made permanent in an Order[16] dated 12 October 1995 "until probability of irreparable injury, inadequacy of pecuniary
such time that the issue of ownership between the parties shall compensation and the prevention of multiplicity of suits.[27] Where
have been resolved by a competent court."[17] The trial court facts are not shown to bring the case within these conditions, the
found that the subject property is in the possession of FRC and its relief of injunction should be refused.[28]
predecessor-in-interest and ruled that FRC's assertion of ownership
is supported by a TCT which must be upheld until nulli ied by a Thus, to be entitled to injunctive relief, the following must be
competent court in a proper proceeding. In all probability, the shown: (1) the invasion of a right sought to be protected is material
Republic would prevent the construction of FRC's fence, if not and substantial; (2) the right of complainant is clear and
provisionally prevented by court order, thereby making injunction a unmistakable; and (3) there is an urgent and paramount necessity
proper relief, the lower court noted. for the writ to prevent serious damage.[29]


rule that title to the property expropriated shall pass from the
In reversing the trial court, the CA found FRC's case to be wanting in owner to the expropriator only upon full payment of just
the second and third requisites. compensation.[35]
We disagree. We note that the Republic claims possession over the subject lot
based irst on its alleged deposit of P9,500 pursuant to the CFI
We irst take up the second requisite. Without ruling on the Order dated 19 October 1938 in the Commonwealth case, and
question of ownership over the subject property, we shall delve into second, on the existence of military structures on the adjoining lots
the respective claims of ownership of the parties if only to of the subject property coupled with the existence of a portion of
determine if FRC had suf iciently established the existence of a right the runway of the defunct Lahug airport on Lot No. 933 and the arch
to be protected by a writ of injunction. of Camp Lapu-Lapu on the subject lot. However, the records are
bereft of evidence on the alleged deposit made by the Republic with
Basically, FRC anchors its claim on the indefeasibility of its the Philippine National Bank. The Republic merely relies on our
registered title to the subject lot which cannot be collaterally ruling in Valdehueza which the Republic claims to have reinforced
attacked by the Republic in an injunction suit. It further alleges, and the Commonwealth case. However, although Valdehueza and even
as found by the trial court, that along with its Lim do mention a disbursement of the said amount, there was no
predecessors-in-interest it has been in open, peaceful and proof presented by the Republic in both cases as to the receipt of
continuous possession thereof since time immemorial, tilling the the said deposit by the authorized depositary.[36] Even then, said
same and paying all the taxes due thereon. cases do not involve Lot No. 933. There is also nothing in the
Commonwealth case stating that the Republic had in fact made the
On the other hand, the Republic has not presented any title over the required deposit as precondition to possession of the subject lot.
subject lot but instead relies heavily on the Commonwealth and
Valdehueza cases in asserting ownership and possession over the There is also no evidence presented as to the existence of the
same, arguing that it was expropriated by the government for camp's arch on subject lot. In any case, the Republic cannot base its
military purposes in 1940. It further alleges that its possession of right to the subject lot solely on the alleged presence of a
the subject lot is evidenced by the existence of military structures government structure therein. The law provides for a strict
on the adjoining lots and that of the Camp Lapu-Lapu arch on the procedure for expropriation which the State must follow lest it
main entrance of the property in question. violates the constitutionally enshrined principle that "private
property shall not be taken for public use without just
Time and again, we have upheld the fundamental principle in land compensation."[37]
registration that a certi icate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the Assuming that the Republic had indeed paid the deposit or made
person whose name appears therein.[30] It becomes the best proof full payment of just compensation, in regular order this should have
of ownership of a parcel of land.[31] One who deals with property led to the cancellation of title, or at least, the annotation of the lien
registered under the Torrens system may rely on the title and need in favor of the government on the certi icate of title covering the
not go beyond the same.[32] Such principle of indefeasibility has subject lot. The registration with the Registry of Deeds of the
long been well-settled in this jurisdiction and it is only when the Republic's interest arising from the exercise of its power of eminent
acquisition of the title is attended with fraud or bad faith that the domain is in consonance with Section 88 of Act No. 496 or the Land
doctrine inds no application.[33] Registration Act (now Section 85 of P.D. 1529 also known as the
Property Registration Decree),[38] to wit:
In the instant case, it is undisputed that FRC is a holder of a SEC. 88. Whenever any land of a registered owner, or any right or
certi icate of title over the lot in question. Records show that each of interest therein, is taken by eminent domain, the Government or
FRC's predecessors-in-interest was likewise a holder of an municipality or corporation or other authority exercising such right
indefeasible title. Furthermore, no patent irregularity can be shall ile for registration in the proper province a description of the
gleaned on the face of FRC's title. Yet, the Republic challenges the registered land so taken, giving the name of such owner thereof,
validity of the same by maintaining that the subject lot had long referring by number and place of registration in the registration
been expropriated in favor of the government. Although it does not book to each certi icate of title, and stating what amount or interest
present any title over the property, the Republic invokes the in the land is taken, and for what purpose. A memorandum of the
expropriation proceedings which are the Commonwealth and right or interest taken, shall be made on each certi icate of title by
Valdehueza cases. However, the Republic's reliance on the the register of deeds, and where the fee simple is taken a new
proceedings does not in any way bolster its cause. certi icate shall be entered to the owner for the land remaining to
him after such taking, and a new certi icate shall be entered to the
First, Valdehueza involves Lot Nos. 932 and 939. It does not in any Government, municipality, corporation, or other authority
way deal with the subject property nor were FRC and its exercising such right for the land so taken. All fees on account of
predecessors-in-interest made parties thereto. Hence, the ruling any memorandum of registration or entry of new certi icate shall be
therein cannot be applied to the instant case. paid by the authority taking the land.Furthermore, Section 251 of
the Code of Civil Procedure, the law in force at the time of the
On the other hand, the property in question was indeed made Commonwealth case likewise provides for the recording of the
subject of expropriation proceedings in the Commonwealth case. judgment of expropriation in the Registry of Deeds. Said provision
However, the CFI in said case made no mention of the award of the reads, to wit:
land subject thereof in favor of the government. The CFI merely SEC. 251. Final Judgment, Its Record and Effect. — The record of the
ixed the valuation of the lots involved for the purpose of payment inal judgment in such action shall state de initely by metes and
of just compensation by the government. Until the government has bounds and adequate description. the particular land or interest in
paid for the value of the lots, ownership shall remain with the land condemned to the public use, and the nature of the public use.
respective landowners.[34] In Republic v. Lim, we reiterated the A certi ied copy of the record of the judgment shall be recorded in


the of ice of the registrar of deeds for the province in which the camp will pose serious danger and damage to military operations.
estate is situated, and its effect shall be to vest in the plaintiff for the Again, we disagree.
public use stated the land and estate so described.[39] (Emphasis
supplied)There is no showing that the Republic complied with the In seeking the af irmation of the writ of injunction issued by the CA
aforestated registration requirement. Without such compliance, it to enjoin the implementation of the permanent injunction ordered
cannot be said that FRC had notice of the Republic's adverse claim by the trial court against it, the Republic invokes national security
suf icient to consider the former in bad faith, for the law gives the and the integrity of its military operations. It argues that civilians
public the right to rely on the face of the Torrens title and to cannot be allowed to lurk within military premises.
dispense with the need of further inquiry, except only when one has
actual knowledge of facts and circumstances that should impel a However, we cannot overemphasize that until FRC's title is annulled
reasonably cautious man to inquire further into its integrity.[40] in a proper proceeding, the Republic has no enforceable right over
Such is the very essence of our Torrens system as ruled in Legarda v. the subject property. Neither military operational integrity nor
Saleeby, 31 Phil. 590, thus: national defense vests title to property in favor of the government.
The real purpose of the system is to quiet title of land; to put a stop Hence, the CA was in error in enjoining enforcement of the lower
forever to any question of the legality of the title, except claims court's order, as injunction does not protect rights not in esse.[46]
which were noted at the time of registration, in the certi icate, or The possibility of irreparable damage, without proof of violation of
which may arise subsequent thereto. That being the purpose of the an actually existing right, is not a ground for injunction.[47]
law, it would seem that once a title is registered, the owner may rest
secure, without the necessity of waiting in the portals of the courts, Furthermore, the only so-called military structure allegedly found
or sitting in the "mirador de su casa," to avoid the possibility of on Lot No. 933 is the arch of Camp Lapu-Lapu. It is not even clear
losing his land. x x x The certi icate, in the absence of fraud, is the where exactly on Lot No. 933 this arch stands. Neither was it shown
evidence of title and shows exactly the real interest of its owner. when the same was constructed. Note that the lot in question is not
The title once registered, with very few exceptions, should not the entire Lot No. 933, but only a portion thereof. We cannot
thereafter be impugned, except in some direct proceeding imagine
permitted by law. Otherwise, all security in registered titles would
be lost.[41]In any event, if FRC or any of its predecessors-in-interest how fencing a 543-square meter lot can lead to grave and
had fraudulently acquired title to the subject lot, this issue should irreparable damage to the Republic. Our ruling in the Lim case is
be properly ventilated in a direct proceeding for that purpose, and instructive, to wit:
not in an injunction suit. By law, a certi icate of title shall not be The Republic's assertion that the defense of the State will be in
subject to collateral attack.[42] In Leyson v. Bontuyan,[43] we grave danger if we shall order the reversion of Lot 932 to
ruled, to wit: respondent is an overstatement. First, Lot 932 had ceased to
While Section 47 of Act No. 496 provides that a certi icate of title operate as an airport. What remains in the site is just the National
shall not be subject to collateral attack, the rule is that an action is Historical Institute's marking stating that Lot 932 is the "former
an attack on a title if its object is to nullify the same, and thus location of Lahug Airport." And second, there are only thirteen (13)
challenge the proceeding pursuant to which the title was decreed. structures located on Lot 932, eight (8) of which are residence
The attack is considered direct when the object of an action is to apartments of military personnel. Only two (2) buildings are
annul set aside such proceeding, or enjoin its enforcement. On the actually used as training centers. Thus, practically speaking, the
other hand, an attack is indirect or collateral when, in an action to reversion of Lot 932 to respondent will only affect a handful of
obtain a different relief, an attack on the proceeding is nevertheless military personnel. It will not result to "irreparable damage" or
made as an incident thereof.Therefore, FRC's claim as a titleholder "damage beyond pecuniary estimation," as what the Republic
is given preference by law to any other claim of right over said land. vehemently claims.[48]Lot No. 932 adjoins the subject lot.
Until such title is nulli ied, the Republic can raise no more than a Although, there existed on Lot No. 932 training centers and housing
doubtful claim over the property in question, which dubious claim for military personnel, we ruled that the reversion of Lot No. 932 to
militates against the issuance in its favor of a writ of injunction. So, respondent therein, a private party, will not cause irreparable injury
the appellate court erred in stating the rule in reverse and in to the Republic that gives rise to a ground for injunctive relief. What
granting injunctive relief to the Republic when its claim of more in this case when the only structures alleged to exist on
ownership as against FRC's is unclear. It must be stressed that subject lot are a portion of an unused runway and an arch? Thus,
injunction is not proper when its purpose is to take the property out the Republic's contention that it will suffer serious damage if
of the possession or control of one party and transfer the same to injunction is ordered against it is more imagined than real.
the hands of another who did not have such control at the inception
of the case and whose legal title has not clearly been Meanwhile, the exercise by FRC of its rights of ownership over the
established,[44] for the reason that before the question of subject lot is being unduly restrained. At this point, its possession
ownership is determined, justice and equity demand that the and ownership of the subject property must be respected.
parties be maintained in status quo so that no advantage may be
given to one party to the detriment of the other.[45] Since the Republic has failed to prove its indubitable right over the
lot in question we have to rule that FRC possesses a clear and
All told, reversing the appellate court we rule that the second unmistakable right over the subject lot that necessitates the
requisite for injunctive relief, that FRC holds a clear and issuance of a writ of injunction to prevent serious damage to its
unmistakable right over the subject lot, has been suf iciently interests as titleholder thereto. Meanwhile, FRC may institute a
established. separate proceeding to quiet its title wherein the issue of ownership
over the subject property may inally be resolved.
Anent the third requisite, the appellate court ruled that in the event
of a permanent injunction the Republic stands to suffer greater WHEREFORE, premises considered, the petition is hereby
injury compared to FRC, as a private commercial building within a GRANTED. The Decision dated 12 September 1996 of the Court of


Appeals is REVERSED and the Order dated 12 October 1995 of the On 18 June 1997, consistent with its defense against Digital's
Regional Trial Court is REINSTATED. Complaint, petitioner iled a Third-Party Complaint[4] against
Macgraphics Carranz International Corporation (Macgraphics) and
SO ORDERED. herein private respondents Bishop Crisostomo Yalung (Bishop
Yalung) and Atty. Roy Manuel Villasor (Atty. Villasor) alleging that it
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, had entered into a contract of lease with Roman Catholic
JJ., concur. Archbishop of Manila (RCAM), as represented by the private
respondents, over a space inside San Carlos Manor Seminary in
Limitless Potentials, Inc. vs Court of Guadalupe Viejo, Makati City, where petitioner erected the subject
billboard. Petitioner further averred that despite its full compliance
Appeals, G.R. NO. 164459, April 24, 2007 with the terms and conditions of the lease contract, herein private
550 Phil. 250
respondents, together with their cohorts, maliciously dismantled
and destroyed the subject billboard and prevented its men from
THIRD DIVISION
reconstructing it. Thereafter, petitioner learned that Macgraphics
G.R. NO. 164459, April 24, 2007
had "cajoled and induced" RCAM, through the private respondents,
LIMITLESS POTENTIALS, INC., PETITIONER, VS. HON. COURT OF
to destroy the subject billboard to enable Macgraphics to erect its
APPEALS, CRISOSTOMO YALUNG, AND ATTY. ROY MANUEL
own billboard and advertising signs. Thus, by way of af irmative
VILLASOR, RESPONDENTS.
defenses, petitioner claimed that: (a) the destruction of the subject
billboard was not of its own making and beyond its control, and (b)
DECISION
Digital's cause of action, if any, should be directed against the
CHICO-NAZARIO, J.:
private respondents and Macgraphics. Hence, petitioner prayed that
judgment be rendered in its favor and to hold private respondents
Before this Court is a Petition for Review on Certiorari under Rule
liable for the following: (a) moral damages in the amount of
45 of the 1997 Revised Rules of Civil Procedure seeking to annul
P1,000,000.00; (b) exemplary, temperate and nominal damages
and set aside: (1) The Decision,[1] dated 16 September 2003, of the
amounting to P300,000.00; (c) P300,000.00 as attorney's fees; (d)
Court of Appeals in CA-G.R. SP No. 73463 entitled, Limitless
P50,000.00 as litigation expenses; and (e) costs of suit, allegedly
Potentials, Inc. vs. Hon. Manuel D. Victorio, in his capacity as the
suffered or incurred by it because of the willful destruction of the
Presiding Judge of the Regional Trial Court of Makati City, Branch
billboard by the private respondents.
141, Crisostomo Yalung, and Atty. Roy Manuel Villasor, which
dismissed herein petitioner's Petition for Certiorari under Rule 65
In response, private respondents iled a Motion to Dismiss the
of the 1997 Revised Rules of Civil Procedure for lack of merit, and
aforesaid Third-Party Complaint based on the following grounds:
(2) The Resolution,[2] dated 8 July 2004, of the appellate court in
(1) litis pendentia; (2) lack of cause of action; (3) forum shopping;
the same case which denied petitioner's Motion for Reconsideration
and (4) lack of privity of contract. The MeTC, in an Order dated 25
because the issues and arguments raised therein had already been
August 1997,[5] denied the said Motion to Dismiss. Petitioner iled
passed upon and judiciously resolved in the Decision dated 16
an Amended Third-Party Complaint. Again, private respondents
September 2003.
iled a Motion to Dismiss Amended Third-Party Complaint.
However, the MeTC also denied the Motion to Dismiss Amended
The controversy of this case stemmed from the following facts:
Third-Party Complaint in an Order dated 10 October 1997.[6]
On 12 October 1995, Digital Networks Communications and

On 9 December 1997, private respondents iled a Petition for
Computers, Inc. (Digital) and herein petitioner Limitless Potentials,
Certiorari with Prayer for Preliminary Restraining Order and/or
Inc. (LPI), a domestic corporation duly organized and existing under
Writ of Preliminary Injunction before the Regional Trial Court (RTC)
Philippine laws, entered into a Billboard Advertisement Contract
of Makati City, assailing the Orders dated 25 August 1997 and 10
whereby petitioner was to construct one billboard advertisement
October 1997 of the MeTC of Makati City denying their Motion to
for Digital's product for a period of one year, with an agreed rental
Dismiss Third-Party Complaint and Motion to Dismiss Amended
of P60,000.00 per month plus Value Added Tax (VAT). It was agreed,
Third-Party Complaint, respectively, in Civil Case No. 55170.
among other things, that Digital will make a three-month deposit in
the following manner, to wit: (a) P60,000.00 plus VAT upon the
The RTC issued an Order on 6 February 1998,[7] granting private
signing of the contract, and (b) P120,000.00 plus VAT upon
respondents' prayer for a writ of preliminary injunction,
completion of the billboard. Digital complied with the aforesaid
conditioned upon the posting of an injunction bond in the amount
agreement.
of P10,000.00. Thus, the MeTC was enjoined from hearing the
Third-Party Complaint in Civil Case No. 55170. The pertinent
The billboard, however, was destroyed by unknown persons. In
portion of the aforesaid Order reads, as follows:
view thereof, the contract between Digital and the petitioner was
When the application for temporary restraining order and/or
considered terminated. Digital demanded for the return of their
preliminary injunction was heard this afternoon, [herein petitioner]
rental deposit for two months, but the petitioner refused to do so
who did not ile comment on the petition appeared thru counsel
claiming that the loss of the billboard was due to force majeure and
Emmanuel Magnaye. It was brought out to the attention of this
that any cause of action should be directed against the responsible
Court that respondent judge is poised on pursuing the hearing of
persons. Thus, on 18 April 1997, Digital commenced a suit against
the case before her despite the pendency of this petition. It
herein petitioner before the Metropolitan Trial Court (MeTC) of
appeared that the case was set by respondent judge for hearing
Makati City, Branch 66, presided over by then Judge Estela
ex-parte for the reception of [herein petitioner's] evidence on 23
Perlas-Bernabe (Judge Perlas-Bernabe)[3], for the return of Digital's
February 1998. It also appeared that [herein private respondents]
deposit, which was equivalent to two months rental inclusive of VAT
were declared in default despite the fact that they have iled their
and attorney's fees. The case was docketed as Civil Case No. 55170.
answer and the motion to lift such order of default and for
admission of the answer was denied by respondent judge.


The Court of Appeals through a Resolution dated 8 July 2004,

Upon consideration of the allegations in the petition and the oral denied the petitioner's Motion for Reconsideration.
manifestations and admissions of both parties, this Court hereby
resolves to issue the writ of preliminary injunction in order to Hence, this Petition.
preserve the status quo as well as not to render the issue herein
raised moot and academic. Petitioner pointed out two basic legal issues wherein the appellate
court committed serious and reversible errors, to wit:
WHEREFORE, the motion for preliminary injunction is granted. Is malice or bad faith a condition sine qua non for liability to attach
Accordingly, upon the iling by [herein private respondents] of a on the injunction bond?
bond in the amount of P10,000.00, let a writ of preliminary Are attorney's fees, litigation costs, and cost of delay by reason of
injunction be issued, enjoining respondent judge, or her successor, the injunction covered by the injunction bond?
from hearing the [T]hird [P]arty [C]omplaint against [herein private Petitioner argues that malice or lack of good faith is not an element
respondents] in Civil Case No. 55170 until further orders from this of recovery on the bond. The dissolution of the injunction, even if
Court.[8]Subsequently, however, the RTC rendered a Decision[9] on the injunction was obtained in good faith, amounts to a
28 April 2000, dismissing the Petition for Certiorari iled by private determination that the injunction was wrongfully obtained and a
respondents, the dispositive portion of which reads: right of action on the injunction immediately accrues to the
WHEREFORE, the petition is hereby dismissed for lack of merit. The defendant. The petitioner maintains that the attorney's fees,
preliminary injunction issued by this Court on 6 February 2000[10] litigation costs, and cost of delay by reason of the injunction are
(sic) is hereby dissolved. proper and valid items of damages which can be claimed against the
injunction bond. Hence, having proven through testimonial and
Costs against [herein private respondents].[11]Disgruntled, private documentary evidence that it suffered damages because of the
respondents iled an Urgent Motion for Reconsideration, which was issuance of the writ of injunction, and since malice or lack of good
denied by the RTC in its Order[12] dated 26 June 2000. faith is not an element of recovery on the injunction bond,
petitioner asserts that it can properly collect such damages on the
Petitioner iled its Motion for Judgment Against the Bond, and in said bond.
compliance with the directive of the RTC, the petitioner iled a
pleading[13] specifying its claims, thus: (a) attorney's fees in the Private respondent Bishop Yalung on the other hand, prays for the
sum of P74, 375.00; and (b) moral damages for the tarnished good outright dismissal of the present Petition due to the alleged failure
will in the sum of P1,000,000.00. of the petitioner to comply with the mandatory rule on proper
certi ication on non-forum shopping under Section 5, Rule 7 of the
The RTC, in its Order dated 3 April 2002,[14] denied petitioner's 1997 Revised Rules of Civil Procedure. According to him, it is not
Motion for Judgment Against the Bond declaring that the suf icient for Mr. Baterna to make the undertaking that "I have not
preliminary injunction was not wrongfully obtained; therefore, the commenced any other action or proceeding involving the same
claim for damages on the bond is untenable. issue in the Supreme Court, etc." inasmuch as such undertaking
should have been made by the principal party, namely, the
Aggrieved, the petitioner moved for the reconsideration of the petitioner. He underscores that the veri ication/disclaimer of forum
aforesaid Order, which was also denied by the RTC in its Order shopping executed by Mr. Baterna on behalf of the petitioner is
dated 6 August 2002.[15] legally defective for failure to enumerate with particularity the
multiple civil and criminal actions, which were iled by him and the
Dissatis ied, the petitioner iled a Petition for Certiorari under Rule petitioner against the private respondents.
65 of the Revised Rules of Civil Procedure before the Court of
Appeals assailing the Orders of the RTC dated 3 April 2002 and 6 Private respondent Bishop Yalung also avers that the petitioner is
August 2002 for having been issued with grave abuse of discretion not entitled to collect damages on the injunction bond iled before
amounting to lack and/or excess of jurisdiction. the court a quo. Primarily, as the appellate court mentioned in its
Decision, the preliminary injunction was directed not against the
On 6 November 2002, the Court of Appeals issued a Resolution[16] petitioner but against the MeTC. The petitioner was not restrained
dismissing the Petition for failure to show proof that a certain from doing any act. What was restrained was the hearing of the
Quirino B. Baterna has been duly authorized by the petitioner to ile Third-Party Complaint while the Petition for Certiorari was
the Petition for and in its behalf. Petitioner moved for the pending, "in order to preserve the status quo and not to render the
reconsideration of the aforesaid Resolution, which was granted by issue therein moot and academic."[18] Also, the fact that the
the appellate court in its Resolution dated 24 January 2003[17] decision is favorable to the party against whom the injunction was
thereby reinstating the Petition for Certiorari iled by the petitioner. issued does not automatically entitle the latter to recover damages
on the bond. Therefore, the petitioner cannot claim that it suffered
On 16 September 2003, the Court of Appeals rendered a Decision damages because of the issuance of the writ of injunction.
dismissing the Petition iled by the petitioner for utter lack of merit.
The petitioner iled a Motion for Reconsideration based on the Private respondent Atty. Villasor shares the same argument as that
following grounds: of his co-respondent Bishop Yalung that it was the MeTC which was
The dismissal of the petition and dissolution of the injunction enjoined and not herein petitioner. Private respondent Atty. Villasor
amount to a determination that the injunction was wrongfully or further alleged that in the Special Civil Action for Certiorari, the
improvidently obtained. action is principally against any tribunal, board, or of icer exercising
The petitioner suffered damages by reason of the issuance of the judicial or quasi-judicial functions who has acted without or in
injunction. excess of jurisdiction or with grave abuse of discretion. Thus,
The damages claimed by the petitioner are covered by the private respondents' Petition for Certiorari before the RTC
injunction bond. principally pertains to the MeTC and not to herein petitioner.
Additionally, private respondent Atty. Villasor argues that it was


petitioner who was bene ited by such writ of preliminary The injunction bond is intended as a security for damages in case it
injunction, because the injunction left Digital unable to prosecute is inally decided that the injunction ought not to have been granted.
Civil Case No. 55170 against herein petitioner. Lastly, private Its principal purpose is to protect the enjoined party against loss or
respondent Atty. Villasor claims that petitioner did not oppose their damage by reason of the injunction,[26] and the bond is usually
application for a writ of preliminary injunction at the hearing conditioned accordingly.
wherein petitioner was duly represented by counsel.
The damages sustained as a result of a wrongfully obtained
Simply stated, the threshold issues are: injunction may be recovered upon the injunction bond which is
Can petitioner recover damages from the injunction bond? required to be deposited with court.[27] Rule 57, Section 20, of the
1997 Revised Rules of Civil Procedure, which is similarly applicable
to preliminary injunction,[28] has outlined the procedure for the
Was petitioner able to substantiate the damages? iling of a claim for damages against an injunction bond. The
Quite apart from the above, there appears to be another question aforesaid provision of law pertinently provides:
concerning the alleged violation by the petitioner of the mandatory SEC. 20. Claim for damages on account of improper, irregular or
rule on proper certi ication on non-forum shopping. excessive attachment. - An application for damages on account of
improper, irregular or excessive attachment must be iled before the
In the case at bar, petitioner repeatedly argues that malice or lack of trial or before appeal is perfected or before the judgment becomes
good faith is not an element of recovery on the injunction bond. In executory, with due notice to the attaching party and his surety or
answering this issue raised by petitioner, this Court must initially sureties, setting forth the facts showing his right to damages and the
establish the nature of the preliminary injunction, the purpose of amount thereof. Such damages may be awarded only after proper
the injunction bond, as well as the manner of recovering damages hearing and shall be included in the judgment on the main case.
on the said bond.
If the judgment of the appellate court be favorable to the party
A preliminary injunction is a provisional remedy that a party may against whom the attachment was issued, he must claim damages
resort to in order to preserve and protect certain rights and sustained during the pendency of the appeal by iling an application
interests during the pendency of an action.[19] It is an order in the appellate court, with notice to the party in whose favor the
granted at any stage of an action, prior to the judgment or inal attachment was issued or his surety or sureties, before the
order, requiring a party, court, agency or person to perform or to judgment of the appellate court becomes executory. The appellate
refrain from performing a particular act or acts. A preliminary court may allow the application to be heard and decided by the trial
injunction, as the term itself suggests, is merely temporary, subject court.
to the inal disposition of the principal action.[20] It is issued to
preserve the status quo ante, which is the last actual, peaceful, and Nothing herein contained shall prevent the party against whom the
uncontested status that preceded the actual controversy,[21] in attachment was issued from recovering in the same action the
order to protect the rights of the plaintiff during the pendency of damages awarded to him from any property of the attaching party
the suit. Otherwise, if no preliminary injunction is issued, the not exempt from execution should the bond or deposit given by the
defendant may, before inal judgment, do the act which the plaintiff latter be insuf icient or fail to fully satisfy the award.[29]Now, it can
is seeking the court to restrain. This will make ineffectual the inal be clearly gleaned that there is nothing from the aforequoted
judgment that the court may afterwards render in granting relief to provision of law which requires an enjoined party, who suffered
the plaintiff.[22] The status quo should be existing ante litem damages by reason of the issuance of a writ of injunction, to prove
motam, or at the time of the iling of the case. For this reason, a malice or lack of good faith in the issuance thereof before he can
preliminary injunction should not establish new relations between recover damages against the injunction bond. This Court was very
the parties, but merely maintain or re-establish the pre-existing succinct in the case of Aquino v. Socorro,[30] citing the case of Pacis
relationship between them.[23] v. Commission on Elections,[31] thus:
Malice or lack of good faith is not an element of recovery on the
The purpose of a preliminary injunction is to prevent threatened or bond. This must be so, because to require malice as a prerequisite
continuous irremediable injury to some of the parties before their would make the iling of a bond a useless formality. The dissolution
claims can be thoroughly studied and adjudicated. Thus, to be of the injunction, even if the injunction was obtained in good faith,
entitled to an injunctive writ, the petitioner has the burden to amounts to a determination that the injunction was wrongfully
establish the following requisites: obtained and a right of action on the injunction bond immediately
(1) a right in esse or a clear and unmistakable right to be protected; accrues. Thus, for the purpose of recovery upon the injunction
(2) a violation of that right; bond, the dissolution of the injunction because of petitioner's main
(3) that there is an urgent and permanent act and urgent necessity cause of action provides the actionable wrong for the purpose of
for the writ to prevent serious damage.[24]A preliminary injunction recovery upon the bond.We, therefore, agree with the petitioner
or temporary restraining order may be granted only when, among that indeed, malice or lack of good faith is not a condition sine qua
other things, the applicant, not explicitly exempted, iles with the non for liability to attach on the injunction bond.
court, where the action or proceeding is pending, a bond executed
to the party or person enjoined, in an amount to be ixed by the With respect to the issue raised by the petitioner regarding the
court, to the effect that the applicant will pay such party or person coverage of the injunction bond, this Court inds it necessary to
all damages which he may sustain by reason of the injunction or quote once again the provision of Section 4(b), Rule 58 of the 1997
temporary restraining order if the court should inally decide that Revised Rules of Civil Procedure, to wit:
the applicant was not entitled thereto. Upon approval of the Unless exempted by the court, the applicant iles with the court
requisite bond, a writ of preliminary injunction shall be issued.[25] where the action or proceeding is pending, a bond executed to the
Thus, the posting of a bond is a condition sine qua non for a writ of party or person enjoined, in an amount to be ixed by the court, to
preliminary injunction to be issued. the effect that the applicant will pay to such party or person all
damages which he may sustain by reason of the injunction or


temporary restraining order if the court should inally decide that In the case at bar, petitioner is claiming attorney's fees in the sum of
the applicant was not entitled thereto. Upon approval of the P74,375.00 it allegedly paid to defend itself in the main case for
requisite bond, a writ of preliminary injunction shall be issued.The certiorari, which it would not have spent had the private
aforesaid provision of law clearly provides that the injunction bond respondents not iled their nuisance Petition and secured a writ of
is answerable for all damages. The bond insures with all practicable preliminary injunction. Likewise, by reason of the unfounded suit,
certainty that the defendant may sustain no ultimate loss in the the good will of the petitioner was brought to bad light, hence,
event that the injunction could inally be dissolved.[32] damaged.[39] It is noteworthy to mention that the undertaking of
Consequently, the bond may obligate the bondsmen to account to the injunction bond is that it shall answer for all damages which the
the defendant in the injunction suit for all damages, or costs and party to be restrained may sustain by reason of the injunction if the
reasonable counsel's fees, incurred or sustained by the latter in case court should inally decide that the plaintiff was not entitled
it is determined that the injunction was wrongfully issued.[33] thereto. Apparently, as the appellate court pointed out in its
Likewise, the posting of a bond in connection with a preliminary Decision dated 16 September 2003, the damages being claimed by
injunction does not operate to relieve the party obtaining an the petitioner were not by reason of the injunction but the litigation
injunction from any and all responsibility for damages that the writ expenses it incurred in defending itself in the main case for
may thereby cause. It merely gives additional protection to the certiorari, which is de initely not within the coverage of the
party against whom the injunction is directed. It gives the latter a injunction bond. Thus, this Court is not convinced that the
right of recourse against either the applicant or his surety or against attorney's fees in the amount of P74,375.00 as well as the moral
both.[34] damages for the tarnished good will in the sum of P1,000,000.00
were suffered by the petitioner because of the issuance of the writ
The contention of the petitioner, thus, is tenable. Attorney's fees, of injunction.
litigation costs, and costs of delay can be recovered from the
injunction bond as long as it can be shown that said expenses were Furthermore, this Court will not delve into the suf iciency of
sustained by the party seeking recovery by reason of the writ of evidence as to the existence and amount of damages suffered by
preliminary injunction, which was later on determined as not to petitioner for it is already a question of fact. It is settled that the
have been validly issued and that the party who applied for the said factual indings of the trial court, particularly when af irmed by the
writ was not entitled thereto. The case of Aquino v. Socorro,[35] Court of Appeals, are binding on the Supreme Court.[40] Although
citing the case of Pacis v. Commission on Elections,[36] holds that this rule is subject to exceptions,[41] the present case does not fall
the dissolution of the injunction, even if the injunction was obtained into any of those exceptions which would have allowed this Court to
in good faith, amounts to a determination that the injunction was make its own determination of facts. This Court upholds the factual
wrongfully obtained and a right of action on the injunction bond indings of both the RTC and the Court of Appeals that there is
immediately accrues. It is also erroneous for the appellate court to insuf icient evidence to establish that petitioner actually suffered
rule that petitioner is not entitled to claim damages from the damages because of the preliminary injunction issued by the RTC.
injunction bond simply because the preliminary injunction was
directed against the MeTC and not against the petitioner. The MeTC Now, on the matter of proper certi ication on non-forum shopping.
does not stand to suffer damages from the injunction because it has
no interest or stake in the Petition pending before it. Damage or loss The requirement of a Certi ication on Non-Forum Shopping is
is suffered by the party whose right to pursue its case is suspended contained in Rule 7, Section 5, of the 1997 Revised Rules of Civil
or delayed, which in this case, is the petitioner. Upon issuance of the Procedure, which states that:
writ of injunction, it is the petitioner who will stand to suffer The plaintiff or principal party shall certify under oath in the
damages for the delay in the principal case because, had it not been complaint or other initiatory pleading asserting a claim for relief, or
for the injunction, the petitioner would not have incurred additional in a sworn certi ication annexed thereto and simultaneously iled
expenses for attending the separate hearings on the injunction, and therewith: (a) that he has not theretofore commenced any action or
the RTC can already decide the main case and make a prompt iled any claim involving the same issues in any court, tribunal or
determination of the respective rights of the parties therein. Hence, quasi-judicial agency and, to the best of his knowledge, no such
even if the preliminary injunction was directed against the MeTC other action or claim is pending therein; (b) if there is such other
and not against the petitioner, it is the latter which has the right to pending action or claim, a complete statement of the present status
recover from the injunction bond the damages which it might have thereof; and (c) if he should thereafter learn that the same or
suffered by reason of the said injunction. similar action or claim has been iled or is pending, he shall report
that fact within ive (5) days therefrom to the court wherein his
As to the second main issue in the present case, although we do aforesaid complaint or initiatory pleading has been iled.
recognize that the petitioner had a right to recover damages from
the injunction bond, however, we agree in the indings of the Court Failure to comply with the foregoing requirements shall not be
of Appeals, which af irmed the indings of the RTC, that the curable by mere amendment of the complaint or other initiatory
petitioner did not sustain any damage by reason of the issuance of pleading but shall be cause for the dismissal of the case without
the writ of injunction. In the petitioner's Motion for Judgment prejudice, unless otherwise provided, upon motion and after
Against the Bond,[37] petitioner stated therein, thus: hearing. The submission of a false certi ication or non-compliance
There can be no serious debate that the issuance of the Writ of with any of the undertakings therein shall constitute indirect
Preliminary injunction, all at the instance of [herein private contempt of court without prejudice to the corresponding
respondents], resulted in actual and pecuniary damages on the part administrative and criminal actions. If the acts of the party or his
of [herein petitioner] in the amount more than the value of the bond counsel clearly constitute willful and deliberate forum shopping, the
posted by [private respondents]. The attorney's fees for expenses in same shall be ground for summary dismissal with prejudice and
litigation alone expended by [petitioner] to defend itself in this shall constitute direct contempt, as well as a cause for
proceedings, not to mention other pecuniary damages, amounts to administrative sanctions.Private respondent Bishop Yalung might
P10,000.00.[38] have overlooked the Secretary's Certi icate[42] attached to the
petitioner's Petition for Review, which authorized Mr. Baterna,


President of herein petitioner LPI, to represent the latter in this Ynares-Santiago, (Chairperson), Austria-Martinez, Callejo, Sr., and
case. According to the Secretary's Certi icate, the Board of Directors Nachura, JJ., concur.
of petitioner LPI, at a special meeting held on 12 August 2004 at its
of ice at No. 812 J.P. Rizal St., Makati City, during which there was a Canlas vs Court of Appeals, G.R. No. 77691,
quorum, the following resolutions were approved, to wit:
RESOLVED, AS IT IS HEREBY RESOLVED, that the corporation August 08, 1988
247 Phil. 118
reiterates the authority of its President, Mr. Quirino B. Baterna, to
represent the corporation in all cases by and/or against the
SECOND DIVISION
corporation vis-à -vis the Roman Catholic Archbishop of
G.R. No. 77691, August 08, 1988
Manila/Crisostomo Yalung, Roy Villasor/Digital Netwrok (sic)
PATERNO R. CANLAS, PETITIONER, VS. HON. COURT OF APPEALS,
Communications and Computers, Inc., and/or MacGraphics Carranz
AND FRANCISCO HERRERA, RESPONDENTS.
International Corporation, to ile a Petition for Review on Certiorari
with the Supreme Court docketed as G.R. No. 164459 to
DECISION
assert/protect LPI's rights and interests in connection with C.A.-G.R.
SARMIENTO, J.:
No. 73463, entitled "Limitless Potentials, Inc., vs. Hon. Manuel
Victorio, et al.," Honorable Court of Appeals, Manila.
The case dramatizes the unpleasant spectacle of a lawyer tangling
with his own client, more often than not, in the matter of fees. The
RESOLVED FURTHERMORE, that any and all acts of our President,
lawyer, the petitioner himself, would have his petition decided on
concerning the above-referenced subject matter are hereby
pure questions of procedure, yet, the Court cannot let pass
af irmed, con irmed and rati ied by the corporation for all legal
unnoticed the murkier face of the controversy, wherein the law is
intents and purposes.[43]Private respondent Bishop Yalung further
corrupted to promote a lawyer's self-seeking ends, and the law
argued that Mr. Baterna failed to enumerate in the Certi ication
profession, debased into a simple business dealing. Accordingly, we
against Forum Shopping the multiple cases iled by him and the
resolve it on the basis not only of the questions raised by the
petitioner against private respondents. This is also erroneous.
petitioner pertaining to procedure, but considering its serious
ethical implications, on its merits as well.
Forum shopping consists of iling multiple suits involving the same
We turn to the facts.
parties for the same cause of action, either simultaneously or
The private respondent was the registered owner of eight (six,
successively, for the purpose of obtaining a favorable judgment.[44]
according to the petitioner) parcels of land located in Quezon
It exists where the elements of litis pendentia[45] are present or
City.[1] Between 1977 and 1978,[2] he obtained various loans from
where a inal judgment in one case will amount to res judicata in
the L & R Corporation, a inancing institution, in various sums
another.[46] It may be resorted to by a party against whom an
totaling P420,000.00. As security therefor, he executed deeds of
adverse judgment or order has been issued in one forum, in an
mortgage in favor of the corporation over the parcels aforesaid. On
attempt to seek a favorable opinion in another, other than by an
August 28, 1979, and upon the maturing of said loans, the irm
appeal or a special civil action for certiorari.[47]
caused an extrajudicial foreclosure of mortgage following his failure
to pay, as a consequence of which, the said eight (six, according to
As the RTC correctly found, there was no violation of the rule
the petitioner) parcels of land were disposed of at public auction,
against forum shopping. The cause of action in petitioner's case for
and in which L & R Corporation was itself the highest bidder.
consignation and damages docketed as Civil Case No. 95-1559,[48]
Pending redemption, the private respondent iled a complaint for
is different from the cause of action in its Third-Party Complaint in
injunction against L & R Corporation, to enjoin consolidation of title
Civil Case No. 55170. The damages sought in the irst case were
in its name, in which he succeeded in obtaining preliminary
those suffered by petitioner by reason of the alleged breach of the
injunctive relief. He was represented by the petitioner.
contract of lease by the RCAM; whereas the damages sought in the
Two years later, and with no imminent end to the litigation in sight,
Third-Party Complaint were those allegedly suffered by petitioner
the parties entered into a compromise agreement whereby L & R
owing to the destruction of its billboard by the private respondents,
Corporation accorded the private respondent another year to
thereby terminating the Billboard Advertisement Contract between
redeem the foreclosed properties subject to payment of
petitioner and Digital. Digital also sued petitioner for recovery of
P600,000.00, with interest thereon at one percent per month. They
the rental deposits it had already paid under the same contract.
likewise stipulated that the petitioner shall be entitled to attorney’s
Consequently, petitioner had to engage the services of counsel and
fees of P100,000.00. On November 19, 1982, the courts[3] approved
incurred litigation expenses in order to defend itself in the case iled
the compromise.
against it by Digital. Thus, the two actions are completely different
The private respondent, however, remained in dire inancial straits
and distinct from each other so much so that a decision in either
— a fact the petitioner himself concedes[4] — for which reason he
case could not be pleaded as res judicata in the other. Hence, there
failed to acquire the funding to repay the loans in question, let alone
is no forum shopping that would necessitate the outright dismissal
the sum of P100.000.00 in attorney's fees demanded by the
of this case.
petitioner. That notwithstanding, the petitioner moved for
execution insofar as his fees were concerned. The court granted
WHEREFORE, premises considered, the instant Petition is hereby
execution, although it does not appear that the sum was actually
DENIED. The Decision and Resolution of the Court of Appeals dated
collected.[5]
16 September 2003 and 8 July 2004, respectively, af irming the
Sometime thereafter, the petitioner and the private respondent met
Decision of the RTC dated 28 April 2000, denying herein petitioner's
to discuss relief for the latter with respect to his liability to L & R
motion to recover damages against the injunction bond, are hereby
Corporation on the one hand, and his Obligation to the petitioner on
AFFIRMED. Costs against petitioner.
the other. The petitioner contends that the private respondent
"earnestly implored"[6] him to redeem the said properties; the
SO ORDERED.
private respondent maintains that it Was the petitioner himself who
''offered to advance the money,"[7] provided that he, the private
respondent, executed a "transfer of mortgage”[8] over the


properties in his favor. Who implored whom is a bone of contention, petitioner himself had acquired an interest in the properties subject
but as we shall see shortly, we are inclined to agree with the private of reconveyance based on the compromise agreement approved by
respondent’s version, considering primarily the petitioner’s moral Judge Castro in the injunction case, pursuant to Section 29(b), of
ascendancy over his client and the private respondent’s increasing Rule 39. of the Rules of Court, that had, consequently, made him a
desperation. judgment creditor in his own right; thirdly, that the private
The records further show that the parties, pursuant to their respondent had lost all rights over the same arising from his failure
agreement, executed a “Deed of Sale and Transfer of Rights of to redeem them from L & R Corporation within the extended period;
Redemption and/or to Redeem,” a document that enabled the and inally, that the petitioner cannot be said to have violated the
petitioner, irst, to redeem the parcels in question, and secondly, to ban against sales of properties in custodia legis to lawyers by their
register the same in his name. The private respondent alleges that clients pendente lite, since the sale in question took place after
he subsequently iled loan applications with the Family Savings judgment in the injunction case abovesaid had attained inality. The
Bank to inance a wet market project upon the subject premises, to complaint was consequently dismissed, a dismissal that eventually
ind, according to him, and to his dismay, the properties already attained a character of inality.
registered in the name of the petitioner. He likewise contends that Undaunted, the private respondent, on December 6, 1985 iled a
the “Deed of Sale and Transfer of Rights of Redemption and/or to suit for "Annulment Of Judgment"[18] in the respondent Court of
Redeem” on ile with the Register of Deeds (Quezon City) had been Appeals,[19] praying that the orders of Judge Castro: (1) granting
falsi ied as follows: execution over the portion of the compromise agreement obliging
the private respondent to pay the petitioner P100,000.00 as
WHEREFORE, for and in full settlement of the attorney's fees of attorney’s fees; (2) denying the private respondent’s prayer for a
TRANSFEREE in the amount of ONE HUNDRED THOUSAND PESOS restraining order directed against the execution; and (3) denying
(P100,000.00). I, FRANCISCO HERRERA, hereby transfer, assign and the motion to recall writ of possession, all be set aside.
convey unto TRANSFEREE. Atty. Paterno R. Canlas, any and all my The petitioner iled a comment on the petition, but followed it up
rights of the real properties and/or to redeem from the Mortgagee, with a motion to dismiss. On December 8, 1986, the respondent
L & R Corporation my mortgaged properties foreclosed and sold at Court of Appeals promulgated the irst of its challenged resolutions,
public auction by the Sheriff of Quezon City and subject matter of denying the motion to dismiss. On March 3, 1987, the Appellate
the above Compromise Agreement in Civil Case No. Q-30679 . . . . Court denied reconsideration.[20]
.[9] Hence, the instant petition.
whereas it originally read: As we stated, the petitioner assails these twin resolutions on
grounds of improper procedure. Speci ically, he assigns the
WHEREFORE, for and in full settlement of the attorney's fees of following errors:
TRANSFEREE in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00). I, FRANCISCO HERRERA, hereby transfer, assign and I.
convey unto TRANSFEREE. Atty. Paterno R. Canlas, any and all my
rights of equity of redemption and/or to redeem from the THE RESPONDENT COURT GRAVELY ABUSE (sic) ITS DISCRETION
Mortgagee, L & R Corporation my mortgaged properties foreclosed IN NOT DISMISSING AC G.R. NO. 07860 ON THE GROUND THAT IT
and sold at public auction by the Sheriff of Quezon City and subject IS IN REALITY A PETITION FOR CERTIORARI FILED OUT OF TIME
matter at the above Compromise Agreement in Civil Case No. AND SHOULD NOT BE GIVEN DUE COURSE.
Q-30679 . . . . [10]
As a consequence, the private respondent caused the annotation of II.
an adverse claim upon the respective certi icates of title embracing
the properties. Upon learning of the same, the petitioner moved for THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION
the cancellation of the adverse claim and for the issuance of a writ IN NOT DISMISSING AC G.R. NO. 07860 ON THE GROUND OF RES
of possession. The court granted both motions. The private JUDICATA.
respondent countered with a motion for a temporary restraining
order and later, a motion to recall the writ of possession. He III.
likewise alleges that he commenced disbarment proceedings before
this Court against the petitioner[11] as well as various criminal THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION
complaints for estafa, falsi ication, and “betrayal of trust”[12] with IN NOT CONSIDERING AC G.R. 07860 AS MOOT AND ACADEMIC
the Department of Justice. On December 1, 1983, inally, he SINCE PETITIONER HAD DISPOSED OF THE SUBJECT PROPERTIES
instituted an action for reconveyance and reformation of LONG BEFORE THE FILING OF THIS SUIT.
document,[13] praying that the certi icates of title issued in the
name of the petitioner be cancelled and that “the Deed of Sale and IV.
Transfer of Rights of Equity of Redemption and/or Redeem dated
May 3, 1983 . . . be reformed to re lect the true agreement of THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION IN
Francisco Herrera and Paterno R. Canlas, of a mortgage.”[14] He DENYING PETITIONER’S MOTION TO DISMISS SOLELY ON THE
vehemently maintains that the petitioner’s agreement with [him] GROUND THAT THE ARGUMENT RAISED THEREIN ARE BUT
was that the latter would lend the money to the former for a year, so REHASH OF THE ARGUMENTS IN HIS COMMENT TO THE
that [petitioner] would have time to look for a loan for the wet PETITION.[21]
market which [the petitioner] intended to put up on said The petitioner argues that the petition pending with the respondent
property.”[15] Predictably, the petitioner moved for dismissal. court "is actually a petition for certiorari,"[22] disguised as a
The trial court, however, denied the private respondent’s petition. It pleading for annulment of judgment and that in such a case, it faces
held that the alteration complained of did not change the meaning alleged legal impediments (1) It had been iled out of time, allegedly
of the contract since it was “well within [the petitioner’s] two years from the issuance of the assailed orders, and (2) It was
rights”[16] “to protect and insure his interest of P654,000.00 which not preceded by a motion for reconsideration. He adds that
is the redemption price he has paid”;[17] secondly, that the assuming annulment of judgment were proper, no judgment


