Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

158630 September 4, 2009

This is to certify that the parcel of land designated as Lot 13687, Cad-452-D, Silang Cadastre as surveyed for Ms. Victoria Abueg situated at Brgy. Adlas, Silang, Cavite containing an area of 9,638 sq. meters more or less as shown and described on the plan on the other side hereof is verified to be within the Alienable or Disposable Land per Land Classification Map No. 3013 established under Project No. 20-A FAO 4-1656 on March 15, 1982.9 (Emphasis and underscoring supplied) In LRC Case No. TG-858 involving Lot 13686, petitioner offered the same documentary evidence presented in the other case except the original tracing cloth and technical description of the lot, and another dated February 3, 1999 CENRO Certification reading This is to certify that the parcel of land designated as Lot 13686, Cad-452-D, Silang Cadastre as surveyed for Ms. Victoria Abueg situated at Brgy. Adlas, Silang, Cavite containing an area of 18,997 sq. meters more or less as shown and described on the plan on the other side hereof is verified to be within the Alienable or Disposable Land per Land Classification Map No. 3013 established under Project No. 20-A under FAO 4-1656 on March 15, 198210 (Emphasis and underscoring supplied) To prove that she and her predecessors-in-interest had been in continuous and uninterrupted possession of the lots as required under the law, petitioner offered the testimony of Domingo Destura (Destura) as a common witness for both applications.11 Destura, who was 71 years old at the time he took the witness stand on March 17, 1999, testified that he was 13 years old when he became a helper at his fathers farm which adjoins the subject lots; that he is familiar with Trinidad Mercado, the then owner of the lots as far back as the year 1941; that Trinidad Mercados daughter, Fernanda Belardo, inherited them; and the latters daughter, Victoria Abueg, in turn inherited it from them; and that the lots were eventually sold to Edgardo Pagkalinawan sometime in the 1990s.12 Herein respondent Republic of the Philippines (the Republic or respondent), represented by an assistant provincial prosecutor, did not present evidence to oppose the applications.13 By Decision of October 21, 1999, Branch 18 of the RTC granted petitioners application in LRC No. TG-857, disposing as follows: WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the land described in Plan Ap-04-012230 and containing an area of Nine Thousand Six Hundred Thirty Eight (9,638) Square Meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of JOYCE Y. LIM who is of legal age, single and with postal address at 333 Juan Luna Street, Binondo, Manila. Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith issue. SO ORDERED. (Emphasis, italics and underscoring supplied) By a separate Decision of October 21, 1999, the same court also granted petitioners application in LRC TG-858, disposing as follows:

JOYCE Y. LIM, represented by her attorney-in-fact BERNARDO M. NICOLAS, Petitioner, vs. REPUBLIC OF THE PHILIPPINES, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 162047 JOYCE Y. LIM, represented by her attorney-in-fact BERNARDO M. NICOLAS, Petitioner, vs. REPUBLIC OF THE PHILIPPINES, Respondent. DECISION CARPIO MORALES, J.: Joyce Lim (petitioner) filed on September 7, 1998 before the Regional Trial Court (RTC) of Tagaytay City an Application for Registration of Title (LRC Case No. TG-857) over Lot 13687, a 9,638-square-meter parcel of land located in Adlas, Silang, Cavite.1 Petitioner also filed on September 7, 1998 another application for registration of title (LRC Case No. TG-858) before the same RTC, this time over adjacent Lot 13686 containing 18,997-squaremeters.2 Petitioner, declaring that she purchased both lots on April 30, 1997 from Spouses Edgardo and Jorgina Pagkalinawan (Spouses Pagkalinawan) as evidenced by a "Kasulatan ng Bilihang Lubusan ng Lupa,"3 sought the application of Presidential Decree No. 1529 or the Property Registration Decree for both applications, claiming that she and her predecessors-in-interest Trinidad Mercado, Fernanda Belardo, Victoria Abueg and the Spouses Pagkalinawan have been in open, continuous, exclusive and notorious possession and occupancy of the lots under a bona fide claim of ownership for more than thirty (30) years. Petitioner alternatively invoked the provisions of Commonwealth Act No. 141, as amended, or the Public Land Act as basis of her applications. In LRC Case No. TG-857, petitioner presented the following documentary evidence to support her claim of ownership over Lot 13687: original tracing cloth,4 technical description of the lot,5 tax declarations,6 official receipts showing real estate tax payments 7 and a March 13, 1997 Certification from the Community Environment and Natural Resources Office (CENRO) that no other application/patent has been filed on the lot and that there is no adverse claimant thereto.8 She likewise appended a February 3, 1999 CENRO Certification reading

WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the land described in Plan Ap-04-012229 and containing an area of Eighteen Thousand Nine Hundred Ninety Seven (18,997) Square Meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of JOYCE Y. LIM who is of legal age, single and with postal address at 333 Juan Luna Street, Binondo, Manila. Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith issue. SO ORDERED. (Emphasis and underscoring supplied) The Solicitor General, on behalf of the Republic, appealed the decisions to the Court of Appeals on the ground that petitioner failed to comply with the provisions of the Property Registration Decree and Article 1137 of the Civil Code both laws of which require at least 30 years of adverse possession.14 By Decisions of November 20, 200215 and April 28, 200316 in CA-G.R. CV No. 67231 and CAG.R. CV No. 67232, respectively, the appellate court reversed and set aside the decisions of the RTC and dismissed petitioners applications. In finding for the Republic in CA-G.R. CV No. 67231, the appellate court noted that petitioners possession was short of the 30-year period of possession. [I]n the case at bench, it is beyond dispute that [petitioner] acquired the subject land through purchased [sic] from Spouses Edgardo and Jorgina Pagkalinawan on April 30, 1997. In addition, [petitioners] predecessors-in-interests have been in possession of the subject land only as early as 1967 as evidenced by the Tax Declaration No. 1980 (Record, p. 92, Exhibit "R-8-B"); Tax Declaration No. 1981 (Record, p.80, Exhibit "R-5-C") and Tax Declaration No. 1982 (Record, p.84, Exhibit "R-7") issued in their names. However, said possession of [petitioners] predecessors-in-interest in 1967 could not be used as the basis for the reckoning of the thirty (30) years period [sic] in view of the Certification dated February 3, 1999 (Record, p. 101) issued by the CENR Office declaring that subject land is "within the Alienable or Disposable Land Per Land Classification Map. No. 3013 established under Project No. 20-A under FAO 4-1656 on March 15, 1982", hence, the reckoning period should be March 15, 1982 and not 1967. Applying March 15, 1982 as the date when the subject land was classified as alienable, it can be concluded that since [petitioner] filed this Application on September 7, 1998 (Record pp. 1-5) and her predecessors-in-interest have been in possession of the subject land for only sixteen (16) years, short of the thirty (30) years possession as required by P.D. [No.] 1529, the application for registration of title should have been denied by the court a quo. Moreover, the number of years from 1967 to 1982 or fifteen (15) years to be exact cannot be credited or included in the computation of the thirty (30)[-]year period since during that time (1967-1982) the subject land was still inalienable and belongs [sic] to [the] public domain. x x x. x x x x17 (Italics in the original; emphasis and underscoring supplied) Whereas, in CA-G.R. CV No. 67232, the appellate court also noted that petitioners possession was short of the 30-year period of possession.

[I]n the case at bench, it is beyond dispute that [petitioner] acquired the subject land through purchased [sic] from Spouses Edgardo and Jorgina Pagkalinawan on April 30, 1997. In addition, [petitioners] predecessors-in-interest have been in possession of the subject land[s] only in 1994 as shown in the Tax Declaration No. 18582 (Record p.10, Annex "A") issued in their name (Spouses Pagkalinawan). No other evidence was adduced by [petitioner] that her predecessors[-]in[-]interest have been in possession of the subject land earlier than 1994. As such, the possession of [petitioner] and her predecessors[-]in[-]interest was only for a period of 3 years (from 1994-1997). This falls short of the required 30 years period [sic] of possession in order to have the land registered and titled. Assuming arguendo that [petitioners] predecessors-in[-]interest have been in possession of the land for a period of 30 years, the application of said period is misplaced because per Certification dated February 3, 1999 (Record, p. 101) issued by the CENR Office, the subject land was declared as "within the Alienable or Disposable Land Per Land Classification Map. No. 3013 established under Project No. 20-A under FAO 4-1656 on March 15, 1982", hence, the reckoning period should be March 15, 1982. Deducting the year 1997 (date of purchase) from 1982 (the year the land was classified an [sic] alienable and disposable), [petitioner] have [sic] been in possession of the subject land only for a period of 15 years, x x x. x x x x18 (Italics in the original; emphasis and underscoring supplied) Her motions for reconsideration having been denied,19 petitioner lodged the present petitions for review. By Resolution20 of September 6, 2006, the Court consolidated both petitions which fault the appellate court as follow: I. . . . IN FINDING THAT PETITIONER HAS NOT PERFORMED ALL THE CONDITIONS ESSENTIAL TO A GOVERNMENT GRANT AS SET FORTH IN SECTION 48 (B) OF COMMONWEALTH ACT NO. 141, AS AMENDED, OTHERWISE KNOWN AS THE PUBLIC LAND ACT, THAT IS, THE OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION AND OCCUPATION OF PUBLIC AGRICULTURAL LAND FOR AT LEAST THIRTY (30) YEARS IMMEDIATELY PRECEDING THE FILING OF HER APPLICATION FOR REGISTRATION OF TITLE, THUS, PETITIONER IS NOT ENTITLED TO A CONFIRMATION OF HER INCOMPLETE AND IMPERFECT TITLE OVER [THE] SUBJECT PROPERTY. II. . . . IN FINDING THAT THE PROVISIONS OF PRESIDENTIAL DECREE NO. 1529, OTHERWISE KNOWN AS THE PROPERTY REGISTRATION ACT, REQUIRING OPEN, CONTINUOUS, EXCLUSIVE, AND NOTORIOUS POSSESSION OF ALIENABLE AND DISPOSABLE LANDS OF [THE] PUBLIC DOMAIN, UNDER A BONAFIDE CLAIM OF OWNERSHIP, PRIOR TO 12 JUNE 1945, MAY DEFEAT PETITIONERS RIGHT THAT HAS ALREADY BEEN VESTED PRIOR TO PROMULGATION THEREOF.21 Petitioner maintains in her Memorandum22 that she and her predecessors-in-interest have been in possession of the properties since 1941. She draws attention to the testimony of Destura as well as the documentary evidence pointing to the payment of real property taxes as far back as 1967 in the name of Trinidad Mercado.23 Respondent, on the other hand, posits that petitioner herself submitted evidence that proves fatal to her applications, citing the CENRO February 3, 1999 Certifications which reflect the failure to satisfy the requirements of the law regarding classification of the lots as alienable and disposable land since June 12, 1945 or earlier, or for 30 years or more at the time of the filing of the applications in 1998.

