G.R. No.

L-3404 April 2, 1951

ANGELA I. TUASON, plaintiff-appellant,

vs.
ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees.

Alcuaz & Eiguren for appellant.

Araneta & Araneta for appellees.

MONTEMAYOR, J.:

In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother
Antonio Tuason Jr., held a parcel of land with an area of 64,928.6 sq. m. covered by
Certificate of Title No. 60911 in Sampaloc, Manila, in common, each owning an
undivided 1/3 portion. Nieves wanted and asked for a partition of the common
property, but failing in this, she offered to sell her 1/3 portion. The share of Nieves
was offered for sale to her sister and her brother but both declined to buy it. The offer
was later made to their mother but the old lady also declined to buy, saying that if the
property later increased in value, she might be suspected of having taken advantage
of her daughter. Finally, the share of Nieves was sold to Gregorio Araneta Inc., a
domestic corporation, and a new Certificate of Title No. 61721 was issued in lieu of
the old title No. 60911 covering the same property. The three co-owners agreed to
have the whole parcel subdivided into small lots and then sold, the proceeds of the
sale to be later divided among them. This agreement is embodied in a document
(Exh. 6) entitled "Memorandum of Agreement" consisting of ten pages, dated June
30, 1941.

Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio
Araneta was acting as the attorney-in-fact and lawyer of the two co-owners, Angela I.
Tuason and her brother Antonio Tuason Jr. At the same time he was a member of
the Board of Director of the third co-owner, Araneta, Inc.

The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The
three co-owners agreed to improve the property by filling it and constructing roads
and curbs on the same and then subdivide it into small lots for sale. Araneta Inc. was
to finance the whole development and subdivision; it was prepare a schedule of
prices and conditions of sale, subject to the subject to the approval of the two other
co-owners; it was invested with authority to sell the lots into which the property was
to be subdivided, and execute the corresponding contracts and deeds of sale; it was
also to pay the real estate taxes due on the property or of any portion thereof that
remained unsold, the expenses of surveying, improvements, etc., all advertising
expenses, salaries of personnel, commissions, office and legal expenses, including
expenses in instituting all actions to eject all tenants or occupants on the property;
and it undertook the duty to furnish each of the two co-owners, Angela and Antonio
Tuason, copies of the subdivision plans and the monthly sales and rents and
collections made thereon. In return for all this undertaking and obligation assumed
by Araneta Inc., particularly the financial burden, it was to receive 50 per cent of the
gross selling price of the lots, and any rents that may be collected from the property,
while in the process of sale, the remaining 50 per cent to be divided in equal portions
among the three co-owners so that each will receive 16.33 per cent of the gross
receipts.

Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for
purposes of reference we are reproducing them below:

(9) This contract shall remain in full force and effect during all the time that it
may be necessary for the PARTY OF THE SECOND PART to fully sell the
said property in small and subdivided lots and to fully collect the purchase
prices due thereon; it being understood and agreed that said lots may be
rented while there are no purchasers thereof;

(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby
given full power and authority to sign for and in behalf of all the said co-
owners of said property all contracts of sale and deeds of sale of the lots into
which this property might be subdivided; the powers herein vested to the
PARTY OF THE SECOND PART may, under its own responsibility and risk,
delegate any of its powers under this contract to any of its officers, employees
or to third persons;

(15) No co-owner of the property subject-matter of this contract shall sell,

alienate or dispose of his ownership, interest or participation therein without
first giving preference to the other co-owners to purchase and acquire the
same under the same terms and conditions as those offered by any other
prospective purchaser. Should none of the co-owners of the property subject-
matter of this contract exercise the said preference to acquire or purchase the
same, then such sale to a third party shall be made subject to all the
conditions, terms, and dispositions of this contract; provided, the PARTIES
OF THE FIRST PART (meaning Angela and Antonio) shall be bound by this
contract as long as the PARTY OF THE SECOND PART, namely, the
GREGORIO ARANETA, INC. is controlled by the members of the Araneta
family, who are stockholders of the said corporation at the time of the signing
of this contract and/or their lawful heirs;

On September 16, 1944, Angela I. Tuason revoked the powers conferred on her
attorney-in-fact and lawyer, J. Antonio Araneta. Then in a letter dated October 19,
1946, Angela notified Araneta, Inc. that because of alleged breach of the terms of
the "Memorandum of Agreement" (Exh. 6) and abuse of powers granted to it in the
document, she had decided to rescind said contract and she asked that the property
held in common be partitioned. Later, on November 20, 1946, Angela filed a
complaint in the Court of First Instance of Manila asking the court to order the
partition of the property in question and that she be given 1/3 of the same including
rents collected during the time that the same including rents collected during the time
that Araneta Inc., administered said property.

The suit was administered principally against Araneta, Inc. Plaintiff's brother, Antonio
Tuason Jr., one of the co-owners evidently did not agree to the suit and its purpose,
for he evidently did not agree to the suit and its purpose, for he joined Araneta, Inc.
as a co-defendant. After hearing and after considering the extensive evidence
introduce, oral and documentary, the trial court presided over by Judge Emilio Pea
in a long and considered decision dismissed the complaint without pronouncement
as to costs. The plaintiff appealed from that decision, and because the property is
valued at more than P50,000, the appeal came directly to this Court.

Some of the reasons advanced by appellant to have the memorandum contract

(Exh. 6) declared null and void or rescinded are that she had been tricked into
signing it; that she was given to understand by Antonio Araneta acting as her
attorney-in-fact and legal adviser that said contract would be similar to another
contract of subdivision of a parcel into lots and the sale thereof entered into by
Gregorio Araneta Inc., and the heirs of D. Tuason, Exhibit "L", but it turned out that
the two contracts widely differed from each other, the terms of contract Exh. "L"
being relatively much more favorable to the owners therein the less favorable to
Araneta Inc.; that Atty. Antonio Araneta was more or less disqualified to act as her
legal adviser as he did because he was one of the officials of Araneta Inc., and
finally, that the defendant company has violated the terms of the contract (Exh. 6) by
not previously showing her the plans of the subdivision, the schedule of prices and
conditions of the sale, in not introducing the necessary improvements into the land
and in not delivering to her her share of the proceeds of the rents and sales.

We have examined Exh. "L" and compared the same with the contract (Exh. 6) and
we agree with the trial court that in the main the terms of both contracts are similar
and practically the same. Moreover, as correctly found by the trial court, the copies
of both contracts were shown to the plaintiff Angela and her husband, a broker, and
both had every opportunity to go over and compare them and decide on the
advisability of or disadvantage in entering into the contract (Exh. 6); that although
Atty. Antonio Araneta was an official of the Araneta Inc.; being a member of the
Board of Directors of the Company at the time that Exhibit "6" was executed, he was
not the party with which Angela contracted, and that he committed no breach of trust.
According to the evidence Araneta, the pertinent papers, and sent to her checks
covering her receive the same; and that as a matter of fact, at the time of the trial,
Araneta Inc., had spent about P117,000 in improvement and had received as
proceeds on the sale of the lots the respectable sum of P1,265,538.48. We quote
with approval that portion of the decision appealed from on these points:

The evidence in this case points to the fact that the actuations of J. Antonio
Araneta in connection with the execution of exhibit 6 by the parties, are above
board. He committed nothing that is violative of the fiduciary relationship
existing between him and the plaintiff. The act of J. Antonio Araneta in giving
the plaintiff a copy of exhibit 6 before the same was executed, constitutes a
full disclosure of the facts, for said copy contains all that appears now in
exhibit 6.

Plaintiff charges the defendant Gregorio Araneta, Inc. with infringing the terms
of the contract in that the defendant corporation has failed (1) to make the
necessary improvements on the property as required by paragraphs 1 and 3
of the contract; (2) to submit to the plaintiff from time to time schedule of
prices and conditions under which the subdivided lots are to be sold; and to
furnish the plaintiff a copy of the subdivision plans, a copy of the monthly
gross collections from the sale of the property.
 The Court finds from the evidence that he defendant Gregorio Araneta,
Incorporated has substantially complied with obligation imposed by the
contract exhibit 6 in its paragraph 1, and that for improvements alone, it has
disbursed the amount of P117,167.09. It has likewise paid taxes,
commissions and other expenses incidental to its obligations as denied in the
agreement.

With respect to the charged that Gregorio Araneta, Incorporated has failed to
submit to plaintiff a copy of the subdivision plains, list of prices and the
conditions governing the sale of subdivided lots, and monthly statement of
collections form the sale of the lots, the Court is of the opinion that it has no
basis. The evidence shows that the defendant corporation submitted to the
plaintiff periodically all the data relative to prices and conditions of the sale of
the subdivided lots, together with the amount corresponding to her. But
without any justifiable reason, she refused to accept them. With the indifferent
attitude adopted by the plaintiff, it was thought useless for Gregorio Araneta,
Incorporated to continue sending her statement of accounts, checks and other
things. She had shown on various occasions that she did not want to have
any further dealings with the said corporation. So, if the defendant corporation
proceeded with the sale of the subdivided lots without the approval of the
plaintiff, it was because it was under the correct impression that under the
contract exhibit 6 the decision of the majority co-owners is binding upon all the
three.

The Court feels that recission of the contract exhibit 6 is not minor violations
of the terms of the agreement, the general rule is that "recission will not be
permitted for a slight or casual breach of the contract, but only for such
breaches as are so substantial and fundamental as to defeat the object of the
parties in making the agreement" (Song Fo & Co. vs. Hawaiian-Philippine Co.,
47 Phil. 821).

As regards improvements, the evidence shows that during the Japanese occupation
from 1942 and up to 1946, the Araneta Inc. although willing to fill the land, was
unable to obtain the equipment and gasoline necessary for filling the low places
within the parcel. As to sales, the evidence shows that Araneta Inc. purposely
stopped selling the lots during the Japanese occupantion, knowing that the purchase
price would be paid in Japanese military notes; and Atty. Araneta claims that for this,
plaintiff should be thankfull because otherwise she would have received these notes
as her share of the receipts, which currency later became valueles.

But the main contention of the appellant is that the contract (Exh. 6) should be
declared null and void because its terms, particularly paragraphs 9, 11 and 15 which
we have reproduced, violate the provisions of Art. 400 of the Civil Code, which for
the purposes of reference we quote below:

ART. 400. No co-owner shall be obliged to remain a party to the community.

Each may, at any time, demand the partition of the thing held in common.
 Nevertheless, an agreement to keep the thing undivided for a specified length
of time, not exceeding ten years, shall be valid. This period may be a new
agreement.

We agree with the trial court that the provisions of Art. 400 of the Civil Code are not
applicable. The contract (Exh., 6) far from violating the legal provision that forbids a
co-owner being obliged to remain a party to the community, precisely has for its
purpose and object the dissolution of the co-ownership and of the community by
selling the parcel held in common and dividing the proceeds of the sale among the
co-owners. The obligation imposed in the contract to preserve the co-ownership until
all the lots shall have been sold, is a mere incident to the main object of dissolving
the co-owners. By virtue of the document Exh. 6, the parties thereto practically and
substantially entered into a contract of partnership as the best and most expedient
means of eventually dissolving the co-ownership, the life of said partnership to end
when the object of its creation shall have been attained.

This aspect of the contract is very similar to and was perhaps based on the other
agreement or contract (Exh. "L") referred to by appellant where the parties thereto in
express terms entered into partnership, although this object is not expressed in so
many words in Exh. 6. We repeat that we see no violation of Art. 400 of the Civil
Code in the parties entering into the contract (Exh. 6) for the very reason that Art.
400 is not applicable.

Looking at the case from a practical standpoint as did the trial court, we find no valid
ground for the partition insisted upon the appellant. We find from the evidence as
was done by the trial court that of the 64,928.6 sq. m. which is the total area of the
parcel held in common, only 1,600 sq. m. or 2.5 per cent of the entire area remained
unsold at the time of the trial in the year 1947, while the great bulk of 97.5 per cent
had already been sold. As well observed by the court below, the partnership is in the
process of being dissolved and is about to be dissolved, and even assuming that Art.
400 of the Civil Code were applicable, under which the parties by agreement may
agree to keep the thing undivided for a period not exceeding 10 years, there should
be no fear that the remaining 1,600 sq. m. could not be disposed of within the four
years left of the ten-years period fixed by Art. 400.

We deem it unnecessary to discuss and pass upon the other points raised in the
appeal and which counsel for appellant has extensively and ably discussed, citing
numerous authorities. As we have already said, we have viewed the case from a
practical standpoint, brushing aside technicalities and disregarding any minor
violations of the contract, and in deciding the case as we do, we are fully convinced
that the trial court and this Tribunal are carrying out in a practical and expeditious
way the intentions and the agreement of the parties contained in the contract (Exh.
6), namely, to dissolve the community and co-ownership, in a manner most profitable
to the said parties.

In view of the foregoing, the decision appealed from is hereby affirmed. There is no
pronouncement as to costs.

So ordered.
G.R. No. L-45142 April 26, 1991

SIMPROSA VDA. DE ESPINA, RECAREDO ESPINA, TIMOTEO ESPINA, CELIA

ESPINA, GAUDIOSA ESPINA and NECIFORA ESPINA, petitioners,
vs.
THE HON. OTILIO ABAYA and SOFIA ESPINA and JOSE ESPINA, respondents.

Cipriano C. Alvizo, Sr. for private respondents.

MEDIALDEA, J.:

This is a petition for certiorari with prayer for the issuance of a writ of preliminary
injunction seeking the nullification of the orders issued by the respondent Judge
Otilio Abaya, in his capacity as the presiding judge of the Court of First Instance of
Surigao del Sur, Branch II, Lianga, Surigao del Sur in Civil Case No. L-108, entitled
"Simprosa Vda. de Espina, et. al. v. Sofia Espina, et. al." dated May 9, 1975
dismissing the complaint for partition; July 25, 1975 denying the motion for
reconsideration; August 13, 1975 denying the second motion for reconsideration and
March 15, 1976 denying plaintiffs' notice of appeal.

The antecedent facts are as follows:

Marcos Espina died on February 14, 1953 and was survived by his spouses,
Simprosa Vda. de Espina and their children namely, Recaredo, Timoteo, Celia,
Gaudiosa, Necifora, Sora and Jose, all surnamed Espina. Decedent's estate
comprises of four (4) parcels of land located at the Municipality of Barobo Province
of Surigao del Sur.

On August 23, 1973 an action for partition of the aforementioned parcels of land was
filed by petitioners Simprosa and her children Recaredo, Timoteo, Celia, Gaudencia
and Necifora.

The complaint alleges that parcel No. 1 is the exclusive property of the deceased,
hence the same is owned in common by petitioners and private respondents in eight
(8) equal parts, while the other three (3) parcels of land being conjugal properties,
are also owned in common, one-half (1/2) belongs to the widow Simprosa and the
other half is owned by her and her children in eight (8) equal parts.

It also alleges that parcel No. 1 has been subdivided into two lots. Lot No. 994 PL8-
44 is covered by Original Certificate of Title No. 5570 in the name of one of the heirs,
Sofia Espina, who acquired the title as a trustee for the beneficiaries or heirs of
Marcos Espina, while lot No. 1329 PCS-44 is covered by Original Certificate of Title
No. 3732 issued in the name of one of the heirs, Jose Espina as trustee for the heirs
of Marcos Espina. Said parcel of land is in the possession of petitioners and private
respondents who have their respective houses thereon.
Simprosa presently occupies parcel No. 2 while parcel No. 3 is occupied by Timoteo,
although the same is actually titled in the name of Sofia. Parcel No. 4 is occupied by
Recaredo.

Petitioners have several times demanded the partition of the aforementioned

properties, but notwithstanding such demands private respondents refused to
accede.

Private respondents alleged in their answer that in or about April, 1951, the late
Marcos Espina and his widow, Simprosa, together with their children made a
temporary verbal division and assignment of shares among their children. After the
death of Marcos, the temporary division was finalized by the heirs. Thereafter the
heirs took immediate possession of their respective shares on April 20, 1952. Private
respondents took actual physical possession of their respective shares including the
portions ceded to them by Simprosa upon their payment of P50.00 each per quarter
starting April, 1952 until the latter's death pursuant to their contract of procession
The assignment of shares was as follows:

(a) To the surviving spouses, (sic) Simprosa Vda. de Espina, herein plaintiffs,
one-half (1/2) of the parcel of land adjudicated to each of said plaintiffs-heirs
and defendants;

(b) To each of the following compulsory heirs, to wit:

1. To Recaredo (sic) Espina, one-half (1/2) portion which contains an area of

one and three-fourths (1 3/4) hectares and which forms part of Parcel 4
whose description is given in paragraph III of the complaint, the said Parcel IV
has been in the possession of both Recaredo Espina and plaintiff Simprosa
Vda. de Espina from April 20, 1952 until the present time;

2. To Timoteo Espina, one half (1/2) portion which contains an area of not
less than one-half (1/2) hectare and which forms part of Parcel 3 whose
description is given in paragraph III of the complaint, the said Parcel III was
originally assigned by Marcos Espina who thereupon obtained an Original
Certificate of Title in her (sic) name but was finally adjudicated to said Timoteo
Espina in April, 1952, the other half (1/2) portion of which parcel III was the
share of the surviving spouses (sic), Simprosa Vda. de Espina, and said
Parcel III has been in the possession of said Timoteo Espina and Simprosa
Vda. de Espina from April, 1952 until the present time as their share;

3. To Cecilia (sic) Espina, Gaudiosa Espina and Necifora Espina, one-half

(1/2) portion, share and share alike which contains two (2) hectares and which
forms part of Parcel II whose description is given in paragraph III of the
complaint, the other half (1/2) of said Parcel III (sic) is the share of the
surviving spouses (sic) Simprosa Vda. de Espina, and said Parcel III (sic) has
been in the possession of said Cecilia. (sic) Espina, Gaudiosa Espina and
Necifora Espina and Simprosa Vda. de Espina from April, 1952 until the
present time;
 4. To Sofia Espina, one-half (1/2) portion of the parcel of land included in the
deception of Parcel 1 in paragraph III of the complaint, the other half (1/2) of
said parcel being the share of the surviving spouses (sic) Simprosa Vda. de
Espina and having been ceded by said Simprosa Vda. de Espina to said Sofia
Espina for a valuable consideration payable quarterly at the rate of P50.00
beginning April, 1952 until her death, and said Sofia Espina has been
regularly paying to said Simprosa Vda. de Espina quarterly from April, 1952
the said amount of P50.00 until the present time, and by virtue of said
agreement, Sofia Espina obtained Original Certificate of Title in her name of
said parcel of land which is included in the description of said parcel 1, as her
exclusive property;

5. To Jose Espina, one-half (1/2) portion of the other parcel of land included in
the description of Parcel 1 in paragraph 1 of the complaint, the other half (1/2)
of said parcel being the share of the surviving spouses (sic) Simprosa Vda. de
Espina and having been coded (sic) by said Simprosa Vda. de Espina to said
Jose Espina for a valuable consideration payable quarterly at the rate of
P50.00 beginning April, 1952 until her death, and said Jose Espina has been
regularly quarterly paying to said Simprosa Vda. de Espina from April, 1952
until the present time, the said amount of P50.00, and by virtue of said
agreement, Jose Espina obtained Original Certificate of Title in his name of
said parcel of land which is included in the description of said Parcel 1 as his
exclusive property. (Rollo, pp. 27-28)

On February 13, 1974 private respondents filed a motion to dismiss the complaint
alleging the following grounds, to wit:

THAT THE FACTS ALLEGED IN THE COMPLAINT FAIL TO CONFER

UPON THE COURT COMPLETE AND LAWFUL JURISDICTION OVER THE
CASE FOR NON-COMPLIANCE WITH THE CONDITION SINE QUA NON
CONCERNING SUIT BETWEEN MEMBERS OF THE SAME FAMILY.

xxx xxx xxx

II

THAT THE CAUSE OF ACTION IS BARRED BY . . . . STATUTE OF

LIMITATIONS.

xxx xxx xxx

III

THAT THE PLAINTIFFS HAS NO LEGAL CAPACITY TO SUE, (Motion to

Dismiss Complaint, pp. 1-5; Rollo, pp. 34-38)

xxx xxx xxx

On May 9, 1975 the trial court granted the motion and thereafter dismissed the
complaint. On May 23, 1975 petitioners filed a motion for reconsideration on the
following grounds, to wit:

1. THAT THE ORDER OF DISMISSAL HAS NO LEGAL BASIS IN FACT AND

IN LAW.

2. THAT THE STATUTE OF LIMITATIONS IS NOT APPLICABLE IN THE

CASE AT BAR. (Rollo, p. 50)

However, petitioners' motion was denied in an order dated July 23, 1975. On August
11, 1975 petitioners filed another motion for reconsideration stressing that they were
denied due process when their motion was not heard. Again said motion was denied
on August 13, 1975.

Thereafter, petitioners filed their notice of appeal on September 11, 1975 and a
motion for extension of time to file their Record on Appeal on September 18, 1975.

On March 15, 1976, the respondent judge disapproved petitioners' Record on Appeal
and appeal bond on the ground that the notice of appeal was filed out of time.
Hence, this petition. The petitioners raised four (,41) assignment of errors:

1. Whether or not an action for partition among co-heirs prescribes.

2. Whether or not an oral partition among co-heirs is valid.

3. Whether or not a hearing on a motion for reconsideration is indispensable

the lack of which is a deal of due process.

4. Whether or not the second motion for reconsideration is pro forma Rollo, p.
10)

Petitioners maintain that the present action is not for reconveyance but one for
partition. Hence, the rule insisted by the private respondents on prescriptibility of an
action for reconcile conveyance of real property based on an implied trust is not
applicable in the case at bar. In addition, petitioners, argue that private respondents
cannot set up the defense of prescription or laches because their possession of the
property no matter how long cannot ripen into ownership. (Memorandum for
Petitioners, p. 7)

However, the private respondents stress that 'any supposed right of the petitioners to
demand a new division or partition of said estate of Marcos Espina has long been
barred by the Statute of Limitations and has long prescribed." (Memorandum for
Private Respondents, p. 5)

The petitioners claim that the alleged oral partition is invalid and strictly under the
coverage of the statute of Frauds on two grounds, to wit:

Firstly, parcel No. 1 being an exclusive property of the deceased should have been
divided into eight (8) equal parts. Therefore, Simprosa . could only cede her share of
the land which is 1/8 portion thereof and cannot validly cede the shares of her then
minor children without being duly appointed as guardian.

Secondly, under Article 1358 of the New Civil Code, Simprosa could not have ceded
her right and that of her other children except by a public document. (Memorandum
of Petitioners, pp. 8-9)

On the other hand, private respondents insist that the oral partition is valid and
binding and does not fall under the coverage of the Statute of Frauds.

Petitioners claim that they were denied due process when the motion for
reconsideration was denied without any hearing.

However, private respondents maintain that the hearing of a motion for

reconsideration in oral argument is a matter which rest upon the sound discretion of
the Court.

Finally, petitioners stress that the second motion for reconsideration is not pro forma,
thus, it suspends the running of the period of appeal. Hence, the notice of appeal
was timely filed.

On this point, private respondent maintain that the order of respondent judge dated
March 1 5, 1976 disapproving petitioners' Record on Appeal and appeal bond may
not properly be a subject of a petition for certiorari. (Memorandum of Private
Respondents, p. 13)

We find the petition devoid of merit.

We already ruled in Lebrilla, et al. v. Intermediate Appellate Court (G.R. No. 72623,
December 18, 1989, 180 SCRA 188; 192) that an action for partition is
imprescriptible. However, an action for partition among co-heirs ceases to be such,
and becomes one for title where the defendants allege exclusive ownership.

In the case at bar, the imprescriptibility of the action for partition cannot be invoked
because two of the co-heirs, namely private respondents Sora and Jose Espina
possessed the property as exclusive owners and their possession for a period of
twenty one (21) years is sufficient to acquire it by prescription. Hence, from the
moment these co-heirs claim that they are the absolute and exclusive owners of the
properties and deny the others any share therein, the question involved is no longer
one of partition but of ownership.

Anent the issue of oral partition, We sustain the validity of said partition.1wphi1 "An
agreement of partition may be made orally or in writing. An oral agreement for the
partition of the property owned in common is valid and enforceable upon the parties.
The Statute of Frauds has no operation in this kind of agreements, for partition is not
a conveyance of property but simply a segregation and designation of the part of the
property which belong to the co-owners." (Tolentino, Commentaries and
Jurisprudence on the Civil Code of the Philippines, Vol. II, 1983 Edition, 182-
183 citing Hernandez v. Andal, et. al., G.R. No. L275, March 29, 1957)
Time and again, the Court stresses that the hearing of a motion for reconsideration
in oral argument is a matter which rests upon the sound discretion of the Court. Its
refusal does not constitute a denial of due process in the absence of a showing of
abuse of discretion. (see Philippine Manufacturing Co. v. Ang Bisig ng PMC et. al.,
118 Phil. 431, 434)

The absence of a formal hearing on the petitioners' motion for reconsideration is

thoroughly explained in the order of the respondent judge dated August 13, 1975,
which is hereunder quoted as follows:

When the court issued its order of June 5, 1975 requiring counsel for
defendants to answer plaintiffs' motion for reconsideration, the court opted to
resolve plaintiffs' motion based on the pleadings of the parties, without further
oral arguments. The court considered the arguments of the parties stated in
their pleadings as already sufficient to apprise the court of the issues involved
in said motion.

Plaintiffs' allegation that the Clerk of Court failed to calendar their motion for
reconsideration for oral argument has not deprived the plaintiffs of any
substantial right or his right to due process.

SO ORDERED. (Memorandum of Private Respondents, pp. 1213)

A cursory reading of the aforequoted order will show that there was indeed no formal
hearing on the motion for reconsideration. There is no question however, that the
motion is grounded on the lack of basis in fact and in law of the order of dismissal
and the existence or lack of it is determined by a reference to the facts alleged in the
challenged pleading. The issue raised in the motion was fully discussed therein and
in the opposition thereto. Under such circumstances, oral argument on the motion is
reduced to an unnecessary ceremony and should be overlooked (see Ethel Case, et
al. v. Jugo, 77 Phil. 517, 522).

We adhere to the findings of the trial court that the second motion for reconsideration
dated August 11, 1975 is pro forma, to it

The grounds stated in said motion being in reiteration of the same grounds
alleged in his first motion, the same is pro-forma. (Order dated March 15,
1976, p. 2, Rollo, p. 74)

xxx xxx xxx

Furthermore, the second motion for reconsideration has not stated new
grounds considering that the alleged failure of the Clerk of Court to set
plaintiffs' motion for reconsideration, although seemingly a different ground
than those alleged in their first motion for reconsideration, is only incidental to
the issues raised in their first motion for reconsideration, as it only refers to
the right of plaintiffs' counsel to argue his motion in court just to amplify the
same grounds already deed by the court. (Ibid, p. 3, Rollo, p. 75)
Therefore, it is very evident that the second motion for reconsideration being pro-
forma did not suspend the running of the period of appeal. Thus, the lower court
committed no error when it held that the notice of appeal was filed after the lapse of
thirty five (35) days, which is clearly beyond the period of thirty (30) days allowed by
the rules.

Finally, it has been a basic rule that certiorari is not a substitute for appeal which had
been lost. (see Edra v. Intermediate Appellate Court, G.R. No. 75041, November 13,
1989, 179 SCRA 344) A special civil action under Rule 65 of the Rules of Court will
not be a substitute or cure for failure to file a timely petition for review
on certiorari (appeal) under Rule 45 of the Rules of Court. (Escudero v. Dulay, G.R.
No. 60578, February 23, 1988, 158 SCRA 69, 77)

The application of the abovecited rule should be relaxed where it is shown that it will
result in a manifest failure or miscarriage of justice. (Ibid, p. 77) However, as
emphasized earlier, the case at bar is totally devoid of merit, thus, the strict
application of the said file will not in any way override sub-substantial justice.

Therefore, the delay of five (5) days in filing a notice of appeal and a motion for
extension to file a record on appeal cannot be excused on the basis of equity.

All premises considered, the Court is convinced that the acts of respondent judge, in
dismissing the action for partition and in subsequently denying the motions for
reconsideration of the petitioners, does not amount to grave abuse of discretion.

ACCORDINGLY, the petition is DISMISSED.

SO ORDERED.
G.R. No. 109262. November 21, 1996]

DOMINGO R. CATAPUSAN, MINELIO R. CATAPUSAN, and FILOMENO R.

CATAPUSAN, petitioners, vs. THE COURT OF APPEALS, VICENTE
CATAPUSAN, JR., CIPRIANO CATAPUSAN, GREGORIA CATAPUSAN,
SEGUNDA BAUTISTA CATAPUSAN, NICANOR T. CATAPUSAN,
NARCISA T. CATAPUSAN, GREGORIO T. CATAPUSAN, BENIGNO T.
CATAPUSAN, REYNALDO T. CATAPUSAN, CATALINA T. CATAPUSAN,
GERTRUDES CATAPUSAN and FLORA DIAZ CATAPUSAN, respondents.

RESOLUTION
FRANCISCO, J.:

The parties in this case are the children of the second marriage (petitioners) and
the heirs of the first marriage (respondents) contracted by Bonifacio Catapusan,
claiming ownership of a parcel of land located in Wawa, Tanay, Rizal (hereinafter
referred to as Wawa lot).[1] The facts:
Bonifacio Catapusan was first married to Narcissa Tanjuatco, the only surviving
heir of Dominga Piguing.[2] They had four (4) children namely, Felix, Vicente, Benicio
and Loreto.[3] Narcissa died in 1910. In 1927, Bonifacio married Paula Reyes and out
of their wedlock petitioners Domingo, Minelio and Filomeno Catapusan were born.
Bonifacio died in 1940.[4] Felix, Vicente and Benicio, Bonifacios sons from the first
marriage, died before the institution of this case, survived by their respective widows
and children, respondents herein.
The petitioners filed on June 11, 1974, an action for partition of the Wawa lot,
which they allegedly co-own with their half-brothers and half-sisters.[5] Petitioners
contend that the said lot belongs to their father Bonifacio and should therefore be
partitioned among the heirs of the first and second marriages. [6] In support thereof,
they presented the tax declarations of the Wawa lots four (4) adjacent lot owners.
These four tax declarations state that each of them bounds on one side the Wawa lot
declared in the name of Bonifacio. Stated differently, the petitioners proof of
Bonifacios ownership of the Wawa lot are the tax declarations of the adjoining lot
owners which noted that they each border on one side the Wawa lot declared in the
name of Bonifacio.[7]
In their answer with counterclaim, respondents asserted that the Wawa lot was
originally owned by Dominga and inherited by Narcissa as her paraphernal
property.[8] Upon Narcissas death, the Wawa lot passed to her four children who are
the predecessor-in-interest of respondents. These children possessed and occupied
the Wawa lot[9] and secured tax declarations thereon in their names. Respondents
likewise alleged that they had been in open, continuous and uninterrupted
possession of the said lot for more than 50 years when the suit was filed in
1974.[10] They also invoke laches and prescription against petitioners action. In
response, petitioners argue that their action had not lapsed since respondents
repudiated the co-ownership only in 1968.[11] They also questioned the respondents
lack of documentary proof (like titulo real) with regard to Dominga and Narcissas
title, as the two lived during the Spanish era.[12]
 After trial, the lower court dismissed the complaint, [13] declared the respondents
as the true and lawful owners of the Wawa lot and granted the counterclaim
for P10,000.00 attorneys fees.[14] On appeal, the Court of Appeals (CA) affirmed the
RTC, but set aside the award of attorneys fees.[15] Petitioners motion for
reconsideration was denied.[16] Hence, this appeal raising three issues: (1) whether
an action for partition includes the question of ownership; (2) whether Bonifacio had
title to the Wawa lot, and (3) whether petitioners action is barred by laches and/or
prescription.[17]
In actions for partition, the court cannot properly issue an order to divide the
property, unless it first makes a determination as to the existence of co-ownership.
The court must initially settle the issue of ownership, the first stage in an action for
partition.[18] Needless to state, an action for partition will not lie if the claimant has no
rightful interest over the subject property. In fact, Section 1 of Rule 69 requires the
party filing the action to state in his complaint the nature and extent of his title to the
real estate. Until and unless the issue of ownership is definitely resolved, it would be
premature to effect a partition of the properties.[19] Hence, on the first issue we rule in
the affirmative.
Anent the second and third issues, it is a basic rule of evidence that the party
making an allegation has the burden of proving[20]it by preponderance of
evidence.[21] In this case, petitioners evidence of their fathers (Bonifacio) ownership
of the Wawa lot are the tax declarations of the adjacent lot owners and the
testimonies of some witnesses who merely saw Bonifacio working on the lot. On the
other hand, respondents presented tax declarations which indicated that the same
lot is owned by their predecessors-in-interest, the children of the first marriage,
evidence which carry more weight as they constitute proof of respondents ownership
of the land in their possession. The statement in the neighboring lot owners tax
declarations is not a conclusive proof that Bonifacio owned the surrounded lot. In
fact, petitioners cannot show any tax receipts or declarations of their ownership over
the same lot. Although tax declarations and receipts are not direct proofs of
ownership, yet when accompanied by proof of actual possession for the required
period, they become strong evidence to support the claim of ownership thru
acquisitive prescription. The possession contemplated as foundation for prescriptive
right must be one under claim of title or adverse to or in concept of
owner.[22] Possession by tolerance, as in the case of petitioners, is not the kind of
possession that may lead to title by prescription. It is the respondents open,
continuous, adverse and uninterrupted possession far beyond the .30 year
extraordinary period for acquisitive prescription,[23] coupled with the tax declarations
of their predecessors-in-interest, that constitutes a superior weight of evidence that
clinched their claim. Moreover, petitioners bare and unsubstantiated allegation that
respondents tax declarations were fraudulently issued is insufficient to sustain the
imputation of fraud considering that good faith is always presumed. Besides,
respondents tax declarations are deemed regularly issued. Being an action involving
property, the petitioners must rely on the strength of their own title and not on the
weakness of the respondents claim.[24]
In any event, the second and third issues pertain to factual findings of the courts
below. It is a settled doctrine that factual findings of the lower court when supported
by substantial evidence on the record is not usually reviewed by the Supreme Court,
especially when it is affirmed by the Court of Appeals, as in this case. [25] No cogent
evidence appears from the records of this case for us to apply the above doctrine
differently. No essential facts were overlooked by the courts below, which if
considered, may produce a different outcome. Besides, the credence of the evidence
and the assessment of the weight and evidentiary value of the testimonies presented
are best appreciated by the trial court judge having observed that elusive and
incommunicable evidence of the witness deportment on the stand.[26]
WHEREFORE, finding no reversible error, the instant appeal is DENIED and the
decision of the Court of Appeals is AFFIRMED in toto.
SO ORDERED.
ARTICLE 496

G.R. No. L-29727 December 14, 1988

PEDRO OLIVERAS, TEODORA GASPAR, MELECIO OLIVERAS and ANICETA

MINOR, plaintiffs-appellees,
vs.
CANDIDO LOPEZ, SEVERO LOPEZ, HIPOLITO LOPEZ, EUGENIA LOPEZ,
PRIMITIVO GASPAR, CORAZON LOPEZ, ALEJANDRO CACAYURIN, FAUSTINA
BOTUYAN, MODESTO SALAZAR, ADORACION BOTUYAN, CLAUDIO
GANOTICE and ENONG BOTUYAN, defendants-appellants.

Venancio B. Fernando for defendants-appellants.

FERNAN, C.J.:

This case exemplifies the Filipino custom of keeping inherited property in a

prolonged juridical condition of co-owner ship.

Lorenzo Lopez owned Lot 4685 of the Cadastral survey of Villasis, Pangasinan with
an area of 69,687 square meters as evidenced by Original Certificate of Title No.
15262. 1 In December, 1931, Lorenzo Lopez died, 2 leaving said property to his wife,
Tomasa Ramos and six (6) children. From that time on, the heirs of Lorenzo Lopez
did not initiate any moves to legally partition the property.

More than twenty-one years later, or on February 11, 1953, Tomasa Ramos and her
eldest son, Candido Lopez, executed a deed of absolute sale of the "eastern
undivided four thousand two hundred and fifty seven-square meters (4,257) more or
less, of the undivided portion of (their) interests, rights and participation" over Lot
4685, in favor of the spouses Melecio Oliveras and Aniceta Minor, in consideration of
the amount of one thousand pesos (P1,000). 3

On the same day, Tomasa and Candido executed another deed of absolute sale of
the "undivided" four thousand two hundred and fifty-seven (4,257) square meters of
the "eastern part" of Lot 4685 in favor of the spouses Pedro Oliveras and Teodora
Gaspar, also in consideration of P1,000. 4 Each of the said documents bear the
thumbmark of Tomasa and the signature of Candido.

In his affidavit also executed on February 11, 1953, Candido stated that a month
prior to the execution of the deed of sale in favor of Melecio Oliveras, he offered his:
"undivided portion" of Lot 4685 to his "adjacent owners" but none of them was "in a
position to purchase" said property. 5

Since the execution of the two deeds of absolute sale, the vendees, brothers Melecio
and Pedro, had been paying the real property taxes for their respectively purchased
properties. 6 They also had been in possession of their purchased properties which,
being planted to palay and peanuts, were segregated from the rest of Lot 4685 by
dikes. 7

More than thirteen years later or on November 21, 1966, the counsel of the Oliveras
brothers wrote the heirs of Lorenzo Lopez reminding them of the Oliverases'
demands to partition the property so that they could acquire their respective titles
thereto without resorting to court action, and that, should they fail to respond, he
would be forced to file a case in court. 8 Apparently, the Lopezes did not answer said
letter since on December 15, 1966, the Oliveras brothers and their wives filed a
complaint for partition and damages 9 in the Court of First Instance of Pangasinan. 10

The Oliverases stated in their complaint that possession of the disputed properties
was delivered to them with the knowledge and consent of the defendants; that they
had been paying the real estate taxes thereon; that prior to the sale, said properties
were offered to the other co-owners for sale but they refused to buy them; that on
February 18, 1953, the transactions were duly annotated and entered in the
Memorandum of encumbrances of OCT No. 15262 as adverse claims; and that their
desire to segregate the portions of Lot 4685 sold to them was frustrated by
defendants' adamant refusal to lend them the owner's duplicate of OCT No. 15262
and to execute a deed of partition of the whole lot.

In claiming moral damages in the amount of P2,000.00 plaintiffs alleged that

defendants also refused to allow them to survey and segregate the portions bought
by them. Plaintiffs prayed that the court order the defendants to partition Lot 4685
and to allow them to survey and segregate the portions they had purchased. They
also demanded payment of P800.00 as attorney's fees and cost of the suit.

In their answer, the defendants alleged that no sale ever transpired as the alleged
vendors could not have sold specific portions of the property; that plaintiffs'
possession and occupation of specific portions of the properties being illegal, they
could not ripen into ownership; and that they were not under any obligation to lend
their copy of the certificate of title or to accede to plaintiffs' request for the partition or
settlement of the property. As special and affirmative defenses, the defendants
contended that the deeds of sale were null and void and hence, unenforceable
against them; that the complaint did not state a cause of action and that the cause or
causes of action if any, had prescribed.

Defendants averred in their counterclaim that despite repeated demands, plaintiffs

refused and failed to vacate the premises; that the properties occupied by the
plaintiffs yielded an average net produce in palay and peanuts in the amount of
P1,600.00 annually, and that the complaint was filed to harass them. They prayed for
the dismissal of the complaint and the payment of P1,600.00 per year from 1953
until plaintiffs shall have vacated the premises and P1,000.00 for attorney's fees.

Plaintiffs filed an answer to defendants' counterclaim, denying all the allegations

therein and stating that defendants never demanded that plaintiffs vacate the
portions of Lot 4685 they had bought.

The lower court explored the possibility of an amicable settlement between the
parties without success. Hence, it set the case for trial and thereafter, it rendered a
decision 11 declaring valid the deeds of absolute sale 12 and ordering the defendants
to allow the segregation of the sold portions of Lot 4685 by a licensed surveyor in
order that the plaintiffs could obtain their respective certificates of title over their
portions of said lot.

In resolving the case, the lower court passed upon the issue of whether the two
deeds of absolute sale were what they purported to be or merely mortgage
documents. It considered as indicia of plaintiffs' absolute dominion over the portions
sold to them their actual possession thereof without any opposition from the
defendants until the filing of the complaint, their payment of taxes thereon and their
having benefited from the produce of the land. The court ruled that the defendants'
testimonial evidence that the deeds in question were merely mortgage documents
cannot overcome the evidentiary value of the public instruments presented by the
plaintiffs.

On the issue of whether the two deeds of absolute sale were null and void
considering that the land subject thereof had not yet been partitioned, the court
observed that the total area of 8,514 square meters sold to plaintiffs by Candido was
less than his share should Lot 4685 with an area of 69,687 square meters be divided
among the six children of Lorenzo Lopez and their mother. In this connection, the
lower court also found that during his lifetime, and before Candido got married,
Lorenzo Lopez had divided Lot 4685 among his children who then took possession
of their respective shares. *

The defendants appealed said decision to this Court contending that the lower court
erred in declaring the two deeds of absolute sale as valid, in ordering the
segregation of the sold portions of Lot 4685 to enable the plaintiffs to obtain their
respective certificates of title, and in not considering their defense of prescription.

The extrinsic validity of the two deeds of absolute sale is not in issue in this case in
view of the finding of the trial court that the defendants admittedly do not question
their due execution. 13 What should pre-occupy the Court is the intrinsic validity of
said deeds insofar as they pertain to sales of designated portions of an undivided,
co-owned property.

In a long line of decisions, this Court has held that before the partition of a land or
thing held in common, no individual co-owner can claim title to any definite portion
thereof. All that the co-owner has is an Ideal or abstract quota or proportionate share
in the entire land or thing. 14

However, the duration of the juridical condition of co-ownership is not limitless.

Under Article 494 and 1083 of the Civil Code, co-ownership of an estate should not
exceed the period of twenty (20) years. And, under the former article, any agreement
to keep a thing or property undivided should be for a ten-year period only. Where the
parties stipulate a definite period of in division which exceeds the maximum allowed
by law, said stipulation shall be void only as to the period beyond such maximum. 15

Although the Civil Code is silent as to the effect of the in division of a property for
more than twenty years, it would be contrary to public policy to sanction co-
ownership beyond the period set by the law. Otherwise, the 20-year limitation
expressly mandated by the Civil Code would be rendered meaningless.

In the instant case, the heirs of Lorenzo Lopez maintained the co-ownership for more
than twenty years. We hold that when Candido and his mother (who died before the
filing of the complaint for partition) sold definite portions of Lot 4685, they validly
exercised dominion over them because, by operation of law, the co-ownership had
ceased. The filing of the complaint for partition by the Oliverases who, as vendees,
are legally considered as subrogated to the rights of Candido over portions of Lot
4685 in their possession, 16 merely served to put a stamp of formality on Candido's
otherwise accomplished act of terminating the co-ownership.