allegedly exists for annulment, the aforesaid two orders being in the The lengths the private respondent, Francisco Herrera, would go to
nature of interlocutory issuances. in a last-ditch bid to hold on to his lands amid constraints of
On purely technical grounds, the petitioner's arguments are economic privation have not been lost on us. It is obvious that he is
impressive. Annulment of judgment, we have had occasion to rule, uneasy about the judgment on compromise itself, as well as the
rests on a single ground: extrinsic fraud. What "extrinsic fraud" subsequent contract between him and his lawyer. In such a case,
means is explained in Macabingkil v. People's Homesite and Housing Article 2038 of the Civil Code applies:
Corporation:[23]
Art. 2038. A compromise in which there is mistake, fraud, violence,
.... intimidation, undue in luence, or falsity of documents, is subject to
the provisions of article 1330 of this Code . . .
It is only extrinsic or collateral fraud, as distinguished from intrinsic in relation to Article 1330 thereof:
fraud, however, that can serve as a basis for the annulment of
judgment. Fraud has been regarded as extrinsic or collateral, within Art. 1330. A contract where consent is given through mistake,
the meaning of the rule, "where it is one the effect of which prevents violence, intimidation, undue in luence, or fraud is voidable.
a party from having a trial, or real contest, or from presenting all of in relation to its provisions on avoidance of contracts.[30] The Court
his case to the court, or where it operates upon matters pertaining, notes that he had for this purpose, gone to the Regional Trial Court,
not to the judgment itself, but to the manner in which it was a vain effort as we stated, and in which the decision had become
procured so that there is not a fair submission of the controversy." inal.
In other words, extrinsic fraud refers to any fraudulent act of the We, however, sustain Atty. Canlas' position — on matters of
prevailing party in the litigation which is committed outside of the procedure — for the enlightenment solely of the bench and the bar.
trial of the case, whereby the defeated party has been prevented It does not mean that we ind merit in his petition. As we have
from exhibiting fully his side of the case, by fraud or deception intimated, we cannot overlook the unseemlier side of the
practiced on him by his opponent.[24] proceeding, in which a member of the bar would exploit his mastery
A perusal of the petition of therein private respondent Herrera of procedural law to score a "technical knockout" over his own
pending before the respondent Court reveals no cause of action for client, of all people. Procedural rules, after all, have for their object
annulment of judgment. In the irst place, and as herein petitioner assistance unto parties "in obtaining just, speedy, and inexpensive
Canlas correctly points out, the judgment itself is not assailed, but determination of every action and proceeding."[31] If procedure
rather, the orders merely implementing it. Secondly, there is no were to be an impediment to such an objective, "it deserts its proper
showing that extrinsic fraud, as Makabingkil de ines it, indeed of ice as an aid to justice and becomes its great hindrance and chief
vitiated the proceedings presided over by Judge Castro. On the enemy."[32] It was almost eight decades ago that the Court held:
contrary, Herrera’s petition in the respondent court will show that
he was privy to the incidents he complains of, and in fact, had . . . A litigation is not a game of technicalities in which one, more
entered timely oppositions and motions to defeat Atty. Canlas’ claim deeply schooled and skilled in the subtle art of movement and
under the compromise agreement. position, entraps and destroys the other. It is, rather, a contest in
What he objects to his suspected collusion between Atty. Canlas and which each contending party fully and fairly lays before the court
His Honor to expedite the former’s collection of his fee. He alleges the facts in issue and then, brushing aside as wholly trivial and
that his counsel had deliberately, and with malevolent designs, indecisive all imperfections of form and technicalities of procedure,
postponed execution to force him (Herrera) to agree to sell the asks that justice be done upon the merits. Lawsuits, unlike duels,
properties in controversy to him (Atty. Canlas) subject to are not to be won by the rapier’s thrust . . .[33]
redemption. (“. . . [I]t was understandable that respondent Atty. It is a ruling that almost eight decades after it was rendered, holds
Paterno R. Canlas did not implement the writ of execution, instead true as ever.
he contacted petitioner in order that petitioner would sign the By Atty. Canlas’ own account, “due to lack of paying capacity of
questioned documents. This was the clincher of the plan of respondent Herrera, no inancing entity was willing to extend him
respondent Atty. Paterno R. Canlas to divest petitioner of his any loan with which to pay the redemption price of his mortgaged
properties. For this purpose, it is obvious that respondent Atty. properties and petitioner’s P100,000.00 attorney’s fees awarded in
Paterno R. Canlas had to conspire with the respondent court judge the Compromise Judgment,”[34] a development that should have
to achieve his plan."[25]) Aside from being plain speculation, it is no tempered his demand for his fees. For obvious reasons, he placed
argument to justify annulment. Clearly, it does not amount to his interest over and above those of his client, in opposition to his
extrinsic fraud as the term is de ined in law. oath to “conduct [him]self as a lawyer . . . with all good idelity. . .to
Neither is it proper for the extraordinary remedy of certiorari. [his] clients.”[35] The Court inds the occasion it to stress that
Certiorari presupposes the absence of an appeal[26] and while lawyering is not a money-making venture and lawyers are not
there is no appeal from execution of judgment, appeal lies in case of merchants, a fundamental standard that has, as a matter of judicial
irregular implementation of the writ.[27] In the case at bar, there is notice, eluded not a few law advocates. The petitioner’s efforts
no irregular execution to speak of. As a rule, "irregular execution" partaking of a “shakedown” of his own client are not becoming of a
means the failure of the writ to conform to the decree of the lawyer and certainly, do not speak well of his fealty to his oath to
decision executed.[28] in the instant case, respondent Herrera's “delay no man for money.”[36]
charges, to wit, that Judge Castro had erred in denying his motions It is true that lawyers are entitled to make a living, in spite of the
for temporary restraining order and to recall writ of possession, or fact that the practice of law is not a commercial enterprise; but that
that His Honor had acted hastily (" . . . that respondent court/judge does not furnish an excuse for plain lust for material wealth, more
took only one [1] day to resolve petitioner's motion for issuance of so at the expense of another. Law advocacy, we reiterate, is not
[a] [restraining] order, . . ."[29]) in denying his twofold motions, do capital that yields pro its. The returns it births are simple rewards
not make out a case for irregular execution. The orders impugned for a job done or service rendered. It is a calling that, unlike
are conformable to the letter of the judgment approving the parties' mercantile pursuits which enjoy a greater deal of freedom from
compromise agreement. government interference, is impressed with a public interest, for


which it is subject to State regulation.[37] Anent attorney’s fees, himself admits that "[t]itles to the properties have been issued to
section 24, of Rule 138, of the Rules, provides in part as follows: the new owners long before the iling of private respondents [sic]
petition for annulment."[41] To say that he did not pro it therefrom
SEC. 24. Compensation of attorneys, agreement as to fees. — An is to take either this Court or the petitioner for naive, a proposition
attorney shall be entitled to have and recover from his client no this Court is not prepared to accept under the circumstances.
more than a reasonable compensation for his services, with a view We are likewise convinced that it was the petitioner who succeeded
to the importance of the subject matter of the controversy, the in having the private respondent sign the "Deed of Sale and Transfer
extent of the services rendered, and the professional standing of the of Rights of Equity of Redemption and/or to Redeem," a
attorney ... A written contract for services shall control the amount pre-prepared document apparently, that allowed him (the
to be paid therefor unless found by the court to be unconscionable petitioner) to exercise the right of redemption over the properties
or unreasonable. and to all .intents and purposes acquire ownership thereof. As we
So also it is decreed by Article 2208 of the Civil Code, reproduced in have earlier averred, the private respondent, by reason of
part, as follows: bankruptcy, had become an easy quarry to his counsel's moral
in luence and ascendancy. We are hard put to believe that it was the
Art. 2208. . . private respondent who "earnestly implored"[42] him to undertake
the redemption amid the former's obstinate attempts to keep his
In all cases, the attorney's fees and expenses of litigation must be lands that have indeed led to the multiple suits the petitioner now
reasonable. complains of, apart from the fact that the latter himself had
We do not ind the petitioner's claim of attorney's fees in the sum of something to gain from the transaction, as alluded to above. We are
P100,000.00 reasonable. We do not believe that it satis ies the of the opinion that in ceding his right of redemption, the private
standards set forth by the Rules. The extent of the services he had respondent had intended merely to forestall the total loss of the
rendered in Civil Case No. 30679, and as far as the records will yield, parcels to the mortgagee upon the understanding that his counsel
is not impressive to justify payment of such a gargantuan amount. shall acquire the same and keep them therefore within reach,
The case itself moreover did not involve complex questions of fact subject to redemption by his client under easier terms and
or law that would have required substantial effort as to research or conditions. Surely, the petitioner himself would maintain that he
leg work for the petitioner to warrant his demands. The fact that the agreed to make the redemption "in order that [he] may already be
properties subject thereof commanded quite handsome prices in paid the P100,000.00 attorney's fees awarded him in the
the market should not be a measure of the importance or Compromise Agreement,"[43] and if his sole concern was his fees,
non-importance of the case. We are not likewise persuaded that the there was no point in keeping the properties in their entirety.
petitioner’s stature warrants the sum claimed. The Court simply cannot fall for the petitioner's pretensions that he
All things considered, we reduce the petitioner’s fees, on a quantum acquired the properties as a gesture of magnanimity and altruism.
meruit basis, to P20,000.00. He denies, of course, having made money from it, but what he
It is futile to invoke the rule granting attorneys a lien upon the cannot dispute is the fact that he did resell the properties.[44]
things won in litigation similar to that vested upon But if he did not entertain intents of making any pro it, why was it
redemptioners.[38] To begin with, the rule refers to reality sold as a necessary to reword the conveyance document executed by the
result of execution in satisfaction of judgment. In this case, however, private respondent? It shall be recalled that the deed, as originally
redemption was decreed by agreement (on compromise) between drafted, provided for conveyance of the private respondent's "rights
the mortgagor and mortgagee. It did not give the petitioner any of equity of redemption and/or redeem"[45] the properties in his
right to the properties themselves, much less the right of favor, whereas the instrument registered with the Register of Deeds
redemption, although provisions for his compensation were purported to transfer "any and all my rights of the real properties
purportedly provided. It did not make him a redemptioner for the and/or to redeem,"[46] in his favor. He admits having entered the
plain reason that he was not named one in the amicable settlement. intercalations in question but argues that he did so “to facilitate the
To this extent, we reverse Judge Pedro Santiago’s ruling in Civil Case registration of the questioned deed with the Register of Deeds,”[47]
No. 40066, recognizing Atty. Canlas’ “legal right, independent of the and that it did not change the meaning of the paper, for which Judge
questioned deed of sale and transfer which was executed Santiago acquitted of any falsi ication charges.[48] To start with, the
subsequently on May 3, 1983, to redeem the subject realty from the Court is at less how such an alteration could “facilitate” registration.
L & R Corporation pursuant to Sec. 29(b), Rule 39 of the Rules of Moreover, if it did not change the tenor of the deed, why was it
Court."[39] Whatever right he had, it was, arguably, with respect necessary then? And why did he not inform his client? At any rate,
alone to his remuneration. It did not extend to the lands. the agreement is clearly a contract of adhesion. Its provisions
Secondly, and assuming that such a right exists, it must be in should be read against the party who prepared it.
proportion to the "just fees and disbursements"[40] due him. It is But while we cannot hold the petitioner liable for falsi ication – this
still subject to the tempering hand of this Court. ' is not the proper occasion for it – we condemn him nonetheless for
The Court notes a hidden agenda in the petitioner's haste to execute in idelity to his oath “to do no falsehood.”[49]
the compromise agreement and subsequently, to force the transfer This brings us to the inal question: Whether or not the conveyance
of the properties to himself. As we have observed, in spite of the in favor of the petitioner is subject to the ban on acquisition by
issuance of the writ of execution, it does not appear that the attorneys of things in litigation. The pertinent provisions of the civil
petitioner took pains to implement it. We ind this perplexing, given Code state as follows:
his passionate end persistent pleas that he was entitled to the
proceeds. There can indeed be no plausible explanation other than Art. 1491. The following persons cannot acquire by purchase,
to enable him to keep an "ace" against the private respondent that even at a public or judicial action, either in person or through the
led; inally, to the conveyance of the; properties in his favor. To be mediation of another:
sure, he would have us believe that by redeeming the same from the
mortgagee and by in fact parting with his own money he had (1) The guardian, the property of the person or persons who may
actually done the private respondent a favor, but this is to assume be under his guardianship;
that he did not get anything out of the transaction. Indeed, he


(2) Agents, the property whose administration or sale may have petitioner, Atty. Paterno Canlas, must be held liable, by way of actual
been intrusted to them, unless the consent of the-principal have damages, for such a loss of properties.
been given; We are not, however, condoning the private respondent's own
shortcomings. In condemning Atty. Canlas monetarily, we cannot
(3) Executors and administrators, the property of the estate overlook the fact that the private respondent has not settled his
under administration; liability for payment of the properties. To hold Atty. Canlas alone
liable for damages is to enrich said respondent at the expense of his
(4) Public of icers and employees, the property of the State or of lawyer. The parties must then set off their obligations against the
any subdivision thereof, or of any government owned or controlled other. To obviate debate as the actual amounts owing by one to the
corporation, or institution, the administration of which has been other, we hold Francisco Herrera, the private respondent, liable to
intrusted to them; this provision shall apply to judges and Atty. Paterno Canlas, the petitioner, in the sum of P654,000.00
government experts who, in any manner whatsoever, take part in representing the redemption price of the properties,[55] in addition
the sale; to the sum of P20,000.00 as and attorney’s fees. We order Atty.
Canlas, in turn, to pay the respondent Herrera the amount of
(5) Justice, judges, prosecuting attorneys, clerks of superior and P1,000,000.00, the sum he earned from the resale thereof,[56] such
inferior courts, and other of icers and employees connected with that he shall, after proper adjustments, be indebted to his client in
the administration of justice, the property and rights in litigation or the sum of P326,000.00 as and for damages.
levied upon an execution before the court within whose jurisdiction Needless to say, we sustain the action of the respondent Court of
or territory they exercise their respective functions; this prohibition Appeals in taking cognizance of the petition below. But as we have
includes the act of acquiring by assignment and shall apply to stated, we are compelled, as the inal arbiter of justiciable cases and
lawyers, with respect to the property and rights which may be the in the highest interests of justice, to write inis to the controversy
object of any litigation in which they may take part by virtue of their that has taxed considerably the dockets of the inferior courts.
profession. Let the Court further say that while its business is to settle actual
controversies and as a matter of general policy, to leave alone moot
(6) Any others specially disquali ied by law.* ones, its mission is, irst and foremost, to dispense justice. At the
In Rubias v. Batiller,[50] we declared such contracts to be void by outset, we have made clear that from a technical vantage point,
force of Article 1409, paragraph (7), of the Civil Code, de ining certiorari, arguably, lies, but as we have likewise stated, the
inexistent contracts. In Director of Lands v. Ababa[51], however, we resolution of the case rests not only on the mandate of technical
said that the prohibition does not apply to contingent contracts, in rules, but if the decision is to have my real meaning, on the merits
which the conveyance takes place after judgment, so that the too. This is not the irst time we would have done so; in many cases,
property can no longer be said to be “subject of litigation”. we have eschewed the rigidity of the Rules of Court if it would
In the instant case, the Court observes that the “Deed of Sale and establish a barrier upon the administration of justice. It is especially
Transfer of Rights of Equity of Redemption and/or to Redeem” was so in the case at bar, in which no end to suit and counter-suit
executed following the inality of the decision approving the appears imminent, and for which it is high time that we have the
compromise agreement. It is actually a new contract – not one in inal say. We likewise cannot, as he overseer of good conduct in both
pursuance of what had been agreed upon on compromise -- in the bench and the bar, let go unpunished what convinces us as
which, as we said, the petitioner purportedly assumed redemption serious indiscretions on the part of a lawyer.
rights over the disputed properties (but in reality, acquired absolute WHEREFORE, judgment is hereby rendered:
ownership thereof). By virtue of such a subsequent agreement, the
lands had ceased to be properties which are “the object of any 1. ORDERING the petitioner, Atty. Paterno Canlas, to pay to the
litigation.” Parenthetically, the Court states that a writ of possession private respondent, Francisco Herrera, the sum of P326,000.00, as
is improper to eject another from possession unless sought in and for damages;
connection with: (1) a land registration proceeding; (2) an
extrajudicial foreclosure of mortgage of real property; (3) in a 2. ORDERING the petitioner to SHOW CAUSE why no disciplinary
judicial foreclosure of property provided that the mortgagor has action may be imposed on him for violation of his oath, as a lawyer,
possession and no third party has intervened; and (4) in execution within ten (10) days from notice, after which the same will be
sales.[52] It is noteworthy that in this case, the petitioner moved for consolidated with AC No. 2625;
the issuance of the writ pursuant to the deed of sale between him
and the private respondent and not the judgment on compromise. 3. DISMISSING this petition and REMANDING the case to the
(He was, as we said, issued a writ of execution on the compromise respondent Court of Appeals for execution; and
agreement but as we likewise observed, he did not have the same
enforced. The sale agreement between the parties, it should be 4. ORDERING the petitioner to pay costs.
noted, superseded the compromise.) The writ does not lie in such a SO ORDERED.
case. His remedy is speci ic performance. Melencio-Herrera, (Chairman) and Medialdea**, JJ., concur.
At any rate, the transfer, so we hold, is not subject to the injunction Paras and Padilla, JJ., no part due to past personal relations with
of Article 1491 of the Civil Code. But like all voidable contracts, it is petitioner.
open to annulment on the ground of mistake, fraud, or undue
in luence,[53] which is in turn subject to the rights of innocent Vencilao vs Vano, G.R. No. L-25660,
purchasers for value.[54]
For this reason, we invalidate the transfer in question speci ically February 23, 1990
261 Phil. 613
for undue in luence as earlier detailed. While the respondent
Herrera has not speci ically prayed for invalidation, this is the clear
FIRST DIVISION
tenor of his petition for annulment in the Appellate Court. It
G.R. No. L-25660, February 23, 1990
appearing, however, that the properties have been conveyed to third
LEOPOLDO VENCILAO, MAURO RENOBLAS, TELESFORO
persons whom we presume to be innocent purchasers for value, the
BALONDIA, FELIX ABANDULA, FAUSTO GABAISEN, ISIDORO


ELIVERA, RAYMUNDO BONGATO, MARTIN ROLLON, EUSTAQUIO On February 15, 1988, We resolved to require the parties to
MEDANA, OROTEO ELIVERA, FRANCISCO PAGAURA, MACARIO manifest whether or not they are still interested in prosecuting
GEPALAGO, GREGORIO ITAOC, ALEJANDRO RENOBLAS, SIMEON these cases, or supervening events have transpired which render
BARBARONA, GREGORIO RENOBLAS, FRANCISCO ASOY, TEOFILA these cases moot and academic or otherwise substantially affect the
GUJELING, FABIAN VILLAME, VICENTE OMUSORA, PEDRO same. On March 25, 1988, the petitioners iled an exparte
BALORIA, GREGORIO ITAOC, TERESITA ITAOC, FAUSTINO ITAOC, manifestation that they are still very much interested in the just
FORTUNATO ITAOC, FLORENTINA GEMENTIZA, RESTITUTA prosecution of these cases.
OMUSORA, ZOILA OMUSORA, FELISA OMUSORA, ROBERTO The antecedent facts are as follows:
HAGANAS, FELISA HAGANAS, FERMIN HAGANAS, VICTORIANO G.R. No. L-25660
HAGANAS, JULIA SEVILLA, ROMAN MATELA, MARCELA MATELA, On April 1, 1950, the heirs of the late Juan Reyes iled an application
DELFIN MATELA, PELAGIO MATELA, ROBERTA MATELA, PROCOPIO for registration of the parcels of land allegedly inherited by them
CABANAS AND SERAFINA CABANAS, PLAINTIFFS-APPELLANTS, VS. from Juan Reyes, in Land Registration Case No. 76, L.R.C. Record No.
TEODORO VANO, JOSE REYES, ROSARIO REYES, SALUD OGILVE N-4251. On July 26, 1951, administratrix Bernardina Vda. de Luspo
BELTRAN, AMALIA R. OGILVE, FLORA VDA. DE COROMINAS, JESUSA iled an amended application for registration. After hearing, the
REYES, LOURDES COROMINAS MUNOZ, JUAN COROMINAS, land was registered under Original Certi icate of Title No. 400 (pp.
LOURDES C. SAMSON CEBALLOS, SOLEDAD C. SAMSON RAMA, 84-85, Record on Appeal; p. 7, Rollo).
DOLORES V. GARCES FALCON, JAIME GARCES, JOAQUIN REYES, AND On October 9, 1962, a complaint for reconveyance of real properties
PEDRO RE. R. LUSPO, DEFENDANTS-APPELLEES. with damages and preliminary injunction, Civil Case No. 1533, (pp.
2-19, Record on Appeal; p. 7, Rollo) was iled by
[G.R. NO. L-32065. FEBRUARY 23, 1990] plaintiffs-appellants before the Court of First Instance of Bohol. It
was alleged that they are the lawful owners of their respective
LEOPOLDO VENCILAO, SOFRONIO ROLLON, AURELIO ELIVERA, parcels of land including the improvements thereon either by
FRANCISCO PAGAORA, MARTIN ROLLON, GRACIANO MAHINAY, purchase or inheritance and have been in possession publicly,
GERARDO ELIVERA, GREGORIO ITAOC, ISIDRO ELIVERA, continuously, peacefully and adversely under the concept of owners
DEMOCRITO ELIVERA, FAUSTO GABAISIN, ALBINO RENOBLAS, for more than thirty (30) years tacked with the possession of their
EUSTAQUIO MENDANIA, SIMEON BARBARONA, TELESFORO predecessors-in-interest. However, those parcels of land were
BALONDA, FELIX ABANDOLA, SATURNINA GEPILAGO, TEOFILA included in the parcels of land applied for registration by the heirs
GOHILING, TOMAS REAMBONANSA, MARCOS HAGANAS, PASTOR of Juan Reyes, either by mistake or fraud and with the intention of
ASNA AND MAURO RENOBLAS, PETITIONERS, VS. HONORABLE depriving them of their rights of ownership and possession without
PAULINO S. MARQUEZ, JUDGE, COURT OF FIRST INSTANCE OF their knowledge, not until the last part of 1960 when the
BOHOL, BRANCH 1, AND MARIANO OGILVE, ET. AL., defendants-appellees, through their agents, attempted to enter
RESPONDENTS. those parcels of land claiming that they now belong to the heirs of
Juan Reyes. To the complaint, the defendants-appellees moved to
[G.R. NO. L-33677. FEBRUARY 23, 1990] dismiss on two grounds (pp. 19-22, Record on Appeal; p. 7, Rollo),
namely: (1) for lack of cause of action and (2) the cause of action is
LEOPOLDO VENCILAO, SOFRONIO ROLLON, AURELIO ELIVERA, barred by prior judgment.
FRANCISCO PAGAORA, MARTIN ROLLON, GRACIANO MAHINAY, On July 20, 1963, the court a quo issued an order denying
GERARDO ELIVERA, GREGORIO ITAOC, ISIDRO ELIVERA, defendants-appellees' motion to dismiss (pp. 29-30, Record on
DEMOCRITO ELIVERA, FAUSTO GABAISIN, ALBINO RENOBLAS, Appeal; p. 7, Rollo). However, acting on the motion to set aside such
EUSTAQUIO MENDANIA, SIMEON BARBARONA, TELESFORO order (pp. 31-32, Record on Appeal; p. 7, Rollo), on May 12, 1964,
BALONDA, FELIX ABANDOLA, SATURNINA GEPILAGO, TEOFILA the same court issued another order reversing itself partially (p. 56,
GOHILING, TOMAS REAMBONANSA, MARCOS HAGANAS, PASTOR Record on Appeal; p. 7, Rollo), the dispositive portion of which
ASNA AND MAURO RENOBLAS, PETITIONERS, VS. HONORABLE reads:
PAULINO S. MARQUEZ, JUDGE, COURT OF FIRST INSTANCE OF "WHEREFORE, the cases herein of the plaintiffs Alejandro Renoblas,
BOHOL, BRANCH 1, THE PROVINCIAL SHERIFF, PROVINCE OF Fausto Cabaisan, Fabian Villame, Gregorio Ita-oc, Faustino Ita-oc,
BOHOL, AND MARIANO OGILVE, ET. AL., RESPONDENTS. Fortunato Ita-oc, Roberto Haganas, Felisa Haganas, Fermin Haganas,
Victoriano Haganas, Julia Sevilla, Ramon Matela, Roberto Matela,
DECISION Procopio Cabañ as and Vicente Amosora are hereby dismissed on
MEDIALDEA, J.: the ground of res-adjudicata with these plaintiffs paying
proportionately eighteenth-forty-one (18/41) of the costs, but the
On February 7, 1974, We resolved to allow the consolidation of petition to dismiss the case of the rest of the plaintiffs is hereby
these three cases, considering that they involve the same parties denied.
and parcels of land: (1) G.R. No. L-25660 — this is an appeal from "SO ORDERED."
the order of the Court of First Instance of Bohol (now Regional Trial On May 28, 1964, the plaintiffs-appellants whose cases were
Court)[1] dated May 12, 1964 dismissing the cases of some of the dismissed iled a motion for reconsideration (pp. 57-68, Record on
plaintiffs-appellants and its order dated August 25, 1965 denying Appeal; p. 7, Rollo). On July 24, 1964, the plaintiffs-appellants
the motion for reconsideration and the motion to declare the whose cases were not dismissed iled a motion to declare the
defendants-appellees in default; (2) G.R. No. L-32065 — this is a defendants-appellees in default for failure to ile their answer
petition for certiorari of the order of the Court of First Instance of within the time prescribed by law (pp. 68-75, Record on Appeal; p.
Bohol[2] dated May 14, 1970 directing the execution of its prior 7, Rollo). On the other hand, defendants?appellees iled their
order dated May 6, 1969 inding petitioners guilty of contempt; (3) opposition to the motion for reconsideration praying that the
G.R. No. L-33677 — this is a petition for certiorari with mandamus complaint as regards the rest of the plaintiffs-appellants be likewise
and prohibition of the order of the Court of First Instance of Bohol dismissed (pp. 75-80, Record on Appeal; p. 7, Rollo).
dated June 2, 1971 directing the demolition of the houses of the
petitioners.


On August 25, 1965, the court a quo issued an order in connection those in privity with them in law or estate (Sy Kao vs. Court of
therewith (pp. 82-98, Record on Appeal; p. 7, Rollo) denying all Appeals, G.R. No. 61752, Sept. 28, 1984, 132 SCRA 302). The
motions. doctrine of res judicata is an old axiom of law, dictated by wisdom
The case is now before Us with the following as assignment of and sancti ied by age, and is founded on the broad principle that it
errors (p. 3, Brief for the Plaintiffs-Appellants; p. 9, Rollo), to wit: is to the interest of the public that there should be an end to
"I litigation by the same parties and their privies over a subject once
"THE TRIAL COURT ERRED IN DISMISSING THE CASES OF THE fully and fairly adjudicated. Interest republicae ut sit inis litium
PLAINTIFFS-APPELLANTS WHOSE NAMES ARE ALREADY (Carandang vs. Venturanza, G.R. No. L-41940, Nov. 21, 1984, 133
MENTIONED ABOVE ON THE ALLEGED GROUND THAT THEIR SCRA 344). To ignore the principle of res judicata would be to open
CASES ARE BARRED BY A PRIOR JUDGMENT OF RES ADJUDICATA. the door to endless litigations by continuous determination of
"II issues without end (Catholic Vicar Apostolic of the Mountain
"THE TRIAL COURT ERRED IN DENYING THE MOTION OF THE Province vs. Court of Appeals, et al., G.R. Nos. 80294-95, Sept. 21,
PLAINTIFFS-APPELLANTS WHOSE CASES ARE NOT DISMISSED TO 1988, 165 SCRA 515).
DECLARE THE DEFENDANTS-APPELLEES IN DEFAULT FOR Thus, when a person is a party to a registration proceeding or when
HAVING FAILED TO FILE THEIR ANSWER WITHIN THE TIME noti ied he does not want to participate and only after the property
PRESCRIBED BY LAW." has been adjudicated to another and the corresponding title has
On August 12, 1966, a resolution was issued by this Court been issued iles an action for reconveyance, to give due course to
dismissing the appeal as regards the second issue because the order the action is to nullify registration proceedings and defeat the
appealed from was merely interlocutory, hence, not appealable (pp. purpose of the law.
35-38, Rollo). In dismissing the cases of some of the petitioners, the court a quo
On August 17, 1988, petitioners Alex Abandula, Mauro Renoblas, meticulously discussed the presence of all the elements of res
Simeon Barbarona, Fabian Villame, Macario Gepalago, Eustaguio judicata (pp. 36-38; pp. 42-54, Record on Appeal; p. 7, Rollo):
Medana, Julia Sevilla, Gregorio Itaoc, Francisco Asoy and Martin "There is no question that in that Registration Proceedings, LRC
Rollon iled a motion to withdraw their appeal on the ground that Record No. N-4251, Land Registration Case No. N-76, the Court of
they are now the absolute owners and possessors of their First Instance of the province of Bohol had jurisdiction of the
respective parcels of land subject of Civil Case No. 1533. subject matter, that said court had rendered a judgment on the
The appeal is not impressed with merit. merit that was terminated in the Court of Appeals since December,
The plaintiffs-appellants claim that no evidence was presented by 1958, and that decision is now inal with a decree of registration
the defendants-appellees that they (plaintiffs-appellants) were over the parcels of land described in the application issued to the
noti ied of the date of the trial on the merits of the application for applicants.
registration nor were they given copies of the decision of the trial "The subject matter (the parcels of land) now claimed by the
court. Likewise, they contend that res judicata is not applicable in plaintiffs in this case at bar are the same, or at least part of the
an action for reconveyance. parcels already adjudicated registration in that registration case to
The allegations that no evidence was presented by the the persons, some of them are made defendants in this case before
defendants-appellees that plaintiffs-appellants were noti ied of the us. The cause of action between the two cases are the same,
date of the trial on the merits of the application for registration nor ownership of these parcels of land, though the forms of action are
were they given copies of the decision of the trial court are new different, one is an ordinary Land Registration and the other is
issues. It is a well-settled rule that, except questions on jurisdiction, reconveyance.
no question will be entertained on appeal unless it has been raised ‘It is settled that notwithstanding the difference in the form of two
in the court below and it is within the issues made by the parties in actions, the doctrine of res adjudicata will apply where it appears
their pleadings (Cordero vs. Cabral, G.R. No. 36789, July 25, 1983, that the parties in effect were litigating for the same thing. A party
123 SCRA 532). The other contention that res judicata is not can not, by varying the form of action, escape the effects of res
applicable in an action for reconveyance is not plausible. The adjudicata (Aguirre vs. Atienza, L-10665, Aug. 30, 1958; Geronimo
principle of res judicata applies to all cases and proceedings, vs. Nava., No. L-12111, Jan. 31, 1959; Labarro vs. Labateria, et al..,
including land registration and cadastral proceedings (Republic vs. 28 O.G. 4479).
Estenzo, G.R. No. L-35376, September 11, 1980, 99 SCRA 65; Paz vs. `Well settled is the rule that a party can not by varying the form of
Inandan, 75 Phil. 608; Penaloza vs. Tuazon, 22 Phil. 303). action, or adopting a different method of presenting his case, escape
It is a settled rule that a inal judgment or order on the merits, the operation of the principle that one and the same cause of action
rendered by a court having jurisdiction of the subject matter and of shall not be twice litigated between the same parties or their
the parties, is conclusive in a subsequent case between the same privies.’ (Francisco vs. Blas, et al., No. L-5078; Cayco, et al., vs. Cruz,
parties and their successors in interest litigating upon the same et al., No. L-12663, Aug. 21, 1959).
thing and issue, regardless of how erroneous it may be. In order, ‘Accordingly, a inal judgment in an ordinary civil action,
therefore, that there may be res judicata, the following requisites determining the ownership of certain lands is res adjudicata in a
must be present: (a) The former judgment must be inal; (b) it must registration proceeding where the parties and property are the
have been rendered by a court having jurisdiction of the subject same as in the former case (Paz vs. Inandan, 75 Phil. 608; Peñ aloza
matter and of the parties; (c) it must be a judgment on the merits; vs. Tuason, 22 Phil. 303).’
and (d) there must be, between the irst and the second actions, "xxx xxx xxx
identity of parties, of subject matter, and of cause of action (San "But are there identities of parties in this case before us and the
Diego vs. Cardona, 70 Phil. 281; Ramos vs. Pablo, G.R. No. 53692, former registration proceedings? Identity of parties means that the
Nov. 26, 1986, 146 SCRA 24). parties in the second case must be the same parties in the irst case,
The underlying philosophy of the doctrine of res judicata is that or at least, must be successors in interest by title subsequent to the
parties should not be permitted to litigate the same issue more than commencement of the former action or proceeding, or when the
once and when a right or fact has been judicially tried and parties in the subsequent case are heirs (Chua Tan vs. Del Rosario,
determined by a court of competent jurisdiction, so long as it 57 Phil. 411; Martinez vs. Franco, 51 Phil 487; Romero vs. Franco,
remains unreversed, it should be conclusive upon the parties and 54 Phil. 744; Valdez, et al. vs. Penida, No. L-3467, July 30, 1951).


"xxx xxx xxx "xxx xxx xxx

"Returning our attention to the case at bar, and with in mind the "Plaintiff Fausto Cabaisan was noti ied by the surveyor and that
principles of res adjudicata above-quoted, we noticed that many of notice of the initial hearing. And though he was not an oppositor,
the plaintiffs were not oppositors in the former registration case, the former land registration proceeding is binding on him. Therfore,
but many are children of the former oppositors. In such a case we this case is dismissed in so far as Fausto Cabaisan is concerned with
have to determine the case of every plaintiff, if the former decision costs.
in the land registration case is conclusive and binding upon him. "xxx xxx xxx
"xxx xxx xxx "Plaintiffs Gregorio Ita-oc, Teresita Ita-oc, Faustino Ita-oc and
"The defendants had proven that the adjoining owners and Fortunato Ita-oc are children of Daniel lta-oc, one of the oppositors
claimants of the parcels of land object of registration proceeding in the registration proceedings. They claim parcel No. 10 described
had been noti ied when the land was surveyed. These persons in paragraph 2 of the complaint. Gregorio Ita-oc testi ied that this
noti ied according to the surveyor's certi icate, Exhibit "B" were as land was inherited by said plaintiffs' mother from her father, Pio
follows: Cipriano Samoya, Fausto Baguisin, Silveria Pahado, Enojario Sevila. The evidence on record (Exhibits J-3, J-4, J-5). However (sic),
Laroda, Alejandro Renoblas, Heirs of Gregorio Lofranco, Julian shows that the land is declared in the name of Daniel Ita-oc, a
Villame, Pedro Itaoc, Adriano Toloy, Bartolome, Omosura, Marcelina former oppositor in the registration case. Hence, these plaintiffs are
Asilon, Gregorio Baguinang, et al., Nicolas Omosura, Simon successors-in-interest of Daniel Ita-oc, and, therefore, are bound by
Lagrimas, et al., Martin Quinalayo, Gorgonio Baguinang, Demetrio the decision in that registration case. Their case, therefore, is
Asolan, Catalino Orellena, Heirs of Catalina Palves, Manuel dismissed, with costs.
Mondano, Angel Mondano, Victoriano Balolo, Eugenio del Rosario, "Plaintiffs Roberto Haganas, Felisa Haganas, Fermin Haganas and
Verinici Bayson, Felomino Ruiz, Apolonio Horbeda, and Mun. of Victoriano Haganas are children of Marcos Haganas, a former
Calape. oppositor in the registration case. Marcos testi ied that his claim
"The following persons were noti ied by the Chief of the Land before was only two hectares, while the claim of his children is
Registration Of ice of the initial hearing (Exhibit "J") of the seven hectares, which come from his wife, not from him. These
registration proceedings enjoining them to appear on June 16, plaintiffs claim two parcels, one under Tax Declaration No. R-4452,
1952, at 8:30 a.m., before the Court of First Instance of Bohol to and Tax Declaration No. R-8456. It appears that Tax Declaration No.
show cause why the prayer of said application should not be R-4452 (Exhibit M) is in the name of Marcos Haganas, and the land
granted: the Solicitor General, the Director of Lands, the Director of described under Tax Declaration No. R-8456 was bought by the
Public Works and the Director of Forestry, Manila; the Provincial spouses Marcos Haganas and Tomasa Sevilla from Gertrudis Sevilla
Governor, the Provincial Fiscal and the District Engineer, Tagbilaran, in 1956 (Exhibit M-3), who was an oppositor in the registration
Bohol; the Municipal Mayor, Gorgonio Baguinang, Demetrio Azocan, proceeding. Therefore, plaintiffs Roberto Haganas, Felisa Haganas,
Catalino Orellena, Manuel Mondano, Angel Mondano, Victoriano Fermin Haganas and Victoriano Haganas are successors-in-interest
Bolalo, Eugenio del Rosario, Verinici Bayson, Filomeno Ruiz, to properties in which the decision in the registration case is
Apolonio Horboda, the Heirs of Gregorio Lofranco, Julian Villame, conclusive and binding to their predecessors-in-interest. Hence,
Pedro Itaoc, Adriano Toloy, Bartolome Omosora, Marcelina Asilom, their case here is dismissed with costs.
Gregorio Baguinang, Nicolas Omosora, Simon Lagrimas and Martin "Plaintiff Julia Sevilla is the wife of Marcelo Matela, who was an
Quinalayo, Calape, Bohol; the heirs of Catalino Polvos, Fausto oppositor in the registration proceedings. Plaintiffs Roman Matela,
Buguisin, Cipriano Samoya, Silveria Pohado, Enojario Laroda, Marcela Matela, Del in Matela and Roberta Matela are their children.
Alejandro Renoblas and Leoncio Barbarona, Antequera, Bohol. She has no son by the name Pelagio. Julia testi ied that the land now
"And after the application had been iled and published in claimed by her children came from her father Pio Sevilla. The land
accordance with law the following persons represented by Atty. that was claimed by Mauricio Matela as oppositor was in his name
Conrado D. Marapao iled opposition to that registration under Tax Declaration No. 5099. This is the same land now claimed
proceeding: Felipe Cubillo, Simon Lagrimas, Simeon Villame, Felix by plaintiffs Julia Sevilla, Ramon Matela, Marcela Matela, Del in
Lacorte, Victor Omosura, Germana Gahil, Anastacio Orillosa, Enerio Matela and Roberta Matela (Exhibit 0-4). These plaintiffs are
Omosura, Valeriano Tuloy, Cipriano Sanoya, Pablo Dumadag, Andres successors-in-interest of Mauricio Matela, who is bound by the
Reimbuncia, Roman Reimbuncia, Cledonio Cabanas, Moises decision in that land proceeding wherein he was the oppositor.
Cabanas, Calixto Gohiting, Gervasio Sevilla, Pedro Omosura, Daniel Therefore, the case of these plaintiffs are dismissed with costs.
Itaoc, Luis Omosura, Bartolome Omosura, Nicasio Omosora, Calixto "Plaintiff Procopia Cabañ as was the wife of Andres Reambonancia,
Sevilla, Teodora Omosora, Jose Sabari, Silverio Lacorte, Silverio oppositor in the land registration proceedings. She claims parcel No.
Tuloy, Gertrudes Sevilla, Teodora Sevilla, Magno Orillosa, Gervacia 20 described in paragraph 2 of the complaint bearing Tax
Sevilla, Marcos Hagonos, Eleuterio Pandas, Pablo Omosora, Fabian Declaration No. R-8121. It appears that this land is declared in the
Villame, Teodoro Omosora, Magdalina Asilom, Mauricio Matela, name of Andres Reambonancia (Exhibit N-3) who, as oppositor in
Marciano Ordada, Eusebio Omosora, and Gregorio Repelle (Exhibit the land registration case, is bound by the decision of that case.
"E"), Atty. Juan V. Balmaseda in representation of the Bureau of Therefore, the case of plaintiff Procopia Cabañ as, as
Lands, and Asst. Fiscal Norberto M. Gallardo in representation of successors-in-interest to Andres Reambonancia, is hereby
the Municipality of Calape. dismissed, with costs.
“Plaintiffs Mauro Renoblas and Gregorio Renoblas are children of "Plaintiff Vicente Amosora is the son of Enerio Amosora and
plaintiff Alejandro Renoblas, Plaintiff Telesforo Balanda is Florencia Gahil, both oppositors in the former registration case. The
son?in-law of Alejandro, being the husband of Juliana Renoblas, land claimed by plaintiff Vicente Amosora is described as parcel No.
daughter of Alejandro. Plaintiff Alejandro Renoblas was not one of 24 of paragraph 2 of the complaint under Tax Declaration no.
the oppositors in the registration proceedings, but he was noti ied R-6107, under the name of his father Enerio Amosora. Since Enerio
of the initial hearing of that registration case and by the surveyor Amosora was an oppositor in the former land registration of which
that surveyed the land object of registration (Exhibit J-Movant). this land was a part, the decision of that land registration case is
Therefore, the decision of the land registration proceeding is conclusive and binding not only to Enerio Amosora, but also to his
binding upon him and his case is dismissed on the ground of res successor-in-interest, plaintiff Vicente Amosora, whose case
ajudicata with costs. therefore, is dismissed, with costs."