Respondent emphasizes that the lots were classified to be alienable and disposable only on March 15, 1982, hence, petitioners possession or occupancy of the lots could only be reckoned from said date onwards.24 Respondent further posits that, in any event, petitioner failed to prove that possession was continuous from 1941 up to the filing of the applications in 1998 as no factual evidence thereof was proffered, the testimony of Destura having only established the transfers of ownership over the lots.25 The petitions fail. The twin applications for registration were decided by the trial court on the basis of the Public Land Act "and/or" the Property Registration Decree. The Property Registration Decree involves original registration through ordinary registration proceedings. Under Section 14 (1) of said law, the requisites for the filing of an application for registration of title are: that the property in question is alienable and disposable land of the public domain; that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation; and that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier.26 As the Solicitor General proffers, the alienable and disposable character of the lots should have already been established on June 12, 1945 or earlier; and given that they were declared alienable only on March 15, 1982, as reflected in the CENRO Certifications, petitioner could not have maintained a bona fide claim of ownership since June 12, 1945 or earlier. In Republic of the Philippines v. Court of Appeals and Naguit,27 the Court declared that Section 14(1) of the Property Registration Decree merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property. This reading aligns conformably with our holding in Republic v. Court of Appeals. Therein, the Court noted that "to prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute." In that case, the subject land had been certified by the DENR as alienable and disposable in 1980, thus the Court concluded that the alienable status of the land, compounded by the established fact that therein respondents had occupied the land even before 1927, sufficed to allow the application for registration of the said property. In the case at bar, even the petitioner admits that the subject property was released and certified as within alienable and disposable zone in 1980 by the DENR 28 (Citations omitted; emphasis and underscoring supplied)

As gathered from the CENRO Certifications, the lots were verified to be alienable or disposable lands on March 15, 1982. These Certifications enjoy the presumption of regularity in the absence of contradictory evidence.1avvphil In another vein, there is no sufficient proof that petitioners predecessors-in-interest had been in open, continuous and adverse possession of the lots since June 12, 1945 or earlier. Petitioners reliance on the testimony of Destura does not lie. Petitioners witness Destura merely recounted petitioners version of the chain of ownership of the lots. His testimony consists of general statements with no specifics as to when petitioners predecessors-in-interest began actual occupancy of the lots. It did not establish the character of the possession of petitioner and her predecessors-in-interest over the lots. Consider his following testimony: Q. When you were 13 years old, do you know who was the owner of these parcels of land? A. Trinidad Mercado, mam. xxxx Q. Do you know what is the nature of these parcels of land? A. Agricultural, sir. Q. And why do you say that this is agricultural? A. It is planted to seasonal crops. Q. After Trinidad Mercado, Mr. Witness, do you remember who became the owner of these parcels of land? A. After the death of Trinidad in 1970, it was inherited by Fernanda Belardo. Q. Why? Who is this Fernanda Belardo? A. She is the only daughter of Trinidad Mercado. xxxx ATTY. PINEDA: Do you know of any crops being planted by this Fernanda Belardo? A. The previous crops that they are planting there [sic], mam.

Q. Until when did Fernanda Belardo own these parcels of land? A. Up to [sic] 1990s. Q. Do you know who became the owner of these parcels of land sometime in the 1990s? A. What I know, Victoria Abueg, the daughter of Fernanda Belardo.

xxxx Q. Are there any crops still being planted on this parcel of land? WITNESS: The same seasonal crops like the previous ones like pineapple and coffee. xxxx

Q. And do you know how this Victoria Abueg became the owner of this land? A. Since I am an adjacent owner of the property, I know that the children partitioned the property among themselves. Q. Are you saying that these properties were inherited by Victoria Abueg from her mother Fernanda? A. That is what I know. xxxx Q. When was this property sold, if you know? A. In the 1990s. A. As a tenant, sir. Q. And do you know to whom these parcels of land were sold to? [sic] x x x x (Emphasis and underscoring supplied)29 A. To Edgardo Pagkalinawan. xxxx Q. Do these properties continue to be agricultural at the time of Edgardo Pagkalinawan? A. Yes, mam. ATTY. PINEDA: Why do you say so, Mr. Witness? A. Because the same crops were planted on the properties by Edgardo Pagkalinawan. Q. After this Edgardo Pagkalinawan, who became the owner of these properties? A. I came to know that it was sold to Joyce Lim. Clearly, Desturas avowals are at best hearsay. Even if he were a helper of his father-occupant of an adjoining lot, he does not appear to have personal knowledge of the ownership and possession of the subject lots or any adverse claim thereto. The same holds true with respect to the testimonies of petitioners other witnesses Fernando Cortez, who is the caretaker of the lots since 1997,30 and Bernardo Nicolas, the liaison officer of the law firm engaged by petitioner to trace back the lots previous owners and secure the requisite documents and certifications from government agencies and offices. Both witnesses testimonies are extraneous as they failed to even mention a single act of dominion over the lots on June 12, 1945 or earlier. As Republic v. Alconaba
31