The action for partition has not prescribed. Although the complaint was filed thirteen
years from the execution of the deeds of sale and hence, as contended by the
defendants-appellants, prescription might have barred its filing under the general
provision of Article 1144 (a) of the Civil Code, Article 494 specifically mandates that
each
co-owner may demand at any time the partition of the thing owned in common
insofar as his share is concerned. Hence, considering the validity of the
conveyances of portions of Lot 4685 in their favor and as subrogees of Candido
Lopez, the Oliverases' action for partition was timely and properly filed. 17

We cannot write finis to this decision without commenting on the compliance with the
resolution of September 1, 1986 of counsel for defendants-appellants. In said
resolution, the court required the parties to move in the premises "considering the
length of time that this case has remained pending in this Court and to determine
whether or not there might be supervening events which may render the case moot
and academic. 18 In his manifestation and motion dated August 12, 1987, said
counsel informed the Court that he had contacted the defendants-appellants whom
he advised "to move in the premises which is the land in question and to maintain
the status quo with respect to their actual possession thereon" and that he had left a
copy of said resolution with the defendants-appellants" for their guidance in the
compliance of their obligations (sic) as specified in said
resolution." 19

Obviously, said counsel interpreted literally the Court's directive "to move in the
premises." For the enlightenment of said counsel and all others of similar perception,
a "move in the premises" resolution is not a license to occupy or enter the premises
subject of litigation especially in cases involving real property. A "move in the
premises" resolution simply means what is stated therein: the parties are obliged to
inform the Court of developments pertinent to the case which may be of help to the
Court in its immediate disposition.

WHEREFORE, the decision of the lower court insofar as it declares the validity of the
two deeds of sale and directs the partition of Lot 4685, is AFFIRMED. The lower
court is hereby ordered to facilitate with dispatch the preparation of a project of
partition which it should thereafter approve. This decision is immediately executory.
No costs.

SO ORDERED.
G.R. No. L-38736 May 21, 1984

FELIPE G. TAC-AN, petitioner,

vs.
HONORABLE COURT OF APPEALS and ELEUTERIO ACOPIADO, MAXIMINO
ACOPIADO, the SPOUSES JESUS PAGHASIAN and PILAR
LIBETARIO, respondents.

Liliano B. Neri for petitioner.

Vic T. Lacaya for private respondents.

ABAD SANTOS, J.:

The petitioner, Felipe G. Tac-An, is a lawyer whose services were engaged by the
brothers Eleuterio Acopiado and Maximino Acopiado who were accused of frustrated
murder and theft of large cattle before the Municipal Court of New Pian,
Zamboanga del Norte in March, 1960.

On April 4, 1960, Tac-An caused a document entitled, "Deed of Quitclaim" to be

thumb-marked by the Acopiado brothers whereby for the sum of P1,200.00
representing his fees as their lawyer in the criminal cases, they conveyed to him a
parcel of land with an area of three hectares. The document was acknowledged
before Notary Public Pacifico Cimafranca on the same date who explained its
contents to the Acopiados.

On April 6, 1960, or two days after the execution of the deed, the Acopiados told
Tac-An that they were terminating his services because their wives and parents did
not agree that the land be given to pay for his services. They also said that they had
hired another lawyer, a relative, to defend them. But Tac-An continued to represent
them.

In the case for frustrated murder, the Acopiados were acquitted. The cases for theft
of large cattle were dismissed due to the desistance of the complainants.

On April 2, 1961, Eleuterio sold his share of the land previously conveyed to Tac-An
to Jesus Paghasian and Pilar Libetario but the latter did not take possession thereof.

In June, 1964, Tac-An appointed Irineo Villejo, a barrio captain, as his overseer in
the land. On July 2, 1964, Tac-An also secured the approval of the Provincial
Governor of Zamboanga del Norte to the Deed of Quitclaim. And on October 7,
1964, Tac-An filed a complaint against the Acopiado brothers, Paghasian and
Libetario in the CFI of Zamboanga del Norte. He prayed that he be declared the
owner of the land; that the sale made in favor of Paghasian and owner Libetario be
annulled; and that he be paid damages, attorney's fees, etc.
The Court of First Instance decided in favor of Tac-An whereupon the Acopiados, et
al. appealed to the Court of Appeals.

The Court of Appeals voided the transfer of the land to Tac-An but held that for his
services in the criminal cases he was entitled to the agreed upon amount of
P1,200.00. The judgment of the Court of Appeals reads as follows:

WHEREFORE, the judgment appealed from is hereby reversed and set

aside. In lieu thereof, another one is rendered ordering the defendants
Acopiados to pay the plaintiff the sum of P1,200.00 with interest at a
legal rate from the date of the finality of this judgment until full payment
thereof. No pronouncement as to costs. (Rollo, pp. 40-41.)

Petitioner Tac-An prays that the decision of the Court of Appeals be set aside and
that the decision of the Court of First Instance be upheld instead.

The petition is not impressed with merit.

The Court of Appeals found as a fact that the Acopiado brothers fully understood the
tenor of the Deed of Quitclaim which they executed. But the Court of Appeals also
found as a fact that the Acopiado brothers are Non-Christians, more specifically
Subanons, and that each is married to a Subanon. And because they are Non-
Christians, the Court of Appeals applied Section 145 of the Administrative Code of
Mindanao and Sulu which reads as follows:

Sec. 145. Contracts with Non-Christians requisites. -- Save and except

contracts of sale or barter of personal property and contracts of
personal service comprehended in chapter seventeen hereof no
contract or agreement shall be made in the Department by any person
with any Moro or other non-Christian tribe or portion thereof the
Department or with any individual Moro or other non-Christian
inhabitants of the same for the payment or delivery of money or other
things of value in present or in prospective, or in the manner affecting
or relating to any real property, unless such contract or agreement be
executed and approved as follows:

xxx xxx xxx

(b) It shall be executed before a judge of a court of record, justice or

auxilliary justice of the peace, or notary public, and shall bear the
approval of the provincial governor wherein the same was executed or
his representative duly authorized in writing for such purpose, indorsed
upon it.

It should be stated that under Section 146 of the same Code, contracts or
agreements made in violation of Sec. 145 shall be "null and void."

It should be recalled that on July 2, 1964, Tac-An secured the approval of the
Provincial Governor of Zamboanga del Norte to the Deed of Quitclaim and that
should have satisfied the requirement of Sec. 145 of the Administrative Code for
Mindanao and Sulu. But it appears that on April 12, 1965, while Tac-An's suit was
pending in the trial court, the Governor of Zamboanga del Norte revoked his
approval for the reasons stated therein.

The petitioner now asserts that the revocation of the approval which had been given
by the Provincial Governor has no legal effect and cannot affect his right to the land
which had already vested. But as Justice Conrado M. Vasquez, with Justices Mateo
Canonoy and Ameurfina M. Herrera concurring, said:

The approval by Provincial Governor Felipe Azcuna appearing on the

face of the Deed of Quitclaim (Exh. "E ") made on July 2, 1964 may no
longer be relied upon by the plaintiff in view of the revocation thereof by
the same official on April 12, 1965 (Exh. 4). The revocation was based
on the ground that the signature of Governor Azcuna was obtained thru
a false representation to the effect that the alleged transaction was
legal and voluntary when in truth and in fact, as found out later, the
said parcel of land was the subject matter of a court litigation; and,
moreover, the non-Christian vendors were not brought before him for
interrogation, confirmation or ratification of the alleged deed of
quitclaim. The fact that the revocation was made after the filing of
instant action on October 10, 1964 does not vitiate the aforesaid action
of the Provincial Governor. Significantly, no attempt was made to
disprove the truth of the reasons stated in the certificate of revocation
(Exh. 4). (Rollo, p. 37.)

The petitioner also argues that the Administrative Code of Mindanao and Sulu was
repealed on June 19, 1965 by Republic Act No, 4252, hence the approval of the
Provincial Governor became unnecessary. Suffice it to say that at times material to
the case, i.e. when the Deed of Quitclaim was executed, when the approval by the
Provincial Governor was given and when the approval was revoked, Sections 145
and 146 of the Administrative Code of Mindanao and Sulu were in full force and
effect and since they were substantive in nature the repealing statute cannot be
given retroactive effect. It should also be stated that the land in question must be
presumed to be conjugal in nature and since the spouses of the Acopiado brothers
did not consent to its transfer to the petitioner, the transaction was at least voidable.

WHEREFORE finding the petition to be lacking in merit, the same is hereby

dismissed with costs against the petitioner.

SO ORDERED.
G.R. No. 72694 December 1, 1987

AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO TAINO, SOLEDAD

TAINO, JOVENCIO TAINO, SAMSON TAINO, NOE TAINO, SOCORRO TAINO
and CLEOFAS TAINO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (Second Civil Cases Division),
ALEJANDRA PANSACOLA, LEONILA ENCALLADO, VEDASTO ENCALLADO,
JOSE YEPES, et al., respondents.

PARAS, J.:

This is a petition for review on certiorari by way of appeal from: (a) the decision of
respondent Court of Appeals (Intermediate Appellate Court) * promulgated on May
17, 1985 in AC-G.R. CV No. 70460, entitled "Alejandra Pansacola, et al. vs. Domen
Villabona del Banco, et al." which reversed and set aside the judgment ** of the trial
court; and (b) its resolution ** of October 15, 1985 in the same case, denying
petitioners' motion for reconsideration of the aforementioned decision and their
supplement to motion for reconsideration.

The dispositive portion of the questioned decision (Rollo, p. 97) reads, as follows:

ACCORDINGLY, the decision appealed from is hereby SET ASIDE

insofar as it dismisses the complaint, and another one entered

(1) Declaring plaintiffs-appellants and defendants-appellees, in their

respective capacities as described in par. V of the complaint, as co-
owners of the property in dispute, but subject to the four-part pro-
indiviso division already made by said property;

(2) Ordering the cancellation of all certificates of title that may have
been issued to any of the parties hereto; and

(3) Ordering the complete and final partition of the subject property in
conformity with law.

For this purpose, this case is hereby remanded to the Court of origin so
that a final partition shall be made in accordance with Sections 2, 3, et.
seq., Rule 69 of the Rules of Court.

Let a copy of this decision be furnished to the Register of Deeds for the
Province of Quezon.

The facts of the case are taken from the decision of the Appellate Court (Rollo, p. 39)
as follows:

In a document executed in the Municipality of San Rafael, Bulacan, on February 11,

1859, three brothers, Benedicto Pansacola, Jose Pansacola and Manuel Pansacola
(known as Fr. Manuel Pena) entered into an agreement which provided, among
others:

(1) That they will purchase from the Spanish Government the lands comprising the
Island of Cagbalite which is located within the boundaries of the Municipality of
Mauban, Province of Tayabas (now Quezon) and has an approximate area of 1,600
hectares;

(2) That the lands shall be considered after the purchase as their common property;

(3) That the co-ownership includes Domingo Arce and Baldomera Angulo, minors at
that time represented by their father, Manuel Pansacola (Fr. Manuel Pena) who will
contribute for them in the proposed purchase of the Cagbalite Island;

(4) That whatever benefits may be derived from the Island shall be shared equally by
the co-owners in the following proportion: Benedicto Pansacola-1/4 share; Jose
Pansacola-1/4 share; and, Domingo Arce and Baldomera Angulo-2/4 shares which
shall be placed under the care of their father, Manuel Pansacola (Fr. Manuel Pena).

On August 14, 1866, co-owners entered into the actual possession and enjoyment of
the Island purchased by them from the Spanish Government. On April 11, 1868 they
agreed to modify the terms and conditions of the agreement entered into by them on
February 11, 1859. The new agreement provided for a new sharing and distribution
of the lands, comprising the Island of Cagbalite and whatever benefits may be
derived therefrom, as follows:

(a) The first one-fourth (1/4) portion shall belong to Don Benedicto
Pansacola;

(b) The second one-fourth (1/4) portion shall belong to Don Jose
Pansacola;

(c) The third one-fourth(1/4) portion shall henceforth belong to the

children of their deceased brother, Don Eustaquio Pansacola,
namely: Don Mariano Pansacola,- Maria Pansacola and Don Hipolito
Pansacola;

(d) The fourth and last one-fourth (1/4) portion shall belong to their
nephews and nieces (1) Domingo Arce, (2) Baldomera Angulo,
(3) Marcelina Flores, (4) Francisca Flores, (5) Candelaria dela Cruz,
and (6) Gervasio Pansacola who, being all minors, are still under the
care of their brother, Manuel Pansacola (Fr. Manuel Pena). The latter
is the real father of said minors.

About one hundred years later, on November 18, 1968, private respondents brought
a special action for partition in the Court of First Instance of Quezon, under the
provisions of Rule 69 of the Rules of Court, including as parties the heirs and
successors-in-interest of the co-owners of the Cagbalite Island in the second
contract of co-ownership dated April 11, 1968. In their answer some of the
defendants, petitioners herein, interposed such defenses as prescription, res
judicata, exclusive ownership, estoppel and laches.

After trial on the merits, the trial court rendered a decision *** dated November 6,
1981 dismissing the complaint, the dispositive portion of which reads as follows:

WHEREFORE, and in the fight of all the foregoing this Court finds and
so holds that the Cagbalite Island has already been partitioned into four
(4) parts among the original co-owners or their successors-in-interest.

Judgment is therefore rendered for the defendants against the plaintiffs

dismissing the complaint in the above entitled case.

Considering that the cross claims filed in the above entitled civil case
are not compulsory cross claims and in order that they may be litigated
individually the same are hereby dismissed without prejudice.

IT IS SO ORDERED.

The motion for reconsideration filed by the plaintiffs, private respondents herein, was
denied by the trial court in an order dated February 25, 1982 (Record on Appeal, p.
241).

On appeal, respondent Court reversed and set aside the decision of the lower court
(Rollo, p. 117). It also denied the motion for reconsideration and the supplement to
motion for reconsideration filed by private respondents, in its resolution dated
October 15, 1983 (Rollo, p. 86).

Instant petition was filed with the Court on December 5, 1985 (Rollo, p. 12).
Petitioners Josefina Pansacola, et al. having filed a separate petition (G.R. No.
72620) on the same subject matter and issues raised in the instant 'petition, the
counsel for private respondents filed a consolidated comment on the separate
petitions for review on February 24, 1986 with the First Division of the Court (Rollo,
p. 119). It appears that counsel for petitioners also filed a consolidated reply to the
consolidated comment of private respondents as required by the Second Division of
the Court (Rollo, p. 151). However, petitioners filed a separate reply in the instant
case on February 18,1987 (Rollo, p. 168)as required by the Court in a Resolution of
the Second Division dated November 24, 1986 (Rollo, p. 160).

On May 19, 1987, private respondents in the instant petition filed a manifestation
praying for the denial of the instant petition in the same manner that G.R. No. 72620
was denied by the Court in its Resolution dated July 23, 1986 (Rollo, p. 151). Their
rejoinder to the reply of petitioners was filed on May 25,1987 (Rollo, p. 179).

On June 8, 1987, the Court resolved to give due course to the petition (Rollo, p.
192). The memorandum of private respondents was mailed on July 18, 1987 and
received in the Court on July 29, 1987 (Rollo, p. 112); the memorandum for
petitioners was mailed on August 18, 1987 and received in the Court on September
7, 1987 (Rollo, p. 177).
The sole issue to be resolved by the Court is the question of whether or not
Cagbalite Island is still undivided property owned in common by the heirs and
successors-in-interest of the brothers, Benedicto, Jose and Manuel Pansacola.

The Pansacola brothers purchased the Island in 1859 as common property and
agreed on how they would share in the benefits to be derived from the Island. On
April 11, 1868, they modified the terms and conditions of the agreement so as to
include in the co-ownership of the island the children of their deceased brothers
Eustaquio and the other children of Manuel Pansacola (Fr. Manuel Pena) who were
committed in the agreement of February 11, 1859. The new agreement provided for
a new sharing proportion and distribution of the Island among the co-owners.

On January 20, 1907, the representative of the heirs of all the original owners of
Cagbalite Island entered into an agreement to partition the Island, supplemented by
another agreement dated April 18, 1908. The contract dated January 20, 1907
provides as follows:

Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga

quinatawan ng mga ibang co-herederos na hindi caharap, sa pulong na
ito, sa nasa naming lahat na magcaroon na ng catahimikan ang aming-
aming cabahagui sa Pulong Kagbalete sumacatuid upang mapagtoos
ang hangahan ng apat na sapul na pagcacabahagui nitong manang ito,
pagcacausap na naming lahat at maihanay at mapagtalonan ang
saysay ng isa't isa, ay cusa naming pinagcasunduan at pinasiya ang
nangasosonod:

Una: Ang malaquing calupaan, alis ang lahat na pacatan ay

babahaguin alinsunod sa pagcabaki na guinawa sa croquis na niyari
ng practico agrimensor Don Jose Garcia.

Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng Pait ay

pagaapatin ding sinlaqui ayon sa dating pagkakabaki.

Icatlo: Cung magawa na ang tunay na piano at icapit na sa lupa,

paglalagay ng nadarapat na mojon, ang masacupan ng guhit,
sumacatuid ang caingin at pananim ng isa na nasacupan ng pucto na
noocol sa iba, ay mapapasulit sa dapat mag-ari, na pagbabayaran nito
ang nagtanim sa halagang:- bawat caponong niog na nabunga, P 1.00
'un peso); cung ang bias ay abot sa isang vara, P 0.50; cung bagong
tanim o locloc P 0. 50 ang capono.

Icapat: Ang lahat na pacatan ay bacod na pagaapatin at bawat bahagui

ay noocol sa isat-isa sa apat na sanga ng paganacang nagmana.

Icalima: Upang ang naipatanim ng bawat isa ay matama sa canya ng

mailagan ang hirap ng loob ng nagatikha; ay pagtotolong-tolongan ng
lahat naiba na mahusay ang dalawang partes na magcalapit na mapa
ayong tumama, hangang may pagluluaran, sa nagsikap at maoyanam,
maidaco sa lugar na walang cailangang pagusapan.
 Icanim: Ang casulatang ito, cung mapermahan na na magcacaharap
sampong ng mga ibang co-herederos na notipicahan nitong lahat na
pinagcasundoan ay mahahabilin sa camay ng agrimensor, Amadeo
Pansacola, upang canyang mapanusugan ang maipaganap ang dito'y
naootos.

Na sa catunayan at catibayan ng lahat na nalalagda dito, sa pag

galang at pag ganap dito sa paingacaisahan ay pumirma sampo ng
mga sacsing caharap at catanto ngayong fecha ayon sa itaas.

The contract dated April 18, 1908 provides as follows:

Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng lahat na

firmantes nito ay pinagcaisahan itong nangasosonod:

Una Pinagtitibay ang mga pinagcasundoan sa itaas noong 20 ng

Enero ng 1907, liban na lamang sa mga pangcat na una at icapat at
tongcol doon pinasiya naming bahaguinin ng halohalo at paparejo ang
calupaan at pacatan.

Ycalawa Sa pagsucat ng agrimensor na si Amadeo at paggawa ng

piano at descripcion ay pagbabayaran siya ng sa bawat isa naoocol sa
halagang isang piso sa bawat hectares.

Icatlo Ang counting pucto sa 'Mayanibulong' na may caingin ni G.

Isidro Altamarino, asawa ni Restitute ay tutumbasan naman cay G.
Norberto Pansacola sa lugar ng Dapo calapit ng Pinangalo ng gasing
sucat.

Icapat Sa inilahad na piano ay pinasiya nang itoloy at upang maca

pagparehistro ang isa't isa ay pinagcaisahang magcacagastos na
parepareho para sa tablang pangmohon at ibat iba pang cagastusan.

Sa catunayan at catibayan ay cami, pumirma. (Record on Appeal, p.

224)

There is nothing in all four agreements that suggests that actual or physical partition
of the Island had really been made by either the original owners or their heirs or
successors-in-interest. The agreement entered into in 1859 simply provides for the
sharing of whatever benefits can be derived from the island. The agreement, in fact,
states that the Island to be purchased shall be considered as their common property.
In the second agreement entered in 1868 the co-owners agreed not only on the
sharing proportion of the benefits derived from the Island but also on the distribution
of the Island each of the brothers was allocated a 1/4 portion of the Island with the
children of the deceased brother, Eustaquio Pansacola allocated a 1/4 portion and
the children of Manuel Pansacola (Fr. Manuel Pena) also allocated a 1/4 portion of
the Island. With the distribution agreed upon each of the co-owner is a co-owner of
the whole, and in this sense, over the whole he exercises the right of dominion, but
he is at the same time the sole owner of a portion, in the instant case, a 1/4 portion
(for each group of co-owners) of the Island which is truly abstract, because until
physical division is effected such portion is merely an Ideal share, not concretely
determined (3 Manresa, Codigo Civil, 3rd Ed., page 486, cited in Lopez vs.
Cuaycong, 74 Phil. 601; De la Cruz vs. Cruz, 32 SCRA 307 [1970]; Felices vs.
Colegado, 35 SCRA 173 [1970],; Dultra vs. CFl 70 SCRA 465 [1976]; Gatchalian vs.
Arlegui, 75 SCRA 234 [1977].)

In the agreement of January 20, 1907, the heirs that were represented agreed on
how the Island was to be partitioned. The agreement of April 18, 1908 which
supplements that of January 20, 1907 reveals that as of the signing of the 1908
agreement no actual partition of the Island had as yet been done. The second and
fourth paragraphs of the agreement speaks of a survey yet to be conducted by a
certain Amadeo and a plan and description yet to be made. Virgilio Pansacola, a son
of the surveyor named Amadeo who is referred to in the contract dated April 18,
1908 as the surveyor to whom the task of surveying Cagbalite Island pursuant to
said agreement was entrusted, however, testified that said contracts were never
implemented because nobody defrayed the expenses for surveying the same
(Record on Appeal, p. 225).

Petitioners invoke res judicata to bar this action for partition in view of the decision of
the Court in G.R. No. 21033, "Domingo Arce vs. Maria Villabona, et
al.," 21034, "Domingo Arce vs. Francisco Pansacola, et al.," and 21035, "Domingo
Arce vs. Emiliano Pansacola, et al." promulgated on February 20, 1958 (Rollo, p.
141) and Brief for Defendants-Appellees, p. 87 Appendix 1), wherein the Court said:

Considering the facts that he waited for a period of nearly 23 years

after the return from his deportation before taking any positive action to
recover his pretended right in the property in question, gives great
credit, in our opinion, to the declaration of the witnesses for the
defense (a) that the original parcel of land was partitioned as they
claim, and (b) that the plaintiff had disposed of all the right and interest
which he had in the portion which had been given to him.

The issue in the aforementioned case which were tried together is not whether there
has already been a partition of the Cagbalite Island. The actions were brought by the
plaintiff to recover possession of three distinct parcels of land, together with
damages. In fact the word partition was used in the metaphysical or Ideal sense (not
in its physical sense).

Commenting on the above ruling of the Court in connection with the instant case, the
respondent Court said:

Concededly, the Supreme Court decision in G.R. Nos. 21033-35 (Exh.

X) did use or employ the word "partition." A careful reading of the said
decision will, however, reveal, and we so hold, that the employment or
use of the word "partition" therein was made not in its technical and
legal meaning or sense adverted to above, but, rather in its Ideal,
abstract and spiritual sense, this is (at) once evident from the bare
statement in said decision to the effect that the property was divided
into four parts, without any reference to the specific parts of the
property that may have been adjudicated to each owner. There being
 no such reference in the decision and in the judgment affirmed therein
to the adjudication of specific and definite portions of the property to
each co-owner, there is a clear and logical inference that there was
indeed no adjudication of specific and definite portions of the property
made to each co-owner.

It must be admitted that the word "partition" is not infrequently used both in popular
and technical parlance (Fule vs. Fule, 52 Phil. 750 [1929]). For purposes of the
aforementioned case, evidently the Court used the word "partition" to refer to the
distribution of the Cagbalite Island agreed upon by the original owners and in the
later agreements, by the heirs and their subsequent successors-in-interest. There
need not be a physical partition; a distribution of the Island even in a state of indiviso
or was sufficient in order that a co-owner may validly sell his portion of the co-owned
property. The sale of part of a particular lot thus co-owned by one co-owner was
within his right pro-indiviso is valid in its entirety (Pamplona vs. Moreto, 96 SCRA
775 [1980]) but he may not convey a physical portion with boundaries of the land
owned in common (Mercado vs. Liwanag, 5 SCRA 472 [1962]). Definitely, there was
no physical partition of the Island in 1859. Neither could there have been one in 1894
because the manner of subdividing the Island was only provided for in the later
agreements entered into by the heirs in 1907 and 1908. There was a distribution of
the Island in 1868 as agreed upon by the original co-owners in their agreement of
April 11, 1868. Any agreement entered into by the parties in 1894 could be no more
than another agreement as to the distribution of the Island among the heirs of the
original co-owners and the preparation of a tentative plan by a practical surveyor, a
Mr. Jose Garcia, mentioned in the first paragraph of the 1907 agreement,
preparatory to the preparation of the real plan to be prepared by the surveyor
Amadeo, mentioned in the agreement of April 18, 1908.

What is important in the Court's ruling in the three aforementioned cases is that, the
fact that there was a distribution of the Island among the co-owners made the sale of
Domingo Arce of the portion allocated to him though pro-indiviso, valid. He thus
disposed of all his rights and interests in the portion given to him.

It is not disputed that some of the private respondents and some of the petitioners at
the time the action for partition was filed in the trial court have been in actual
possession and enjoyment of several portions of the property in question (Rollo, p.
148). This does not provide any proof that the Island in question has already been
actually partitioned and co-ownership terminated. A co-owner cannot, without the
conformity of the other co-owners or a judicial decree of partition issued pursuant to
the provision of Rule 69 of the Rules of Court (Rule 71 of the Old Rules), adjudicate
to himself in fee simple a determinate portion of the lot owned in common, as his
share therein, to the exclusion of other co-owners (Santos, Jr. vs. Buenconsejo, 14
SCRA 407 [1965]; Carvajal vs. Court of Appeals, 112 SCRA 237 [1982]). It is a basic
principle in the law of co-ownership both under the present Civil Code as in the Code
of 1889 that no individual co- owner can claim any definite portion thereof
(Diversified Credit Corporation vs. Rosada 26 SCRA 470 [1968]). lt is therefore of no
moment that some of the co-owners have succeeded in securing cadastral titles in
their names to some portions of the Island occupied by them (Rollo, p. 10).
It is not enough that the co-owners agree to subdivide the property. They must have
a subdivision plan drawn in accordance with which they take actual and exclusive
possession of their respective portions in the plan and titles issued to each of them
accordingly (Caro vs. Court of Appeals, 113 SCRA 10 [1982]). The mechanics of
actual partition should follow the procedure laid down in Rule 69 of the Rules of
Court. Maganon vs. Montejo, 146 SCRA 282 [1986]).

Neither can such actual possession and enjoyment of some portions of the Island by
some of the petitioners herein be considered a repudiation of the co-ownership. It is
undisputed that the Cagbalite Island was purchased by the original co-owners as a
common property and it has not been proven that the Island had been partitioned
among them or among their heirs. While there is co-ownership, a co-owner's
possession of his share is co-possession which is linked to the possession of the
other co-owners (Gatchalian vs. Arlegui, 75 SCRA 234 [1977]).

Furthermore, no prescription shall run in favor of a co-owner against his co-owners

or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Valdez
vs. Olonga, 51 SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Co-owners
cannot acquire by prescription the share of the other co-owners, absent a clear
repudiation of the co-ownership clearly communicated to the other co-owners
(Mariano vs. De Vega, 148 SCRA 342 [1987]).

An action for partition does not prescribe. Article 403 of the Old Civil Code, now
Article 497, provides that the assignees of the co-owners may take part in the
partition of the common property, and Article 400 of the Old Code, now Article 494
provides that each co-owner may demand at any time the partition of the common
property, a provision which implies that the action to demand partition is
imprescriptible or cannot be barred by laches (Budlong vs. Pondoc, 79 SCRA 24
[1977]). An action for partition does not lie except when the co-ownership is properly
repudiated by the co- owner (Jardin vs. Hollasco, 117 SCRA 532 [1982]).

On July 23, 1986, the Court through its Second Division denied the petition for the
review of G.R. No. 72620, the petition for review on certiorari separately filed by
Josefina Pansacola (Rollo, p. 151). CONSIDERED, the instant petition is likewise
DENIED for lack of merit. SO ORDERED.

ARTICLE 536

G.R. No. 76217 September 14, 1989

GERMAN MANAGEMENT & SERVICES, INC., petitioner,

vs.
HON. COURT OF APPEALS and ERNESTO VILLEZA, respondents.

G.R. No. L-76216 September 14, 1989

GERMAN MANAGEMENT & SERVICES, INC., petitioner,

vs.
HON. COURT OF APPEALS and ORLANDO GERNALE, respondents.
Alam, Verano & Associates for petitioner.

Francisco D. Lozano for private respondents.

FERNAN, C.J.:

Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of

Pennsylvania, Philadelphia, USA are the owners of a parcel of land situated in Sitio
Inarawan, San Isidro, Antipolo, Rizal, with an area of 232,942 square meters and
covered by TCT No. 50023 of the Register of Deeds of the province of Rizal issued
on September 11, 1980 which canceled TCT No. 56762/ T-560. The land was
originally registered on August 5, 1948 in the Office of the Register of Deeds of Rizal
as OCT No. 19, pursuant to a Homestead Patent granted by the President of the
Philippines on July 27, 1948, under Act No. 141.

On February 26, 1982, the spouses Jose executed a special power of attorney
authorizing petitioner German Management Services to develop their property
covered by TCT No. 50023 into a residential subdivision. Consequently, petitioner on
February 9,1983 obtained Development Permit No. 00424 from the Human
Settlements Regulatory Commission for said development. Finding that part of the
property was occupied by private respondents and twenty other persons, petitioner
advised the occupants to vacate the premises but the latter refused. Nevertheless,
petitioner proceeded with the development of the subject property which included the
portions occupied and cultivated by private respondents.

Private respondents filed an action for forcible entry against petitioner before the
Municipal Trial Court of Antipolo, Rizal, alleging that they are mountainside farmers
of Sitio Inarawan, San Isidro, Antipolo, Rizal and members of the Concerned
Citizens of Farmer's Association; that they have occupied and tilled their
farmholdings some twelve to fifteen years prior to the promulgation of P.D. No. 27;
that during the first week of August 1983, petitioner, under a permit from the Office of
the Provincial Governor of Rizal, was allowed to improve the Barangay Road at Sitio
Inarawan, San Isidro, Antipolo, Rizal at its expense, subject to the condition that it
shag secure the needed right of way from the owners of the lot to be affected; that
on August 15, 1983 and thereafter, petitioner deprived private respondents of their
property without due process of law by: (1) forcibly removing and destroying the
barbed wire fence enclosing their farmholdings without notice; (2) bulldozing the rice,
corn fruit bearing trees and other crops of private respondents by means of force,
violence and intimidation, in violation of P.D. 1038 and (3) trespassing, coercing and
threatening to harass, remove and eject private respondents from their respective
farmholdings in violation of P.D. Nos. 316, 583, 815, and 1028. 1

On January 7,1985, the Municipal Trial Court dismissed private respondents'

complaint for forcible entry. 2 On appeal, the Regional Trial Court of Antipolo, Rizal,
Branch LXXI sustained the dismissal by the Municipal Trial Court. 3
Private respondents then filed a petition for review with the Court of Appeals. On July
24,1986, said court gave due course to their petition and reversed the decisions of
the Municipal Trial Court and the Regional Trial Court. 4

The Appellate Court held that since private respondents were in actual possession of
the property at the time they were forcibly ejected by petitioner, private respondents
have a right to commence an action for forcible entry regardless of the legality or
illegality of possession. 5 Petitioner moved to reconsider but the same was denied by
the Appellate Court in its resolution dated September 26, 1986. 6

Hence, this recourse.

The issue in this case is whether or not the Court of Appeals denied due process to
petitioner when it reversed the decision of the court a quo without giving petitioner
the opportunity to file its answer and whether or not private respondents are entitled
to file a forcible entry case against petitioner. 7

We affirm. The Court of Appeals need not require petitioner to file an answer for due
process to exist. The comment filed by petitioner on February 26, 1986 has
sufficiently addressed the issues presented in the petition for review filed by private
respondents before the Court of Appeals. Having heard both parties, the Appellate
Court need not await or require any other additional pleading. Moreover, the fact that
petitioner was heard by the Court of Appeals on its motion for reconsideration
negates any violation of due process.

Notwithstanding petitioner's claim that it was duly authorized by the owners to

develop the subject property, private respondents, as actual possessors, can
commence a forcible entry case against petitioner because ownership is not in issue.
Forcible entry is merely a quieting process and never determines the actual title to
an estate. Title is not involved. 8

In the case at bar, it is undisputed that at the time petitioner entered the property,
private respondents were already in possession thereof . There is no evidence that
the spouses Jose were ever in possession of the subject property. On the contrary,
private respondents' peaceable possession was manifested by the fact that they
even planted rice, corn and fruit bearing trees twelve to fifteen years prior to
petitioner's act of destroying their crops.

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

WHEREFORE, the Court resolved to DENY the instant petition. The decision of the
Court of Appeals dated July 24,1986 is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
G.R. No. L-9989 March 13, 1918

EDUARDO CUAYCONG, ET AL., plaintiffs-appellees,

vs.
RAMONA BENEDICTO, ET AL., defendants-appellants.

Ruperto Montinola and Aurelio Montinola for appellants.

No appearance for appellees.

FISHER, J.:

The issues in this case relate to the right of plaintiffs to make use of two roads
existing on the Hacienda Toreno, a tract of land in the municipality of Victorias,
Negros Occidental, the property of the defendants, Blasa Benedicto and Ramona
Benedicto. One of these roads is referred to in the proceedings as the Nanca-
Victorias road and the other as the Dacuman Toreno road. The Court of First
Instance held that those of the plaintiffs who claimed to be entitled to make use of
the Dacuman Toreno road had failed to establish the asserted right, and
dismissed the action as to them. From this decision they appealed to this court but,
their brief not having been filed within the time prescribed by the rules, their appeal
was dismissed, on motion of defendants, by resolution dated February 14, 1916.
Consequently, the issues presented on this appeal are limited to those which relate
to the rights of the parties with respect to the Nanca-Victorias road, and the
determination of the correctness of the decision of the court concerning that part of
the controversy submitted to its decision.

The allegations in the complaint with respect to the Nanca-Victorias road are that the
appellees, Eduardo Cuaycong, Lino Cuaycong, and Eulalio Dolor, are the owners of
a group of haciendas situated between the southern boundary of the Hacienda
Toreno and the barrio of Nanca, of the municipality of Seravia, and that the
appellees Silverio Ginoo, Gervasio Ascalon, and Juan Ledesma, are the lessees of
part of said haciendas; that more than twenty years the appellees and their
predecessors in interest have made use of the Nanca-Victorias road, which crosses
the Hacienda Toreno, openly, publicly, and continiously, with the knowledge of the
owners of the said hacienda, for the purpose of conveying the products of their
haciendas to the town of Victorias and to the landing place there situated, and for the
purpose of transporting supplies from those points to their haciendas, making use of
the said road by means of carts, carabaos, and other usual means of transportation;
that there is no outlet to a public road from the hacienda occupied by these plaintiffs,
the only road and way by which the products of the plaintiffs' property can be taken
to the town of Victorias and to the landing place there being across the Hacienda
Toreno by the road marked on the plan attached to the complaint; that on the
fifteenth day of November, 1912, the defendants closed the road in question at the
point at which it crosses the Hacienda Toreno, and refused to permit plaintiffs to
continue using it; that plaintiffs were about to commence to grind their crop of sugar
cane, and that, if prevented from transporting their sugar across the Hacienda
Toreno to their point of embarkation, would suffer damages difficult to estimate.
Upon these averments of fact the plaintiffs prayed for a judgment that they are
entitled to use the road in question as they have been using it in the past, and that a
perpetual injunction be issued against plaintiffs restraining them from impending
such use. Upon the filing of the complaint, plaintiffs moved the court to issue a
preliminary injunction restraining defendants from interfering with the use of the road
during the pendency of the suit, which motion was granted by the court.

Defendants in their answer put in issue all the special averments of the complaint, as
above set forth, and by way of counterclaim and special defense, averred that the
road crossing the Hacienda Toreno, over which plaintiffs claim the right of passage,
is the private property of defendants; and, further, that they have not refused
plaintiffs permission to pass over this road but have required them to pay toll for the
privilege of doing so. Defendants also claimed damages for the use of the road by
plaintiffs during the pendency of the suit, alleging that the preliminary injunction had
been improvidently issued upon false statements contained in the verified complaint
filed by plaintiffs.

The case was tried in July, 1913. The court on December 8, 1913, rendered
judgment, dismissing the complaint with respect to the plaintiffs Felix Suarez, Probo
Jereza, Enrique Azcona, and Melecio Pido, these being the plaintiffs who claimed
the right to use the Dacuman Toreno road. With respect to the Nanca-Victorias
road, the court held that it was a public highway over which the public had acquired a
right of use by immemorial prescription, and ordered the issuance of a perpetual
injunction against plaintiffs, restraining them from interfering in any manner with the
use of the said road.

The conclusion of the court with respect to the facts affecting the Nanca-Victorias
road are as follows:

Turning to a consideration of the evidence relative to the Nanca-Victorias road

we find incontestable proof that it has been in existence for at least forty
years. That the hacenderos located in the southwestern section of Victorias
and the public generally passed over it freely and that it was used for all
purposes of transportation of farm produce, animals, etc. and by pedestrians
as well as carromatas and other conveyances without break or interruption
until two or three years ago when the defendants announced that the road
was private and that those who wished to pass over it with sugar carts would
be obliged to pay a toll of ten centavos all other vehicles, it appears, were
permitted to pass free charge. This arrangement seems to have existed
during the years of 1911 and 1912 and part of 1913, the money being
collected apparently from some hacenderos and not from others. There is
some reason to believe from the evidence presented by defendants
themselves that the practice of making these payments to hacienda 'Toreno'
originated in an attempt to raise a fund for the repair of the road. There is no
evidence that any other hacenderos between Nanca and Victorias or any
other person made any attempt to close the road or to collect toll. On the
contrary the road appears to have been repaired by the hacenderos when it
needed repairing and everyone used it on equal terms until the defendants in
1910 or 1911 interposed the objection that the road in dispute was private.
This we think is a fair deduction from the evidence and although it is asserted
that toll was collected at an earlier date by the late Leon Montinola, brother of
the defendant Ruperto Montinola, there is no tangible evidence that this was
 so and that toll has been paid only during the years of 1911, 1912, and part of
1913.

The question presented by the assignment of error are in effect:

(a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno
a public highway or not?

(b) If it be held that the road in question is not a public highway, have plaintiffs
proven their acquisition of an easement of way over the Hacienda Toreno at the
point traversed by the road in question?

The trial judge, in holding that the road in question is public, bases in conclusion
upon the fact, which he deems to have been proven, that the road has been in
existence "from time immemorial," and had been "continiously used as a public road
. . . and open to public as such for thirty or forty years . . . until . . . the defendants
undertook to claim it as private and to collect toll for the passage of carts." (Bill of
Exceptions, p. 56.) There is no doubt that for the past thirty or forty years a road has
existed between the former site of the town of Victorias and the barrio of Nanca, of
the municipality of Seravia, and that this road crosses defendants' hacienda. It is
also true that during this period the plaintiffs and their predecessors in the ownership
of the hacienda now held by them have made use of this road for the purpose of
going and coming from their haciendas to the town of Victorias; but the question is
whether this use was limited to the plaintiffs, and their tenants and employees, or
whether it was, as held by the lower court, a use enjoyed by the public in general.
Plaintiffs produced only two witnesses, Segundo de Leon (stet. notes, pp. 21-22) and
Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify as regards the use of the
Nanca-Victorias road. Several other witnesses testified on behalf of plaintiffs, but
their testimony relates to the Dacuman Toreno road, which is not involved in this
appeal. We have carefully read the testimony of the witnesses Leon and Cuaycong,
given upon their direct and cross examination, but we have been unable to find that
either of them has testified that the road in question was ever used by the public in
general. These witnesses testified with regard to the use of the road by the present
and former owners and occupants of the estates of Bacayan, Esperanza, Alcaigan,
Pusot, and Dolores for the transportation of the products of these estates to the town
of Victorias, and of supplies and agricultural implements from Victorias to the
haciendas, but neither of them testified expressly that any other use had been made
of said road. Nevertheless, it may be reasonably inferred from the testimony of these
witnesses that all persons having occasion to travel between Victorias and the
haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores, whether or not
they were owners, tenants, or employees of said estates, made use of the road now
in dispute, crossing the Hacienda Toreno, and to this limited extent it may be said
that the public made use of the road, but there is nothing in the evidence to indicate
that the so called public use extended beyond this.

Apart from the fact that there is no direct evidence to support the finding of the court
concerning the general public use of the road in dispute, the record contains data
strongly tending to show that when the complaint was filed plaintiffs did not contend
that the road was a public highway, but merely contended that they had acquired by
prescription an easement of way across the Hacienda Toreno. For example, the
action is entitled an "action concerning a right of away." (Bill of Exceptions, pp. 64
and 65.) It is not averred in the complaint that the road in question was used by the
public. On the contrary, it is averred that it was used by the plaintiffs and their
predecessors. The averment in paragraph 8 of the complaint that the plaintiffs have
no other "outlet to a public road" than that which they have been accustomed to used
by going across the defendants' hacienda for the purpose of going to the town of
Victorias also shows that when they commenced this action they had in mind the
provisions of articles 564, et seq. of the Civil Code, which relate to the method
of establishing the compulsory easement of way. The owners of an existing
easement, as well as those whose properties are adjacent with a public road, have
no occasion to invoke these provisions of the Code, which relate to the creation
of new rights, and not the enforcement of rights already in existence.

It is true in the opening statement made to the court, counsel for plaintiffs, who was
not the same attorney by whom the complaint was signed, stated that plaintiffs
contend that the road in question is public, but as no evidence was introduced
tending to establish this contention concerning the Nanca Victorias road, counsel
for defendants had no occasion to object upon the ground that such testimony was
not relevant to the averments of the complaint. No evidence was taken to indicate
that at any time since the road in question has been in existence any part of the
expense of its upkeep has been defrayed by the general government, the province,
or the municipality. The trial judge said upon this subject:

It is true that whatever repairs were made on the road were made irregularly.
The municipality of Victorias had no funds to devote to the construction and
repair of roads, and the upkeep of the road depending entirely therefore on
the initiative of the persons who used it, was attended to only at such times as
repairs were absolutely necessary. (Bill of Exceptions, p. 49.)