G.R. No. L-32065 application for registration; and that after the hearing of the
Upon the death of administratrix Bernardina Vda. de Luspo, registration case, they continued in possession of the said land.
Transfer Certi icate of Title No. 3561 was issued in the name of In a registration case, the judgment con irming the title of the
Pedro R. Luspo and Transfer Certi icate of Title No. 3562 was issued applicant and ordering its registration in his name necessarily
in the name of several persons (p. 36, Rollo). carried with it the delivery of possession which is an inherent
A writ of possession dated November 6, 1959, a irst alias writ of element of the right of ownership. The issuance of the writ of
possession dated January 6, 1961, and a second alias writ of possession is, therefore, sanctioned by existing laws in this
possession dated July 2, 1966 were issued by the trial court against jurisdiction and by the generally accepted principle upon which the
the petitioners. A sample of the guerilla-like, hide and seek tactics administration of justice rests (Romasanta, et. al. vs. Platon, 34 O.G.
employed by the petitioners was proved by the of icial report of the No. 76; Abulocion, et. al. vs. CFI of Iloilo, et. al., 100 Phil. 554
deputy sheriff dated January 21, 1960. Another evidence of [1956]). A writ of possession may be issued not only against the
petitioners' refusal to sign and to vacate was a certi ication dated person who has been defeated in a registration case but also against
July 22, 1966 and the Sheriff's return dated October 25, 1966. anyone unlawfully and adversely occupying the land or any portion
On March 29, 1967, a petition for contempt was iled by Mariano thereof during the land registration proceedings up to the issuance
Ogilve, who is one of the registered owners of the parcel of land of the inal decree (Demorar vs. Ibanez, et al., 97 Phil 72 [1955]).
covered by Transfer Certi icate of Title No. 3562, against the The petitioners' contention that they have been in possession of the
petitioners for refusing to vacate the land occupied by them and for said land for more than thirty (30) years which began long before
refusing to sign the Sheriff's return. the iling of the application for registration and continued in
On May 6, 1969, the court a quo issued a resolution, the dispositive possession after the hearing of the registration case, worked against
portion of which reads (p. 47, Rollo): them. It was a virtual admission of their lack of defense. Thus, the
"FOR ALL THE FOREGOING CONSIDERATION, make it of record that writs of possession were properly issued against them.
Procopia Reambonansa voluntarily left the land and dropped out However, We do not subscribe to the ruling of the court a quo that
from the case; the charge of contempt against Alejandro Renoblas petitioners are guilty of contempt. Under Section 8 (d) of Rule 39,
(who died) is dismissed and each of the remaining 22 respondents Rules of Court, if the judgment be for the delivery of the possession
are hereby found guilty of contempt under Sec. 3-b of Rule 71 and of real property, the writ of execution must require the sheriff or
are hereby sentenced each to pay a ine of One Hundred Pesos, other of icer to whom it must be directed to deliver the possession
authorizing the Constabulary Detachment at or near Candungao, of the property, describing it, to the party entitled thereto. This
Calape, Bohol to collect the same and to transmit the money to the means that the sheriff must dispossess or eject the losing party
Clerk of this Court, with subsidiary imprisonment in case of from the premises and deliver the possession thereof to the winning
insolvency at the rate of one day for every P2.50 or fraction of a day, party. If subsequent to such dispossession or ejectment the losing
the said Constabulary Detachment to effect the commitment if any party enters or attempts to enter into or upon the real property, for
of them is unable to pay the ine. The ingerprints of each of these the purpose of executing acts of ownership or possession, or in any
22 respondents shall also be taken by the constabulary and iled manner disturbs the possession of the person adjudged to be
with the record of this case. entitled thereto, then and only then may the loser be charged with
"It is so ordered." and punished for contempt (Quizon vs. Philippine National Bank, et.
On June 4, 1969, the petitioners iled a motion for reconsideration al., 85 Phil. 459). According to this section, it is exclusively
of the aforestated resolution whereas Ogilve iled an opposition incumbent upon the sheriff to execute, to carry out the mandates of
thereto. the judgment in question, and in fact, it was he himself, and he
On February 14, 1970, the motion for reconsideration was denied. alone, who was ordered by the trial judge who rendered that
On March 18, 1970, another motion for reconsideration was iled by judgment, to place the respondents in possession of the land. The
petitioners on the ground of pendency of the action for petitioners in this case had nothing to do with that delivery of
reconveyance in Civil Case No. 1533 and their appeal in G.R. No. possession, and consequently, their refusal to effectuate the writ of
L-25660. On May 14, 1970, the court a quo ordered the proper possession, is entirely of icious and impertinent and therefore could
of icers to actually execute the resolution dated May 6, 1969. not hinder, and much less prevent, the delivery being made, had the
Hence, the present petition. sheriff known how to comply with his duty. It was solely due to the
Petitioners raise the following issues: latter's fault, and not to the disobedience of the petitioners, that the
I judgment was not duly executed. For that purpose, the sheriff could
THAT THE SAID RESPONDENT JUDGE ERRED IN ISSUING A WRIT even have availed himself of the public force, had it been necessary
OF POSSESSION WITHOUT ANY COMPLAINT FILED IN COURT FOR to resort thereto (see United States v. Ramayrat, 22 Phil. 183).
FORCIBLE ENTRY AND DETAINER, NOR FOR RECOVERY OF G.R. No. L-33677
OWNERSHIP AND POSSESSION OF THE PARCELS OF LAND IN On March 22, 1971, Mariano Ogilve iled a Motion for a Writ of
QUESTION AGAINST THE HEREIN PETITIONERS. Demolition which was granted by the trial court on April 5, 1971
II (pp. 42-43, Rollo) against those who were adjudged guilty of
THAT THE HONORABLE RESPONDENT JUDGE ERRED IN ISSUING A contempt. On April 29, 1971, the petitioners iled an urgent motion
WRIT OF POSSESSION AGAINST THE PETITIONERS HEREIN, WHO for reconsideration of said order. On June 2, 1971, the trial court
WERE NOT PARTIES TO THE REGISTRATION PROCEEDING AND issued another order, the dispositive portion of which reads (p. 48,
WHO WERE NOT DEFEATED OPPOSITORS OF THE SAID Rollo):
APPLICATION FOR REGISTRATION. "WHEREFORE, in the absence of writ of preliminary injunction
The petition is impressed with merit. Deputy Provincial Sheriff Pedro Aparece must not only take P.C.
Petitioners contend that they were not claimants-oppositors nor soldiers with him but also carpenters to effect the demolition, the
defeated oppositors in the said land registration case, as their carpenters being at the expense of the Luspo.
names do not appear in the amended application for registration; "IT IS SO ORDERED."
that they have occupied the subject parcels of land for more than Hence, the present petition.
thirty (30) years which began long before the iling of the The issue here is whether or not the respondent judge acted
without or in excess of his jurisdiction, or with grave abuse of


discretion and thus excluded the herein petitioners from the use respondent Bank of the Philippine Islands (BPI). Upon approval of
and enjoyment of their right to which they are entitled when he said credit facility, petitioner Jetri Construction Corporation was
(respondent judge) issued the order of demolition on April 5, 1971 able to borrow from the bank a total of P20,000,000.00. As security
and again on June 2, 1971 (p. 107, Rollo). for the loans, petitioner mortgaged its land covered by Transfer
On July 14, 1971, this Court issued a temporary restraining order (p. Certi icate of Title (TCT) No. 213950 of the Registry of Deeds of
51, Rollo). Manila as well as the 4-storey building erected thereon located at
The petition is not impressed with merit. No. 177 M. dela Fuente St., Sampaloc, Manila. A Comprehensive
The petitioners allege that the respondent judge cannot issue a writ Surety Agreement was also executed by Anastacia Corpus Rigor,
of demolition pending the resolution of G.R. No. L-32065. president of Jetri Construction Corporation, wherein she acted as
We rule that the petition in G.R. No. L-32065 was not a bar to the surety of the corporation's loans from Far East Bank and bound
issuance of the writ of demolition. It is signi icant to note that the herself to pay jointly and severally with Jetri Construction
subject matter of the petition in G.R. No. L-32065 is the order dated Corporation all obligations the latter may incur.
May 14, 1970 directing the execution of the prior order dated May
6, 1969 inding petitioners guilty of contempt and not the writs of When Jetri Construction Corporation defaulted in paying the loan, it
possession themselves. Thus, the respondent Judge correctly issued entered into a Loan Restructuring Agreement with the bank
the writs of demolition. In Marcelo vs. Mencias, 107 Phil. 1071, We wherein it acknowledged that its obligation under the Discounting
held: Line was for the total amount of P22,621,876.37.
"[I]f the writ of possession issued in a land registration proceeding
implies the delivery of possession of the land to the successful For failure of Jetri Construction Corporation to pay the loan under
litigant therein (Demorar vs. Ibañ ez, 97 Phil. 72; Pasay Estate the Loan Restructuring Agreement upon maturity, the bank
Company vs. Del Rosario, et al., 11 Phil. 391; Manlapas vs. Llorente, foreclosed the real estate mortgage on the property covered by TCT
48 Phil. 298), a writ of demolition must, likewise, issue, especially No. 213950. On 22 November 1999, an auction sale was held
considering that the latter writ is but a complement of the former wherein the mortgaged property was sold to the bank, it being the
which, without said writ of demolition, would be ineffective. lone and highest bidder. The Certi icate of Sale was registered and
"xxx xxx xxx annotated at the back of TCT No. 213950 on 3 December 1999.
"[The issuance of the writ of demolition] is reasonably necessary to
do justice to petitioner who is being deprived of the possession of Upon expiration of the redemption period, with petitioner failing to
the lots in question, by reason of the continued refusal of redeem the property, ownership over the mortgaged property was
respondent x x x to remove his house thereon and restore consolidated in favor of the bank and a new certi icate of title was
possession of the premises to petitioner. issued in its name, particularly TCT No. 250654.
ACCORDINGLY, judgment is hereby rendered as follows:
1) In G.R. No. L-25660, the appeal is DENIED and the orders of the On 28 August 2001, BPI iled before the Regional Trial Court (RTC)
Court of First Instance dated May 12, 1964 and August 25, 1965 are of Makati, Branch 62, Civil Case No. 01-1336 against herein
AFFIRMED; the motion to withdraw the appeal of some of the petitioner for alleged foreclosure de iciency in the amount of
plaintiffs-appellants is GRANTED; P33,270,131.25.
2) In G.R. No. L-32065, the petition is GRANTED and the resolution
of the Court of First Instance dated May 14, 1970 is SET ASIDE; and Jetri Construction Corporation, on the other hand, simultaneously
3) In G.R. No. L-33677, the petition is DISMISSED and the order of iled two complaints against respondent BPI and its managing
the Court of First Instance dated June 2, 1971 is AFFIRMED. The of icers, respectively. The irst is a complaint for (a) annulment of
temporary restraining order is LIFTED. mortgage foreclosure; (b) cancellation of respondent's derivative
SO ORDERED. Transfer Certi icate of Title No. 250654; (c) quieting of petitioner's
Narvasa, (Chairman), Cruz, Gancayco, and Griñ o-Aquino, JJ., concur. ownership and restoration of title; and (d) indemnity for damages
before the RTC of Manila, Branch 50 and docketed as Civil Case No.
Jetri Construction Corp. vs BPI, G.R. No. 04-111298. The second is a complaint for Estafa before the City
Prosecutor's Of ice of Manila against the managing of icers of BPI
171687, June 08, 2007 for the alleged misappropriation of the Three (3) Million Pesos paid
551 Phil. 962
by petitioner as amortization for its loan.
THIRD DIVISION
Despite demands, petitioner refused to vacate the premises of the
G.R. No. 171687, June 08, 2007
foreclosed property, thus, on 15 August 2003, herein respondent
JETRI CONSTRUCTION CORPORATION/ ANASTACIA CORPUZ
iled a Petition for the Issuance of Writ of Possession of Real
RIGOR, PRESIDENT, PETITIONER, VS. BANK OF THE PHILIPPINE
Property[2] before the RTC of Manila.
ISLANDS, RESPONDENT.
On 28 February 2005, the RTC of Manila, Branch IV, issued the
DECISION
assailed Order[3] issuing the writ of possession prayed for by
CHICO-NAZARIO, J.:
respondent BPI. According to the court a quo:
As to the Oppositor's attack on the validity of the foreclosure sale,
Before Us is a Petition for Review on Certiorari under Rule 45 of the
the Highest Tribunal has already ruled in several cases that:
Rules of Civil Procedure, assailing the Resolution[1] of the Court of
"The order for writ of possession issue as a matter of course with no
Appeals in CA-G.R. CV No. 84788, dated 17 November 2005, which
discretion being left to the court and any question regarding the
dismissed petitioner's appeal for its failure to ile its appellant's
validity of the sale should be determined in a subsequent
brief within the reglementary period despite notice.
proceeding and cannot be raised as a justi ication for opposing the
issuance of writ of possession." [De Gracia vs. San Jose, et al., 94 Phil.
Sometime in 1994, petitioner Jetri Construction Corporation
623].
applied for a P20,000,000.00 Omnibus Line Credit Facility with Far
East Bank and Trust Company, predecessor-in-interest of herein


"x x x the order for a writ of possession issues as a matter of course For failure of the appellant to ile its appellant's brief within the
upon the iling of the proper motion and approval of the reglementary period despite notice, the appeal is declared
corresponding bond. No discretion is left to the court. And any ABANDONED and hereby DISMISSED, pursuant to Section 1 (e),
question regarding the regularity and validity of the sale (and the Rule 50 of the 1997 Rules of Civil Procedure.[5]Petitioner
subsequent cancellation of the writ) is to be determined in a subsequently iled a Motion for Reconsideration assailing the
subsequent proceeding as outlined in Sec. 8. Such question is not to dismissal of its appeal before the appellate court. In Petitioner's
be raised as a justi ication for opposing the issuance of a writ of Motion for Reconsideration, it was averred that counsel for
possession, since, under the Act, the proceeding for this is ex parte." petitioner did not receive any notice to ile its brief from the Court
[Banco Filipino Savings and Mortgage Bank vs. Intermediate of Appeals as well as a copy of the letter of transmittal of the record
Appellate Court, 142 SCRA, citing Marcelo Steel Corp. vs. Court of from the clerk of the lower court to the Court of Appeals. Petitioner,
Appeals, 54 SCRA 89].Moreover, in the case of Ong vs. CA, 333 SCRA thus, argued that this non-compliance by the clerk of the lower
189, the High Court forti ied the foregoing obiter dicta by declaring court in violation of Section 10 of Rule 41 of the Rules of Court
that: caused the unwarranted confusion which actually deprived the
"As a rule, any question regarding the validity of the mortgage or its petitioner of the means to know when the reglementary period to
foreclosure cannot be a legal ground for refusing the issuance of a ile its brief had commenced.
writ of possession. Regardless of whether or not there is a pending
suit for annulment of the mortgage or the foreclosure itself, the In a Resolution dated 1 March 2006, the Court of Appeals denied the
purchaser is entitled to a writ of possession, without prejudice of Motion for Reconsideration in this wise:
course to the eventual outcome of the said case."As to the prayer of Finding no merit on oppositor-appellant's MOTION FOR
the petitioner bank for the issuance of writ of possession over the RECONSIDERATION, dated December 5, 2005, considering that the
subject property, the court inds no cogent reason why the same Notice to File Brief, dated July 21, 2005, was sent to and received by
should not be issued, in the case of PDCP Bank vs. Vestil 264 SCRA the oppositor-appellant, through counsel, on August 1, 2005, as
467, the Supreme Court declared among others, that: shown by the attached Registry Return Receipt (Back of p. 6, Rollo),
"In cases in which, an extra-judicial sale is made pursuant to an and taking into consideration the Comment iled thereto by counsel
extra-judicial foreclosure of mortgage, redemption is governed by for petitioner-appellee, We hereby DENY the motion. [6]Hence, the
secs. 29 to 31 and sec. 35, Rule 39 of the Rules of Court and sec. 35 instant petition.
provides among others, that, If no redemption is made within
twelve (12) months after the sale, the purchaser or his assignee is Petitioner contends that the dismissal of its appeal by the Court of
entitled to a conveyance and possession of the property. "The rule Appeals amounts to a denial of due process. Petitioner now explains
therefore is that: after the redemption period has expired, the in its petition before this Court that it's counsel failed to receive the
purchaser of the property has the right to be placed in possession Notice to ile appellant's brief by "honest mistake" or "unforeseen
thereof.In Navarra vs. CA, 204 SCRA 850, The Highest Tribunal accident" as the same was received and allegedly misplaced by one
ruled: Angeline Diguinat, who was just a visiting relative of petitioner's
The purchaser at an extra-judicial foreclosure sale has the right to counsel seeking inancial assistance for the victims of the calamities
the possession of the property even during the one-year period of in the province of Aurora. Moreover, petitioner contends that the
redemption provided he iles an indemnity bond. After the lapse of Court of Appeals, in the interest of justice, equity and fair play, could
the said period with no redemption having been made, that right have simply directed petitioner's counsel to show cause why he
becomes absolute and may be demanded by the buyer even without should not be cited for contempt for failure to comply with the
the posting of the bond. Possession may then be obtained under a order to ile appellant's brief.
writ which, may be applied for ex parte pursuant to sec. 7 of Act
3135 as amended by Act 4118."It having been established that the Rule 44, Section 7[7] of the Rules of Civil Procedure provides that it
period of redemption of the property described in Transfer shall be the duty of the appellant to ile his brief within 45 days
Certi icate of Title No. 213950 (now Transfer Certi icate of Title No. from receipt of notice; and failure to comply with this mandate is a
250654) which was sold at public auction to Far East Bank and ground for the dismissal of the appeal as provided under Rule 50,
Trust Company, (the herein petitioner's predecessor-in-interest) as Section 1(e)[8] of the Rules of Civil Procedure. In the instant case,
highest bidder in connection with the extra-judicial foreclosure sale there is no question that petitioner failed to ile its appellant's brief
of the mortgage has already expired without said property having despite notice which warranted the dismissal by the appellate court
been redeemed and a new title, Transfer Certi icate of Title No. of its appeal as ordained in the Rules of Court. However, petitioner
250654 issued in the name of Far East Bank and Trust Company maintains that such failure must be excused as it was occasioned by
(now) Bank of the Philippine Islands and in conformity with the an "unforeseen accident" or "honest mistake" that petitioner's
provisions of Act 3135, as amended, the petition is hereby counsel did not receive the notice ordering it to ile the appellant's
GRANTED. brief. Thus, petitioner rationalizes, it is erroneous for the Court of
Appeals to summarily dismiss the appeal (thereby depriving
WHEREFORE, let the corresponding writ of possession be issued petitioner of due process) on the ground of failure to ile appellant's
directing the Sheriff of this Branch to place the herein petitioner brief within the reglementary period which could not have been
bank in actual physical possession of the foreclosed property possibly computed since petitioner's counsel did not receive the
situated in the district of Sampaloc, City of Manila, and covered by notice due to "honest mistake" or "unforeseen accident". Hence,
Transfer Certi icate of Title No. 213950, now Transfer Certi icate of petitioner was deprived of his due process right.
Title No. 250654, and to eject therefrom mortgagor JETRI
Construction Corporation, its agents and such other persons We ind petitioner's postulations bereft of merit. As stated in the
claiming rights under it.[4]Aggrieved by the aforequoted Order, Resolution of the Court of Appeals dated 1 March 2006, the Registry
petitioner instituted an appeal before the Court of Appeals which Return Receipt shows that the Notice to File Brief, dated 21 July
was dismissed by the appellate court in a Resolution dated 17 2005, was sent to and received by petitioner, through counsel, on 1
November 2005, which reads: August 2005. However, no appellant's brief was iled by petitioner
until the Resolution dated 17 November 2005, dismissing the


appeal was issued by the appellate court. Evidently, petitioner's foreclosure is not a legal ground for refusing the issuance of a writ
counsel was negligent in failing to ile the required appellant's brief of possession.
within 45 days from receipt of said notice as mandated by the Rules
of Court. Petitioner's counsel, nevertheless, would like to lay the WHEREFORE, premises considered, the instant petition is hereby
blame at the door of one Angeline Diguinat, who allegedly was only DENIED. The Resolution of the Court of Appeals in CA-G.R. CV No.
visiting to solicit inancial aid for victims of the calamities in Aurora. 84788 dismissing petitioner's appeal for failure of appellant to ile
Petitioner's counsel explains that Angeline Diguinat, being its appellant's brief within the reglementary period despite notice is
unlearned and unaware of the signi icance of the letter, hereby AFFIRMED. Costs against petitioner.
unconsciously or accidentally misplaced or mis iled the notice. Still
hurting, petitioner's counsel explains in the Reply that he has no SO ORDERED.
regular of ice assistant or secretary as he is alone in his law of ice
which also serves as his residence. Ynares-Santiago, (Chairperson) Austria-Martinez, and Nachura, JJ.,
concur.
Regrettably, such excuse of petitioner's counsel is unacceptable. It is
the duty of a practicing lawyer to so arrange matters that of icial or A.G. Development Corp. vs Court of
judicial communications sent by mail reach him promptly.[9] For
failure to do so, he and his clients must suffer the consequences of Appeals, G.R. No. 111662, October 23, 1997
346 Phil. 136
his negligence.[10] Furthermore, a lawyer can adopt an ef icient
way of handling court mail matters even if his residence also serves
THIRD DIVISION
as his of ice.[11] Hence, if petitioner's counsel was not informed by
G.R. No. 111662, October 23, 1997
his visiting relative of the Notice to File Brief, petitioner's counsel
A.G. DEVELOPMENT CORPORATION, PETITIONER, VS. HONORABLE
cannot hide behind his relative's negligence to excuse his own
COURT OF APPEALS, HONORABLE IGNACIO CAPULONG,
failure to adopt an ef icient way of managing his court notices. That
PRESIDING JUDGE, REGIONAL TRIAL COURT OF MAKATI, BRANCH
said, this Court cannot fault the Court of Appeals for dismissing the
134; NATIONAL HOUSING AUTHORITY; AND A. FRANCISCO REALTY
appeal which was done in faithful compliance with the rules of
AND DEVELOPMENT CORPORATION, RESPONDENTS.
procedure the Court has been mandated to observe.
DECISION
Nevertheless, in our desire to put an end to the present controversy,
ROMERO, J.:
we have carefully perused the records of this case and have reached
the conclusion that the order assailed is in perfect harmony with
Challenged in this petition for review under Rule 45 of the Rules of
law and jurisprudence.
Court is the decision of respondent Court of Appeals in CA G.R. S.P.
No. 30227 which upheld the order of the Regional Trial Court (RTC),
Petitioner Jetri Construction Corporation raises the validity of the
Branch 134, Makati, dismissing petitioner’s complaint on the
foreclosure sale as a ground to attack the propriety of the issuance
ground of the lack of jurisdiction.
of the Writ of Possession. This is erroneous. This Court, in
numerous decisions, has enunciated that any question regarding the
The pertinent facts are as follows:
validity of the mortgage or its foreclosure cannot be a legal ground
for refusing the issuance of a writ of possession.[12] Regardless of
On November 4, 1981, petitioner A.G. Development (AGDC) and
whether or not there is a pending suit for annulment of the
public respondent National Housing Authority (NHA) entered into a
mortgage or the foreclosure itself, the purchaser is entitled to a writ
“Memorandum of Agreement,”[1] wherein the former agreed to
of possession, without prejudice of course to the eventual outcome
construct on its lot a dormitory-apartment-commercial building for
of the said case.[13] Any question regarding the regularity and
the latter at a total cost of Eleven Million Four Hundred Fifty Two
validity of the sale, as well as the consequent cancellation of the
Thousand Nine Hundred Eighty Nine Pesos (P11,452,989.00).
writ, is to be determined in a subsequent proceeding.[14] In fact,
Pursuant to the agreement, AGDC executed in favor of NHA a
petitioner itself has already commenced Civil Case No. 04-111298
promissory note[2] and a real estate mortgage[3] over the land as a
before the RTC of Manila, Branch 50 for annulment of mortgage
security for the obligation. Thereafter, NHA made an initial payment
foreclosure. Therefore, the determination of the validity of said
of three million three hundred eight thousand four hundred forty
foreclosure sale is best left to the discretion of the court wherein
(P3,308,440.00) to AGDC to cover a portion of the contract price.
said complaint has been iled.
On August 30, 1983, however, NHA rescinded the agreement and

More succinctly, the issuance of a writ of possession to a purchaser
demanded the immediate return of the initial amount paid on the
in a public auction is a ministerial act.[15] After the consolidation of
ground that AGDC was not able to complete the project on time. The
title in the buyer's name for failure of the mortgagor to redeem the
demand was refused, as a result of which, the real estate mortgage
property, the writ of possession becomes a matter of right.[16] And
was extra-judicially foreclosed and the property sold to NHA as the
its issuance to a purchaser in an extrajudicial foreclosure sale is
highest bidder. The one-year period to redeem having expired, a
merely a ministerial function.[17] It is undisputed that herein
new Transfer Certi icate of Title (TCT) was issued in favor of NHA;
petitioner failed to redeem the property within the redemption
thereafter, a writ of possession was applied for and granted by the
period and thereafter, ownership was consolidated in favor of
Regional Trial Court of Quezon City docketed as LRC Case No. 3067
herein respondent and a new certi icate of title was issued in its
(85).
name, particularly TCT No. 250654. Thus, it was purely ministerial
for the trial court to issue a writ of possession in favor of herein
On December 3, 1986, AGDC iled a complaint against NHA before
respondent upon the latter's iling of a petition. The issue of nullity
the Makati RTC docketed as Civil Case No. 15495 for breach of
of the extrajudicial foreclosure sale was of no moment.[18] Said
contract, declaration of nullity of the promissory note and real
issue cannot bar the issuance of a writ of possession since, as stated
estate mortgage, and annulment of foreclosure sale and reversion of
above, any question regarding the validity of the mortgage or its
possession and title. NHA iled a motion to dismiss on the ground of


litis pendentia, which was denied by the trial court. While the case We also note that LRC Case No. 3067 (85) is not an action as de ined
was pending, private respondent A. Francisco Realty and by law. An action is an act by which one sues another in a court of
Development Corp. (AFRDC) iled a motion to intervene claiming justice for the enforcement or protection of a right or the
that it is an innocent purchaser for value of the subject property prevention or redress of a wrong[16] and such is commenced by
since it had already bought the foreclosed property from NHA.[4] iling a complaint with the Court.[17] However, in the procedure for
the issuance of a writ of possession, no complaint is necessary, the
Consequently, AFRDC iled a motion to dismiss before the Makati iling of an ex parte motion being enough.[18] Indeed, the term
RTC, reasoning that the said court has no jurisdiction to entertain “action” does not include non-judicial proceedings, although they
the complaint and annul the writ issued by the Quezon City RTC are before a court, as in cases where the court does not act in a
since both are co-equal or coordinate jurisdiction. The Makati RTC judicial capacity.[19]
ruled in favor of AFRDC and dismissed AGDC’s complaint.[5]
Recourse to the Court of Appeals proved futile. Hence, this petition. There is also another consideration that supports this conclusion
since an extra-judicial foreclosure only requires the posting and
In resolving the instant petition, the principal issue to be addressed publication of the notices to effect the same.[20] It has been held
is whether the issuance of a writ of possession by the Quezon City that a proceeding to foreclose a mortgage by advertisement is not
RTC constitutes res judicata as to bar the complaint iled by AGDC. an action.[21]
It is an oft-repeated rule that for res judicata to apply, the following In the absence of the necessary elements, the doctrine of res
requisites must concur: judicata cannot be applied in the instant petition.
a) the former judgment must be inal; WHEREFORE, in view of the foregoing, the decision appealed from
b) the court which rendered it had jurisdiction over the subject is hereby GRANTED. Civil Case No. 15495 is hereby REINSTATED.
matter and the parties; SO ORDERED.
c) the judgment must be on the merits; and
d) there must be between the irst and second actions identity of Melo, Francisco, and Panganiban, JJ., concur.
parties, subject matter and causes of action.[6] Narvasa, C.J., (Chairman), on leave.
Although not explicitly stated, a basic requisite for res judicata to Maglente vs Baltazar-Padilla, G.R. NO.
apply is that there are two cases which have been decided on the
merits. 148182, March 07, 2007
546 Phil. 472
In af irming the Makati RTC’s dismissal of AGDC’s complaint, the
FIRST DIVISION
Court of Appeals ruled that the issuance of the writ of possession
G.R. NO. 148182, March 07, 2007
has the effect of con irming the title of NHA over the property in
URSULA MAGLENTE, CONSOLACION BERJA, MERCEDITA FERRER,
question.[7] As such, the grant of said writ constitutes an absolute
THELMA ABELLA AND ANTONIO NGO, PETITIONERS, VS. HON.
bar to a subsequent action. It is inal as to the claim of nullity of the
PRISCILLA BALTAZAR- PADILLA, IN HER CAPACITY AS THE
promissory note, real estate mortgage and the resultant
PRESIDING JUDGE OF THE RTC, MANILA BRANCH 38, VISITACION
extra-judicial foreclosure sale. We cannot agree with the Court of
GABELO, ERLINDA ABELLA, PETRA PEREZ, ERLINDA TRAQUENA,
Appeals that the action to annul both the real estate mortgage and
BEN CARDINAL, EDUARDO TRAQUENA, LEOPOLDO TRAQUENA,
the foreclosure sale is barred by res judicata.
MARIFE TUBALAS, ULYSIS MATEO, JOCELYN FERNANDEZ,
ALFONSO PLACIDO, LEONARDO TRAQUENA, SUSAN RENDON AND
The issuance of a writ of possession is not a judgment on the merits.
MATEO TRINIDAD, RESPONDENTS.
A writ of possession is generally understood to be an order whereby
the sheriff is commanded to place a person in possession of a real or
DECISION
personal property,[8] such as when a property is extra-judicially
CORONA, J.:
foreclosed.[9] In this regard, the issuance of a writ of possession to
a purchaser in an extra-judicial foreclosure is merely a ministerial
At bar is a special civil action for certiorari under Rule 65 of the
function.[10] As such, the Court neither exercises its of icial
Rules of Court assailing the order[1] of the Regional Trial Court
discretion nor judgment.[11] In other words, the issuance of the
(RTC) of Manila, Branch 38, dated April 20, 2001, denying
writ of possession is summary in nature,[12] hence the same cannot
petitioners' motion for the issuance of a writ of possession in their
be considered a judgment on the merits which is de ined as one
favor.
rendered after a determination of which party is right, as
distinguished from a judgment rendered upon some preliminary or
The antecedent facts follow.
formal technical point.[13]
On January 15, 1985, Philippine Realty Corporation (PRC), owner of

Furthermore, the doctrine of res judicata applies only to judicial or
a 687.80-square meter parcel of land at 400 Solana St., Intramuros,
quasi-judicial proceedings and not to the exercise of administrative
Manila, entered into a contract of lease for three years with one of
powers or to legislative, executive or ministerial determination.[14]
the petitioners, Ursula Maglente. In the contract, it was stated that,
Accordingly, cases disposed of on technical grounds do not fall
if PRC were to sell the leased property, Maglente would be given the
within the doctrine of res judicata.[15] Hence, the issuance of the
irst priority (right of irst refusal) to buy it. Both parties likewise
writ of possession by the Regional Trial Court of Quezon City was
agreed that the lessee was prohibited from subleasing any portion
not a judgment on the merits but simply an incident in the transfer
of the property without the consent of the lessor. However, after the
of title.
execution of the lease contract, petitioner Maglente subleased
portions of the property to respondents.


On March 9, 1987, when the lease contract was about to expire, PRC In this petition for certiorari under Rule 65, petitioners assail the
sent a written offer to sell the leased property to Maglente. In Manila RTC's denial of their motion for the issuance of the writ of
response, the latter intimated that she would exercise her right of possession. However, they do not allege that the trial court was
irst refusal to purchase the property with co-petitioners as her without jurisdiction or exceeded its jurisdiction, or that it
co-buyers. In February 1989, PRC received a letter from committed grave abuse of discretion in denying said motion, as
respondents expressing their desire to purchase the same property. required in all Rule 65 petitions.
On February 23, 1989, PRC iled a complaint for interpleader[2] in The remedy of certiorari is limited to acts of any tribunal or board
the RTC against both petitioners and respondents so they could exercising judicial functions without or in excess of jurisdiction or
litigate among themselves on who had the right to purchase the with grave abuse of discretion.[9] It must be based on jurisdictional
property.[3] On March 11, 1991, the trial court ruled in favor of grounds like want of jurisdiction or grave abuse of discretion;
petitioners and declared them as the rightful parties to purchase otherwise, any error committed by it will amount to nothing more
PRC's property. The dispositive portion of the decision read: than an error of judgment which may be questioned only on
WHEREFORE, premises considered, judgment is hereby rendered as ordinary appeal.[10]
follows:
Declaring [petitioners] Ursula Maglente, Consolacion Berja, Considering, however, that a question of law[11] is involved, that is,
Mercedita Ferrer, Thelma Abella and Antonio Ngo as the rightful whether a writ of possession should be granted to a party with the
[parties] to purchase the land in controversy; and right of irst refusal in an interpleader case, we give due course to
this petition.
Ordering...[PRC] to execute the corresponding contract of Indeed, should petitioners be granted the writ of possession they
sale/contract to sell in favor of [petitioners] aforementioned in seek? We rule in the negative.
accordance with this Decision within 30 days from notice hereof.[4]
Dissatis ied with the above decision, respondents appealed to the A writ of possession shall issue only in the following instances: (1)
Court of Appeals (CA) which af irmed the judgment of the trial land registration proceedings; (2) extrajudicial foreclosure of
court. mortgage of real property; (3) judicial foreclosure of property
provided that the mortgagor has possession and no third party has
Undaunted, respondents found their way to this Court, assigning as intervened, and (4) execution sales.[12] Here, petitioners seek the
sole error the ruling of the CA upholding the right of petitioners. writ as a consequence of the trial court's decision ordering the
The case was docketed as G.R. No. 111743. execution of a contract of sale/contract to sell in their favor. The
writ does not lie in such a case.
On October 8, 1999, we af irmed the decision of the CA and denied
respondents' petition for lack of merit.[5] We declared: Furthermore, the trial court's decision in the interpleader case
In the case under consideration, the contract of sale was already (af irmed by both the CA and the SC) merely resolved the question
perfected - PRC offered the subject lot for sale to [petitioners] of who, between petitioners and respondents, had the right to
Maglente and her group... Respondent Maglente and her group purchase PRC's property. The directive was only for PRC to execute
accepted such offer...manifesting their intention to purchase the the necessary contract in favor of petitioners as the winning parties,
property as provided for under the lease contract. Thus, there was nothing else. The trial court's writ of execution read:
already an offer and acceptance giving rise to a valid contract. As a NOW THEREFORE, [PRC] is hereby ordered to execute a contract of
matter of fact, [petitioners] have already completed payment of sale/contract to sell in favor of [petitioners] within thirty (30) days
their downpayment of P100,000. Therefore, as borne by evidence from the date of execution hereof. The Branch Sheriff shall return
on record, the requisites under Article 1318 of the Civil Code for a this Writ to the Court within thirty (30) days from the date of
perfected contract have been met. receipt... until the judgment is satis ied in full or its effectivity
expires. The returns of periodic reports shall set forth the whole of
On April 11, 2000,[6] we ordered entry of judgment.On motion of the proceedings taken and shall be iled with the Court and copies
petitioners, a writ of execution was later issued by the RTC directing thereof promptly furnished the parties..[13] (emphasis supplied)It
PRC to execute the contract of sale/contract to sell in favor of was clear that, at that point, petitioners were not yet the owners of
petitioners. the property. The execution of the "deed of sale" in their favor was
only preliminary to their eventual acquisition of the property.[14]
As ordered, PRC executed a "deed of sale" in favor of petitioners. Likewise, although we stated in G.R. No. 111743[15] that the
The latter then iled a motion for the issuance of a writ of contract of sale between petitioners and PRC had already been
possession but respondents (who were occupying the property) perfected, we refrained from declaring them the owners since,
objected on the ground that the trial court's decision on the pending the execution of the deed of sale or delivery of the property,
interpleader case merely resolved petitioners' right to purchase the ownership had yet to transfer to them at that time.[16]
leased property but did not declare them as the owners entitled to
possession. The trial court sustained respondents' argument and Thus, petitioners' argument that the trial court's writ of
denied petitioners' motion.[7] execution[17] in the interpleader case carried with it the corollary
right to a writ of possession is without merit. A writ of possession
Petitioners are now before us via this special civil action for complements the writ of execution only when the right of
certiorari raising this sole query: whether or not they are entitled to possession or ownership has been validly determined in a case
a writ of possession after being adjudged (in the interpleader case) directly relating to either.[18] The interpleader case obviously did
as the proper parties to buy the subject property, considering that a not delve into that issue.
"deed of sale" has already been executed in their favor.[8]
Furthermore, the rule is that the enforcement of a judgment may
not vary or alter the tenor of the judgment but must strictly


conform to it.[19] It should be in harmony with the judgment that The Gepalago spouses, on the other hand, denied all the material
gives it life and not exceed it.[20] We thus cannot fault the trial allegations in the complaint and claimed that they were the
court for refusing to issue a writ of possession to petitioners as its registered owners of a 5,970-square meter property located in
issuance would not be in conformity with the trial court's judgment Candungao Calapo, San Isidro, Bohol, and covered by TCT No.
in the interpleader case. 16042, previously a portion of a 1,401,570 square-meter land
originally owned by a certain Pedro Luspo. The entire parcel of land
Finally, petitioners cannot recover possession of the property via a was mortgaged by Pedro Luspo to the Philippine National Bank
mere motion. They must ile the appropriate action in court against (PNB) as security for a loan. Since Luspo failed to pay the obligation
respondents to recover possession. While this remedy can delay upon maturity the mortgage was foreclosed. Thereafter PNB, the
their recovery, this Court cannot permit an abbreviated method highest bidder in the foreclosure sale, conveyed the whole property
without subverting the rules and processes established for the to ifty-six (56) vendees among whom were the spouses Sabas and
orderly administration of justice. Ruperta Gepalago who acquired the 5,970 square-meter portion
thereof. Since then, they had been the owner and possessor of the
WHEREFORE, the assailed order of the Regional Trial Court of land until they donated the same in 1988 to their son Domiciano
Manila, Branch 38, is hereby AFFIRMED. Accordingly, the petition is Gepalago.
DISMISSED. The trial court appointed a commissioner to survey the litigated
property and determine the areas claimed by both parties. The
Costs against petitioners. commissioner reported that the area claimed by the Vencilaos was
included in the titled property of the Gepalagos. On the basis of the
SO ORDERED. commissioner’s report and the other pieces of evidence presented
by the parties, the trial court found the following: (a) The property
Puno, C.J., (Chairperson), Sandoval-Gutierrez, and Garcia, JJ., concur. claimed by the Gepalagos consisted of 5,970 square meters, while
Azcuna, J., on of icial leave. that of the Vencilaos covered an area of 22,401.58 square meters as
indicated in the survey plan submitted by Engr. Jesus H. Sarmiento,
Heirs of L. Vencilao Sr. vs Court of the court appointed commissioner; (b) Insofar as the survey plan
and report submitted by Engr. Sarmiento were concerned, these
Appeals, G.R. No. 123713, April 01, 1998 indubitably established the fact that the Vencilaos owned the excess
351 Phil. 815
area of 16,431.58 square meters which was clearly outside the area
claimed by the Gepalagos; (c) The lot in question had been titled to
FIRST DIVISION
defendant Sabas Gepalago and subsequently titled to his son,
G.R. No. 123713, April 01, 1998
defendant Domiciano Gepalago, under Transfer Certi icate of Title
HEIRS OF LEOPOLDO VENCILAO, SR., REPRESENTED BY THEIR
No. 18621 by virtue of a deed of donation executed on 25 October
ADMINISTRATOR ELPIDIO VENCILAO, PETITIONER, VS. COURT OF
1988 by Sabas Gepalago in favor of Domiciano Gepalago; and, (d) As
APPEALS, SPOUSES SABAS AND RUPERTA GEPALAGO, AND
stated in the commissioner’s report, "If the titled lot of Domiciano
DOMICIANO GEPALAGO, RESPONDENTS.
Gepalago is plotted in accordance with the technical description
appearing in the title, it will be relocated to more than 219
DECISION
kilometers eastward away from its supposed actual location. This
BELLOSILLO, J.:
amounts to its non-existence."[3]
The trial court then ruled in favor of the Vencilaos holding that they
Between two (2) sets of claimants of real property - those claiming
had been in possession, cultivation and enjoyment of the litigated
ownership by acquisitive prescription, and those asserting
property for more than thirty (30) years and that the improvements
ownership on the basis of a deed of sale recorded in the certi icate
therein were introduced by them long before any title was ever
of title of the vendor as mortgagee and highest bidder in a
issued to the Gepalagos. The lower court added that there was
foreclosure sale - who has a better right?
ample evidence showing that the Gepalagos knew when they
On 12 February 1990 the heirs of Leopoldo Vencilao Sr., represented
bought the property from PNB that the land had long been
by their Administrator Elpidio Vencilao, iled with the Regional Trial
possessed and enjoyed in the concept of owners by the Vencilaos.
Court of Bohol a complaint for quieting of title, recovery of
Thus, while under ordinary circumstances a certi icate of title is
possession and/or ownership, accounting and damages with prayer
indefeasible, it is not so when a person with prior knowledge of the
for the issuance of writs of preliminary prohibitory and mandatory
ownership and possession of the land by another obtains title to it.
injunction against the spouses Sabas and Ruperta Gepalago.[1] The
The Gepalagos appealed the decision of the trial court. After due
complaint was subsequently amended to include an action for
consideration, the Court of Appeals reversed the trial court and
reconveyance and cancellation of title and to implead defendant
declared the Gepalagos owners of the disputed property -
Domiciano Gepalago.[2]
Evidently, defendant-appellants spouses Gepalago were purchasers
The heirs of Leopoldo Vencilao Sr. alleged that they were the
in good faith and for value. They acquired their share in the
absolute owners of a parcel of land situated in Cambansag, San
property from the Philippine National Bank (PNB) which was the
Isidro, Bohol, with an area of 3,625 square meters having inherited
registered owner. Even assuming they had knowledge of the
the same from their father, Leopoldo Vencilao Sr., who during his
plaintiff-appellees' possession of the said property at the time of the
lifetime was in peaceful, open, notorious and uninterrupted
purchase, it was PNB which was the registered owner of the
possession and enjoyment of the property in the concept of owner,
property. The title was transferred to the bank after the foreclosure
declared the property for taxation purposes under Tax Declaration
sale of the property mortgaged by the previous registered owner,
No. 37C6-344 and religiously paid the real estate taxes. He likewise
Pedro Luspo. Thus where the certi icate of title is in the name of the
had the property consistently declared as his own in other
vendor when the land is sold, the vendee for value has the right to
documents, e.g., those relevant to the 1987 Comprehensive Agrarian
rely on what appears on the certi icate of title. The rule that all
Reform Program (CARP). After his death, his heirs continued to
persons dealing with property covered by Torrens Certi icate of
possess and enjoy the property.
Title are not required to go beyond what appears on the face of the


title is well-settled.Granting that plaintiff-appellees were possessors obligation to look beyond the certi icate and investigate the title of
of the property for a long time, they never raised objections to the the vendor appearing on the face of the certi icate. By way of
transactions affecting the land. There was no action made or any exception, the vendee is required to make the necessary inquiries if
protest recorded with the Register of Deeds.Defendant-appellants’ there is anything in the certi icate of title which indicates any cloud
claim of ownership was evidenced by certi icates of title issued in or vice in the ownership of the property.[15] Otherwise, his mere
their names. A Torrens Certi icate of Title is the best evidence of refusal to believe that such defect exists, or his willful closing of his
ownership of a registered land. As against the allegations of eyes to the possibility of the existence of a defect in his vendor’s
plaintiff-appellees, defendant-appellants are the ones entitled to the title, will not make him an innocent purchaser for value if it
property. Defendant-appellants’ ownership of the property was afterwards develops that the title was in fact defective, and it
evidenced by a certi icate of title while plaintiff-appellees relied appears that he had such notice of the defect as would have led to
merely on tax declaration. Torrens title is generally a conclusive its discovery had he acted with that measure of precaution which
evidence of the ownership of the land referred to therein. may reasonably be required of a prudent man in a like situation.[16]
Defendant-appellants acquired the land in a foreclosure sale and Petitioners maintain that it is the exception, not the general rule,
there was no evidence to show that plaintiff-appellees were which should be applied in this case. They argue that respondents
defrauded when the property was mortgaged and then sold x x x x had knowledge of prior possession and enjoyment by petitioners
[4] when they purchased the property. Thus, they were not innocent
The motion for reconsideration by the Vencilaos having been purchasers for value and could not invoke the indefeasibility of
denied[5] they iled the instant petition for review. their title.
In awarding the disputed land to petitioners, the trial court We do not agree. The exception contemplates a situation wherein
erroneously found that petitioners had been in possession and there exists a law in the title of the vendor and the vendee has
enjoyment of the property for more than thirty (30) years. It should knowledge or at least ought to have known of such law at the time
be noted that the land in dispute is a registered land placed under he acquired the property, in which case, he is not considered as an
the operation of the Torrens system way back in 1959, or more than innocent purchaser for value. In the instant case, we discern
thirty (30) years before petitioners instituted the present action in nothing from the records showing that the title of PNB, the vendor,
the court a quo, and for which Original Certi icate of Title No. 400 was lawed. Petitioners not only failed to substantiate their claim of
was issued.[6] The rule is well-settled that prescription does not acquisitive prescription as basis of ownership but they also failed to
run against registered land. Thus, under Sec. 47 of PD 1529, allege, and much less adduce, any evidence that there was a defect
otherwise known as the Property Registration Decree, it is in the title of PNB. In the absence of such evidence, the presumption
speci ically provided that "no title to registered land in derogation leans towards the validity of the vendor’s title.
of that of the registered owner shall be acquired by prescription or Therefore, inasmuch as there was no law in the title of PNB, private
adverse possession." A title, once registered, cannot be defeated respondents rightly believed that they could and did acquire
even by adverse, open and notorious possession. The certi icate of likewise a lawless title. Indeed, as a result of the deed of
title issued is an absolute and indefeasible evidence of ownership of conveyance between PNB and private respondents, there was
the property in favor of the person whose name appears therein. It transmission of ownership and the latter stepped into the shoes of
is binding and conclusive upon the whole world.[7] All persons the former hence entitled to all the defenses available to PNB,
must take notice and no one can plead ignorance of the including those arising from the acquisition of the property in good
registration.[8] faith and for value.
Neither can the tax declarations and tax receipts presented by Finally, another consideration that militates heavily against the
petitioners as evidence of ownership prevail over respondents’ present petition is the unusual silence of petitioners while the
certi icate of title which, to reiterate, is an incontrovertible proof of ownership of the disputed land transferred from one person to
ownership. It should be stressed that tax declarations and receipts another. There were at least three (3) transactions on record
do not by themselves conclusively prove title to the land.[9] They involving the property: irst, the contract of mortgage between
only constitute positive and strong indication that the taxpayer Luspo and PNB whereby the property was used as security for the
concerned has made a claim either to the title or to the possession loan contracted by Luspo; second, the foreclosure of mortgage upon
of the property for which taxes have been paid.[10] Stated the failure of Luspo to pay the loan and the subsequent sale of the
differently, tax declarations and tax receipts are only prima facie property at public auction; and, third, the sale of the property to
evidence of ownership or possession. ifty-six (56) vendees, among whom were the Gepalago spouses.
But assuming ex gratia argumenti that petitioners had indeed Each of these transactions was registered and a corresponding
acquired the land they were claiming by prescription, there likewise transfer certi icate issued in favor of the new owner. Yet in all these,
exists a serious doubt on the precise identity of the disputed petitioners never instituted any action contesting the same nor
property. What petitioners claimed in their complaint was a parcel registered any objection thereto; instead, they remained silent.
of land located in Cambansag, San Isidro, Bohol, with an area of Thus, they are now estopped from denying the title of the present
3,625 square meters.[11] This clearly differs from the piece of land owner. Having failed to assert their rights, if any, over the property
registered in the name of the Gepalagos, which is Lot No. A-73 of the warrants the presumption that they have either abandoned them or
Subdivision Plan (LRC) Psd-60558, LRC Rec. No. H-4251, and declined to assert them. Or, it could likewise be inferred therefrom
located in Candungao Calapo, San Isidro, Bohol, with an area of that petitioners themselves were not convinced in the validity of
5,970 square meters.[12] Even the commissioner’s report failed to their claim.
clarify the difference in the area and location of the property WHEREFORE, the petition is DENIED. The Decision of the Court of
claimed. In order that an action to recover ownership of real Appeals of 31 July 1995 as well as its Resolution of 14 December
property may prosper, the person who claims that he has a better 1995 denying reconsideration is AFFIRMED. Costs against
right to it must prove not only his ownership of the same but also petitioners.
satisfactorily prove the identity thereof.[13] SO ORDERED.
As a general rule, where the certi icate of title is in the name of the Davide, Jr., (Chairman), Vitug, Panganiban, and Quisumbing, JJ.,
vendor when the land is sold, the vendee for value has the right to concur.
rely on what appears on the face of the title.[14] He is under no