Q. And you said you and your father are working on the property belonging, adjoining to these properties [sic], is that correct? A. Yes, sir. Q. Not on these properties? A. No, sir. FISCAL VELAZCO: The property that adjoins the parcels of land subject of the application is owned by you, or you just work on it?

holds:

The law speaks of possession and occupation. Since these words are separated by the conjunction and, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his

possession must not be a mere fiction. Actual possession of a land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property. (Emphasis, italics and underscoring supplied)32 As for petitioners reliance on the tax declarations and receipts of realty tax payments, the documents - tax declarations for Lot No. 13687 and Lot No. 13686 which were issued only in 1991 and 1994,33 respectively, are indicia of the possession in the concept of an owner.34 There is no showing of tax payments before these years. Furthermore, an examination of the tax declaration marked as Exhibit "R-10" reveals that the realty taxes on Lots 13686 and 13687 from 1982 to 1991 were paid only on August 1, 1991.35 And while the tax declarations marked as Exhibits "R" to "R-4" specifically pertain to Lot 13687 with an area of 9,638 square meters,36 Exhibits "R-5" to "R-9-D" neither contain the cadastral lot number nor the total area of the lot covered thereby. Additionally, these Exhibits relate to a lot located in "Biluso," not in "Adlas" in Silang, Cavite, the adjacent lots or boundaries of which are not even detailed.37 An applicant in a land registration case cannot just harp on mere conclusions of law to embellish the application but must impress thereto the facts and circumstances evidencing the alleged ownership and possession of the land.38 As for petitioners alternative invocation of the provisions of the Public Land Act to have her applications considered as confirmations of imperfect titles, the same fails too. The Public Land Act provides: Section 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: xxxx (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (Emphasis and underscoring supplied.) When Section 48 (b) of the Public Land Act was amended by Presidential Decree No. 1073,39 which made June 12, 1945 as the cut-off date, the amendment made the law concordant with Section 14 (1) of the Property Registration Decree.

As earlier discussed, while the subject lots were verified to be alienable or disposable lands since March 15, 1982, there is no sufficient proof that open, continuous and adverse possession over them by petitioner and her predecessors-in-interest commenced on June 12, 1945 or earlier. Petitioners applications cannot thus be granted. While a property classified as alienable and disposable public land may be converted into private property by reason of open, continuous, exclusive and notorious possession of at least 30 years,41 public dominion lands become patrimonial property not only with a declaration that these are alienable or disposable but also with an express government manifestation that the property is already patrimonial or no longer retained for public use, public service or the development of national wealth.42 And only when the property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion begin to run. While the subject lots were declared alienable or disposable on March 15, 1982, there is no competent evidence that they are no longer intended for public use or for public service. The classification of the lots as alienable and disposable lands of the public domain does not change its status as properties of the public dominion. Petitioner cannot thus acquire title to them by prescription as yet. WHEREFORE, the petitions are DENIED. The Decisions and Resolutions of the Court of Appeals in CA-G.R. CV Nos. 67231 and 67232 are hereby AFFIRMED. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 179549 June 29, 2010

LIRIO A. DEANON, represented by Attorney-in-Fact JOCELYN D. ASOR, Petitioner, vs. MARFELINA C. MAG-ABO, Respondent. DECISION PERALTA, J.:

Section 48(b) of the Public Land Act and Section 14(1) of the Property Registration Decree vary, however, with respect to their operation since the latter operates when there exists a title which only needs confirmation, while the former works under the presumption that the land applied for still belongs to the State.40

This is a petition for review on certiorari1 of the Decision of the Court of Appeals in CA-G.R. SP No. 97714, dated May 25, 2007, and its Resolution dated August 28, 2007, which denied petitioners motion for reconsideration. The Decision of the Court of Appeals affirmed the Decision of the Regional Trial Court (RTC) of Pasig City, Branch 161, which held that