The court also held that it appears from the government grant issued in 1885 to the
original owner of the hacienda adjacent to the Hacienda Toreno on its western
boundary, that the Nanca-Victorias road at that time separated that estate from the
Jalbuena Hacienda, and that these facts constitute "circumstantial evidence that the
road was in existence in 1885." We have examined the document to which the court
refers, and we agree that the road in question existed in 1885; but we do not believe
that the document in question proves that the road was public highway.

Another circumstance established by the evidence, and which is some importance in

the determination of this issue, is that although the defendants closed the Nanca-
Victorias road in the month of February, 1911, and since that time have collected toll
from persons passing over it with carts loaded with sugar, including those belonging
to several of the plaintiffs, nothing was done by them to prevent the continuation of
this restriction until December, 1912, when this action was commenced. It is natural
to assume that if plaintiffs had considered that the road in question was public, they
would have protested immediately against the action of the defendants, and would
have either commenced a civil action, as they subsequently did, or would have
brought about a prosecution under section 16 of Act No. 1511.
Upon the evidence taken and admissions contained in the pleadings and those
made during the course of the trial we consider that the following findings are
warranted:

1. The town of Victorias has always been the shipping point of the products of the
Hacienda Toreno, and of the haciendas of appellees, as well as the place from which
supplies were brought to those properties.

2. For thirty or forty years before the commencement of the suit a wagon road,
herein called the Nanca-Victorias road, has been in existence, connecting the
haciendas of appellees with the town of Victorias, and this road traverses the
property of defendants. Since the removal of the town of Victorias to a new site the
Nanca-Victorias road has been used by appellees in travelling between their
properties and the provincial road which crosses the Hacienda Toreno from east to
west.

3. No public funds have at any time been expended on the construction or upkeep of
the Nanca-Victorias road, but from time to time work has been done on it by the
laborers employed by the present and former owners of the Hacienda Toreno and
the haciendas owned by the appellees and their predecessors in title.

4. The Nanca-Victorias wagon road, including that part of it which crosses the
Hacienda Toreno, has for thirty-five or forty years been used by the appellees and
their predecessors in title for the transportation, by the usual means, of the products
of their estates to their shipping points in or near the town of Victorias, and the
transportation to their estates of all supplies required by them, and has been used by
all persons having occasion to travel to and from all or any of the estates now owned
by the appellees.

5. The use of the Nanca-Victorias road in the manner and by the person above
mentioned was permitted without objection by the owners of the Hacienda Toreno
until the year 1911, when they closed it, and began charging a toll of 5 centavos for
each cart which passed over the road, including carts belonging to the appellants,
until restrained from continuing to do so by the preliminary injunction granted in this
case.

6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants
to the nearest public road which is the provincial road which crosses the Hacienda
Toreno from east to west.

Upon these facts the questions of law to be decided are:

(a) Is the Nanca-Victorias road a public highway?

(b) If the Nanca-Victoria road, or that part of it which crosses the Hacienda Toreno, is
not a public highway, is it subject to a private easement of way in favor of the
appellees?

The defendants are the owners of the Hacienda Toreno under a Torrens title issued
in accordance with the Land Registration Act, conferring to them its absolute
ownership, subject only to the limitations of paragraph four of section 39 of said Act.
It is admitted that there is no annotation on the certificate of title regarding the road
here in question, either as a "public road" or as a "private way established by law,"
and, therefore, the questions presented by this appeal are to be determined
precisely as they would be had the Hacienda Toreno not been brought under the
operation of the Land Registration Act. The plaintiffs being the owners of the
property in question, the presumption of law is that it is free from any lien or
encumbrance whatever, and the burden therefore rests upon plaintiffs to establish
the contrary. As this court said in case of Fabie vs. Lichauco and the children of
Francisco L. Roxas (11 Phil. Rep., 14):

It is settled of law that a property is assumed to be free from all encumbrance

unless the contrary is proved.

There is admittedly no evidence to show that the land occupied by the road here in
question was any time conveyed to the general government or any of its political
subdivisions by the present or any of the former owners of the Hacienda Toreno.
There is no evidence, even remotely, tending to show that the road existed prior to
the time when the property now known as the Hacienda Toreno passed from the
State into private ownership. The record fails to disclose any evidence whatever
tending to show that the Government has at any time asserted any right or title in or
to the land occupied by the road, or that it has incurred any expense whatever in its
upkeep or construction. The Civil Code defines as public roads those which are
constructed by the State (art. 339), and as provincial and town roads those "the
expense of which is borne by such towns or provinces." (Civil Code, art. 344.) While
it is not contended that this definition is exclusive, it does show that during the
Spanish regime, under normal conditions, roads which were public were maintained
at the public expense, and that the fact that at no time was any expense incurred by
the Government with respect to the road here in question tends strongly to support
the contention of the defendants that it is private way.

During the Spanish regime the law required each able to bodied citizen not within
one of the exempted classes to work a certain number of days in each year, his labor
to be devoted to "services of general utility" to the municipality of his residence.
(Royal Decree of July 11, 1883, art. 5.) Under this Decree and the Regulations for its
enforcement (Berriz, vol. 11, 258) the greater part of the work on the public road of
the Islands was accomplished. Had the road here in question been a public way, it is
reasonable to assume that the polistas of the town of Victorias would have been
employed in maintaining it. It is most significant that no mention is made in the
testimony of the plaintiffs' witnesses of any work of this character having been done
on the road at any time, particularly in view of the fact that their attention was drawn
to this point. (Stet. note, pp. 8, 10, 11, 12, 13 and 14.)

The evidence shows that the repairs were made by the owners of the estates
benefited by the road, and by their laborers, as a pure voluntary act for their own
convenience and interest. There being no evidence of a direct grant to the
government of the land occupied by the road in question or that any Government
funds or labor were expended upon it, the question presents itself whether the use to
which the road has been put was such as to justify the conclusion of the lower court
that it has become public property. There being no evidence that the original use of
the road by plaintiffs' predecessors was based upon any grant of the fee to the road
or of an easement of way, or that it began under the assertion of a right on their part,
the presumption must be that the origin of the use was the mere tolerance or license
of the owners of the estates affected.

This being so, has that merely permissive use been converted into a title vested in
the public at large, or in the plaintiffs by reason of their ownership of the land
beneficially affected by the use?

Had it been shown that the road had been maintained at the public expense, with the
acquiescence of the owners of the estates crossed by it, this would indicate such
adverse possession by the government as in course of time would ripen into title or
warrant the presumption of a grant or of a dedication. But in this case there is no
such evidence, and the claims of plaintiffs, whether regarded as members of the
public asserting a right to use the road as such, or as persons claiming a private
easement of way over the land of another must be regarded as resting upon the
mere fact of user.

If the owner of a tract of land, to accommodate his neighbors or the public in general,
permits them to cross his property, it is reasonable to suppose that it is not his
intention, in so doing, to divest himself of the ownership of the land so used, or to
establish an easement upon it and that the persons to whom such permission, tacit
or express, is granted, do not regard their privilege of use as being based upon an
essentially revocable license. If the use continues for a long period of time, no
change being made in the relations of the parties by any express or implied
agreement, does the owner of the property affected lose his right of revocation? Or,
putting the same question in another form, does the mere permissive use ripen into
title by prescription?

It is a fundamental principle of the law in this jurisdiction concerning the possession

of real property that such possession is not affected by acts of a possessory
character which are "merely tolerated" by the possessor, or which are due to his
license (Civil Code, arts. 444 and 1942). This principle is applicable not only with
respect to the prescription of the dominium as a whole, but to the prescription of
right in rem. In the case of Cortes vs. Palanca Yu Tibo (2 Phil. Rep., 24, 38), the
Court said:

The provision of article 1942 of the Civil Code to the effect that acts which are
merely tolerated produce no effect with respect to possession is applicable as
much to the prescription of real rights as to the prescription of the fee, it being
a glaring and self-evident error to affirm the contrary, as does the appellant in
his motion papers. Possession is the fundamental basis of the prescription.
Without it no kind of prescription is possible, not even the extraordinary.
Consequently, if acts of mere tolerance produce no effect with respect to
possession, as that article provides, in conformity with article 444 of the same
Code, it is evident that they can produce no effect with respect to prescription,
whether ordinary or extraordinary. This is true whether the prescriptive
acquisition be of a fee or of real rights, for the same reason holds in one and
the other case; that is, that there has been no true possession in the legal
sense of the word. (See also Ayala de Roxas vs. Maglonso, 8 Phil Rep., 745;
 Municipality of Nueva Caceres vs. Director of Lands and Roman Catholic
Bishop of Nueva Caceres, 24 Phil. Rep., 485.)

Possession, under the Civil Code, to constitute the foundation of a prescriptive right,
must be possession under claim of title (en concepto de dueno), or use the common
law equivalent of the term, it must be adverse. Acts of a possessory character
performed by one who holds by mere tolerance of the owner are clearly not en
concepto de dueo, and such possessory acts, no matter how long so continued, do
not start the running of the period of prescription.

A similar question was presented in the case of the Roman Catholic Archbishop of
Manila vs. Roxas (22 Phil. Rep., 450), in which case it appeared that Roxas, the
owner of the Hacienda de San Pedro Macati, claimed a right of way across the
property of the church to Calle Tejeron, a public street of the town of San Pedro
Macati. The proof showed that the road in question had been used by the tenants of
the Hacienda de San Pedro Macati for the passage of carts in coming and leaving
the hacienda "from time immemorial," and further that the road had been used for
time out of mind, not only by the tenants of the hacienda but by many other people in
going and coming from a church half-way between the boundary line of the hacienda
and Calle Tejeron. The court held that the facts did not give rise to a prescriptive
right of easement in favor of the owner of the hacienda, upon the ground that such
use "is to be regarded as permissive and under an implied license, and not adverse.
Such a use is not inconsistent with the only use which the proprietor thought fit to
make of the land, and until the appellee thinks proper to inclose it, such use is not
adverse and will not preclude it from enclosing the land when other views of its
interest render it proper to do so. And though an adjacent proprietor may make such
use of the open land more frequently than another, yet the same rule will apply
unless there be some decisive act indicating a separate and exclusive use under a
claim of right. A different doctrine would have a tendency to destroy all neighborhood
accommodations in the way of travel; for if it were once understood that a man, by
allowing his neighbor to pass through his farm without objection over the pass-way
which he used himself, would thereby, after the lapse of time, confer a right on such
neighbor to require the pass-way to be kept open for his benefit and enjoyment, a
prohibition against all such travel would immediately ensue."

The decisions of the supreme court of Louisiana, a State whose jurisdiction is based,
as is our own, upon the Roman Law, and whose Civil Code is taken, as is our own,.
very largely from the Code of Napoleon, are particularly persuasive in matters of this
character. In the case of Torres vs. Fargoust (37 La. Ann., 497), cited by appellants
in their brief, in which the issues were very similar to those of the present case, the
court held that

The mere fact that for thirty or forty years the public was permitted to pass
over this ground would not of itself constitute the place a locus publicus . . .
dedication must be shown by evidence so conclusive as to exclude all idea of
private ownership; . . . such dedication cannot be inferred from ere user alone;
. . . no one is presumed to give away his property. The burden is on him who
avers a divestiture of ownership to prove it clearly.
We are, therefore, of the opinion, and so hold, that upon the facts established by the
evidence it does not appear that the road in question is a public road or way. We are
also of the opinion that plaintiffs have failed to show that they have acquired by
prescription a private right of passage over the lands of defendants. The supreme
court of Spain has decided that under the law in force before the enactment of the
Civil Code, the easement of way was discontinous, and that while such an easement
might be acquired by prescription, it must be used in good faith, in the belief of the
existence of the right, and such user must have been continuous from time
immemorial. (Judgment of December 15, 1882.) In the appealed decision the court
below says that the plaintiffs and their predecessors made use of the road in
question "from time immemorial," but there is no evidence whatever in the record to
sup[port this finding, although it is true that the evidence shows the existence of the
road and its use by the plaintiffs and their predecessors for thirty-five or forty years.
Speaking of the evidence required under the present Code of Civil Procedure to
show immemorial use of an easement, this court said in the case of Ayal de Roxas
vs. Case (8 Phil. Rep., 197, 198):

Third Partida in title 31, law 15 . . . says that discontinues servitudes . . . must
be proved by usage or a term so long that men can not remember its
commencement. . . . In many judgments the supreme court of Spain has
refused to accept proof of any definite number of years as a satisfaction of
this requirement of the law. . . . We are of the opinion that in order to establish
a right of prescription [title of prescription based upon use from time
immemorial] something more required than memory of living witnesses.
Whether this something should be the declaration of persons long dead,
repeated by those who testify, as exacted by the Spanish law, or should be
the common reputation of ownership recognized by the Code of Procedure, it
is unnecessary for us to decide. On either theory the appellant has failed in
his proof . . . .

The same thing may be said in this case. Witnesses have testified that they have
known the road for a certain period of years, beginning at a time prior to the
enactment of the Civil Code, but no evidence has been made to prove immemorial
use by either of the means of proof mentioned in this decision cited, nor is
immemorial user averred in the complaint as the basis of the right. It is evident,
therefore, that no vested right by user from time immemorial had been acquired by
plaintiffs at the time the Civil Code took effect. Under that Code (art 539) no
discontinuous easement could be acquired by prescription in any event. Assuming,
without deciding, that this rule has been changed by the provisions of the present
Code of Civil Procedure relating to prescription, and that since its enactment
discontinuous easement may be required by prescription, it is clear that this would
not avail plaintiffs. The Code of Civil Procedure went into effect on October 1, 1901.
The term of prescription for the acquisition of rights in real estate is fixed by the Code
(sec. 41) at ten years. The evidence shows that in February, 1911, before the
expiration of the term of ten years since the time the Code of Civil Procedure took
effect, the defendants interrupted the use of the road by the plaintiffs by constructing
and maintaining a toll gate on it and collecting toll from persons making use of it with
carts and continued to do so until they were enjoined by the granting of the
preliminary injunction by the trial court in December, 1912. Our conclusion is,
therefore, that the plaintiffs have not acquired by prescription a right to an easement
of way over the defendant's property; that their use of the Nanca-Victorias road
across the Hacienda Toreno was due merely to the tacit license and tolerance of the
defendants and their predecessors in title; that license was essentially revokable;
and that, therefore, the defendants were within their rights when they closed the road
in 1911.

While in the allegations from the plaintiffs' complaint it might be inferred that it was
their purpose to seek to impose upon the defendants the easement to which arts.
564 et seq. of the Civil Code relate, that purpose was evidently abandoned, and the
case was tried upon a wholly different theory. Proof was offered to show that the
right of passage across defendants' land is necessary to enable plaintiffs to get their
products to market, but there was no offer on their part to pay defendants the
indemnity required by section 564.

For the reasons stated the judgment of the court below is reversed, the injunction
issued against defendants is allowed on this appeal. So ordered.
 [G.R. No. 108558. June 21, 2001]

ANDREA TABUSO and RENATO BISMORTE, petitioners, vs. COURT OF

APPEALS and the HEIRS OF ESTEBAN ABAD represented by Nemesio
Abad and Ana Abad Paghubasan, respondents.

DECISION
PANGANIBAN, J.:

It is settled that great weight, and even finality, is accorded to the factual
conclusions of the Court of Appeals which affirm those of the trial courts. Only when
it is clearly shown that such findings are whimsical, capricious, and arbitrary can they
be overturned.

Statement of the Case

Before us is an appeal under Rule 45 of the Rules of Court, assailing the July 29,
1992 Decision[1] of the Court of Appeals[2] (CA) in CA-GR CV No. 26047 and its
January 14, 1993 Resolution[3] denying reconsideration. The CA affirmed in toto the
Decision of the Regional Trial Court, which had found abundant proof of appellees
ownership of the land, as opposed to the scanty evidence offered by appellants. The
dispositive portion of the assailed Decision reads as follows:

WHEREFORE, [there being] no reversible error in the decision appealed from[,] the
same is hereby affirmed in toto. Costs against appellants.[4]

The Facts

The undisputed facts of the case are summarized by the Court of Appeals as
follows:

This case involves declaration of ownership filed before the Regional Trial Court of
Naval, Leyte, [in] Biliran, Leyte, of an unregistered parcel of land at Antipolo, Naval,
Leyte with an area of 3,267 square meters.

The plaintiffs evidence consists of the following:

a) A tax declaration No. 3705 (Exh. A) in the name of Ignacio Montes for the year
1912. However, the land taxes thereon for the years 1944 to 1947 were paid only in
1981 (Exh. F and series).

b) Plaintiff Andrea Tabuso claims to be the owner as successor in interest

(granddaughter) of one Andrea Elaba, daughter of Maria Montes and Borja Elaba,
Maria Montes appears to be a sister of Ignacio Montes, in whose name the tax
declaration for the property in question was issued for the year 1912 (Exh. A).

c) The property in question has been in the possession of the defendants (heirs of
Esteban Abad), although the house standing thereon appears to have been
constructed by Marcelo Tabuso, father of plaintiff Andrea Tabuso.

On the other hand, evidence for the defendants tends to establish the following:

a) The land in question originally owned by Maria Montes was donated to Isabel
Elaba through an ancient document executed on September 24, 1923 (Exh.
F). Isabel in turn sold the land to Esteban Abad on May 5, 1948 (Exh. 4).

b) The original tax declaration in the name of Ignacio Montes (Exh. A) was
superseded by Tax Declaration Nos. 6422 and 1450 both in the name of Isabel
Elaba (Exh. 6-D; 6-E)[;] Declaration No. 1450 for the year 1948 was superseded by
Tax Declaration No. 6959 for 1960 (Exh. 6-C) in the name of Esteban Abad; and the
latter was superseded in 1969 by Tax Declaration No. 1661 (Exh. 6-B) in the name
of Esteban Abad. In 1974 a new tax declaration No. 19 (Exh. 6-A) was issued in the
name of Esteban Abad with Nemesio Abad and his co-heirs as administrators. The
last tax declaration No. 22 (Exh. 6) for 1982 was in the name of Esteban Abad. The
land taxes due thereon for the years 1947 to 1982 were paid by Isabel Elaba[,]
Esteban Abad and Nemesio Abad (Exhs. 7 to 7-W).

c) The land in question is tenanted by one Valentin Poblete in accordance with a

lease contract executed by defendant Nemesio [Abad], one of the heirs and co-
owners of the land.

On the basis of the foregoing evidence, the court dismissed the complaint and
declared the defendant the lawful owners of the land in question.[5]

The trial court[6] concluded that there was abundant proof of private respondents
ownership of the lot in question as against the scanty evidence offered by
petitioners. And even if the latter had built a house thereon, such action was only
tolerated by private respondents, who had originally allowed one Marcelo Tabuso
(father of Petitioner Andrea Tabuso), to construct a house on the same lot. Besides,
Petitioner Tabuso is not a compulsory heir of Ignacio Montes, from whom she claims
to have inherited the lot, subject of this litigation. In addition, the tax declaration in his
name has long been revised.
The trial court likewise gave credit to the testimony of Atty. Jose Gonzales,
private respondents counsel who had been presented by petitioners as their own
witness. He testified that the land in question, which was adjacent to the land he
himself possessed, had been in the possession of Esteban Abads heirs, herein
private respondents. The trial court also took note of the various tax declarations
covering the property, indicating that it was owned by private respondents.

Ruling of the Court of Appeals

 The Court of Appeals upheld the findings of the trial court. It ruled as follows:

The only issue presented to [u]s for resolution is the question of ownership. After a
careful review of the records, [w]e agree with the trial court that the preponderance
of evidence supports the claim of ownership of defendants-appellees.

As regards the first assigned error, [the] trial court cannot be faulted for giving weight
to the testimony of Atty. Jose Gonzales. He testified that the land in question had
been in he possession of appellees; that he personally [knew] this as he own[ed] the
land adjacent to the land in question at the northern point; that he inherited said land
from his late father; and that he frequently visit[ed] his land and passe[d] by the land
in question. Thus, he testified of his own personal knowledge regarding the fact of
possession. Moreover, Atty. Gonzales, although a counsel for appellees, was
presented by appellants ad their own witness; hence, they are bound by his
testimony.

As to the validity of the document of donation executed by appellants predecessor in

interest, Maria Montes in 1923, or more than sixty (60) years ago, it is too late in the
day to raise the question of the validity of said document. Appellants are barred by
laches to raise the same. Moreover, the issue is being raised for the first time on
appeal, which is not allowed.

It also appears that since 1923 to the present, or for more than 60 years, appellees
have been able to establish by the tax declarations in their name and that of their
predecessors in interest that they have been in open, continuous, uninterrupted and
adverse possession of the land in question.

xxxxxxxxx

Finally, the area of the land appears to be immaterial. Whether it is only 3,267
square meters as contained in the tax declaration, or 11,927 square meters, as
found by the court-appointed commissioner, the important thing to consider is that
appellants have not substantiated their claim by a preponderance of evidence
adverse to the claim of ownership and possession of appellees. [7]

Issues

In their Memorandum,[8] petitioners raise the following issues:

I

The findings and conclusion of the Honorable Court of Appeals that private
respondents are in possession and owners of the land in dispute are
contradicted by the evidence on record.

II

The Honorable Court of Appeals committed grave abuse of discretion amounting

to lack of jurisdiction when it upheld the validity of the Deed of Donation dated
 September 23, 1923 which is [a] spurious document as it was executed by Maria
Montes who was already dead as early as 1919.

III

The Honorable Court of Appeals gravely erred in holding private respondents as

owners of the land notwithstanding the undisputed fact that they (private
respondents) admitted the facts set forth by appellants[,] now petitioners in their
appellants brief[,] as the former (private respondents[)] did not file their appellees
brief[.]

IV

The Order of the respondent Court of Appeals to deliver the entire 11,927 sq.
meters to private respondent is illegal and unsupported by evidence.

The Court of Appeals gravely erred in concluding that private respondents are
the owners of the land merely on the basis of their tax declarations without
evidence of actual physical possession.[9]

In sum, the main issue that needs to be resolved in the case at bar is the
ownership of the land in question. The other issues presented by petitioners are
merely ancillary and will be discussed in conjunction with this main issue.

The Courts Ruling

The Petition is devoid of merit.[10]

Main Issue: Ownership of the Property

After a careful examination of the issues involved, the evidence adduced, and
the arguments or issues raised by both parties, this Court rules that the totality of the
evidence presented leans heavily in favor of herein private respondents.
It is settled that great weight, and even finality, is given to the factual conclusions
of the Court of Appeals which affirm those of the trial courts. Only where it is shown
that such findings are whimsical, capricious, and arbitrary can they be overturned.[11]
We agree with the findings of the Court of Appeals that for a period of more than
60 years, private respondents have been able to establish that they are the owners
of the lot; and that for said period, they have been in open, continuous and
uninterrupted possession of the same.
Both the trial and the appellate courts were likewise correct in giving weight to
the testimony of Atty. Jose Gonzales. He testified that being, the owner of the
adjacent land, he had personal knowledge of the simple fact that the land in question
was owned by private respondents, who were in actual, open and continuous
possession thereof. Significantly, while he was private respondents counsel, he was
presented by petitioners themselves. Having done so, they are bound by his
testimony, even if it is hostile.
The only substantial argument of petitioners supporting their claim of ownership
is their construction of a small house (barong-barong) on the property, as
acknowledged in private respondents letter, which reads:

Notice to Vacate

Naval, Leyte
September 24, 1981
To: Mr. & Mrs. Renato Bismorte
Barangay Calumpang
Naval, Leyte

Greetings:

You are advised to vacate the area/lot where your Barong-Barong House [was]
temporarily constructed for we, the lawful owners, shall have to use it. You are given
three (3) months grace period upon receipt thereof within which to transfer or
completely vacate the area/lot.

[Should there be f]ailure to comply [with] this notice or advise [,] an ejectment
proceeding shall be instituted or filed against you before the proper court. Hence,
compliance is hereby desired.

(Signed) Mr. NEMESIO E. ABAD

Co-Owner
(Signed) ANA A. PAGHUBASAN
Co-Owner

(Signed) NESTORA DELA CUALA[12]

Obviously, the claim of private respondents that they are the owners of the land
is supported by the above letter, in which they were asking petitioners to vacate the
property. Moreover, considering its size, which is 11,927 square meters as found by
the court-appointed commissioner, the fact that petitioners house is only a barong-
barong or make-shift shanty lends support to private respondents claim that the
formers presence on the property was merely tolerated.
It must be stressed that possession and ownership are distinct legal
concepts. Ownership exists when a thing pertaining to one person is completely
subjected to his will in a manner not prohibited by law and consistent with the rights
of others. Ownership confers certain rights to the owner, one of which is the right to
dispose of the thing by way of sale. xxx. On the other hand, possession is defined as
the holding of a thing or the enjoyment of a right. Literally, to possess means to
actually and physically occupy a thing with or without right. Possession may be had
in one of two ways: possession in the concept of an owner and possession of a
holder. Possessors in the concept of owners may be the owners themselves or those
who claim to be so. On the other hand, those who possess as mere holders
acknowledge in another a superior right which he believes to be ownership, whether
his belief be right or wrong.[13]
In this case, the evidence shows that the occupation of the property by
petitioners is not in the concept of owners, because their stay is merely
tolerated. This finding is bolstered by the fact that Petitioner Andrea Tabuso is the
daughter of Marcelo Tabuso, who was merely allowed by the previous owner,
Esteban Abad, to construct a small house on the lot. As held in Caniza v. Court of
Appeals,[14] an owners act of allowing another to occupy his house, rent-free[,] does
not create a permanent and indefeasible right of possession in the latters favor.[15]
Lastly, the claim of petitioners that private respondents are not in actual
possession of the land is unsubstantiated. Besides, it is not necessary that the latter
actually stay on the property in order to prove ownership of the same. As found by
both the trial and the appellate courts, since the acquisition of the subject property by
private respondents, they had religiously paid the taxes due thereon. Further, one of
the co-owners executed a lease contract over it in favor of a tenant. These acts are
clearly consistent with ownership.

Deed of Donation Not Proven to Be Invalid

Petitioners point out that the Deed of Donation executed by Maria Montes to
Isabel Elaba, who in turn sold the lot to private respondents, is spurious since the
Deed was executed on September 23, 1923; whereas the death certificate issued by
the Holy Rosary Cathedral Parish of Naval, Leyte, shows that Maria Montes was
buried on February 21, 1919.
However, the Court of Appeals was correct in stating that petitioners were barred
by laches from questioning the validity of the Deed. Laches has been defined as the
failure or neglect, for an unreasonable and unexplained length of time, to do that
which by exercising due diligence could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable time, warranting [the]
presumption that the party entitled to it either has abandoned it or declined to assert
it.[16] It is too late for private respondents to raise this issue now, considering that the
Deed of Donation was executed more than 60 years ago. Moreover, they are
precluded from raising this argument, because it is being raised for the first time on
appeal.[17]
In addition, private respondents have not proven that the Maria Montes
mentioned in the Death Certificate is the same Maria Montes who executed the
Deed of Donation. The two have been shown to have different sets of parents, thus
raising serious doubts on the identity of the person mentioned in the Death
Certificate. Lastly, the Death Certificate was not marked in evidence, nor was it
subjected to cross-examination. It is thus inadmissible in evidence.

Size of Lot Immaterial To Private Respondents Claim of Ownership

 Lastly, petitioners argue that private respondents own only 3,267 square meters
of the questioned lot. This is the area that appears on their Tax Declarations. On the
other hand, the entire lot that was adjudicated measures 11,927 square
meters. Petitioners contention deserves scant consideration, because they have not
substantiated, by any means whatsoever, their claim to any part of the disputed
land. Hence, they are not entitled to ownership thereof. Besides, what defines a
piece of land is not the numerical data indicated as its area, but the boundaries or
metes and bounds specified in its description as enclosing the land and indicating its
limits.[18]
WHEREFORE, the petition is hereby DISMISSED and the assailed Decision and
Resolution AFFIRMED. Costs against petitioners.
SO ORDERED.
 [G.R. No. 112519. November 14, 1996]

CATHOLIC BISHOP OF BALANGA, represented by CRISPULO

TORRICO, petitioner, vs. THE HON. COURT OF APPEALS and AMANDO
DE LEON, respondents.

DECISION
HERMOSISIMA, JR., J.:

It is the cardinal principle in Land Registration that a torrens title is indefeasible

and inprescriptible. Considering that private respondent in this case, by himself and
through his predecessor-in-interest, had been in uninterrupted, open and adverse
possession of a portion of the land covered by said title for 49 years, by virtue of a
duly accepted donation, although unregistered, will private respondent, under this
circumstance, prevail over the titled owner?
Thus, we have before us this petition for review of a decision [1] of the Court of
Appeals[2] reversing the Regional Trial Court (RTC)[3] which rendered judgment[4] in
favor of petitioner and ordered private respondent to vacate the subject property and
surrender possession thereof to petitioner and to pay rent from the finality of the RTC
judgment until the said property is actually vacated.
We quote, as the herein parties have done so in their pleadings, the following
narration of facts rendered by the respondent appellate court:

The parties do not dispute that the Roman Catholic Archbishop [sic] of Manila was
the owner of a parcel of land (Lot No. 1272, Balanga Cadastre) situated in the Barrio
of Puerto Rivas, Municipality of Balanga, Bataan, having an area of 3,368 sq. m.,
more or less covered by OCT No. 14379 of the Registry of Deeds for the province of
Bataan. With respect to its rights over its properties in Bataan (inclusive of Lot No.
1272), the said church was succeeded by the Roman Catholic Bishop of San
Fernando, Pampanga which was, likewise, succeeded by x x x Catholic Bishop of
Balanga registered as a corporation on 15 December 1975.

Prior thereto, or on 23 August 1936, by virtue of the authority given him by the
Roman Catholic Archbishop of Manila to donate a portion of Lot No. 1272, the then
parish priest and administrator of all the properties of the said church in the
Municipality of Balanga, Bataan, Rev. Fr. Mariano Sarili, executed an Escritura De
Donacion donating an area of 12.40 meters by 21.40 meters or 265.36 sq. m. (the
subject property) of Lot No. 1272 to Ana de los Reyes and her heirs, as a reward for
her long and satisfactory service to the church. Her acceptance of the donation, as
well as her possession of the subject property, is indicated in the deed of donation,
which deed, for unknown reasons, was refused registration by the Register of
Deeds. Six (6) years later, or in 1939, Ana de los Reyes died without issue.

Nevertheless, before her death, she had given the subject property to her nephew
who had been living with her, the herein defendant-appellant [private
respondent]. The latter immediately took possession of the property in the concept of
owner, built his house thereon and, through the years, declared the land for taxation
purposes as well as paid the taxes due thereon.

His possession of the subject property was never disturbed by anybody until plaintiff-
appellee [petitioner] filed the instant complaint against him on 5 November 1985, or
more than 49 years after the deed of donation was executed, alleging, among
others, that: (1) during the Japanese occupation of the country, defendant-
appellant [private respondent], without the knowledge and prior consent of the
plaintiff-appellee [petitioner], and its predecessors-in-interest, entered and occupied
the subject property, and (2) despite requests by plaintiff-
appellee [petitioner], defendant-appellant [private respondent] refused to
vacate the property in question. In support of the above contention, Crispulo Torrico,
the sole witness and authorized representative of plaintiff-
appellee [petitioner] testified, among others, that: the subject property is situated at
the corner of Lot No. 1272, and defendant-appellant [private respondent] has, on the
strength of the deed of donation, publicly claimed ownership and occupied the same
as early as before the 2nd World War and has built his store thereon.

As his defense, defendant-appellant [private respondent] maintains that by virtue of

the deed of donation of 23 August 1936 executed in favor of his predecessor-in-
interest, he is the lawful owner of the subject property and the complaint states no
cause of action as it was filed only to harass him.

xxx

On 27 and 30 October 1986, 10 months after he filed his answer on 10 December

1985 and almost 3 months after plaintiff-appellee [petitioner] rested its case x x x
defendant-appellant [private respondent] filed his motions [sic] to dismiss the
complaint on the ground that x x x the instant action is barred by the statute of
limitations. Plaintiff-appellee [petitioner] filed on 3 November 1986 its opposition to
the motion alleging that the defense of prescription was not raised in a timely filed
motion to dismiss, and as an affirmative defense in the answer. x x x

On 13 November 1989 the lower court rendered the judgment x x x It opined that,
since: (1) defendant-appellant [private respondent] failed to present the necessary
power of attorney executed by the Roman Catholic Archbishop of Manila giving Rev.
Fr. Mariano Sarili the authority to execute the deed of donation; (2) the first 2
paragraphs of the Excritura de Donacion indicates that the parish priest x x x was
only the administrator of all, hence, had no authority to dispose in whatever manner
any of the properties of the Roman Catholic Church of Balanga, Bataan; (3) the
parish priest was not a corporation sole and registered owner of Lot No. 1272; and,
(4) he did not, in his own behalf or that of the Roman Catholic Archbishop of Manila,
secure any prior leave of court to donate a portion of Lot No. 1272 in consonance
with Sec. 159 of the old Corporation Code x x x Rev. Fr. Mariano Sarili was not
authorized to, and could not validly, donate the subject lot. Thus, the deed of
donation he executed is unenforceable under Art. 1403 of the New Civil Code and
defendant-appellant [private respondent], as well as his predecessor-in-interest,
never acquired ownership over the subject property.[5]
 The court a quo having rendered judgment against private respondent, the latter
lost no time in bringing the case to the respondent Court of Appeals for review.

In his appeal, defendant-appellant [private respondent] contend[ed] that the lower

court erred in not ruling on the issue of prescription which he raised in his amended
answer and motion to dismiss. The thrust of his argument [was] that, since the
instant case [was] basically and fundamentally a suit for the recovery of possession
of a real property and the complaint was filed x x x more than 49 years after the deed
of donation was executed x x x the instant action should have been dismissed on the
ground of prescription. x x x.[6]

Respondent court is in agreement with private respondents insistence that the

defense of prescription is not deemed waived when prescription is apparent from the
allegations in the complaint, citing this courts ruling in the cases of Gicano vs.
Gegato,[7] Garcia vs. Mathis,[8] and PNB vs. Pacific Commission House.[9] But
respondent court also stated that private respondent could not have acquired
ownership over the subject property through acquisitive prescription because the
same having been duly registered under the Torrens system, title thereto was
indefeasible.
Nonetheless, respondent Court of Appeals ultimately ruled that under the
doctrine of laches, the consequence of petitioners inaction for 49 years since the
execution of the deed of donation, despite its apparently undeniable knowledge of
private respondents adverse, peaceful and continuous possession of the subject
property in the concept of an owner from 1936 to the institution of the recovery suit in
1985, is that it has lost its rights to the subject property and can no longer recover
the same due to its own inexcusable negligence and grave lack of vigilance in
protecting its rights over a tremendously long period of time. In the words of the
respondent court:

x x x He [private respondent] and his predecessor-in-interest have been in adverse,

peaceful and continuous possession of the subject property in the concept of owners
since the execution of the deed of donation on 23 August 1936 and were never
ousted therefrom by plaintiff-appellees [petitioners] predecessors-in-interest. It was
not until almost 5 decades later or on 5 November 1985 that plaintiff-
appellee [petitioner] instituted the instant action. The inaction for almost half a
century now bars plaintiff-appellee [petitioner] from recovering the land in question
on the equitable principles of laches, which is defined as such neglect or omission to
assert a right taken in conjunction with the lapse of time and other circumstances
causing prejudice to the adverse party as will operate as a bar in equity. Registered
lands may not be acquired by prescription but the same can be lost or acquired by
Laches. [citing Lola vs. CA, 145 SCRA 439] Plaintiff-appellee [petitioner] has lost,
while defendant-appellant [private respondent] has acquired, the subject property by
laches.[10]

Now aggrieved by the aforecited decision of the respondent Court of Appeals,

petitioner comes before us mainly claiming that it was contrary to the law and settled
jurisprudence for the respondent court to have applied the doctrine of laches in the
instant case and to have considered a mere administrator as authorized to donate
one of the properties under administration.
 Petitioners asseverations are devoid of merit.
First, petitioner postulates that the respondent Court of Appeals should not have,
in the first place, applied the doctrine of laches in the instant controversy because
private respondent did not assign the same as an error on appeal.
True, the appealing party is legally required to indicate in his brief an assignment
of errors,[11] and only those assigned shall be considered by the appellate court in
deciding the case.[12] However, equally settled in jurisprudence is the exception to
this general rule.

x x x Roscoe Pound states that according to Ulpian in Justinians Digest, appeals are
necessary to correct the unfairness or unskillfulness of those who judge. Pound
comments that the purpose of review is prevention quite as much as correction of
mistakes. The possibility of review by another tribunal, especially a bench of judges x
x x is an important check upon tribunals of first instance. It is a preventive of
unfairness. It is also a stimulus to care and thoroughness as not to make mistakes.
Pound adds that review involves matters of concern both to the parties to the case
and to the public x x x. It is of public concern that full justice be done to [e]very one.
This judicial injunction would best be fulfilled and the interest of full justice would best
be served if it should be maintained that x x x appeal brings before the reviewing
court the totality of the controversy resolved in the questioned judgment and order
apart from the fact that such full-scale review by appeal is expressly granted as a
matter of right and therefore of due process by the Rules of Court.[13]

Guided by the foregoing precepts, we have ruled in a number of cases that the
appellate court is accorded a broad discretionary power to waive the lack of proper
assignment of errors and to consider errors not assigned. [14] It is clothed with ample
authority to review rulings even if they are not assigned as errors in the
appeal.[15] Inasmuch as the Court of Appeals may consider grounds other than those
touched upon in the decision of the trial court and uphold the same on the basis of
such other grounds,[16] the Court of Appeals may, with no less authority, reverse the
decision of the trial court on the basis of grounds other than those raised as errors
on appeal. We have applied this rule, as a matter of exception, in the following
instances:
(1) Grounds not assigned as errors but affecting jurisdiction over the subject
matter;[17]
(2) Matters not assigned as errors on appeal but are evidently plain or
clerical errors within contemplation of law;[18]
(3) Matters not assigned as errors on appeal but consideration of which is
necessary in arriving at a just decision and complete resolution of the
case[19] or to serve the interest of justice[20] or to avoid dispensing
piecemeal justice;[21]
(4) Matters not specifically assigned as errors on appeal but raised in the
trial court and are matters of record having some bearing on the issue
submitted which the parties failed to raise or which the lower court
ignored;[22]
 (5) Matters not assigned as errors on appeal but closely related to an error
assigned;[23] and
(6) Matters not assigned as errors on appeal but upon which the
determination of a question properly assigned, is dependent.[24]
The instant controversy falls squarely under the exception to the general rule
that only assigned errors may be passed upon by the appellate court. A just, fair and
complete resolution of the present case necessitates the consideration and the
application of the doctrine of laches which is not the same as but is undoubtedly
closely related to, the issue of prescription which was properly raised by private
respondent before the respondent Court of Appeals.
Laches means the failure or neglect for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or should have been
done earlier; it is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert it either has abandoned
or declined to assert it.[25] It has also been defined as such neglect or omission to
assert a right taken in conjunction with the lapse of time and other circumstances
causing prejudice to an adverse party, as will operate as a bar in equity. [26]
The principle of laches is a creation of equity which, as such, is applied not really
to penalize neglect or sleeping upon ones right, but rather to avoid recognizing a
right when to do so would result in a clearly inequitable situation. [27] As an equitable
defense, laches does not concern itself with the character of the defendants title, but
only with whether or not by reason of the plaintiffs long inaction or inexcusable
neglect, he should be barred from asserting this claim at all, because to allow him to
do so would be inequitable and unjust to the defendant.[28]

The doctrine of laches or of stale demands is based upon grounds of public policy
which requires, for the peace of society, the discouragement of stale claims and x x x
is principally a question of the inequity or unfairness of permitting a right or claim to
be enforced or asserted.[29]

The time-honored rule anchored on public policy is that relief will be denied to a
litigant whose claim or demand has become stale, or who has acquiesced for an
unreasonable length of time, or who has not been vigilant or who has slept on his
rights either by negligence, folly or inattention.[30] In other words, public policy
requires, for the peace of society, the discouragement of claims grown stale for non-
assertion; thus laches is an impediment to the assertion or enforcement of a right
which has become, under the circumstances, inequitable or unfair to permit.[31]
The following are the essential elements of laches:
(1) Conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation complained of;
(2) Delay in asserting complainant's right after he had knowledge of the
defendant's conduct and after he has an opportunity to sue;
(3) Lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and
 (4) Injury or prejudice to the defendant in the event relief is accorded to the
complainant.[32]
Under the present circumstances, all of the aforegoing elements are attendant in
this case.
On or some time before August 23, 1936, Rev. Fr. Mariano Sarili, the parish
priest and administrator of the church property in the Municipality of Balanga,
Bataan, executed a deed of donation over a 265-square meter church lot in favor of
Ana de los Reyes and her heirs in recognition of her long and satisfactory service to
the church of Balanga, Bataan. For some reason or another, the said deed was
refused registration by the Register of Deeds. However, she accepted the donation,
indicated such acceptance in the said deed, occupied the donated property, and
exercised acts of ownership thereupon.
In 1945, the donee, Ana de los Reyes, died without issue. She had, however,
given the subject property to her nephew who is the private respondent in the instant
case. Upon acceptance of the gift, private respondent immediately took possession
of the subject property in the concept of owner, built his house thereon, and
thenceforth paid land taxes therefor after declaring the subject property for that
purpose.
The act of petitioner-defendant that culminated in the filing of the present action
is thus clearly his occupation since 1945 of the subject property in the concept of
owner in continuation of the occupation of the same nature regarding the same
property by the donee Ana de los Reyes starting in 1936. Undoubtedly, the first
element of laches exists.
The second element also exists in this case. The second element is three-tiered:
(a) knowledge of defendants action; (b) opportunity to sue defendant after obtaining
such knowledge; and (c) delay in the filing of such suit. Petitioner, in his complaint
filed in the trial court, alleged that without its consent, private respondent entered
and occupied the subject property during the Second World War. By its own
admission, therefore, petitioner was clearly aware of private respondents possession
of the subject property in the concept of owner. Petitioner did not also rebut the
testimony of its own authorized representative and sole witness, one Crispulo
Torrico, that the subject property was so proximately located to the rest of petitioners
church property as to foreclose assertion of ignorance of private respondents
possession of the subject property, on the part of petitioner.
From that time during the Second World War to 1985 when petitioner actually
commenced suit against private respondent, there was doubtlessly all the
opportunity to file the appropriate action to have the donation of the subject property
to Ana de los Reyes and her heirs, declared null and void and to demand
reconveyance of said property from its present occupants.
Notwithstanding such opportunity available to petitioner, however, forty (40)
years had to first pass by for petitioner to finally institute the appropriate court
proceedings. As such, the second element of knowledge, opportunity to file suit, and
delay in filing such suit, is undoubtedly present in the instant controversy.
The third element of laches is likewise present. There is nothing on the record
that impresses us as clear evidence of at least an inkling on the part of private
respondent as to petitioners serious intention to revoke the donated property. There
was neither a demand letter nor positive testimony of any person who actually
informed private respondent of petitioners intentions. In other words, private
respondent manifestly had every reason to believe that, with the passing of almost
half a century since his predecessor-in-interest accepted the donated property and
without unambiguous intimation of petitioners non-recognition of such donation, he
was secure in his possession of the subject property in the concept of owner.
In the light of all the above, it goes without saying that private respondent will
suffer irreparable injury under the most unfair circumstances, were we to disregard
petitioners inaction for more than forty (40) years in asserting its rights.
In applying the doctrine of laches, we had ruled that where a party allows the
following number of years to lapse from the emergence of his cause of action, before
instituting court action to enforce his claim, such action would be barred by the
equitable defense of laches: 36 years;[33] 12 years;[34] 50 years;[35] 34 years;[36] 37
years;[37] 32 years;[38] 20 years;[39] 47 years;[40] 11 years;[41] 25 years;[42] 40
years;[43] 19 years;[44] 27 years;[45] 7 years;[46] 44 years;[47] 4 years[48] and 67 years.[49]
In this case, petitioner filed its complaint in court only after forty nine (49) years
had lapsed since the donation in its behalf of the subject property to private
respondents predecessor-in-interest. There is nary an explanation for the long delay
in the filing by petitioner of the complaint in the case at bench, and that inaction for
an unreasonable and unexplained length of time constitutes laches. As such,
petitioner cannot claim nullity of the donation as an excuse to avoid the
consequences of its own unjustified inaction and as a basis for the assertion of a
right on which they had slept for so long.[50] Courts cannot look with favor at parties
who, by their silence, delay and inaction, knowingly induce another to spend time,
effort, and expense in cultivating the land, paying taxes and making improvements
thereon for an unreasonable period only to spring an ambush and claim title when
the possessors efforts and the rise of land values offer an opportunity to make easy
profit at their own expense.[51] Considerable delay in asserting ones right before a
court of justice is strongly persuasive of the lack of merit of his claim, since it is
human nature for a person to enforce his right when same is threatened or invaded;
thus, it can also be said that petitioner is estopped by laches from questioning
private respondents ownership of the subject property.[52] At any rate, petitioners
right to recover the possession of the subject property from private respondent has,
by the latters long period of possession and by petitioners inaction and neglect, been
converted into a stale demand. Such passivity in the face of what might have given
rise to an action in court is visited with the loss of such right, and ignorance resulting
from inexcusable negligence does not suffice to explain such failure to file
seasonably the necessary suit.[53]
Finally, we agree with the respondent Court of Appeals that, while petitioner is
admittedly still the registered owner of the donated property, and jurisprudence is
settled as to the imprescriptibility and indefeasibility of a Torrens Title, there is
equally an abundance of cases in the annals of our jurisprudence where we
categorically ruled that a registered landowner may lose his right to recover the
possession of his registered property by reason of laches.[54]
WHEREFORE, the instant petition is DISMISSED with costs against petitioner.
SO ORDERED.
G.R. No. 57092 January 21, 1993

EDGARDO DE JESUS, REMEDIOS DE JESUS, JUANITO DE JESUS, JULIANA

DE JESUS, JOSE DE JESUS, FLORDELIZA DE JESUS, REYNALDO DE JESUS,
ERNESTO DE JESUS, PRISCILO DE JESUS, CORAZON DE JESUS, petitioners,
vs.
COURT OF APPEALS and PRIMITIVA FELIPE DE JESUS, respondents.