Pang-oden vs Leonen, G.R. NO. 138939, question. It was then that Manuel Leonen discovered that
petitioners had encroached on the 1,336.5-square meter portion of
December 06, 2006 their property and had in fact occupied the same. Respondents
539 Phil. 148
brought the matter before the local barangay authorities but
Alejandro Pang-oden refused to surrender possession of said
SECOND DIVISION
portion claiming that he is the lawful owner thereof.
G.R. NO. 138939, December 06, 2006
MR. AND MRS. ALEJANDRO PANG-ODEN, PETITIONERS, VS. ISABEL
On September 25, 1992, after repeated demands to vacate the
LEONEN, CATALINA G. LEONEN, CAYETANO LEONEN, MANUEL
subject strip of land remained unheeded, the respondents iled a
LEONEN, ANGEL LEONEN, MARIA LEONEN, HERMINIA LEONEN,
complaint for Recovery of Possession Based on Ownership against
TERESITA L. ACOSTA, AND FRANCISCO LEONEN, RESPONDENTS.
the spouses Alejandro and Saturnina Pang-oden before the RTC of
Balaoan, La Union, thereat docketed as Civil Case No. 440.
DECISION
GARCIA, J.:
In their Answer with Counterclaim, the spouses Alejandro and
Saturnina Pang-oden claimed that the 1,336.5-square meter strip of
In this petition for review under Rule 45 of the Rules of Court,
land in question was part of a bigger property with an area of
petitioner-spouses Alejandro Pang-oden and Saturnina Pang-oden
12,674-square meters originally owned by Alejandro's mother,
assail and seek to set aside the decision[1] dated June 8, 1998 of the
Sotera Apusen, under Tax Declaration No. 4506. They also averred
Court of Appeals (CA) in CA-G.R. CV No. 54494, as reiterated in its
that it was around the year 1950 when Manuel Leonen started
Resolution[2] of January 7, 1999, denying the petitioners' motion
cultivating the subject strip of land and planted crops thereon, but
for reconsideration.
only upon the mere tolerance of Alejandro's mother.
The assailed decision af irmed an earlier decision[3] of the Regional

On November 23, 1995, the RTC rendered judgment for the
Trial Court (RTC) of Balaoan, La Union, Branch 34, in Civil Case No
respondents as plaintiffs thereat, adjudging the latter to be the
440, an action for Recovery of Possession Based on Ownership,
lawful and exclusive owners of the property in question, and
thereat commenced by the herein respondents against the
ordering the spouses Pang-oden to vacate the same and pay the
petitioners.
respondents the amount of P1,000.00 representing the yearly
harvest of the land; P10,000.00 as attorney's fees; P10,000.00 as
Basically, the case involves a boundary dispute between petitioners
moral damages; and P5,000.00 as litigation expenses.
and respondents. Both claim ownership of a strip of land consisting
of 1,336.5 square meters.
From the adverse decision of the trial court, the spouses went on
appeal to the CA in CA G.R. CV No. 54494. On June 8, 1998, the CA
The facts:
came out with its herein challenged decision af irming that of the
trial court, minus the award of P1,000.00 for the yearly harvest of
Petitioners and respondents are the owners of two (2) adjoining
the land, thus:
parcels of land located at Sudipen, La Union. Petitioners' land is at
WHEREFORE, the appealed Decision is AFFIRMED with the
the eastern portion while that of the respondents is at the western
MODIFICATION that the order to pay xxx the amount of P1,000.00
side. The two properties have a common boundary: a creek which
representing the yearly harvest of the land from 1989 up to the time
ran from south to north, such that petitioners' property was
ownership and possession is inally restored is SET ASIDE.
bounded by said creek on the west, while that of respondents was
bounded by the same creek on the east.
Costs against defendants-appellants.
Due to constant heavy rains and lood, water from the creek
SO ORDERED.Partly says the CA in its decision:
over lowed and destroyed the irrigation canal located at the north
Based on the evidence submitted by plaintiffs-appellees [herein
of the property in dispute. In order to minimize the damage to the
respondents], it was established that there was indeed an old creek
irrigation canal, the National Irrigation Administration (NIA)
that used to separate the properties of plaintiffs-appellees and the
diverted the course of the creek so rain water will not go directly to
defendants-appellants [herein petitioners] which originally ran
the irrigation canal. As a result, the course of the creek which
from south to north. It has likewise been established by
originally ran from south to north and which used to separate the
overwhelming evidence that a new creek was later created that now
respective properties of the parties was instead diverted to run
runs from south to northwest and thus cuts through
from south to northwest, passing through the middle portion of the
plaintiffs-appellees' property.
respondents' property and resulting to the formation of a new
creek. Consequently, the NIA asked the permission of Manuel
xxx xxx xxx
Leonen, one of the herein respondents, to allow it to use the new
creek as an irrigation canal. Manuel Leonen consented. The portion
These witnesses are, as aptly noted by the trial court, "disinterested
segregated by the new creek, consisting of 1,336.5 square meters, is
witnesses testifying to a fact of public knowledge that there was an
the strip of land subject of this controversy.
original creek in the eastern boundary of the property of Dionisio
Leonen." Their testimonies were properly found to be credible as
According to the respondents, the property in question forms part
they were consistent with the cadastral survey and the survey plan
of a bigger parcel of land with an area of 5,370 square meters
submitted by plaintiffs-appellees.
declared in the name of their father and predecessor-in-interest,
Dionisio Leonen, under Tax Declaration No. 6473. For more than 50
xxx xxx xxx
years, they have been in quiet, peaceful, adverse and uninterrupted
possession of the disputed property. Sometime in 1976, however,
xxx. And by the creation of the new creek that cuts through the
Manuel Leonen saw the carabao of petitioner Alejandro Pang-oden
property of plaintiffs-appellees, defendants-appellants cannot claim
devouring the Leonens' sugar cane crops planted on the property in


ownership of the segregated portion (subject of this case) because common boundary of the respective properties of the parties, and of
as far as their property is concerned, the parcel of land left by the subsequent diversion of the creek to its present position which
Sotera Apusen remains bounded on the west by the old creek and now cuts through the middle portion of the respondents' property.
cannot extend to the portion segregated by the new creek. (Words Petitioners insist, however, that their testimonies are replete with
in brackets added).[4]Their motion for reconsideration having been inconsistencies and contradictions which render said testimonies
denied by the appellate court in its Resolution of January 7, 1999, unworthy of belief. The Court disagrees. The two courts below both
the spouses Pang-oden are now with this Court via the instant found their testimonies credible. Matters of credibility of witnesses
recourse, contending that the CA gravely erred: are best addressed to the sound judgment of the trial court, and this
I Court generally defers to the trial court's assessment because it has
the singular opportunity to observe the demeanor of witnesses and
XXX IN AWARDING THE OWNERSHIP OF THE PROPERTY IN SUIT their manner of testifying.[9] Besides, as correctly pointed out by
(1,336.5 SQ. M. IN AREA) LOCATED WITHIN SITIO PANGASAAN, the CA, the inconsistencies cited by the petitioners refer to minor
NAMALTUGAN, SUDIPEN, LA UNION, TO RESPONDENTS WHEN and collateral matters which do not affect the credibility of said
THEIR PROPERTY IS LOCATED AT SITIO BIMMODET, witnesses.
NAMALTUGAN, SUDIPEN LA UNION.
For sure, the witnesses' testimonies were amply supported by the
II report and sketch plan prepared by the court-appointed
commissioner, which revealed the existence of an old creek running
XXX IN AFFIRMING THE AWARDS OF P10,000.00 AS ATTORNEY'S from south to north, and the creation of a new creek from south to
FEES, P10,000.00 AS MORAL DAMAGES AND P5,000.00 AS northwest. The same sketch plan showed that the location of the
LITIGATION EXPENSES TO RESPONDENTS. house of Sotera Apusen, mother of petitioner Alejandro Pang-oden,
was bounded on the west by the old creek, which creek bounds the
III lot of Dionisio Leonen on the east. This bolsters the fact that there
was indeed an old creek which used to separate the respective
XXX IN NOT REVERSING THE DECISION OF THE TRIAL COURT properties of the herein parties.
SINCE RESPONDENTS' COMPLAINT LACKS THE REQUIRED
QUANTUM OF PROOF AND THE TESTIMONY OF THEIR WITNESSES Worth mentioning is the provision of Article 434 of the Civil Code
ARE NOT IN HARMONY WITH THE STATE OF AFFAIRS IN THE which ordains that "in an action to recover, the property must be
LOCALITY.[5] identi ied, and the plaintiff must rely on the strength of his title and
not on the weakness of the defendant's claim." Hence, in order that
We DENY.In the main, the only issue to be resolved is: who, as an action for the recovery of property may prosper, it is
between the petitioners and the respondents, own the strip of land indispensable that the party who prosecutes it must fully prove, not
subject of the suit. only his ownership of the thing claimed, but also the identity of the
same.[10] As we see it, the evidence presented in this case showed
Petitioners contend that no new creek was created and that the that the property subject of the dispute rightfully belongs to the
present creek is the same creek which bounds their property on the respondents, as it was established that the same is part of the parcel
west, thus making them the owners of the property in question. of land declared under the name of respondents'
Likewise, the petitioners argue that both the trial and appellate predecessor-in-interest, Dionisio Leonen. Indeed, the veri ication
courts should have relied on the boundaries and exact location of survey of the contested property conducted by Juvenal Quitoriano, a
the subject property. Finally, they fault the CA for giving credence to geodetic engineer, revealed that it was in the name of Dionisio
the con licting testimonies of the respondents' witnesses. Leonen. Too, the identity of the disputed strip of land has been
proven in a conclusive manner as its location corresponds with
In assailing the appellate court's decision, petitioners impute errors those given by the witnesses and the record of the ocular
which basically involve questions of fact and the appreciation of inspection. The cadastral survey of the property clearly identi ies
evidence by the two courts below. This case furnishes another and delineates the extent of the subject land. As the petitioners
occasion for us to reiterate the settled principle that this Court's failed to substantiate their claim that the present creek is still the
jurisdiction in a petition for review under Rule 45 is limited to same creek which bounds their property on the west, the
reviewing and correcting only errors of law, not of fact, the only respondents have the right to recover possession of the disputed
power of the Court being to determine if the legal conclusions strip of land.
drawn from the indings of fact are correct.[6] Absent any showing
that the indings complained of are totally devoid of support from In sum, the evidence on record clearly establish that there used to
the evidence on record, or that the judgment itself is based on be an old creek originally running from south to north and
misapprehension of facts, such indings must stand. The Court is not separating the property of the petitioners from that of the
expected or required to examine or refute the oral and documentary respondents. Then, due to expediency and necessity of protecting
evidence submitted by the parties.[7] The Court inds no reason to the irrigation canal in the area, the course of that creek was
depart from this settled rule, it appearing that the indings of fact by subsequently diverted to run from south to northwest, cutting
the courts a quo are fully substantiated by the evidence extant on through the property of the respondents. Hence, the portion
record. Likewise, the Court has consistently ruled that the indings segregated (the subject property) from respondents' land as a result
of fact by the CA, especially if such indings, as here, are af irmatory of such diversion continues to be their property and they shall
of those of the trial court, will not be disturbed on appeal.[8] retain ownership of the same.
The CA and the trial court relied on the testimonies of two (2) We are, however, with the petitioners in their challenge as regards
disinterested witnesses: Gregorio Libao, a retired employee of the the trial court's award of moral damages, attorney's fees and
NIA, and Anacleto Dicta-an, a resident of Sudipen, La Union. Both expenses of litigation, as af irmed by the CA. As it is, the trial court
testi ied as to the existence of an old creek which served as the erred in this respect, as it did not disclose in the body of its decision


the factual basis for such awards. Whenever such awards are made, the possession of the property to Simeona Balhon and her
the court must explicitly state in the body of its decision, and not children-heirs of Anastacio Fabela, without need of “redemption”;
merely in its dispositive portion, the legal reason for the award.[11] that sometime in 1977 or 1978, the Bureau of Lands conducted a
Here, the trial court made the award only in the dispositive portion cadastral survey on this land when a road (Barrio Abacan road) was
of its decision without stating the basis therefor in the body thereof. constructed across the land dividing it into two separate lots which
The power of courts to grant damages and attorney's fees demands are now known as lot 868 and 870; that Roque Neri Sr. declared
factual, legal and equitable justi ication; its basis cannot be left to these two parcels of land in his name with the Bureau of Lands and
speculation or conjecture.[12] the Assessor’s of ice; that sometime in 1980, the Philippine
Veterans Industrial Development Corporation (PHIVIDEC), a
WHEREFORE, the instant petition is DENIED and the assailed CA government entity buying substantially all real properties at
decision dated June 8, 1998 is AFFIRMED, with the MODIFICATION Nabacaan, Villanueva, Misamis Oriental, negotiated with Roque Neri
that the award of moral damages, attorney's fees and litigation Sr. for the purchase of lot 870, however, the heirs of Anastacio
expenses is DELETED. Fabela, protested and consequently, Roque Neri Sr. executed a
waiver of rights over a portion of lot 870 stating that the 8,000 sq.
Costs against the petitioners. meter portion of lot 870 was erroneously included in his name, thus
plaintiff heirs of Anastacio Fabela eventually received the proceeds
SO ORDERED. of the sale; that with respect to lot 868, which was the lot in
controversy, the late Roque Neri Sr. continued to ignore plaintiffs’
Puno, (Chairperson), Sandoval-Gutierrez, and Azcuna, concur. demand for the return of the said lot. Plaintiffs prayed for judgment
Corona, J., on leave. declaring (1) the plan of lot 868, Pls-293 and the tax declarations
issued subsequent to and by virtue of aforesaid plan as null and
Heirs of Anastacio Fabela vs Court of void, (2) the heirs of Anastacio Fabela as the lawful owners of lot
868, and (3) the estate of Roque Neri Sr. liable for payment of
Appeals, G.R. No. 142546, August 09, 2001 damages.
414 Phil. 838
Upon motion of plaintiffs heirs of Anastacio Fabela, defendants
Sherlinda Neri Jamisolamin, Emeterio Neri and Antonio Neri, were
THIRD DIVISION
declared in default on April 14, 1986, Filomena Neri on September
G.R. No. 142546, August 09, 2001
26, 1986 while Nelchar and Claudia Neri on February 9, 1989, for
HEIRS OF ANASTACIO FABELA, NAMELY; TEODULA FABELA
their failure to ile answer despite receipt of summons and copy of
PAGUIDOPON, RICARDO FABELA, IRENITA FABELA ZEA(D),
the complaint. On the other hand, defendant Roque B. Neri, Jr. had
CAROLINA FABELA ARAZO DONGLAS, AND AMPILOQUIO FABELA,
iled his answer with Counterclaim, but was likewise declared in
PETITIONERS, VS. HON. COURT OF APPEALS, HEIRS OF ROQUE
default for failure to appear at pre-trial on August 12, 1988.
NERI, NAMELY: ROQUE NERI, JR., FILOMENO, SHERLINA,
The case was submitted for decision on the basis of plaintiffs’
EMETERIO, ANTONIO, NELCAR AND CLAUDIA, ALL SURNAMED
evidence since all the defendants were declared in default. After
NERI, RESPONDENTS.
trial and hearing ex-parte, the trial court rendered judgment in
favor of plaintiffs, the dispositive portion reads:[4]
DECISION
“WHEREFORE, in view of the foregoing, judgment is rendered in
GONZAGA-REYES, J.:
favor of the heirs of the late Anastacio Fabela including those named
in the Complaint as plaintiffs, as co-owners of lot 868, Pls-293
Petitioners, heirs of Anastacio Fabela, seek to annul the (1) decision
subject of the complaint and as indicated in the plan (Exhibit D), as
of the respondent Court of Appeals dated June 17, 1999[1] which
such entitled to the full enjoyment and possession thereof. All other
reversed and set aside the appealed judgment by default of the
prayers or claims in the complaint are denied for lack of merit.”
Regional Trial Court of Misamis Oriental, Branch 18, Cagayan De
In inding that the property belonged to the heirs of Anastacio
Oro City[2] in Civil Case No. 10459 declaring petitioners as the
Fabela, the trial court concluded that in the “Escritura de
rightful owners of subject lot 868 of the Pls. 293 of Balacanas,
Transaccion,” Carmelino Neri was obliged to restore the subject
Nabacaan, Villanueva, Misamis Oriental, and (2) its resolution dated
property in or about 1938 to the heirs of Anastacio Fabela; thus the
February 18,[3] 2000 denying petitioners’ motion for
ful illment of that prestation of Carmelino Neri was presumed
reconsideration.
under Section 5, par (ii), Rule 131, Rules of Court which enumerates
Sometime in December 1985, the heirs of Anastacio Fabela iled a
among the disputable presumptions “that a trustee or other person
complaint for reconveyance and damages against the heirs of Roque
whose duty it was to convey real property to a particular person has
Neri, Sr., involving the subject lot 868, alleging among others, that
actually conveyed it to him when such presumption is necessary to
plaintiffs’ late grandfather, Anastacio Fabela, left two parcels of land
perfect the title of such person or his successor-in interest.” It thus
in Nabacaan, Misamis Oriental which were later identi ied as lot
found that the Fabela heirs have been in possession of lot 868 since
868 with an area of 48,121 sq. meters and lot 870 consisting of
1938 up to the present and as such were entitled to the full
15,658 sq. meters which originally formed part of their
enjoyment and possession as owners thereof.
grandfather’s big tract of land; that earlier in 1924, the parcel of
On July 24, 1989, defendants heirs of Roque Neri Sr. iled a motion
land became the subject of litigation (Civil Case No. 2891) in the
to set aside orders of default and judgment which the trial court
then Court of First Instance of Misamis Oriental between Carmelino
denied in an Order dated August 22, 1989, on the grounds that the
Neri as plaintiff and Simeona Balhon and children heirs of Anastacio
motion had been iled out of time (after judgment) and that even if
Fabela as defendants and in connection therewith, the parties
such motion would be treated as a motion to set aside
entered into an agreement embodied in an “Escritura de
judgment/new trial under Section 1, Rule 37, Rules of Court,
transaccion”, a notarized document in a Visayan dialect, which
defendants’ negligence was not excusable, much less a mistake.[5]
provided that Carmelino Neri, as vendee-a-retro had been entrusted
Heirs of Roque Neri Sr. appealed to the respondent Court of
with the possession of a parcel of land for a period of fourteen (14)
Appeals. Considering, however, that the original records of the case
years from the date of the instrument which was May 10, 1924 and
from the trial court had been lost or misplaced, the respondent
upon the expiration of said period, Carmelino Neri was to restore


court, pursuant to Rule 7 of the Revised Internal Rules of the Court of possession was through the land’s caretaker and administrator,
of Appeals (RIRCA), set the case for preliminary conference on Del in Sia, but at the same time admitting that appellants similarly
December 17, 1998, which was reset to January 26, 1999, and the bene it from the fruits of the land. Regarding tax declarations, it has
parties were informed of the loss of the original records of the case. been held that while tax declarations and receipts are not
Counsel for defendants-appellants heirs of Roque Neri Sr. conclusive evidence of ownership, yet, when coupled with proof of
manifested her clients’ willingness to submit the case for decision, actual possession, they are strong evidence of ownership. Thus,
even without the original records and asked for thirty days to ile where it was shown that plaintiff has never paid the land tax, while
memorandum, to which manifestation counsel for the defendant has faithfully done so for many years, there being no
plaintiffs-appellees heirs of Fabela interposed no objection. The explanation offered, it was held that such payment of taxes should
respondent court granted appellants’ prayer and gave be taken into consideration in favor of defendant. Being the
plaintiffs-appellees twenty days to ile their counter memorandum exclusive possessors of the subject property who have declared the
and appellants ten (10) days to ile reply memorandum, after which same for tax purposes through the years, defendants-appellants are
the case was submitted for decision.[6] entitled to such favorable presumption of ownership which so far
On June 17, 1999, the respondent Court of Appeals rendered its had not been overturned by plaintiffs-appellees.The foregoing
assailed decision reversing the trial court’s judgment by default and considered, it is clear that plaintiffs had not successfully proved by
dismissed the complaint. It sustained the trial court’s declaration of the required preponderance of evidence their claim of absolute
default against appellants heirs of Roque Neri, Sr. but found that the ownership of Lot 868. It is an invariable rule laid down in numerous
judgment of default was contrary to the evidence or the law. It decisions, that a person who claims the ownership of property is in
concluded that petitioners had not successfully adduced the duty bound to clearly identify the land claimed, in accordance with
required preponderance of evidence on their claim of absolute the titles on which he founds (sic) his right to ownership, and he
ownership over lot 868, the court stated:[7] shall not be permitted to rely upon the defects in defendant’s title.
“Art. 434 of the Civil Code states that “In an action to recover, the Failure to prove his right of ownership will bar an action to recover
property must be identi ied, and the plaintiff must rely on the the property; his right to recover must be founded on positive title
strength of his title and not on the weakness of the defendant’s or right, and not merely on negative ones, such as the lack or
claims. The possessor of the property has the presumption of title in insuf iciency of title on the part of the defendant. The possessor has
his favor. Hence, any person who claims that he has a better right to a presumption of title, and unless the plaintiff proves he has a better
the property, as owner thereof, must prove (1) that he has a better right, he cannot recover the property from the defendant.”
title than the defendant to the property, and (2) the identity of the Appellees’ motion for reconsideration was denied in a resolution
property. The identity of the land sought to be recovered may be dated February 18, 2000.
established through the survey plan of the property. Ownership may Hence this petition for review on certiorari iled by the heirs of
be proved by any evidence admissible in law, such as titles and Anastacio Fabela alleging that the respondent court (1) departed
certi icates, long possession and tax declarations or from the stringent jurisprudence on default and appeals iled out of
receipts.Appellees claimed that Lots 868 and 870 are owned by time and (2) erred in the appreciation of the indings of fact of the
their grandfather Anastacio Fabela. The records of the Bureau of lower court.
Lands, as well as the survey plan presented in court, however, Anent the irst assigned error, petitioners fault the respondent court
indicate Roque Neri, Sr. as the registered claimant of both lots. The for reversing the decision of the trial court despite its complete
original of the ‘Escritura de Transaccion’ on which appellees relied agreement with the indings of the trial court that respondents
heavily, was not presented in court. Its probative value, however, were properly declared in default. They contend that the reasons
remains doubtful since said document does not really prove cited by private respondents for their failure to ile answer and to
appellees’ absolute ownership of the subject property, nor was Lot appear at the pre-trial were not meritorious and that private
868 explicitly referred to as the property being entrusted to the respondents’ af idavit attached to the motion for reconsideration
vendee-a-retro (Carmelino Neri).On the other hand, the waiver of did not declare how Roque Neri Sr. acquired lot 868.
rights executed in 1980 by Roque Neri, Sr. appears to refer only to a We are not persuaded.
portion of Lot 870 (the parcel of land sold to PHIVIDEC), and not to Section 1, Rule 18[8] of the old Rules of Court which is the law
Lot 868. The old tax declaration presented by appellees and which applicable in the instant case provides:
supposedly covered the two (2) lots did not specify the lot number, “Judgment by default- If the defendant fails to answer within the
nor was there any evidence presented that the original parcel of time speci ied in these rules, the court shall, upon motion of the
land actually consisted of eighteen (18) hectares. Their allegation plaintiff and proof of such failure, declare the defendant in default.
that both lots have already been partitioned among the heirs of Thereupon, the court shall proceed to receive the plaintiff’s
Anastacio Fabela was not substantiated by any document or writing evidence and render judgment granting him such relief as the
evidencing such extra-judicial partition. The fourteen (14) years of complaint and the facts proven may warrant. This provision applies
the agreed temporary possession of the land by the where no answer is made to a counterclaim, cross-claim, or
defendants-appellants had lapsed a long time ago, and this was third-party complaint within the period provided in this rule.”
prior to the 1971 public survey conducted by the Bureau of Lands. Favorable relief can be granted only after the court has ascertained
It appears appellees did not exert diligent efforts to regain that the evidence offered and the facts proven by the presenting
possession or resume paying taxes on the land thereafter, prior to party, petitioners in this case, warrant the grant of the same.[9] In
the purchase of Lot 870 by PHIVIDEC. The fact that appellees were this sense, the law gives the defaulting parties some measure of
the ones paid by PHIVIDEC for the portion of Lot 870 does not protection because plaintiffs, despite the default of defendants, are
automatically lead to the conclusion that they also absolutely own still required to substantiate their allegations in the complaint. The
Lot 868. Most signi icant yet, is appellees’ failure to adequately judgment of default against defendants who have not appeared or
explain why they had not at all registered their claim over the iled their answers does not imply a waiver of all their rights, except
property with the Bureau of Lands during and after the public their right to be heard and to present evidence to support their
survey in the municipality.Roque Neri, Sr., appellants’ allegations.[10] Otherwise, it would be meaningless to require
predecessor-in-interest, meanwhile registered his claim or interest presentation of evidence if every time the other party is declared in
on the land and declared it for taxation purposes. Appellees’ claim default, a decision would automatically be rendered in favor of the


non- defaulting party and exactly according to the tenor of his possession of Carmelino Neri, as vendee-a retro, for a period of 14
prayer.[11] Since the trial court rendered a judgment of default years from the date of the instrument which was May 10, 1924 and
against private respondents, the latter took the appropriate remedy upon the expiration of which said Carmelino Neri was to restore the
which is an ordinary appeal under Section 2 Rule 41, par (3)[12], of possession of the property to Simeona Balhon and her children
the Rules of Court providing in part as follow: heirs of Anastacio Fabela, namely Petra Buenaventura, Julio and
“A party who has been declared in default may likewise appeal from Pedro, all surnamed Fabela, without need of ‘redemption’,” and “that
the judgment rendered against him as contrary to the evidence or to ful illment of Neri’s obligation was presumed to have taken place.”
the law, even if no petition for relief to set aside the order of default We note, however, that nowhere in the trial court’s narration of facts
had been presented by him in accordance with Rule 38.” were the boundaries of the parcel of land indicated with
Thus, notwithstanding the respondent court’s complete agreement particularity, nor the parcel of land referring to as lot 868. What
with the trial court’s indings that all the respondents were properly really de ines a piece of land is not the area mentioned in its
declared in default, it found that the judgment by default was description, but the boundaries therein laid down, as enclosing the
contrary to the evidence or the law and thus reversed the trial court land and indicating its limits.[18]
decision. Moreover, the testimony of petitioner heir Teodula Fabela
Anent the second error, petitioners claim that the respondent court Paguidopon which was quoted in part in petitioners’ own
erred in concluding that petitioners’ predecessor Roque Neri, Sr. memorandum[19] did not also clearly establish the relation of the
appeared as the registered claimant of lot 868 and 870 which was said “Escritura de Transaccion” to lot 868, to wit:
contrary to the indings of the trial court that the “plan showing lot “Q: Now, that bigger lot has the cadastral lot number before?A:
868 (Exh. D-2) and lot 870 (Exh. D-1) although appearing to have No because that was not yet surveyed.Q: Do you know who owns
been approved by Jose F. Gatus, OIC, Regional Director, on July 17, this lot?A: Our grandfather Anastacio Fabela.Q: Now while it
1986 does not on its face indicate for whom it had been approved”; was still in the hands of Anastacio Fabela while he was still alive, do
that Neri Sr. failed to produce evidence of ownership on how he you know what was the total area of the mother lot?A: Yes, it was
acquired the subject Lot No. 868. They further claim that the estimated by our father and we estimated it to be 18 hectares.Q:
execution in their favor by Roque Neri Sr. of a waiver of right over Do you have evidence to prove that it was indeed 18 hectares?A:
lot 870 where the former acknowledged the erroneous inclusion of Yes, ma’am.Q: I am showing to you an old document but only a
the lot in his name was a strong admission against interest on Neri’s xerox copy thereof entitled escritura de transaccion notarized by
part. They also contend that the respondent court erred in doubting Uldarico Akut in the year 1924, kindly take a look and see where is
the probative value of the “Escritura de Transaccion” only for the the 18 hectares which you have just mentioned?A: This one.
reason that the original was not presented in court. xxxxxxx
These arguments essentially raise factual issues which normally are ATTY. LLEGO: “x x x We will have this marked as our Exhibits
not reviewable by this Court in a petition under Rule 45 which is A, A-1 to A-3.”
generally limited only to question of law.[13] While certain xxxxxxx
exceptions to this rule are recognized such as when the factual (TSN of 2/9/89 pages 16 to 18 (topmost)COURT:
indings of the respondent Court of Appeals are at variance with Plaintiff is ordered to prepare the English translation of that
those of the Regional Trial Court, the Court does not, in all cases of document.
disagreement of facts between these two courts, automatically delve xxxxxxx
into the record to determine the facts for itself.[14] Admittedly, (TSN of 2/9/89 page 18)“ATTY. LLEGO: (continuing)Q: You
there have been instances when this Court made independent have pointed this portion as your basis for saying that the area is 18
indings of fact on the points that the trial court and the appellate hectares. Now kindly read this paragraph on the description of the
court disagreed but we did not do so as a matter of course. When land for purposes of record. (witness is ready (sic)
the dispute between the two courts are merely on probative value, Which, we pray that that portion being read into the record by
we limit our review of the evidence ascertaining if the indings of witness be marked as our Exhibit A-4.COURT: Mark it. (page
the Court of Appeals are supported by the record. And, so long as 18 bottom to page 19 middle portion of the page).”
the indings of the said court are consistent with, or not palpably Unfortunately, the description of the eighteen (18) hectare land
contrary to, the evidence on record, we decline to make a review on which should had been read and incorporated into the transcript for
the probative value of the evidence.[15] In the instant case, We ind purposes of record, was omitted in the quoted portion, to establish
no cogent reason to disturb the factual indings of the respondent the exact location, area and boundary of the 18 hectare lot in
court and its conclusion that petitioners failed to establish their relation to lot 868. The omission has created serious doubts as to
case by preponderance of evidence. the speci ic identity of the lot which petitioners sought to recover.
The invariable applicable rule is to the effect that in order to Moreover, even in the petitioners’ complaint iled before the trial
maintain an action for recovery of ownership, the person who court, there was no allegation of the metes and bounds of the
claims that he has a better right to the property must prove not only subject lot, the complaint reads:
his ownership of the property claimed but also the identity “3) a. That the grandfather of plaintiffs-the late Anastacio Fabela,
thereof.[16] The party who desires to recover must ix the identity had left among others, the following property, to wit:
of the land claimed by describing the location, area and boundaries a) Lot 870
thereof.[17] Area:15,658 sq. m.
In the instant case, petitioners based their claim of ownership on Location: Nabacaan, Misamis Oriental
the “1924 Escritura de Transaccion”, the original copy of which was b) Lot 868
not presented in the trial court, while the photocopy was also lost Area: 48, 121 sq.m.
when the original records were elevated to the respondent court. Location: Nabacaan, Misamis Oriental
This was the only piece of evidence that would establish petitioners’ b. That the above described parcels of land are adjacent to each
ownership and the identity of subject lot 868. In ruling for other as shown by a photocopy of the sketch plan from the Bureau
petitioners heirs of Anastacio Fabela as the absolute owners of lot of Lands hereto enclosed and marked as Annex “B”;c. That these
868, the trial court found that in the Escritura, “it appears that the two parcels since time immemorial used to be one big parcel of
portion which is now identi ied as lot 868 had been entrusted to the land, until in 1977 or 1978, when a government cadastral survey in


Villanueva, Misamis Oriental, was undertaken by the Bureau of cadastral survey was conducted in 1971, the registered claimant of
Lands, wherein a road was provided and made to appear across the lot 868 based on their of icial record was Roque Neri Sr. Petitioners’
big parcel of land, causing it to be divided physically and for which allegation that Neri Sr., committed fraud in the registration in his
the government surveyors assigned two lots numbers for what used name of these two (2) parcels of lot was not substantiated. The
to be one big parcel of land, thus the appearance of Lot 870 and Lot survey plan for lot 868 was approved for Roque Neri Sr. and he had
868; This once one big chunk of land never had a cadastral number also declared lot 868 for taxation purposes which was admitted by
in the past;” petitioners as their complaint prayed for the annulment of the plan
Notably, the total area of lots 868 and 870 would only be about and tax declaration. Although a tax declaration is not considered as
63,679 sq. meters or about six (6) hectares which fails to conclusive proof of ownership the same is admissible in evidence to
correspond to the eighteen (18) hectare parcel of land allegedly show the nature of the possession of the claimant of the property
owned by the late Anastacio Fabela which was the subject of the for which taxes have been paid. We accordingly ind well-taken the
“Escritura de Transaccion” and testi ied to by Teodula Fabela respondent court’s conclusion as follows:
Paguidopon. Petitioners failed to identify the land with that degree “Thus, where it was shown that plaintiff has never paid the land tax,
of certainty required to support their af irmative allegation of while the defendant has faithfully done so for many years, there
ownership. being no explanation offered, it was held that such payment of taxes
Moreover, the respondent court found, and we agree, that the should be taken into consideration in favor of defendant. Being the
waiver of rights executed in 1980 by Roque Neri Sr., in favor of exclusive possessors of the subject property who have declared the
petitioners referred only to a portion of lot 870 and not to lot 868. same for tax purposes through the years, defendants-appellants are
Thus such waiver which petitioners capitalized on as an admission entitled to such favorable presumption of ownership which so far
against Neri’s interest did not in any way support petitioners’ claim had not been overturned by plaintiffs-appellees.”
of ownership of lot 868. Said waiver reads:[20] In civil cases, the burden of proof is on the plaintiff to establish his
“ACKNOWLEDGMENT OF ADJUDICATION AND QUITCLAIM KNOW case by preponderance of evidence.[21] If he claims a right granted
ALL MEN BY THESE PRESENTS:That I, Roque Neri, Sr., of legal age, or created by law, he must prove his claim by competent evidence.
widower, Filipino, with residence and postal address at Villanueva, He must rely on the strength of his own evidence and not upon the
Misamis Oriental, Philippines, do hereby ACKNOWLEDGE AND weakness of that of his opponent.[22] When the record does not
CONFIRM that the certain portion of a parcel of land located at show that the land which is the subject matter of the action for
Balacanas, Villanueva, Misamis Oriental under Lot No. 870 of Pls. recovery of ownership has been exactly determined, such action
923 of Villanueva Public Land Subdivision containing a total area of cannot prosper, inasmuch as the petitioners’ ownership rights in
SIXTEEN THOUSAND SQUARE METERS (16,0000 sq. m.) which the land claimed do not appear satisfactorily and conclusively
portion is more particularly described as follows: proven at the trial.[23]
North - Roque Neri, Sr. WHEREFORE, the petition is DENIED and the decision of the
East - Nabacaan Road respondent Court of Appeals is AFFIRMED.
West - Tayum Creek SO ORDERED.
South - Lot 869 Melo, (Chairman), Vitug, and Panganiban, JJ., concur.
containing an area of EIGHT THOUSAND SQUARE METERS (8,000 Sandoval-Gutierrez, J., on leave.
sq. m.) is hereby adjudicated in favor of the Heirs of Anastacio
Fabela.That the above described portion of a parcel of land actually Republic vs Carrasco, G.R. NO. 143491,
belongs and owned by said Heirs of Anastacio Fabela.That the above
described portion of land was erroneously included in the land December 06, 2006
539 Phil. 205
survey conducted by the Bureau of Lands in my name.That I hereby
quitclaim and renounce whatever interest, rights and participation I
SECOND DIVISION
have over the described portion of real property of which the Heirs
G.R. NO. 143491, December 06, 2006
of Anastacio Fabela were the lawful owners.In witness whereof, I
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. EFREN M.
have hereunto set my hand this 18th day of August 1980 in
CARRASCO, RESPONDENT.
Villanueva, Misamis Oriental, Philippines. SGD. ILLEGIBLE
T/ROQUE NERI, SR.”
DECISION
A simple reading of the instrument would readily show that only
GARCIA, J.:
8,000 sq. meters of the entire 16,000 sq. meters included in lot 870
was adjudicated in favor of the heirs of Anastacio Fabela as
Petitioner Republic of the Philippines, thru this petition for review
belonging to them. In fact, petitioners in their memorandum
on certiorari under Rule 45 of the Rules of Court, seeks to annul and
admitted that only 8,000 sq. meters was given to them and yet they
set aside the Decision[1] dated June 14, 2000 of the Court of
did not take any positive action to assert their ownership of the
Appeals (CA) in CA-G.R. CV No. 59566, af irming in toto an earlier
entire lot 870. Petitioners have accordingly no sound basis to claim
decision[2] of the Regional Trial Court (RTC) of Morong, Rizal,
lot 868 by virtue of such instrument. As the appellate court
Branch 80, which ordered the registration in the name of herein
succinctly stated, “the fact that appellees were the ones paid by
respondent Efren C. Carrasco of a parcel of land situated at Tandang
PHIVIDEC for the portion of lot 870 does not automatically lead to
Kutyo, Sampaloc, Tanay, Rizal.
the conclusion that they also absolutely own lot 868. Most
signi icantly, is appellees failure to adequately explain why they had
The factual antecedents:
not at all registered their claim over the property with the Bureau of
Lands during and after the public survey in the municipality.”
On October 1, 1996, in the RTC of Morong, Rizal, respondent Efren
Finally, petitioners also failed to allege much less establish that they
M. Carrasco iled an application for registration of title over a
are in possession of the subject lot.
17,637-square meter land situated at Sitio Ulang Tubig, Tandang
On the other hand, the respondent court found, and this inding was
Kutyo, Sampaloc, Tanay, Province of Rizal.
not refuted, that petitioners’ own witness, Norberto Dumat-ol, a
representative of the Bureau of Lands, testi ied that when a


In his application, docketed as Land Registration Case (LRC) No. property subject matter of the case is not within a military or naval
215-T and raf led to Branch 80 of the court, respondent alleged that reservation.
he is the owner in fee simple of the land sought to be registered;
that said land is alienable and disposable and not within any On cross-examination, he testi ied and clari ied that he was
military or whatever kind of reservation; that to the best of his employed in the land of Norberto Mingao, clearing and planting on
knowledge, the land has never been mortgaged or encumbered or the vast property he owns; that his father also had worked for
that any person has any interest thereon, legal or equitable; and Norberto Mingao for a very long time and for the services that he
that the subject land is declared for taxation purposes in his name. and his father rendered, he was given by Mingao about 17,637
Among the documents attached to the application were the square meters of the more or less 600,000 square meters of land he
individual plan and technical description of the land; Diazo owns; that in 1950 his father took over the possession of the land,
polyester ilm (SEPIA) of the original survey subdivision plan cultivated the same and planted fruit trees and growing crops; the
SGS-No. 04-000518-D of which the subject land is a part; said land was given by Mr. Mingao to his father because of the
respondent's Af idavit of Ownership dated August 22, 1996, therein services he rendered to Mingao by clearing, planting and cultivating
stating that he took possession of the land in 1990 from his his vast track of lands; that it was in 1990 that he occupied the
predecessor, Norberto Mingao, who has occupied the land for the possession of his father by virtue of the Deed of Waiver executed by
last 25 years; the latter's Deed of Waiver dated December 16, 1991, Mingao in his favor.
thereunder waiving his claim over the land in favor of the
respondent; a Certi ication from the Land Registration Authority as The second witness of petitioner is Teosito Avesado, 69 years old, a
to the status of the land; Tax Declaration No. 017-4224 for the year businessman and a resident of B.F. Homes Phase 3, Parañ aque,
1996 in respondent's name; and an of icial receipt dated September Metro Manila; that he personally knows the applicant in this case as
13, 1996 of realty tax payment. he is one of the workers of Norberto Mingao, that he knew the land
sought to be registered because he used to visit Mingao in that area
Petitioner Republic, through the Of ice of the Solicitor General as they happened to be the President and Vice President of the
(OSG), iled an opposition to the application. There being no private Magellan Agricultural Corporation respectively; that he is interested
oppositor, the trial court issued an order of general default on in the petition so that people working with Mingao should be given
November 10, 1997 and proceeded on the same day with the the rightful ownership and title to the land they hold; that Mr.
markings of the respondent's documents and the reception ex parte Mingao had started to occupy a vast tract of land during the early
of his evidence. 1940s and because of his appreciation to the services of his workers
who worked for him in the land for a very long time, he gave a
Thereafter, or on November 26, 1997, the respondent testi ied in portion of his land to applicant.[3]In a decision[4] dated February 4,
support of his application. He likewise adduced the testimony of 1998, the trial court, upon a inding that the respondent has
one Teosito Avesado. Hereunder is the trial court's summation of suf iciently established his ownership of the land in question,
respondent's testimonial evidence: ordered the registration thereof in his name, thus:
Petitioner Efren Carrasco testi ied on November 26, 1997 that he is Wherefore, it is hereby decreed that the property described as Lot
single, 24 years of age, a farmer and residing at Tanay, Rizal, a 16, SGS-000518-D located at Tandang Kutyo, Sampaloc, Tanay, Rizal
Filipino; that he owned a parcel of land located at Sitio Ulang Tubig, with an area of 17,637 square meters may now be registered and
Barangay Tandang Kutyo, Tanay, Rizal with an area of 17,637 sq. con irmed in the name of Efren N. Carrasco pursuant to the
meters; that the said land has not been the subject of Original provisions of the Land Registration Act, and the corresponding title
Registration of Title as amended by PD 1529; that he acquired the to the property be issued in his name after payment of the required
said land from Norberto Mingao as his compensation for having fees.
worked with him and his acquisition as evidenced by a Waiver
executed by Norberto Mingao in favor of petitioner on December 16, Let copies of this Decision be furnished the Solicitor General, the
1991 which he caused to be marked Exhibit "E;" that he also Land Registration Authority, the Department of Environment and
produced and showed to the Court as proof of his ownership to the Natural Resources, the Provincial Government of Rizal, the Of ice of
land an original survey subdivision plan No. SGS-04-000518-0, the District Engineer of Rizal, the Municipality of Tanay, Rizal and
which he caused to be marked Exhibit "F" and the particular Lot No. the parties concerned.
16 on the map as Exhibit "F-1;" that he caused the survey of the
property by a duly licensed Geodetic Engineer in the person of SO ORDERED.Insisting that (1) the land being applied for
Engineer Modesto Allado who prepared the technical descriptions registration is not alienable public agricultural land; and (2)
of the property now marked Exhibit "G" and issued a surveyors respondent is not quali ied to register the same under Presidential
certi icate which was marked Exhibit "H;" that the land sought to be Decree (P.D.) No. 1529,[5] the Republic, through the OSG, appealed
registered was declared for taxation purposes as shown in Tax to the CA whereat its appellate recourse was docketed as CA-G.R. CV
Declaration No. 017-4224 in the name of Efren Carrasco which was No. 59566.
marked Exhibit "I;" that the taxes for the said property was paid
under Of icial Receipt No. 215109 dated September 13, 1996 During the pendency of the appeal, the respondent iled a motion
marked Exhibit "J;" that the boundary owners of his property with the appellate court praying for the admission of additional
sought to be registered are: on the East, Miguel Taclas, on the North, evidence, which additional evidence included an Af idavit of
Maximo Mondragon, on the South, Allan Alcantara and on the West, Ownership dated June 1, 1998 of Norberto Mingao. In its resolution
Jesus Consulta; that he has been in continuously, openly, adversely of February 9, 1999, however, the CA merely noted the motion.
in possession of the said property in the concept of an owner, while
his predecessors-in-interest has likewise been in possession of the Eventually, in the herein assailed decision dated June 14, 2000, the
same in the concept of an owner continuously, openly, and adversely CA dismissed the Republic's appeal and af irmed in toto the
for more than 25 years; that there are no other persons claiming appealed decision of the trial court, to wit:
possession over the property; that the same property has not been WHEREFORE, the judgment appealed from is hereby AFFIRMED in
mortgaged or encumbered to any other persons or entities; that the toto.