respondent Marfelina2 C. Mag-abo has a better right of possession of the property involved in this case. The facts are as follows: The property involved in this case is a 74-square-meter lot located at No. 181 Bayabas Extension, NAPICO, Manggahan, Pasig City.3 The records show that the lot is part of the 24,406-square-meter property titled to the Metro Manila Commission (now Metro Manila Development Authority [MMDA]) under Transfer Certificate of Title (TCT) No. PT-96040.4 On October 22, 2002, the MMDA sold the 24,406square-meter property to the NAPICO Homeowners Association XIII, Inc,5 and a new title, TCT No. PT-119333, was issued in the name of the NAPICO Homeowners Association XIII, Inc. It appears that the subject property is under the Community Mortgage Program being implemented by the MMDA, the National Housing Authority and the National Home Mortgage Finance Corporation under the socialized housing program of the government.6 On March 17, 2004, petitioner Lirio A. Deanon filed a Complaint7 for unlawful detainer and ejectment against respondent Marfelina Mag-abo with the Metropolitan Trial Court (MeTC) of Pasig City, Branch 70 (trial court). Petitioner alleged that respondent occupied the subject property in the year 2000, when it was still owned by Ma. Imelda Eloisa P. Galvan. The lot was then being used by Felizardo Sasi, the caretaker of Galvan. The rights to the said property were offered for sale by Galvan to Sasi, but the sale did not materialize. By virtue of an Agreement dated November 18, 2000, Sasi vacated the lot. After Sasi vacated the lot, respondent allegedly used the property as her garage without any permission from Ma. Imelda Eloisa Galvan. Since Galvan was not in need of the premises yet, she allegedly allowed respondent to use the place as a garage. There was no verbal or written lease agreement between Galvan and respondent. Respondent was never charged or assessed for any rental for occupying the property. On July 28, 2003, Ma. Imelda Eloisa Galvan executed a Waiver8 of her rights over the subject property in favor of petitioner. It was agreed that petitioner would assume payment of the amortization and other incidental costs of the property, which was mortgaged with the National Home Mortgage Finance Corporation. In a letter9 dated July 28, 2003, Galvan informed the NAPICO Homeowners Association XIII, Inc. that she had transferred her right of ownership over the said lot in favor of petitioner. On June 5, 2004, petitioner wrote a letter10 to the National Home Mortgage Finance Corporation, requesting for the substitution of the right of ownership for Lot No. 37, Block 9, located at No. 181 Bayabas Extension, NAPICO, Manggahan, Pasig City. On August 14, 2003, the Board of Directors of the NAPICO Homeowners Association XIII, Inc. issued a Board Resolution11 resolving that the Board would issue a letter of endorsement signed by its President to the National Home Mortgage Finance Corporation for the transfer of rights over the subject property from Galvan to petitioner.

Petitioner alleged that she was required to pay all arrearages of the former owner, Ma. Imelda Eloisa P. Galvan, before the substitution was effected. Such payment was evidenced by a Certification12 issued by NAPICO Homeowners Association XIII, Inc. on January 13, 2004, stating that the account of Galvan had been updated and/or the arrearages thereof had been paid in full by petitioner for the purpose of substitution. Also on January 13, 2004, petitioner and NAPICO Homeowners Association XIII, Inc., represented by its President, Wilson S. Baltazar, executed a Lease/Purchase Agreement13 over the subject property. The term of the lease was 25 years with a monthly rental of P374.15. The parties agreed that all rental payments would be considered as installment payment for the purchase price of the unit awarded to the lessee. Meantime on August 14, 2003, petitioner, through her counsel, sent respondent a notice 14 that the subject property had been purchased from Ma. Imelda Eloisa Galvan and that respondent was being given 90 days from receipt of the notice within which to vacate the property; otherwise, legal action would be taken against her. Despite receipt of the notice, respondent refused to vacate the subject property. Petitioner sought the intercession of the Barangay Lupon of Barangay Manggahan, Pasig City, but the parties failed to reach an amicable settlement of the case. On February 20, 2004, the Barangay Lupon issued a Certification15 allowing the parties to file a complaint in the proper court. Hence, petitioner filed the Complaint against respondent. Petitioner prayed that after notice and hearing, judgment be rendered directing respondent and all persons claiming rights under her to vacate and surrender the subject premises at No. 181 Bayabas Extension, NAPICO, Manggahan, Pasig City, and to pay petitioner attorney's fees in the amount of P20,000.00 and P2,000.00 per appearance fee and costs of the suit. In her Answer,16 respondent countered that petitioner had no cause of action against her. She claimed that she acquired the subject property from Ruth Cabrera through a Deed of Transfer and Assignment of Rights dated February 23, 2001. Ruth Cabrera, on the other hand, acquired the property by virtue of a Certificate of Sale dated February 28, 1998. The allegations of respondent17 showed that the former lot claimants and owner of all the improvements on the subject property were the spouses Dominador Galvan and Ma. Imelda Eloisa Galvan. Dominador Galvan was charged with the crime of Attempted Rape before the RTC of Pasig City, Branch 166, but he was found guilty of the crime of Acts of Lasciviousness. After the decision became final, the RTC, on motion of the victims mother, issued a Writ of Execution against Dominador Galvan to satisfy the civil indemnity in the amount of P15,000.00. The deputy sheriff of the RTC of Pasig City, Branch 166 levied on the subject property, referred to as Lot 32, Block 5, Zone 4, Phase 3, located at 181 Bayabas Extension, NAPICO, Manggahan, Pasig City, with Dominador Galvan and his wife Ma. Imelda Eloisa Galvan as lot claimants. At the auction sale conducted by the deputy sheriff, the Galvans rights over the subject property was purchased by Ruth Cabrera in the amount of P15,000.00. A certificate of sale was issued in the name of Ruth Cabrera, and she acquired Galvans rights over the subject property as no redemption appeared to have been made within the reglementary period provided under Section 33, Rule 39 of the Rules of Court.