Jose B. Soriano for petitioners.

Jose A. Aguiling and Paquito C. Ochoa for private respondent.

MELO, J.:

This has reference to a petition for review on certiorari seeking the reversal of the
decision of the Court of Appeals in CA-G.R. No. 59613 (December 24, 1980, Sison,
P.V., Cenzon. Asuncion [P], JJ) which reversed the decision dated September 7,
1975 of the then Court of First Instance of Bulacan. In consequence, the appellate
court dismissed herein petitioners' complaint and declared private respondent
Primitive Felipe de Jesus to be the absolute owner entitled to the possession of the
land in question to the exclusion of petitioners.

The property in dispute is a parcel of residential land situated in Dampol 2nd, Pulilan,
Bulacan, bounded on the North by a Vereda: on the South, by the Provincial Road;
on the East, by Catalino Tayag (Tayao); on the West, by Macario de Leon,
containing an area of 2565 square meters (Brief for the Petitioners, p. 3), and
covered by Tax Declaration No. 2383 of the Office of the Provincial Assessor of
Bulacan, in the name of Victoriano Felipe (Exh. "5-C").

Respondent appellate court found the above-described parcel of land to be the same
parcel of land which was

. . . the subject of the Kasulatang-Biling-Mabibiling-Muli (Exh. 1)

executed on November 25, 1932, by Emilia Camacho (surviving widow
of Catalino Esguerra), Jose C. Esguerra and Socorro Esguerra,
conveying or selling this land to the spouses, Victoriano Felipe and
Guillerma de la Cruz, with right to repurchase the same within a period
of five years, but that the vendors-a-retro failed to repurchase the land.
The vendors-a-retro were the heirs of the deceased Catalino Esguerra.
Since the date of the sale the spouses Victoriano Felipe and Guillerma
de la Cruz, possessed and lived on this land. The appellant [herein
private respondent] was living with her parents on the land, and upon
their deaths, she continued to live on and possess the same. (pp. 33-
34, Rollo.)

On November 29, 1961 private respondent executed a sworn statement declaring

herself the only heir of the deceased Victoriano Felipe and adjudicating to herself the
ownership of the land in question (Exh. "4").
More than twelve years later or on April 27, 1973, petitioners herein filed in the Court
of First Instance of Bulacan, an action for recovery of ownership and possession and
quieting of title to the abovementioned piece of land covered by Tax Declaration No.
2383, alleging among others: "that their grandfather, Santiago de Jesus during his
lifetime owned the residential lot; that Santiago de Jesus died before the outbreak of
World War II, leaving three (3) sons, namely: Mariano, Exequiel, and Jose, all
surnamed de Jesus; that Mariano de Jesus died on September 3, 1956 leaving eight
(8) surviving children, namely: Edgardo, Remedios, Juanita, Juliano, Jose,
Flordeliza, Reynaldo, and Ernesto, all surnamed de Jesus and all of them plaintiffs;
that Exequiel de Jesus died on April 3, 1948, survived by two (2) children Priscilo
and Corazon, both surnamed de Jesus, also plaintiffs in this case; while Jose de
Jesus died before the outbreak of World War II without any issue . . . "(p. 35, Record
on Appeal).

The trial court found for the plaintiffs, petitioners herein. The dispositive portion of the
decision dated September 7, 1975 reads:

FOR ALL OF THE FOREGOING, judgment is hereby rendered:

(1) Declaring the plaintiffs as having the better right to ownership and
possession of the residential lot in question by virtue of hereditary
succession;

(2) Ordering the defendant to surrender the ownership and possession

of the said property to the herein plaintiffs;

(3) Ordering the defendant to pay to the plaintiffs the sum of P500.00
for and as attorney's fees, and the costs of suit.

SO ORDERED. (pp. 56-57, Record, on Appeal.)

As earlier intimated, on appeal, the Court of Appeals set aside the judgment of the
trial court in a decision promulgated on December 24, 1980
(pp. 32-38, Rollo), the dispositive portion of which reads:

IN VIEW OF THE FOREGOING CONSIDERATION, finding serious

errors to have been committed by the trial court in its judgment, the
same is hereby set aside and another one entered, dismissing the
complaint, and declaring the appellant to be the absolute owner, and
entitled to the possession of this land in question, to the exclusion of
plaintiffs-appellees. (p. 38, Rollo.)

Thus, the instant petition for review on certiorari which was filed with this Court on
August 13, 1981 (p. 9, Rollo) with the following assigned errors:

THE COURT OF APPEALS ERRED IN SETTING ASIDE THE

JUDGMENT OF THE TRIAL COURT WHICH AWARDED THE
RESIDENTIAL LOT IN QUESTION TO THE PETITIONERS BY
 VIRTUE OF HEREDITARY SUCCESSION AND ORDERED THE
PRIVATE RESPONDENT TO SURRENDER THE OWNERSHIP AND
POSSESSION OF THE SAME TO THEM.

II

THE COURT OF APPEALS ERRED IN RULING THAT THE LAND

DESCRIBED IN THE PETITIONERS' COMPLAINT IS THE SAME
LAND WHICH IS THE SUBJECT OF THE SALE WITH RIGHT TO
REPURCHASE (Exh. 1) EXECUTED ON NOVEMBER 5, 1932 BY
THE ESGUERRAS IN FAVOR OF THE PARENTS OF THE PRIVATE
RESPONDENT.

III

THE COURT OF APPEALS ERRED IN DECLARING THE PRIVATE

RESPONDENT TO BE THE ABSOLUTE OWNER AND ENTITLED TO
THE POSSESSION OF THE LAND IN QUESTION TO THE
EXCLUSION OF THE PETITIONERS.

IV

THE COURT OF APPEALS ERRED IN HOLDING THAT THIS LAND

WAS PURCHASED BY THE PARENTS OF THE PRIVATE
RESPONDENT FROM THE HEIRS OF THE LATE CATALINO
ESGUERRA ON NOVEMBER 5, 1932 AND THE PRIVATE
RESPONDENT AND HER PARENTS HAD BEEN IN OPEN,
CONTINUOUS, ADVERSE, PUBLIC AND NOTORIOUS
POSSESSION OF THE SAME SINCE 1932 UP TO THE PRESENT,
IN THE CONCEPT OF OWNER.

In effect, the sole issue in this petition boils down to this question: Who has the right
to the ownership and possession of the residential lot subject matter of the case,
petitioners by virtue of hereditary succession, or private respondent who claims
ownership through purchase of the property by her parents?

According to the trial court, petitioners have the better right but according to the
appellate court, the property rightly belongs to private respondent. In view of the fact
that the findings of the trial court and the appellate court are contrary to each other,
this Court shall exercise its authority of reviewing the evidence in order to arrive at
the correct facts based on the record (Director of Lands vs. Court of Appeals, 117
SCRA 346 [1982]; Quality Tobacco Corporation vs. Intermediate Appellate Court,
187 SCRA 210 [1990]; Valenzuela vs. Court of Appeals, 191 SCRA 1 [1990]; Shauf
vs. Court of Appeals, 191 SCRA 713 [1990] ; Bustamante vs. Court of Appeals, 194
SCRA 645 [1991).

It is not disputed that petitioners are the heirs of their late grandfather, Santiago de
Jesus; what is in dispute is their claim that the residential lot in question belonged to
their grandfather and therefore theirs by hereditary succession (Brief for the
Respondent, pp. 8-9). Neither is it contradicted that Santiago de Jesus was married
to Maria Reyes, a widow with three children by a prior marriage, namely: Basilio,
Violeta, and Guillerma, the last having been the mother of herein private respondent
(tsn, August 15, 1974, pp. 14-15; September 16, 1974, pp. 14-15, 39-41).

The only documentary evidence of Santiago de Jesus' alleged ownership of the

residential lot in question is Tax Declaration No. 2384 (Exh. "A") in the name of
Victoriano Felipe. Therein, Felipe claimed ownership for tax purposes of a house of
mixed materials and a nipa roof, valued at P190.00 and constructed on the lot or
"solar" belonging to Santiago de Jesus. The statement therein regarding Santiago de
Jesus' ownership of the lot is supported by the testimony of petitioners Edgardo de
Jesus and Corazon de Jesus-Masiglat, and three other witnesses. They asserted
personal knowledge of said fact which, they swore, was also common knowledge in
Dampol 2nd, Pulilan, Bulacan (tsn, August 15, 1974, p. 16; September 16, 1974, pp.
18, 39). As a child, for instance, witness Antonio Roxas was frequently in the house
of his aunt, Maria Reyes, a sister of his mother. When his aunt was still alive, she
told him and his mother, in the presence of Victoriano Felipe, that she had no right at
all over the property, including the old house, as it really belonged to Santiago de
Jesus (tsn, September 16, 1974, pp. 39, 46-49).

On the other hand, private respondent presented a contract of sale with right of
repurchase, "Kasulatang-Biling-Mabibiling-Muli" (Exh. "1"), entered into in 1932
between her parents, Victoriano Felipe and Guillerma de la Cruz, and the vendors-a-
retro Emilia Camacho, Socorro Esguerra, and Jose Esguerra; a "Sinumpaang
Salaysay"; or an affidavit of adjudication which private respondent executed in 1961
(Exh. "4"); and tax declarations and official receipts.

On the evidentiary value of these documents, it should be recalled that the

notarization of a private document converts it into a public one and renders it
admissible in court without further proof of its authenticity (Joson vs. Baltazar, 194
SCRA 114 [1991]). This is so because a public document duly executed and entered
in the proper registry is presumed to be Valid and genuine until the contrary is shown
by clear and convincing proof (Asido vs. Guzman, 37 Phil. 652 [1918]; U.S. vs.
Enriquez, 1 Phil. 241 [1902]; Favor vs. Court of Appeals, 194 SCRA 308 [1991]). As
such, the party challenging the recital of the document must prove his claim with
clear and convincing evidence (Diaz vs. Court of Appeals, 145 SCRA 346 [1986]).

There is no doubt that the pacto de retro deed of sale has assumed the character of
a public document, having been notarized by then Justice of the Peace Francisco
Makapugay, Jr. in his capacity as Notary Public Ex-Oficio. Hence, it is presumed
valid and authentic until proven otherwise. Petitioners, however, challenge this
presumption of validity and authenticity. They contend that private respondent's non-
production of Tax Declaration No. 5096, specifically mentioned in Exh. "1" as
containing the description of the piece of land subject of the "Kasulatang-Biling-
Mabibiling-Muli" shattered such presumption and rendered suspect the latter
document (Brief for the Petitioners, pp. 9, 19-22).

While both Socorro Olarte, a signatory to the "Kasulatang-Biling-Mabibiling-Muli" as

one of the vendors-a-retro, and private respondent testified that the land subject of
the sale was covered by Tax Declaration No. 5096 in the name of the original owner
Catalino Esguerra (tsn, October 21, 1974, p. 6 and December 18, 1974, pp. 3-5),
they could not produce a copy of said tax declaration. Capitalizing on said omission,
petitioners presented a certified true copy of said Tax Declaration No. 5096 (Exh.
"G") covering the year 1948 and which, however, concerns a piece of lot owned by a
certain Teodoro Sinson. Further, petitioners also produced certified true copies of
Tax Declarations Nos. 2214 (Exh. "H"), 2215 (Exh "I") and 2216 (Exh. "J"), all in the
name of Catalino Esguerra as owner, and all for the year 1967.

Pablo H. Domingo, Senior Deputy Assessor, who was subpoenaed to present in

court Tax Declaration No. 5096 in the name of Catalino Esguerra identified the
above-mentioned certified true copies of tax declarations as having been issued by
the Office of the Provincial Assessor of Bulacan (tsn, March 12, 1975, pp. 13-14).
However, he said he could not bring with him a copy of Tax Declaration No. 5096 in
the name of Catalino Esguerra as the records of the Office of the Provincial
Assessor only started with the year 1948 because the old Assessor's Office was
burned down during the early part of the liberation (Transcript, March 12, 1975, pp.
5-6, 12).

It is significant to note that the land covered by Tax Declaration No. 5096 (Exh. "G")
described therein as bamboo land, was previously covered by Tax Declaration No.
233 for the same owner, while Tax Declaration No. 2383 (Exh. "5-C") beginning with
the year 1948 and covering the residential lot in question declared in the name of
Victoriano Felipe, cancelled Tax Declaration No. 5326 (Exh. "5-C-1"). An uncertified
copy of said Tax Declaration No. 5326 for Victoriano Felipe purporting to commence
with the year 1939 allegedly superseded Tax Declaration No. 252 in the name of
Catalino Esguerra
(Exh. "3").

In other words, the piece of residential lot covered by Tax Declaration No. 2383
(Exh. "5"), or by Tax Declaration No. 252 (Exh. "3") at around the time of the alleged
sale, until superseded by Tax Declaration No. 5326 (Exh. "5-C-1") beginning with the
year 1939, is not the piece of land covered by Tax Declaration No. 5096 specifically
referred to in Exh. "1" as the subject of the "Kasulatang-Biling-Mabibiling-Muli". Thus,
the fact that Guillerma de la Cruz, mother of private respondent, made real property
tax payments purportedly on Tax Declaration No. 5096 for the years 1935 (Exh. "2-
d" and "2-e") and 1936 (Exh. "2-b") and probably for the years 1933, 1934, 1937 and
1938, in the name of Catalino Esguerra neither alters the fact that the piece of land
covered by Tax Declaration No. 2383 (Exh. "5") is not the subject of the "Kasulatang-
Biling-Mabibiling-Muli" (Exh. "1") nor demonstrates that the payments were made for
the residential lot under litigation.

It is, therefore, evident that Tax Declaration No. 5096 was inexistent at the time of
the alleged sale. By a simply analysis of the different tax declarations presented as
evidence in this case, it is likewise clear that when by virtue of the alleged sale, a
new tax declaration numbered 5326, was made in 1938 in the name of Victoriano
Felipe (Exh. "5-C-1"), what was cancelled was Tax Declaration No. 252 (Exh. "3"),
not Tax Declaration No. 5096 which supposedly covered the property subject of the
"Kasulatang-Biling-Mabibiling-Muli". It should be noted that the property under Tax
Declaration No. 5326 bears an identical description to the property under litigation.
Thus, the inevitable conclusion is that, without any legal basis, Victoriano Felipe had
declared himself the owner of the disputed property for tax purposes. Tax
Declaration No. 5326 thereafter became the basis for Tax Declaration
No. 2383 in 1948 (Exh. "5-C") until it was cancelled and new tax declarations were
made in the name of private respondent, viz., Tax Declaration No. 9453 in 1962
(Exh. "5-b"), then Tax Declaration No. 2657 in 1967 (Exh. "5") and finally Tax
Declaration No. 2962 in 1974 (Exh. "5-A").

As earlier stated, Guillerma de la Cruz had also been paying real property tax on the
house described as located in Dampol 2nd in the name of Victoriano Felipe under
Tax Declaration No. 14984 since 1933 (Exh. "2-C"), and then under Tax Declaration
No. 3975 since 1941 (Exh. "2-4") until 1947, and under Tax Declaration No. 2384 in
1948. By a twist of fate, however, Tax Declaration No. 2384 describes the house,
among others, as located in the residential lot belonging to Santiago de Jesus or
"solar de Santiago de Jesus" (Exh. "A-1"). While real property tax continued to be
paid under the latter declaration until 1958 (Exh. "2-y"), by stating in said tax
declaration that his house was located in the land of Santiago de Jesus. Victoriano
Felipe recognized and admitted the ownership of Santiago de Jesus over the
residential lot involved herein. Such admission puts to naught the claim of private
respondent for when one derives title to property from another, the act, declaration or
omission of the latter in relation to the property is evidence against the former
(Rolleza vs. Court of Appeals, 174 SCRA 354 (1989]).

The authenticity of the signature of Victoriano Felipe in the deed of sale with right to
repurchase is also in question. Both Moises de Jesus and Antonio Roxas testified
that Victoriano Felipe could not even vote as he did not know how to read and write
(tsn, September 16, 1974, pp. 30, 42). Although Socorro Esguerra Olarte identified
the signature of Victoriano Felipe on the "Kasulatang-Biling-Mabibiling-Muli" as his
(tsn, October 21, 1974, p. 13), she also testified that Victoriano Felipe has a brother
who looked exactly like Victoriano (tsn, October 21, 1974, p. 36). On the issue, all
that private respondent could say was that her father studied the cartilla (tsn,
January 24, 1975, p. 8).

Under the circumstances, there is strong, convincing, and conclusive proof of the
nullity and falsity of Exhibit "1". Its evidentiary nature cannot, therefore, be sustained
(Legaspi vs. Court of Appeals, 142 SCRA 82 [1986]). Even if the document were to
be considered simply as a private document, it would still need evidence of its due
execution and authenticity even if it is already more than 30 years old as it cannot be
considered unblemished by any circumstance of suspicion (Heirs of Demetria Lacsa
vs. Court of Appeals, 197 SCRA 234 [1991]).

Consequently, the affidavit of adjudication executed by private respondent on May

21, 1961 (Exh. "4"), has no evidentiary value as it has become baseless.
Furthermore, private respondent falsely stated therein that she is the only heir of
Victoriano Felipe for, at the time of its execution, her mother, Guillerma de la Cruz,
was still living. Guillerma de la Cruz died on April 23, 1964 (Exh. "B"), three years
after the "Sinumpaang Salaysay" (Exh. "4") was executed. Moreover, the tax receipts
and declarations of ownership for tax purposes upon which private respondent
basically anchors her claim, are not incontrovertible evidence of ownership; they only
become evidence of ownership acquired by prescription when accompanied by proof
of actual possession of the property (Tabuena vs. Court of Appeals, 196 SCRA 650
[1991]; Rojas vs. Court of Appeals, 192 SCRA 709 [1992]).
On the issue of ownership by acquisitive prescription, private respondent contends:
"Granting that it was formerly owned by their late grandfather, they (petitioners) have
lost whatever right they may have over the land by extinctive prescription" for the
reason that she, private respondent has acquired the same by acquisitive
prescription (Brief for the Respondents, p. 9), citing Section 41 of the old Code of
Civil Procedure which states:

Sec. 41. Title to Land by Prescription. Ten years of actual adverse

possession by any person claiming to be the owner for that time of any
land or interest in land, uninterruptedly, continuously for ten years by
occupancy, descent, grants, or otherwise, in whatever way such
occupancy may have commenced or continued, shall vest in every
actual possessor of such land, a full and complete title . . . .

Corazon de Jesus Masiglat testified that from 1930 to 1952, the period of time she
was living in the house her grandfather erected on the contested property, her
grandmother, Victoriano Felipe, Guillerma de la Cruz, and private respondent also
lived there (tsn, July 16, 1974, p. 23). She was corroborated by petitioner Edgardo
de Jesus who also testified that in 1932 up to the time of his death in 1948, Exequiel
de Jesus was taking charge of the property and that while the parents of private
respondent were the ones paying the real property taxes the money therefor came
from Exequiel (tsn, July 16, 1974, pp. 11-14). Witness Salvador Esguerra testified
that Victoriano Felipe began to reside in the house when he married Guillerma de la
Cruz and that Corazon and her father, Exequiel, also resided there after the death of
Santiago de Jesus (tsn, August 15, 1974, pp. 14, 21, 22). Moises de Jesus, for his
part, testified that while Victoriano Felipe started staying in the property only when
the children of Santiago de Jesus had died, Corazon de Jesus continued to reside
there (tsn, September 16, 1974, p. 27).

In her own defense private respondent first testified that Corazon de Jesus never
lived with them and that Exequiel de Jesus never went to their place (tsn., October
11, 1974, pp. 35-36). She did not contradict, however, the testimony of Edgardo de
Jesus on rebuttal that he himself at the age of 12 used to stay in the house and was
witness to the occasion when Corazon fell in a ditch going towards their place, that
as a result of such accident, Corazon sustained a permanent deformity on one hand;
and that Corazon left the place only in 1952 when she got married (tsn, April 23,
1975, pp. 23-24). Neither did private respondent or her witnesses traverse the
testimony of Corazon de
Jesus-Masiglat, also on rebuttal, that since childhood she had been residing in the
house owned by her grandfather Santiago de Jesus, together with private
respondent and the latter's parents, and actually left the place only in 1952: that her
parents as well as her child died in that house; and that private respondent was, in
fact, the one who caused the registration of her child's death (tsn, April 23, 1975, p.
25). Even Socorro Esguerra Olarte, witness for private respondent, testified that she
remembers Exequiel de Jesus as he was always around whenever she visited the
place and he was the one who got santol fruits for her sometimes (tsn, September
23, 1974, p. 17).

It thus appears that Victoriano Felipe was residing in the house of Santiago de Jesus
simply because he was married to Guillerma de la Cruz, daughter of Maria Reyes by
a first marriage, who, obviously, was living with her mother who had taken Santiago
de Jesus for her second husband. In effect, their possession of the contested lot was
neither exclusive nor in the concept of owner. Possession, to constitute the
foundation of a prescriptive right, must be possession under a claim of title or it must
be adverse or in the concept of owner or concepto de dueo (Ordoez vs. Court of
Appeals, 188 SCRA 109 [1990]; Coronado vs. Court of Appeals, 191 SCRA 814
[1990]; Manila Electric Company vs. Intermediate Appelate Court, 174 SCRA 313
[1989]).

In this case, Victoriano Felipe and his family were residing in the land by mere
tolerance. There is no way of knowing how the house on the lot was described in
Tax Declaration Nos. 14984 and 3975, but, to repeat, in Tax Declaration No. 2384
which commenced with the year 1948 (Exh. "A"), the house was described as
constructed on the lot or solar of Santiago de Jesus up to the year 1961 when
private respondent was still paying property tax (Exh.
"2-x").

Significantly, the "Kasulatang-Biling-Mabibiling-Muli" was not even given to private

respondent by her parents; she admitted having found it in the house although they
mentioned its existence to her when they were still alive (tsn, December 18, 1974,
pp. 18-19). Under the circumstances, the prescriptive period cannot be considered to
have accrued during the lifetime of Victoriano Felipe.

It is interesting to note that when private respondent executed her "Sinumpaang

Salaysay" (Exh. "4") adjudicating the disputed lot to herself on the basis of the
contract of sale as no repurchase had been made by the vendors of retro, Exequiel
de Jesus was already dead and Corazon de Jesus-Masiglat was no longer residing
in the property in question. As she was in possession of the property, private
respondent then had it declared in her name for real property tax purposes under
Tax Declaration No. 9453 (Exh. "5-b") thereby cancelling Tax Declaration No. 2383
(Exh. "5-b-1") which was in the name of Victoriano Felipe.

As to Tax Declaration No. 2384, the last vestige of Santiago de Jesus' ownership of
the property in question, there is no evidence on record as to whether private
respondent had it cancelled, had a new declaration made on the property in her
name, or whether she continued paying tax after her payment for the year 1961. It
was established, however, through the testimony of Salvador Esguerra, that the old
house was demolished and a new bungalow was constructed on the lot (tsn, August
15, 1974, pp. 23-24).

To create a fundamental basis for her claim of ownership by acquisitive prescription,

private respondent mortgaged the questioned property to the Rural Bank of Pulilan
(Exh. "5-b") not as a mere possessor but as an owner thereof. She also registered
both the mortgage and the "Sinumpaang Salaysay" (tsn, December 18, 1974, p. 23).
However, she never attempted to obtain a certificate of title over the property. This
omission indicates, to say the least, that private respondent realizes her lack of any
lawful claim of ownership over the property for while registration is not a mode of
acquiring ownership, it is evidence of such title over the particular property (Avila v.
Tapucar, 201 SCRA 148 [1991]).
Private respondent's pretensions to acquisitive prescription may not succeed even
under Act No. 190, the Code of Civil Procedure. Under Section 41 thereof, good faith
and just title are not required for purposes of acquisitive prescription; adverse
possession in either character ripens into ownership after the lapse of ten years
(Cruz vs. Court of Appeals, 93 SCRA 619 [1979]; Quilisado vs, Court of Appeals,
182 SCRA 401 [1990]; Ongsiaco vs. Dallo, 27 SCRA 161 [1969]; Miraflor vs. Court
of Appeals, 142 SCRA 18 [1986]). The just title required for acquisitive prescription
to set in is not "titulo verdadero y valido" such title which by itself is sufficient to
transfer ownership without the necessity of letting the prescriptive period elapse, but
only "titulo
colorado" or such title where, although there was a mode of transferring
ownership, still something is wrong because the grantor is not the owner (Doliendo
vs. Biannesa, 7 Phil. 232 [1906] cited in Solis vs. Court of Appeals, 176 SCRA 678
[1989]), and incidentally, it may perhaps be mentioned that prescription running even
after the effectivity of the New Civil Code on August 30, 1950, continued to be
governed by Section 41 of the Old Civil Code (Solis vs. Court of Appeals, supra).

Under the present Civil Code, the prescriptive period required for acquisition of
immovable property is ten years if the possession is in good faith, and thirty years if
in bad faith (South City Homes, Inc. vs. Republic, 185 SCRA 693 [1990]). Such
open, continuous, exclusive and notorious occupation of the disputed property for
thirty years must be conclusively established (San Miguel Corporation vs. Court of
Appeals, 185 SCRA 722 [1990]).

Reckoned from the time she executed the affidavit of adjudication in 1961, eleven
years after the New Civil Code had taken effect, private respondent's possession of
the contested lot is far too short of the prescriptive period of thirty years considering
that her possession is in bad faith. The filing of the petition for recovery of ownership
and possession and quieting of title by petitioners on April 27, 1973 was well below
the acquisitive prescriptive period for private respondent, which is thirty years under
Article 1141 of the present Civil Code. In this case, the statutory period of
prescription is deemed to have commenced when petitioners were made aware of a
claim adverse to them (Coronel vs. Intermediate Appellate Court, 155 SCRA 270
[1987]), that is, when the affidavit of adjudication was duly registered with the
Registry of Deeds which, at the earliest may be considered to be in 1974, when
private respondent was able to secure a tax declaration in her name.

WHEREFORE, the decision of the Court of Appeals under review is hereby SET
ASIDE and the decision of the trial court, dated September 7, 1975, REINSTATED.

SO ORDERED.
G.R. No. 77976 November 24, 1988

MAXIMO GABRITO, ROGER LIBUT, CARMELITA UY, LIZA DE VERA, thru her
Attorney-in-Fact, JESUS DE LOS SANTOS, petitioners,
vs.
THE HON. NINTH DIVISION, COURT OF APPEALS, THE HON. NICIAS O.
MENDOZA, Presiding Judge Branch 74, Regional Trial Court, Olongapo City,
ET AL., respondents.

Cornelio C. Cardenas and Valeriano S. Peralta for petitioners.

Estanislao L. Cesa, Jr. for respondents.

BIDIN, J.:

This is a petition for review on certiorari with preliminary injunction and restraining
order of the decision of the Court of Appeals * dated March 4, 1987 in CA-G.R. No.
SP No. 08710, "Maximo Gabrito et al. vs. Hon. Nicias O. Mendoza and Roberto Tan
et al.," affirming the April 2, 1986 decision of the Regional Trial Court of Olongapo
City ** which also affirmed the decision of MTCC, Branch V, Olongapo City, and the
Resolution of respondent court dated March 30, 1987 denying herein petitioners'
motion for reconsideration.

The appeal originated as an unlawful detainer complaint filed by herein private

respondents with the Municipal Trial Court, Branch V, Olongapo City.

The antecedent facts as summarized by the Court of Appeals are as follows:

The spouses Roberto Tan and Benita Ching-Tan filed a complaint in

the Municipal Trial Court against defendants Maximo Gabrito, et al.,
alleging that they are the possessors and legal owners of the property
situated at No. 107 Gordon Ave., New Kalalake, Olongapo City as
evidenced by Tax Declaration No. 4-2046. The defendants are leasing
portions of this parcel of land, each paying the corresponding monthly
rentals due thereon.

On the leased portion, the defendants constructed buildings and have

allowed other persons to sublease the same for commercial purposes.

As the spouses Tan have no other property where they could construct
their residential house, the spouses Tan notified the defendants (in
January 1984) that they intend to personally use the land to build their
house thereon and gave defendants three (3) months to vacate the
premises and remove the structures and improvements which
defendants had constructed thereon.

In April 1984, defendants requested for an extension of time within

which to vacate, which was granted by the spouses Tan. However,
 from that time on, defendants also stopped paying monthly rentals due
on the land they leased.

In view of this, in July 1984, defendants were told to leave the premises
and to pay rentals in arrears. As defendants refused to comply with
both demands, the matter was brought to the Barangay Council for
settlement. As no agreement was reached, a certification to file action
was issued to the spouses Tan. Hence, the Tans filed an action for
unlawful detainer with damages against Gabrito, et al.

In answer to the complaint, defendants Gabrito, et al. denied the

material allegations of the complaint and alleged that: they are builders
in good faith over the land as provided in Article 448 of the Civil Code;
the land where the houses of defendants were built is a public land, not
yet awarded nor titled to anybody; plaintiffs's alleged predecessor-in-
interest not being the owner thereof could not have passed nor
transferred ownership thereof to them (plaintiffs) considering that Gloria
Carillo's Miscellaneous Sales Application No. (X-4-4320) has not yet
been acted upon by the Bureau of Lands; plaintiffs and their
predessors-in-interest are absentee applicants over the land, hence,
are disqualified to own the same; plaintiffs have never been in
possession of the land while the defendants are in actual physical
possession thereof; the sale of plaintiffs' alleged predecessor-in-
interest in favor of plaintiffs is null and void for being in violation of P.D.
No. 1517 as defendants being lessees of the land have the right of first
refusal thereof.

Defendants brought a counterclaim for damages against the plaintiffs.

(Rollo, Annex "C", pp. 39-40).

Respondent Municipal Trial Judge applied the rule on summary procedure in this
case, rendered its decision dated November 22, 1985, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered for all the defendants to

vacate the parcel of land described in par. 3 of the complaint, removing
therefrom the buildings and any other improvements respectively
owned by them; and to pay plaintiffs the following as reasonable
compensation for the use of the premises:

Maximo Gabritoat
P250.00 per month from April 1984 until he vacates the premises;
Roger Libutat
P150.00 per month from May 1984 until he vacates the premises;
Liza de Veraat:
P150.00 per month from April 1984, until she vacates the premises;
Carmelita Uyat
Pl 70.00 per month from April 1984, until she vacates the premises.
 for all defendants to pay, in equal shares, damages by way of
attorney's fees in the amount of ONE THOUSAND PESOS ( P1,000.00
) as well as costs.

SO ORDERED. (Rollo, p. 35).

On appeal to the Regional Trial Court (Civil Case No. 450-08-5), the decision of the
Municipal Trial Court was affirmed in its decision dated April 2, 1986, the dispositive
portion of which reads:

WHEREFORE, premised on all the foregoing consideration and finding

no prejudicial and reversible error was ever committed by the lower
Court, the Court affirms in toto the decision being appealed, with costs
against the defendants-appellants.

SO ORDERED. (Rollo, Annex 'B' p. 38).

On review, herein respondent Court of Appeals sustained the decision rendered by

the Regional Trial Court Branch LXXIV, and ruled;

WHEREFORE, the Petition for Review herein is DISMISSED for lack of

merit. (Rollo, Annex "C", p. 44).

On March 16, 1987, the petitioner filed their "Motion for Reconsideration and
Opposition to the Motion for Immediate Execution Pending Further Proceedings"
which was denied by the Ninth Division of respondent Court of Appeals in its
Resolution dated March 30, 1987 and granted the Motion for Immediate Issuance of
a Writ of Execution filed by private respondents (Annex "F", Rollo, pp. 57-58).

Hence, this petition for review on certiorari filed on April 13, 1987.

On April 21, 1987, Acting Chief Justice Andres Narvasa, authorized the grant of
Temporary Restraining Order in this case which was confirmed by the Second
Division of this Court in its Resolution dated April 27, 1987 (Rollo, pp. 86, 87, 88).

In a Resolution dated June 8, 1987, petitioners were required to comment on the

motion dated April 26, 1987 (Rollo, p. 94) of counsel for respondents, praying to set
aside the temporary restraining order issued on April 21, 1987 and to issue a writ of
execution pending appeal or to allow the Court of Appeals to proceed with the
execution of the decision pending appeal (Rollo, p. 115), which was complied with by
petitioners on July 22, 1987 (Rollo, p. 143).

In the resolution of October 5, 1987 (Rollo, p. 187) the petition was given due course
and the parties were required to submit their respective memoranda within twenty
(20) days from notice. Petitioners' memorandum was submitted on December 3,
1987 (Rollo, p. 196). Respondents submitted their memorandum on April 12, 1988
(Rollo, p. 235). Petitioners raised the following issues:

1. That a Municipal Trial Court has no jurisdiction to take cognizance of

a case for Unlawful Detainer under Sec. 1 of Rule 70 of the Rules of
Court, where the plaintiffs are merely the legal possessors and recent
transferees of a public land, and the defendants are the absolute
owners of the building existing on the same land, for a number of years
already.

2. That the respondent Regional Trial Court, Branch LXXIV, Olongapo

City, ought to have dismissed the action for Unlawful Detainer and as
the same was also heard on appeal by the said Court on this
jurisdictional challenge.

3. The market value of the residential houses or buildings of the

defendants on the said land is approximately P170,000.00, and it was
with plaintiffs' predecessor-in-interest, one Gloria Carillo-Potente that
defendants caused said structures to be erected on said land plaintiffs
having only acquired from said predecessor, by means of a Deed of
Sale of such rights sometime on January 5, 1984.

4. Upon this frame of facts which are admitted in the Decision of both
Courts, only a Court of General Jurisdiction, a Regional Trial Court, can
have the competence to try and decide the same: the Court of Special
Limited Jurisdiction, cannot take cognizance of such facts as an action
for Unlawful Detainer.

5. Arguendo, that the Court of Origin has jurisdiction to take

cognizance of the cause of action for Unlawful Detainer, it should have
not heard the case in accordance with the Rules of Summary
Proceedings, and based its Decision on an Affidavit hearing, as the
question of ownership was being contested between plaintiffs and
defendants, with respect to whom was the preferred grantee to the
same land, and which falls under the complete administration and
control of the Bureau of Lands.

6. In fact, the Court of Origin, Branch V, Municipal Trial Court in Cities,

Olongapo, should have suspended the proceedings, as there was an
Administrative Protest being heard by the District Land Office of
Olongapo City.

7. On the question of suspension of proceedings denied by the Court of

Origin, Municipal Trial Court in Cities, Branch V, Olongapo City, an
action for certiorari was filed before Branch LXXIII of Regional Trial
Court, Olongapo City, Civil Case No. 399-0-85, and although a
Restraining Order against Municipal Trial Court in Cities, Branch V,
City of Olongapo, was issued, the same was already academic as by
that time said Municipal Trial Court, Branch V, Olongapo City, has
already rendered its Decision in favor of private respondent hereat,
plaintiff therein.

8. Branch LXXIV, Regional Trial Court, Olongapo, in its Decision

rendered on appeal, did not pass upon such matters, specified supra,
so as to reverse the Decision of the Court of Origin: the subject
 Decisions, have not considered the due process rights of petitioners
toward their residences and structures, the same are facing the risk of
condemnation and destruction without fair hearing, and such
improvements have an aggregate value of Pl70,000.00, more or less.

9. Respondent Honorable Judge Mendoza of Branch LXXIV, Regional

Trial Court, Olongapo, may have been misled by the citation of
authority, case of Vda. de Bocaling vs. Laguna, et al., 54 SCRA, 243,
relied upon by appellees, said case being totally inapplicable to the
facts of this case.

10. Respondent Deputy Sheriff Rogelio Lumanlan, without regard to

the fif'teen (15) days period finality of the Order and/or Writ of
Demolition, harrassed herein petitioners, notwithstanding the pendency
of matters involved to their extreme discomfort and anxiety.

11. The Decision of the Honorable Court of Appeals, Annex "C",

sustained the Decision of the Regional Trial Court and ignored the vital
issues posed for resolution: A Motion For Reconsideration, copy is
hereto attached as Annex "D", was presented, precisely to stress the
same but, a pointed or precise ruling upon such issues was avoided in
the Resolution dated 30th of March, 1987, true copy attached herein as
Annex "E".

12. On the other (sic) upon Motion of private respondents, the Tans,
despite Opposition thereto, Writ of Execution pending appeal was
issued and respondent Deputy Sheriff Lumanlan enforced the same,
copy of which is hereto attached as Annex "F": true copy of Notice to
Vacate served by said respondent Deputy Sheriff to petitioners is
attached as Annex "G" herein.

13. Per Annex "D" Motion For Reconsideration a constitutional point,

was reared forth, on first impression, per proviso of Sec. 10, Art. XIII-
new, 1986 Constitution, relevant to demolition and resettlement, and,
Resolution, dated 30th March, 1987, Annex "E", of the Honorable
Appellate Authority, avoided said constitutional question, without
passing upon the same.

14. Of Jurisdictional matters: Decision dated March 4, 1987, of the

Honorable Court of Appeals was, received on March 6, 1987, Motion
For Reconsideration was filed on March 16, 1987, and Resolution
dated 30th of March, 1987, denying Motion for Reconsideration was
received on April 1, 1987: thus, this Petition is filed within the 15 day
period. (Rollo, pp. 4-8).

All of which boil down to the main issue of whether or not an action for unlawful
detainer is the proper action to oust petitioners from their occupation of the land in
dispute.
There is no question as to the ownership of the land in litigation as both petitioners
and private respondents admit that the same is a public land and owned by the
government. The bone of contention is, who has a better right to possess the land
which definitely falls under the jurisdiction of the Municipal Trial Court and the rule of
summary procedure may properly be applied.

In a preliminary conference held pursuant to Section 6 of the Rule on Summary

Procedure, defendants admitted that they entered the premises as lessees and had
been paying rentals for the use of the land to Gloria Carillo, private respondents'
predecessor-in-interest (Order dated May 15, 1985 in Civil Case No. 2511, MTC,
Olongapo City, Branch V; Rollo, pp. 72-73).<re||an1w> When requested to
vacate the premises, petitioners asked for an extension of time which request was
granted. However, petitioners failed to vacate the premises and also stopped paying
rentals. In view of said admissions, petitioners had unquestionably recognized
private respondents' prior right of possession over the questioned property.

Petitioners' allegation in their answer that they are builders in good faith over the
land as provided for in Article 448 of the Civil Code is untenable. As ruled by this
Court, Article 448 of the Civil Code, applies only where one builds on land in the
belief that he is the owner of the land, but does not apply where one's interest in the
land is that of a lessee under a rental contract (Balucanag v. Francisco, 122 SCRA
498 [1983]). More than that, it has been settled that the mere fact that, in his answer,
defendant claims to be the exclusive owner of the property from which plaintiff seeks
to eject him is not sufficient to divest the Municipal Trial Court of jurisdiction (Vivar v.
Vivar, 8 SCRA 847, 849 [1963]; De Santa vs. Court of Appeals, 140 SCRA 52
[1985]).