For sure, Section 14, paragraph (1), of the Property Registration

SO ORDERED.In its decision, the CA held that the subject land is Decree (P.D. No. 1529) explicitly states:
alienable in view of the certi ication from the Department of SEC. 14. Who may apply. – The following persons may ile in the
Environment and Natural Resources (DENR) that the land was proper Court of First Instance [now the Regional Trial Court] an
veri ied to be within the alienable and disposable land of the public application for registration of title to land, whether personally or
domain and outside of any civil or military reservation. On the issue through their duly authorized representatives:
of whether the respondent was quali ied to have the land registered (1) Those who by themselves or through their
in his name, the CA ruled in the af irmative having found the predecessors-in-interest have been in open, continuous, exclusive
evidence suf icient to establish respondent's and Mingao's and notorious possession and occupation of alienable and
ownership and possession of the land in accordance with the rule disposable lands of the public domain under a bona ide claim of
laid down in Republic v. Court of Appeals[6] that occupation and ownership since June 12, 1945, or earlier.We have no disagreement
cultivation for more than 30 years by an applicant and his with the inding of the CA that the subject property is part of the
predecessor-in-interest vest title on such applicant so as to alienable and disposable agricultural lands of the public domain,
segregate the land from the mass of the public domain. having been classi ied as such by the DENR, an appropriate
government agency for the purpose. We part ways, however, with
Unable to accept the judgment, the Republic is now with this Court the CA in its conclusion that the respondent has established his
via the present petition on the following grounds: ownership of the land in question for the period of possession
I required by law.
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE Respondent anchors his claim of ownership on his allegation of
LOWER COURT'S RULING THAT RESPONDENT IS QUALIFIED TO continuous, open and adverse possession in the concept of an
APPLY FOR THE REGISTRATION OF TITLE OVER THE SUBJECT owner by himself and through his predecessor-in-interest, Norberto
PARCEL OF LAND UNDER P.D. NO. 1529. Mingao, for more than 30 years.[11] Bearing in mind the rule that a
person who seeks registration of title to a piece of land must prove
II his claim by clear and convincing evidence,[12] we ind
respondent's evidence in this respect insuf icient.
ASSUMING ARGUENDO THAT RESPONDENT IS QUALIFIED TO
APPLY FOR REGISTRATION OF THE QUESTIONED LOT, STILL THE To begin with, the respondent failed to prove that Norberto Mingao
HONORABLE COURT OF APPEALS ERRED IN RULING THAT BASED from whom he allegedly derived his title, was the owner of the
ON JURISPRUDENCE, REPUBLIC V. COURT OF APPEALS, 235 SCRA subject land and hence can transmit rights over the same in his
567 (1994), RESPONDENT HAD BEEN IN POSSESSION THEREOF favor.
WITHIN THE PERIOD PRESCRIBED BY LAW FOR THE SAME TO BE
ACQUIRED THROUGH JUDICIAL CONFIRMATION OF IMPERFECT In his Deed of Waiver dated December 16, 1991, Mingao merely
TITLE.[7]In his Comment,[8] respondent maintains that he is claimed ownership of the land and that he is waiving his right and
entitled to apply for registration of title over the subject property interest thereon in favor of the respondent. Signi icantly, the same
because his open, adverse and continuous possession thereof for Waiver did not even speci ically state when his (Mingao's)
more than 30 years has ripened into ownership. In any event, possession started. While, as rightly found by the CA, Mingao has
respondent argues that the CA has found his evidence suf icient to been in possession of the land since 1950 based on Mingao's
establish his and his predecessor-in-interest's ownership and Af idavit of Ownership dated June 1, 1998 which was presented
possession of the land, which factual inding is conclusive on this while the case was pending appeal with the CA, nonetheless,
Court. without more, said af idavit is not adequate to prove the fact of
possession beginning that date. Indeed, it may not be amiss to point
The petition is impressed with merit. out that Mingao did not even testify in this case.
While the rule is well-settled that indings of fact of appellate courts The Court cannot give full credence to respondent's Af idavit of
are conclusive upon this Court, there are, however, recognized Ownership dated August 22, 1996 for he simply alleged therein that
exceptions thereto, among which is where the indings of fact are Mingao had occupied the land for the last 25 years. Likewise,
not supported by the record or are so glaringly erroneous as to respondent's testimony regarding Mingao's possession and
constitute a serious abuse of discretion.[9] Such exceptions obtain ownership, aside from being self-serving, consists merely of general
in this case. statements with no speci ics even as to when his predecessor began
occupying the land. Indeed, such is hardly the well-nigh
Basically, the pivotal issue is whether the respondent was able to incontrovertible evidence required in cases of this nature.
suf iciently prove his possession, in the concept of an owner, of the Respondent must present proof of speci ic acts of ownership to
land sought to be registered for the period required by law so as to substantiate his claim and cannot just offer general statements
entitle him to the registration thereof in his name. which are mere conclusions of law than factual evidence of
possession.
We resolve the issue in the negative.
In the same vein, Teosito Avesado's testimony cannot be relied upon
Before one can register his title over a parcel of land, he must show to corroborate respondent's claim as to Mingao's possession as
that: (1) he, by himself or through his predecessors-in-interest, has owner of the land, more so, when we are not suf iciently convinced
been in open, continuous, exclusive and notorious possession and as to said witness' personal acquaintance with Mingao or
occupation thereof under a bona ide claim of ownership since June knowledge regarding the latter's intention to give the subject land
12, 1945 or earlier; and (2) the land subject of the application is to the respondent.
alienable and disposable land of the public domain.[10]


Furthermore, there is no proof that Mingao declared the land in his xxx xxx xxx x
name for taxation purposes or paid taxes due thereon. True, a tax
declaration by itself is not suf icient to prove ownership. (b) Those who by themselves or through their
Nonetheless, it may serve as suf icient basis for inferring predecessors-in-interest have been in open, continuous, exclusive,
possession.[13] As we held in Republic v. Alconaba:[14] and notorious possession and occupation of agricultural lands of
While tax receipts and declarations are not incontrovertible the public domain, under a bona ide claim of acquisition of
evidence of ownership, they constitute, at the least, proof that the ownership, since June 12, 1945, or earlier, immediately preceding
holder has a claim of title over the property. The voluntary the iling of the application for con irmation of title except when
declaration of a piece of property for taxation purposes not only prevented by war or force majeure. These shall be conclusively
manifests one's sincere and honest desire to obtain title to the presumed to have performed all the conditions essential to a
property, but also announces an adverse claim against the State and Government grant and shall be entitled to a certi icate of title under
all other interested parties with an intention to contribute needed the provisions of this chapter.Clearly then, the reliance placed by the
revenues to the government. Such an act strengthens one's bona appellate court in Republic v. Court of Appeals[17] where we ruled
ide claim of acquisition of ownership.Hence, since Mingao's that occupation and cultivation for more than 30 years by an
possession and ownership of the subject land were not suf iciently applicant and his predecessor-in-interest vest title on such
proven, Mingao himself cannot validly transmit his rights over the applicant so as to segregate the land from the mass of public land, is
land in respondent's favor. At any rate, the mode by which erroneous. Said ruling has been effectively superseded by
respondent alleged to have taken possession and ownership of the subsequent legislations which amended Section 48(b) the Public
land is not one of those provided for under Article 712 of the Civil Land Act. The case of Republic v. Doldol,[18] cited in Igtiben v.
Code. [15] Republic,[19] provides a summary of these amendments, to wit:
The original Section 48(b) of C.A. No. 141 provided for possession
To show how he acquired possession of the subject land from and occupation of lands of the public domain since July 26, 1894.
Mingao, respondent presented his Af idavit of Ownership dated This was superseded by R.A. No. 1942 which provided for a simple
August 22, 1996 and Mingao's Deed of Waiver dated December 16, thirty-year prescriptive period of occupation by an applicant for
1991. But said documents cannot show that there was a valid judicial con irmation of imperfect title. The same, however, has
transmission of rights. As it were, respondent's Af idavit of already been amended by Presidential Decree No. 1073, approved
Ownership merely stated that he has taken possession of the on January 25, 1977. As amended Section 48(b) now reads:
subject land in 1990 from Mingao. On the other hand, Mingao's
Deed of Waiver is not, as aforestated, a mode of acquiring Section 48. The following described citizens of the Philippines,
ownership. occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been
The waiver cannot even be considered a donation because it does perfected or completed, may apply to the Court of irst Instance of
not comply with the formalities required in order for a donation of the province where the land is located for con irmation of their
an immovable to be valid pursuant to Article 749 of the Civil claims and the issuance of a certi icate of title therefore, under the
Code[16] because respondent's acceptance thereof is lacking. Land Registration Act, to wit:
Also, prescription cannot be availed of to acquire ownership not xxx xxx xxx x
only because the respondent's possession was not in the concept of
an owner, but also because he failed to comply with the required (b) Those who by themselves or through their
period. Respondent cannot tack his possession to that of Mingao's predecessors-in-interest have been in open, continuous, exclusive,
since there is no privity between them, the transmission of rights and notorious possession and occupation of agricultural lands of
not having been proven. Thus, respondent's possession must be the public domain, under a bona ide claim of acquisition of
reckoned only from the time of his actual possession which, as ownership, since June 12, 1945, or earlier, immediately preceding
admitted by him, commenced in 1990. the iling of the application for con irmation of title except when
prevented by war or force majeure. These shall be conclusively
But even assuming, in gratia argumenti, that respondent may validly presumed to have performed all the conditions essential to a
derive his right of possession from Mingao, still, he may not Government grant and shall be entitled to a certi icate of title under
rightfully apply for con irmation of title to the land in question. For, the provisions of this chapter. (Emphasis supplied.)As presently
as the CA correctly found, and which the respondent does not phrased, the law requires that possession of lands of the public
dispute, Mingao's possession started only in 1950 which is 5 years domain must be from June 12, 1945 or earlier for the land to be
later than the reckoning point of June 12, 1945 under the Property acquired through judicial con irmation of imperfect or incomplete
Registration Decree (P.D. No. 1529). It is thus clear that respondent title.
failed to comply with the period of possession and occupation not
only as required by Section 14(1), supra, of the Property In sum, the respondent could not have acquired an imperfect title to
Registration Decree but also by the Public Land Act or the land in question because he has not proved possession openly,
Commonwealth Act (C.A.) No. 141, the pertinent provision of which continuously and adversely in the concept of an owner since June
is Section 48(b): 12, 1945, the period of possession required by law. At best, he can
Section 48. The following described citizens of the Philippines, only prove possession since 1990, the date which he admitted to
occupying lands of the public domain or claiming to own any such have taken possession of the subject parcel of land from Mingao.
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of irst Instance of WHEREFORE, the petition is GRANTED. Accordingly, the assailed
the province where the land is located for con irmation of their decision dated June 14, 2000 of the CA in CA-G.R. CV No. 59566 is
claims and the issuance of a certi icate of title therefore, under the REVERSED and SET ASIDE and LRC No. 215-T of the RTC of Morong,
Land Registration Act, to wit: Rizal, Branch 80, is ordered DISMISSED.


No costs. siblings. The partition was not registered but Deeds of Sale were
executed in favor of Rolando and Alexander.
SO ORDERED.
Petitioner thereafter mortgaged her share; however, it came to her
Puno, (Chairperson), Sandoval-Gutierrez, and Azcuna, JJ., concur. knowledge that respondents Rolando and Eusebio had usurped her
Corona, J., on leave. share and deprived the mortgagees of possession over the land.
After settling the mortgage, petitioner iled a case for recovery of
Ramos-Balalio vs Ramos, G.R. NO. 168464, inheritance, possession and damages with a petition for preliminary
mandatory injunction.
January 23, 2006
515 Phil. 506
The trial court had the land surveyed. Subdividing the land into Lots
204-A to 204-H [5] based on the actual possessor or occupant, the
FIRST DIVISION
survey plan revealed the following:
G.R. NO. 168464, January 23, 2006
Plaintiff Zenaida Ramos Balalio has no possession, occupation, and
ZENAIDA RAMOS-BALALIO, PETITIONER, VS. ROLANDO RAMOS,
cultivation whatsoever of lot 204, Pls-15;
EUSEBIO I. RAMOS AND EVANGELISTO GARCIA, RESPONDENTS.
DECISION
Rolando Ramos is in possession and cultivation of lot 204-F, lot
204-G and lot 204-C, with a total area of 43,957 sq. m., more or less;
This petition assails the Decision [1] of the Court of Appeals dated
February 16, 2005 in CA-G.R. CV No. 58644 reversing the Decision
Eusebio Ramos is occupying and cultivating lot 204-A with an area
[2] of the Regional Trial Court (RTC) of Roxas, Isabela, Branch 23,
of 4,994 sq. m., more or less;
dated July 17, 1996, in Civil Case No. Br. 23-357 which ruled that
herein petitioner Zenaida Ramos-Balalio had a superior right to
possess Lot No. 204, Pls-15, situated at Muñ oz, Roxas, Isabela, as
Lot 204-B consisting of 17,685 sq. m., more or less, is possessed and
well as its Resolution [3] dated June 14, 2005 denying the motion
cultivated by Evangelisto Garcia, another intervenor. His occupation
for reconsideration.
is very much less than the two (2) hectares sold to him by
Alexander Ramos. It is short by 2,311 sq. m., more or less;
As culled from the records, petitioner Zenaida and her brother
Alexander (now deceased) are the children of spouses Susana
Bueno and Abundio Ramos. The spouses started occupying Lot No.
The total area of the land in question, after deducting one (1)
204 in 1938. Abundio died in 1944. Susana met her second
hectare occupied by the cemetery is 73,150 sq. m., more or less. [6]
husband, respondent Eusebio Ramos in 1946, with whom she had
On July 17, 1996, the trial court rendered its decision holding that
ive children, one of whom is respondent Rolando.
petitioner was deprived of her right to cultivation and possession of
her share of Lot No. 204 and thus ruled:
In the interim, prior to 1958, Susana discovered that Felimon
AS A CONSEQUENCE OF ALL THE FOREGOING, judgment is hereby
Domingo applied for a sales patent over the subject parcel of land
rendered in favor of plaintiff, Zenaida Ramos and against Rolando
which she opposed. The Bureau of Lands resolved the dispute, thus:
Ramos, defendant, and Eusebio Ramos, intervenor.
In the light of the foregoing facts, it is clear that Felimon B. Domingo
Ordering Eusebio Ramos to vacate lot 204-A and surrender it to
has not entered, possessed or cultivated the land in question and
Evangelisto Garcia because he is not entitled to any portion of the
therefore he has not acquired any preference right thereto. Upon
lot in question, it being the conjugal property of the irst marriage of
the other hand contestant Susana Bueno Vda. de Ramos and her
Susana Bueno to Abundio Ramos;
children have suf iciently established their right of preference over
the land except the one hectare Cemetery site, on the basis of their
continuous occupation and cultivation and their valuable
Evangelisto Garcia is adjudicated the irst two (2) hectares from the
improvements introduced thereon.
North and East of the cemetery, as he validly bought the area from
Alexander Ramos. He is presently occupying only 17,689 sq. m.,
Wherefore, it is ordered that the Sales Application No. 21992 of
more or less. His possession now is increased to two (2) hectares
Felimon B. Domingo be as hereby it is rejected, forfeiting in favor of
which includes the area being possessed by Eusebio Ramos;
the Government whatever amount have been paid on account
thereof. The land in question shall be subdivided so as to exclude
therefrom the one hectare portion in the northwestern part of the
The remaining portion of the share of Alexander Ramos is 4,410 sq.
land, which shall be reserved as barrio cemetery site, while the
m., more or less. This is adjudicated in favor of his heirs. This
remaining area is hereby allocated to SUSANA BUENO VDA DE
portion now corresponds to the area immediately South of the area
RAMOS who shall ile an appropriate application therefore within
of Evangelisto Garcia, the partition being from East to West;
sixty (60) days after the survey thereof at her own expense, it not
appearing that this Of ice has received the homestead (new)
application allegedly iled by her for the same land.
The middle portion consisting of 24,410 sq. m., more or less, and
immediately South of the cemetery, and also South of the portion
SO ORDERED. [4]It was alleged that as Susana accompanied her
adjudicated to the heirs of Alexander is now given to Zenaida Ramos
husband Eusebio, a soldier, wherever he was assigned, Susana's
Balalio as her valid share of lot 204, the partition being also East to
father, George Bueno, and daughter, petitioner Zenaida continued
West;
the cultivation and possession of the subject land. Sometime later,
Susana sold the land to petitioner who, in turn, partitioned it among
herself, her brother, Alexander, and respondent Rolando and his


South of the share of Zenaida consisting also of 24,410 sq. m., more
or less, is the valid share of Rolando Ramos and his full blooded 7.3. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING
brother and sisters namely Robin, Corazon, Myrna and Mila, all THE ISSUE OF ACCION PUBLICIANA IN THE CASE AT BAR AND
surnamed Ramos; CONFINED ITSELF TO THE CLAIM OF RECOVERY OF INHERITANCE.
[9]The petition is partly meritorious.
Rolando Ramos and Eusebio Ramos are ordered jointly and Under the Regalian doctrine, all lands of the public domain belong
severally to pay Zenaida Ramos: to the State and those lands not appearing to be clearly within
private ownership are presumed to belong to the State. [10] Lands
of the public domain are classi ied into agricultural, forest or timber,
Thousand (P10,000.00) Pesos as attorney's fees; mineral lands, and national parks. Alienable lands of the public
One thousand Five Hundred (P1,500.00) Pesos as appearance fees domain shall be limited to agricultural lands. [11]
of her lawyer;
Ten Thousand (P10,000.00) Pesos as incidental expenses relative to Commonwealth Act No. 141 (1936), or the Public Land Act, as
the case; amended by Presidential Decree No. 1073 (1977), remains to be the
One Hundred Thousand Eight Hundred (P100,800.00) Pesos as the general law governing the classi ication and disposition of alienable
reasonable owner's share of the produce of the land of Zenaida lands of the public domain. It enumerates the different modes of
Ramos from 1975 to the present, with an interest of 6% per annum acquisition of these lands and prescribes the terms and conditions
until fully paid; to enable private persons to perfect their title to them. It is,
therefore, the applicable law to the case before us.
The Clerk of Court and the Sheriff are ordered to repair to the land
in question and partition said land in accordance with the tenor of A homestead patent, such as the subject of the instant case, is one of
this decision; the modes to acquire title to public lands suitable for agricultural
purposes. Under the Public Land Act, a homestead patent is one
issued to any citizen of this country, over the age of 18 years or the
And to pay the cost. head of a family, and who is not the owner of more than 24 [12]
hectares of land in the country. [13] To be quali ied, the applicant
SO ORDERED. [7] must show that he has resided continuously for at least one year in
On appeal, the Court of Appeals found that neither Zenaida nor the municipality where the land is situated and must have
Alexander complied with the homestead application requirements cultivated at least one- ifth of the land applied for. [14]
in order to acquire superior vested right. As a consequence, it
reversed the decision of the trial court, to wit: In the case at bar, petitioner Zenaida asserts her right to a parcel of
As a consequence of the foregoing, the Court rules in favor of agricultural land that her parents Susana and Abundio had
appellants as to the fourth error and inds that the contract possessed since 1938. She claims that, for some time, the cultivation
supposedly dividing that property among Zenaida, Rolando Ramos of this land was left to her and her grandfather and that, following
and Alexander Ramos cannot be enforced because neither of the the death of her father Abundio, the land was allegedly sold to her
parties therein can claim any vested right over the subject parcel by her mother Susana.
land which is still part of the public domain.
Zenaida's argument is lawed because it assumes that her parents
Also, prescinding from the above ruling, the intervention of Eusebio had perfected their title over the land and that they could validly
Ramos and Evangelisto Garcia should likewise be dismissed. As to convey the same to third persons, whether by sale or by inheritance.
Eusebio, since Susana never iled an application for homestead, her However, a careful examination of the records shows that petitioner
right never ripened to ownership which she could have transmitted has not satisfactorily established that a valid application for
to her heirs. As to Evangelisto Garcia who supposedly purchased homestead patent was iled by her parents. The decision of the
that share of Alexander (an heir of Susana), since the vendor never Bureau of Lands in 1958 only addressed Zenaida's family's right of
inherited anything from Susana there was nothing which he preference over the land, in view of their possession and cultivation
(Evangelisto) could have bought. In ine, neither of the intervenors of the land. Nonetheless, the Bureau of Lands ordered the iling of
could claim any right which they can enforce in court. an appropriate application for its registration which indicates that
as of that time, there was as yet no valid application iled. [15]
WHEREFORE, the Decision of the Regional Trial Court of Roxas,
Isabela, Branch 23, in Civil Case No. Br. 23-357 is REVERSED and the The purported sale, therefore, between petitioner and her mother
"Complaint" iled by plaintiff-appellee as well as the respective cannot be given effect, nor can it be a source of right for Zenaida,
"Answer in Intervention" of Eusebio Ramos and Evangelisto Garcia because Susana did not have the authority to sell what did not
are all hereby ordered DISMISSED. belong to her. The invalidation of the sale consequently nulli ies the
partition of the property among Zenaida, Alexander, and Rolando
SO ORDERED. [8]Hence, this petition on the following assigned and his siblings because Zenaida could not have disposed of the
errors: land which she did not own.
7.1. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE TRIAL COURT'S DECISION AND DISMISSING THE For the same reason, neither Eusebio nor Rolando can claim any
PETITIONER'S COMPLAINT. right whatsoever as heirs of Susana. Their claim evidently relies on
the provision of the Public Land Act which states:
7.2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN Section 105. If at any time the applicant or grantee shall die before
HOLDING THAT PETITIONER IS NOT IN PRIOR POSSESSION OF the issuance of the patent or the inal grant of the land, or during
THE SAID LAND, AND DECLARING THAT SHE HAS NO RIGHT the life of the lease, or while the applicant or grantee still has
WHATSOEVER TO THE DISPUTED LAND. obligations pending towards the Government, in accordance with


this Act, he shall be succeeded in his rights and obligations with as to grant petitioner Zenaida Ramos-Balalio preferential
respect to the land applied for or granted or leased under this Act possession of the portion of Lot 204, Pls-15, situated in Muñ oz,
by his heirs in law, who shall be entitled to have issued to them the Roxas, Isabela, as delineated in the Decision of the Regional Trial
patent or inal concession if they show that they have complied with Court of Roxas, Isabela, Branch 23, dated July 17, 1996.
the requirements therefor, and who shall be subrogated in all his
rights and obligations for the purposes of this Act. (Emphasis SO ORDERED.
added)The reliance is misplaced because the cited provision speaks
of an applicant, grantee, or lessee. Susana was not one of these. In Panganiban, C.J., Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.,
her lifetime, despite her possession and cultivation of the land, she concur.
failed to apply for a homestead patent and to acquire any vested
right that Eusebio or Rolando can inherit. As such, the land remains Republic vs Enriquez, G.R. NO. 160990,
part of the public domain. Furthermore, Eusebio and Rolando
cannot invoke their prior possession and occupation of the land September 11, 2006
533 Phil. 87
because the same cannot be considered as adverse, open, public,
FIRST DIVISION
peaceful and to the exclusion of all.
G.R. NO. 160990, September 11, 2006
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. SPOUSES
Hence, the subject land remains to be part of the public domain and
RICARDO B. ENRIQUEZ AND ELIZA M. ENRIQUEZ, RESPONDENTS.
rightfully belongs to the State. As held by the Court of Appeals, none
of the parties obtained a defensible title to the property which can
DECISION
be upheld by the Court. Nonetheless, the possession of the land is
AUSTRIA-MARTINEZ, J.:
different from the issue of its ownership. Petitioner argues that her
petition may be treated as an accion publiciana and not merely an
For resolution by the Court is a petition for review under Rule 45 of
action for recovery of inheritance.
the Rules of Court, iled by the Republic of the Philippines
questioning the Decision[1] dated November 28, 2003 rendered by
An accion publiciana is an action for the recovery of the right to
the Court of Appeals (CA) in CA-G.R. CV No. 68973. The assailed
possess and is a plenary action in an ordinary civil proceeding to
Decision af irmed the Decision of the Regional Trial Court (RTC) of
determine the better right of possession of realty independently of
Daet, Camarines Norte, Branch 39, granting the application for
title. [16] In this case, the issue is whether Zenaida, as an applicant
registration of title of land iled by respondents.
for public land, may be considered as having any right to the land
occupied, which may entitle her to sue in courts for the return of the
Respondents iled their veri ied petition for con irmation and
possession thereof.
registration of title to two parcels of land located in Gahonon, Daet,
Camarines Norte on January 16, 1997. [2] One parcel, Lot 1711,
We ind that Zenaida has proven prior possession of the portion of
Pls-488-D, consists of 455 square meters. The other parcel
land she claims as her share, which possession antedates the iling
(hereafter referred to as "Parcel 2"), described in Psu-05-006497-D,
of the homestead application. She produced evidence showing that
contains 297 square meters.
she has iled a veri ied application for the registration of the land
with the Bureau of Lands on August 10, 1971, [17] which is still
Petitioner, through the Director of Lands, iled an Opposition on the
pending. The documents remain uncontested and the application
grounds that respondents or their predecessors-in-interest have not
has not been assailed by any of the parties to the case. She alleged
been in continuous, exclusive, and notorious possession of the
that during the lifetime of her mother, she and her maternal
property since June 12, 1945 or prior thereto; that respondents'
grandfather cultivated and occupied the land.
evidence is not competent or suf icient to establish their claim; and
that the parcel of land applied for is a portion of the public
Moreover, Zenaida presented tax declarations both in her name and
domain.[3]
that of her predecessor-in-interest (mother Susana Bueno) covering
the property. Time and again, we have held that although tax
On September 28, 1998, the RTC rendered its Decision with the
declarations or realty tax payments of property are not conclusive
following dispositive portion:
evidence of ownership, nevertheless, they are good indicia of
WHEREFORE, title of the applicants to the 455-square meter parcel
possession in the concept of owner for no one in his right mind
of land described on Plan-051603-0022344 (Exh. "M") and the
would be paying taxes for a property that is not in his actual or at
297-square meter parcel of land described on plan
least constructive possession. [18] They constitute at least proof
Psu-05-006497-D (Exh. "M-1") is hereby con irmed and the same is
that the holder has a claim of title over the property. The voluntary
ordered registered in the name of spouses Ricardo B. Enriquez and
declaration of a piece of property for taxation purposes manifests
Eliza M. Enriquez, both of legal age, Filipino citizens and residents
not only one's sincere and honest desire to obtain title to the
of Batobalani, Paracale, Camarines Norte.
property and announces his adverse claim against the State and all
other interested parties, but also the intention to contribute needed
Once this decision shall have become inal, let an order for the
revenues to the Government. [19]
issuance of decree be issued.SO ORDERED.[4]Petitioner iled an
appeal with the CA on grounds of lack of jurisdiction due to
All told, petitioner Zenaida's uncontested and veri ied application
respondents' failure to present the original tracing cloth plan of the
for a homestead patent coupled with her open and notorious
subject lots, and respondents' failure to prove open, continuous,
occupation of the land convinces us of her preferential right to
exclusive, and adverse possession for more than 30 years. Finding
possess the land claimed, which entitles her to be protected by the
no error, the CA denied the appeal and af irmed the RTC Decision in
law in such possession.
the assailed Decision dated November 28, 2003.[5]
Hence, herein petition based on the following grounds:
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of
the Court of Appeals dated February 16, 2005 is MODIFIED, insofar
I


THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF One of the mandatory requirements in applications of original
THE TRIAL COURT WHICH GRANTED THE APPLICATION FOR registration of land is the submission in evidence of the original
LAND REGISTRATION, DESPITE THE FACT THAT THE TRIAL tracing cloth plan or the "sepia copy" (Diazo Polyester Film), duly
COURT HAS NOT ACQUIRED JURISDICTION TO PROCEED WITH approved by the Bureau of Lands. This is to establish the true
THE CASE FOR FAILURE OF RESPONDENTS TO PRESENT THE identity of the land to ensure that it does not overlap a parcel of
ORIGINAL TRACING CLOTH PLAN OR THE DIAZO POLYESTER FILM. land or a portion thereof already covered by a previous land
registration, and to forestall the possibility that it will be overlapped
II by a subsequent registration of any adjoining land. Failure to
comply with this requirement is fatal to petitioner's application for
THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF registration.[10]
THE TRIAL COURT GRANTING THE APPLICATION FOR LAND
REGISTRATION DESPITE THE FAILURE OF RESPONDENTS TO Nevertheless, in several cases, the Court allowed substantial
PROVE THAT THEY AND THEIR PREDECESSORS-IN- INTEREST compliance with this rule. In Recto v. Republic of the
HAD BEEN IN OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS Philippines,[11] this Court held that blueprint copies of the original
POSSESSION OF THE SUBJECT LOTS IN THE CONCEPT OF OWNERS tracing cloth plan from the Bureau of Lands and other evidence
FOR AT LEAST THIRTY YEARS.[6]These issues, notably, are could also provide suf icient identi ication to identify a piece of land
questions of fact that petitioner had already previously raised in its for registration purposes, as the property was suf iciently identi ied
appeal before the CA. The general rule is that questions of fact are by: 1) the blueprint copy of the plan and technical description
beyond the province of Rule 45 of the Rules of Court.[7] Said rule, which were both approved by the Land Management Services of the
however, admits of certain exceptions, to wit: Department of Environment and Natural Resources (DENR); and 2)
(1) when the factual indings of the Court of Appeals and the trial the report of the Land Management Sector stating that the subject
court are contradictory; property is not a portion of, nor identical to any previously
approved isolated survey. The applicants in the Recto case also
(2) when the indings are grounded entirely on speculations, submitted a certi ied true copy of the original tracing cloth plan to
surmises, or conjectures; the CA as well as a certi ication from the Land Registration
Authority attesting that the original plan in diazo polyester ilm was
(3) when the inference made by the Court of Appeals from its on ile.
indings of fact is manifestly mistaken, absurd, or impossible;
In Republic of the Philippines v. Hubilla,[12] the Court also deemed
(4) when there is grave abuse of discretion in the appreciation of as substantial compliance the submission of the following in lieu of
facts; the original tracing cloth plan, to wit: 1) a blueprint copy of the
subdivision plan approved by the Director of Lands; 2) a technical
(5) when the appellate court, in making its indings, goes beyond description approved by the Land Management Bureau of the
the issues of the case, and such indings are contrary to the DENR; 3) a certi ication from the DENR Community Environment
admissions of both appellant and appellee; and Natural Resources Of ice (CENRO) which states that the
Property has not been forfeited for non-payment of real estate
(6) when the judgment of the Court of Appeals is premised on a taxes, is entirely within the alienable and disposable zone as of
misapprehension of facts; December 31, 1925, has not been previously titled and is not
covered by any previous public land application; and 4) a report of
(7) when the Court of Appeals fails to notice certain relevant facts the Land Management Bureau stating that the Property is not
which, if properly considered, will justify a different conclusion; recorded in their lot and plan index cards as being subject of a
previous public land application. The applicants also iled a motion
(8) when the indings of fact are themselves con licting; to admit original tracing cloth plan with the Court of Appeals during
the pendency of the appeal and attached thereto the original plan,
(9) when the indings of fact are conclusions without citation of the which the Court noted as the same as the blueprint subdivision plan
speci ic evidence on which they are based; and offered as evidence before the trial court.
(10) when the indings of fact of the Court of Appeals are premised In the present case, there is no question that respondents did not
on the absence of evidence but such indings are contradicted by the submit the original of the tracing cloth plan of Lots 1711, Pls-488-D
evidence on record. [8] (Emphasis supplied)After going over the and Psu-05-006497-D. Applying the exception, the CA ruled that the
evidence extant in the record of this case, the Court inds that the same may be dispensed with as there are on record the blueprint
CA failed to notice a relevant fact which, if properly considered, will copies of the properties and "other evidences," which suf iciently
justify a different conclusion, thus necessitating a review of the case. establish the nature, identity, location and extent of the subject
Particularly, the Court is referring to the fact that there exists a properties. The CA also ruled that the case of Director of Lands v.
material discrepancy in the technical description of Parcel 2 applied Tesalona,[13] cited by petitioner, does not apply in this case since
for as will be discussed forthwith. there is no discrepancy in the area of the land as stated in the
application and in the blue print.
Before one can register his title over a parcel of land, the applicant
must show that (a) he, by himself or through his Petitioner, however, insists that there exists a material discrepancy
predecessors-in-interest, has been in open, continuous, exclusive in the area of Parcel 2.
and notorious possession and occupation of the subject land under
a bona ide claim of ownership since June 12, 1945 or earlier; and The Court went over the records of this case and indeed, as borne
(b) the land subject of the application is alienable and disposable by respondents' own evidence, there exists a signi icant discrepancy
land of the public domain.[9] in the area of Lot Psu-05-006497-D creating a doubt as to the actual


area, such that the exception to the rule on the presentation of the It should be stressed that a person who seeks registration of title to
original tracing cloth plan cannot be applied. a piece of land must prove the claim by clear and convincing
evidence, and is duty bound to identify suf iciently and satisfactorily
In the Deed of Absolute Sale dated December 2, 1994 between the property. Otherwise stated, all facts must indicate that no other
Rosalinda Oloya and respondents, Parcel 2 was described as person, including the government, will be prejudiced by the
follows: adjudication of the land to the applicant. [22]
Parcel 2 - A parcel of land situated at Gahonon, Daet, Camarines
Norte, Philippines. Bounded on the north by irrigation canal; on the Given respondents' failure to identify with certainty the area of
South lot owned by Mrs. of Tomas Cootauco; on the West lot No. Parcel 2 as described in Lot Psu-05-006497-D, the RTC should have
1710 -____ and on the East lo [sic] No. 1710 ____. Declared under Tax therefore denied the application for registration of title over said
Decl. No. 018-0991 containing an area of 250 Sq. m more or property.
less.[14]
The foregoing conclusion, however, does not hold true with regard
This is con irmed in the Provincial Assessor's Property Field to Lot 1711, Pls-488-D. All the evidence on record suf iciently
Appraisal & Assessment Sheet for the years 1993[15] and 1994,[16] identi ied the property as the one applied for by respondents, and
and the Declaration of Real Property in the names of Rosalinda containing the corresponding metes and bounds as well as area.
Oloya and Tomas Cootauco, although the boundaries set therein Consequently, the original tracing cloth plan need not be presented
were as follows: in evidence, applying the exception set forth in the Hubilla[23] and
Recto[24] cases.
Northeast:
Lot 1711 On the issue of open, continuous, exclusive and notorious
Northwest: possession of the subject lots, the Court will settle the issue only
Road lot vis-à -vis Lot 1711, Pls-488-D, since as earlier stated, the application
Southeast: for the registration of title over Parcel 2 should be denied.
Road lot
Southwest: In Republic v. Jacob,[25] the Court explained the concept of
National road possession and occupation referred to in cases of registration of
title, viz.:
Meanwhile, in the 1996 blue print copy of the survey plan[17] and Indeed, the law speaks of "possession and occupation." Possession
the technical description issued by the Lands Management is broader than occupation because it includes constructive
Services,[18] Parcel 2 already contained an area of 297 square possession. Unless, therefore, the law adds the word "occupation," it
meters, and bounded as follows: seeks to delimit the all-encompassing effect of constructive
possession. Taken together with the words "continuous," "exclusive"
Southwest: and "notorious," the word "occupation" seems to highlight the facts
National Road that for an applicant to qualify, her possession of the property must
Northwest: not be a mere iction.
property of Samuel Magana
Northeast: Actual possession of a land consists in the manifestation of acts of
Lot 1711, Pls 488-D dominion of such a nature as a party would naturally exercise over
Southeast her own property. A mere casual cultivation of portions of land by
property of Emeteria Abodago the claimant does not constitute suf icient basis for a claim of
Moreover, the Court notes that in a Certi ication dated October 15, ownership. Such possession is not exclusive and notorious as it
1992, issued by the Of ice of the CENRO, Daet, Camarines Norte, gives rise to a presumptive grant from the State. The applicant is
there already exists a previous survey plan over the same property burdened to offer proof of speci ic acts of ownership to substantiate
but which measures 250 square meters. It was stated therein: "THIS the claim over the land. The good faith of the person consists in the
IS TO CERTIFY that per records iled in this Of ice, shows that the reasonable belief that the person from whom she received the
parcel of land with an area of 250 square meters as surveyed by property was the owner thereof and could transfer
Engr. Virgilio F. Jimenez for Tomas Cootauco, located at Gahonon, ownership.Records bear out that Lot 1711, Pls-488-D was originally
Daet, Camarines Norte x x x."[19] part of a 707-square meter property owned by Concepcion Pabico.
In an Escritura de Compra Venta dated April 23, 1941, the property
Respondents failed to satisfactorily explain the reason for the was sold to Tomas Cootauco.[26] After the death of Cootauco, his
difference in the area. What respondent Ricardo Enriquez merely heirs sold the property, which was already partitioned into to two
said on this score was: "When the relocation survey was conducted portions, Parcel 1 consisting of 455 square meters and Parcel 2
and the exact boundaries were determined, it was found out that consisting of 250 square meters, to Rosalinda Buñ ag Oloya by virtue
the area is actually 297 and not 250."[20] Such bare testimony does of a "Deed of Absolute Sale" dated October 22, 1992.[27] The sale
not suf ice to clarify the difference in the area, as shown in the was con irmed in an "Extra-Judicial Settlement of Estate with
pertinent documents on record. Respondent Enriquez did not Con irmation of Sale" executed on October 22, 1992.[28] Oloya, in
conduct the survey, and it does not appear that he has technical turn, sold these two parcels of land to respondents in a "Deed of
know-how in this regard. It could have been different had the Absolute Sale" dated December 2, 1994.[29]
original tracing cloth plan been submitted in evidence, since it is the
best evidence to identify a piece of land for registration Records also show that as early as 1963, Cootauco has already
purposes,[21] or at the very least, the geodetic engineer who declared Lot 1711, Pls-488-D for taxation purposes,[30] and realty
surveyed the property should have testi ied with regard to the taxes have been paid thereon since 1964.[31] It has been ruled that
increase in the area. while tax declarations and realty tax payment of property are not
conclusive evidence of ownership, nevertheless, they are good


indicia of the possession in the concept of owner for no one in his auction by their parents, which they inherited entirely; that such
right mind would be paying taxes for a property that is not in his sale in the public auction was evidenced by a inal bill of sale dated
actual or at least constructive possession. They constitute at least September 18, 1939; that Lot 64 was separately designated during
proof that the holder has a claim of title over the property. The the national reservation survey only because it was also being
voluntary declaration of a piece of property for taxation purposes claimed by the spouses Gregorio; and that, if Lots 63 and 64 were
manifests not only one's sincere and honest desire to obtain title to combined, the boundaries of the resulting lot coincided with the
the property and announces his adverse claim against the State and boundaries of the lot purchased under the inal bill of sale.
all other interested parties, but also the intention to contribute
needed revenues to the Government. Such an act strengthens one's For their part, petitioners claim that they purchased Lot 64 from the
bona ide claim of acquisition of ownership.[32] spouses Gregorio in good faith; that the spouses Gregorio became
the lawful owners of Lot 64 by virtue of a deed of absolute sale
Given the suf iciency of proof of respondents' compliance with the dated March 25, 1976 executed by Ignacio Bandiola in favor of
legal requirements, in that Lot 1711, Pls-488-D has been identi ied Estela Gregorio whereby Bandiola transferred to Gregorio a parcel
with certainty, and that respondents and their of land with an area of 3.4768 hectares; and that Lot 64 was part of
predecessor-in-interest have been in open, continuous, exclusive this 3.4768-hectare land.
and notorious possession and occupation of the same since 1963, or
for 34 years, the application for the registration of title of Lot 1711, According to the RTC of Kalibo, Aklan, respondents failed to
Pls-488-D was therefore correctly granted by the RTC and af irmed establish the identity of the lot sold under the inal bill of sale.
by the CA. Consequently, their claim of title over Lot 64 also had to fail. In the
words of the court a quo:
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision Assaying the evidence presented by the parties in relation to their
dated November 28, 2003 of the Court of Appeals in CA-G.R. CV No. respective submissions, the Court noted that the land acquired by
68973 af irming the Decision of the Regional Trial Court is [respondents'] parents at the public auction is not solely bounded
AFFIRMED with MODIFICATION to the effect that the Decision of on the North and East by [the] Visayan Sea, but also by Anunciacion
the Regional Trial Court dated September 28, 1998 is MODIFIED Gelito and Guillermo Sualog, respectively. Indeed, [respondents]
whereby the application for original registration of the 297-square own survey plan discloses that Lots 63 and 64 [are] bounded by Lot
meter parcel of land described in plan Psu-05-006497-D is DENIED. 62 and seashore.
SO ORDERED. Hence, it is not clear that the land acquired by [respondents']

parents at an auction sale includes Lot 64. The Court could probably
Panganiban, C. J., (Chairperson) Ynares-Santiago, Callejo, Sr., and sustain [respondents'] theory if the said land is solely bounded on
Chico-Nazario, JJ., concur. the North and East by [the] Visayan Sea or seashore. There would
be no space for any intervening lot.[4] (citations omitted)Finding
Spouses Azana vs Lumbo, G.R. NO. 157593, equiponderance of evidence[5], the trial court ruled in favor of
petitioners and upheld the validity of the sale of Lot 64 to them.
March 22, 2007
547 Phil. 598
On review, the CA arrived at a different conclusion. It declared
FIRST DIVISION
respondents as owners of Lot 64 and nulli ied the sale by the
G.R. NO. 157593, March 22, 2007
spouses Gregorio to petitioners. The appellate court agreed with
SPS. ALBERTO AND JOCELYN AZANA, PETITIONERS, VS.
respondents that Lot 64 was part of the 8.0488-hectare property
CRISTOPHER LUMBO AND ELIZABETH LUMBO-JIMENEZ,
described in the inal bill of sale. As opposed to the indings of the
RESPONDENTS.
trial court, the appellate court was satis ied that the boundaries of
the lot resulting from the merger of Lots 63 and 64 coincided with
DECISION
the boundaries of the 8.0488 hectare property. Moreover, the CA
CORONA, J.:
noted that the areas of Lots 63 and 64 were 7.0300 hectares and
1.2012 hectares respectively, meaning that the area resulting from
In this appeal by certiorari, spouses Alberto and Jocelyn Azana
the combination of the two lots was equivalent to "8.0000 hectares,
assail the decision[1] dated September 17, 2002 and resolution[2]
more or less, which [was] the total area being claimed by the
dated March 12, 2003 of the Court of Appeals (CA) in CA-G.R. CV No.
[respondents]".[6]
60973. After a re-evaluation of the evidence on record, the appellate
court held that the trial court's factual indings were contrary to the
Aggrieved, the spouses Gregorio and the spouses Azana iled in this
evidence presented and, on that basis, reversed the latter's ruling.
Court separate petitions for review on certiorari under Rule 45 of
the Rules of Court. The petitions were separately docketed as G.R.
Originally, respondents iled an action for quieting of title[3] in the
No. 157617[7] and G.R. No. 157593, respectively. The Court
Regional Trial Court (RTC) of Kalibo, Aklan. The subject matter of
instantly denied both petitions for essentially raising questions of
the action was a piece of real property located in the island of
fact which are generally beyond our review.
Boracay, a prime tourist destination. It was designated as Lot 64
during the national reservation survey of Boracay on April 14, 1976.
Thereafter, both the Gregorios and petitioners iled their respective
motions for reconsideration. The Court denied the MR[8] of the
Respondents alleged that they were the owners of Lot 64. They
spouses Gregorio, in effect denying G.R. No. 157617 with inality.
claimed that, in a deed of absolute sale dated December 1, 1996, the
spouses Emilio and Estela Gregorio sold Lot 64 to petitioners. This
Meanwhile, the MR of the spouses Azana was granted. As a general
cast a cloud over their title.
rule, it is not the Supreme Court's function to review, examine and
evaluate or weigh the probative value of the evidence presented.[9]
To support their claim of ownership, respondents stated that Lot 64
The factual indings of the trial and appellate courts are binding on
was originally part of the 8.0488-hectare land bought in a public