Sometime in 1999, Ruth Cabrera filed an unlawful detainer case with the MeTC of Pasig City, Branch 68 against the spouses Galvan, entitled Ruth Cabrera v. Spouses Dominador Galvan and Ma. Imelda Eloisa P. Galvan, Spouses John Doe Sase and Marissa Sase. 18 On August 30, 2000, the MeTC of Pasig City, Branch 68 ruled in favor of Ruth Cabrera. The dispositive portion of the MeTCs Decision states: Wherefore, premises considered, judgment is hereby rendered for herein plaintiff and against herein defendants, ordering the latter and all those claiming rights under them to vacate and surrender possession of the subject property; ordering defendants to pay P1,000.00 a month as reasonable compensation for their continued occupation of the subject property from April 1999 until the time they and all those claiming rights under them shall have completely vacated the property; to pay attorneys fees in the amount of P5,000.00 and the costs of suit.19 Defendants spouses Galvan and spouses Sase appealed the Decision of the MeTC of Pasig City, Branch 68 to the RTC of Pasig City, Branch 267. In a Decision dated May 9, 2001, the appellate court affirmed in toto the decision of the lower court. No appeal was made; hence, the decision became final and executory. On November 27, 2003, the MeTC of Pasig City, Branch 68 issued an Order20 granting the motion for issuance of a writ of execution filed by plaintiff Ruth Cabrera. Hence, defendants spouses Galvan and the spouses Sase were ejected from the subject property. Meantime, on February 23, 2001, Ruth Cabrera,21 through a Deed of Transfer and Assignment of Rights,22 conveyed to respondent all her rights and interest over the Certificate of Sale covering the subject property. Thereafter, respondent took possession and control of the property. Hence, respondent prayed that the Complaint be dismissed for lack of cause of action. In a Decision dated December 15, 2005, the trial court ruled in favor of petitioner. The dispositive portion of the Decision reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against defendant Marfelina Mag-abo in the following manner: 1) Ordering the defendant and all persons claiming rights under her to vacate and surrender the peaceful possession of the premises located at No. 181 Bayabas Extension, NAPICO, Manggahan, Pasig City; 2) Ordering the defendant to pay plaintiff the sum of P20,000.00 as and by way of attorney's fees; and 3) Ordering the defendant to pay the costs of suit.23 The trial court held that petitioner was able to establish, by preponderance of evidence, a case for repossession. It held that no right was ever transferred to respondent by Ruth Cabrera. It pointed out that petitioner requested for a certified true copy of the Deed of Transfer and

Assignment of Rights at the Notarial Section of the Makati Regional Trial Court, but no such copy was submitted, showing that there was no available record of the same. The trial court stated that the Decisions of the MeTC of Pasig City, Branch 68 and the RTC of Pasig, Branch 267 in the unlawful detainer case entitled Ruth Cabrera v. Spouses Dominador Galvan and Ma. Imelda Eloisa P. Galvan, Spouses John Doe Sase and Marissa Sase, which Decisions respondent attached to her Answer, could not be used to conclude that there was a right transferred or assigned to her. When petitioner asked the former owner about the alleged Certificate of Sale in the name of Ruth Cabrera, she was given copies of the appeal papers. The trial court gave credence to petitioners evidence showing that the subject lot is part of the property of the MMDA under TCT No. PT-96040, which property was sold to the NAPICO Homeowners Association XIII, Inc., and a new title, TCT No. PT-119333, was subsequently issued in the name of the said association. The trial court stated that petitioner has never known any other owner of the subject property aside from Ma. Imelda Eloisa Galvan. Moreover, Ma. Imelda Eloisa Galvan was the one registered as owner- awardee by the Association. After the approval of the substitution, the President of the NAPICO Homeowners Association XIII, Inc. issued a Certification dated May 20, 2004, which stated that petitioner, in place of the former owner Ma. Imelda Eloisa Galvan, has acquired the said lot. Hence, the trial court concluded that petitioner may demand that she be placed in possession of the property, because possession is a mere consequence of ownership. Respondent appealed the trial courts decision to the RTC of Pasig City, Branch 161. On August 18, 2006, the RTC reversed the trial courts decision. The dispositive portion of the Decision states: WHEREFORE, in view of all the foregoing, the APPEALED DECISION is hereby REVERSED and SET ASIDE. Civil Case No. 7813 is ordered DISMISSED. 24 The RTC held that the evidence on record showed that prior to the transfer of rights by Ma. Imelda Eloisa Galvan to petitioner, the subject property was already transferred to respondent through a Deed of Transfer and Assignment of Rights executed by Ruth Cabrera-Mendoza, who was able to obtain the property by virtue of a Certificate of Sale dated February 28, 1998 pursuant to a Writ of Execution dated February 6, 1998. This fact was already established in the Decisions of the MeTC of Pasig City, Branch 68, and the RTC of Pasig City, Branch 267 in the case for ejectment, entitled Ruth Cabrera v. Spouses Dominador Galvan and Ma. Imelda Eloisa P. Galvan, Spouses John Doe Sase and Marissa Sase. The RTC stated that Galvans failure to file an appeal of the decision of the RTC of Pasig City, Branch 267 rendered the said decision final and executory. By virtue of a Writ of Execution, the spouses Dominador Galvan and Ma. Imelda Eloisa Galvan, and the spouses John Doe Sase and Marissa Sase were ejected from the subject property; thus, Ruth Cabrera was able to gain possession of the same. Ruth Cabrera turned over the possession and control of the property to respondent by virtue of the Deed of Transfer and Assignment of Rights. The RTC held that respondents possession of the property is in the concept of an owner, and not by mere tolerance of Ma. Imelda Eloisa Galvan. Galvan did not have any right to transfer the