In addition, this Court held in Bocaling v. Laguna, et al (54 SCRA 243, 250 [1973])
that:

The rule is well-settled that lessees, like petitioner, are not possessors
in good faith because he knew that their occupancy of the premises
continues only during the life of the lease, and they cannot as a matter
of right, recover the value of their improvements from the lessor, much
less retain the premises until they are reimbursed. Their rights are
governed by Article 1678 of the Civil Code which allows reimbursement
of lessees up to one-half of the value of their improvements if the
lessor so elects.

Petitioners contend that the above cited case is "completely inapplicable to the case
at bar, because the genesis case of Ejectment therein was subjected to a
compromise Agreement" (Rollo, p. 18). Such contention is, however, untenable. One
of the issues raised in the above-cited case was whether or not lessees are builders
and/or possessors in good faith entitled to reimbursement for the value of their
improvements. The Court categorically resolved the issue in the negative without
qualification nor even a reference to the compromise agreement alluded to by the
petitioner.
In a later development, petitioners filed a supplemental memorandum submitting the
decision of the Bureau of Lands dated June 7, 1987, the dispositive portion of which
reads:

IN VIEW OF ALL THE FOREGOING, the Miscellaneous Sales

Application No. 4320 of Benita Ching Tan should be, as hereby as it is
rejected forfeiting to the government whatever amount had been paid
on account thereof. The miscellaneous sales application of Maximo
Gabrito, Carmelita Uy, Roger Libut and Liza de Vera shall continue to
be given due course after a subdivision survey of the portion occupied
by them shall have been made at their pro-rata expense.

SO ORDERED.

In view thereof, petitioners maintain that they are the lawful owners of the buildings
and the legal possessors of subject land and that the records of the court
proceedings show the pendency of the administrative protest before the Bureau of
Lands between the same litigating parties (Rollo, pp. 166-167).

Respondents countered that the decision of the Bureau of Lands granting

preferential right to the petitioners to apply for the subject parcel of land is still on
appeal before the Department of Natural Resources. 1 Hence, said decision which is
not yet final, cannot affect the outcome of this case because the authority given to
the land department over the disposition of public land does not exclude the courts
from their jurisdiction over possessory actions, the character of the land
notwithstanding (Rollo, pp. 246-247).

The contention of private respondents is well taken.

This issue has long been laid to rest by this Court. As early as the case of Pitarque v.
Sorilla (92 Phil. 55 [1952]), this Court ruled that:

The vesting of the Lands Department with authority to administer,

dispose of, and alienate public lands must not be understood as
depriving the other branches of the Government of the exercise of their
respective functions of powers thereon, such as the authority to stop
disorders and quell breaches of peace by the police and the authority
on the part of the courts to take jurisdiction over possessory actions
arising therefrom not involving, directly or indirectly, alienation and
disposition.

Said ruling was reiterated in Bahayang v. Maceren, 96 Phil 390 (1955); in Molina v.
De Bacud, 19 SCRA 56 (1967) and in Rallon v. Ruiz, Jr., 28 SCRA 331 (1969). In
the latter case, the Court specifically ruled on the jurisdictional question, as follows:

Courts have jurisdiction over possessory actions involving public lands

to determine the issue of physical possession (in forcible entry cases
before the inferior court) on the better right of possession (in accion
publiciana cases before court of first instance). And this is because the
issue of physical possession raised before the courts is independent of
 the question of disposition and alienation of public lands which should
be threshed out in the Bureau of Lands.

The above ruling was further reiterated in Francisco v. Secretary of Agriculture and
Natural Resources (121 SCRA 380 [1983]) and in a recent case of National
Development Co., et al. v. Hervilla, G.R. No. 65718, June 30, 1987 (151 SCRA 520),
where it was held that:

It is now well settled that the administration and disposition of public

lands are committed by law to the Director of Lands primarily, and
ultimately to the Secretary of Agriculture and Natural Resources. The
jurisdiction of the Bureau of Lands is confined to the determination of
the respective rights of rival claimants of public lands or to cases which
involve disposition and alienation of public lands. The jurisdiction of
courts is limited to the determination of who has the actual, physical
possession or occupation of the land in question (in forcible entry
cases, before municipal courts) or, the better right of possession (in
accion publiciana, in cases before the Court of First Instance, now
Regional Trial Court).

And even more recently in the case of Guerrero v. Amores, et al., G.R. No.
L-34492 promulgated on March 28, 1988, the Court clearly stated that "pending final
adjudication of ownership by the Bureau of Lands, the Court has jurisdiction to
determine in the meantime the right of possession over the land." Corollary thereto,
the power to order the sheriff to remove improvements and turn over the possession
of the land to the party adjudged entitled thereto, belongs only to the courts of justice
and not to the Bureau of Lands.

In the same case, the application of the principle of exhaustion of administrative

remedies with reference to public lands, was further clarified by this Court as follows:

On the other hand, the application of the principle of exhaustion of

administrative remedies as a condition precedent to the filing of a
juridical action is confined to controversies arising out of the disposition
of public lands (Geukoko vs. Araneta, 102 Phil. 706 (1957); Marukot
vs. Jacinto, 98 Phil. 128 (1957), alienation of public lands (Rallos vs.
Ruiz, Jr., supra) or to the determination of the respective rights of rival
claimants to public lands (Pitarque vs. Sorilla, supra) and not to
possessory actions involving public lands which are limited to the
determination of who has the actual, physical possession or occupation
of the land in question (Rallos vs. Ruiz, Jr., supra).<re||an1w>

In fact, the Bureau of Lands in its decision of June 7, 1987, admitted the jurisdiction
of the courts to decide the case on the question of physical possession, although not
on the question of ownership (Rollo, p. 179).

Under the circumstances, a careful study of the records failed to show any cogent
reason to disturb the findings of the Municipal Trial Court in Cities and of the
Regional Trial Court, both of Olongapo City, and finally of the Court of Appeals.
WHEREFORE, the decision of respondent Court of Appeals is AFFIRMED and the
temporary restraining order is lifted. Costs against petitioners.

SO ORDERED.
 ARTICLE 539
SEMIRARA COAL CORPORATION (now G.R. No. 166854
SEMIRARA MINING CORPORATION),
Petitioner,
Present:

QUISUMBING, J., Chairperson,

CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

HGL DEVELOPMENT CORPORATION and Promulgated:

HON. ANTONIO BANTOLO, Presiding
Judge, Branch 13, Regional Trial December 6, 2006
Court, 6th Judicial Region, Culasi,
Antique,
Respondents.
x--------------------------------------------------x

DECISION

QUISUMBING, J.:

Before us is a petition for review on certiorari assailing the Decision[1] dated

January 31, 2005, of the Court of Appeals in CA G.R. CEB SP No. 00035 which
affirmed the Resolution[2] dated September 16, 2004 of the Regional Trial Court of
Culasi, Antique, Branch 13.

The facts are as follows:

Petitioner Semirara Mining Corporation is a grantee by the Department of

Energy (DOE) of a Coal Operating Contract under Presidential Decree
No. 972[3] over the entire Island of Semirara, Antique, which contains an area
of 5,500 hectares more or less. [4]

Private respondent HGL Development Corporation is a grantee of Forest

Land Grazing Lease Agreement (FLGLA) No. 184 by the then Ministry of
Environment and Natural Resources,[5] over 367hectares of land located at the
barrios of Bobog and Pontod, Semirara, Caluya, Antique. The FLGLA No. 184 was
issued on September 28, 1984[6] for a term of 25 years, to end
on December 31, 2009. Since its grant, HGL has been grazing cattle on the subject
property.
 Sometime in 1999, petitioners representatives approached HGL and
requested for permission to allow petitioners trucks and other equipment to pass
through the property covered by the FLGLA. HGL granted the request on condition
that petitioners use would not violate the FLGLA in any way. Subsequently, however,
petitioner erected several buildings for petitioners administrative offices and
employees residences without HGLs permission. Petitioner also conducted blasting
and excavation; constructed an access road to petitioners minesite in
the Panaan Coal Reserve, Semirara; and maintained a stockyard for the coal it
extracted from its mines. Thus, the land which had been used for cattle grazing was
greatly damaged, causing the decimation of HGLs cattle.

On September 22, 1999, HGL wrote petitioner demanding full disclosure of

petitioners activities on the subject land as well as prohibiting petitioner from
constructing any improvements without HGLs permission. Petitioner ignored the
demand and continued with its activities.

On December 6, 2000, the Department of Environment and Natural

Resources (DENR) unilaterally cancelled FLGLA No. 184 and ordered HGL to
vacate the premises. The DENR found that HGL failed to pay the annual rental and
surcharges from 1986 to 1999 and to submit the required Grazing Reports
from 1985 to 1999 or pay the corresponding penalty for non-submission thereof.[7]

HGL contested the findings and filed a letter of reconsideration

on January 12, 2001, which was denied by DENR Secretary Heherson Alvarez in a
letter-order dated December 9, 2002. The DENR stated that it had coordinated with
the DOE, which had jurisdiction over coal or coal deposits and coal-bearing lands,
and was informed that coal deposits were very likely to exist in Sitios Bobog and
Pontod. Hence, unless it could be proved that coal deposits were not present, HGLs
request had to be denied.[8]

HGL sent a letter dated March 6, 2003 to DENR Secretary Alvarez seeking
reconsideration. The DENR did not act on the letter and HGL later withdrew this
second letter of reconsideration in its letter of August 4, 2003.

On November 17, 2003, HGL filed a complaint against the DENR for specific
performance and damages with prayer for a temporary restraining order and/or writ
of preliminary injunction, docketed as Civil Case No. 20675 (2003) with
the Regional Trial Court of Caloocan City. A writ of preliminary injunction was issued
by the Caloocan City RTC on December 22, 2003, enjoining the DENR from
enforcing its December 6, 2000 Order of Cancellation.

Meanwhile, HGL had also filed on November 17, 2003, a complaint against
petitioner for Recovery of Possession and Damages with Prayer for TRO and/or Writ
of Preliminary Mandatory Injunction, docketed as Civil Case No. C-146 with the
Regional Trial Court of Culasi, Antique, Branch 13.[9]

On December 1, 2003, the Antique trial court heard the application for Writ of
Preliminary Mandatory Injunction in Civil Case No. C-146. Only HGL presented its
evidence. Reception for petitioners evidence was set to March 23-
24, 2004. Petitioner was notified. But, on March 19, 2004, petitioners President wrote
the court asking for postponement since its counsel had suddenly resigned. The trial
court refused to take cognizance of the letter and treated it as a mere scrap of paper
since it failed to comply with the requisites for the filing of motions and since it was
not shown that petitioners President was authorized to represent petitioner. Because
of petitioners failure to attend the two scheduled hearings, the trial court, in an Order
dated March 24, 2004, deemed the application for issuance of a Writ of Preliminary
Mandatory Injunction submitted for decision. Meanwhile, petitioner had filed its
Answer dated February 26, 2004, raising among others the affirmative defense that
HGL no longer had any right to possess the subject property since its FLGLA has
already been cancelled and said cancellation had already become final.

On April 14, 2004, petitioner filed a verified Omnibus Motion praying that the
trial court reconsider its Order of March 24, 2004, since petitioners failure to attend
the hearing was due to an accident.Petitioner also prayed that the trial court admit as
part of petitioners evidence in opposition to the application for injunction, certified
copies of the DENR Order of Cancellation dated December 6, 2000; HGLs letter of
reconsideration dated January 12, 2001; letter of DENR Secretary Alvarez dated
December 9, 2002 denying reconsideration of the order; and registry return receipt
showing HGLs receipt of the denial of reconsideration. In the alternative, petitioner
prayed that the case be set for preliminary hearing on its affirmative defense of lack
of cause of action and forum-shopping.[10] Public respondent denied the Omnibus
Motion in a Resolution dated June 21, 2004.

Petitioner filed a motion for reconsideration of the said resolution. Upon HGLs
opposition, the motion was declared submitted for resolution in accordance with the
trial courts Order of August 5, 2004.[11]
 On September 16, 2004, the trial court granted the prayer for issuance of a
Writ of Preliminary Mandatory Injunction.[12] Petitioner did not move for
reconsideration of the order. The Writ of Preliminary Mandatory Injunction was
accordingly issued by the trial court on October 6, 2004.[13] The writ restrained
petitioner or its agents from encroaching on the subject land or conducting any
activities in it, and commanded petitioner to restore possession of the subject land to
HGL or its agents.

Petitioner questioned the Resolution dated September 16, 2004, and the Writ
of Preliminary Mandatory Injunction dated October 6, 2004 before the Court of
Appeals in a petition for certiorari, raising eight issues. On January 31, 2005,
however, the appellate court dismissed the petition. The Court of Appeals in its
decision by Justice Magpale ruled on the issues posed before the appellate court:

1. PRIVATE RESPONDENT HAS NO LEGAL RIGHT OR CAUSE

OF ACTION UNDER THE PRINCIPAL ACTION OR COMPLAINT,
MUCH LESS, TO THE ANCILLARY REMEDY OF INJUNCTION;

2. PRIVATE RESPONDENT DID NOT COME TO COURT WITH

CLEAN HANDS;

3. RESPONDENT JUDGE UNJUSTIFIABLY AND ARBITRARILY

DEPRIVED PETITIONER OF ITS FUNDAMENTAL RIGHT TO
DUE PROCESS BY NOT GIVING IT AN OPPORTUNITY TO
PRESENT EVIDENCE IN OPPOSITION TO THE MANDATORY
INJUNCTION;

4. RESPONDENT JUDGE IMMEDIATELY GRANTED THE

APPLICATION FOR THE ISSUANCE OF A WRIT OF
MANDATORY INJUNCTION WITHOUT FIRST RESOLVING THE
PENDING MOTION FOR RECONSIDERATION DATED JULY 12,
2004 OF PETITIONER;

5. RESPONDENT JUDGE DID NOT CONSIDER OR ADMIT THE

CERTIFIED TRUE COPIES OF THE OFFICIAL RECORDS OF
THE DENR CANCELLING PRIVATE RESPONDENTS FLGLA AS
EVIDENCE AGAINST THE MANDATORY INJUNCTION PRAYED
FOR;

6. RESPONDENT JUDGE SHOULD HAVE GRANTED

PETITIONERS MOTION FOR PRELIMINARY HEARING ON ITS
AFFIRMATIVE DEFENSE THAT PRIVATE RESPONDENT
UNDER ITS COMPLAINT HAS NO CAUSE OF ACTION AGAINST
PETITIONER;
 7. RESPONDENT JUDGE SHOULD HAVE DISMISSED THE
COMPLAINT OUTRIGHT FOR VIOLATION OF THE RULES ON
FORUM SHOPPING BY PRIVATE RESPONDENT;

8. THE MANDATORY INJUNCTION ISSUED IN THE INSTANT

CASE IS VIOLATIVE OF THE PROVISIONS OF PRESIDENTIAL
DECREE 605.[14]

The Court of Appeals in the assailed Decision dated January 31, 2005, opined
and ruled as follows (which we quote verbatim):

Anent the first issue, WE rule against the petitioner.

Perusal of the allegations in the Complaint filed by the private

respondent with the court a quo show that its cause of action is mainly
anchored on the Forest Land Grazing Lease Agreement (FLGLA)
executed by and between said private respondent and the Department
of Environment and Natural Resources (DENR) which became
effective on August 28, 1984 and to expire on December 31, 2009.

Under the said lease agreement, the private respondent was

granted permission to use and possess the subject land comprising
of 367-hectares located at the barrios
of Bobog and Pontod, Semirara Island, Antique for cattle-grazing
purposes.

However, petitioner avers that the FLGLA on which private

respondents cause of action is based was already cancelled by the
DENR by virtue of its Orders dated December 6, 2000 and December
9, 2002.

While it is true that the DENR issued the said

Orders cancelling the FLGLA, the same is not yet FINAL since it is
presently the subject of Civil Case No. 20675 pending in the Regional
Trial Court (RTC) of Caloocan City.Thus, for all intents and purposes,
the FLGLA is still subsisting.

The construction of numerous buildings and the blasting

activities thereon by the petitioner undertaken without the consent of
the private respondent blatantly violates the rights of the latter because
it reduced the area being used for cattle-grazing pursuant to the
FLGLA.

From the foregoing it is clear that the three (3) indispensable

requisites of a cause of action, to wit: (a) the right in favor of the plaintiff
by whatever means and under whatever law it arises or is created; (b)
an obligation on the part of the named defendant to respect or not to
violate such right; (c) an act or omission on the part of such defendant
is violative of the right of plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain
an action for recovery of damages, are PRESENT.

Hence, having established that private respondent herein has a

cause of action under the principal action in Civil Case No. C-146,
necessarily it also has a cause of action under the ancillary remedy of
injunction.

Anent the third issue, WE rule against the petitioner.

This Court finds that the petitioner was not deprived of due
process.

It appears from the records of the instant case that the petitioner
was given two (2) settings for the reception of its evidence in support of
its opposition to the prayer of herein private respondent for the
issuance of a writ of preliminary mandatory injunction. Unfortunately,
on both occasions, petitioner did not present its evidence.

Petitioner claims that its failure to attend the hearings for the
reception of its evidence was excusable due to the sudden resignation
of its lawyer and as such, nobody can attend the hearings of the case.

WE are not persuaded.

Scrutiny of the pleadings submitted by both parties shows that

petitioners lawyer, Atty. Mary Catherine P. Hilario, affiliates herself with
the law firm of BERNAS SAN JUAN & ASSOCIATE LAW OFFICES
with address
at 2nd Floor, DMCI Plaza 2281 Pasong Tamo Extension, Makati City,
by signing on and in behalf of the said law office. This Court takes
judicial notice of the fact that law offices employ more than one (1)
associate attorney aside from the name partners. As such, it can easily
assign the instant case to its other lawyers who are more than capable
to prepare the necessary motion for postponement or personally
appear to the court a quo to explain the situation.

Even assuming arguendo that Atty. Hilario is the only one who is
knowledgeable of the facts of the case, still, petitioners cannot claim
that there was violation of due process because the ESSENCE of due
process is reasonable opportunity to be heard x x x. What the law
proscribed is lack of opportunity to be heard. In the case at bar,
petitioner was given two (2) settings to present its evidence but it opted
not to.

Lastly, a prayer for the issuance of a writ of preliminary

mandatory injunction demands urgent attention from the court and as
such, delay/s is/are frowned upon due to the irreparable damage/s that
can be sustained by the movant.

Anent the fourth issue, WE rule against the petitioner.

 Petitioner claims that the court a quo gravely erred when it
issued the writ of preliminary injunction without first resolving its Motion
for Reconsideration dated July 12, 2004.

WE rule that the public respondent cannot be faulted for not

resolving the Motion for Reconsideration dated July 12, 2004 because
the same partakes of the nature of a second motion for reconsideration
of the Order dated March 24, 2004.

Records readily disclose that a prior motion for reconsideration

was filed by the petitioner herein assailing the Order
dated March 24, 2004. Although captioned as Omnibus Motion the
same was really a motion for reconsideration. Said Omnibus Motion
was resolved by the court a quo in its Order dated June 21, 2004.

Hence, the public respondent is no longer duty bound to resolve

the subsequent, reiterative and second motion for reconsideration.

Anent the fifth issue, WE rule against the petitioner.

The court a quo was correct in disregarding the documentary

evidence submitted by the petitioner in support of its opposition to the
prayer for the issuance of a writ of preliminary mandatory injunction.

The documentary evidence submitted by the petitioner herein

with the court a quo were merely attached to an Omnibus Motion and
was not properly identified, marked and formally offered as evidence
which is a blatant disregard and violation of the Rules on Evidence.

Considering the above discussions, this Court finds that the

public respondent did not abuse his discretion in issuing the assailed
resolution.

Anent the eighth issue, WE likewise rule against the petitioner.

Presidential Decree (PD) 605 is the law Banning the Issuance

by Courts of Preliminary Injunctions in Cases Involving Concessions,
Licenses, and Other Permits Issued by Public Administrative Officials
or Bodies for the Exploitation of Natural Resources.

Section 1 thereof provides that No court of the Philippines shall

have jurisdiction to issue any restraining order, preliminary injunction or
preliminary mandatory injunction in any case involving or growing out
of the issuance, suspension, revocation, approval or disapproval of any
concession, license, permit, patent or public grant of any kind for the
disposition, exploitation, utilization, exploration and development of the
natural resources of the country.

The instant case is not within the purview of the above-cited law
because the issue/s raised herein does not involve or arise out of
petitioners coal operation contract.
 The case filed with the court a quo is principally based on the
alleged encroachment by the petitioner of the subject land over which
private respondent claims it has authority to occupy or possess
until December 31, 2009 pursuant to FLGLA No. 184.

As such, the preliminary mandatory injunction issued by the

court a quo did not in any way affect the efficacy of the petitioners coal
concession or license.

WHEREFORE, the instant petition for certiorari is DENIED and

consequently, the assailed Resolution is hereby AFFIRMED.

SO ORDERED.[15]

Hence, this instant petition. On February 23, 2005, this Court issued a TRO
enjoining the implementation and enforcement of the Court of Appeals Decision
dated January 31, 2005.[16]

Petitioner submits in the petition now the following grounds:

I
THE RESOLUTION DATED 16 SEPTEMBER 2004 AND THE WRIT
OF PRELIMINARY MANDATORY INJUNCTION DATED 6 OCTOBER
2004 ISSUED BY PUBLIC RESPONDENT ARE A PATENT NULLITY
AS PRIVATE RESPONDENT CLEARLY HAS NO LEGAL RIGHT OR
CAUSE OF ACTION UNDER ITS PRINCIPAL ACTION OR
COMPLAINT, MUCH LESS, TO THE ANCILLARY REMEDY OF
PRELIMINARY MANDATORY INJUNCTION;

II
A WRIT OF PRELIMINARY MANDATORY INJUNCTION CANNOT BE
USED TO TAKE PROPERTY OUT OF THE POSSESSION OF ONE
PARTY AND PLACE IT INTO THAT OF ANOTHER WHO HAS NO
CLEAR LEGAL RIGHT THERETO;

III
PRIVATE RESPONDENTS COMPLAINT IN CIVIL CASE NO. C-146
IS IN THE NATURE OF AN ACCION PUBLICIANA, NOT FORCIBLE
ENTRY; HENCE, A WRIT OF PRELIMINARY MANDATORY
INJUNCTION IS NOT A PROPER REMEDY;

IV
PETITIONER WAS UNJUSTIFIABLY AND ARBITRARILY DEPRIVED
OF ITS FUNDAMENTAL RIGHT TO DUE PROCESS WHEN IT WAS
DENIED THE RIGHT TO PRESENT EVIDENCE IN OPPOSITION TO
THE APPLICATION FOR PRELIMINARY MANDATORY
INJUNCTION;
 V
THE PUBLIC RESPONDENT DELIBERATELY WITHHELD THE
RESOLUTION OF PETITIONERS MOTION FOR
RECONSIDERATION DATED 12 JULY 2004 AND PROCEEDED TO
PREMATURELY ISSUE THE PRELIMINARY MANDATORY
INJUNCTION IN VIOLATION OF PETITIONERS RIGHT TO FAIR
PLAY AND JUSTICE;

VI
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF
DISCRETION WHEN:
1) HE REFUSED OR FAILED TO ADMIT AND/OR CONSIDER
THE CERTIFIED DENR RECORDS OF THE DENR ORDER
CANCELLING PRIVATE RESPONDENTS FLGLA;

2) HE REFUSED OR FAILED TO CONDUCT A HEARING ON

THESE CERTIFIED PUBLIC DOCUMENTS WHICH
CONCLUSIVELY PROVE PRIVATE RESPONDENTS LACK OF
CAUSE OF ACTION UNDER THE PRINCIPAL ACTION; AND

3) HE REFUSED OR FAILED TO DISMISS THE COMPLAINT

OUTRIGHT FOR VIOLATING THE RULES ON FORUM
SHOPPING BY PRIVATE RESPONDENT.[17]

Before this Court decides the substantive issues raised herein, certain procedural
issues that were raised by the parties must first be addressed.

Petitioner contends that it was improper for the Regional Trial Court of Antique to
issue the writ of preliminary mandatory injunction (and for the Court of Appeals to
affirm the same) without giving it an opportunity to present evidence and without first
resolving the Motion for Reconsideration dated July 12, 2004. But as borne by the
records of the case, it is evident that petitioner had the opportunity to present
evidence in its favor during the hearing for the application of the writ of preliminary
mandatory injunction before the lower court. However, petitioners failure to present
its evidence was brought by its own failure to appear on the hearing dates scheduled
by the trial court. Thus, petitioner cannot complain of denial of due process when it
was its own doing that prevented it from presenting its evidence in opposition to the
application for a writ of preliminary mandatory injunction. It must be pointed out that
the trial court correctly refused to take cognizance of the letter of petitioners President
which prayed for the postponement of the scheduled hearings. Said letter was not a
proper motion that must be filed before the lower court for the stated purpose by its
counsel of record. Moreover, there was absolutely no proof given that the sender of
the letter was the duly authorized representative of petitioner.

Second, the filing of the motion for reconsideration dated July 12, 2004, which
essentially reproduced the arguments contained in the previously filed and denied
Omnibus Motion dated April 14, 2004, renders the said motion for reconsideration
dated July 12, 2004, a mere pro forma motion. Moreover, the motion for
reconsideration dated June 12, 2004, being a second motion for reconsideration, the
trial court correctly denied it for being a prohibited motion.[18]

Third, it must be stated that the petition for certiorari before the Court of Appeals
should not have prospered because petitioner failed to file a motion for
reconsideration from the assailed resolution of the Regional Trial Court of Antique,
granting the writ of preliminary mandatory injunction. Well settled is the rule that
before a party may resort to the extraordinary writ of certiorari, it must be shown that
there is no other plain, speedy and adequate remedy in the ordinary course of
law. Thus, it has been held by this Court that a motion for reconsideration is a
condition sine qua non for the grant of the extraordinary writ of certiorari.[19] Here, a
motion for reconsideration was an available plain, speedy and adequate remedy in
the ordinary course of law, designed to give the trial court the opportunity to correct
itself.

Now on the merits of the instant petition.

The pivotal issue confronting this Court is whether the Court of Appeals seriously
erred or committed grave abuse of discretion in affirming the September 16, 2004
Resolution of the Regional Trial Court of Antique granting the writ of preliminary
mandatory injunction.

Under Article 539 of the New Civil Code, a lawful possessor is entitled to be
respected in his possession and any disturbance of possession is a ground for the
issuance of a writ of preliminary mandatory injunction to restore the
possession.[20] Thus, petitioners claim that the issuance of a writ of preliminary
mandatory injunction is improper because the instant case is allegedly one
for accion publicianadeserves no consideration. This Court has already ruled
in Torre, et al. v. Hon. J. Querubin, et al.[21] that prior to the promulgation of the New
Civil Code, it was deemed improper to issue a writ of preliminary injunction where
the party to be enjoined had already taken complete material possession of the
property involved. However, with the enactment of Article 539, the plaintiff is now
allowed to avail of a writ of preliminary mandatory injunction to restore him in his
possession during the pendency of his action to recover possession.[22]

It is likewise established that a writ of mandatory injunction is granted upon a

showing that (a) the invasion of the right is material and substantial; (b) the right of
complainant is clear and unmistakable; and (c) there is an urgent and permanent
necessity for the writ to prevent serious damage.[23]

In the instant case, it is clear that as holder of a pasture lease agreement under
FLGLA No. 184, HGL has a clear and unmistakable right to the possession of the
subject property. Recall that under the FLGLA, HGL has the right to the lawful
possession of the subject property for a period of 25 years or until 2009. As lawful
possessor, HGL is therefore entitled to protection of its possession of the subject
property and any disturbance of its possession is a valid ground for the issuance of a
writ of preliminary mandatory injunction in its favor. The right of HGL to the
possession of the property is confirmed by petitioner itself when it sought permission
from HGL to use the subject property in 1999. In contrast to HGLs clear legal right to
use and possess the subject property, petitioners possession was merely by
tolerance of HGL and only because HGL permitted petitioner to use a portion of the
subject property so that the latter could gain easier access to its mining area in
the Panaan Coal Reserve.

The urgency and necessity for the issuance of a writ of mandatory injunction also
cannot be denied, considering that HGL stands to suffer material and substantial
injury as a result of petitioners continuous intrusion into the subject
property. Petitioners continued occupation of the property not only results in the
deprivation of HGL of the use and possession of the subject property but likewise
affects HGLs business operations. It must be noted that petitioner occupied the
property and prevented HGL from conducting its business way back in 1999 when
HGL still had the right to the use and possession of the property for another 10 years
or until 2009. At the very least, the failure of HGL to operate its cattle-grazing
business is perceived as an inability by HGL to comply with the demands of its
customers and sows doubts in HGLs capacity to continue doing business. This
damage to HGLs business standing is irreparable injury because no fair and
reasonable redress can be had by HGL insofar as the damage to its goodwill and
business reputation is concerned.
Petitioner posits that FLGLA No. 184 had already been cancelled by the DENR in its
order dated December 6, 2000. But as rightly held by the Court of Appeals, the
alleged cancellation of FLGLA No. 184through a unilateral act of the DENR does not
automatically render the FLGLA invalid since the unilateral cancellation is subject of
a separate case which is still pending before
the Regional Trial Court ofCaloocan City. Notably, said court has issued a writ of
preliminary injunction enjoining the DENR from enforcing its order of cancellation of
FLGLA No. 184.

The Court of Appeals found that the construction of numerous buildings and blasting
activities by petitioner were done without the consent of HGL, but in blatant violation
of its rights as the lessee of the subject property. It was likewise found that these
unauthorized activities effectively deprived HGL of its right to use the subject
property for cattle-grazing pursuant to the FLGLA. It cannot be denied that the
continuance of petitioners possession during the pendency of the case for recovery
of possession will not only be unfair but will undeniably work injustice to HGL. It
would also cause continuing damage and material injury to HGL. Thus, the Court of
Appeals correctly upheld the issuance of the writ of preliminary mandatory injunction
in favor of HGL.
WHEREFORE, the instant petition is DENIED. The Decision
dated January 31, 2005, of the Court of Appeals in CA G.R. CEB SP No. 00035,
which affirmed the Resolution dated September 16, 2004 of the Regional Trial Court
of Culasi, Antique, Branch 13, as well as the Writ of Preliminary Mandatory Injunction
dated October 6, 2004 issued pursuant to said Resolution, is AFFIRMED. The
temporary restraining order issued by this Court is hereby lifted. No pronouncement
as to costs.

SO ORDERED.
G.R. No. L-30817 September 29, 1972

DOMINADOR DIZON, doing business under the firm name "Pawnshop of

Dominador Dizon", petitioner,
vs.
LOURDES G. SUNTAY, respondent.

Andres T. Velarde for petitioner.

Rafael G. Suntay for respondent.

FERNANDO, J.:p

In essence there is nothing novel in this petition for review of a decision of the Court
of Appeals affirming a lower court judgment sustaining the right of an owner of a
diamond ring, respondent Lourdes G. Suntay, as against the claim of petitioner
Dominador Dizon, who owns and operates a pawnshop. The diamond ring was
turned over to a certain Clarita R. Sison, for sale on commission, along with other
pieces of jewelry of respondent Suntay. It was then pledged to petitioner. Since what
was done was violative of the terms of the agency, there was an attempt on her part
to recover possession thereof from petitioner, who refused. She had to file an action
then for its recovery. She was successful, as noted above, both in the lower court
and thereafter in the Court of Appeals. She prevailed as she had in her favor the
protection accorded by Article 559 of the Civil
Code. 1 The matter was then elevated to us by petitioner. Ordinarily, our discretion
would have been exercised against giving due course to such petition for review.
The vigorous plea however, grounded on estoppel, by his counsel, Atty. Andres T.
Velarde, persuaded us to act otherwise. After a careful perusal of the respective
contentions of the parties, we fail to perceive any sufficient justification for a
departure from the literal language of the applicable codal provision as uniformly
interpreted by this Court in a number of decisions. The invocation of estoppel is
therefore unavailing. We affirm.

The statement of the case as well as the controlling facts may be found in the Court
of Appeals decision penned by Justice Perez. Thus: "Plaintiff is the owner of a three-
carat diamond ring valued at P5,500.00. On June 13, 1962, the plaintiff and Clarita
R. Sison entered into a transaction wherein the plaintiff's ring was delivered to Clarita
R. Sison for sale on commission. Upon receiving the ring, Clarita R. Sison executed
and delivered to the plaintiff the receipt ... . The plaintiff had already previously
known Clarita R. Sison as the latter is a close friend of the plaintiff's cousin and they
had frequently met each other at the place of the plaintiff's said cousin. In fact, about
one year before their transaction of June 13, 1962 took place, Clarita R. Sison
received a piece of jewelry from the plaintiff to be sold for P500.00, and when it was
sold, Clarita R. Sison gave the price to the plaintiff. After the lapse of a considerable
time without Clarita R. Sison having returned to the plaintiff the latter's ring, the
plaintiff made demands on Clarita R. Sison for the return of her ring but the latter
could not comply with the demands because, without the knowledge of the plaintiff,
on June 15, 1962 or three days after the ring above-mentioned was received by
Clarita R. Sison from the plaintiff, said ring was pledged by Melia Sison, niece of the
husband of Clarita R. Sison, evidently in connivance with the latter, with the
defendant's pawnshop for P2,600.00 ... ." 2 Then came this portion of the decision
under review: "Since the plaintiff insistently demanded from Clarita R. Sison the
return of her ring, the latter finally delivered to the former the pawnshop ticket ...
which is the receipt of the pledge with the defendant's pawnshop of the plaintiff's
ring. When the plaintiff found out that Clarita R. Sison pledged, she took steps to file
a case of estafa against the latter with the fiscal's office. Subsequently thereafter, the
plaintiff, through her lawyer, wrote a letter ... dated September 22, 1962, to the
defendant asking for the delivery to the plaintiff of her ring pledged with defendant's
pawnshop under pawnshop receipt serial-B No. 65606, dated June 15, 1962 ... .
Since the defendant refused to return the ring, the plaintiff filed the present action
with the Court of First Instance of Manila for the recovery of said ring, with P500.00
as attorney's fees and costs. The plaintiff asked for the provisional remedy of
replevin by the delivery of the ring to her, upon her filing the requisite bond, pending
the final determination of the action. The lower court issued the writ of replevin
prayed for by plaintiff and the latter was able to take possession of the ring during
the pendency of the action upon her filing the requisite bond." 3 It was then noted that
the lower court rendered judgment declaring that plaintiff, now respondent Suntay,
had the right to the possession of the ring in question. Petitioner Dizon, as
defendant, sought to have the judgment reversed by the Court of Appeals. It did him
no good. The decision of May 19, 1969, now on review, affirmed the decision of the
lower court.

In the light of the facts as thus found by the Court of Appeals, well-nigh conclusive
on use, with the applicable law being what it is, this petition for review cannot
prosper. To repeat, the decision of the Court of Appeals stands.

1. There is a fairly recent restatement of the force and effect of the governing codal
norm in De Gracia v. Court of Appeals. 4 Thus: "The controlling provision is Article
559 of the Civil Code. It reads thus: 'The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has lost any movable or has
been unlawfully deprived thereof may recover it from the person in possession of the
same. If the possessor of a movable lost of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain its
return without reimbursing the price paid therefor.' Respondent Angelina D. Guevara,
having been unlawfully deprived of the diamond ring in question, was entitled to
recover it from petitioner Consuelo S. de Garcia who was found in possession of the
same. The only exception the law allows is when there is acquisition in good faith of
the possessor at a public sale, in which case the owner cannot obtain its return
without reimbursing the price. As authoritatively interpreted in Cruz v. Pahati, the
right of the owner cannot be defeated even by proof that there was good faith in the
acquisition by the possessor. There is a reiteration of this principle in Aznar v.
Yapdiangco. Thus: 'Suffice it to say in this regard that the right of the owner to
recover personal property acquired in good faith by another, is based on his being
dispossessed without his consent. The common law principle that were one of two
innocent persons must suffer by a fraud perpetrated by another, the law imposes the
loss upon the party who, by his misplaced confidence, has enabled the fraud to be
committed, cannot be applied in a case which is covered by an express provision of
the new Civil Code, specifically Article 559. Between a common law principle and a
statutory provision, the latter must prevail in this jurisdiction." " 5

2. It must have been a recognition of the compulsion exerted by the above

authoritative precedents that must have caused petitioner to invoke the principle of
estoppel. There is clearly a misapprehension. Such a contention is devoid of any
persuasive force.

Estoppel as known to the Rules of Court 6 and prior to that to the Court of Civil
Procedure, 7 has its roots in equity. Good faith is its basis. 8 It is a response to the
demands of moral right and natural justice. 9 For estoppel to exist though, it is
indispensable that there be a declaration, act or omission by the party who is sought
to be bound. Nor is this all. It is equally a requisite that he, who would claim the
benefits of such a principle, must have altered his position, having been so
intentionally and deliberately led to comport himself thus, by what was declared or
what was done or failed to be done. If thereafter a litigation arises, the former would
not be allowed to disown such act, declaration or omission. The principle comes into
full play. It may successfully be relied upon. A court is to see to it then that there is
no turning back on one's word or a repudiation of one's act. So it has been from our
earliest decisions. As Justice Mapa pointed out in the first case, a 1905
decision, Rodriguez v. Martinez, 10 a party should not be permitted "to go against his
own acts to the prejudice of [another]. Such a holding would be contrary to the most
rudimentary principles of justice and law." 11 He is not, in the language of Justice
Torres, in Irlanda v. Pitargue, 12 promulgated in 1912, "allowed to gainsay [his] own
acts or deny rights which [he had] previously recognized." 13 Some of the later cases
are to the effect that an unqualified and unconditional acceptance of an agreement
forecloses a claim for interest not therein provided. 14 Equally so the circumstance
that about a month after the date of the conveyance, one of the parties informed the
other of his being a minor, according to Chief Justice Paras, "is of no moment,
because [the former's] previous misrepresentation had already estopped him from
disavowing the contract. 15 It is easily understandable why, under the circumstances
disclosed, estoppel is a frail reed to hang on to. There was clearly the absence of an
act or omission, as a result of which a position had been assumed by petitioner, who
if such elements were not lacking, could not thereafter in law be prejudiced by his
belief in what had been misrepresented to him. 16 As was put by Justice Labrador, "a
person claimed to be estopped must have knowledge of the fact that his voluntary
acts would deprive him of some rights because said voluntary acts are inconsistent
with said rights." 17 To recapitulate, there is this pronouncement not so long ago,
from the pen of Justice Makalintal, who reaffirmed that estoppel "has its origin in
equity and, being based on moral right and natural justice, finds applicability
wherever and whenever the special circumstances of a case so demand." 18

How then can petitioner in all seriousness assert that his appeal finds support in the
doctrine of estoppel? Neither the promptings of equity nor the mandates of moral
right and natural justice come to his rescue. He is engaged in a business where
presumably ordinary prudence would manifest itself to ascertain whether or not an
individual who is offering a jewelry by way of a pledge is entitled to do so. If no such
care be taken, perhaps because of the difficulty of resisting opportunity for profit, he
should be the last to complain if thereafter the right of the true owner of such jewelry
should be recognized. The law for this sound reason accords the latter protection. So
it has always been since Varela v.
Finnick, 19 a 1907 decision. According to Justice Torres: "In the present case not
only has the ownership and the origin of the jewels misappropriated been
unquestionably proven but also that the accused, acting fraudulently and in bad faith,
disposed of them and pledged them contrary to agreement, with no right of
ownership, and to the prejudice of the injured party, who was thereby illegally
deprived of said jewels; therefore, in accordance with the provisions of article 464,
the owner has an absolute right to recover the jewels from the possession of
whosoever holds them, ... ." 20 There have been many other decisions to the same
effect since then. At least nine may be cited. 21 Nor could any other outcome be
expected, considering the civil code provisions both in the former Spanish
legislation 22 and in the present Code. 23 Petitioner ought to have been on his guard
before accepting the pledge in question. Evidently there was no such precaution
availed of. He therefore, has only himself to blame for the fix he is now in. It would be
to stretch the concept of estoppel to the breaking point if his contention were to
prevail. Moreover, there should have been a realization on his part that courts are
not likely to be impressed with a cry of distress emanating from one who is in a
business authorized to impose a higher rate of interest precisely due to the greater
risk assumed by him. A predicament of this nature then does not suffice to call for
less than undeviating adherence to the literal terms of a codal provision. Moreover,
while the activity he is engaged in is no doubt legal, it is not to be lost sight of that it
thrives on taking advantage of the necessities precisely of that element of our
population whose lives are blighted by extreme poverty. From whatever angle the
question is viewed then, estoppel certainly cannot be justly invoked.

WHEREFORE, the decision of the Court of Appeals of May 19, 1969 is affirmed, with
costs against petitioner.
ARNELITO ADLAWAN, G.R. No. 161916

Petitioner,
Present:
Panganiban, C.J. (Chairman),
- versus - Ynares-Santiago,

Austria-Martinez,

Callejo, Sr., and

Chico-Nazario, JJ.

EMETERIO M. ADLAWAN and

NARCISA M. ADLAWAN, Promulgated:

Respondents.

January 20, 2006

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

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the September 23, 2003 Decision [1] of the Court
of Appeals in CA-G.R. SP No. 74921 which set aside the September 13, 2002
Decision[2] of the Regional Trial Court (RTC) of Cebu City, Branch 7, in Civil Case
No. CEB-27806, and reinstated the February 12, 2002 Judgment [3] of the Municipal
Trial Court (MTC) of Minglanilla, Metro Cebu, in Civil Case No. 392, dismissing
petitioner Arnelito Adlawans unlawful detainer suit against respondents Emeterio and
Narcisa Adlawan. Likewise questioned is the January 8, 2004 Resolution [4] of the
Court of Appeals which denied petitioners motion for reconsideration.
The instant ejectment suit stemmed from the parties dispute over Lot 7226 and the
house built thereon, covered by Transfer Certificate of Title No. 8842, [5] registered in
the name of the late Dominador Adlawan and located at Barrio Lipata, Municipality of
Minglanilla, Cebu. In his complaint, petitioner claimed that he is an acknowledged
illegitimate child[6] of Dominador who died on May 28, 1987 without any other issue.
Claiming to be the sole heir of Dominador, he executed an affidavit adjudicating to
himself Lot 7226 and the house built thereon.[7] Out of respect and generosity to
respondents who are the siblings of his father, he granted their plea to occupy the
subject property provided they would vacate the same should his need for the
property arise. Sometime in January 1999, he verbally requested respondents to
vacate the house and lot, but they refused and filed instead an action for quieting of
title[8] with the RTC. Finally, upon respondents refusal to heed the last demand letter
to vacate dated August 2, 2000, petitioner filed the instant case on August 9, 2000. [9]

On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of

age, respectively,[10] denied that they begged petitioner to allow them to stay on the
questioned property and stressed that they have been occupying Lot 7226 and the
house standing thereon since birth. They alleged that Lot 7226 was originally
registered in the name of their deceased father, Ramon Adlawan [11] and the
ancestral house standing thereon was owned by Ramon and their mother, Oligia
Maacap Adlawan. The spouses had nine[12] children including the late Dominador
and herein surviving respondents Emeterio and Narcisa. During the lifetime of their
parents and deceased siblings, all of them lived on the said property. Dominador and
his wife, Graciana Ramas Adlawan, who died without issue, also occupied the
same.[13]Petitioner, on the other hand, is a stranger who never had possession of Lot
7226.