this Court and are given great weight and respect.[10] However, the Bandiola's lots was bound in the east by the Visayan Sea. On the
rule is not absolute. In instances where there is divergence in the contrary, all the tax declarations stated that each of the lots was
indings and conclusions of the trial court, on one hand, and the bound in the east by a particular land mass:
appellate court, on the other, the Court may give the petition due Tax Declaration No. 3066
course and re-examine the evidence on record.[11] Satis ied that
the foregoing exception applies to this case, the Court ordered the Land area:
reinstatement of G.R. No. 157593 (this petition). 8.7766 hectares
Boundaries:
Respondents oppose the petition on the ground that it is already North - Visayan Sea
barred by prior judgment. They argue that the dismissal of the East - Lorenzo Lumbo,
Gregorios' petition (G.R. No. 157617) was a inal judgment Vanancio Maming
constituting a bar to the institution of a similar petition. West - Conchita Tirol, Visayan Sea
South - Moises Pelayo, Paula Gelito[18]
Respondents' position is incorrect. Res judicata calls for the
concurrence of the following requisites: (1) there is inal judgment
or order; (2) the court rendering it has jurisdiction over the subject
matter and the parties; (3) the judgment or order is on the merits Tax Declaration No. 3087
and (4) there is, between the two cases, identity of parties, subject Land Area:
matter and causes of action.[12] Here, the irst requisite is absent. 0.6550 hectare
The Court's resolution denying the spouses Gregorio's petition is Boundaries:
not the inal judgment contemplated by the irst requisite. Rather, North - Visayan Sea
" inal judgment" entails a decision which perpetually settles the East - Felicitas Alag de Lumbo
controversy and lays to rest all questions raised. At that point, there West - Felicitas Alag de Lumbo
was no inal judgment because the spouses Azana's appeal of the CA South - Quirica Lumbo[19]
decision was still pending before us. Stated differently, there was yet
no inal judgment which could be entered and executed. Tax Declaration No. 3068
We now proceed to consider the documents relied upon by the Land Area:
parties. 0.4994 hectare
Boundaries:
To prove their claim, petitioners submitted a deed of absolute sale North - Ignacio Bandiola
of real property[13] dated March 25, 1976 to show that Ignacio East - Anunciacion Gelito and
Bandiola sold to Estela Gregorio 3.4768 hectares of land located in F.A. Lumbo
Manoc-Manoc, Malay, Aklan. The property was particularly West - Ignacio Bandiola
described as follows: South - Gertrudes Casimero
THE PORTION SOLD CONSISTS of 3.4768 hectares, more or less, Salvador Magapi[20]
located at the southern side of the whole parcel and with the Petitioners strained to explain the discrepancy by pointing out that
following pertinent boundaries: on the North by Visayan Sea and "Lot 64 was but a mere portion of the three parcels of land covered
Ernesto Bandiola; on the East by Visayan Sea; on the South by by the [three] tax declarations. xxx. It [was] therefore, quite unlikely
Felicitas Lumbo, D. Pelayo, and D. Magapi; and on the West by that Lot 64 would have the exact same boundaries as any or all of
Teodorica Bandiola.[14]They also presented the corresponding tax these [three] parcels."[21]
declaration[15] which reiterated the same property boundaries.
We ind their explanation wanting. If, indeed, Lot 64 was part of
Petitioners point out that a portion of this property was separately Ignacio Bandiola's mass of properties it would have been in its
declared for realty tax purposes under ARP/TD No. south-east corner, occupying part of its southern and eastern
93-011-1020/1021 as Lot 64 with an area of 1.48 hectares.[16] The perimeter. [22] Therefore, the parcels of land covered by the three
tax declaration indicated that the boundaries of Lot 64 were: tax declarations must re lect southern and/or eastern boundaries
North: Visayan Sea South: Lot 63 similar to those of Lot 64. But, as explained earlier, none of the lots
West: lot 99-pt East: Visayan SeaIn the hope of strengthening their was enclosed or partly enclosed in the east by the sea. It is highly
case, petitioners narrated the supposed origin of the disputed unlikely that the corner portion of the mother property would not
property. They claimed that the 3.4768-hectare property was taken have similar boundaries as those of the latter on at least two sides.
from the consolidated lots owned by Ignacio Bandiola, i.e., three
contiguous parcels of land with individual areas of 8.7766 hectares, The Court is not inclined to pronounce which of the documents
6550 square-meters and 4994 square-meters.[17] From this land presented by petitioners is true and correct. It is enough to say that
mass, Ignacio Bandiola carved out 3.4768 hectares and sold the the evidence they presented cast doubt on the validity of their
same to Estela Gregorio. Allegedly, this portion included Lot 64 claim. Petitioners failed to establish, by preponderance of evidence,
which Estela Gregorio, in turn, sold to petitioners. the exact perimeters of the land which they claim as their own.
Granting for the sake of argument that petitioners' preceding On the other hand, respondents anchor their claim over Lot 64 on a
allegations are true, it follows that Ignacio Bandiola's lots, if taken inal bill of sale[23] dated September 18, 1939. Apparently, the
as one, must have extended to the Visayan Sea in the east to have document was executed in favor of Lorenzo and Felicitas Lumbo
roped in Lot 64. It also follows that at least one of the lots should who bought an 8.0488-hectare property in a public auction. It
have the Visayan Sea as its eastern boundary. However, this stated:
conclusion is belied by the tax declarations petitioners themselves That on September 30, 1937, the real property under Tax
presented. Not one of the tax declarations stated that any of Declaration No. 6523 was forfeited to the Government in the


manner and form prescribed by Act 3995 known as the Assessment actually declared Lot 64 as theirs and cannot therefore claim
Law, for non-payment of land taxes corresponding to the years 1931 ownership of the property.
to 1937, inclusive, the description of which follows:A parcel of cocal
land situated in the barrio of Manocmanoc, municipality of Jurisprudence is consistent that tax declarations are not conclusive
Buruanga, province of Capiz, Philippines, having an area of 80, 488 evidence of ownership of the properties stated therein.[31] A
square meters more or less. Bounded on the North by Visayan Sea; disclaimer is even printed on their face that they are "issued only in
on the East by the property of Guillermo Sualog and Visayan Sea; on connection with real property taxation [and] should not be
the South by the property of Moises Pelayo; and on the West by the considered as title to the property." At best, tax declarations are an
properties of Venancio Maming and Lucino Gelito, and assessed at indicia of possession in the concept of an owner.[32] However,
P1040.00. x x x.[24]The trial court discredited the inal bill of sale non-declaration of a property for tax purposes does not necessarily
by highlighting the fact that the property bought at the public negate ownership.[33]
auction was not solely bound on the north and east by the Visayan
Sea but also by the properties of Anuncion Gelito and Guillermo From the foregoing, the fact that both tax declarations in the names
Sualog, respectively. With this, the trial court deduced that there of respondents covered Lot 63 only did not necessarily mean they
was an intervening space which should not have been there if the did not own Lot 64 as they were in fact able to present a document
lot referred to in the document included Lot 64. Thus, the inal bill evidencing ownership of both properties the inal bill of sale.
of sale must pertain to a different parcel of land.
Clearly, respondents have been able to establish by preponderance
We ind the trial court's conclusion inaccurate. The Gelito and of evidence that they are the rightful owners of Lot 64.
Sualog properties were not located between the Visayan Sea and the
disputed property. Otherwise, the tax declarations and inal bill of When an owner of real property is disturbed in any way in his rights
sale would have indicated that the Lumbo property was solely over the property by the unfounded claim of others, he may bring
bound in the north by the Gelito property and in the east by the an action for quieting of title. The purpose of the action is to remove
Sualog property. A cursory look at the survey map[25] reveals that the cloud on his title created by any instrument, record,
the perimeter of the Lumbo property ran along the Visayan Sea and encumbrance or proceeding which is apparently valid or effective
Gelito's property in the north, and the Visayan Sea and Sualog's but is in truth and in fact invalid and prejudicial to his title.[34]
property in the east. Naturally, the tax declarations and inal bill of
sale included the two properties mentioned as part of the Here, the deeds of sale executed in favor of petitioners and the
boundaries of the Lumbo property. spouses Gregorio were prima facie valid and enforceable. However,
further scrutiny and investigation established that petitioners'
Petitioners underscore the seeming irregularities in the description predecessor-in-interest, Ignacio Bandiola, could not have owned the
of the property under the inal bill of sale, a deed of sale dated May disputed lot. Consequently, the subsequent conveyances of Lot 64 to
20, 1939 and the tax declarations for the years 1991 and 1993 in the spouses Gregorio and thereafter, to petitioners, were null and
the names of respondents. They posit that these irregularities void. Therefore, respondents, as the adjudged owners of Lot 64, are
negate respondents' claim of legal or equitable title and ultimately entitled to have the aforementioned deeds of sale nulli ied to
justify the resolution of the case in their favor. remove any doubt regarding their ownership of the lot.
A deed of absolute sale[26] was executed on May 20, 1939 between While the appellate court adequately explained its decision, it failed
Pantaleon Maming and the respondents' parents, stipulating the to categorically declare the deeds of sale as null and void in its
sale to the Lumbos of "an approximate area of [ ive hectares], being dispositive portion. Since it is the dispositive portion of the decision
a part of the land under Tax No. 6523 in the name of Pantaleon which shall be carried out, it is important that the status of the
Maming...".[27] Petitioners emphasize the fact that the property deeds of sale be clearly stated therein.
sold under the inal bill of sale was the same lot under Tax
Declaration No. 6523. This discrepancy supposedly blurred the WHEREFORE, the petition is hereby DENIED. The decision dated
identi ication of the property claimed by respondents. September 17, 2002 and resolution dated March 12, 2003 of the
Court of Appeals are AFFIRMED with the MODIFICATION that the
We disagree. deed of absolute sale dated March 25, 1976, in so far as it covers Lot
64, and the deed of absolute sale dated December 1, 1996 are
The CA suf iciently reconciled the difference in the land areas in the hereby declared null and void.
two deeds:
xxx. It may be asked why there were two deeds of sale covering the Costs against petitioners.
same property. We ind credence in [respondents'] explanation. The
public auction was held on 13 September 1938 and therefore SO ORDERED.
Pantaleon Maming had up to 13 September 1939 to redeem the
property. Before the expiration of the period of redemption, Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ.,
Lorenzo Lumbo bought [ ive] hectares of the [eight]-hectare concur.
property in an attempt, as [respondents] put it, to persuade Maming
not to redeem the property. This can be inferred from the price of Rumarate vs Hernandez, G.R. NO. 168222,
P500.00 he paid for the [ ive] hectares while in the auction sale
held, he bought the entire 8.0488 hectares for only P56.78. April 18, 2006
521 Phil. 447
xxx.[28]Next, petitioners highlight the tax declarations iled by
FIRST DIVISION
respondents for the years 1991[29] and 1993[30] covering Lot 63
G.R. NO. 168222, April 18, 2006
only. In the absence of contrary evidence, tax declarations, being
SPS. TEODULO RUMARATE, (DECEASED) AND ROSITA RUMARATE;
of icial documents, enjoy a presumption of truth as to their
DECEASED TEODULO RUMARATE IS REPRESENTED HEREIN BY
contents. Petitioners contend that, unlike them, respondents never
HIS HEIRS/SUBSTITUTES, NAMELY, ANASTACIA RUMARATE, CELSO


RUMARATE, MARINA RUMARATE, ROMEO RUMARATE, Santiago because he failed to ile an Answer. Spouses Cipriano
GUILLERMO RUMARATE, FIDEL RUMARATE, MERLINDA Hernandez and Julia Zoleta iled a motion to re-open Cadastral
RUMARATE, MARISSA RUMARATE, CLEMENCIA RUMARATE, Proceeding No. 12, alleging that though no title was issued in the
SANCHO RUMARATE AND NENITA RUMARATE, PETITIONERS, VS. name of Santiago, the same decision is, nevertheless, proof that
HILARIO HERNANDEZ, JOAQUIN HERNANDEZ, SALVADOR Santiago was in possession of Lot No. 379 since 1925 or for more
HERNANDEZ, BENJAMIN HERNANDEZ, LEONORA than 30 years. Having succeeded in the rights of Santiago, the
HERNANDEZ-LAZA, VICTORIA HERNANDEZ-MERCURIO, RODRIGO spouses prayed that Cadastral Proceeding No. 12 be re-opened and
HERNANDEZ, BERNARDO HERNANDEZ, LOURDES that the corresponding title over Lot No. 379 be issued in their
HERNANDEZ-CABIDA, MARIO SALVATIERRA, ADELAIDA name. On September 13, 1965, the CFI of Tayabas rendered a
FONTILA-CIPRIANO, AND THE REGISTER OF DEEDS OF QUEZON decision adjudicating Lot No. 379 in favor of the spouses, in whose
PROVINCE, RESPONDENTS. name Original Certi icate of Title (OCT) No. O-11844[14] was issued
on the same date.[15] Cipriano Hernandez planted coconut trees on
DECISION the land through the help of a certain Fredo[16] who was instituted
YNARES-SANTIAGO, J.: as caretaker. In 1970, Fredo informed Cipriano Hernandez that he
will no longer stay on the land because there are people instructing
Assailed in this petition for review is the May 26, 2005 Decision[1] him to discontinue tilling the same.[17]
of the Court of Appeals in CA-G.R. CV No. 57053, which reversed and
set aside the March 31, 1997 Decision[2] of the Regional Trial Court After the death of the spouses,[18] respondents executed a deed of
of Calauag, Quezon, Branch 63, in Civil Case No. C-964, declaring partition over the subject lot and were issued TCT No. T- 237330 on
petitioners as owners of Lot No. 379 with an area of 187,765 square June 28, 1988 in lieu of OCT No. O-11844.[19]
meters and located in Barrio Catimo,[3] Municipality of
Guinayangan, Province of Quezon. Respondent Joaquin Hernandez (Joaquin) testi ied that in 1964, he
accompanied his father in inspecting the lot which was then planted
The facts show that on September 1, 1992, petitioner spouses with coconut trees.[20] Thereafter, he visited the land twice, once in
Teodulo Rumarate (Teodulo) and Rosita Rumarate iled an action 1966 and the other in 1970. From 1966 up to the time he testi ied,
for reconveyance of real property and/or quieting of title with his family declared the lot for taxation and paid the taxes due
damages against respondent heirs of the late spouses Cipriano thereon.[21] Joaquin explained that after the death of his father in
Hernandez and Julia Zoleta.[4] Teodulo averred that Lot No. 379 1971, he no longer visited the land and it was only when the
was previously possessed and cultivated by his godfather, Santiago complaint was iled against them when he learned that petitioners
Guerrero (Santiago), a bachelor, who used to live with the Rumarate are in actual possession of the property.[22] He added that his
family in San Pablo City. Between 1923 and 1924, Santiago and the siblings had planned to convert Lot No. 379 into a grazing land for
Rumarate family transferred residence to avail of the land cattle but decided to put it off for fear of the rampant operations
distribution in Catimo, Guinayangan, Quezon. From 1925 to 1928, then of the New People's Army between the years 1965-1970.[23]
Santiago occupied Lot No. 379 cultivating ive hectares thereof.
Before moving to Kagakag, Lopez, Quezon in 1929, Santiago orally On March 31, 1997, the trial court rendered a decision in favor of
bequeathed his rights over Lot No. 379 to Teodulo and entrusted to petitioners. It held that since the latter possessed the land in the
him a copy of a Decision of the Court of First Instance (CFI) of concept of an owner since 1929, they became the owners thereof by
Tayabas dated April 21, 1925 recognizing his (Santiago) rights over acquisitive prescription after the lapse of 10 years, pursuant to the
Lot No. 379.[5] Since Teodulo was only 14 years old then, his father Code of Civil Procedure. Thus, when Santiago sold the lot to
helped him cultivate the land.[6] Their family thereafter cleared the respondents' parents in 1964, the former no longer had the right
land, built a house[7] and planted coconut trees, corn, palay and over the property and therefore transmitted no title to said
vegetables thereon.[8] In 1960, Santiago executed an "Af idavit respondents. The dispositive portion of the trial court's decision,
(quit-claim)"[9] ratifying the transfer of his rights over Lot No. 379 reads:
to Teodulo. Between 1960 and 1970, three con lagrations razed the WHEREFORE, in the light of all the foregoing considerations
land reducing the number of coconut trees growing therein to only judgment is hereby rendered in favor of the plaintiffs and against
400, but by the time Teodulo testi ied in 1992, the remaining the defendants, to wit:
portions of the land was almost entirely cultivated and planted with Declaring that the parcel of land (Lot No. 379 of the Cadastral
coconuts, coffee, jackfruits, mangoes and vegetables.[10] From Survey of Guinayangan, Cadastral Case No. 12, LRC Cadastral Record
1929, Teodulo and later, his wife and 11 children possessed the land No. 557), situated in Brgy. Katimo, Tagkawayan, Quezon had been
as owners and declared the same for taxation, the earliest being in fraudulently, deceitfully and mistakenly registered in the names of
1961.[11] the spouses Cipriano Hernandez and Julia Zoleta;
In 1970, Teodulo discovered that spouses Cipriano Hernandez and

Julia Zoleta, respondents' predecessors-in-interest, were able to Declaring that herein defendants [heirs] of spouses Cipriano
obtain a title over Lot No. 379. He did not immediately ile a case Hernandez and Julia Zoleta have no better rights than their
against respondents because he was advised to just remain on the parents/predecessors-in-interest, they having stepped only on (sic)
land and pay the corresponding taxes thereon.[12] their shoes;
Respondents, on the other hand, claimed that on November 11,

1964, Santiago sold the questioned lot to their parents, the spouses Declaring that the plaintiff Rosita Victor Rumarate and substitute
Cipriano Hernandez and Julia Zoleta, for P9,000.00.[13] plaintiffs-[heirs] of the deceased Teodulo Rumarate are the true,
Respondents alleged that on April 21, 1925, the CFI of Tayabas real and legal owners/or the owners in fee simple absolute of the
rendered a Decision written in Spanish, declaring Lot No. 379 as a above described parcel of land;
public land and recognizing Santiago as claimant thereof in
Cadastral Proceeding No. 12. However, no title was issued to


Ordering the defendants to convey the above-described parcel of an equitable title to or interest in the real property subject of the
land to plaintiff Rosita Victor Rumarate and to the substitute action; and (2) the deed, claim, encumbrance or proceeding claimed
plaintiffs (heirs) of the deceased Teodulo Rumarate; to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal
ef icacy.[28]
Ordering the Register of Deeds for Quezon Province in Lucena City
to cancel Transfer Certi icate of Title No. T-237330 and to issue in In Evangelista v. Santiago,[29] it was held that title to real property
lieu thereof a new certi icate of title in favor of plaintiff Rosita Victor refers to that upon which ownership is based. It is the evidence of
Rumarate and the substitute plaintiffs (heirs) of the deceased the right of the owner or the extent of his interest, by which means
plaintiff Teodulo Rumarate, in accordance with law and settled he can maintain control and, as a rule, assert a right to exclusive
jurisprudence; and possession and enjoyment of the property.
In the instant case, we ind that Teodulo's open, continuous,

Ordering the defendants to pay the costs of the suit. exclusive, notorious possession and occupation of Lot No. 379, in
SO ORDERED.[24]Respondents appealed to the Court of Appeals the concept of an owner for more than 30 years vested him and his
which on May 26, 2005, reversed and set aside the decision of the heirs title over the said lot. The law applicable at the time Teodulo
trial court. It ruled that Teodulo did not acquire title over Lot No. completed his 30-year possession (from 1929 to 1959) of Lot No.
379, either by donation or acquisitive prescription; that Teodulo's 379, in the concept of an owner was Sec. 48(b) of Commonwealth
bare allegation that Santiago orally bequeathed to him the litigated Act No. 141 or the Public Land Act, as amended by Republic Act
lot is insuf icient to prove such transfer of ownership; and that even (RA) No. 1942, effective June 22, 1957[30] which provides:
assuming that the property was truly donated by Santiago to Sec. 48. The following-described citizens of the Philippines,
Teodulo in 1929, or in the 1960 Af idavit, said conveyance is void occupying lands of the public domain or claiming to own any such
for not complying with the formalities of a valid donation which lands or an interest therein, but whose titles have not been
require the donation and the acceptance thereof by the donee to be perfected or completed, may apply to the Court of First Instance
embodied in a public instrument. Both requirements, however, are (now Regional Trial Courts) of the province where the land is
absent in this case because in 1929, the alleged donation was not located for con irmation of their claims and the issuance of a
reduced to writing while the purported 1960 donation was never certi icate of title thereafter, under the Land Registration Act (now
accepted in a public document by Teodulo. The appellate court thus Property Registration Decree), to wit:
surmised that since it was not established that Santiago donated Lot
No. 379 to Teodulo, it follows that the latter also failed to prove that xxxx
he possessed the land adversely, exclusively and in the concept of an
owner, a vital requisite before one may acquire title by acquisitive (b) Those who by themselves or through their
prescription. In conclusion, the Court of Appeals ruled that even predecessors-in-interest have been, in continuous, exclusive, and
assuming further that Teodulo had a right over the property, his notorious possession and occupation of agricultural lands of the
cause of action is now barred by laches because he iled an action public domain, under a bona ide claim of acquisition or ownership,
only in 1992 notwithstanding knowledge as early as 1970 of the for at least thirty years immediately preceding the iling of the
issuance of title in the name of spouses Cipriano Hernandez and application for con irmation of title, except when prevented by war
Julia Zoleta. The decretal portion of the decision states: or force majeure. Those shall be conclusively presumed to have
WHEREFORE, premises considered, the instant appeal is GRANTED. performed all the conditions essential to a government grant and
The assailed March 31, 1997 decision of the Regional Trial Court of shall be entitled to a certi icate of title under the provisions of this
Calauag, Quezon, Branch 63, in Civil Case No. C-964 is hereby chapter.When the conditions speci ied therein are complied with,
REVERSED and SET ASIDE. No costs. the possessor is deemed to have acquired, by operation of law, a
right to a government grant, without necessity of a certi icate of title
SO ORDERED.[25]Hence, the instant appeal. being issued, and the land ceases to be part of the public domain.
The con irmation proceedings would, in truth be little more than a
The issue to be resolved is to whom should Lot No. 379 be awarded? formality, at the most limited to ascertaining whether the
To petitioners who possessed and cultivated the lot since 1929 up possession claimed is of the required character and length of time;
to the present, but do not have a certi icate of title over the and registration thereunder would not confer title, but simply
property, or to respondents who have a certi icate of title but are recognize a title already vested. The proceedings would not
not in possession of the controverted lot? originally convert the land from public to private land, but only
con irm such conversion already effected by operation of law from
In an action for quieting of title, the court is tasked to determine the the moment the required period of possession became complete.
respective rights of the parties so that the complainant and those [31]
claiming under him may be forever free from any danger of hostile
claim.[26] Under Article 476[27] of the Civil Code, the remedy may In the instant case, the trial court gave full faith and credence to the
be availed of only when, by reason of any instrument, record, claim, testimony of Teodulo and his witnesses that his (Teodulo's)
encumbrance or proceeding, which appears valid but is, in fact, possession of the land since 1929 was open, continuous, adverse,
invalid, ineffective, voidable or unenforceable, a cloud is thereby exclusive, and in the concept of an owner. It is a settled rule in civil
cast on the complainant's title to real property or any interest cases as well as in criminal cases that in the matter of credibility of
therein. Article 477 of the same Code states that the plaintiff must witnesses, the indings of the trial courts are given great weight and
have legal or equitable title to, or interest in the real property which highest degree of respect by the appellate court considering that the
is the subject matter of the suit. latter is in a better position to decide the question, having heard the
witnesses themselves and observed their deportment and manner
For an action to quiet title to prosper, two indispensable requisites of testifying during the trial.[32]
must concur, namely: (1) the plaintiff or complainant has a legal or


A careful examination of the evidence on record shows that Teodulo word occupation, it seeks to delimit the all-encompassing effect of
possessed and occupied Lot No. 379 in the concept of an owner. constructive possession. Taken together with the words open,
Since 1929, Teodulo cultivated the controverted land, built his continuous, exclusive and notorious, the word occupation serves to
home, and raised his 11 children thereon. In 1957, he iled a highlight the fact that for one to qualify under paragraph (b) of the
homestead application over Lot No. 379 but failed to pursue the aforesaid section, his possession of the land must not be mere
same.[33] After his demise, all his 11 children, the youngest being iction. As this Court stated, through then Mr. Justice Jose P. Laurel,
28 years old,[34] continued to till the land. From 1929 to 1960, in Lasam vs. The Director of Lands:
Santiago never challenged Teodulo's possession of Lot No. 379 nor "x x x Counsel for the applicant invokes the doctrine laid down by us
demanded or received the produce of said land. For 31 years in Ramos vs. Director of Lands (39 Phil. 175, 180). (See also Rosales
Santiago never exercised any act of ownership over Lot No. 379. vs. Director of Lands, 51 Phil. 302, 304). But it should be observed
And, in 1960, he con irmed that he is no longer interested in that the application of the doctrine of constructive possession in
asserting any right over the land by executing in favor of Teodulo a that case is subject to certain quali ications, and this court was
quitclaim. careful to observe that among these quali ications is 'one
particularly relating to the size of the tract in controversy with
Indeed, all these prove that Teodulo possessed and cultivated the reference to the portion actually in possession of the claimant.'
land as owner thereof since 1929. While the oral donation in 1929 While, therefore, 'possession in the eyes of the law does not mean
as well as the 1960 quitclaim ceding Lot No. 379 to Teodulo are void that a man has to have his feet on every square meter of ground
for non-compliance with the formalities of donation, they before it can be said that he is in possession', possession under
nevertheless explain Teodulo and his family's long years of paragraph 6 of section 54 of Act No. 926, as amended by paragraph
occupation and cultivation of said lot and the nature of their (b) of section 45 of Act No. 2874, is not gained by mere nominal
possession thereof. claim. The mere planting of a sign or symbol of possession cannot
justify a Magellan-like claim of dominion over an immense tract of
In Bautista v. Poblete,[35] the Court sustained the registration of a territory. Possession as a means of acquiring ownership, while it
parcel of land in the name of the successors-in-interest of the donee may be constructive, is not a mere iction x x x."Earlier, in Ramirez
notwithstanding the invalidity of the donation inasmuch as said vs. The Director of Lands, this Court noted:
donee possessed the property in the concept of an owner. Thus - "x x x The mere fact of declaring uncultivated land for taxation
There is no question that the donation in question is invalid because purposes and visiting it every once in a while, as was done by him,
it involves an immovable property and the donation was not made does not constitute acts of possession."In the instant case,
in a public document as required by Article 633 of the old Civil Santiago's short-lived possession and cultivation of Lot No. 379
Code, in connection with Article 1328 of the same Code (concerning could not vest him title. While he tilled the land in 1925, he ceased
gifts propter nuptias), but it does not follow that said donation may to possess and cultivate the same since 1928. He abandoned the
not serve as basis of acquisitive prescription when on the strength property and allowed Teodulo to exercise all acts of ownership. His
thereof the donee has taken possession of the property adversely brief possession of Lot No. 379 could not thus vest him title. Nemo
and in the concept of owner.It follows therefore that Teodulo's open, potest plus juris ad alium transferre quam ipse habet. No one can
continuous, exclusive, and notorious possession and occupation of transfer a greater right to another than he himself has. Hence,
Lot No. 379 for 30 years, or from 1929 to 1959 in the concept of an spouses Cipriano Hernandez and Julia Zoleta and herein
owner, earned him title over the lot in accordance with Sec. 48 (b) of respondents did not acquire any right over the questioned lot and
the Public Land Act. Considering that Lot No. 379 became the the title issued in their names are void, because of the legal truism
private property of Teodulo in 1959, Santiago had no more right to that the spring cannot rise higher than the source.[37]
sell the same to spouses Cipriano Hernandez and Julia Zoleta in
1964. Consequently, the latter and herein respondents did not Furthermore, spouses Cipriano Hernandez and Julia Zoleta cannot
acquire ownership over Lot No. 379 and the titles issued in their be considered as purchasers in good faith because they had
name are void. knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry.[38] The Court notes
Interestingly, respondents adopted the theory that Santiago that Santiago was not residing in Lot No. 379 at the time of the sale.
acquired title over Lot No. 379 not from the April 21, 1925 Decision He was already 81 years old, too old to cultivate and maintain an
of the CFI of Tayabas which merely recognized his rights over said 18-hectare land. These circumstances should have prompted the
lot, but from his more than 30 years of possession since 1925 up to spouses to further inquire who was actually tilling the land. Had
1964 when he sold same lot to their (respondents) they done so, they would have found that Teodulo and his family are
predecessors-in-interest, the spouses Cipriano Hernandez and Julia the ones possessing and cultivating the land as owners thereof.
Zoleta. On the basis of said claim, said spouses iled an action for,
and successfully obtained, con irmation of imperfect title over Lot In the same vein, respondents could not be considered as third
No. 379, pursuant to Sec. 48 (b) of the Public Land Act. persons or purchasers in good faith and for value or those who buy
the property and pay a full and fair price for the same[39] because
However, the records do not support the argument of respondents they merely inherited Lot No. 379 from spouses Cipriano
that Santiago's alleged possession and cultivation of Lot No. 379 is Hernandez and Julia Zoleta.
in the nature contemplated by the Public Land Act which requires
more than constructive possession and casual cultivation. As Then too, even if Santiago acquired title over Lot No. 379 by virtue
explained by the Court in Director of Lands v. Intermediate of the April 21, 1925 Decision of the CFI of Tayabas, and not on
Appellate Court:[36] account of his alleged 30-year possession thereof, we will still arrive
It must be underscored that the law speaks of "possession and at the same conclusion. This is so because the declaration of this
occupation." Since these words are separated by the conjunction Court that petitioners are the rightful owners of the controverted
and, the clear intention of the law is not to make one synonymous lot is based on Teodulo's own possession and occupation of said lot
with the other. Possession is broader than occupation because it under a bona ide claim of acquisition of ownership, regardless of
includes constructive possession. When, therefore, the law adds the the manner by which Santiago acquired ownership over same lot.


petitioners as they even asserted in their Answer that in 1970,

On the issue of prescription, the settled rule is that an action for Teodulo ousted the tenant they (respondents) instituted in the lot.
quieting of title is imprescriptible, as in the instant case, where the From 1970 up to the iling of petitioners' complaint in 1992, or after
person seeking relief is in possession of the disputed property. A 22 years, respondents never bothered to assert any right over Lot
person in actual possession of a piece of land under claim of No. 379. Respondent Joaquin Hernandez testi ied that he and his
ownership may wait until his possession is disturbed or his title is siblings had a plan to convert the land into a grazing land for cattle
attacked before taking steps to vindicate his right, and that his but decided to put it off for fear of the rampant operations of the
undisturbed possession gives him the continuing right to seek the New People's Army between the years 1965-1970. However, even
aid of a court of equity to ascertain and determine the nature of the after said years, respondents took no step to implement their plan.
adverse claim of a third party and its effect on his title.[40] Worse, among the siblings of spouses Cipriano Hernandez and Julia
Considering that petitioners herein continuously possessed Lot No. Zoleta who are all living in the Philippines,[46] only Joaquin
379 since 1929 up to the present, their right to institute a suit to Hernandez visited the land and only thrice, i.e., once in each years of
clear the cloud over their title cannot be barred by the statute of 1964, 1966 and 1970. Thereafter, not one of them paid visit to Lot
limitations. No. 379, up to the time Joaquin Hernandez testi ied in 1996,[47]
despite the fact that two of them are living only in Calauag, Quezon;
Neither could petitioners' action be barred by laches because they one in Agdangan, Quezon;[48] and two in Lucena City.[49] Neither
continuously enjoyed the possession of the land and harvested the did they send a notice or correspondence to petitioners invoking
fruits thereof up to the present to the exclusion of and without any their right over the property. From all indications, the late spouses
interference from respondents. They cannot therefore be said to Cipriano Hernandez and Julia Zoleta as well respondents, have
have slept on their rights as they in fact exercised the same by neglected Lot No. 379. Were it not for this action instituted by
continuously possessing Lot No. 379. petitioners in 1992, their con licting claims over the property could
not have been settled. It goes without saying that to lose a property
On the contrary, we ind that it is respondents who are actually that has been in the family from 1929 up to the present, or for 77
guilty of laches. Though not speci ically pleaded, the Court can years will certainly cause irreparable pecuniary and moral injury to
properly address the issue of laches based on petitioners' allegation petitioners, especially so if the same ancestral land will be lost
in the complaint that "[n]either spouses Cipriano Hernandez and under most unfair circumstances in favor of respondents who
Julia Zoleta x x x nor [herein respondents] had taken steps to appear to have no real interest in cultivating the same.
possess or lay adverse claim to said parcel of land from the date of
their registration of title in November, 1965 up to the present."[41] Finally, payment of taxes alone will not save the day for
Such averment is suf icient to impute abandonment of right on the respondents. Only a positive and categorical assertion of their
part of respondents. At any rate, laches need not be speci ically supposed rights against petitioners would rule out the application
pleaded. On its own initiative, a court may consider it in of laches. It means taking the offensive by instituting legal means to
determining the rights of the parties.[42] wrest possession of the property which, however, is absent in this
case. Respondents' payment of taxes alone, without possession
The failure or neglect, for an unreasonable length of time to do that could hardly be construed as an exercise of ownership. What stands
which by exercising due diligence could or should have been done out is their overwhelming passivity by allowing petitioners to
earlier constitutes laches. It is negligence or omission to assert a exercise acts of ownership and to enjoy the fruits of the litigated lot
right within a reasonable time, warranting a presumption that the for 22 years without any interference.
party entitled to assert it has either abandoned it or declined to
assert it. While it is by express provision of law that no title to In sum, the Court inds that Lot No. 379 should be adjudicated in
registered land in derogation of that of the registered owner shall favor of petitioners.
be acquired by prescription or adverse possession, it is likewise an
enshrined rule that even a registered owner may be barred from One last point. Notwithstanding this Court's declaration that Lot No.
recovering possession of property by virtue of laches.[43] 379 should be awarded in favor of petitioners, their title over the
same is imperfect and is still subject to the iling of the proper
In applying the doctrine of laches, we have ruled that where a party application for con irmation of title under Section 48 (b) of the
allows the following number of years to lapse from the emergence Public Land Act, where the State and other oppositors may be given
of his cause of action without enforcing his claim, laches sets in: 36 the chance to be heard. It was therefore premature for the trial
years; 12 years; 50 years; 34 years; 37 years; 32 years; 20 years; 47 court to direct the Register of Deeds of Lucena City to issue a
years; 11 years; 25 years; 40 years; 19 years; 27 years; 7 years; 44 certi icate of title in the name of petitioners.
years; 4 years; and 67 years.[44]
Nevertheless, the imperfect title of petitioners over Lot No. 379 is
The elements of laches are: (1) conduct of a party on the basis of enough to defeat the certi icate of title issued to respondents.[50]
which the other party seeks a remedy; (2) delay in asserting one's
rights, despite having had knowledge or notice of the other party's WHEREFORE, the petition is GRANTED and the May 26, 2005
conduct and having been afforded an opportunity to institute a suit; Decision of the Court of Appeals in C.A. GR. CV No. 57053, is
(3) lack of knowledge or notice on the part of a party that the REVERSED and SET ASIDE. The March 31, 1997 Decision of the
person against whom laches is imputed would assert the right; and Regional Trial Court of Calauag, Quezon, Branch 63, in Civil Case No.
(4) injury or prejudice to the party asserting laches in the event the C-964, awarding Lot No. 379 in favor petitioners and ordering the
suit is allowed to prosper.[45] cancellation of respondents' Transfer Certi icate of Title No. T-
237330, is REINSTATED with the MODIFICATION deleting the trial
All these elements are present in this case. Petitioners' continuous court's order directing the Register of Deed of Lucena City to issue a
possession and occupation of Lot No. 379 should have prompted the certi icate of title in the name of petitioners.
respondents to ile an action against petitioners, but they chose not
to. Respondents cannot deny knowledge of said possession by SO ORDERED.


name, asked John W. Legare what that paper was. The latter
Panganiban, C.J., (Chairperson), Austria-Martinez, Callejo, Sr., and answered that it was an application for payment of compensation.
Chico-Nazario, JJ., concur As plaintiff had con idence in John W. Legare and prior to that
occasion she had received from the U.S. Veterans Administration a
Fule vs Legare, G.R. No. L-17951, February letter concerning some compensation she was to receive, she signed
that paper. After the paper was signed by the plaintiff, John W.
28, 1963 Legare had Purita Tarrosa sign it as a witness, without however,
117 Phil. 367
allowing the latter to read it.
G.R. No. L-17951, February 28, 1963
"After that paper was thus signed, John W. Legare told the plaintiff
CONRADO C. FULE AND LOURDES E. ARAGON, PETITIONERS, VS.
and Purita Tarrosa to pack up their things as they were leaving the
EMILIA E. DE LEGARE AND COURT OF APPEALS, RESPONDENTS.
house to hide in a hotel, adding that the men who came earlier that
evening were Huks. Early the next morning John W. Legare took the
DECISION
plaintiff and Purita Tarrosa to the Windsor Hotel in the City of
REGALA, J.:
Manila, and after conducting them to a room in the hotel, told them
not to leave the room nor peep out of the window as they might be
This is a petition for certiorari to review the decision of the Court of
seen by the men who came to their house in' the previous evening.
Appeals, promulgated on November 16, 1960, in Civil Case No.
This advice given John W. Legare left the hotel. The plaintiff and
15728-R, entitled "Emilia E. Legare, plaintiff-appellant, versus,
Purita Tarrosa stayed in that hotel for about a month and a half.
Conrado C. Fule and Lourdes F. Aragon, defendants-appellants.
John W. Legare oecasionaly visited them there. In one of said
The facts of this case as found by the Court of Appeals in its decision
occasional visits the plaintiff told John that she wanted to go home.
are as follows:
The latter told her that it was not yet safe for her to go home. On
"This is an action for annulment of certain deeds of sale and
May 7, 1953, however, John W. Legate came to the hotel, gave the
conveyance covering a parcel of land, together with the
plaintiff a ive peso bill, and told her that she could use the amount
improvements existing thereon, situated in the municipality of San
for transportation expenses if she wanted to leave the hotel. On the
Juan, province of Rizal, and for damages.
following morning the plaintiff and Purita Tarrosa left the hotel and
"It appears in evidence that the plaintiff, Emilia E. de Legare, was
went direct to her house at Sta. Mesa Boulevard Extension. When
the owner of a parcel of land, together with a residential house
they arrived at the house, however, they found that it was occupied
erected thereon, situated at No. 146 Sta. Mesa Boulevard Extension,
by strangers, and that all her furniture and personal belongings had
San Juan, Rizal, her ownership being evidenced by Transfer
disappeared. Inquiring from those strangers how they happened to
Certi icate of Title No. 21253, issued by the Of ice of the Register of
occupy the house, the latter told her that John W. Legare had sold
Deeds of the Province of Rizal. She was living in that house together
the house to them and that it was no longer hers. The plaintiff
with defendant John W. Legare, her adopted son, and a maid named
thereupon sought the help of rher attorney. It was then discovered
Purita Tarrosa. On September 26, 1951, the plaintiff, thru a public
that the paper which John W. Legare had the plaintiff and Purita
deed, constituted on the above mentioned house and lot a irst class
Tarrosa sign in the evening of March 29, 1953 was a deed of sale of
mortgage in favor of defendant Tomas Q. Soriano to guarantee the
the lot and house in question in favor of John W. Legare for the sum
payment of a loan in the amount of P8.000.00. This deed of
of. P12,000.00, and that it was supposed to have been executed on
mortgage was on the same date recorded in the Of ice of the
the 7th day of April 1953, and acknowledged before a notary public
Register of Deeds of the province of Rizal and annotated in the
on that date Exhibit X.
memorandum of encumbrances of transfer certi icate of title No.
"It further appears that sometime prior to May 9, 1953, John W.
21253. On account of certain partial payments made by the plaintiff
Legare approached Elias B. Fermin, the real estate broker who
and the contracting by the latter of additional loans in small
intervened in the securing of the loan contracted by the plaintiff
amounts from Tomas Q. Soriano the debt guaranteed by the above
from Tomas Q. Soriano, and sought said broker's help to sell the lot
mentioned mortgage was reduced to the sum of P7.000.00 as of
and house in question. Elias B. Fermin accepted the commission and
February 23, 1953. These transactions, however, were not
offered the property in sale to defendants spouses Conrado C. Fule
annotated on the memorandum of encumbrances of the above
and Lourdes F. Aragon. Conrado C. Fule read the title papers in the
mentioned certi icate of title.
hand of John W. Legare and inspected the premises, and satis ied
"At about 9:00 o'clock in the evening of March 29, 1953, while the
with the result of his inspection, he agreed to purchase the property
plaintiff, John W. Legare, and Purita. Tarrosa were seated in the
for P12,000.00 on condition that the sum of P7,000, the unpaid
drawing room of the house above referred to, an unknown man
balance of plaintiff's indebtedness to Tomas Q. Soriano secured by a
intruded into the room, approached the plaintiff, covered her
mortgage thereon, would be deducted from the price, and that he
mouth, and, pressing a knife on her side, demanded that she give
would assume said mortgage. The terms offered by Conrado C. Fule
him P10.000.00 if she did not like to be killed. The plaintiff replied
being acceptable to John W. Legare and Tomas Soriano, the parties
that she did not have that amount. Thereupon, the intruder told the
proceeded to formalize the contract. Accordingly, on May 9, 1953,
plaintiff to raise the necessary amount as he would come back the
defendant Tomas Q. Soriano executed a deed of absolute sale
following morning, and once more threatened to kill her if she
thereof, free of all liens and encumbrances, in favor of defendant
would fail to do so. After having made that threat, the intruder left
spouses Conrado C. Fule and Lourdes F. Aragon, Exhibit X-2, and
the house. John W. Legare did not call for help nor made any
said spouses in turn executed in favor of Tomas Q. Soriano a deed of
attempt to defend his mother, and when Purita Tarrosa stood up to
mortgage covering the property for the sum of P7,000.00. Exhibit
go down the house to call for a policeman, he held the latter by the
X-3. These three deeds, together with transfer certi icate of Title No.
hand and slapped her on the face when she persisted in going down,
21253, issued in the name of the plaintiff, were on that same date
telling her that the man had companions waiting downstairs.
presented for registration in the Of ice of the Register of Deeds of
"After the intruder was gone John W. Legare approached the
the province of Rizal. The latter, following the usual procedure,
plaintiff, and exhibiting to her a paper told her to sign it as with the
recorded, irst, the deed of sale executed by the plaintiff in favor of
same he could secure from the U.S. Veterans Administration the
defendant John W. Legare (Exhibit 1) and issued in the name of the
amount which they needed to deliver to that intruder. The plaintiff,
latter transfer certi icate of title No. 30126 which cancelled transfer
who did not.know how to read nor write, altho she could sign her


for certi icate of title No. 21253 (Exhibit Y), then the deed of sale assigned were but attempts at disputing the same. The other four
executed by John W. Legare in favor of the spouses Conrado C. Fule were simply detailed aspects of the one, sole issue, to wit:
and Lourdes F. Aragon (Exhibit X-2) and issued in favor of the latter Were the herein petitioners purchasers in good faith and for value
transfer certi icate of title No. 30127 (Exhibit Y-l), which cancelled of the properties here contested?
transfer certi icate of title No. 30126, and then annotated on the Guided by the facts found by the Court of Appeals, We hold the
memorandum of encunlbrances of transfer certi icate of title No. herein petitioners innocent purchasers for value of the house and
30127 the deed of mortgage (Exhibit X-l) executed in favor of Tomas lot here disputed. In consequence, they are here adjudged the lawful
Q. Soriano by said spouses. Once these were accomplished, Elias B. owners thereof.
Fermin and John W. Legare went back to the house of the spouses A purchaser in good faith is one who buys property of another,
Conrado C. Fule and Lourdes F. Aragon and gave the transfer without notice that some other person has a right to or interest in,
certi icate of title No. 30127. Thereupon said spouses delivered to such property and pays a full and fair price for the same, at the time
John W. Legare the balance of the purchase price of the property, of such purchase, or before he has notice of the claim or interest of
after deducting therefrom the amount of the mortgage constituted some other persons in the property. Good faith consists in an honest
thereon in favor of Tomas Q. Soriano, the brokerage fees and the intention to abstain from taking any unconscientious advantage of
expenses incident to the execution and registration of said deeds another (Cui and Joven vs. Henson, 51 Phil., 606). We have
and issuance of new certi icates of title, which amounted to a little measured the conduct of the petitioner spouses by this yardstick.
over P4,000.00. These facts were uncontroverted. The negotiation and transaction
Upon the evidence, the trial court rendered judgment, the which eventually caused the certi icate of title to be transferred
dispositive part of which reads as follows: from the herein respondent to the petitioner spouses were
"IN VIEW OF ALL THE FOREGOING, this Court hereby orders: conducted by a real estate broker licensed since 1938. Nothing in
"1) the cancellation of Certi icate of Title Nos. 30127 and 30126, John W. Legare's person or behaviour suggested anything
thereby leaving valid TCT No. 21253 in the name of Emilia E. de suspicious. He was the adopted son of the herein respondent, and,
Lograre together with the encumbrance thereon in favor of Tomas to the time that he was contracting with the petitioner spouses, he
Q. Soriano; had not been known to commit crime or dishonesty. On the
"2) the delivery of the possession of the premises to the plaintiff and contrary John hag had previous dealings with the real estate broker
the monthly rental of P150.00 a month from May 9, 1953, up to and during which he exhibited the expected degree of trustworthiness.
including the date on which the delivery is to be made, this It should be noted that the deed of sate was regular its face, and no
obligation being understood to be joint and several insofar as the one would have questioned its authenticity since it was duly
defendants Fule and Aragon are concerned: acknowledged before a notary public. Moreover, even if the
"3) the award of P5.000.00 as moral damages in favor of the plaintiff petitioners had the opportunity to compare the signature of the
and enforceable against John W. Legare for the fraud perpetrated by respondent on the deed of conveyance with a specimen of her
the latter on the former; genuine signature, the effort, nonetheless, would have been in vain
"4) the award of P1,000.00 as attorney's fees enforceable against since the respondent's signature on the document was admittedly
the defendants Fule and Aragon; hers. Lastly, it should not be overlooked that the respondent, during
"And on the cross-claim the court orders— the whole period of the negotiation, was nowhere available to
"1) John W. Legare to refund to the spouses Fule and Aragon the con irm or deny the execution of the deed. She was then in hiding,
amount paid by the latter on account of the sale contained in or, hidden, at the Windsor Hotel in Manila.
Exhibit X-2 plus interest thereon at the legal rate from the date of The diligence and precaution observed by the petitioners,
the cross-claim; themselves could hardly have been wanting. The records show that
"2) the award of P5,000.00 as moral damages in favor of the they did not rely solely and fully upon the deed of sale in favor of
spouses Fule and Aragpn and enforceable against John W. Legare for John W. Legare and the fact that John had then in his possession the
the misrepresentation made by him; corresponding certi icate of title of the registered owner. They
"3) the reimbursement to the spouses Fule and Aragon hy John W. demanded more. They insisted that the sale in favor of John W.
Legare of all amounts which may be paid by the former to the Legare be irst registered and that the transfer in their favor be
plaintiff by way af rentals for the premises involved herein, as well thereafter likewise registered. It was only after all these were
as attorney's fees in the amount of P1,000.00, complied with that they paid the purchaser price. In other words,
"SO ORDERED." the petitioner spouses relied not really on the documents exhibited
The Court of Appeals, in deciding the appeal, entered a judgment to them by John W. Legare, but, on the registerability of those
the dispositive portion of which follows: documents. This in our view, satis ies the measure of good faith
"WHEREFORE, modi ied as indicated above, i.e., the transfer contemplated by law.
certi icate of title No. 21253 issued in the name of Emilia E. de It is true that at the time the herein petitioners purchased the
Legare is revived with the mortgage in favor of appellee Tomas Q. properties from John W. Legare, he was not yet the registered owner
Soriano annotated on its memorandum of encumbrances but of the same. This fact alone, however, could not have caused the
reduced to the amount of P7,000.00, and that the award of herein petitioners to lose their status as innocent purchasers for
attorney's fees in the amount of P1,000.00 to be paid by the spouses value. It should be recalled that although the title was in the name of
Conrado C. Fule and Lourdes F. Aragon, in favor of the plaintiff, is the respondent Emilia E. de Legare, the certi icate of title was in the
eliminated therefrom the judgment appealed from is hereby possession of her adopted son, John. Under Section 5 of Act 496, as
af irmed in all other inspects, without special pronouncement as to amended, John's possession of the certi icate and his subsequent
costs in this instance. production of it to the herein petitioners operated as a "conclusive
"IT IS SO ORDERED." authority from the registered owner to the register of deeds to
In elevating the judgment of the Court of Appeals to this Tribunal enter a new certi icate."
for review, herein petitioners discussed 6 assignments of error. "Sec. 55.* * *
However, this Court is ot the view that, in effect and substance, only "The production of the owner's duplicate certi icate whenever any
one issue was raised. We have always refrained from reviewing voluntary instrument is presented for registration shall be
factual indings of the Court of Appeals and the irst two errors conclusive authority from the registered owner to the register of