property to petitioner in July 2003, since she knew of the two Decisions of the MeTC of Pasig City, Branch 68 and the RTC of Pasig City, Branch 267. Further, the RTC held that the case should be dismissed on the ground of res judicata. The requisites of res judicata are: (1) there must be a former final judgment rendered on the merits; (2) the court must have had jurisdiction over the subject matter and the parties; and (3) there must be identity of parties, subject matter and cause of action between the first and second actions.25 The RTC stated that the existence and finality of the decision of the RTC of Pasig City, Branch 267 in the unlawful detainer case entitled Ruth Cabrera v. Spouses Dominador Galvan and Ma. Imelda Eloisa P. Galvan, Spouses John Doe Sase and Marissa Sase was not contested by petitioner. The court in the said case had jurisdiction over the subject matter and the parties. The case established the fact that by virtue of the Certificate of Sale dated February 28, 1998 issued in the name of Ruth Cabrera, she was able to acquire Galvans rights over the subject property, including the right of possession. Thus, the first and second requisites of res judicata have been complied with. As regards the presence of identity of parties, the RTC cited the case of Taganas v. Emuslan,26 which held that there is identity of parties where the parties in both actions are the same or there is privity between them, or they are successors-in-interest by title subsequent to the commencement of the action, litigating for the same thing and under the same title and in the same capacity. The RTC stated that in this case, petitioner is the successor-in-interest of Ma. Imelda Eloisa Galvan, who was one of the defendants in the first case entitled Ruth Cabrera v. Spouses Dominador Galvan and Ma. Imelda Eloisa P. Galvan, Spouses John Doe Sase and Marissa Sase, while respondent is the successor-in-interest of Ruth Cabrera, who was the plaintiff in the first case. Therefore, it is clear that the parties in both actions are substantially the same, representing the very same interest. Moreover, the RTC averred that the subject of an action is defined as the matter or thing with respect to which the controversy has arisen, concerning which a wrong has been done.27 There can be no doubt that the subject matter involved in the first case and this case is the lot located at No. 181 Bayabas Extension, NAPICO, Manggahan, Pasig City. Hence, the RTC held that the element of identity of subject matter is also present. The RTC also ruled that the causes of action in the two cases under consideration are identical. It cited Dela Rama v. Mendiola,28 which held: x x x Causes of action are identical when there is an identity in the facts essential to the maintenance of the two actions, or where the same evidence will sustain both actions. If the same facts or evidence can sustain either, the two actions are considered the same, so that the judgment in one is a bar to the other. x x x [T]he difference in form and nature of the two actions is immaterial. The philosophy behind the rule on res judicata prohibits the parties from litigating the same issue more than once. x x x. When material facts or questions in issue in a former action were conclusively settled by a judgment rendered therein, such facts or questions constitute res judicata and may not be again litigated in a subsequent action between the same parties or their privies regardless of the form

of the latter. This is the essence of res judicata or bar by prior judgment. The parties are bound not only as regards every matter offered and received to sustain or defeat their claims or demand but as to any other admissible matter which might have been offered for that purpose and of all other matters that could have been adjudged in that case. The RTC explained that the issue involved in the first unlawful detainer case was who between Ruth Cabrera and the Spouses Galvan had the right of possession over the subject property. In the present case, the issue is who between Deanon and Mag-abo, the successors-in-interest of the Spouses Galvan and Ruth Cabrera, respectively, has the right of possession over the subject property. The issue of possession over the subject property was already decided upon in the first case, as the parties therein were the predecessors-in-interest of the parties in this case. Thus, the RTC held that the present case is barred by res judicata, because the parties are bound by any other admissible matter which might have been offered for that purpose and all other matters that could have been adjudged in the prior case. Petitioner appealed the Decision of the RTC to the Court of Appeals via a petition for review. The Court of Appeals affirmed the Decision of the RTC in its Decision dated May 25, 2007, the dispositive portion of which reads: UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition must be, as it is hereby DENIED, and consequently, DISMISSED. Costs against petitioner. 29 Petitioners motion for reconsideration was denied by the Court of Appeals in a Resolution 30 dated August 28, 2007. Hence, petitioner filed this petition. The main issue in this case is who among the parties is entitled to possession of the subject property and the structure erected thereon, located at No. 181 Bayabas Street Extension, NAPICO, Manggahan, Pasig City. The Court upholds the decision of the Court of Appeals that respondent Marfelina Mag-abo is entitled to possession of the subject property. Petitioner seeks the ejectment of respondent from the subject property on the ground that she acquired the property from its grantee, Ma. Imelda Eloisa P. Galvan, and she is recognized by the lot owner, NAPICO Homeowners Association XIII, Inc., as the claimant in the place of Galvan, and that respondents occupancy of the property was merely tolerated by Ma. Imelda Eloisa Galvan. However, evidence on record showed that in the ejectment case entitled Ruth Cabrera v. Sps. Dominador Galvan and Ma. Imelda Eloisa P. Galvan, and Sps. John Doe Sase and Marissa Sase involving the same property, the RTC of Pasig City, Branch 267, in a Decision 31 dated May 9, 2001, held that Ruth Cabrera, who is respondents predecessor-in-interest, is entitled to the possession of the said property, not the Spouses Galvan, who are petitioners predecessor-ininterest. It was established that Ruth Cabrera acquired the rights of Ma. Imelda Eloisa Galvan over the subject property by virtue of a Certificate of Sale dated February 28, 1998, after the said property was levied upon and sold in a public auction to satisfy the civil indemnity of