Sometime in 1961, spouses Ramon and Oligia needed money to finance the
renovation of their house. Since they were not qualified to obtain a loan, they
transferred ownership of Lot 7226 in the name of their son Dominador who was the
only one in the family who had a college education. By virtue of a January 31, 1962
simulated deed of sale,[14] a title was issued to Dominador which enabled him to
secure a loan with Lot 7226 as collateral. Notwithstanding the execution of the
simulated deed, Dominador, then single, never disputed his parents ownership of the
lot. He and his wife, Graciana, did not disturb respondents possession of the
property until they died on May 28, 1987 and May 6, 1997, respectively.
Respondents also contended that Dominadors signature at the back of petitioners
birth certificate was forged, hence, the latter is not an heir of Dominador and has no
right to claim ownership of Lot 7226.[15]They argued that even if petitioner is indeed
Dominadors acknowledged illegitimate son, his right to succeed is doubtful because
Dominador was survived by his wife, Graciana.[16]

On February 12, 2002, the MTC dismissed the complaint holding that the
establishment of petitioners filiation and the settlement of the estate of Dominador
are conditions precedent to the accrual of petitioners action for ejectment. It added
that since Dominador was survived by his wife, Graciana, who died 10 years
thereafter, her legal heirs are also entitled to their share in Lot 7226. The dispositive
portion thereof, reads:

In View of the foregoing, for failure to prove by preponderance of

evidence, the plaintiffs cause of action, the above-entitled case is
hereby Ordered DISMISSED.

SO ORDERED.[17]

On appeal by petitioner, the RTC reversed the decision of the MTC holding
that the title of Dominador over Lot 7226 cannot be collaterally attacked. It thus
ordered respondents to turn over possession of the controverted lot to petitioner and
to pay compensation for the use and occupation of the premises. The decretal
portion thereof, provides:

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

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

So ordered.[18]
 Meanwhile, the RTC granted petitioners motion for execution pending
appeal[19] which was opposed by the alleged nephew and nieces of Graciana in their
motion for leave to intervene and to file an answer in intervention. [20] They contended
that as heirs of Graciana, they have a share in Lot 7226 and that intervention is
necessary to protect their right over the property. In addition, they declared that as
co-owners of the property, they are allowing respondents to stay in Lot 7226 until a
formal partition of the property is made.

The RTC denied the motion for leave to intervene. [21] It, however, recalled the
order granting the execution pending appeal having lost jurisdiction over the case in
view of the petition filed by respondents with the Court of Appeals.[22]

On September 23, 2003, the Court of Appeals set aside the decision of the
RTC and reinstated the judgment of the MTC. It ratiocinated that petitioner and the
heirs of Graciana are co-owners of Lot 7226. As such, petitioner cannot eject
respondents from the property via an unlawful detainer suit filed in his own name and
as the sole owner of the property. Thus

WHEEFORE, premises considered, the appealed Decision

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

SO ORDERED.[23]

Petitioners motion for reconsideration was denied. Hence, the instant petition.

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

maintain the instant case for ejectment.
 Petitioner averred that he is an acknowledged illegitimate son and the sole
heir of Dominador. He in fact executed an affidavit adjudicating to himself the
controverted property. In ruling for the petitioner, the RTC held that the questioned
January 31, 1962 deed of sale validly transferred title to Dominador and that
petitioner is his acknowledged illegitimate son who inherited ownership of the
questioned lot. The Court notes, however, that the RTC lost sight of the fact that the
theory of succession invoked by petitioner would end up proving that he is not the
sole owner of Lot 7226. This is so because Dominador was survived not only by
petitioner but also by his legal wife, Graciana, who died 10 years after the demise of
Dominador on May 28, 1987.[24] By intestate succession, Graciana and petitioner
became co-owners of Lot 7226.[25] The death of Graciana on May 6, 1997, did not
make petitioner the absolute owner of Lot 7226 because the share of Graciana
passed to her relatives by consanguinity and not to petitioner with whom she had no
blood relations. The Court of Appeals thus correctly held that petitioner has no
authority to institute the instant action as the sole owner of Lot 7226.

Petitioner contends that even granting that he has co-owners over Lot 7226,
he can on his own file the instant case pursuant to Article 487 of the Civil Code
which provides:

ART. 487. Any one of the co-owners may bring an action in

ejectment.

This article covers all kinds of actions for the recovery of possession. Article
487 includes forcible entry and unlawful detainer (accion interdictal), recovery of
possession (accion publiciana), and recovery of ownership (accion de
reivindicacion).[26] A co-owner may bring such an action without the necessity of
joining all the other co-owners as co-plaintiffs because the suit is presumed to have
been filed to benefit his co-owners. It should be stressed, however, that where the
suit is for the benefit of the plaintiff alone who claims to be the sole owner and
entitled to the possession of the litigated property, the action should be dismissed.[27]

The renowned civilist, Professor Arturo M. Tolentino, explained

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

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

exclusive ownership of the property, but the evidence showed that respondent has
co-owners over the property. In dismissing the complaint for want of respondents
authority to file the case, the Court held that
Under Article 487 of the New Civil Code, any of the co-owners
may bring an action in ejectment. This article covers all kinds of actions
for the recovery of possession, including an accion publiciana and a
reinvidicatory action. A co-owner may bring such an action without the
necessity of joining all the other co-owners as co-plaintiffs because the
suit is deemed to be instituted for the benefit of all. Any judgment of the
court in favor of the co-owner will benefit the others but if such
judgment is adverse, the same cannot prejudice the rights of the
unimpleaded co-owners. If the action is for the benefit of the plaintiff
alone who claims to be the sole owner and entitled to the possession
thereof, the action will not prosper unless he impleads the other co-
owners who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming

sole ownership over the subject property and praying that he be
declared the sole owner thereof. There is no proof that the other co-
owners had waived their rights over the subject property or conveyed
the same to the respondent or such co-owners were aware of the case
in the trial court. The trial court rendered judgment declaring the
respondent as the sole owner of the property and entitled to its
possession, to the prejudice of the latters siblings. Patently then, the
decision of the trial court is erroneous.

Under Section 7, Rule 3 of the Rules of Court, the respondent

was mandated to implead his siblings, being co-owners of the property,
as parties. The respondent failed to comply with the rule. It must,
 likewise, be stressed that the Republic of the Philippines is also an
indispensable party as defendant because the respondent sought the
nullification of OCT No. P-16540 which was issued based on Free
Patent No. 384019. Unless the State is impleaded as party-defendant,
any decision of the Court would not be binding on it. It has been held
that the absence of an indispensable party in a case renders ineffective
all the proceedings subsequent to the filing of the complaint including
the judgment. The absence of the respondents siblings, as parties,
rendered all proceedings subsequent to the filing thereof, including the
judgment of the court, ineffective for want of authority to act, not only
as to the absent parties but even as to those present.[30]

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

In the same vein, there is no merit in petitioners claim that he has the legal
personality to file the present unlawful detainer suit because the ejectment of
respondents would benefit not only him but also his alleged co-owners. However,
petitioner forgets that he filed the instant case to acquire possession of the property
and to recover damages. If granted, he alone will gain possession of the lot and
benefit from the proceeds of the award of damages to the exclusion of the heirs of
Graciana. Hence, petitioner cannot successfully capitalize on the alleged benefit to
his co-owners. Incidentally, it should be pointed out that in default of the said heirs of
Graciana, whom petitioner labeled as fictitious heirs, the State will inherit her
share[31] and will thus be petitioners co-owner entitled to possession and enjoyment
of the property.

The present controversy should be differentiated from the cases where the
Court upheld the right of a co-owner to file a suit pursuant to Article 487 of the Civil
Code. In Resuena v. Court of Appeals,[32]and Sering v. Plazo,[33] the co-owners who
filed the ejectment case did not represent themselves as the exclusive owner of the
property. In Celino v. Heirs of Alejo and Teresa Santiago,[34] the complaint for
quieting of title was brought in behalf of the co-owners precisely to recover lots
owned in common.[35] Similarly in Vencilao v. Camarenta,[36] the amended complaint
specified that the plaintiff is one of the heirs who co-owns the controverted
properties.

In the foregoing cases, the plaintiff never disputed the existence of a co-
ownership nor claimed to be the sole or exclusive owner of the litigated lot. A
favorable decision therein would of course inure to the benefit not only of the plaintiff
but to his co-owners as well. The instant case, however, presents an entirely
different backdrop as petitioner vigorously asserted absolute and sole ownership of
the questioned lot. In his complaint, petitioner made the following allegations, to wit:

3. The plaintiff was the only son (illegitimate) and sole heir of
the late DOMINADOR ADLAWAN who died intestate on 28 May 1987
without any other descendant nor ascendant x x x.

xxxx

5. Being the only child/descendant and, therefore, sole heir of

the deceased Dominador Adlawan, the plaintiff became the absolute
owner, and automatically took POSSESSION, of the aforementioned
house and lot x x x. (Emphasis added)[37]

Clearly, the said cases find no application here because petitioners action
operates as a complete repudiation of the existence of co-ownership and not in
representation or recognition thereof. Dismissal of the complaint is therefore proper.
As noted by Former Supreme Court Associate Justice Edgrado L. Paras [i]t is
understood, of course, that the action [under Article 487 of the Civil Code] is being
instituted for all. Hence, if the co-owner expressly states that he is bringing the case
only for himself, the action should not be allowed to prosper.[38]
 Indeed, respondents not less than four decade actual physical possession of
the questioned ancestral house and lot deserves to be respected especially so that
petitioner failed to show that he has the requisite personality and authority as co-
owner to file the instant case. Justice dictates that respondents who are now in the
twilight years of their life be granted possession of their ancestral property where
their parents and siblings lived during their lifetime, and where they, will probably
spend the remaining days of their life.

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

the Court of Appeals in CA-G.R. SP No. 74921 which reinstated the February 12,
2002 Judgment of the Municipal Trial Court of Minglanilla, Metro Cebu, dismissing
petitioners complaint in Civil Case No. 392, and its January 8, 2004 Resolution,
are AFFIRMED.

SO ORDERED.
REYNALDO BALOLOY and G.R. No. 157767
ADELINA BALOLOY-HIJE,
Petitioners,

Present:
PUNO, J., Chairman,
- versus - AUSTRIA-MARTINEZ,*
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.

Promulgated:
ALFREDO HULAR,
Respondent. September 9, 2004
x--------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of

Court, as amended, of the Decision[1] of the Court of Appeals in CA-G.R. CV No.

51081, which affirmed the Decision[2]of the Regional Trial Court of Sorsogon, Branch

51, in Civil Case No. 93-5871.

The antecedents are as follows:

On May 11, 1993, respondent Alfredo Hular filed a complaint for quieting of title of
real property with damages against the children and heirs of Iluminado Baloloy,
namely, Anacorita, Antonio, and petitioners Reynaldo and Adelina, all surnamed
Baloloy. The respondent alleged, inter alia, in his complaint that his father, Astrologo
Hular, was the owner of a parcel of residential land located in Sitio Page, Biriran,
Juban, Sorsogon, with an area of 287 square meters, and that such lot was part of
Lot No. 3347 of the Juban Cadastre. The respondent alleged that Iluminado Baloloy,
the petitioners predecessor-in-interest, was able to secure a Free Patent over the
property through fraud on March 1, 1968, on the basis of which the Register of
Deeds issued Original Certificate of Title (OCT) No. P-16540 in his name. The
respondent later discovered that in the cadastral survey of lands in Juban, the
property of his father, which actually consisted of 1,405 square meters was made to
form part of Lot No. 3353, the property of Iluminado Baloloy. According to the
respondent, even if the residential land was made to form part of Lot No. 3353
registered under the name of Iluminado Baloloy, he had acquired ownership of the
property by acquisitive prescription, as he and his predecessors had been in
continuous, uninterrupted and open possession of the property in the concept of
owners for more than 60 years.

The respondent prayed for alternative reliefs that, after due hearing, judgment
be rendered in his favor, thus:

a) Declaring the plaintiff as the absolute owner of the land in

question;

b) Ordering the defendants to perpetually refrain from disturbing

plaintiff in his peaceful possession in the land in question;

c) Ordering the defendants to remove their houses in the land in

question, and to declare OCT No. P-16540, and whatever paper,
form, document or proceeding the defendants may have, as null
and void and without any effect whatsoever as far as the land in
question is concerned as they cast cloud upon the title of the
plaintiff;

d) In the alternative, defendants be ordered to reconvey the title in

favor of the plaintiff as far as the land in question is concerned;

e) Ordering the defendants to jointly and severally pay the plaintiff

the amount of P50,000.00 as moral damages; P5,000.00 as
attorneys fee plus P500.00 for every appearance or hearing of his
lawyer in court; P1,500.00 as consultation fee; P5,000.00 as
incidental litigation expenses; P20,000.00 as exemplary damages;
and to pay the costs.

Plaintiff further prays for such other relief [as are] just and equitable in
the premises.[3]

The Evidence of the Respondent

 The respondent adduced evidence that the Spouses Lino and Victoriana
Estopin were the original owners of a parcel of land located in Barangay Biriran,
Juban, Sorsogon, designated as Lot No. 3347 of the Juban Cadastre. A major
portion of the property, where a house of strong materials was constructed, was
agricultural, while the rest was residential. The respondent also averred that the
Spouses Estopin declared the property in their names under Tax Declaration No.
4790. On the north of the agricultural portion of the property was the road leading to
Biriran, while north of the residential portion was a creek (canal) and the property of
Iluminado.

When Lino Estopin died intestate, his widow, Victoriana Lagata, executed a
Deed of Absolute Sale[4] on November 11, 1961 over the agricultural portion of Lot
No. 3347, which had an area of 15,906 square meters, more or less, in favor of
Astrologo Hular, married to Lorenza Hular. Shortly thereafter, on November 25,
1961, Lagata executed a Deed of Absolute Sale[5] over the residential portion of the
property with an area of 287 square meters, including the house constructed
thereon, in favor of Hular. Hular and his family, including his son, the respondent,
then resided in the property. In 1961 or thereabouts, Iluminado asked Hulars
permission to construct a house on a portion of Lot No. 3347 near the road, and the
latter agreed. In l977, Lorenza Hular, wife of Astrologo, declared the residential land
in the latters name under Tax Declaration No. 6841.[6]

Earlier, or on August 14, 1945, Irene Griarte had executed a Deed of Absolute Sale
over a coconut land located in Barangay Biriran, Juban, with an area of 6,666 square
meters in favor of Martiniano Balbedina, with the following boundaries: North,
Alejandro Gruta; South, Lino Estopin; East, River Page; West, Pedro Grepal and
Esteban Grepal.[7] Subsequently, after a cadastral survey was conducted on lands in
Juban, the property of Balbedina was designated as Lot No. 3353, with the following
boundaries: North: Lot No. 3353 (portion), Alejandro Gruta; South: Lino Estopin;
West: Lot No. 3349; East: creek.A trail was then established between Lot No. 3353
and Lot No. 3347 resulting in the decrease of Lot No. 3353 owned by Balbedina to
4,651 square meters. He declared the property under his name under Tax
Declaration No. 191 with the following boundaries: North: Lot No. 3353 (portion)
Alejandro Gruta; South: trail; East: creek; West: Lot No. 3349.[8]
 On June 4, 1951, Balbedina executed a Deed of Absolute Sale over Lot No.
3353 with an area of only 4,651 square meters in favor of Iluminado.[9] The latter
declared the property in his name under Tax Declaration No. 5359. [10] Iluminado filed
an application with the Bureau of Lands for a free patent over the entirety of Lot No.
3353 on January 5, 1960.[11] He indicated in his application that the property was not
occupied by any person and was disposable or alienable public land. In support
thereof, he executed an affidavit wherein he declared that he purchased about one-
half portion of the property in 1951 based on a deed of absolute sale attached to said
affidavit; that in 1957, he purchased the other one-half portion, but for economic
reasons, no deed of sale was executed by the parties. He also alleged that the
improvements on the land consisted of coconut trees.[12] The Bureau of Lands
processed the application in due course.

In the meantime, Iluminado constructed his house on a portion of Lot No. 3353 near
the trail (road) leading to Biriran. He and his family, including his children, forthwith
resided in said house.

On March 1, 1968, the Secretary of Agricultural and Natural Resources

approved Iluminados application and issued Free Patent No. 384019 covering Lot
No. 3353 with an area of 9,302 square meters, on the basis of which OCT No. P-
16540 was thereafter issued by the Register of Deeds on March 1, 1968. [13]

On August 2, 1975, Alejandro Gruta had executed a deed of absolute sale

over a portion of Lot No. 3353 with an area of 4,651 square meters in favor of
Estelito Hije, the husband of petitioner Adelina Baloloy, one of Iluminados
children.[14]

Before he left for employment in Saudi Arabia in 1979, respondent Hular had his
house constructed near the trail (road) on Lot No. 3347, which, however, occupied a
big portion of Lot No. 3353.[15]

Iluminado died intestate on November 29, 1985. His widow and their children
continued residing in the property, while petitioner Reynaldo Baloloy, one of
Iluminados children, later constructed his house near that of his deceased
father. When Astrologo died intestate on December 25, 1989, he was survived by his
children, Jose, Romeo, Anacleto, Elena, Leo, Teresita, and the respondent, among
others,[16] who continued to reside in their house.[17]
Sometime in l991, the respondents house helper was cleaning the backyard,
but was prevented from doing so by petitioner Adelina Baloloy who claimed that their
father Iluminado owned the land where the respondents house was located. To
determine the veracity of the claim, the respondent had Lot No. 3353 surveyed by
Geodetic Engineer Rodolfo Cunanan on February 16, 1993, in the presence of
Balbedina, Antonio Baloloy and petitioner Reynaldo Baloloy. Cunanan prepared a
Special Sketch Plan of Lot No. 3353[18] showing that the house of Iluminado was
constructed on Lot No. 3353[19] near the road behind the houses owned by Astrologo
and Alfredo.[20] The engineer discovered that the residential area deeded by Lagata
to Hular had an area of 1,405 square meters, instead of 287 square meters only. [21]

In their Answer to the complaint, the heirs of Iluminado Baloloy averred that
Iluminados house was built in 1962 on a portion of Lot No. 3353, which the latter
purchased from Balbedina, and not on a portion of Lot No. 3347 which Hular
purchased from Lagata. They alleged that Hular constructed his house on a portion
of Lot No. 3353 after securing the permission of their father Iluminado, and that the
respondent had no cause of action for the nullification of Free Patent No. 384019
and OCT No. P-16540 because only the State, through the Office of the Solicitor
General, may file a direct action to annul the said patent and title; and even if the
respondent was the real party in interest to file the action, such actions had long
since prescribed. The heirs of Baloloy prayed that judgment be rendered in their
favor, thus:
WHEREFORE, it is most respectfully prayed of the Honorable Court to
DISMISS this case pursuant to paragraph 15, et seq., hereof, and/or
DECIDE it in favor of the defendants by UPHOLDING the sanctity of
OCT No. P-16540 and ordering plaintiff to:

1. RESPECT defendants proprietary rights and interests on the

property in question covered by OCT No. P-16540;
2. VACATE it at his sole and exclusive expense, and never to set
foot on it ever again;
3. PAY defendants:
a) MORAL DAMAGES at P50,000.00 EACH;
b) ACTUAL DAMAGES and UNREALIZED PROFITS
at P1,000.00/MONTH COMPUTED UP TO THE TIME
OF PAYMENT PLUS LEGAL RATE OF INTEREST;
c) EXEMPLARY DAMAGES of P50,000.00
 d) ATTYS FEES and LITIGATION EXPENSES
of P100,000.00; and
e) THE COSTS OF THIS SUIT.

DEFENDANTS pray for all other reliefs and remedies consistent

with law and equity.[22]

The Evidence for the Petitioners

Sometime in 1982, Hular asked permission from Iluminado to construct his

house on Lot No. 3353 near the road leading to Biriran. Iluminado agreed, in the
presence of his daughter, petitioner Adelina Baloloy. As per the plan of Lot No. 3353
certified by a Director of the Bureau of Lands on November 6, 1961, Lot No. 3353
had an area of 9,302 square meters.[23]

As gleaned from the Sketch Plan of Lot Nos. 3347 and 3353 prepared on
February 7, 1991 by Geodetic Engineer Salvador Balilo, the houses of the Baloloy
siblings and those of Astrologo and Alfredo were located in Lot No. 3353. [24] In the
said sketch plan, Lot No. 3353 had an area of 9,302 square meters, while Lot No.
3347 had an area of 15,905 square meters. When apprised of Hulars claim over the
property, the petitioners and their co-heirs filed a complaint for unlawful detainer with
the Municipal Trial Court of Juban, docketed as Civil Case No. 331. The case was,
however, dismissed for lack of jurisdiction.

On December 4, 1995, the trial court rendered judgment in favor of the

respondent. The fallo of the decision reads:

a/ Declaring plaintiff the absolute owner of the land in question,

consisting of 1,405 square meters, more or less, and entitled to
the peaceful possession thereof;

b/ Ordering the defendants to reconvey the title to the plaintiff as far as

the land in question is concerned within fifteen (15) days
counted from the finality of the decision, failing in which, the
Clerk of Court is hereby ordered to execute the necessary
document of reconveyance of the title in favor of the plaintiff
after an approved survey plan is made;

c/ Ordering defendants to remove their houses from the land in

question at their own expense within fifteen (15) days after the
decision has become final;
 d/ Ordering the defendants to pay jointly and severally plaintiff the
amount of P5,000.00 as attorneys fees. P5,000.00 as incidental
litigation expenses;

e/ To pay the costs.

SO ORDERED.[25]

The trial court ruled that the property subject of the complaint, with an area of 1,405
square meters, was part of Lot No. 3347 which the Spouses Estopin owned, and
which they later sold to Astrologo Hular. The trial court
also held that Iluminado committed fraud in securing the free patent and the title for
the property in question, and that when Victoriana Lagata executed the deed of
absolute sale on the residential portion of Lot No. 3347, she did not know that it
formed part of Lot No. 3353. It further held that the action of the plaintiff to nullify the
title and patent was imprescriptible.

The petitioners filed on December 8, 1995 a motion to reopen the case to admit Tax
Declaration Nos. 6957 and 4790 covering Lot No. 3347, under the names of
Astrologo Hular and Victoriana Lagata, respectively, in which it was declared that Lot
No. 3347 was coconut land. The trial court ruled that the motion had been mooted by
its decision.

On appeal, the Court of Appeals rendered judgment affirming the decision of the trial
court, and thereafter denied the motion for reconsideration thereof.

The Present Petition

The petitioners, who are still residing on the subject property, filed their
petition for review on certiorari for the reversal of the decision and resolution of the
Court of Appeals.

The issues for resolution are:

(1) whether all the indispensable parties had been impleaded by the
respondent in the trial court;
 (2) whether the said respondent had a cause of action against the petitioners
for the nullification of Free Patent No. 384019 and OCT No. P-16540; for
reconveyance and for possession of the subject property; and for damages; and
(3) whether the respondent had acquired ownership over the property through
acquisitive prescription.

The first issue, while not raised by the parties in the trial court and in the Court of
Appeals, is so interwoven with the other issues raised therein and is even decisive of
the outcome of this case; hence, such issue must be delved into and resolved by this
Court.[26]

We note that the action of the respondent in the trial court is for: (a) reinvidicatoria, to
declare the respondent the absolute owner of the subject property and its
reconveyance to him as a consequence of the nullification of Free Patent No.
384019 and OCT No. P-16540; (b) publiciana, to order the petitioners and the other
heirs of Iluminado Baloloy to vacate the property and deliver possession thereof to
him; and (c) damages and attorneys fees.

It is the contention of the respondent that the subject property was sold by
Lagata to his father, Astrologo Hular, in 1961. He adduced evidence that when his
parents died intestate, they were survived by their children, the respondent and his
siblings Elena, Jose, Romeo, Anacleto, Leo, and Teresita. Article 1078 of the Civil
Code provides that where there are two or more heirs, the whole estate of the
decedent is, before partition, owned in common by such heirs, subject to the
payment of the debts of the deceased. Until a division is made, the respective share
of each cannot be determined and every co-owner exercises, together with his co-
participants, joint ownership over the pro indiviso property, in addition to the use and
enjoyment of the same.

Under Article 487 of the New Civil Code, any of the co-owners may bring an
action in ejectment. This article covers all kinds of actions for the recovery of
possession, including an accion publicianaand a reinvidicatory action. A co-owner
may bring such an action without the necessity of joining all the other co-owners as
co-plaintiffs because the suit is deemed to be instituted for the benefit of all. [27] Any
judgment of the court in favor of the co-owner will benefit the others but if such
judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-
owners. If the action is for the benefit of the plaintiff alone who claims to be the sole
owner and entitled to the possession thereof, the action will not prosper unless he
impleads the other co-owners who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming sole ownership
over the subject property and praying that he be declared the sole owner
thereof. There is no proof that the other co-owners had waived their rights over the
subject property or conveyed the same to the respondent or such co-owners were
aware of the case in the trial court. The trial court rendered judgment declaring the
respondent as the sole owner of the property and entitled to its possession, to the
prejudice of the latters siblings. Patently then, the decision of the trial court is
erroneous.

Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated
to implead his siblings, being co-owners of the property, as parties. The respondent
failed to comply with the rule. It must, likewise, be stressed that the Republic of the
Philippines is also an indispensable party as defendant because the respondent
sought the nullification of OCT No. P-16540 which was issued based on Free Patent
No. 384019. Unless the State is impleaded as party-defendant, any decision of the
Court would not be binding on it. It has been held that the absence of an
indispensable party in a case renders ineffective all the proceedings subsequent to
the filing of the complaint including the judgment.[28] The absence of the respondents
siblings, as parties, rendered all proceedings subsequent to the filing thereof,
including the judgment of the court, ineffective for want of authority to act, not only as
to the absent parties but even as to those present.[29]

Even if we glossed over the procedural lapses of the respondent, we rule that
he failed to prove the material allegations of his complaint against the petitioners;
and that he is not entitled to the reliefs prayed for.

The burden of proof is on the plaintiff to establish his case by the

requisite quantum of evidence. If he claims a right granted as created by law or
under a contract of sale, he must prove his claim by competent evidence. He must
rely on the strength of his own evidence and not on the weakness or absence of the
evidence of that of his opponent.[30] He who claims a better right to real estate
property must prove not only his ownership of the same but also the identity
thereof.[31] In Huy v. Huy,[32] we held that where a property subject of controversy is
duly registered under the Torrens system, the presumptive conclusiveness of such
title should be given weight and in the absence of strong and compelling evidence to
the contrary, the holder thereof should be considered as the owner of the property
until his title is nullified or modified in an appropriate ordinary action. A Torrens
Certificate is evidence of an indefeasible title to property in favor of the person in
whose name appears therein.[33] Such holder is entitled to the possession of the
property until his title is nullified.

The petitioners aver that Lot No. 3347 owned by the Spouses Estopin was
coconut, and not residential, land. The petitioners contend that, under the deed of
absolute sale, Victoriana Lagata executed on November 25, 1961 in favor of
Astrologo Hular, she sold the residential portion of Lot No. 3347; however, the latter
constructed his house on a portion of Lot No. 3353 which Iluminado had purchased
from Balbedina, now covered by OCT No. P-16540. The petitioners assert that along
with their mother Anacorita and their brother Antonio Baloloy, they constructed their
houses on a part of Lot No. 3353, titled in the name of their father Iluminado; hence,
they could not be dispossessed of the said property. The petitioners posit that,
whether the house of Hular was constructed on a portion of Lot No. 3353 of the
property of Balbedina or Gruta is irrelevant because both properties are now
covered
by OCT No. P-16540 under the name of Iluminado, their predecessor-in-interest.

The Court of Appeals ruled that Victoriana Lagata owned the subject property,
which turned out to be 1,405 square meters, and sold the same to Hular. In contrast,
the RTC declared in its decision that while under the deed of absolute sale executed
by Irene Griarte in favor of Balbedina, Lot No. 3353 had an area of 6,666 square
meters, Griarte actually owned only 4,651 square meters; a portion of the lot was
actually owned by Lino Estopin. Hence, Balbedina sold only 4,651 square meters to
Iluminado[34] because he was aware that he owned only 4,651 square meters of the
land. It also held that, unknown to Lagata, a portion of Lot No. 3347 was declared as
part of Lot No. 3353 when the lands in Juban were surveyed. The trial court
concluded that Lagata erroneously declared, under the deed of absolute sale
executed on November 25, 1961 in favor of Hular, that the property was part of Lot
No. 3347.
 The trial and appellate courts erred in their decisions.

The evidence on record shows that Irene Griarte owned a parcel of land with
an area of 6,666 square meters, more or less.[35] When she sold the property to
Martiniano Balbedina on August 14, 1945, it was bounded on the south by the
property of Lino Estopin. There was no trail yet between the property of Griarte on
the south and of Lino Estopin on the north. In the
meantime, however, a road (trail) leading to Biriran was established between the
property of Balbedina on the south and that of Lino Estopin on the north. Thereafter,
a cadastral survey of the lands in Juban was conducted by the Bureau of Lands. The
property of Balbedina was designated as a portion of Lot No. 3353, while that of
Estopin was designated as Lot No. 3347. The other portion of Lot No. 3353, with an
area of 4,561 square meters, belonged to Alejandro Gruta. Because of the
construction of the road, the property of Balbedina, which was a part of Lot No. 3353,
was reduced to 4,651 square meters. Balbedina declared, under Tax Declaration No.
391, that Lot No. 3353 had an area of 4,651 square meters and was coconut
land[36] and that his property was bounded on the south by a trail (road). Lino Estopin
declared Lot No. 3347 under his name for taxation purposes, in which he stated that
his property was bounded on the north by the trail going to Biriran.[37] Clearly, then,
Lot No. 3353 and Lot No. 3347 had a common boundary the trail (road) going to
Biriran.

Balbedina sold his property, which was a portion of Lot No. 3353, with an area
of 4,651 square meters to Iluminado Baloloy on June 4, 1951. [38] Under the deed of
absolute sale, the property was bounded on the south by the trail (road) owned by
Lino Estopin.[39] The English translation of the deed of sale attached as page 85 to
the RTC Records, which both the trial court and the appellate court relied upon, is
incorrect.
The original deed of absolute sale, which is in Spanish, states that the
boundary of the property on the south is con camino, Lino Estopin, while the English
version of the deed, indicates that the property is bounded on the south by Lino
Estopin. Being an earlier document, the deed in Spanish signed by the parties
therefore should prevail. Conformably to such deed, Iluminado Baloloy declared in
Tax Declaration No. 5359 under his name that the property is bounded on the south
by a trail,[40] and not by Lot No. 3347 owned by Lino Estopin.

The respondent failed to adduce any documentary evidence to prove how the
Spouses Estopin acquired the disputed property. The respondents reliance on the
testimonies of Melissa Estopin, the daughter of the Spouses Estopin, and on Porfirio
Guamos as well as the May 8, 1993 Affidavit of Martiniano Balbedina, and the deed
of sale executed by Victoriana Lagata on November 27, 1961 in favor of Astrologo
Hular to corroborate his claim over the lot in question, is misplaced.

First. Per the testimony of Porfirio Guamos, the witness of the respondent,
Lino Estopin purchased the disputed property in 1941 from Irene Griarte and insisted
that there was a deed of sale evidencing the sale:

Atty. Dealca:
Q The area of the land in question is 1,405 sq. m., you claim that way
back in 1944 the owner of the land was Lino Estopin; 41 to 44?
A 1941.

Q And you said that Lino Estopin was able to acquire the land by
purchase?
A That was very long time when Lino Estopin sold the property.

Q My question is whether you know because you testified earlier that

Lino Estopin was able to acquire the land by purchase; do you
confirm that?
A Yes, Sir.

Q From whom?
A From Irene Griarte.

Q Were you present when that sale was consummated?

A I was not there.

Q So you do not know how much was it bought by Lino Estopin from
Irene Griarte?
A No, Sir.

Q You do not know whether a document to that effect was actually

drafted and executed?
A There was.

Q Have you seen the document?

A I did not see but there was a document.
 Q You maintain there was a document but you did not see a document,
is that it?
A In my belief there was a document.

Q In your belief, how did you organize that belief when you did not see
a document?
A I insist there was a document.

Q That is why, why are you insisting when you did not see a
document?
A Well, during the sale that document was used.

Q How was it used when you did not see that document?
A When the deed of sale was executed I did not see the document, but
I insist there was a document.

Q Thats why, how were you able to say before the court that there was
a document when you contend that you did not see any?
A There was basis in the sale the sale was based on a document. You
cannot sell a property without document? (sic)

Q Is that your belief?

A Yes, Sir.

Q But you did not see any document?

Atty. Diesta:

Already answered.

Witness:

A I did not see.

Atty. Dealca:

Q You said that that document was used when the property was sold
by Lino Estopin to Alfredo Hular. . .
A In 1961. Yes.[41]

However, the respondent failed to adduce in evidence the said deed or even
an authentic copy thereof. The respondent did not offer any justification for his failure
to adduce the same in evidence. As against the respondents verbal claim that his
father acquired the property from Lagata, the Torrens title of Iluminado Baloloy must
prevail.[42]
 Second. The respondent even failed to adduce in evidence any tax
declarations over the disputed property under the name of Irene Griarte and/or Lino
Estopin, or realty tax payment receipts in their names from 1941 to November 1961.
The documents are circumstantial evidence to prove that Irene Griarte claimed
ownership over the disputed property and that Lino Estopin acquired the same from
her.After all, such tax declarations and tax receipts can be strong evidence of
ownership of land when accompanied by possession for a period sufficient for
acquisitive prescription.[43]

Third. The respondent even failed to adduce in evidence Tax Declaration No. 4790
covering the two parcels of land under the name of Lino Estopin to prove his claim
that Lot No. 3347 consisted of agricultural and residential lands. We note that the
petitioners appended a certified true copy of Tax Declaration No. 4790 under the
name of Victoriana Lagata over Lot No. 3347 to their Motion to Reopen the Case. In
the said declaration, Lot No. 3347 was described as coconut land; this is contrary to
the respondents claim that the said lot was then residential, and that the boundary of
the property on the north was the road to Biriran which, in turn, is consistent with the
petitioners claim.[44] Unfortunately, the trial court denied the said motion on the
ground that it was mooted by its decision.

Fourth. During the cadastral survey of lands in Juban, the lot of Gruta and that of
Balbedina, inclusive of the subject property, were designated as Lot No. 3353 with a
total area of 9,302 square meters under their names, while that of Lino Estopin was
designated as Lot No. 3347 with an area of 15,906 square meters. Iluminado Baloloy
applied for a free patent over Lot No. 3353, including the disputed property, under
his name. The respondent failed to adduce any evidence that the Spouses Estopin
and/or Astrologo Hular opposed Balbedina and/or Iluminados claim of ownership of
Lot No. 3353 during the survey and after the filing of the application. A propos is our
ruling in Urquiaga v. Court of Appeals: [45]

As succinctly observed by respondent Court of Appeals in

assessing the totality of the evidence

We do not agree with defendants that they are also the occupants and
possessors of the subject lot just because it is adjacent to their titled
property. Precisely, the boundaries of defendants titled property were
determined, delineated and surveyed during the cadastral survey of
Dipolog and thereafter indicated in their certificate of title in order that
 the extent of their property will be known and fixed. Since the subject
lot was already found to be outside their titled property, defendants
have no basis in claiming it or other adjacent lots for that
matter. Otherwise, the very purpose of the cadastral survey as a
process of determining the exact boundaries of adjoining properties will
be defeated.

Defendants own title, O.C.T. No. 0-357 (in the names of Jose Aguirre
and Cristina Gonzales), in fact belies their claim of occupation and
possession over the adjacent subject lot. Examining said title, we note
that: (1) the cadastral survey of Dipolog was conducted from January,
1923 to November 1925; (2) defendants titled property was one of
those lots surveyed and this was designated as Lot No. 2623; (3)
during the survey, it was already determined and known that Lot No.
2623 is bounded on the northeast, southeast, southwest and west by
Lot No. 4443 (as we have seen in our narration of facts, the subject lot
is a subdivision lot of Lot No. 6552 which was originally identified as
Lot No. 4443-B-1, Dipolog Cadastre 85 Ext.: hence, the subject lot is a
portion of Lot No. 4443); and (4) O.C.T. No. 0-357 was issued on
October 11, 1965 on the strength of the judgment rendered on July 31
(sic), 1941 by the then Court of First Instance of Zamboanga del Norte
in Cadastral Case No. 6, LRC Cadastral Record No. 756.

From the foregoing facts, we find that as early as January, 1923 when
the cadastral survey was started, the boundaries of Lot Nos. 2623 and
4443 were already determined and delineated. Since the subject lot
was surveyed to be part of Lot No. 4443, it means that during that time
defendants predecessors-in-interest never claimed ownership or
possession over the subject lot. Otherwise, they would have
complained so that the subject lot could be excluded from Lot No. 4443
and included in Lot No. 2623, they being adjacent lots. It is obvious
then that defendants predecessors only claimed Lot No. 2623 and they
pursued their claim in Cadastral Case No. 6, LRC Cadastral Record
No. 756 until O.C.T. No. 0-357 was issued to them. The contention of
defendants that they and their predecessors-in-interest occupied and
possessed the subject lot since time immemorial therefore is not
true.[46]

Fifth. Under the deed of absolute sale dated November 25, 1961, Lagata sold
to Astrologo Hular Lot No. 3347, and not Lot No. 3353. In Veterans Federation of the
Philippines v. Court of Appeals,[47]we ruled that:

Petitioner VFP maintains that the deed of sale was valid and
enforceable and that it was perfected at the very moment that the
parties agreed upon the thing which was the object of the sale and
upon the price. The parties herein had agreed on the parcel of land that
petitioner would purchase from respondent PNR, and the same was
 described therein; thus, petitioner VFP cannot conveniently set aside
the technical description in this agreement and insist that it is the legal
owner of the property erroneously described in the certificate of
title. Petitioner can only claim right of ownership over the parcel of land
that was the object of the deed of sale and nothing else.[48]

Sixth. Under the said deed of sale dated November 11, 1961, Victoriana
Lagata sold Lot No. 3347 which had an area of 15,906 square meters and covered
by Tax Declaration No. 4790. The deed does not state that what was sold was only a
portion of Lot No. 3347, excluding therefrom the disputed property. This is
understandable, since the subject property is a portion of Lot No. 3353 owned by
Alejandro Gruta and Iluminado Baloloy, and not of Lino Estopin and/or Victoriana
Lagata. Lagata could not have sold a portion of Lot No. 3353 which she does not
own. As the Latin adage goes: NEMO DAT QUOD NON HABET.
Seventh. The Balbedinas Affidavit dated May 8, 1993 offered by the
respondent to prove the contents thereof is inadmissible in evidence against the
petitioners. Balbedina did not testify; as such, the petitioners were deprived of their
right to cross-examine him. The said affidavit is thus hearsay and barren of probative
weight. The affidavit varies the contents of the deed of absolute sale which he
(Balbedina) executed in favor of Iluminado more than forty years earlier. In the said
affidavit, it was made to appear that Balbedina sold to Iluminado on June 4, 1951
only a portion of Lot 3353 with an area of 3,333 square meters, when under the said
deed of absolute sale, the property that was sold consisted of 4,651 square meters.
The affidavit is proscribed by Section 9, Rule 130 of the Rules of Court, which
provides:
Section 9. Evidence of written agreements. - When the terms of
an agreement have been reduced to writing, it is considered as
containing all the terms agreed upon and there can be, between the
parties and their successors in interest, no evidence of such terms
other than the contents of the written agreement.
...

It bears stressing that the deed of absolute sale executed by Balbedina in

favor of Baloloy was notarized by the Justice of the Peace who was an Ex-Officio
Notary Public; hence, entitled to full probative weight.

Eighth. The Special Sketch Plan of Lot No. 3353 prepared by Geodetic Engineer
Rodolfo P. Cunanan[49] cannot prevail over OCT No. P-16540. In fact, the plan even
buttressed the case for the petitioners because it shows that the subject property is a
portion of Lot No. 3353, and not of Lot No. 3347, covered by OCT No. P-16540
under the name of Iluminado Baloloy, the deceased father of the petitioners.

Ninth. The conclusion of the RTC that Lagata in fact sold a portion of Lot No. 3347
under the deed of absolute sale dated November 25, 1961, unaware that the
property was a part of Lot No. 3353, is based on mere speculations and surmises.

Iluminado Baloloy included in his application for a free patent the property of
Alejandro Gruta, and was able to secure a free patent over said property in addition
to his own. As such, Gruta, not the respondent, is the proper party to assail such free
patent, as well as OCT No. P-16540 which was issued based thereon.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decisions of

the Regional Trial Court and the Court of
Appeals are REVERSED and SET ASIDE. The complaint of the respondent
is DISMISSED. No costs.

SO ORDERED.
G.R. No. L-123 December 12, 1945

JOSEFA FABIE, petitioner,

vs.
JOSE GUTIERREZ DAVID, Judge of First Instance of Manila, NGO BOO SOO
and JUAN GREY, respondents.

Sancho Onocencio for petitioner.

Serverino B. Orlina for respondent Ngo Soo.
No appearance for other respondents.

OZAETA, J.:

The petitioner Josefa Fabie is the usufructuary of the income of certain houses
located at 372-376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila,
under the ninth clause of the will of the deceased Rosario Fabie y Grey, which
textually reads as follows:

NOVENO. Lego a mi ahijada menor de edad, Maria Josefa de la Paz

Fabie, en usufructo vitalicio las rentas de las fincas situadas en la Calle Santo
Cristo Numeros 372 al 376 del Disrito de Binondo, de esta Ciudad de Manila,
descrita en el Certificado Original de Titulo No. 3824; y en la Calle Ongpin,
Numeros 950 al 956 del Distrito de Santa Cruz, Manila descrita en el
Certificado Original de Titulo No. 5030, expedidos por el Registrador de
Titulos de Manila, y prohibo enajene, hipoteque, permute o transfiera de
algun modo mientras que ella sea menor de edad. Nombro a Serafin Fabie
Macario, mi primo por linea paterna tutor de la persona y bienes de mi ahijada
menor, Maria Josefa de la Paz Fabie.