deeds to enter a new certi icate or to make a memorandum or thereto, such title passes by operation of law to the buyer or
registration in accordance with such instrument, and the new grantee."
certi icate or memorandum shall be binding upon the registered This Court sympathizes with the respondent. It is aware of the
owner and upon all persons claiming under him, in favor of every treacherous, painful fraud committed on her by her adopted son.
purchaser for value and in good faith. * * *" But positive provisions of law and settled jurisprudence cannot be
While it was true that the transfer in favor of John was still subordinated to that feeling.
unregistered when he sought to sell the property to the herein Besides, the records of this case reveal that the herein respondent is
petitioners, it was not true that the latter observed no precaution herself not entirely free from blame. We note that when John
whatsoever from the complication of such non-registration. As presented to her the document which turned out to be a deed of
already discussed above, the petitioners required that the conveyance in his favor, she readily af ixed her signature thereto
registration of the previous sale (from the respondent to John W. upon the simple representation of John that it was document
Legare) be irst attended to and completed. After that was done and pertaining to her claim with the U.S. Veterans Administrations. She
the certi icate of title was issued to John by the Register of Deeds, could have asked her maid to read the contents of the same for her
they still withheld payment till the second sale (from John to the and yet she did not. These, We believe, amount to a lack of prudence
petitioners) was in turn registered and the corresponding and precaution on the part of Mrs. Emilia de Legare.
certi icate of title therefor was issued in their names. It was only In view of the foregoing, the decision of the Court of Appeals is
after all these were followed that the entire negotiation was hereby reversed and set aside. A new one is here entered dismissing
terminated with the payment of. the balance of the purchase price. the respondent's complaint and declaring the petitioners herein the
All these, we hold, were adequate safeguards against the objection lawful owners of the properties here involved. Without
interposed. A contrary conclusion would operate to weaken the pronouncement as to costs.
reliance of the general public on the indefeasibility of titles Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., and
registered under the Torrens System. Dizon, JJ., concur.
We have so far demonstrated the good faith of the petitioner Bengzon, C.J., concurs in the result.
spouses. By the very facts established by the Court of Appeals,
however, there is still another reason why the property here in Phil. Columbian Association vs Panis, G.R.
question should be adjudged to the petitioners.
Although the deed of sale in favor of John W. Legare was fraudulent, No. 106528, December 21, 1993
FIRST DIVISION
the fact remains that he was able to secure a registered title to the
G.R. No. 106528, December 21, 1993
house and lot. It was this title which he subsequently conveyed to
PHILIPPINE COLUMBIAN ASSOCIATION, PETITIONER, VS. THE
the herein petitioners. We have indeed ruled that a forged or
HONORABLE DOMINGO D. PANIS, AS JUDGE, REGIONAL TRIAL
fraudulent deed is a nullity and conveys no title (Director of Lands
COURT OF MANILA, BRANCH 41, THE HONORABLE RICARDO DIAZ,
vs. Addison, 49 Phil., 19). However, we have also laid down the
AS JUDGE, REGIONAL TRIAL COURT OF MANILA, BRANCH 27, THE
doctrine that there are instances when such a fraudulent document
CITY OF MANILA, ANTONIO GONZALES, JR., KARLO BUTIONG,
may become the root of a valid title. One such instance is where the
LEONARDO AQUINO, EDILBERTO LOPEZ, ANTILANO FERRER,
certi icate of title was already transferred from the name of the true
LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ, PATRICIO DE
owner to the forger, and while it remained that way, the land was
GUZMAN, RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO
subsequently sold to an innocent purchaser. For then, the vendee
FERNANDEZ, DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA
had the right to rely upon what appeared in the certi icate
VELEZ, LUSITO ALMADRONES, MYRNA BARREDO EBREO,
(Inquimboy vs. Cruz, 108 Phil., 1054).
FULGENCIO CORSINO, PEDRO VELASQUEZ, JUAN INOBAYA, NENITA
We have been constrained to adopt the conclusion here set forth
ARCE, MAGNO ORTINEZ, ARMANDO PARAGAS, HIPOLITO
because under the Torrens system, "registration is the operative act
ESTABILLO, FELICIANO FAUSTINO, VIRGILIO EDIC, JOSE TINGZON,
that gives validity to the transfer or creates a lien upon the land
JOSUE MARIANO, MARIA YERO, MA. DOLORES QUIZON, ISIDERO
(Sees. 50 and 51, Land Registration Act). Consequently, where there
TAGUILIG, CIRIACO MENDOZA, JUAN ROMERO, JOSE LAGATA,
was nothing in the certi icate of title to indicate any cloud or vice in
FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO LACHICA, PIO
the ownership of the property, or any encumbrance thereon, the
RAJALES, REGINA VIERNES, JUAN ROMERO, DOMINGO EDIC,
purchaser is not required to explore farther than what the Torrens
EDUARDA GONZALES, PABLO QUIRANTE, LEONORA SANTIA,
title upon its face indicates in quest tor any hidden defect or
MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA,
inchoate right that may subsequently defeat,his right thereto. If the
DOMINADOR ADAO, JUAN PANTERA, FRISCA MANOOT, SOCORRO
rule were otherwise, the ef icacy and conclusiveness of the
SANTOS AND GLORIA JEBUNAN, RESPONDENTS.
certi icate of title which the Torrens system seeks to insure would
entirely be futile and nugatory. (Reynes vs. Barrera, 68 Phil., 656; De
Lara and De. Guzman vs. Ayroso, 95 Phil., 185; 50 Off. Gaz., No 10,
4838). The public shall then be denied of its foremost motivation for
DECISION
respecting and observing the Land Registration Act. In the end, the
QUIASON, J.:
business community stands to be inconvenienced and prejudiced
immeasurably. Furthermore, when the Register of Deeds issued a
certi icate of title in the name of John W. Legare, and thereafter
This is an appeal by certiorari to review: (1) the decision of the
registered the same, John W. Legare, insofar as third parties were
Court of Appeals in CA-G.R. SP No. 23338, which dismissed the
concerned, acquired a valid title to the house and lot here disputed.
petition for certiorari iled by herein petitioner, assailing the orders
When, therefore, he transferred this title to the herein petitioners,
of (a) respondent Judge Domingo D. Panis of the Regional Trial
third persons, the entire transaction fell within the purview of
Court, Branch 41, Manila, in Civil Case No. 90-53531, and (b)
Article 1434 of the Civil Code. The registration in John W. Legare's
respondent Judge Ricardo D. Diaz, of the Regional Trial Court,
name effectively operated to convey the properties to him.
Branch 27, Manila, in Civil Case No. 90-53346; and (2) its Resolution
"Art. 1434. When a person who is not the owner of a thing sells or
dated July 30, 1992, which denied the motion for reconsideration of
alienates and delivers it, and later the seller or grantor acqune title
the decision.


Philippine Columbian Association, petitioner herein, is a non-stock, 1992, denying the petition, and a Resolution on July 30, 1992,
non-pro it domestic corporation and is engaged in the business of denying reconsideration thereof.
providing sports and recreational facilities for its members. Hence, this petition.
Petitioner's of ice and facilities are located in the District of Paco, The land subject of this case is the 4,842.90 square meter lot, which
Manila, and adjacent thereto, is a parcel of land consisting of was formerly a part of the Fabie Estate. As early as November 11,
4,842.90 square meters owned by petitioner. 1966, the Municipal Board of the City of Manila passed Ordinance
Private respondents are the actual occupants of the said parcel of No. 5971, seeking to expropriate the Fabie Estate. Through
land, while respondents Antonio Gonzales, Jr. and Karlo Butiong negotiated sales, the City of Manila acquired a total of 18,017.10
were duly-elected councilors of the City of Manila. square meters of the estate, and thereafter subdivided the land into
In 1982, petitioner instituted ejectment proceedings against herein home lots and distributed the portions to the actual occupants
private respondents before the Metropolitan Trial Court of Manila. thereof.
Judgment was rendered against the said occupants, ordering them The remaining area of 4,842.90 square meters, more or less, was
to vacate the lot and pay reasonable compensation therefor. This sold in 1977 by its owner, Dolores Fabie-Posadas, to petitioner.
judgment was af irmed by the Regional Trial Court, the Court of Since the time of the sale, the lot has been occupied by private
Appeals and subsequently by the Supreme Court in G.R. No. 85262. respondents.
As a result of the favorable decision, petitioner iled before the On May 23, 1989, the City Council of Manila, with the approval of
Metropolitan Trial Court of Manila, a motion for execution of the Mayor, passed Ordinance No. 7704 for the expropriation of the
judgment, which was granted on April 9, 1990. A writ of demolition 4,842.90 square meter lot.
was later prayed for and likewise issued by the same court on May Petitioner claims that expropriation of the lot cannot prosper
30, 1990. because: (1) the City of Manila has no speci ic power to expropriate
On June 8, 1990, private respondents iled with the Regional Trial private property under the 1987 Constitution; and (2) assuming
Court, Branch 27, Manila, a petition for injunction and prohibition that it has such power, this was exercised improperly and illegally in
with preliminary injunction and restraining order against the violation of the public use requirement and petitioner's right to due
Metropolitan Trial Court of Manila and petitioner herein (Civil Case process.
No. 90-53346) to enjoin their ejectment from and the demolition of Petitioner argues that under the 1987 Constitution, there must be a
their houses on the premises in question. law expressly authorizing local governments to undertake urban
On June 28, 1990, the City of Manila iled a complaint docketed as land reform (Art. XIII, Sec. 9).
Civil Case No. 90-53531 against petitioner before the Regional Trial Petitioner forgot that the Revised Charter of the City of Manila, R.A.
Court, Branch 41, Manila, for the expropriation of the 4,842.90 No. 409, expressly authorizes the City of Manila to "condemn
square meter lot subject of the ejectment proceedings in Civil Case private property for public use" (Sec. 3) and "to acquire private land
No. 90-53346. Petitioner, in turn, iled a motion to dismiss the x x x and subdivide the same into home lots for sale on easy terms
complaint, alleging, inter alia, that the City of Manila had no power to city residents" (Sec. 100).
to expropriate private land; that the expropriation is not for public The Revised Charter of the City of Manila expressly grants the City
use and welfare; that the expropriation is politically motivated; and, of Manila general powers over its territorial jurisdiction, including
that the deposit of P2 million of the City of Manila representing the the power of eminent domain, thus:
provisional value of the land, was insuf icient and was made under "General powers.-- The city may have a common seal and alter the
P.D. 1533, a law declared unconstitutional by the Supreme Court. same at pleasure, and may take, purchase, receive, hold, lease,
On September 14, 1990, the Regional Trial Court, Branch 41, Manila, convey, and dispose of real and personal property for the general
denied petitioner's motion to dismiss and entered an order of interest of the city, condemn private property for public use,
condemnation declaring that the expropriation proceeding was contract and be contracted with, sue and be sued, and prosecute
properly instituted in accordance with law. The court also ordered and defend to inal judgment and execution, and exercise all the
the parties to submit, within ive days, the names of their respective powers hereinafter conferred" (R.A. 409, Sec. 3; Italics supplied).
nominees as commissioners to ascertain just compensation for the Section 100 of said Revised Charter authorizes the City of Manila to
land in question. undertake urban land reform, thus:
Petitioner iled a motion for reconsideration of the order denying its Sec. 100. The City of Manila is authorized to acquire private lands in
motion to dismiss, and later a motion to defer compliance with the the city and to subdivide the same into home lots for sale on easy
order directing the submission of the names of nominees to be terms to city residents, giving irst priority to the bona ide tenants
appointed commissioners. The City of Manila, however, iled an or occupants of said lands, and second priority to laborers and
ex-parte motion for the issuance of a writ of possession over the low-salaried employees. For the purpose of this section, the city
subject lot, mentioning the P2 million deposit with the Philippine may raise the necessary funds by appropriations of general funds,
National Bank, representing the provisional value of the land. by securing loans or by issuing bonds, and, if necessary, may acquire
In separate orders dated October 5 and 8, 1990, the court issued the the lands through expropriation proceedings in accordance with
writ of possession, and at the same time, denied petitioner's motion law, with the approval of the President xxx" (Italics supplied).
to defer compliance and motion for reconsideration. The City of Manila, acting through its legislative branch, has the
On September 21, 1990, as a result of the expropriation express power to acquire private lands in the city and subdivide
proceedings, the Regional Trial Court, Branch 27, Manila, in Civil these lands into home lots for sale to bona- ide tenants or
Case No. 90-53346 issued an order, granting the writ of preliminary occupants thereof, and to laborers and low-salaried employees of
injunction prayed for by private respondents. A motion for the city.
reconsideration iled by petitioner was denied. That only a few could actually bene it from the expropriation of the
Petitioner iled before the Court of Appeals a petition assailing the property does not diminish its public use character. It is simply not
orders dated September 14, 1990, and October 5 and 8, 1990 of possible to provide all at once land and shelter for all who need
Branch 41 of the Regional Trial Court, and the Order dated them (Sumulong v. Guerrero, 154 SCRA 461 [1987]).
September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No. Corollary to the expanded notion of public use, expropriation is not
23338). The Court of Appeals rendered a Decision on November 31, anymore con ined to vast tracts of land and landed estates
(Province of Camarines Sur v. Court of Appeals, G.R. No. 103125,


May 17, 1993; J.M. Tuason and Co. Inc. v. Land Tenure FERNANDEZ, J.:
Administration, 31 SCRA 413 [1970]). It is therefore of no moment
that the land sought to be expropriated in this case is less than half This is a petition for certiorari instituted by Jane L. Garcia, Mayorico
a hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]). P. Sandico, Belen R. Garcia, and Danilo Diokno against the Court of
Through the years, the public use requirement in eminent domain Appeals (Special Tenth Division), and the National Power
has evolved into a lexible concept, in luenced by changing Corporation seeking the following relief:
conditions (Sumulong v. Guerrero, supra; Manotok v. National "WHEREFORE, premises considered, it is most respectfully prayed
Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. of the Court:
Reyes, 125 SCRA 220 [1983]). Public use now includes the broader
notion of indirect public bene it or advantage, including in "1. That the Decision of the Court of Appeals respecting Block 19,
particular, urban land reform and housing. wherein it has adjudged private respondent entitled to acquire title
This concept is speci ically recognized in the 1987 Constitution and ownership over the property by paying a compensation of
which provides that: P0.07 per square meter be reversed and that the Decision of the
xxx xxx x Court of First Instance of Pampanga adjudging the private
x x"The state shall, by law, and for the common good, undertake, in respondent to compensate herein petitioners for Block 19 in the
cooperation with the private sector, a continuing program of urban amount of P15.00 per square meter with interest at the legal rate
land reform and housing which will make available at affordable from June 30, 1954 be upheld;
cost decent housing and basic services to underprivileged and
homeless citizens in urban centers and resettlement areas. It shall "2. That, in the alternative to the petition next preceding, the private
also promote adequate employment opportunities to such citizens. respondent be adjudged to pay rentals for the use of Block 19 at the
In the implementation of such program the State shall respect the rate of P2.00 per square meter per annum from June 30, 1954 until
rights of small property owners" (Art. XIII, Sec. 9; Italics supplied).x the same is vacated by it;
x x xxx
xxx "Petitioners further pray for such other reliefs as may be just and
The due process requirement in the expropriation of subject lot has equitable in the premises.
likewise been complied with. Although the motion to dismiss iled
by petitioner was not set for hearing as the court is required to do "Quezon City for Manila, Philippines January 31, 1978.[1]
(National Housing Authority v. Valenzuela, 159 SCRA 396 [1998]), it The record discloses that on August 8, 1969, the private respondent
never questioned the lack of hearing before the trial and appellate National Power Corporation iled a complaint for eminent domain
courts. It is only now before us that petitioner raises the issue of with the Court of First Instance of Pampanga, Branch Five, docketed
due process. as Civil Case No. 3584[2] praying that it be allowed to acquire right
Indeed, due process was afforded petitioner when it iled its motion of way easements over the property of petitioners consisting of two
for reconsideration of the trial court's order, denying its motion to adjoining parcels of land (Lots Nos. 633 and 634) with a total area
dismiss. of 15.98 hectares; that the said complaint alleges that the proposed
The Court of Appeals, in determining whether grave abuse of right-of-way is needed to construct the 69 KV Mexico-Balibago
discretion was committed by respondent courts, passed upon the power line which will encompass some 2,835 square meters of
very same issues raised by petitioner in its motion to dismiss, which petitioner's property[3]; that on March 2, 1970, the defendants,
indings we uphold. Petitioner therefore cannot argue that it was petitioners herein, iled an answer asking that the complaint for
denied its day in court. expropriation be dismissed and on the irst and second
The amount of P2 million representing the provisional value of the counter-claims praying for the following:
land is an amount not only ixed by the court, but accepted by both
parties. The fact remains that petitioner, albeit reluctantly, agreed to "1. Under the irst cause of action, sentencing the plaintiff to pay the
said valuation and is therefore estopped from assailing the same. It defendants rentals at the annual rate of P2.00 per square meter for
must be remembered that the valuation is merely provisional. The the use and occupancy of Block 19 with a total area of not less than
parties still have second stage in the proceedings in the proper 20,439 square meters, starting from the year 1957 and for as long
court below to determine speci ically the amount of just as plaintiff uses and occupies the same; back rentals to bear interest
compensation to be paid the landowner (Revised Rules of Court, at the rate of 12% per annum, until paid.
Rule 67, Sec. 5; National Power Corporation v. Jocson, 2?? SCRA 520
[1992]). "2. Under the second cause of action, sentencing plaintiff
WHEREFORE, the petition is DENIED for lack of merit. alternatively, i.e., in the event that expropriation be granted as
SO ORDERED. prayed for in the complaint — to pay defendants as compensation
for the total encompassed in Block 10 (not less than 6,000 square
Cruz, (Chairman), Davide, Jr., and Bellosillo, JJ., concur. meters) at the price of P20.00 per square meter, with 12% interest
computed from date of possession, until paid."[4]
Garcia vs Court of Appeals, G.R. No. that on March 30, 1970, the plaintiff was placed in possession of the
property sought to be expropriated[5] upon a previous deposit on
L-47553, January 31, 1981 March 12, 1970 of a provisional amount of P5,670;[6] that after the
190 Phil. 518
issues were joined evidence was submitted by both parties to the
FIRST DIVISION
Clerk of Court, Andres B. Paras, as lone Commissioner, who
G.R. No. L-47553, January 31, 1981
submitted his Report[7] with the following recommendation:
JANE L. GARCIA, MAYORICO P. SANDICO, BELEN R. GARCIA AND
DANILO DIOKNO, PETITIONERS, VS. COURT, OF APPEALS (SPECIAL
"C O N C L U S I O N
TENTH DIVISION) AND NATIONAL POWER CORPORATION,
RESPONDENTS.
"All told this Commissioner respectfully recommends that judgment
be rendered;
DECISION


defendants the amount of P5,670 deposited with him on February

"(1) Expropriating the areas covered by Block 19 (20,439 sq. 26, 1970 as evidenced by Of icial Receipt No. 2497123 dated March
meters) and Block 10 (6,190 sq. meters) of the subdivision plan 11, 1970 with interest at the legal rate on the amount of P87,180.00
(Exhibit 3) of the defendant's properties in favor of the plaintiff; from March 30, 1970;
(2) Ordering plaintiff to pay the defendants Juana Garcia Sandico, "3. Ordering the plaintiff to pay to the same defendants the amount
Belen Garcia Diokno and Bienvenido Garcia (a) by way of just of P14,511.69 as the market value for Block 19 (20,439 square
compensation, the amount of P15.00 per square meter for the Total meters) at P0.07 per square meter with legal interest from July 1,
area encomposed in Block 19 and Block 10, supra, with 6% interest 1957.
computed from March 16, 1970, until paid, (b) an amount to be
ixed by the Court as and for attorney's fees. "The judgment of the lower court awarding attorney's fees and
costs are hereby eliminated.
"San Fernando, Pampanga, September 8, 1971.
"SO ORDERED.[11]
"RESPECTFULLY SUBMITTED: that on November 24, 1977, the petitioners iled a motion for
reconsideration of the decision of the Court of Appeals which
"(Sgd) ANDRES B. PARAS was denied in its resolution dated December 13, 1977;[12] and that
"Commissioner"[8] the petitioners appealed to this Court assigning as sole error
that mainly on the basis of the above report, the lower court allegedly committed by the Court of Appeals the following:
rendered a decision, the dispositive part of which reads:
“THE COURT OF APPEALS IN ITS DECISION OF OCTOBER 28, 1977
"WHEREFORE, in view of all the foregoing, judgment is hereby IN CA-GR NO. 55720-R ERRED IN FIXING THE AMOUNT OF JUST
rendered: COMPENSATION AT P0.07 PER SQUARE METER, WHEN THE
LOWER COURT FINDS THIS TO BE P15.00 PER SQUARE
"a) Expropriating the area covered by Block 10 (6,190 square METER."[13]
meters) and Block 19 (20,439 square meters) of the subdivision The facts, as found by the Court of Appeals, are:
plan of defendants' properties, with an aggregate area of 26,629
square meters, in favor of the plaintiff; "The defendants own Lot 633 and Lot 634 located in Mexico,
Pampanga. Lot 633 has an area of 85,212 square meters. Lot 634
"b) Ordering the plaintiff to pay the defendants Juana Garcia has an area of 74,613 square meters. Total area is 159,825 square
Sandico, Belen Garcia Diokno and Bienvenido Garcia the amount of meters.
P15.00 per square meter for the area herein expropriated which
totals P399.435.00, with interest at the legal rate computed as ''According to the defendants' pleadings (p. 34, Record on Appeal),
follows: not denied in the plaintiff's pleading, the National Power
Corporation occupied as early as 1957 portions of the two (2) lots
"A) For the area covered by Block 10, from June 30, 1954; for the construction of 'steel towers and high power lines for 230
KV Ambuklao-Manila Line and 69 KV Mexico-Tarlac Line.' The
"B) For the area covered by Block 19, from March 30, 1970, portions of the two (2) lots occupied has an area of 20,439 square
meters. It is designated as Block 19 in the sketch plan (Exhibit 3).
until fully paid and to pay Five (5%) percent of the amount involved Up to now the plaintiff has not paid anything for the portion
as and for attorney's fees and expenses of litigation, and to pay the occupied, either as rental or as purchase price.
costs of the suit.
"As early as March 10, 1960 these two (2) lots were surveyed for the
"SO ORDERED. purpose of converting them into 'Conching Subdivision' (Exhibit 3)
for residential purposes. The two (2) lots were subdivided into 19
"San Fernando, Pampanga, November 16, 1971, blocks (Block No. 1 to 19). Except Block 19 which has been occupied
by the NPC since 1957, the other blocks were subdivided into
(Sgd) HONORIO ROMERO residential lots, totalling 350 lots in all. Block 19 occupied by the
Judge"[9] NPC was not subdivided into lots because of the steel towers and
that the plaintiff, private respondent National Power Corporation, the power lines of the NPC, which make the said block dangerous
appealed to the Court of Appeals;[10] that on October 28, 1977, the for residential purposes.
Court of Appeals rendered its decision modifying the trial court's
decision as follows: "The plan and the technical descriptions were duly approved by the
court as early as August 23, 1962 (Exhibit 2-A). The subdivision
"Wherefore, judgment is hereby rendered: plan was in turn approved by the Land Registration Commission on
July 23, 1962 and by the Municipal Council of Mexico, Pampanga on
"1. Expropriating in favor of the plaintiff the area covered by Block January 22, 1962 (Exhibit 4).
10 (6,190 square meters) and Block 19 (20,439 square meters) of
the subdivision plan of the defendants' property; "After the subdivision plan was approved, steps were taken to
improve the property. Asphalted roads and gutters have been
"2. Ordering the plaintiff to pay the defendants Juana Garcia constructed. According to the Commissioner's Report, 'there are
Sandico, Belen Garcia Diokno and Bienvenido Garcia the purchase men working in the construction of an asphalt road and work is
price of Block 10 (6,190 square meters) in the amount of being done in full blast.1 The same report states that there are
P87,180.00 at P15.00 per square meter and at the same time 'more or less 25 houses of strong materials constructed in the area.'
ordering the Provincial Treasurer of Pampanga to release to the said


"According to the defendants' evidence, not rebutted by the plaintiff, damages with respect to the occupation of Block 19. The defendants
there are about 100 to 150 willing buyers of lots in the subdivision. did not present evidence as to the. market value of Block 19 as of
1957. The tax declaration therefore should constitute the prima
"On May 8, 1969 the NPC instituted the instant action for facie evidence of the market value for the purpose of determining
expropriation of a 'right-of-way easement' over a portion of the two the just compensation. (Province of Jlocos Norte vs. Compania
(2) lots. In Lot 633 the plaintiff wants to expropriate a portion General de Tabacos, L-7361, April 20, 1956, 53 O.G. 7687). As per
consisting of 1470 square meters. In Lot 634 the area to be tax declaration (Exhibits B, B-l) the market value should be P.07 per
expropriated is 2835 square meters. Total area to be expropriated is square meter or a total amount of P14.511.69 for Block 19 which
2835 square meters (Exhibit A). The entire area to be expropriated consists of 20,439 square meters."[15]
is within Block 10 of Conching Subdivision (Exhibit 3) which is The error raised refers solely to Block 19 of the petitioners'
adjacent to Block 19. (Vide, Exhibit 3). The plaintiff intends to use property.
the area to be expropriated for the construction and maintenance of It is apparent that the substantial reduction of what compensation
its 69 KV Mexico-Balibago Transmission Line.' The plaintiff offers to has to be paid for Block 19 came about as a result of the application
pay to the defendants an easement fee in the nominal sum of PI.00 of the doctrine enunciated in the case of the Republic vs. Phil.
and 10.00 for its power to be constructed."[14] National Bank, et al.,[16] clarifying the question as to what date the
Anent the error assigned by the petitioners, the pertinent portions market value of condemned property should be ixed, that "where
of the decision of the Court of Appeals are: the taking of the property precedes the institution of the
condemnation proceedings, the value should be ixed as of the time
"The inal question involves the determination of the just of the taking." A careful reading of this case and the cases[17]
compensation. Just compensation is the market value of the mentioned therein shows certain material facts which are not
property. It .should be determined at the time of the taking. K is the identical to the case at bar, to wit: the properties in question
price which it will command where it is offered for sale by one who became the subject of expropriation proceedings initiated by the
desires, but is not obliged to sell, and is bought by one who is under plaintiff Government, and that the possession or "taking" of the
no necessity of having it. (Manila Railway Co. vs. Velasquez, 32, Phil., Government of the properties in question, whether it was made
286; Manila Railroad Co. vs. Caligsihan, 40 Phil., 326). before or after the iling of the complaint for expropriation v/as
made for purposes of eminent domain or with the intent to
"The market value must be determined as of the time the plaintiff expropriate.[18] Hence, the Court of Appeals, in reducing the
takes possession. Thus when possession is ahead of the iling of the amount fromP15.00 per square meter to P0.07 per square meter,
complaint, the date of possession determines the market value. made the value stated in the tax declaration of Block 19 in 1957 its
(Republic vs. PNB, L-14I58, 41261). basis on the assumption that in the said year 3957 the private
respondent had taken possession of the land for the purpose of
"We irst determine the market value of Block 10 consisting of 6,190 eminent domain and on the further presumption that subsequent
square meters. The defendants' witnesses, namely, Garcia Sandico thereto an action for expropriation was entered in court over this
(tsn., January 9, 1971,p. 27), Gonzalo Magpayo (tsn., Feb. 6, 1971), property. However, these facts assumed by the Court of Appeals are
Igino Sason (tsn., Feb. 6, 1971), Igino Sason (tsn., May 8, 1971), and not borne by the evidence on record.
Jose Angeles (tsn., May 15, 1975) all testi ied that the prices of the Civil Case No. 3584 of the Court of First Instance of Pampanga,
residential lots in the subdivision as of 1971 was P15.00 to P20.00 Branch V, entitled "National Power Corporation vs. Jane L, Garcia, et
per square meter. The contract to sell dated November 18, 1965 al.," is an action for expropriation but what was sought to be
(Exhibit 5) shows that the price per square meter is P15.00. expropriated in the action was a right of way for the use of private
Another contract to sell dated October 9, 1967 (Exhibit 5-A) shows respondent in the construction of its 69 KV Mexico-Balibago
a purchase price of P15.00 per square meter. A request for transmission line. This purpose of private respondent is stated in
reservation dated July 6. 1970 (Exhibit 6) shows a purchase price of paragraph 5 of the Complaint[19] and indicated and shaded in red
P17.00 per square meter. Other requests for reservation in 1969 on the sketch attached to the complaint as Annex "A".[20] Said
and 1970 show a purchase price ranging from P15.00 to P17.00 per paragraph reads:
square meter (Exhibits 6-A to 6-H, inclusive.)
"The plaintiff needs right-of-way easements over portions of the
On the other hand, the plaintiff presented only a tax declaration to parcels of land hereinabove described for the consideration and
prove the market value. A tax declaration is only prima facie maintenance of its KV Mexico-Balibago transmission line, which
evidence of market value which may be overcome by satisfactory portions are indicated and shaded in red on the sketches attached
evidence presented by the owners of the property to be hereto, marked as Annex "A"
expropriated. The writ of possession directed the Sheriff "to place the plaintiff
National Power Corporation in immediate possession of what is
"We therefore agree with the inding of the lower court that the needed of the defendants' lands, for a right-of-way easement
price of Block 10 consisting of 6,190 square meters at P15.00 per subject of this expropriation proceedings."[21] The
square meter is P92,850.00. It appears, however, that as of February Ambuklao-Manila and Mexico-Tarlac transmission lines established
26, 1970 the plaintiff deposited with the Provincial Treasurer of as early as 1953 and 1957 traversing properties covered by Block
Pampanga the amount of P5,670 for the compensation of the 19 were not the subject matter of the said action.
property. Deducting P5,670 from P92,850.00 the unpaid balance for Moreover, in the second paragraph of private respondents' answer
Block 10 is P87,180.00. to defendant's compulsory counterclaim,[22] it is alleged that the
construction of the Ambuklao-Manila and Mexico-Tarlac
"Block 19 presents a different problem. Said property was occupied, transmission lines were with the permission of petitioners'
according to the allegations of the defendants' counterclaim not predecessor-in-interest, their father, Eutiquiano Garcia. As shown
denied in the plaintiff's reply thereto, in 1957 by the plaintiff. In by the transcript of the stenographic notes of the proceedings of
other words, the possession of the property took place 13 years June 26, 3971,[23] Mr. Eladio Espiritu, a witness of the private
before the defendants iled their counterclaim praying for the respondent, attempted to establish that the entry of private


respondent to petitioners' property was with the consent of their Anent the compensation to be paid for Block 19, the reasons relied
predecessor. Likewise, as found by the Commissioner in his upon by the trial court which appear just, equitable, and in
Report,[24] all that the plaintiff, private respondent herein, could consonance with established jurisprudence are:
show was an alleged authority to construct the Ambuklao-Manila
line only, allegedly signed by defendants' father (Exhibit "M"), "In the mind of the Court, the contentions so advanced by the
pending completion of the negotiation of the compensation to be plaintiff cannot be maintained, and the authority just cited is not
paid. Exhibit "M", in clear and unmistakable terms, states the nature applicable in the instant case. In the irst place, it was clearly shown
of the possession that the private respondent was granted at the by the defendants that the properties herein involved have been
time. The title of this document is "PERMISSION TO OCCUPY LAND" converted into a subdivision way back in 1962. In support of this,
which undoubtedly grants to the National Power Corporation a the defendants presented the order of this Court approving the
privilege and the same is subject to the terms and conditions subdivision plan, which was likewise approved by the Land
embodied in the document.[25] As the private respondent's entry Registration Commission, and the resolution of the municipal
was gained through permission, it did not have the intention to council of Mexico, Pampanga relative to the same subdivision.
acquire ownership either by voluntary purchase or by the exercise Moreover, as earlier discussed the Court is guided by the
of eminent domain. And the fact remains that the private Commissioner's Report and Findings of the ocular inspection in
respondent never completed the negotiation as to compensation. determining the nature of the properties involved. In effect,
Not only this, private respondent went on to construct another line therefore, the Court is of the opinion that the evidence presented by
— the 69 KV Mexico-Tarlac without defendants' permission nor a the defendants outweigh the evidence presented for the plaintiff by
court authorization.[26] All these prove the private respondent's preponderance.
intention not to expropriate Block 19, as it did not seek so in the
action it instituted on August 8, 1969. Neither did it have the "Furthermore, by the testimonies of the witnesses, ii was
intention to do so in 1953 as shown by the terms in Exhibit "M". It is established that the properties, being converted into a subdivision
clear, therefore, that the private respondent not only did not take sell at P15.00 to P20.00 per square meter and there are many
possession with intent to expropriate Block 19, but that it did not willing buyers at this price range. However, the plaintiff, in an effort
institute expropriation proceedings over the same. to contradict this claim, presented the appraisal made by the
Consequently, since the areas covered by Block 19 were never provincial appraisal committee for the province of Pampanga which
entered into or possessed for purposes of eminent domain, nor did appraisal gave the valuation of P6.00 to P8.00 per square meter for
they become the subject of an action for eminent domain, neither lots adjoining the lots of defendants. These prices or valuation,
the date of entry nor the iling of the action by private respondent however, in the opinion of the Court, cannot be and are not the
for expropriation of a "right-of-way" easement on December 8, determinative factors in determining the value of the defendants'
1969 could be reckoned with as the basis for the determination of properties. It has been established by the evidence on record and
just compensation. con irmed by the report of the Commissioner, that the Couching
Hence, the conclusion of the Court of Appeals that the fair market Subdivision, where the subject properties form pans, are located
value of the property in question based on the tax assessment in along the national highway; that it is near the town proper of
1957 is an error of law, as it is a conclusion predicated on the wrong Mexico, Pampanga where the school and church sites are situated.
assumption that there was a taking or possession of Block 19 in In giving valuation to properties, these factors, namely, the relation
1957 for purposes of expropriation and that there was an action for or distance of the premises towards the national highway, to the
expropriation of the same. town proper, and to other commercial sites such as schools and
It is signi icant that the expropriation of Block 19 came about only churches, must be given consideration. In this particular case, the
when the trial court declared that inasmuch as the private properties, being along the national highway, near the town proper
respondent cannot acquire easement of right-of-way over Block 19, of Mexico, Pampanga and likewise near the school and church sites,
much less own it through prescription, the only way for the private must be given valuation commensurate to its standing. This being
respondent to justify its continued occupation of Block 19 is to the case, the Court believes that the value of PI 5.00 per square
expropriate the same. This declaration of the trial court was meter is reasonable to be given to the defendants' properties. The
af irmed by the Court of Appeals. The petitioners cannot legally defendants therefore are entitled to the payment of P15.00 per
impugn now for the irst time on appeal to this Court the trial square meter for their properties object of this expropriation
court's directive to expropriate Block 19 for public use. Well settled proceedings which are Blocks 10 and 19 of the subdivision plan
is the rule that questions now raised in the lower court cannot now with an aggregate area of 26,439 square meters."
be raised for the irst lime on appeal.[27] Hence, the expropriation The fair market value of Block 19 should be ixed at P15.00 per
of Block 19 is inal. square meter.
By virtue of the special and peculiar circumstances of the case at WHEREFORE, the decision of the Court of Appeals in CA-G.R. No.
bar, there being no taking of the property in question for purposes 55720-R is hereby modi ied as to Block 19 of the subdivision plan of
of eminent domain nor condemnation proceedings instituted over petitioners' property and the private respondent, National Power
the same to speak of, the time as of which the market value should Corporation, is ordered to pay to the petitioners the amount of
be ixed is the time when the trial court made its order of P3O6.585.00 as the market value for Block 19 (20,439 square
expropriation. It is the date of appropriation or the investing date meters) at P15.00 per square meter with legal interest from March
which as everyone knows required more than a day, sometimes 30, 1970. No pronouncement as to costs.
weeks to carry through as would an ordinary real estate purchase SO ORDERED.
and sale. Hence, in estimating the market value, all the capabilities Teehankee, (Chairman), Makasiar, Guerrero, De Castro and
of the property and all the uses to which it may be applied or for Melencio-Herrera, JJ., concur.
which it is adapted are to be considered and not merely the
condition it is in the time and the use to which it is then applied by Manila Railroad Company vs Velasquez,
the owner. All the facts as to the condition of the property and its
surroundings, its improvements and capabilities may be shown and G.R. No. 10278, November 23, 1915
32 Phil. 286
considered in estimating its value.
G.R. No. 10278, November 23, 1915


THE MANILA RAILROAD COMPANY, PLAINTIFF AND APPELLANT, method produce a different result in reference to any part of the
VS. ROMAN A VELASQUEZ, MELECIO ALLAREY AND DEOGRACIAS report from that recommended by the commissioner?
MALIGALIG, DEFENDANTS AND APPELLANTS.
Section 246 expressly authorizes the court to "accept the report in
DECISION part and reject it in part." If this phrase stood alone, it might be said
TRENT, J.: that the court is only empowered to accept as a whole certain parts
of the report and reject as a whole other parts. That is, if the
This action was instituted by the Manila Railroad Company for the commissioners ixed the value of the land taken at P5,000, the
purpose of expropriating twelve small parcels of land for a railroad improvements at P1,000, and the consequential damages at P500,
station site at Lucena, Province of Tayabas. the court could accept the report in full as to any one item and reject
it as to any other item, but could not accept or reject a part of the
The original defendants were Romana Velasquez, Melecio Allarey, report in such a way as to change any one of the amounts. But the
and Deogracias Maligalig. After the iling of the complaint Simeon court is also empowered "to make such inal order and judgment as
Perez, Filemon Perez, and Francisco Icasiano, having bought shall secure to the plaintiff the property essential to the exercise of
Romana Velasquez' interest, were included as defendants. The his rights under the law, and to the defendant just compensation for
commissioners ixed the value of the twelve parcels at P81,412.75, the land so taken." The court is thereby expressly authorized to
and awarded P600 to Simeon Perez as damages for the removal of issue such orders and render such judgment as will produce these
an uncompleted camarin. Upon hearing, the commissioners' report results. If individual items which make up the total amount of the
was approved and the plaintiff directed to pay to the "Tayabas Land award in the commissioners' report could only be accepted or
Company" the total amount awarded, with interest and costs. The rejected in their entirety, it would be necessary to return the case,
plaintiff company alleges that that amount is grossly excessive, so far as the rejected portions of the report were concerned, for
pointing out that the land has never been used except for rice further consideration before the same or new commissioners, and
culture. the court could not make a " inal order and judgment" in the cause
until the rejected portions of the report had been rereported to it.
Upon this appeal we are asked to review the evidence and reduce Thus, in order to give the quotation from 246 its proper meaning, it
the appraised value of the condemned land in accordance with our is obvious that the court may, in its discretion correct the
indings rendering judgment accordingly. Has this court, under the commissioners' report in any manner deemed suitable to the
law, authority to take such action? And along with this question it occasion so that inal judgment may be rendered and thus end the
must be decided whether the Courts of First Instance have such litigation. The " inal order and judgment" are reviewable by this
power over the reports of commissioners. Section 246 of the Code court by means of a bill of exceptions in the same way as any other
of Civil Procedure reads: "action." Section 496 provides that the Supreme Court may, in the
exercise of its appellate jurisdiction, af irm, reverse, or modify any
"Action of Court Upon Commissioners' Report.—Upon the iling of inal judgment, order, or decree of the Court of First Instance, and
such report in court, the court shall, upon hearing, accept the same section 497, as amended by Act No. 1596, provides that if the
and render judgment in accordance therewith; or for cause shown, excepting party iled a motion in the Court of First Instance for a
it may recommit the report to the commissioners for further report new trial upon the ground that the evidence was insuf icient to
of facts; or it may set aside the report and appoint new justify the decision and the judge overruled such motion and due
commissioners; or it may accept the report in part and reject it in exception was taken to his ruling, the Supreme Court may review
part, and may make such inal order and judgment as shall secure to the evidence and make such indings, upon the facts by a
the plaintiff the property essential to the execise of his rights under preponderance of the evidence and render such inal judgment as
the law, and to the defendant just compensation for the land so justice and equity may require. So it is clear from these provisions
taken; and the judgment shall require payment of the sum awarded that this court, in those cases where the right of eminent domain
as provided in the next section, before the plaintiff can enter upon has been exercised and where the provisions of the above section
the ground and appropriate it to the public use." have been complied with, may examine the testimony and decide
From this section it clearly appears that the report of the the case by a preponderance of the evidence; or, in other words,
commissioners on the value of the condemned land is not inal. The retry the case upon the merits and render such order or judgment
judgment of the court is necessary to give effect to their estimated as justice and equity may require. The result is that, in our opinion,
valuation. (Crawford vs. Valley R. R. Co., 25 Grat., 467.) Nor is the there is ample authority in the statute to authorize the courts to
report of the commissioners conclusive, under any circumstances, change or modify the report of the commissioners by increasing or
so that the judgment of the court is a mere detail or formality decreasing the amount of the award, if the facts of the case will
requisite to the proceedings. The judgment of the court on the justify such change or modi ication. As it has been suggested that
question of the value of the land sought to be condemned is this conclusion is in con lict with some of the former holdings of
rendered after a consideration of the evidence submitted to the this court upon the same question, it might be well to brie ly review
commissioners, their report, and the exceptions thereto submitted the decisions to ascertain whether or not, as a matter of fact, such
upon the hearing of the report. By this judgment the court may con lict exists.
accept the commissioners' report unreservedly; it may return the
report for additional facts; or it may set the report aside and In City of Manila vs. Tuason (R. G. No. 3367, decided March 23,
appoint new commissioners; or it may accept the report in part or 1907, unreported), the Court of First Instance modi ied the report
reject it in part, and "make such inal order and judgment as shall of the commissioners as to some of the items and con irmed it as to
secure to the plaintiff the property essential to the exercise of his others. On appeal, the Supreme Court remanded the cause,
rights under the law, and to the defendant just compensation for the apparently for the reason that the evidence taken by the
land so taken." Any one of these methods of disposing of the report commisioners and the lower court was not before it, and perhaps
is available to and may be adopted by the court according as they also because the commissioners adopted a wrong principle of
are deemed suited to secure to the plaintiff the necessary property assessing damages.
and to the defendant just compensation therefor. But can the latter


In Manila Railway Co. vs. Fabie (17 Phil. Rep., 206) the majority provided in accordance with law, it has no standing in this court to
report of the commissioners appraised the land at P56,337.18, demand a new trial based on its unsupported allegations of grossly
while a dissenting commissioner estimated it at P27,415.92. The excessive valuation of the property by the commissioners and the
Court of First Instance, after taking additional evidence upon the court below."
consequential bene its to the remainder of defendants' land by the
construction of the railroad, and also as to the rental value of This court af irmed the inding of damages made by the trial court
various pieces of land in the locality, ixed the value of the land at with the exception of an item for damages caused by ire to
the sum estimated by the dissenting commissioner. The defendants improvements on lands adjoining those condemned, which was
appealed to this court. This court remarked that the only evidence held not to be a proper matter to be considered in condemnation
tending to support the 'majority report of the commissioners proceedings. The court here approved of the action of the Court of
consisted of deeds of transfer of real estate between parties in that First Instance in reducing the amount of damages ixed by the
community showing the prices paid by the vendees in such commissioners as to the value of the young orange trees on the
conveyances. It was held that without its being shown that such strength of the evidence of record.
transfers had been made in the ordinary course of business and
competition, and that the parties therein stated were not ictitious, In Manila Railroad Company vs. Caligsihan (R. G. No. 7932, decided
such deeds were incompetent as evidence of the value of the March 25, 1913, unreported), it appears that the lower court
condemned land. As to the action of the court in ixing the price of approved in toto the report of the commissioners. On appeal, this
the land at P27,415.92, the court said: Supreme >Court reversed the lower court and remanded the case
with orders to appoint new commissioners, saying:
"Conceding, without deciding, that he also had the right to
formulate an opinion of his own as to the value of the land in "Under the evidence in this case the award is excessive. Section 246
question, nevertheless, if he formulate such an opinion, he must of the Code of Civil Procedure giving to the court the power to 'make
base it upon competent evidence. The dif iculty with the case is that such inal order and judgment as shall secure to the party the
it af irmatively appears from the record on appeal that there is an property essential to the exercise of his rights under the law, and to
entire absence of competent evidence to support the inding either the defendant just compensation for the land so taken,' we exercise
of the commissioners or of the court, even if the court had a right to that right in this case for the purpose of preventing the defendants
make a inding of his own at all under the circumstances." from obtaining that which would be more than 'just compensation'
In Manila Railroad Co. vs. Attorney-General (22 Phil. Rep., 192) the under all the evidence of the case.
only question raised was the value of certain improvements on the
condemned portion of a hacienda, such improvements consisting "The judgment is reversed and the cause remanded, with
mainly of plants and trees and belonging to a lessee of the premises. instructions to the lower court to appoint a new commission and to
The total damages claimed were P24,126.50. The majority report of proceed from that point de novo."
the commission allowed P19,478, which amount was reduced by We will now examine the case (Philippine Railway Co. vs. Solon, 13
the Court of First Instance to P16,778. The plaintiff company, upon Phil. Rep., 34) relied upon to support the proposition that the courts
appeal to this court, alleged that the damages allowed were grossly should not interfere with the report of the commissioners to correct
excessive and that the amount allowed by the commissioners the amount of damages except in cases of gross error, showing
should have been reduced by at least P17,000; while the defendant prejudice or corruption.
urged that the damages as shown by the record were much greater
than those allowed, either by the commissioners or by the court. In In that case the property belonging to the appellant which the
disposing of the case this court said: company sought to appropriate was his interest as tenant in a tract
of land belonging to the Government, together with a house
"The only ground upon which the plaintiff company bases its standing thereon and other property belonging to him. He asked
contention that the valuations are excessive is the minority report that he be awarded for all the property taken P19,398.42. The
of one of the commissioners. The values assigned to some of the commissioners allowed him P10,745.25. At the hearing had upon
improvements may be excessive but we are not prepared to say that the report, the court reduced this amount and allowed the appellant
such is the case. Certainly there is no evidence in the record which P9,637.75. The commissioners took a large amount of evidence
would justify us in holding these values to be grossly excessive. The relative to the amount of damages. The testimony was con licting as
commissioners in their report go into rather minute detail as to the to the value of the house, two witnesses ixing it at over P12,000;
reasons for the conclusions reached and the valuations ixed for the another at over P14,000; one at P8,750; another at P6,250; and
various items included therein. There was suf icient evidence before another at P7,050.95. The commissioners ixed the value of the
the commissioners to support the valuations ixed by them except house alone at P9,500, and the court at P8,792.50. This court said:
only those later modi ied by the court below. The trial court was of
opinion that the price of P2 each which was ixed for the orange "Nor do we decide whether, in a case where the damages awarded
trees (naranjitos) was excessive, and this was reduced to P1.50 for by the commissioners are grossly excessive or grossly insuf icient,
each tree; this on the ground that the evidence discloses that these the court can, upon the same evidence presented before the
trees were comparatively young at the time of the expropriation, commissioners, itself change the award. We restrict ourselves to
and that the value ixed by the majority report of the commissioners deciding the precise question presented by this case, in which it is
was that of full-grown or nearly full-grown trees. We are of opinion apparent that, in the opinion of the court below, the damages were
that this reduction was just and reasonable. Aside from the not grossly excessive, for its own allowance was only P1,000 less
evidence taken into consideration by the trial judge we ind no than the amount allowed by the commissioners, and the question is
evidence in the record in support of the contention of the railroad whether in such a case the court can substitute its own opinion
plaintiff that the valuations ixed in the majority report of the upon the evidence presented before the commissioners for the
commissioners and by the trial court are grossly excessive, and opinion which the commissioners themselves formed, not only from
plaintiff company having wholly failed to offer evidence in support that evidence but also from a view of the premises which by law
of its allegations in this regard when the opportunity so to do was they were required to make."


Referring to the manner in which the trial court arrived at its two-thirds more than the value of the land. We ix the value of the
valuation of the various items, including the house, this court said: land at $833.33."
See also T. & P. R. R. Co. vs. Southern Develop. Co. (52 La. Ann., 535),
"Without considering the correctness of the rule adopted by the where the court held the appraisement too low and after discussing
court for determining the value of the property it is suf icient to say the evidence, increased the amount of the award accordingly. A
that the evidence before the commissioners as to the value of the similar case is Abney vs. Railroad Co. (105 La., 446). See also T. & P.
property taken was contradictory and that their award was not R. R. Co. vs. Wilson (108 La., 1; 32 So., 173); and Louisiana Western
palpably excessive or inadequate. Under such circumstances, we are R. Co. vs. Crossman's Heirs (111 La., 611; 35 So., 784), where the
of the opinion that the court had no right to interfere with it." point is touched upon.
From the foregoing it is clear that (1) the testimony was con licting;
(2) that the award as allowed by the commissioners was well within In Missouri the statute (1 Mo. Ann. Stat., sec. 1268) directs that "the
the amounts ixed by the witnesses; and (3) that the award was not court shall make such order therein as right and justice may
grossly excessive. That it was not grossly excessive is shown by the require, and may order a new appraisement, upon good cause
difference between the amount ixed by the commissioners and that shown." Owing to a constitutional restriction, this provision has
ixed by the court, this difference being P1,117.50, a reduction of a been construed to apply only to damages and bene its resulting to
little over 10 per cent. land owners in consequence of proposed improvements, the cash
value of property expropriated being an issue triable, at the
In City of Manila vs. Estrada (25 Phil. Rep., 203), the city sought to instance of either party by a jury subsequent to the indings of the
expropriate an entire parcel of land with its improvements for use commissioners. Subject to this restriction, however, it has been held
in connection with a public market. The commissioners, after that the above provision of law gives the court the right to increase
viewing the premises and receiving evidence, being unable to agree, or decrease the amount awarded by the commissioners. In the late
submitted two reports to the court. In the majority report the value case of Tarkio Drainage District vs. Richardson (237 Mo., 49), the
of the land was ixed at P20 per square meter and in the minority court presents a lengthy review of its decisions on this subject.
report at P10. The Court of First Instance ixed the value at 1*15 per
square meter. Upon appeal this court, after reviewing the evidence, The question now arises, when may the courts, with propriety,
held that P10 per square meter was a just compensation for the overrule the award of the commissioners in whole or in part, and
land taken and rendered judgment accordingly, saying: substitute their own valuation of the condemned property? We shall
consider this question in two ways: irst, as one of procedure under
"After a careful examination of the entire record in this case and the section 246, above quoted; and second, as to the evidence which
law applicable to the questions raised therein, we are of the opinion must appear in the record in order to justify such action.
that P10 per square meter is a just compensation for the land
taken." From a mere reading of section 246 and the remarks just made, it
From the above review of the cases it will be seen that this court has should be clear that the court is permitted to act upon the
not only not decided that the courts cannot interfere with the report commissioners' report in one of several ways, at its own discretion.
of the commissioners unless prejudice or fraud has been shown, but The whole duty of the court in considering the commissioners'
the decisions, aside from the case of the City of Manila vs. Estrada, report is to satisfy itself that just compensation will be made to the
tend to show the contrary; that is, an award which is grossly defendant by its inal judgment in the matter, and in order to ful ill
excessive or grossly insuf icient in the opinion of the court can be its duty in this respect the court will be obliged to exercise its
increased or decreased, although there be nothing which tends to discretion in dealing with the report as the particular circumstances
indicate prejudice or fraud on the part of the commissioners. The of the case may require. But generally speaking, when the
case of the City of Manila vs. Estrada is direct authority supporting commissioners' report cannot with justice be approved by the
the conclusions which we have reached in the case at bar. And we court, one of three or four circumstances will usually present itself,
are not without authority outside of this jurisdiction which each of which has for its antidote one of the methods of dealing with
supports the view we have taken in the case under consideration. the report placed at the disposal of the court by section 246. Thus, if
In Morgan's Louisiana & Texas R. R. Co. vs. Barton (51 La. Ann., it be successfully established that the commissioners refused to
1338), the court, in considering a procedural law similar to our hear competent evidence material to the case, then all the evidence
own, stated: in the case would not be before the court. The court could not, with
reason, attempt to either approve or change the report, as it stood,
"On the question of the value of the land, 8.34 acres, the for the reason that all the evidence of the case would not have been
commissioners have allowed $2,500, or $300 per acre. The considered by the commissioners nor have been presented to the
defendant has put in the record the testimony of witnesses claimed court; and the remedy would be to "recommit the report of the
to support the allowance. Without disregarding this testimony, it is commissioners for further report of facts." Again, if improper
suf icient to say that the opinions of the witnesses do not seem to be conduct, fraud, or prejudice be charged against the commissioners
based on any fact calculated to show the value of the land. * * * On and this charge be sustained it would be safer to set aside the award
the other hand the plaintiff has placed before us the titles of thus vitiated and "appoint new commissioners" who could render a
defendant of recent date showing the price paid by him (the report not tainted by these things. But when the only error of the
defendant) for the entire body of land of which the 8 acres are part; commissioners is that they have applied illegal principles to the
the acts of sale of land in the same neighborhood, and of the same evidence submitted to them; or that they have disregarded a clear
quality; the assessment of defendant's property, and other preponderance of the evidence; or that they have used an improper
testimony on this issue of value. * * * Giving all possible weight, or rule of assessment in arriving at the amount of the award, then, in
rather restricting the testimony of the plaintiffs' witnesses to its due such a case, if the evidence be clear and convincing, the court
in luence, and giving, we think, necessary effect to the acts by which should ordinarily be able, by the use of those correct legal principles
defendant purchased, the acts of sale of other land, the assessment which govern the case, to determine upon the amount which should
of value, with due allowance for under assessment, and the other be awarded without returning the report to the commissioners.
testimony of record, we reach the conclusion that the award gives When the matter stands in this light, it becomes the duty of the


court to make " inal order and judgment" in which the proper the evidence delivered to them in open court, and they may not take
award will be made and thus end the litigation between the parties. into consideration facts known to them personally, but outside of
the evidence produced before them in court. If a party would avail
Now, what evidence as to value must the record contain in order to himself of the facts known to a juror, he must have him sworn and
justify the court in disregarding the valuation ixed upon the examined as other witnesses."
condemned property by the commissioners and substituting
therefor its own inding of value? It is almost a universal practice in In C. K. & W. R. Co. vs. Mouriquand (45 Kan., 170), the court
the United States to submit the question of value in expropriation approved of the practice of instructing the jury that their view of the
cases to a jury or commission, usually of local property owners, and premises was to be used, in determining the value of con licting
one of the things they are specially instructed to do is to view or testimony, saying: "Had the jury disregarded all the sworn
inspect the condemned property. The purpose of this view and the evidence, and returned a verdict upon their own view of the
additional weight which should be given to the award of the premises, then it might be said that the evidence which the jurors
appraisers because of the view are questions often discussed. After acquired from making the view had been elevated to the character
a careful examination of a number of adjudicated cases, we have of exclusive and predominating evidence. This is not allowable. The
concluded that ths following cases, all agreeing in principle, evidence of the witnesses introduced in the court on the part of the
correctly state the purpose of the view. landowner supports fully the verdict. If the verdict was not
supported by substantial testimony given by witnesses sworn upon
In Denver Co. vs. Howe (49 Colo., 256; 112 P., 779), it was said: "The the trial, we would set it aside, but as the jury only took into
jury viewed the premises and were better able to judge of the consideration the result of their view of the premises, in connection
number of acres in each, as well as other conditions affecting the with the sworn evidence produced before them, to determine
land. The facts ascertained by the view of the premises are not in between con licting evidence, the instruction was not so erroneous
the record, whether they were regarded as so much additional as to require a new trial."
evidence, or were used to better understand and apply the evidence
adduced at the trial. Keeping in view the evidence relating to the In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746; 52 S. E., 803;
special value of the building site, the value of improvements and of 3 L. R. A., N. S., 333), it was said: "A jury cannot be left to roam
the ground, it will be found that the verdict is within and supported without any evidence in the ascertainment and assessment of
by the values as testi ied to, and these values, as ixed by the several damages. The damages which the law allows to be assessed in favor
witnesses, represented to each the market value, as conceded by of a landowner whose property has been taken or damaged under
appellants. The verdict is supported by the evidence of market the right of eminent domain are purely compensatory. The land
value and on that ground would have to be sustained if the matter actually appropriated by the telegraph company amounted to only a
complained of in the instruction had been entirely omitted." fraction of an acre; and while it appeared that the construction and
maintenance of the telegraph line would cause consequential
In Gorgas vs. Railroad Co. (114 Pa., 1; 22 Atl., 715), it was said: "A damages to the plaintiff, no proof was offered from which any fair
view may sometimes be of the highest importance, where there is a and reasonable estimate of the amount of damages thereby
con lict of testimony. It may enable the jurors to see on which side sustained could be made. The jury should have been supplied with
the truth lies. And if the witnesses on the one side or the other have the data necessary in arriving at such an estimate. In the absence of
testi ied to a state of facts which exists only in their imagination, as this essential proof, a verdict many times in excess of the highest
to the location of the property, the manner in which it is cut by the proved value of the land actually taken must necessarily be deemed
road, the character of the improvements, or any other physical fact excessive. Judgment reversed."
bearing upon the case, they surely cannot be expected to ignore the
evidence of their senses and give weight to testimony which their In New York, where the question has doubtless been raised more
view shows to be false. * * * The true rule in such cases is believed often than anywhere else, the late cases illustrate the rule, perhaps
to be that the jury in estimating the damages shall consider the the most clearly. The appellate division, supreme court, in In re
testimony as given by the witnesses, in connection with the facts as Titus Street in City of New York (123 N. Y. S., 1018), where it
they appear upon the view; and upon the whole case, as thus appeared that the city's witnesses testi ied that the property was
presented, ascertain the difference between the market value of the worth $9,531 and the commissioners awarded $2,000 less, said:
property immediately before and immediately after the land was
taken. This difference is the proper measure of damages." "We do not think that this is meeting the requirements of the law;
we do not believe that it is within the province of commissioners to
In Close vs. Samm (27 Iowa, 503), subsequently approved in Guinn arbitrarily set up their own opinion against that of the witnesses
vs. Railway Co. (131 Iowa, 680, 683; 109 N. W., 209), it was said: called by the city, and to award damages largely below the igure to
"The question then arises as to the purposes and intent of this which the moving party is committed, without something appearing
statute, it seems to us that it was to enable the jury, by the view of in the record to justify such action. When a party comes into court
the premises or place to better understand and comprehend the and makes an admission against his interest, no court or judicial
testimony of the witnesses respecting the same, and thereby the tribunal is justi ied in assuming that the admission is not true
more intelligently to apply the testimony to the issues on trial without at least pointing out the reason for discrediting it; it carries
before them, and not to make them silent witnesses in the case, with it the presumption of truth, and this presumption is not to be
burdened with testimony unknown to both parties, and in respect overcome by the mere fact that the commissioners might
to which no opportunity for cross-examination or correction of themselves have reached a different conclusion upon the viewing of
error, if any, could be afforded either party. If they are thus the premises. * * * This view of the commissioners, it seems to us,
permitted to include their personal examination, how could a court is for the purpose of enabling the commissioners to give proper
ever properly set aside their verdict as being against the evidence, weight and effect to the evidence before them, and it might justify
or even refuse to set it aside without knowing: the facts ascertained them in giving larger damages than some of the witnesses thought
by such personal examination by the jury? It is a general rule proper, or even less than some of them declared to be sustained, but
certainly, if not universal, that the jury must base their verdict upon where the evidence produced by the moving party in a proceeding


for taking property for public purposes ixes a sum, without any which shows the price to be greatly higher or lower than the just
disagreement in the testimony on that side, we are of the opinion compensation to which the defendant owner is entitled. If, after
that the cases do not justify a holding that the commissioners are making due allowance for the superior facilities which the
authorized to ignore such testimony and to substitute their own commissioners had for arriving at the correct value of the property,
opinion, in such a manner as to preclude the supreme court from the court is clearly of the opinion that the evidence relied upon by
reviewing the determination. That is not in harmony with that due them is untrustworthy, and that other evidence rejected by the
process of law which is always demanded where rights of property commission and which ixes the value of the property at a igure
are involved, and would make it possible for a corrupt commission greatly at variance with their valuation of the property bears the
to entirely disregard the rights of the individual to the undisturbed earmarks of truth, then it becomes the duty of the court to
enjoyment of his property, or its equivalent." substitute for the commissions' award the amount indicated by
From these authorities and keeping in mind the local law on the such evidence. That the estimated value made by the appraisers is
subject, we think the correct rule to be that, if the testimony of value to be given "great weight;" that such valuation is not to be "lightly
and damages is con licting, the commissioners may resort to their set aside;" that it will not be set aside "if there is substantial
knowledge of the elements which affect the assessment and which testimony to support it," unless error is "plainly manifest;" "unless it
were obtained from a view of the premises, in order to determine is apparent that injustice has been done;" "unless the
the relative weight of con licting testimony, but their award must be commissioners have clearly gone astray or adopted erroneous
supported by the evidence adduced at their hearings and made of principles;" "unless the commissioners acted upon wrong
record, or it cannot stand; or, in other words, the view is intended principles, or their award is grossly inadequate;" unless the award is
solely for the purpose of better understanding the evidence "palpably excessive or inadequate;" unless it is "grossly inadequate
submitted. To allow the commissioners to make up their judgment or unequal," is the burden of all the cases.
on their own individual knowledge of disputed facts material to the
case, or upon their private opinions, would be most dangerous and Let us now examine the evidence, keeping these legal principles in
unjust. It would deprive the losing party of the right of mind. The only discussion of the evidence of value made by the
cross-examination and the bene it of all the tests of credibility lower court was as follows:
which the law affords. It would make each commissioner the
absolute judge of the accuracy and value of his own knowledge or "To determine this question (the value of the land) the court abides
opinions and compel the court to af irm the report on the facts by and refers to the report of the commissioners dated July 10,
when all of such facts were not before it. The evidence of such 1913, because it understands that it must accept this report in all its
knowledge or of the grounds of such opinions could not be parts for the reason that the prices ixed in the said report of P3.75
preserved in a bill of exceptions or questioned upon appeal. It is no per square meter for parcel 21-B, that of P3.50 per square meter for
hardship upon any of the parties to require that the award must be parcel 21-A, and that of P2 per square meter for the rest of the
based upon the evidence. It is the duty of each party to submit what parcels (naming them) are reasonable and just; the compensation
evidence of value he has and if he fails to do so he can not complain which is made in the said report for the damages occasioned to the
if the appraisement is kept within the bounds of the evidence defendant Simeon Perez being also reasonable and just."
presented to the commissioners. It will be seen that the lower court relied entirely upon the indings
of the commissioners. The commissioners justi ied their
In those cases where the testimony as to value and damages is appraisement of the land at a price so greatly in excess of its value
con licting the commissioners should always set forth in full their as agricultural land upon the following considerations. First, the
reasons for accepting the testimony of certain witnesses and construction of the provincial building and the high school had
rejecting that of others, especially in those cases where a view of the increased the price of land in their vicinity. Second, the
premises has been made. neighborhood of these buildings had become a choice residential
district. Third, the population in the vicinity had increased since it
The commissioners are required by law to be disinterested became known that the condemned property had been selected as a
landowners of the province, selected by the court with a view to station site by the railroad company. We propose to discuss the
their ability to arrive at a judicious decision in the assessment of evidence of value precisely along these lines, starting irst, however,
damages. The judgment of men with these quali ications upon the with its value as agricultural land, the only use to which it has ever
price of real property is entitled to some considerable weight. Being been put.
local men, it may be assumed that they are familiar with the local
land values, the needs of the community in that line, and the The condemned land is not located in the commercial district of the
adaptability of particular sites to commercial purposes. Then, too, town of Lucena, but is located near the provincial building and the
their view of the premises enables commissioners to better high school. The land has been used from time out of mind solely for
understand the evidence submitted to them, as we have said above. the cultivation of rice. Deogracias Maligalig, one of the defendants,
The declarations of witnesses as to the value of the land, as to its testi ied that rice land in the municipality of Lucena was worth
condition, or the conditions of improvements which may be located P500 per cavan (hectare). Melecio Allarey, another defendant,
upon it, and comparisons made between the condemned land and testi ied that such land was worth from P300 to P400 per hectare.
other land in the vicinity may all be better understood by the Agustin testi ied that such land was worth between P400 and P500
commissioners if they have viewed the premises. It is, therefore, no per hectare if not under irrigation, and if under irrigation, more
slight divergence from the seeming preponderance of the evidence than P1,000. Ambrosio Zaballero, owner of more than 30 parcels of
of record, as viewed by the court, which will justify the court in land in the municipality of Lucena, said that the site of the railroad
brushing aside the commissioners' report and appraising the station was nothing but a rice ield prior to the coming of the
property itself, based only upon a perusal of the evidence which railroad, worth from P300 to P400 per hectare. Cayo Alzona, the
was submitted to them. It is in those cases where the evidence only witness for the plaintiff, testi ied that, in Candelaria, rice land
submitted to the commissioners as to value varies greatly that the was worth between P200 and P250 per hectare, he having
real dif iculty lies. In these cases it is clear that some of the evidence purchased an uncleared parcel of rice land for P150 per hectare. It
must be untrustworthy. Hence, it is necessary to reject that evidence seems fair to accept the statement of the two defendants, Maligalig


and Allarey, and ix the price of the condemned land for agricultural In Aledo Terminal Ry. Co. vs. Butler (246 Ill., 406; 92 N. E., 909), the
purposes at P500 per hectare. court said: "Evidence of voluntary sales of other lands in the vicinity
and similarly situated is admissible in evidence to aid in estimating
Witnesses for the defendants, including three of the latter, ixed the the value of the tract sought to be condemned, but the value of such
value of the condemned land at prices ranging from P5 to P8 per testimony depends upon the similarity of the land to that in
square meter. The remaining defendant, Icasiano, did not testify question and the time when such sales were made and the distance
before the commissioners. But in his answer iled about seven such lands are from those the value of which is the subject of
months after purchasing the land for P0.81 per square meter, he inquiry."
alleged that his parcel was worth P5 per square meter. So that we
have all of the defendants and several other witnesses estimating In an earlier case, the supreme court of Illinois stated the rule as
the value of the condemned land at about the same igure, or from follows: "The theory upon which evidence of sales of other similar
P50,000 to P80,000 per hectare. property in the neighborhood, at about the same time, is held to be
admissible is that it tends to show the fair market value of the
The defendant, Melecio Allarey, testi ied that he owned 30,000 property sought to be condemned. And it can not be doubted that
square meters of land in the vicinity of the railroad station site, such sales, when made in a free and open market, where a fair
2,895 square meters of which was wanted by the plaintiff company. opportunity for competition has existed, become material and often
Upon being asked what the value of his land was, he promptly Very important factors in determining the value of the particular
replied that it was worth P5.50 per square meter. Asked if he were property in question." (Peoria Gas Light Co. vs. Peoria Term. Ry. Co.,
making his will whether he would list this property at a total value 146 Ill., 372; 21 L. R. A., 373; 34 N. E. 550.)
of P150,000, he evaded a direct reply by saying that he would divide
it among his children. Asked if he considered himself the owner of The supreme court of Massachusetts, in Fourth National Bank vs.
land valued at P150,000, he replied that for his purpose he igured Com. (212 Mass., 66; 98 N. E., 86), af irms the rule as follows: "It
on that price. Asked if he would declare the land to be worth that long has been settled that in the assessment of damages where
sum in his sworn tax declaration, he replied that he would accept lands are acquired by eminent domain evidence is admissible of the
the igures ixed upon by the tax appraisers. His testimony shows price received from sales of land similar in character, and situated in
clearly that he did not desire to commit himself positively to the the vicinity, if the transactions are not so remote in point of time
assertion that his three hectares of land was worth P150,000. His that a fair comparison practically is impossible."
ambiguous and evasive replies on cross-examination do not at all
harmonize with his unequivocal statement in his direct examination In Hewitt vs. Price (204 Mo., 31), it was said: "It is suf icient to say
that his land was worth P5.50 per square meter. Apparently, when upon this proposition that the law is well settled in this State upon
confronted with the price per hectare, which this estimate would that subject, and while the value or selling price of similar property
put upon his land, he was somewhat astounded. Indeed, we are may be taken into consideration in determining the value of the
inclined to believe that one of the reasons for the high value placed piece of property in litigation, it is equally true that the location and
upon the condemned land by all the witnesses is that they were character of such property should be similar and the sale of such
estimating the price per square meter instead of per hectare, which other property should at least be reasonably near in point of time to
is the customary method of ixing the price of agricultural land. A the time at which the inquiry of the value of the property in dispute
perusal of the remainder of the testimony of defendant AJlarey is directed."
shows that he is paying annual taxes on his 30,000 square meters of
land amounting to between P12 and P13. He also naively informs us In Laing vs. United New Jersey R. R. & C. Co. (54 N. J. L., 576; 33 Am.
that he has not been able to till the land lately because he has no St. Rep., 682; 25 A., 409), it was said: "Generally in this and other
carabaos or other work animals. states evidence of sales of land in the neighborhood is competent on
an inquiry as to the value of land, and if the purchases or sales were
Several of the witnesses for the defendants testi ied to having made by the party against whom the evidence was offered it might
purchased land in the vicinity of the station site for residential stand as an admission. But such testimony is received only upon the
purposes. Thus, Edard testi ied that he paid P1,400 for 220 square idea that there is substantial similarity between the properties. The
meters in 1910. Andres Dinlasan sold 119 square meters for P10 practice does not extend, and the rule should not be applied, to
per square meter on June 6, 1912. He could give no reason why the cases where the conditions are so dissimilar as not easily to admit
purchaser had paid so much for the land, but in response to a of reasonable comparison, and much must be left to the discretion
question said the purchaser had some more land joining it. Agustin of the trial judge in the determination of the preliminary question
bought 1,900 square meters in 1910 for P2 per square meter. whether the conditions are fairly comparable."
Esteban Lagos paid P1,000 for a plot 16 by 18 meters in 1911. A
most remarkable thing about these purchases is that, as choice Evidence of other sales made in good faith is competent if the
residential sites, they are so extremely small. With the possible character of such parcels as sites for business purposes, dwellings,
exception of the parcel purchased by Agustin, the parcels in or for whatever other use which enhances the pecuniary value of
question are hardly generous enough to permit of the construction the condemned land is suf iciently similar to the latter that it may
of even a modest mansion. Cayo Alzona testi ied that he purchased be reasonably assumed that the price of the condemned land would
2,200 square meters in 1906 for P350, and that he purchased a little be approximately near the price brought by the parcels sold. The
less than one hectare in 1912, all in the vicinity of the station site, value of such evidence, of course, diminishes as the differences
for which he paid P1,500. It will be noted that there is considerable between the property sold and the condemned land increase. The
difference between these igures and the prices at which the other property must be in the immediate neighborhood, that is, in the
witnesses testi ied they purchased land in that neighborhood. That zone of commercial activity with which the condemned property is
the evidence of sales of nearby land was competent, there can be no identi ied, and the sales must be suf iciently near in point of time
doubt. with the date of the condemnation proceedings as to exclude
general increases or decreases in property values due to changed
commercial conditions in the vicinity. No two estates are ever


exactly alike, and as the differences between parcels sold and the with the exception of Simeon Perez who accepted P2.ll and P2.27
land condemned must necessarily be taken into consideration in for the two parcels which the commissioners had appraised at
comparing values, we think it much better that those differences P3.50 and P3.75 per meter, respectively. It is unfortunate that the
should be shown as part of the evidence.of such sales, as is the commissioners.did not have an opportunity to consider the deeds
practice in Iowa. (Town of Cherokee vs. S. C. & I. F. Town Lot and executed by the defendants in favor of the Tayabas Land Company.
Land Co., 52 Iowa, 279; 3 N. W., 42.) And where these differences With the commissioners' valuation of the land before them, the
are so great that the sales in question can form no reliable standard Tayabas Land Company was actually able to purchase from the
for comparison, such evidence should not be admitted. (Presbrey defendant all of the condemned land at a greatly inferior price. The
vs. Old Colony & Newport R. Co., 103 Mass., 1.) defendants were not able to resist an offer of P1 and P2 per meter
for their holdings, notwithstanding their fervid declarations before
Aside from the bare fact that the real estate transactions referred to the commissioners that their property was worth P5 per meter, and
by the witnesses were somewhere in the vicinity of the condemned notwithstanding the of icial report by a board composed of local
land, there is nothing to guide us as to the relative value of the men that it was worth from P2 to P3.75 per meter. This, of course,
condemned land. The differences which must have existed between does not include the defendant Icasiano who sold out to the land
the various parcels of land in the vicinity we are left to imagine. And company after the commission had been appointed but before it
while the commissioners' view of the condemned land undoubtedly had begun its labors. It is to be remembered, however, that he both
assisted them in forming their estimate of value, still counsel should bought and sold the land after the railroad company had made
not have relied upon their astuteness to discover differences in known its intention of expropriating it, and that in his answer to the
values, but should have brought them speci ically to the attention of complaint he alleged his land to be worth P5 per meter.
the commissioners. It seems rather unusual, also, that the bare
statements of witnesses should be accepted as to the prices which Now, what was the object of the Tayabas Land Company in
nearby parcels brought, in view of the insistence of counsel that the purchasing the land? Evidently it was not with the intention of
condemned land is nothing more than agricultural land. These sales making any use of it, for the railroad company had long since taken
should have been thoroughly investigated to determine whether possession. They, as well as the owners, were simply speculating on
they were made bona ide and, if so, whether they were not the probability that the award of the commissioners would be
attended by unusual circumstances which materially increased the approved by the court. It was little more than a sporty guess on
purchase price. each side as to what would be allowed for the land by the inal
judgment of the court. The company believed the award would
But while these transfers of nearby land are interesting as bearing exceed P1.05 per meter, and the defendants thought the risk that
upon the value of the condemned land, the record also shows the award would be in a lesser amount was so great that they let the
several transfers of the latter itself after it became generally known land go for the price the company offered them. Nor is it at all
that it had been selected by the railroad company as the site for its certain that the prices inserted in these deeds of sale were not
Lucena station. We take it that these transactions, in which the ictitiously in lated. The circumstances under which the sales were
defendants were themselves parties, offer a far more certain basis made would readily suggest the expediency of inserting ictitious
for estimating the value of the land than do their testimony before prices in the deeds.
the commissioners or the testimony of other witnesses as to fancy
prices paid for neighboring parcels. Romana Velasquez, who owned The moment a parcel of land is wanted by a public service
the major portion of the condemned land, disposed of hers to her corporation the price, for some occult reason, immediately soars far
nephews sumamed Perez. Her irst sale was on July 21, 1912. This beyond what the owner would think of asking or receiving in the
parcel contained 16,094 square meters and brought at this time open market. Owners ask fabulous prices for it and neighbors look
P6,500, or a little more than P0.40 per square meter. A month later on with an indulgent smile or even persuade themselves that the
Perez sold this parcel to one Icasiano for P13,000, or a little less land is worth the price for which the owner holds out—in view of
than P0.81 per square meter. Sra. Velasquez' next sale was of three the fact that it is wanted by a corporation, whose inancial resources
parcels, the irst two of which contained approximately 23,000 are popularly supposed to be inexhaustible. The resultant good to a
square meters, while the area of the third was described as three community due to the investment of new capital, the increased
gantas of rice. The total price of the three parcels was P2,500 or a employment of labor, and the services the corporation will render
little over P0.10 per meter. In one of these parcels was located are for the moment forgotten; and persons called upon for opinions
approximately 8,700 square meters of the condemned land which as to the price of the desired property, unconsciously perhaps, relax
the commissioners reported at a price higher than any of the rest. from that sound business acumen which guides them in their daily
affairs, while they are considering, not the price which they would
On May 26, 1913, Icasiano, the then owner of the parcel containing care to pay if they wanted the land, but the price which the
16,094 square meters, sold it to the Tayabas Land Company for corporation ought to pay in view of the fact that it is a corporation.
P18,000; and oh July 1, 1913, some twenty days after the
commissioners had rendered their report, all of the remaining The owner of condemned land is entitled to just compensation. That
owners of the condemned land sold their holdings, parcel by parcel, is all the law allows him. "Compensation" means an equivalent for
as it had been assessed by the commissioners, to the same company the value of the land (property) taken. Anything beyond that is
for P1.05 per square meter, with the exception of Simeon Perez who more and anything short of that is less than compensation. To
sold the two parcels owned by him at P2.27 and P2.11, respectively. compensate is to render something which is equal in value to that
Here is the most convincing: argument that all the witnesses who taken or received. The word "just" is used to intensify the meaning
placed values on the condemned property, ranging from P5 per of the word "compensation;" to convey the idea that the equivalent
square meter to P8 per meter, were seriously in error. After all the to be rendered for the property taken shall be real, substantial, full,
speculation concerning the land, after the commissioners had ample. "Just compensation," therefore, as used in section 246 of the
reported its value at prices ranging from P2 to P3.75 per square Code of Civil Procedure, means a fair and full equivalent for the loss
meter, the owners sold the land, parcel by parcel, as it had been sustained.
assessed by the commissioners for a little more than P1 per meter,


"The exercise of the power being necessary for the public good, and reference to the uses for which the property is suitable, having
all property being held subject to its exercise when, and as the regard to the existing business or wants of the community, or such
public good requires it, it would be unjust to the public that it as may be reasonably expected in the immediate future." (Boom Co.
should be required to pay the owner more than a fair indemnity for vs. Patterson, 98 U. S., 403.)
such loss. To arrive at this fair indemnity, the interests of the public This passage is quoted with approval in the late case of St. Louis I.
and of the owner and all the circumstances of the particular M. & S. R. Co. vs. Theodore Max ield Co. (94 Ark., 135; 26 L. R. A., N.
appropriation should be taken into consideration." (Lewis on S., 1111; 126 S. W., 83), a very well considered case.
Eminent Domain, sec. 462.)
The supreme court of Missouri has also formulated an exceedingly
The compensation must be just to the public as well as to the clear statement of the matter in the Stock Yards Case (120 Mo.,
owners. (Searl vs. School District, 133 U. S., 533; 33 L. ed. 740.) 541):
Section 244 of our code says that:
"The market value of the property means its actual value,
"The commissioners shall assess the value of the property taken independent of the location of plaintiff's road thereon, that is, the
and used, and shall also assess the consequential damages to the fair value of the property as between one who wants to purchase
property not taken and deduct from such consequential damages and one who wants to sell it; not what could be obtained for it in
the consequential bene its to be derived by the owners from the peculiar circumstances when greater than its fair price could be
public use of the land taken." obtained; nor its speculative value; nor the value obtained through
"To assess" is to perform a judicial act. The commissioners' power is the necessities of another. Nor, on the other hand, is it to be limited
limited to assessing the value and to determining the amount of the to that price which the property would bring when forced off at
damages. There it stops; they can go no farther. The value and auction under the hammer. The question is, if the defendant wanted
damages awarded must be a just compensation and no more and no to sell its property, what could be obtained for it upon the market
less. But in ftxing these amounts, the commissioners are not to act from parties who wanted to buy and would give its full value."
ad libitum. They are to discharge the trust reposed in them These views are practically in accord with Lewis on Eminent
according to well established rules and form their judgment upon Domain (2d ed.), section 478, where the rule is stated as follows:
correct legal principles. To deny this is to place them where no one
else in this country is placed, above the law and beyond "The market value of property is the price which it will bring when
accountability. it is offered for sale by one who desires, but is not obliged to sell it,
and is bought by one who is under no necessity of having it. In
There is no question but that the compensation to which a estimating its value all the capabilities of the property, and all the
defendant owner is entitled is the market value of the condemned uses to which it may be applied or for which it is adapted are to be
property, to which, of course, must be added his consequential considered, and not merely the condition it is in at the time and the
damages if any, or from which must be deducted his consequential use to which it is then applied by the owner. It is not a question of
bene its, if any. Such was our holding in Manila Railway Co. vs. Fabie the value of the property to the owner. Nor can the damages be
(17 Phil. Rep., 206). But, as stated in Packard vs. Bergen Neck Ry. Co. enhanced by his unwillingness to sell. On the other hand, the
(54 N. J. L., 553; 23 A., 506): damages cannot be measured by the value of the property to the
party condemning it, nor by its need of the particular property. All
"The dif iculty is not with the rule, but with its application. For the the facts as to the condition of the property and its surroundings, its
determination of the market value of land, which is that sum of improvements and capabilities, may be shown and considered in
money which a person, desirous but not compelled to buy and an estimating its value." (Approved in Seaboard Air Line vs. Chamblin,
owner willing but not compelled to sell, would agree on as a price to 108 Va.( 42.)
be given and received therefor, is beyond doubt dif icult. The test is Now, what was the utility of the land condemned? So far as the
logically and legally correct, but is cannot be applied to land with record shows, its possible uses were, irst, for the cultivation of rice;
the accuracy with which it can be applied to stocks, bonds and second, as a residential site owing to its proximity to the provincial
personal property generally. Still it is this test which admittedly building and the high school; and third, as a railroad station site.
must be applied, even when the value of the land and the damages
are found in separate sums." Its location from a farmer's point of view would doubtless enhance
its value, since it was so close to the town of Lucena that the
It is a very dif icult matter to limit the scope of the inquiry as to marketing of crops was a decidedly simple matter. For this reason it
what the market value of condemned property is. The market value was more valuable as agriculture land than other farms farther
of a piece of land is attained by a consideration of all those facts away from town.
which make it commercially valuable. Whether evidence considered
by those whose duty it is to appraise the land is of that nature is As a residential site it seems to have been so far a complete failure.
often a very dif icult matter to decide. The Supreme Court of the How long the high school had stood there the record does not state.
United States, in a carefully worded statement, marks out the scope But although the provincial building had stood near it for several
of the inquiry as follows: years, not a single homebuilder had selected any portion of the
condemned land as a site for his residence. We note that all those
"In determining the value of land appropriated for public purposes, who testi ied at the hearing before the commissioners to having
the same considerations are to be regarded as in a sale of property purchased land in the vicinity for home sites, purchased other land
between private parties. The inquiry in such cases must be: What is than that condemned. Nor does the record contain any intimation
the property worth in the market, viewed not merely with reference that any of the owners of the land had ever attempted to dispose of
to the uses to which it is at the time applied, but with reference to any part of it as building lots. As a residential site, therefore, its
the uses to which it is plainly adapted; that is to say, what is it worth value was decidedly problematical. Possibly, in the next dozen years
from its availability for valuable uses? * * * As a general thing, we a few houses might have been built upon the land, but, judging by
should say that the compensation to the owner is to be estimated by


the past record, its development along this line would have been said that they were not aware of all the latent utility of the land. For
extremely slow. these reasons, the price which this parcel brought should serve as
an excellent criterion of the value of the entire station site. And
As a railroad station site, the record gives no indication that it is the while no explanation is given of why the sale occurred, since, of
sole possible location for that purpose in Lucena. It is not shown course, no one would buy it with the expectation of using it himself
that its location for that purpose is at all superior to other possible when he knew that it would shortly be occupied by the railroad
locations. Indeed, it seems that the railroad company at irst company, still there is not suf icient indication that it was sold for
selected another site for its station on the other side of town. Hence, speculative purposes or that the element of speculation entered into
possessing no exclusive natural advantages for this purpose, it is a the transaction to enable us to say that the price was in lated and
foregone conclusion that the railroad company would not willingly exceeded the actual market value of the condemned land as
pay P81,000 for such a site when it could have purchased another agricultural land to be worth P500 per hectare, and leaves a little
site for, say, P1,500. more than P3,500 for its potential value as a residential district and
as a railroad station site. This is, furthermore, approximately 400
Here it seems proper to say that the appearance of the railroad in per cent higher than Sra. Velasquez' second sale (some four months
the town of Lucena was the occasion for an incipient real estate later) to Simeon Perez, when she sold about 23,000 square meters
boom in the vicinity of the provincial building and the high school. in the same neighborhood for a little over P1,000 per hectare.
Several of the witnesses for the defendants testi ied what they
would offer, if they were in the market for land in the vicinity of the It is to be further noted that the average assessed valuation of the
station site, and the witness Alzona, the single witness who testi ied condemned property is somewhat less than P0.08 per square meter,
for the plaintiff, testi ied that some owners of land near the while the highest assessed valuation of any of it is only P0.23 per
provincial building were asking between P500 and P700 for lots of square meter, which is carried by some 5,973 square meters, or less
400 square meters. It is clear that these hypothetical purchases and than one-sixth of the whole. It is also to be noted that these 5,973
sales do not offer any reliable basis upon which to calculate the square meters were appraised by the commissioners as being worth
actual market value of the land. The fond dreams of the owners of a exactly what the 16,094 square meters were worth, the latter being
sudden shift of the business center of the town of Lucena to their assessed for taxation purposes at only P0.03 per square meter.
vicinity, or of its becoming a choice residential district, are not
capital in hand. At the price we have ixed, we are of the opinion that any
consequential damages which may have been occasioned to any of
"Proof must be limited to showing the present condition of the the defendants by the condemnation proceedings is amply cared for.
property and the uses to which it is naturally adapted. It is not
competent for the owner to show to what use he intended to put the The defendant, Simeon Perez, was awarded P600 damages by the
property, nor what plans he had for its improvement, nor the commissioners for being compelled to remove a building in course
probable future use of the property. Nothing can be allowed for of construction at the time the expropriation proceedings were
damages to an intended use." (Lewis on Eminent Domain, 2d ed., started. This building was designed to serve partly as a warehouse
sec. 709.) and partly for stores. He commenced its construction about the
middle of December, 1912, after it became known that the plaintiff
From the evidence we have discussed above, it is apparent that a company wanted the land for a railroad station. Construction work
good price for rice land in the vicinity of Lucena is P500 per hectare. was ordered stopped by the court. From the vague description of
With this as a basis, at what would the prospective buyer estimate this order in the record, we presume it was the order of the court of
the possibility of the land being used as a residential site sometime date of January 22, 1913, placing the plaintiff in possession of the
in the future and its possible advantages as a railroad site? Certainly land under the provisions of Act No. 1258 as amended by Act No.
at nothing like the estimates contained in the report of the 1592. Until such action was taken by the railroad company, or until
commissioners. To secure an adequate return on such a large the commissioners were appointed and had appraised the land, we
investment as P80,000, every meter of the land would have to be know of no legal provision which would prohibit the owner from
put to immediate use as residential sites, supposing that people doing with the land what he pleased. The Act in question gives to
could be induced to buy it for that purpose at such igures or to pay the company "the right to enter immediately upon the possession of
the necessarily large rent therefor based on such a valuation. And the land involved." (Sec. 3.) This amendment to Act No. 1258 was
to hold out for such a igure in case a railroad company wanted the enacted especially for the bene it of railroad companies, and affords
land as a depot site would mean that the company would locate its full protection to them if they act with due diligence. Until some
depot at some other place. It seems to us that, either as a residential such positive assertion of its desire to expropriate the land, no
site or as a railroad station site, its value should be principally reason is seen why the company might not ask for a dismissal of the
regulated by the value of other agricultural land on the outskirts of proceedings in accordance with section 127 of the Code of Civil
the town. In other words, the chance that it would be wanted for Procedure. The right of the owner to the enjoyment of his property
either of these purposes owing to its superior location was but ought not to be made to depend so entirely upon the whims of a
slightly greater than that of other agricultural land adjacent to the third party. No attempt was made to meet the statement of Perez
town. We are, therefore, led to the conclusion that the price at which that he had expended a large sum of money on the construction of
practically half of the condemned land was sold by Romana the building. The commissioners probably saw the structure or
Velasquez to the defendant, Filemon Perez, is a most liberal some of the materials which entered into it and are in a much better
estimate of its value. We refer to her sale of the parcel of 16,094 position to judge of the amount expended upon the work than are
square meters for P6,500. This parcel comprises practically we. They have ixed that amount at P600. In the absence of positive
one-half of the entire station site and no outside land was included evidence in the record showing this inding to be grossly excessive,
in the transaction. The sale was made after it became known that we must accept it as correct.
the land sold was to be part of the station site, and a statement to
this effect was included in the deed. Both parties being aware that For the foregoing reasons, the judgment of the court below is
the land was to be condemned by the plaintiff company, it cannot be modi ied by reducing the award for the parcel containing 16,094


square meters to the sum of P6,500. The damages for the remaining
parcels will be ixed at the same proportionate amount. As thus
modi ied the judgment appealed from is af irmed. No costs will be
allowed on this appeal. The amount as herein ixed, together with
interest, will be deposited with the clerk of the Court of First
Instance of Tayabas, subject to the rights of the defendants and the
Tayabas Land Company. So ordered.
Arellano, C. J., Torres, Carson, and Araullo, JJ., concur.

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PROPERTY CASES FULL TEXT ARTS 414-436

Board of Assessment Appeals, QC vs Meralco, G. R. No. L-15334, Sarmiento vs Court of Appeals, 96

© 2018 Based on the Syllabus of Atty Bathan-Lasco 1 of 201

PROPERTY CASES FULL TEXT ARTS 414-436

Ramos-Balalio vs Ramos, G.R. NO. 168464, January 23, 2006

Republic vs Enriquez, G.R. NO. 160990, September 11, 2006174

Rumarate vs Hernandez, G.R. NO. 168222, April 18, 2006 179

Fule vs Legare, G.R. No. L-17951, February 28, 1963 184

Phil. Columbian Association vs Panis, G.R. No. 106528,

Garcia vs Court of Appeals, G.R. No. L-47553, January 31, 1981

Manila Railroad Company vs Velasquez, G.R. No. 10278,

© 2018 Based on the Syllabus of Atty Bathan-Lasco 2 of 201

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Petitioner iled a "Motion to Quash (with Motion to Defer

© 2018 Based on the Syllabus of Atty Bathan-Lasco 3 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 4 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 5 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 6 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 7 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 8 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 9 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 10 of 201

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proceedings in the Court of First Instance of Camarines Norte

© 2018 Based on the Syllabus of Atty Bathan-Lasco 11 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 12 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 13 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 14 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 15 of 201

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two metal pieces being connected with criss-cross iron running

© 2018 Based on the Syllabus of Atty Bathan-Lasco 16 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 17 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 18 of 201

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Hence, this Petition.[11] x x x....................................x x x....................................x x x

The Issues (5) Machinery, receptacles, instruments or implements intended by

© 2018 Based on the Syllabus of Atty Bathan-Lasco 19 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 20 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 21 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 22 of 201

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© 2018 Based on the Syllabus of Atty Bathan-Lasco 23 of 201