The owner of Santo Cristo property abovementioned is the respondent Juan Grey,
while those of the Ongpin property are other person not concern herein. Previous to
September 1944 litigation arose between Josefa Fabie as plaintiff and Juan Grey as
defendant and the owner of the Ongpin property as intervenors, involving the
administration of the houses mentioned in clause 9 of the will above quoted (civil
case No. 1659 of the Court of First Instance of Manila). That suit was decided by the
court on September 2, 1944, upon a stipulation in writing submitted by the parties to
and approved by the court. The pertinent portions of said stipulation read as follows:

(4) Heretofore, the rent of said properties have been collected at times by the
respective owners of the properties, at other times by the usufructuary, and
lastly by the defendant Juan Grey as agent under a written agreement dated
March 31, 1942, between the owners of both properties and the usufructuary.

(5) When the rents were collected by the owners, the net amounts thereof
were duly paid to the usufructuary after the expenses for real estate taxes,
repairs and insurance premiums, including the documentary stamps, on the
properties and the expenses of collecting the rents had been deducted, and
certain amount set aside as a reserve for contingent liabilities. When the rents
 were collected by the usufructuary, she herself paid the expenses aforesaid.
When the rents are collected by the defendant Juan Grey under the
agreement of March 31, 1942, the net amounts thereof were duly paid to the
usufructuary, after deducting and setting aside the items aforesaid, monthly,
until the month of October 1943, when the usufructuary refused to continue
with the agreement of March 31, 1942.

xxx xxx xxx

II. The parties hereto jointly petition the Court to render judgment adopting the
foregoing as finding of facts and disposing that:

(8) Beginning with the month of September 1944, the usufructuary shall
collect all the rents of the both the Sto. Cristo and the Ongpin properties.

(9) The usufructuary shall, at her own cost and expense, pay all the real
estate taxes, special assessments, and insurance premiums, including the
documentary stamps, and make all the necessary repairs on each of the
properties, promptly when due or, in the case of repairs, when the necessary,
giving immediate, written notice to the owner or owners of the property
concerned after making such payment or repairs. In case of default on the
part of the usufructuary, the respective owners of the properties shall have the
right to make the necessary payment, including penalties and interest, if any,
on the taxes and special assessments, and the repairs and in that event the
owner or owners shall entitled to collect all subsequent rents of the property
concerned until the amount paid by him or them and the expenses of
collection are fully covered thereby, after which the usufructuary shall again
collect the rents in accordance herewith.

(10) The foregoing shall be in effect during the term of the usufruct and shall
be binding on the successors and assigns of each of the parties.

(11) Nothing herein shall be understood as affecting any right which the
respective owners of the properties have or may have as such and which is
not specifically the subject of this stipulation.

In June 1945 Josefa Fabie commenced an action of unlawful detainer against the
herein respondent Ngo Boo Soo (who says that his correct name is Ngo Soo),
alleging in her amended complaint that the defendant is occupying the premises
located at 372-376 Santo Cristo on a month-to month rental payable in advance not
latter than the 5th of each month; that she is the administratrix and usufructuary of
said premises; "that the defendant offered to pay P300 monthly rent payable in
advance not later than the 5th of every month, beginning the month of April 1945, for
the said of premises including the one door which said defendant, without plaintiff's
consent and contrary to their agreement, had subleased to another Chinese, but
plaintiff refused, based on the fact that the herein plaintiff very badly needs the said
house to live in, as her house was burned by the Japanese on the occasion of the
entry of the American liberators in the City and which was located then at No. 38
Flores, Dominga, Pasay; that defendant was duly notified on March 24 and April 14,
1945, to leave the said premises, but he refused"; and she prayed for judgment of
eviction and for unpaid rentals.

The defendant answered alleging that he was and since 1908 had been a tenant of
the premises in question, which he was using and had always used principally as a
store and secondarily for living quarters; that he was renting it from its owner and
administrator Juan Grey; "that plaintiff is merely the usufructuary of the income
therefrom, and by agreement between her and said owner, which is embodied in a
final judgment of the Court of First Instance of Manila, her only right as usufructuary
of the income is to receive the whole of such income; that she has no right or
authority to eject tenants, such right being in the owner and administrator of the
house, the aforesaid Juan Grey, who has heretofore petitioned this Court for
permission to intervene in this action; that plaintiff herein has never had possession
of said property; that defendant's lease contract with the owner of the house is for 5-
year period, with renewal option at the end of each period, and that his present lease
due to expire on December 31, 1945 . . .; that on June 1, 1945, defendant made a
written offer to plaintiff to compromise and settle the question of the amount of rent to
be paid by defendant . . . but said plaintiff rejected the same for no valid reason
whatever and instituted the present action; that the reason plaintiff desires to eject
defendant from the property is that she wishes to lease the same to other persons
for a higher rent, ignoring the fact that as usufructuary of the income of the property
she has no right to lease the property; that the defendant has subleased no part of
the house to any person whomsoever.

Juan Grey intervened in the unlawful detainer suit, alleging in his complaint in
intervention that he is the sole and absolute owner of the premises in question; that
the plaintiff Josefa Fabie is the usufructuary of the income of said premises; by virtue
of a contract between him and the intervenor which will expire on December 31,
1945, with the option to renew it for another period of five years from and after said
date; that under the agreement between the intervenor and plaintiff Josefa Fabie in
civil case No. 1659 of the Court of First Instance of Manila, which was approved by
the court and incorporated in its decision of September 2, 1944, the only right
recognized in favor of Josefa Fabie as usufructuary of the income of said premises is
to receive the rents therefrom when due; and that as usufructuary she has no right
nor authority to administer the said premises nor to lease them nor to evict tenants,
which right and authority are vested in the intervenor as owner of the premises.

The municipal court (Judge Mariano Nable presiding) found that under paragraph 9
of the stipulation incorporated in the decision of the Court First Instance of Manila in
civil; case No. 1659, the plaintiff usufructuary is the administratrix of the premises in
question, and that the plaintiff had proved her cause. Judgment was accordingly
rendered ordering the defendant Ngo Soo to vacate the premises and to pay the
rents at the rate of P137.50 a month beginning April 1, 1945. The complaint in
intervention was dismissed.

Upon appeal to the Court of First Instance of Manila the latter (thru Judge Arsenio P.
Dizon) dismissed the case for the following reason: "The main issue *** is not a mere
question of possession but precisely who is entitled to administer the property
subject matter of this case and who should be the tenant, and the conditions of the
lease. These issues were beyond the jurisdiction of the municipal court. This being
case, this Court, as appellate court, is likewise without jurisdiction to take cognizance
of the present case." A motion for reconsideration filed by the plaintiff was denied by
Judge Jose Gutierrez David, who sustained the opinion of Judge Dizon.lawphi1.net

The present original action was instituted in this Court by Josefa Fabie to annul the
order of the dismissal and to require to the Court of First Instance to try and decide
the case on the merits. The petitioner further prays that the appeal of the intervenor
Juan Grey be declared out of time on the ground that he receive copy of the decision
on August 3 but did not file his notice of appeal until August 25, 1945.

1. The first question to determine is whether the action instituted by the petitioner
Josefa Fabie in the municipal court is a purely possessory action and as such within
the jurisdiction of said court, or an action founded on property right and therefore
beyond the jurisdiction of the municipal court. In other words, is it an action of
unlawful detainer within the purview of section 1 of Rule 72, or an action involving
the title to or the respective interests of the parties in the property subject of the
litigation?

Said section 1 of Rule 72 provides that "a landlord, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue of any contract,
express or implied, or the legal representatives or assigns of any such landlord,
vendor vendee, or other person, may, at any time within one year after such unlawful
deprivation of withholding of possession, bring an action in the proper inferior court
against the person or persons unlawfully withholding or depriving of possession, or
any person or persons claiming under them, for the restitution of such possession,
together with the damages and costs."

It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of the
income of the property in question and that the respondent Juan Grey is the owner
thereof. It is likewise admitted that by virtue of a final judgment entered in civil case
No. 1659 of the Court of First Instance of Manila between the usufructuary and the
owner, the former has the right to collect all the rents of said property for herself with
the obligation on her part to pay all the real estate taxes, special assessments, and
insurance premiums, and make all necessary repairs thereon, and in case default on
her part the owner shall have the right to do all those things, in which event he shall
be entitled to collect all subsequent rents of the property concerned until the amount
paid by him and the expenses of collection are fully satisfied, after which the
usufructuary shall again collect the rents. There is therefore no dispute as to the title
to or the respective interests of the parties in the property in question. The naked title
to the property is to admittedly in the respondent Juan Grey, but the right to all the
rents thereof, with the obligation to pay the taxes and insurance premiums and make
the necessary repairs, is, also admittedly, vested in the usufructuary, the petitioner
Josefa Fabie, during her lifetime. The only question between the plaintiff and the
intervenor is: Who has the right to manage or administer the property to select the
tenant and to fix the amount of the rent? Whoever has that right has the right to the
control and possession of the property in question, regardless of the title thereto.
Therefore, the action is purely possessory and not one in any way involving the title
to the property. Indeed, the averments and the prayer of the complaint filed in the
municipal court so indicate, and as a matter of fact the defendant Ngo Soo does not
pretend to be the owner of the property, but on the contrary admits to be a mere
tenant thereof. We have repeatedly held that in determining whether an action of this
kind is within the original jurisdiction of the municipal court or of the Court of First
Instance, the averments of the complaint and the character of the relief sought are
primarily to be consulted; that the defendant in such an action cannot defeat the
jurisdiction of the justice of the peace or municipal court by setting up title in himself;
and that the factor which defeats the jurisdiction of said court is the necessity to
adjudicate the question of title. (Mediran vs. Villanueva, 37 Phil., 752, 759;
Medel vs. Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino, 51 Phil., 333; Supia and
Batioco vs. Quintero and Ayala, 59 Phil., 312; Lizo vs. Carandang, G.R. No. 47833,
2 Off. Gaz., 302; Aguilar vs. Cabrera and Flameo, G.R. No. 49129.)

The Court of First Instance was evidently confused and led to misconstrue the real
issue by the complaint in intervention of Juan Grey, who, allying himself with the
defendant Ngo Soo, claimed that he is the administrator of the property with the right
to select the tenant and dictate the conditions of the lease, thereby implying that it
was he and not the plaintiff Josefa Fabie who had the right to bring the action and
oust the tenant if necessary. For the guidance of that court and to obviate such
confusion in its disposal of the case on the merits, we deem it necessary and proper
to construe the judgment entered by the Court of First Instance of Manila in civil case
No. 1659, entitled "Josefa Fabie and Jose Carandang, plaintiffs, vs. Juan Grey,
defendant, and Nieves G. Vda. de Grey, et al., intervenors-defendants" which
judgment was pleaded by the herein respondents Juan Grey and Ngo Soo in the
municipal court. According the decision, copy of which was submitted to this Court
as Appendix F of the petition and as Annex 1 of the answer, there was an
agreement, dated March 31, 1942, between the usufructuary Josefa Fabie and the
owner Juan Grey whereby the latter as agent collected the rents of the property in
question and delivered the same to the usufructuary after deducting the expenses for
taxes, repairs, insurance premiums and the expenses of collection; that in the month
of October 1943 the usufructuary refused to continue with the said agreement of
March 31, 1942, and thereafter the said case arose between the parties, which by
stipulation approved by the court was settled among them in the following manner:
Beginning with the month of September 1944 the usufructuary shall collect all the
rents of the property in question; shall, at her own cost and expense, pay all the real
estate taxes, special assessments, and insurance premiums, including the
documentary stamps, and make all the necessary repairs on the property; and in
case of default on her part the owner shall the right to do any or all of those things, in
which event he shall be entitled to collect all subsequent rents until the amounts paid
by him are fully satisfied, after which the usufructuary shall again collect the rents. It
was further stipulated by the parties and decreed by the court that "the foregoing
shall be in effect during the term of the usufruct and shall be binding on the
successors and assigns of each of the parties."

Construing said judgment in the light of the ninth clause of the will of the deceased
Rosario Fabie y Grey, which was quoted in the decision and by which Josefa Fabie
was made by the usufructuary during her lifetime of the income of the property in
question, we find that the said usufructuary has the right to administer the property in
question. All the acts of administration to collect the rents for herself, and to
conserve the property by making all necessary repairs and paying all the taxes,
special assessments, and insurance premiums thereon were by said judgment
vested in the usufructuary. The pretension of the respondent Juan Grey that he is
the administrator of the property with the right to choose the tenants and to dictate
the conditions of the lease is contrary to both the letter and the spirit of the said
clause of the will, the stipulation of the parties, and the judgment of the court. He
cannot manage or administer the property after all the acts of management and
administration have been vested by the court, with his consent, in the usufructuary.
He admitted that before said judgment he had been collecting the rents as agent of
the usufructuary under an agreement with the latter. What legal justification or valid
excuse could he have to claim the right to choose the tenant and fix the amount of
the rent when under the will, the stipulation of the parties, and the final judgment of
the court it is not he but the usufructuary who is entitled to said rents? As long as the
property is properly conserved and insured he can have no cause for complaint, and
his right in that regard is fully protected by the terms of the stipulation and the
judgment of the court above mentioned. To permit him to arrogate to himself the
privilege to choose the tenant, to dictate the conditions of the lease, and to sue when
the lessee fails to comply therewith, would be to place the usufructuary entirely at his
mercy. It would place her in the absurd situation of having a certain indisputable right
without the power to protect, enforce, and fully enjoy it.

One more detail needs clarification. In her complaint for desahucio Josefa Fabie
alleges that she needs the premises in question to live in, as her former residence
was burned. Has she the right under the will and the judgment in question to occupy
said premises herself? We think that, as a corollary to her right to all the rent, to
choose the tenant, and to fix the amount of the rent, she necessarily has the right to
choose herself as the tenant thereof, if she wishes to; and, as she fulfills her
obligation to pay the taxes and insure and conserve the property properly, the owner
has no legitimate cause to complain. As Judge Nable of the municipal court said in
his decision, "the pretension that the plaintiff, being a mere usufructuary of the rents,
cannot occupy the property, is illogical if it be taken into account that that could not
have been the intention of the testatrix."

We find that upon the pleadings, the undisputed facts, and the law the action
instituted in the municipal court by the petitioner Josefa Fabie against the respondent
Ngo Soo is one of unlawful detainer, within the original jurisdiction of said court, and
that therefore Judges Dizon and Gutierrez David of the Court of First Instance erred
in holding otherwise and in quashing the case upon appeal.

2. The next question to determine is the propriety of the remedy availed of by the
petitioner in this Court. Judging from the allegations and the prayer of the petition, it
is in the nature of certiorari and mandamus, to annul the order of dismissal and to
require the Court of First Instance to try and decide the appeal on the merits. Under
section 3 of Rule 67, when any tribunal unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, and there is no
other plain, speedy, and adequate remedy in the ordinary course of law, it may be
compelled by mandamus to do the act required to be done to protect the rights of the
petitioner. If, as we find, the case before the respondent judge is one of unlawful
detainer, the law specifically requires him to hear and decide that case on the merits,
and his refusal to do so would constitute an unlawful neglect in the performance of
that duty within section 3 of Rule 67. Taking into consideration that the law requires
that an unlawful detainer case be promptly decided (sections 5 and 8, Rule 72),it is
evident that an appeal from the order of dismissal would not be a speedy and
adequate remedy; and under the authority of Cecilio vs. Belmonte (48 Phil., 243,
255), and Aguilar vs. Cabrera and Flameo (G.R. No. 49129), we hold
that mandamus lies in this case.

3. The contention of the petitioner that the appeal of the intervenor Juan Grey was
filed out of time is not well founded. Although said respondent received copy of the
decision of the municipal court on August 3, 1945, according to the petitioner (on
August 6, 1945, according to the said respondent), it appears from the sworn answer
of the respondent Ngo Soo in this case that on August 8 he filed a motion for
reconsideration, which was granted in part on August 18. Thus, if the judgment was
modified on August 18, the time for the intervenor Juan Grey to appeal therefrom did
not run until he was notified of said judgment as modified, and since he filed his
notice of appeal on August 23, it would appear that his appeal was filed on time.
However, we observe in this connection that said appeal of the intervenor Juan
Grey, who chose not to answer the petition herein, would be academic in view of the
conclusions we have reached above that the rights between him as owner and
Josefa Fabie as usufructuary of the property in question have been definitely settled
by final judgment in civil case No. 1659 of the Court of First Instance of Manila in the
sense that the usufructuary has the right to administer and possess the property in
question, subject to certain specified obligations on her part.

The orders of dismissal of the respondent Court of First Instance, dated September
22 and October 31, 1945, in the desahucio case (No. 71149) are set aside that court
is directed to try and decide the said case on the merits; with the costs hereof
against the respondent Ngo Soo.
[G.R. No. 148830. April 13, 2005]

NATIONAL HOUSING AUTHORITY, petitioner, vs. COURT OF APPEALS,

BULACAN GARDEN CORPORATION and MANILA SEEDLING BANK
FOUNDATION, INC., respondents.

DECISION
CARPIO, J.:

The Case

This is a petition for review[1] seeking to set aside the Decision[2] dated 30 March
2001 of the Court of Appeals (appellate court) in CA-G.R. CV No. 48382, as well as
its Resolution dated 25 June 2001 denying the motion for reconsideration. The
appellate court reversed the Decision[3] of Branch 87 of the Regional Trial Court of
Quezon City (trial court) dated 8 March 1994 in Civil Case No. Q-53464. The trial
court dismissed the complaint for injunction filed by Bulacan Garden Corporation
(BGC) against the National Housing Authority (NHA). BGC wanted to enjoin the NHA
from demolishing BGCs facilities on a lot leased from Manila Seedling Bank
Foundation, Inc. (MSBF). MSBF allegedly has usufructuary rights over the lot leased
to BGC.

Antecedent Facts

On 24 October 1968, Proclamation No. 481 issued by then President Ferdinand

Marcos set aside a 120-hectare portion of land in Quezon City owned by the
NHA[4] as reserved property for the site of the National Government Center (NGC).
On 19 September 1977, President Marcos issued Proclamation No. 1670, which
removed a seven-hectare portion from the coverage of the NGC. Proclamation No.
1670 gave MSBF usufructuary rights over this segregated portion, as follows:

Pursuant to the powers vested in me by the Constitution and the laws of the
Philippines, I, FERDINAND E. MARCOS, President of the Republic of the
Philippines, do hereby exclude from the operation of Proclamation No. 481, dated
October 24, 1968, which established the National Government Center Site, certain
parcels of land embraced therein and reserving the same for the Manila Seedling
Bank Foundation, Inc., for use in its operation and projects, subject to private rights
if any there be, and to future survey, under the administration of the
Foundation.

This parcel of land, which shall embrace 7 hectares, shall be determined by the
future survey based on the technical descriptions found in Proclamation No. 481,
and most particularly on the original survey of the area, dated July 1910 to June
1911, and on the subdivision survey dated April 19-25, 1968. (Emphasis added)
 MSBF occupied the area granted by Proclamation No. 1670. Over the years,
MSBFs occupancy exceeded the seven-hectare area subject to its usufructuary
rights. By 1987, MSBF occupied approximately 16 hectares. By then the land
occupied by MSBF was bounded by Epifanio de los Santos Avenue (EDSA) to the
west, Agham Road to the east, Quezon Avenue to the south and a creek to the
north.
On 18 August 1987, MSBF leased a portion of the area it occupied to BGC and
other stallholders. BGC leased the portion facing EDSA, which occupies 4,590
square meters of the 16-hectare area.
On 11 November 1987, President Corazon Aquino issued Memorandum Order
No. 127 (MO 127) which revoked the reserved status of the 50 hectares, more or
less, remaining out of the 120 hectares of the NHA property reserved as site of the
National Government Center. MO 127 also authorized the NHA to commercialize the
area and to sell it to the public.
On 15 August 1988, acting on the power granted under MO 127, the NHA gave
BGC ten days to vacate its occupied area. Any structure left behind after the
expiration of the ten-day period will be demolished by NHA.
BGC then filed a complaint for injunction on 21 April 1988 before the trial court.
On 26 May 1988, BGC amended its complaint to include MSBF as its co-plaintiff.

The Trial Courts Ruling

The trial court agreed with BGC and MSBF that Proclamation No. 1670 gave
MSBF the right to conduct the survey, which would establish the seven-hectare area
covered by MSBFs usufructuary rights. However, the trial court held that MSBF
failed to act seasonably on this right to conduct the survey. The trial court ruled that
the previous surveys conducted by MSBF covered 16 hectares, and were thus
inappropriate to determine the seven-hectare area. The trial court concluded that to
allow MSBF to determine the seven-hectare area now would be grossly unfair to the
grantor of the usufruct.
On 8 March 1994, the trial court dismissed BGCs complaint for injunction. Thus:

Premises considered, the complaint praying to enjoin the National Housing Authority
from carrying out the demolition of the plaintiffs structure, improvements and facilities
in the premises in question is hereby DISMISSED, but the suggestion for the Court
to rule that Memorandum Order 127 has repealed Proclamation No. 1670 is
DENIED. No costs.

SO ORDERED.[5]

The NHA demolished BGCs facilities soon thereafter.

The Appellate Courts Ruling

 Not content with the trial courts ruling, BGC appealed the trial courts Decision to
the appellate court. Initially, the appellate court agreed with the trial court that
Proclamation No. 1670 granted MSBF the right to determine the location of the
seven-hectare area covered by its usufructuary rights. However, the appellate court
ruled that MSBF did in fact assert this right by conducting two surveys and erecting
its main structures in the area of its choice.
On 30 March 2001, the appellate court reversed the trial courts ruling. Thus:

WHEREFORE, premises considered, the Decision dated March 8, 1994 of the

Regional Trial Court of Quezon City, Branch 87, is hereby REVERSED and SET
ASIDE. The National Housing Authority is enjoined from demolishing the structures,
facilities and improvements of the plaintiff-appellant Bulacan Garden Corporation at
its leased premises located in Quezon City which premises were covered by
Proclamation No. 1670, during the existence of the contract of lease it (Bulacan
Garden) had entered with the plaintiff-appellant Manila Seedling Bank Foundation,
Inc.

No costs.

SO ORDERED.[6]

The NHA filed a motion for reconsideration, which was denied by the appellate
court on 25 June 2001.
Hence, this petition.

The Issues

The following issues are considered by this Court for resolution:

WHETHER THE PETITION IS NOW MOOT BECAUSE OF THE

DEMOLITION OF THE STRUCTURES OF BGC; and

WHETHER THE PREMISES LEASED BY BGC FROM MSBF IS WITHIN

THE SEVEN-HECTARE AREA THAT PROCLAMATION NO. 1670
GRANTED TO MSBF BY WAY OF USUFRUCT.

The Ruling of the Court

We remand this petition to the trial court for a joint survey to determine finally the
metes and bounds of the seven-hectare area subject to MSBFs usufructuary rights.

Whether the Petition is Moot because of the

Demolition of BGCs Facilities
 BGC claims that the issue is now moot due to NHAs demolition of BGCs facilities
after the trial court dismissed BGCs complaint for injunction. BGC argues that there
is nothing more to enjoin and that there are no longer any rights left for adjudication.
We disagree.
BGC may have lost interest in this case due to the demolition of its premises, but
its co-plaintiff, MSBF, has not. The issue for resolution has a direct effect on
MSBFs usufructuary rights. There is yet the central question of the exact location of
the seven-hectare area granted by Proclamation No. 1670 to MSBF. This issue is
squarely raised in this petition. There is a need to settle this issue to forestall future
disputes and to put this 20-year litigation to rest.

On the Location of the Seven-Hectare Area Granted by

Proclamation No. 1670 to MSBF as Usufructuary

Rule 45 of the 1997 Rules of Civil Procedure limits the jurisdiction of this Court to
the review of errors of law.[7] Absent any of the established grounds for
exception,[8] this Court will not disturb findings of fact of lower courts. Though the
matter raised in this petition is factual, it deserves resolution because the findings of
the trial court and the appellate court conflict on several points.
The entire area bounded by Agham Road to the east, EDSA to the west, Quezon
Avenue to the south and by a creek to the north measures approximately 16
hectares. Proclamation No. 1670 gave MSBF a usufruct over only a seven-hectare
area. The BGCs leased portion is located along EDSA.
A usufruct may be constituted for a specified term and under such conditions as
the parties may deem convenient subject to the legal provisions on usufruct. [9] A
usufructuary may lease the object held in usufruct.[10]Thus, the NHA may not evict
BGC if the 4,590 square meter portion MSBF leased to BGC is within the seven-
hectare area held in usufruct by MSBF. The owner of the property must respect the
lease entered into by the usufructuary so long as the usufruct exists. [11] However, the
NHA has the right to evict BGC if BGC occupied a portion outside of the seven-
hectare area covered by MSBFs usufructuary rights.
MSBFs survey shows that BGCs stall is within the seven-hectare area. On the
other hand, NHAs survey shows otherwise. The entire controversy revolves on the
question of whose land survey should prevail.
MSBFs survey plots the location of the seven-hectare portion by starting its
measurement from Quezon Avenue going northward along EDSA up until the creek,
which serves as the northern boundary of the land in question. Mr. Ben Malto
(Malto), surveyor for MSBF, based his survey method on the fact that MSBFs main
facilities are located within this area.
On the other hand, NHAs survey determines the seven-hectare portion by
starting its measurement from Quezon Avenue going towards Agham Road. Mr.
Rogelio Inobaya (Inobaya), surveyor for NHA, based his survey method on the fact
that he saw MSBFs gate fronting Agham Road.
 BGC presented the testimony of Mr. Lucito M. Bertol (Bertol), General Manager
of MSBF. Bertol presented a map,[12] which detailed the area presently occupied by
MSBF. The map had a yellow-shaded portion, which was supposed to indicate the
seven-hectare area. It was clear from both the map and Bertols testimony that MSBF
knew that it had occupied an area in excess of the seven-hectare area granted by
Proclamation No. 1670.[13] Upon cross-examination, Bertol admitted that he
personally did not know the exact boundaries of the seven-hectare area.[14] Bertol
also admitted that MSBF prepared the map without consulting NHA, the owner of the
property.[15]
BGC also presented the testimony of Malto, a registered forester and the
Assistant Vice-President of Planning, Research and Marketing of MSBF. Malto
testified that he conducted the land survey, which was used to construct the map
presented by Bertol.[16] Bertol clarified that he authorized two surveys, one in 1984
when he first joined MSBF, and the other in 1986. [17] In both instances, Mr. Malto
testified that he was asked to survey a total of 16 hectares, not just seven hectares.
Malto testified that he conducted the second survey in 1986 on the instruction of
MSBFs general manager. According to Malto, it was only in the second survey that
he was told to determine the seven-hectare portion. Malto further clarified that he
based the technical descriptions of both surveys on a previously existing survey of
the property.[18]
The NHA presented the testimony of Inobaya, a geodetic engineer employed by
the NHA. Inobaya testified that as part of the NHAs Survey Division, his duties
included conducting surveys of properties administered by the NHA.[19] Inobaya
conducted his survey in May 1988 to determine whether BGC was occupying an
area outside the seven-hectare area MSBF held in usufruct.[20] Inobaya surveyed the
area occupied by MSBF following the same technical descriptions used by Malto.
Inobaya also came to the same conclusion that the area occupied by MSBF, as
indicated by the boundaries in the technical descriptions, covered a total of 16
hectares. He further testified that the seven-hectare portion in the map presented by
BGC,[21] which was constructed by Malto, does not tally with the boundaries BGC
and MSBF indicated in their complaint.
Article 565 of the Civil Code states:

ART. 565. The rights and obligations of the usufructuary shall be those provided in
the title constituting the usufruct; in default of such title, or in case it is deficient, the
provisions contained in the two following Chapters shall be observed.

In the present case, Proclamation No. 1670 is the title constituting the usufruct.
Proclamation No. 1670 categorically states that the seven-hectare area shall be
determined by future survey under the administration of the Foundation subject to
private rights if there be any. The appellate court and the trial court agree that MSBF
has the latitude to determine the location of its seven-hectare usufruct portion within
the 16-hectare area. The appellate court and the trial court disagree, however,
whether MSBF seasonably exercised this right.
It is clear that MSBF conducted at least two surveys. Although both surveys
covered a total of 16 hectares, the second survey specifically indicated a seven-
hectare area shaded in yellow. MSBF made the first survey in 1984 and the second
in 1986, way before the present controversy started. MSBF conducted the two
surveys before the lease to BGC. The trial court ruled that MSBF did not act
seasonably in exercising its right to conduct the survey. Confronted with evidence
that MSBF did in fact conduct two surveys, the trial court dismissed the two surveys
as self-serving. This is clearly an error on the part of the trial court. Proclamation No.
1670 authorized MSBF to determine the location of the seven-hectare area. This
authority, coupled with the fact that Proclamation No. 1670 did not state the location
of the seven-hectare area, leaves no room for doubt that Proclamation No. 1670 left
it to MSBF to choose the location of the seven-hectare area under its usufruct.
More evidence supports MSBFs stand on the location of the seven-hectare area.
The main structures of MSBF are found in the area indicated by MSBFs survey.
These structures are the main office, the three green houses, the warehouse and the
composting area. On the other hand, the NHAs delineation of the seven-hectare
area would cover only the four hardening bays and the display area. It is easy to
distinguish between these two groups of structures. The first group covers buildings
and facilities that MSBF needs for its operations. MSBF built these structures before
the present controversy started. The second group covers facilities less essential to
MSBFs existence. This distinction is decisive as to which survey should prevail. It is
clear that the MSBF intended to use the yellow-shaded area primarily because it
erected its main structures there.
Inobaya testified that his main consideration in using Agham Road as the
starting point for his survey was the presence of a gate there. The location of the
gate is not a sufficient basis to determine the starting point. MSBFs right as a
usufructuary as granted by Proclamation No. 1670 should rest on something more
substantial than where MSBF chose to place a gate.
To prefer the NHAs survey to MSBFs survey will strip MSBF of most of its main
facilities. Only the main building of MSBF will remain with MSBF since the main
building is near the corner of EDSA and Quezon Avenue. The rest of MSBFs main
facilities will be outside the seven-hectare area.
On the other hand, this Court cannot countenance MSBFs act of exceeding the
seven-hectare portion granted to it by Proclamation No. 1670. A usufruct is not
simply about rights and privileges. A usufructuary has the duty to protect the owners
interests. One such duty is found in Article 601 of the Civil Code which states:

ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third
person, of which he may have knowledge, that may be prejudicial to the rights of
ownership, and he shall be liable should he not do so, for damages, as if they had
been caused through his own fault.

A usufruct gives a right to enjoy the property of another with the obligation of
preserving its form and substance, unless the title constituting it or the law otherwise
provides.[22] This controversy would not have arisen had MSBF respected the limit of
the beneficial use given to it. MSBFs encroachment of its benefactors property gave
birth to the confusion that attended this case. To put this matter entirely to rest, it is
not enough to remind the NHA to respect MSBFs choice of the location of its seven-
hectare area. MSBF, for its part, must vacate the area that is not part of its usufruct.
MSBFs rights begin and end within the seven-hectare portion of its usufruct. This
Court agrees with the trial court that MSBF has abused the privilege given it under
Proclamation No. 1670. The direct corollary of enforcing MSBFs rights within the
seven-hectare area is the negation of any of MSBFs acts beyond it.
The seven-hectare portion of MSBF is no longer easily determinable considering
the varied structures erected within and surrounding the area. Both parties advance
different reasons why their own surveys should be preferred. At this point, the
determination of the seven-hectare portion cannot be made to rely on a choice
between the NHAs and MSBFs survey. There is a need for a new survey, one
conducted jointly by the NHA and MSBF, to remove all doubts on the exact location
of the seven-hectare area and thus avoid future controversies. This new survey
should consider existing structures of MSBF. It should as much as possible include
all of the facilities of MSBF within the seven-hectare portion without sacrificing
contiguity.
A final point. Article 605 of the Civil Code states:

ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or

association for more than fifty years. If it has been constituted, and before the
expiration of such period the town is abandoned, or the corporation or association is
dissolved, the usufruct shall be extinguished by reason thereof. (Emphasis added)

The law clearly limits any usufruct constituted in favor of a corporation or

association to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural
person, a corporation or associations lifetime may be extended indefinitely. The
usufruct would then be perpetual. This is especially invidious in cases where the
usufruct given to a corporation or association covers public land. Proclamation No.
1670 was issued 19 September 1977, or 28 years ago. Hence, under Article 605, the
usufruct in favor of MSBF has 22 years left.
MO 127 released approximately 50 hectares of the NHA property as reserved
site for the National Government Center. However, MO 127 does not affect MSBFs
seven-hectare area since under Proclamation No. 1670, MSBFs seven-hectare area
was already exclude[d] from the operation of Proclamation No. 481, dated October
24, 1968, which established the National Government Center Site.
WHEREFORE, the Decision of the Court of Appeals dated 30 March 2001 and
its Resolution dated 25 June 2001 in CA-G.R. CV No. 48382 are SET ASIDE. This
case is REMANDED to Branch 87 of the Regional Trial Court of Quezon City, which
shall order a joint survey by the National Housing Authority and Manila Seedling
Bank Foundation, Inc. to determine the metes and bounds of the seven-hectare
portion of Manila Seedling Bank Foundation, Inc. under Proclamation No. 1670. The
seven-hectare portion shall be contiguous and shall include as much as possible all
existing major improvements of Manila Seedling Bank Foundation, Inc. The parties
shall submit the joint survey to the Regional Trial Court for its approval within sixty
days from the date ordering the joint survey.
SO ORDERED.
G.R. No. L-44428 September 30, 1977

AVELINO BALURAN, petitioner,

vs.
HON. RICARDO Y. NAVARRO, Presiding Judge, Court of First Instance of
Ilocos Norte, Branch I and ANTONIO OBEDENCIO, respondents.

Alipio V. Flores for petitioner.

Rafael B. Ruiz for private respondent.

MUOZ PALMA, J.:

Spouses Domingo Paraiso and Fidela Q. Paraiso were the owners of a residential lot
of around 480 square meters located in Sarrat, Ilocos Norte. On or about February 2,
1964, the Paraisos executed an agreement entitled "BARTER" whereby as party of
the first part they agreed to "barter and exchange" with spouses Avelino and Benilda
Baluran their residential lot with the latter's unirrigated riceland situated in Sarrat,
Ilocos Norte, of approximately 223 square meters without any permanent
improvements, under the following conditions:

1. That both the Party of the First Part and the Party of the Second Part
shall enjoy the material possession of their respective properties; the
Party of the First Part shall reap the fruits of the unirrigated riceland
and the Party of the Second Part shall have a right to build his own
house in the residential lot.

2. Nevertheless, in the event any of the children of Natividad P.

Obencio, daughter of the First Part, shall choose to reside in this
municipality and build his own house in the residential lot, the Party of
the Second Part shall be obliged to return the lot such children with
damages to be incurred.

3. That neither the Party of the First Part nor the Party of the Second
Part shall encumber, alienate or dispose of in any manner their
respective properties as bartered without the consent of the other.

4. That inasmuch as the bartered properties are not yet accordance

with Act No. 496 or under the Spanish Mortgage Law, they finally
agreed and covenant that this deed be registered in the Office of the
Register of Deeds of Ilocos Norte pursuant to the provisions of Act No.
3344 as amended. (p. 28, rollo)

On May 6, 1975 Antonio Obendencio filed with the Court of First Instance of Ilocos
Norte the present complaint to recover the above-mentioned residential lot from
Avelino Baluran claiming that he is the rightful owner of said residential lot having
acquired the same from his mother, Natividad Paraiso Obedencio, and that he
needed the property for Purposes Of constructing his house thereon inasmuch as he
had taken residence in his native town, Sarrat. Obedencio accordingly prayed that
he be declared owner of the residential lot and that defendant Baluran be ordered to
vacate the same forfeiting his (Obedencio) favor the improvements defendant
Baluran had built in bad faith.1

Answering the complaint, Avelino Baluran alleged inter alia (1) that the "barter
agreement" transferred to him the ownership of the residential lot in exchange for the
unirrigated riceland conveyed to plaintiff's Predecessor-in-interest, Natividad
Obedencio, who in fact is still in On thereof, and (2) that the plaintiff's cause of action
if any had prescribed. 2

At the pre-trial, the parties agreed to submit the case for decision on the basis of
their stipulation of facts. It was likewise admitted that the aforementioned residential
lot was donated on October 4, 1974 by Natividad Obedencio to her son Antonio
Obedencio, and that since the execution of the agreement of February 2, 1964
Avelino Baluran was in possession of the residential lot, paid the taxes of the
property, and constructed a house thereon with an value of P250.00. 3 On November
8, 1975, the trial Judge Ricardo Y. Navarro rendered a decision the dispositive
portion of which reads as follows:

Consequently, the plaintiff is hereby declared owner of the question,

the defendant is hereby ordered to vacate the same with costs against
defendant.

Avelino Baluran to whom We shall refer as petitioner, now seeks a review of that
decision under the following assignment of errors:

I The lower Court erred in holding that the barter agreement did not
transfer ownership of the lot in suit to the petitioner.

II The lower Court erred in not holding that the right to re-barter or
re- exchange of respondent Antonio Obedencio had been barred by
the statute of limitation. (p. 14, Ibid.)

The resolution of this appeal revolves on the nature of the undertaking contract of
February 2, 1964 which is entitled "Barter Agreement."

It is a settled rule that to determine the nature of a contract courts are not bound by
the name or title given to it by the contracting parties. 4 This Court has held that
contracts are not what the parties may see fit to call them but what they really are as
determined by the principles of law. 5 Thus, in the instant case, the use of the, term
"barter" in describing the agreement of February 2, 1964, is not controlling. The
stipulations in said document are clear enough to indicate that there was no intention
at all on the part of the signatories thereto to convey the ownership of their
respective properties; all that was intended, and it was so provided in the agreement,
was to transfer the material possession thereof. (condition No. 1, see page I of this
Decision) In fact, under condition No. 3 of the agreement, the parties retained the
right to alienate their respective properties which right is an element of ownership.
With the material ion being the only one transferred, all that the parties acquired was
the right of usufruct which in essence is the right to enjoy the Property of
another. 6 Under the document in question, spouses Paraiso would harvest the crop
of the unirrigated riceland while the other party, Avelino Baluran, could build a house
on the residential lot, subject, however, to the condition, that when any of the
children of Natividad Paraiso Obedencio, daughter of spouses Paraiso, shall choose
to reside in the municipality and build his house on the residential lot, Avelino
Baluran shall be obliged to return the lot to said children "With damages to be
incurred." (Condition No. 2 of the Agreement) Thus, the mutual agreement each
party enjoying "material possession" of the other's property was subject to a
resolutory condition the happening of which would terminate the right of possession
and use.

A resolutory condition is one which extinguishes rights and obligations already

existing. 7 The right of "material possession" granted in the agreement of February 2,
1964, ends if and when any of the children of Natividad Paraiso, Obedencio
(daughter of spouses Paraiso, Party of the First Part) would reside in the municipality
and build his house on the property. Inasmuch as the condition opposed is not
dependent solely on the will of one of the parties to the contract the spouses
Paraiso but is Part dependent on the will of third persons Natividad Obedencio
and any of her children the same is valid. 8

When there is nothing contrary to law, morals, and good customs Or Public Policy in
the stipulations of a contract, the agreement constitutes the law between the parties
and the latter are bound by the terms thereof. 9

Art. 1306 of the Civil Code states:

Art. 1306. The contracting parties may establish such stipulations,

clauses, terms and conditions as they may deem convenient, provided
they are not contrary to law, Morals, good customs, public order, or
public policy.

Contracts which are the private laws of the contracting parties, should
be fulfilled according to the literal sense of their stipulations, if their
terms are clear and leave no room for doubt as to the intention of the
contracting parties, for contracts are obligatory, no matter what their
form may be, whenever the essential requisites for their validity are
present. (Philippine American General Insurance Co., Inc. vs. Mutuc,
61 SCRA 22)

The trial court therefore correctly adjudged that Antonio Obedencio is entitled to
recover the possession of the residential lot Pursuant to the agreement of February
2, 1964.

Petitioner submits under the second assigned error that the causa, of action if any of
respondent Obedencio had Prescribed after the lapse of four years from the date of
execution of the document of February 2, 1964. It is argued that the remedy of
plaintiff, now respondent, Was to ask for re-barter or re-exchange of the properties
subject of the agreement which could be exercised only within four years from the
date of the contract under Art. 1606 of the Civil Code.

The submission of petitioner is untenable. Art. 1606 of the Civil Code refers to
conventional redemption which petitioner would want to apply to the present
situation. However, as We stated above, the agreement of the parties of February 2,
1964, is not one of barter, exchange or even sale with right to repurchase, but is one
of or akin the other is the use or material ion or enjoyment of each other's real
property.

Usufruct may be constituted by the parties for any period of time and under such
conditions as they may deem convenient and beneficial subject to the provisions of
the Civil Code, Book II, Title VI on Usufruct. The manner of terminating or
extinguishing the right of usufruct is primarily determined by the stipulations of the
parties which in this case now before Us is the happening of the event agreed upon.
Necessarily, the plaintiff or respondent Obedencio could not demand for the recovery
of possession of the residential lot in question, not until he acquired that right from
his mother, Natividad Obedencio, and which he did acquire when his mother
donated to him the residential lot on October 4, 1974. Even if We were to go along
with petitioner in his argument that the fulfillment of the condition cannot be left to an
indefinite, uncertain period, nonetheless, in the case at bar, the respondent, in
whose favor the resolutory condition was constituted, took immediate steps to
terminate the right of petitioner herein to the use of the lot. Obedencio's present
complaint was filed in May of 1975, barely several months after the property was
donated to him.

One last point raised by petitioner is his alleged right to recover damages under the
agreement of February 2, 1964. In the absence of evidence, considering that the
parties agreed to submit the case for decision on a stipulation of facts, We have no
basis for awarding damages to petitioner.

However, We apply Art. 579 of the Civil Code and hold that petitioner will not forfeit
the improvement he built on the lot but may remove the same without causing
damage to the property.

Art. 579. The usufructuary may make on the property held in usufruct
such useful improvements or expenses for mere pleasure as he may
deem proper, provided he does not alter its form or substance; but he
shall have no right to be indemnified therefor. He may, however. He
may, however, removed such improvements, should it be possible to
do so without damage to the property. (Emphasis supplied)

Finally, We cannot close this case without touching on the unirrigated riceland which
admittedly is in the possession of Natividad Obedencio.

In view of our ruling that the "barter agreement" of February 2, 1964, did not transfer
the ownership of the respective properties mentioned therein, it follows that petitioner
Baluran remains the owner of the unirrigated riceland and is now entitled to its
Possession. With the happening of the resolutory condition provided for in the
agreement, the right of usufruct of the parties is extinguished and each is entitled to
a return of his property. it is true that Natividad Obedencio who is now in possession
of the property and who has been made a party to this case cannot be ordered in
this proceeding to surrender the riceland. But inasmuch as reciprocal rights and
obligations have arisen between the parties to the so-called "barter agreement", We
hold that the parties and for their successors-in-interest are duty bound to effect a
simultaneous transfer of the respective properties if substance at justice is to be
effected.

WHEREFORE, Judgment is hereby rendered: 1) declaring the petitioner Avelino

Baluran and respondent Antonio Obedencio the respective owners the unirrigated
riceland and residential lot mentioned in the "Barter Agreement" of February 2, 1964;
2) ordering Avelino Baluran to vacate the residential lot and removed improvements
built by thereon, provided, however that he shall not be compelled to do so unless
the unirrigated riceland shall five been restored to his possession either on volition of
the party concerned or through judicial proceedings which he may institute for the
purpose.

Without pronouncement as to costs. So Ordered.

MERCEDES MORALIDAD, G.R. No. 152809

Petitioner,

Present:

- versus -

PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,

CORONA,

AZCUNA, and

SPS. DIOSDADO PERNES and ARLENE GARCIA, JJ.

PERNES,

Respondents.
Promulgated:

August 3, 2006

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

DECISION

GARCIA, J.:

Under consideration is this petition for review on certiorari under Rule 45 of the
Rules of Court to nullify and set aside the following issuances of the Court of
Appeals (CA) in CA-G.R. SP No. 61610, to wit:
 1. Decision dated September 27, 2001,[1] affirming an earlier
decision of the Regional Trial Court (RTC) of Davao City which
reversed that of the Municipal Trial Court in Cities (MTCC),
Davao City, Branch 1, in an action for unlawful detainer thereat
commenced by the petitioner against the herein
respondents; and

2. Resolution dated February 28, 2002,[2] denying petitioners

motion for reconsideration.

At the heart of this controversy is a parcel of land located in Davao City and
registered in the name of petitioner Mercedes Moralidad under Transfer Certificate of
Title (TCT) No. T-123125 of the Registry of Deeds of Davao City.

In her younger days, petitioner taught in Davao City, Quezon City and Manila. While
teaching in Manila, she had the good fortune of furthering her studies at
the University of Pennsylvania, U.S.A. While schooling, she was offered to teach at
the Philadelphia Catholic Archdiocese, which she did for seven (7) years. Thereafter,
she worked at the Mental Health Department of said University for the next
seventeen (17) years.

During those years, she would come home to the Philippines to spend her two-
month summer vacation in her hometown in Davao City. Being single, she would
usually stay in Mandug, Davao City, in the house of her niece, respondent Arlene
Pernes, a daughter of her younger sister, Rosario.

Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at
the outskirts of Davao City was infested by NPA rebels and many women and
children were victims of crossfire between government troops and the insurgents.
Shocked and saddened about this development, she immediately sent money to
Araceli, Arlenes older sister, with instructions to look for a lot in Davao City where
Arlene and her family could transfer and settle down. This was why she bought the
parcel of land covered by TCT No. T-123125.
 Petitioner acquired the lot property initially for the purpose of letting Arlene
move from Mandug to Davao City proper but later she wanted the property to be also
available to any of her kins wishing to live and settle in Davao City. Petitioner made
known this intention in a document she executed on July 21, 1986.[3] The document
reads:

I, MERCEDES VIA MORALIDAD, of legal age, single, having been

born on the 29th day of January, 1923, now actually residing at 8021
Lindbergh Boulevard, Philadelphia, Pennsylvania, U.S.A., wishes to
convey my honest intention regarding my properties situated at Palm
Village Subdivision, Bajada, Davao City, 9501, and hereby declare:

1. That it is my desire that Mr. and Mrs. Diosdado M.

Pernes may build their house therein and stay as long as they like;

2. That anybody of my kins who wishes to stay on the

aforementioned real property should maintain an atmosphere of
cooperation, live in harmony and must avoid bickering with one
another;

3. That anyone of my kins may enjoy the privilege to stay

therein and may avail the use thereof. Provided, however, that the
same is not inimical to the purpose thereof;

4. That anyone of my kins who cannot conform with the

wishes of the undersigned may exercise the freedom to look for his
own;

5. That any proceeds or income derived from the

aforementioned properties shall be allotted to my nearest kins who
have less in life in greater percentage and lesser percentage to
those who are better of in standing.

xxx xxx xxx

 Following her retirement in 1993, petitioner came back to the Philippines to
stay with the respondents on the house they build on the subject property. In the
course of time, their relations turned sour because members of the Pernes family
were impervious to her suggestions and attempts to change certain practices
concerning matters of health and sanitation within their compound. For instance,
Arlenes eldest son, Myco Pernes, then a fourth year veterinary medicine student,
would answer petitioner back with clenched fist and at one time hurled profanities
when she corrected him. Later, Arlene herself followed suit. Petitioner brought the
matter to the local barangay lupon where she lodged a complaint for slander,
harassment, threat and defamation against the Pernes Family. Deciding for
petitioner, the lupon apparently ordered the Pernes family to vacate petitioners
property but not after they are reimbursed for the value of the house they built
thereon. Unfortunately, the parties could not agree on the amount, thus prolonging
the impasse between them.

Other ugly incidents interspersed with violent confrontations meanwhile

transpired, with the petitioner narrating that, at one occasion in July 1998, she
sustained cuts and wounds when Arlene pulled her hair, hit her on the face, neck
and back, while her husband Diosdado held her, twisting her arms in the process.

Relations having deteriorated from worse to worst, petitioner, on July 29,

1998, lodged a formal complaint before the Regional Office of the Ombudsman
for Mindanao, charging the respondent spouses, who were both government
employees, with conduct unbecoming of public servants. This administrative case,
however, did not prosper.

Then, on August 3, 1998, petitioner filed with the MTCC of Davao City an
unlawful detainer suit against the respondent spouses. Petitioner alleged that she is
the registered owner of the land on which the respondents built their house; that
through her counsel, she sent the respondent spouses a letter demanding them to
vacate the premises and to pay rentals therefor, which the respondents refused to
heed.
In their defense, the respondents alleged having entered the property in question,
building their house thereon and maintaining the same as their residence with
petitioners full knowledge and express consent. To prove their point, they invited
attention to her written declaration of July 21, 1986, supra, wherein she expressly
signified her desire for the spouses to build their house on her property and stay
thereat for as long as they like.

The MTCC, resolving the ejectment suit in petitioners favor, declared that the
respondent spouses, although builders in good faith vis--vis the house they built on
her property, cannot invoke their bona fides as a valid excuse for not complying with
the demand to vacate. To the MTCC, respondents continued possession of the
premises turned unlawful upon their receipt of the demand to vacate, such
possession being merely at petitioners tolerance, and sans any rental. Accordingly,
in its decision dated November 17, 1999,[4] the MTCC rendered judgment for the
petitioner, as plaintiff therein, to wit:

WHEREFORE, judgment is hereby rendered in favor of herein plaintiff

and against the defendants, as follows:

a) Directing the defendants, their agents and other persons

acting on their behalf to vacate the premises and to yield
peaceful possession thereof to plaintiff;

b) Ordering defendants to pay P2,000.00 a month from the

filing of this complaint until they vacate premises;

c) Sentencing defendants to pay the sum

[5]
of P120,000.00 as attorneys fees and to pay the cost of suit.

Defendants counterclaim are hereby dismissed except with respect to

the claim for reimbursement of necessary and useful expenses which
should be litigated in an ordinary civil actions. (sic)
 Dissatisfied, the respondent spouses appealed to the RTC of Davao City.

In the meantime, petitioner filed a Motion for Execution Pending Appeal. The motion
was initially granted by the RTC in its Order of February 29, 2000, but the Order was
later withdrawn and vacated by its subsequent Order dated May 9, 2000 [6] on the
ground that immediate execution of the appealed decision was not the prudent
course of action to take, considering that the house the respondents constructed on
the subject property might even be more valuable than the land site.

Eventually, in a decision[7] dated September 30, 2000, the RTC reversed that of the
MTCC, holding that respondents possession of the property in question was not, as
ruled by the latter court, by mere tolerance of the petitioner but rather by her express
consent. It further ruled that Article 1678 of the Civil Code on reimbursement of
improvements introduced is inapplicable since said provision contemplates of a
lessor-lessee arrangement, which was not the factual milieu obtaining in the case.
Instead, the RTC ruled that what governed the parties relationship are Articles 448
and 546 of the Civil Code, explaining thus:

Since the defendants-appellees [respondents] are admittedly

possessors of the property by permission from plaintiff [petitioner], and
builders in good faith, they have the right to retain possession of the
property subject of this case until they have been reimbursed the cost
of the improvements they have introduced on the property.

Indeed, this is a substantive right given to the defendants by

law, and this right is superior to the procedural right to [sic] plaintiff to
immediately ask for their removal by a writ of execution by virtue of a
decision which as we have shown is erroneous, and therefore invalid.
(Words in brackets supplied),

and accordingly dismissed petitioners appeal, as follows:

 WHEREFORE, in view of the foregoing, the Decision appealed from is
REVERSED and declared invalid. Consequently, the motion for
execution pending appeal is likewise denied.

Counter-claims of moral and exemplary damages claimed by

defendants are likewise dismissed. However, attorneys fees in the
amount of fifteen thousand pesos is hereby awarded in favor of
defendants-appellants, and against plaintiffs.

SO ORDERED.[8]

Therefrom, petitioner went to the CA in CA-G.R. SP No. 61610.

On September 27, 2001, the CA, while conceding the applicability of Articles
448 and 546 of the Civil Code to the case, ruled that it is still premature to apply the
same considering that the issue of whether respondents right to possess a portion of
petitioners land had already expired or was already terminated was not yet
resolved. To the CA, the unlawful detainer suit presupposes the cessation of
respondents right to possess. The CA further ruled that what governs the rights of
the parties is the law on usufruct but petitioner failed to establish that respondents
right to possess had already ceased. On this premise, the CA concluded that the
ejectment suit instituted by the petitioner was premature. The appellate court thus
affirmed the appealed RTC decision, disposing:

WHEREFORE, premises considered, the instant petition for

review is hereby denied for lack of merit. Accordingly, the petitioners
complaint for Unlawful Detainer is DISMISSED.

SO ORDERED.

With the CAs denial of her motion for reconsideration in its Resolution of February
28, 2002, petitioner is now before this Court raising the following issues:
 I. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN DISMISSING THE UNLAWFUL DETAINER CASE
FOR BEING PREMATURE WHICH DECISION IS NOT IN
ACCORDANCE WITH LAW AND JURISPRUDENCE.

II. WHETHER OR NOT THE COURT OF APPEALS ERRED

IN APPLYING ARTICLES 448 AND 546 AND THE
PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF
ARTICLE 1678 OF THE CIVIL CODE.

The Court rules for the petitioner.

The Court is inclined to agree with the CA that what was constituted between the
parties herein is one of usufruct over a piece of land, with the petitioner being the
owner of the property upon whom the naked title thereto remained and the
respondents being two (2) among other unnamed usufructuaries who were simply
referred to as petitioners kin. The Court, however, cannot go along with the CAs
holding that the action for unlawful detainer must be dismissed on ground of
prematurity.

Usufruct is defined under Article 562 of the Civil Code in the following wise:

ART. 562. Usufruct gives a right to enjoy the property of another

with the obligation of preserving its form and substance, unless the title
constituting it or the law otherwise provides.

Usufruct, in essence, is nothing else but simply allowing one to enjoy anothers
property.[9] It is also defined as the right to enjoy the property of another temporarily,
including both the jus utendi and the jus fruendi,[10] with the owner retaining the jus
disponendi or the power to alienate the same.[11]
 It is undisputed that petitioner, in a document dated July 21,
1986, supra, made known her intention to give respondents and her other kins
the right to use and to enjoy the fruits of her property. There can also be no
quibbling about the respondents being given the right to build their own house on the
property and to stay thereat as long as they like. Paragraph #5 of the same
document earmarks proceeds or income derived from the aforementioned
properties for the petitioners nearest kins who have less in life in greater percentage
and lesser percentage to those who are better of (sic) in standing. The established
facts undoubtedly gave respondents not only the right to use the property but also
granted them, among the petitioners other kins, the right to enjoy the fruits
thereof. We have no quarrel, therefore, with the CAs ruling that usufruct was
constituted between petitioner and respondents. It is thus pointless to discuss why
there was no lease contract between the parties.

However, determinative of the outcome of the ejectment case is the resolution

of the next issue, i.e., whether the existing usufruct may be deemed to have been
extinguished or terminated. If the question is resolved in the affirmative, then the
respondents right to possession, proceeding as it did from their right of
usufruct, likewise ceased. In that case, petitioners action for ejectment in the
unlawful detainer case could proceed and should prosper.

The CA disposed of this issue in this wise:

xxx Section 1, Rule 70 of the 1997 Rules of Civil Procedure, as

amended, provides xxx

xxx xxx xxx

From the foregoing provision, it becomes apparent that for an action for
unlawful detainer to prosper, the plaintiff [petitioner] needs to prove that
defendants [respondents] right to possess already expired and
terminated. Now, has respondents right to possess the subject portion
of petitioners property expired or terminated? Let us therefore examine
respondents basis for occupying the same.
 It is undisputed that petitioner expressly authorized respondents
o occupy portion of her property on which their house may be
built. Thus it is my desire that Mr. and Mrs. Diosdado M. Pernes may
build their house therein and stay as long as they like. From this
statement, it seems that petitioner had given the respondents the
usufructuary rights over the portion that may be occupied by the house
that the latter would build, the duration of which being dependent on
how long respondents would like to occupy the property. While
petitioner had already demanded from the respondents the surrender
of the premises, this Court is of the opinion that the usufructuary rights
of respondents had not been terminated by the said demand
considering the clear statement of petitioner that she is allowing
respondents to occupy portion of her land as long as the latter want
to. Considering that respondents still want to occupy the premises,
petitioner clearly cannot eject respondents.[12]

We disagree with the CAs conclusion of law on the matter. The term or period
of the usufruct originally specified provides only one of the bases for the right of a
usufructuary to hold and retain possession of the thing given in usufruct. There are
other modes or instances whereby the usufruct shall be considered terminated or
extinguished. For sure, the Civil Code enumerates such other modes of
extinguishment:

ART. 603. Usufruct is extinguished:

(1) By the death of the usufructuary, unless a contrary

intention clearly appears;

(2) By expiration of the period for which it was

constituted, or by the fulfillment of any resolutory condition
provided in the title creating the usufruct;

(3) By merger of the usufruct and ownership in the

same person;
 (4) By renunciation of the usufructuary;

(5) By the total loss of the thing in usufruct;

(6) By the termination of the right of the person

constituting the usufruct;

(7) By prescription. (Emphasis supplied.)

The document executed by the petitioner dated July 21, 1986 constitutes the
title creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof
states [T]hat anyone of my kins may enjoy the privilege to stay therein and may avail
the use thereof. Provided, however, that the same is not inimical to the purpose
thereof (Emphasis supplied). What may be inimical to the purpose constituting the
usufruct may be gleaned from the preceding paragraph wherein petitioner made it
abundantly clear that anybody of my kins who wishes to stay on the aforementioned
property should maintain an atmosphere of cooperation, live in harmony and
must avoid bickering with one another. That the maintenance of a peaceful and
harmonious relations between and among kin constitutes an indispensable condition
for the continuance of the usufruct is clearly deduced from the succeeding
Paragraph #4 where petitioner stated [T]hat anyone of my kins who cannot
conform with the wishes of the undersigned may exercise the freedom to look for
his own. In fine, the occurrence of any of the following: the loss of the atmosphere of
cooperation, the bickering or the cessation of harmonious relationship
between/among kin constitutes a resolutory condition which, by express wish of
the petitioner, extinguishes the usufruct.

From the pleadings submitted by the parties, it is indubitable that there were indeed
facts and circumstances whereby the subject usufruct may be deemed terminated or
extinguished by the occurrence of the resolutory conditions provided for in the title
creating the usufruct, namely, the document adverted to which the petitioner
executed on July 21, 1986.

As aptly pointed out by the petitioner in her Memorandum, respondents own

evidence before the MTCC indicated that the relations between the parties have
deteriorated to almost an irretrievable level.[13] There is no doubt then that what
impelled petitioner to file complaints before the local barangay lupon, the Office of
the Ombudsman for Mindanao, and this instant complaint for unlawful detainer
before the MTCC is that she could not live peacefully and harmoniously with the
Pernes family and vice versa.

Thus, the Court rules that the continuing animosity between the petitioner and
the Pernes family and the violence and humiliation she was made to endure, despite
her advanced age and frail condition, are enough factual bases to consider the
usufruct as having been terminated.

To reiterate, the relationship between the petitioner and respondents respecting the
property in question is one of owner and usufructuary. Accordingly, respondents
claim for reimbursement of the improvements they introduced on the property during
the effectivity of the usufruct should be governed by applicable statutory provisions
and principles on usufruct. In this regard, we cite with approval what Justice Edgardo
Paras wrote on the matter:

If the builder is a usufructuary, his rights will be governed by Arts.

579 and 580. In case like this, the terms of the contract and the
pertinent provisions of law should govern (3 Manresa 215-216; se also
Montinola vs. Bantug, 71 Phil. 449).[14] (Emphasis ours.)

By express provision of law, respondents, as usufructuary, do not have the

right to reimbursement for the improvements they may have introduced on the
property. We quote Articles 579 and 580 of the Civil Code:

Art. 579. The usufructuary may make on the property held in

usufruct such useful improvements or expenses for mere pleasure as
he may deem proper, provided he does not alter its form or
substance; but he shall have no right to be indemnified
therefor. He may, however, remove such improvements, should it be
possible to do so without damage to the property. (Emphasis supplied.)
 Art. 580. The usufructuary may set off the improvements he may
have made on the property against any damage to the same.

Given the foregoing perspective, respondents will have to be ordered to

vacate the premises without any right of reimbursement. If the rule on
reimbursement or indemnity were otherwise, then the usufructuary might, as an
author pointed out, improve the owner out of his property. [15] The respondents may,
however, remove or destroy the improvements they may have introduced thereon
without damaging the petitioners property.

Out of the generosity of her heart, the petitioner has allowed the respondent
spouses to use and enjoy the fruits of her property for quite a long period of time.
They opted, however, to repay a noble gesture with unkindness. At the end of the
day, therefore, they really cannot begrudge their aunt for putting an end to their right
of usufruct. The disposition herein arrived is not only legal and called for by the law
and facts of the case. It is also right.

WHEREFORE, the petition is GRANTED. The assailed Decision and

Resolution of the CA are REVERSED and SET ASIDE. Accordingly, the decision of
the MTCC is REINSTATED with MODIFICATION that all of respondents
counterclaims are dismissed, including their claims for reimbursement of useful
and necessary expenses.

No pronouncement as to costs.

SO ORDERED.
G.R. No. L-19614 March 27, 1971

JESUS M. GABOYA, as Administrator of the Estate of DON MARIANO

CUI, plaintiff-appellant,
vs.
ANTONIO MA. CUI, MERCEDES CUI-RAMAS and GIL RAMAS, defendants-
appellees, JESUS MA. CUI, JOSE MA. CUI, SERAFIN MA. CUI, JORGE MA. CUI,
ROSARIO CUI DE ENCARNACION, PRECILLA C. VELEZ, and LOURDES C.
VELEZ, intervenors-appellants, VICTORINO REYNES, defendant-in-counterclaim-
appellee.

Vicente Jayme for plaintiff-appellant.

Hector L. Hofilea Candido Vasqueza and Jaime R. Nuevas for defendants-

appellees.

Jose W. Diokno for intervenors-appellants.

REYES, J.B.L., J.:

Direct appeal (before Republic Act 5440) from a decision of the Court of First
Instance of Cebu (in its Civil Case No. R-1720) denying resolution of a contract of
sale of lots 2312, 2313 and 2319 executed on 20 March 1946 by the late Don
Mariano Cui in favor of three of his children Antonio Ma. Cui, Mercedes Cui de
Ramas and Rosario Cui de Encarnacion, but sentencing the first two, Antonio Cui
and Mercedes; Cui, to pay, jointly and severally (in solidum), to the Judicial
Administrator of the Estate of Mariano Cui (appellant Jesus M. Gaboya the amount
of P100,088.80, with legal interest from the interposition of the complaint (5
November 1951), plus P5,000.00 attorney's fees and the costs.

The antecedents of the case are stated in the previous decision of this Supreme
Court rendered on 31 July 1952, in the case of Antonio and Mercedes Cui vs. Judge
Piccio, et al., 91 Phil. 712.

Don Mariano Cui, widower, as owner of lots Nos. 2312, 2313 and 2319
situated in the City of Cebu, with an area of 152 square meters, 144
square meters and 2,362 square meters, respectively, or a total
extension of 2,658 square meters, on March 8, 1946, sold said three
lots to three of his children named Rosario C. de Encarnacion,
Mercedes C. de Ramas and Antonio Ma. Cui, pro indiviso for the sum
of P64,000. Because Rosario C. de Encarnacion for lack of funds was
unable to pay her corresponding share of the purchase price, the sale
to her was cancelled and the one-third of the property corresponding to
her was returned to the vendor. These three lots are commercial. The
improvements thereon were destroyed during the last Pacific War so
that at the time of the sale in 1946, there were no buildings or any other
improvements on them. Because of the sale of these lots pro
indiviso and because of the cancellation of the sale to one of the three
original vendees, Don Mariano and his children Mercedes and Antonio
became co-owners of the whole mass in equal portions. In the deed of
sale vendor Don Mariano retained for himself the usufruct of the
property in the following words:

"...do hereby sell, transfer, and convey to Messrs.

Rosario C. de Encarnacion, Mercedes C. de Ramas and
Antonio Ma. Cui, the above-mentioned parcel of land in
equal parts, ... and the further consideration, that I, shall
enjoy the fruits and rents of the same, as long as my
natural life shall last. Granting and conveying unto the
said buyers the full rights as owners to enjoy the
constructive possession of the same, improve, construct
and erect a building in the lot, or do whatever they believe
to be proper and wise, ..."

Subsequently, a building was erected on a portion of this mass facing

Calderon street and was occupied by a Chinese businessman for
which he paid Don Mariano P600 a month as rental. The date when the
building, was constructed and by whom do not appear in the record.

Sometime after the sale to Mercedes and Antonio the two applied to
the Rehabilitation Finance Corporation (RFC) for a loan of P130,000
with which to construct a 12-door commercial building presumably on a
portion of the entire parcel corresponding to their share. In order to
facilitate the granting of the loan and inasmuch as only two of the three
co-owners applied for the loan, Don Mariano on January 7, 1947,
executed an authority to mortgage (Annex U) authorizing his two
children co-owners to mortgage his share, the pertinent portion of said
authority reading thus:

"That by virtue of these presents, I hereby agree, consent permit and

authorize my said co-owners to mortgage, pledge my share so that
they may be able to construct a house or building in the said property,
provided however, that the rents of the said land shall not be impaired
and will always be received by me."

The loan was eventually granted and was secured by a mortgage on

the three lots in question, Don Mariano being included as one of the
three mortgagors and signing the corresponding promissory note with
his two co-owners. He did not however, join in the construction of the
12-door commercial building as may be gathered from the "Convenio
de Asignacion de Parte' (Annex V) wherein it was agreed among the
three co-owners to assign to Don Mariano that one-third of the whole
mass facing Calderon street and on which was erected the building
already referred to as being occupied by a Chinese businessman and
for which he was paying Don Mariano P600 a month rental. The area
of this one-third portion was fixed at 900 square meters approximately
one-third of the total area of the three lots. The pertinent Portion of this
Annex V reads as follows:
"Que como quiera que, la propiedad arriba descrita esta actualmente
hipotecada a la Rehabilitation Finance Corporation para garantizar
la construccion que mis condueos cnotruyeron en la parte que les
correponde;

"Y que como quiera que, el Sr. Don Mariano Cui, uno de los
condueos, no ha querido unirse a la construccion de dicho edificio, y
desea que la parte que le corresponda sea la 1/3 que este dando
frente a la Calle Calderon."

The 12-door commercial building was eventually constructed and the

builder-owners thereof Mercedes and Antonio received and continued
to receive the rents thereof amounting to P4,800 a month and paying
therefrom the installments due for payment on the loan to the
Rehabilitation Finance Corporation.

On March 25, 1948, two other children of Don Mariano named Jesus
and Jorge brought an action (Civil case No. 599R) in the Court of First
Instance of Cebu for the purpose of annulling the deed of sale of the
three lots in question on the ground that they belonged to the conjugal
partnership of Don Mariano and his deceased wife Antonia Perales.
Thereafter, plaintiffs Jesus and Jorge applied for the appointment of a
receiver to take charge of the lots and of the rentals of the building.
This petition was denied on November 8, 1948.

On March 19, 1949, Rosario C. Encarnacion, that daughter of Don

Mariano who was one of the original vendees, filed a petition to declare
her father incompetent and to have a guardian appointed for his
property, in Special Proceeding No. 481-R of the Court of First
Instance of Cebu. In May 1949 the petition was granted and Don
Mariano was declared incompetent and Victorino Reynes was
appointed guardian of his property.lwph1.t Thereafter, the
complaint in civil case No. 599-R seeking to annul the deed of sale of
the three lots in favor of Mercedes and Antonio was amended so as to
include as plaintiffs not only the guardian Victorino Reynes but also all
the other children of Don Mariano.

On June 15, 1949, guardian Victorino Reynes filed a motion in the

guardianship proceedings seeking authority to collect the rentals from
the three lots in question and asking the Court to order Antonio and
Mercedes to deliver to him as guardian all the rentals they had
previously collected from the 12-door commercial building, together
with all the papers belonging to his ward. This motion was denied by
Judge Piccio in his order of July 12, 1949. The guardian did not appeal
from this order.

On May 22, 1951, Judge Saguin rendered a decision in civil case No.
599-R and found that the three lots in question were not conjugal
property but belonged exclusively to Don Mariano and so upheld the
 sale of two-thirds of said lots to Antonio and Mercedes. The plaintiffs
appealed to the Court of Appeals where the case is now pending.

From the Court of Appeals the case was brought to the Supreme Court, and the
decision of Judge Saguin upholding the validity of the sale in favor of Antonio and
Mercedes Cui was finally affirmed on 21 February 1957, in Cui vs. Cui, 100 Phil,
914.

This third case now before Us was started by the erstwhile guardian of Don Mariano
Cui (while the latter was still alive) in order to recover P126,344.91 plus legal interest
from Antonio Cui and Mercedes Cui (Record on Appeal, pages 2-3) apparently as
fruits due to his ward by virtue of his usufruct. The guardian's complaint was
supplemented and amplified by a 1957 complaint in intervention (duly admitted) filed
by the other compulsory heirs of Mariano Cui, who had died on 29 July 1952, some
nine months after the present case was instituted in the court below (Record on
Appeal, pages 67-68).

In essence, the complaint alleges that the usufructuary right reserved in favor of Don
Mariano Cui extends to and includes the rentals of the building constructed by
Antonio Cui and Mercedes Cui on the land sold to them by their father; that the
defendants retained those rentals for themselves; that the usufructuary rights of the
vendor were of the essence of the sale, and their violation entitled him to rescind (or
resolve) the sale. It prayed either for rescission with accounting, or for delivery of the
rentals of the building with interests, attorneys' fees and costs (Record on Appeal,
pages 12-38).

The amended answer, while admitting the reserved usufruct and the collection of
rentals of the building by the defendants, denied that the usufructuary rights included
or extended to the said rentals, or that such usufruct was of the essence of the sale;
that the vendor (Don Mariano Cui ) had waived and renounced the usufruct and that
the defendants vendees gave the vendor P400.00 a month by way of aid; that the
original complaint having sought fulfillment of the contract, plaintiff can not thereafter
seek rescission; that such action is barred by res judicata (on account of the two
previous decisions of the Supreme Court and by extinctive prescription. Defendants
counterclaimed for actual and moral damages and attorney's fees.

Plaintiffs denied the allegations in the counterclaim. .

From a consideration of the pleadings, the basic and pivotal issue appears to be
whether the usufruct reserved by the vendor in the deed of sale, over the lots in
question that were at the time vacant and unoccupied, gave the usufructuary the
right to receive the rentals of the commercial building constructed by the vendees
with funds borrowed from the Rehabilitation and Finance Corporation, the loan being
secured by a mortgage over the lots sold. Similarly, if the usufruct extended to the
building, whether the failure of the vendees to pay over its rentals to the usufructuary
entitled the latter to rescind, or more properly, resolve the contract of sale. In the
third place, should the two preceding issues be resolved affirmatively, whether the
action for rescission due to breach of the contract could still be enforced and was not
yet barred.
The court below declared that the reserved right of usufruct in favor of the vendor did
not include, nor was it intended to include, nor was it intended to include, the rentals
of the building subsequently constructed on the vacant lots, but that it did entitle the
usufructuary to receive a reasonable rental for the portion of the land occupied by
the building, which the Court a quo fixed at Pl,858.00 per month; and that the rentals
for the land from November, 1947, when the building was rented, to 29 July 1952,
when Don Mariano died, amounted to P100,088.80. It also found no preponderant
evidence that the seller, Don Mariano Cui, had ever waived his right of usufruct, as
contended by the defendants; and that the Supreme Court, in denying
reconsideration of its second (1957) decision (100 Phil. 914), had, like the court of
origin, refused to pass upon the extent of the usufructuary rights of the seller,
specially because the present case, was already pending in the Court of First
Instance, hence no res judicata existed. No attorney's fees were awarded to the
defendants, but they were sentenced to pay counsel fees to plaintiffs.

Both parties appealed in the decision of the court a quo.

We find no the decision appealed from. As therein pointed out, the terms of the 1946
deed of sale of the vacant lots in question made by the late Don Mariano Cui in favor
of his three children, Rosario, Mercedes and Antonio Cui, in consideration of the sum
of P64,000.00 and the reserved usufruct of the said lot in favor of the vendor, as
amplified by the deed of 7 January 1947, authorizing Mercedes, and Antonio Cui to
borrow money, with the security of a mortgage over the entirety of the lots, in order
to enable them to construct a house or building thereon

provided, however, that the rents of said land shall not be impaired and
will always received by me.

clearly prove that the reserved usufruct in favor of the vendor, Mariano Cui, was
limited to the rentals of the land alone. Had it been designed to include also the rents
of the buildings intended to be raised on the land, an express provision would have
been included to the effect, since in both documents (heretofore quoted) the
possibility of such construction was clearly envisaged and mentioned.

Appellants, however, argue that the terms of the deed constituting the usufruct are
not determinative of the extent of the right conferred; and that by law, the enjoyment
of the rents of the building subsequently erected passed to the usufructuary, by
virtue of Article 571 of the Civil Code of the Philippines (Article 479 of the Spanish
Civil Code of 1889) prescribing that:

Art. 571. The usufructuary shall have the right to enjoy any increase
which the thing in usufruct may acquire through accession, the
servitudes established in its favor, and, in general, all the benefits
inherent therein,

inasmuch as (in the appellants' view) the building constructed by appellees was an
accession to the land.

This argument is not convincing. Under the articles of the Civil Code on industrial
accession by modification on the principal land (Articles 445 to 456 of the Civil Code)
such accession is limited either to buildings erected on the land of another, or
buildings constructed by the owner of the land with materials owned by someone
else.

Thus, Article 445, establishing the basic rule of industrial accession, prescribes that

Whatever is built, planted or sown on the land of another, and the

improvements or repairs made thereon, belong to the owner of the land
subject to the provisions of the following articles.

while Article 449 states:

He who builds, plants or sows in bad faith on the land of another, loses
what is built, planted or sown without right to indemnity. (Emphasis
supplied)

Articles 447 and 445, in turn, treat of accession produced by the landowner's
building, planting and sowing "with the materials of another" and when "the
materials, plants or seeds belong to a third person other than the landowner or the
builder, planter or sower.

Nowhere in these articles on industrial accession is there any mention of the case of
landowner building on his own land with materials owned by himself (which is the
case of appellees Mercedes and Antonio Cui). The reason for the omission is readily
apparent: recourse to the rules of accession are totally unnecessary and
inappropriate where the ownership of land and of the, materials used to build thereon
are concentrated on one and the same person. Even if the law did not provide for
accession the land-owner would necessarily own the building, because he has paid
for the materials and labor used in constructing it. We deem it unnecessary to
belabor this obvious point. .

There is nothing in the authorities (Manresa, Venezian, Santamaria, and Borrell cited
by appellants that specifically deals with constructions made by a party on his own
land with his own materials, and at his own expense. The authorities cited merely
indicate the application in general of the rules of accession. But as already stated
above, the Civil Code itself limits the cases of industrial accession to those involving
land and materials belonging to different owners. Anyway, commentators' opinions
are not binding where not in harmony with the law itself.

The author that specifically analyses the situation of the usufructuary vis-a-
vis constructions made by the landowner with his own materials is Scaevola (Codigo
Civil, 2d Edition, pages 288 to 297) ; and his conclusion after elaborate discussion is
that, at the most

(b) El nudo propietario no podra, sin el consentimiento del

usufructuario, hacer construcciones, plantaciones y siembras en el
predio objecto del usufructo; y en el caso de que aquel lascosintiese, la
utilizacion sera comun en los frutos y productosde lo sembrado y
plantado, y con respecto a las construcciones,el usufructuario tendra
 derecho a la renta que de mutuo acuerdo se fije a las mismas; en su
defecto, por la autoridad judicial (Author cit., Emphasis supplied).

Scaevola's opinion is entirely in harmony with Article 595 of the Civil Code of the
Philippines, prescribing that

The owner may construct any works and make any improvements of
which the immovable usufruct is susceptible, or make new plantings
thereon if it be rural, provided that such acts do not cause a diminuition
in the value of the usufruct or prejudice the right of the usufructuary.

Note that if the income from constructions made by the owner during the existence of
the usufruct should be held to accrue automatically to the usufructuary under Article
571, such improvements could not diminish the value of the usufruct nor prejudice
the right of the usufructuary; and the qualifications by Article 595 on the owner's right
to build would be redundant. The limitations set by Article 595 to the construction
rights of the naked owner of the land are evidently premised upon the fact that such
constructions would necessarily reduce the area of the land under usufruct, for which
the latter should be indemnified. This is precisely what the court a quo has done in
sentencing the appellee owners of the building to pay to the usufructuary a monthly
rent of P1,758.00 for the area occupied by their building, after mature consideration
of the rental values of lands in the neighborhood.

Additional considerations against the thesis sustained by appellants are (1) that the
amount invested in the building represents additional capital of the landowners not
foresee" when the usufruct was created; and (2) that no land-owner would be willing
to build upon vacant lots under usufruct if the gain therefrom were to go to the
usufructuary while the depreciation of the value of the building (as distinguished from
the necessary repairs) and the amortization of its cost would burden exclusively the
owner of the land. The unproductive situation of barren lots would thus be prolonged
for an indefinite time, to the detriment of society. In other words, the rule that
appellants advocate would contradict the general interest and be against public
policy.

Appellants urge, in support of their stand, that the loan .for the construction of the
building was obtained upon the security of a mortgage not only upon the share of
appellees but also upon the undivided interest of Don Mariano Cui in the lots in
question. That factor is irrelevant to the ownership of the building, because the
money used for the building was loaned exclusively to the appellees, and they were
the ones primarily responsible for its repayment. Since the proceeds of the loan was
exclusively their property, 1 the building constructed with the funds loaned is likewise
their own. A mortgagor does not become directly liable for the payment of the loan
secured by the mortgage, in the absence of stipulation to that effect; and his
subsidiary role as guarantor does not entitle him to the ownership of the money
borrowed, for which the mortgage is mere security.

We agree with the trial court that there was no adequate proof that the vendor, Don
Mariano Cui, ever renounced his usufruct. The alleged waiver was purely verbal, and
is supported solely by the testimony of Antonio Cui, one of the alleged beneficiaries
thereof. As a gratuitous renunciation of a real right over immovable property that as
created by public document, the least to be expected in the regular course of
business is that the waiver should also appear in writing. Moreover, as pointed out in
the appealed decision (Record on Appeal, page 184, et seq.), in previous pleadings
sworn to by Antonio Cui himself, in Civil Case No. 599 and Special Proceeding 481-
R of the Cebu Court of First Instance (Exhibits "I", "J", and "20-A"), he and his sister
Mercedes had contended that Don Mariano Cui had been receiving from them
P400.00 per month as the value of his usufruct, and never claimed that the real right
had been renounced or waived.lwph1.t The testimony of Antonio Cui on the
alleged waiver, given after the usufructuary had been declared incompetent and
could no longer contradict him, is obviously of negligible probative value.

Turning now to the second issue tendered by herein appellants, that the non-
compliance with the provisions concerning the usufruct constituted sufficient ground
for the rescission (or resolution) of the sale under the tacit resolutory condition
established by Article 1191 of the Civil Code. What has been stated previously in
discussing the import of Don Mariano's usufruct shows that the alleged breach of
contract by the appellees Antonio and Mercedes Cui could only consist in their
failure to pay to the usufructuary the rental value of the area occupied by the building
constructed by them. But as the rental value in question had not been ascertained or
fixed either by the parties or the court, prior to the decision of 31 October 1961, now
under appeal, nor had Don Mariano Cui, or anyone else in his behalf, made any
previous demand for its payment, the default, if any, can not be exclusively blamed
upon the defendants-appellees. Hence, the breach is not it "so substantial and
fundamental as to defeat the object of the parties in making the agreement" 2 as to
justify the radical remedy of rescission. This Court, in Banahaw, Inc. vs. Dejarme 55
Phil. 338, ruled that

...Under the third paragraph of article 1124 3 of the Civil Code, the court
is given a discretionary power to allow a period within which a person
in default may be permitted to perform the stipulation upon which the
claim for resolution of the contract is based. The right to resolve or
rescind a contract for non-performance of one of its stipulations is,
therefore, not absolute.

We have stated "the default, if any," for the reason that without previous
ascertainment of the exact amount that the, defendants-appellees were obligated to
turn over to the usufructuary by way of reasonable rental value of the land occupied
by their building, said parties can not be considered as having been in default (mora)
for failure to turn over such monies to the usufructuary. "Ab illiquido non fit
mora": this principle has been repeatedly declared by the jurisprudence of Spanish
Supreme Court (v. Manresa, Commentaries to the Spanish Civil Code [5th Ed.], Vol.
8, No. 1, page 134) that is of high persuasive value in the absence of local
adjudications on the point .

No puede estimarse que incurre en mora el obligado al pago de

cantidad mientras esta no sea liquida, y tenga aquel conocimiento por
virtud de requirimiento o reclamacion judicial de lo que debe abonar
(Sent. TS of Spain, 13 July 1904) .
 Seguin tiene declarado esta sala con repeticion, no se puede
establecer que hay morosidad, ni condenar por tal razon al abono de
intereses cuando no se conoce la cantidad liquida reclamable" (Sent.
TS of Spain, 29 November 1912)

... es visto que no existiendo obligacion de entregar cantidad hasta

tanto que se liquide no puede estimarse segun jurisprudencia, que los
recurridos ineurran en mora, por tanto que hayan de pagar intereses
legales de la cantidad que en su caso resulte (Sent, TS of Spain, 29
April 1914)

In the absence of default on the part of the defendants-vendees, Article 1592 of the
Civil Code of the Philippines that is invoked by appellants in, support of their all right
to rescind the sale, is not applicable: for said article (which is a mere variant of the
general principle embodied in Article 1191, of the same Code) presupposes default
of the purchasers in the fulfilment of their obligations. As already noted, no such
default or breach could occur before liquidation of the usufructuary's credit; and the
time for paying such unliquidated claim can not be said to have accrued until the
decisions under appeal was rendered, fixing the rental value of the land occupied by
the building.

The filing of the initial complaint by Victoriano Reynes, then guardian of the late Don
Mariano in 1951, seeking to recover P126,344.91 plus interest, did not place
appellees in default, for that complaint proceeded on the theory that the usufructuary
was entitled to all the rentals of the building constructed by the appellees on the lot
under usufruct; and as We have ruled, that theory was not legally tenable. And the
1957 complaint in intervention, seeking rescission of the sale as alternative remedy,
was only interposed after the death of the usufructuary in 1952, and the consequent
extinction of the usufruct, conformably to Article 603, paragraph (1), of the Civil
Code.

It is also urged by the appellants that the usufruct was a condition precedent to the
conveyance of ownership over the land in question to herein appellees, and their
failure to comply with their obligations under the usufruct prevented the vesting of
title to the property in said appellees. We need not consider this argument, since We
have found that the usufruct over the land did not entitle the usufructuary to either
the gross or the net income of the building erected by the vendees, but only to the
rental value of the portion of the land occupied by the structure (in so far as the
usufructuary was prevented from utilizing said portion), and that rental value was not
liquidated when the complaints were filed in the court below, hence, there was no
default in its payment. Actually, this theory of appellants fails to take into account that
Don Mariano could not retain ownership of the land and, at the same time, be the
usufructuary thereof. His intention of the usufructuary rights in itself imports that he
was no longer its owner. For usufruct is essentially jus in re aliena; and to be a
usufructuary of one's own property is in law a contradiction in terms, and a
conceptual absurdity.

The decision (Exhibit "30") as well as the resolution of this Court upon the motion to
reconsider filed in the previous case (100 Phil 914) refusing to adjudicate the
usufructuary rights of Don Mariano in view of the pendency of the present litigation
(Exhibit "22") amply support the trial court's overruling of the defense of res judicata.

Summing up, We find and hold:

(1) That the usufructuary rights of the late Don Mariano Cui, reserved in the deed of
sale (Exhibit "A" herein), was over the land alone and did not entitle him to the rents
of the building later constructed thereon by defendants Mercedes and Antonio Cui at
their own expense.

(2) That said usufructuary was entitled only to the reasonable rental value of the land
occupied by the building aforementioned.

(3) That such rental value not having been liquidated until the judgment under appeal
was rendered, Antonio and Mercedes Cui were not in default prior thereto, and the
deed of sale was therefore, not subject to rescission.

(4) That as found by the court below, the reasonable rental value of the land
occupied by the defendants' building totalled P100,088.80 up to the time the
usufructuary died and the usufruct terminated.

(5) That pursuant to Articles 2208 (No. 11), 2210 and 2213 of the Civil Code, 5 the
trial court had discretion to equitably award legal interest upon said sum of
P100,088.80, as well as P5,000.00 attorney's fees, considering that defendants Cui
have enjoyed the said rental value of the land during all those years.

WHEREFORE, finding no reversible error in the appealed decision, the same is

hereby affirmed. Costs against appellant-intervenors, Jesus Ma. Cui, Jose Ma. Cui,
Serafin Ma. Cui, Jorge Ma. Cui, Rosario Cui de Encarnacion, Precilla C. Velez, and
Lourdes C. Velez.