P15,000.00 imposed upon Dominador Galvan in a criminal case filed with the RTC of Pasig City, Branch 166. Therefore, when Ma. Imelda Eloisa Galvan waived her rights over the subject property in favor of petitioner on July 28, 2003,32 the rights to the property had already been transferred to Ruth Cabrera, who, in turn, conveyed her rights to respondent by virtue of the Deed of Transfer and Assignment of Rights dated February 23, 2001.33 Petitioner contends that the lawful owner of the subject property should be entitled to actual physical possession of the same. Petitioner asserts that Ruth Cabrera-Mendoza and her successor-in-interest, respondent Mag-abo, failed for an unreasonable length of time to inform the National Home Mortgage Corporation of their rights over the property; hence, they cannot prevail over the right of petitioner, who acquired the property in good faith and for value by virtue of the document entitled Waiver of Rights on Lot,34 which was executed by Ma. Imelda Eloisa P. Galvan in her favor. Petitioner pointed out that Ma. Imelda Eloisa Galvan was a mere awardee of the lot from the NAPICO Homeowners Association XIII, Inc. Petitioner emphasized that she complied with the tedious process in order to perfect her rights over the property, and she was still paying monthly amortization to the NAPICO Homeowners Association XIII, which remits the payment to the National Home Mortgage Corporation. In short, petitioner claims that she is a buyer in good faith and for value of the rights to the property, and upon notice to the lot owner NAPICO Homeowners Association XIII, Inc. and payment of Ma. Imelda Eloisa Galvans arrears, the rights of Galvan to purchase the property was transferred to her, and she is still paying the purchase price to the said Association. Thus, she has a better right of possession over respondent, who failed to inform the NAPICO Homeowners Association XIII, Inc. for an unreasonable length of time of her rights over the property. The contention of petitioner does not persuade. To reiterate, Ma. Imelda Eloisa Galvan transferred her rights over the subject property to petitioner on July 28, 2003. At that time, she had already lost her rights to the property, as Ruth Cabrera acquired her rights by virtue of the Certificate of Sale dated February 28, 1998. In addition, Ruth Cabrera transferred her rights to the property to respondent through the Deed of Transfer and Assignment of Rights on February 23, 2001, which is two years earlier than the transfer to petitioner. Consequently, petitioner cannot be considered a buyer in good faith, because respondent was already in possession of the subject property at the time Ma. Imelda Eloisa Galvan conveyed her rights over the property to petitioner. It is settled rule that a buyer of real property that is in the possession of a person other than the seller must be wary and should investigate the rights of the person in possession.35 Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith.36 Since respondent was already in possession of the subject property at the time Ma. Imelda Eloisa Galvan transferred her rights over the property to petitioner, petitioner was obliged to investigate respondents rights over the property vis--vis that of the seller. Petitioner cannot be considered a buyer in good faith for her failure to make such inquiry. The Court notes that respondents rights over the property are the same rights, interest and claim of then lot claimant Ma. Imelda Eloisa Galvan to the property as of the time of the levy.37 It

appears that respondent failed to inform the NAPICO Homeowners Association XIII, Inc. of her rights in order to facilitate substitution and assumption of payment of the purchase price, while petitioner accomplished the same. However, this development, insofar as the instant case is concerned, does not detract from the finding that respondent is entitled to the right of possession of the subject property.1avvphi1 The sole issue for resolution in an unlawful detainer case is physical or material possession.38 Courts in ejectment cases decide questions of ownership only as it is necessary to decide the question of possession.39 The reason for this rule is to prevent the defendant from trifling with the summary nature of an ejectment suit by the simple expedient of asserting ownership over the disputed property.40 The Court's adjudication of ownership in an ejectment case is merely provisional, and it will not bar or prejudice an action between the same parties involving title to the property, if and when such action is brought seasonably before the proper forum.41 WHEREFORE, the petition for review on certiorari is DENIED. The Decision of the Court of Appeals, dated May 25, 2007, in CA-G.R. SP No. 97714 is hereby AFFIRMED. Costs against petitioner. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11093 January 27, 1958

LEONARDO ENAGE LABAJO, ET AL., plaintiffs-appellants, vs. CIRIACO ENRIQUEZ, defendant-appellant. Jesus V. Velasco for plaintiffs and appellants. De la Cruz and De la Cruz for defendant and appellant. MONTEMAYOR, J.: Both parties, plaintiffs and defendant, are appealing from the judgment of the Court of First Instance of Leyte, dismissing the complaint of plaintiffs and the counterclaim of defendant. On February 16, 1954, plaintiffs commenced the present action in the Leyte court, alleging that they were co-owners of Lot No. 676 of the Tacloban cadastre, covered by Original Certificate of Title No. 10552; that in May, 1945, up to June, 1950, inclusive, due to their absence from Tacloban, Leyte, they had neglected or abandoned the said lot and that defendant Ciriaco Enriquez, without their knowledge and consent, voluntarily administered the said lot by leasing the same to several tenants and collecting during the aforesaid period, rentals thereon

amounting to P2,552, thereby unjustly enriching himself in the said sum; that they, plaintiffs, have made repeated dermands on Enriquez for reimbursement of the said amount, but that he had refused to comply with their demand, and so they asked the court for judgment on the said amount, plus P200 as damages. Defendant Enriquez answering the complaint, alleged that the lot in question had been abandoned by the plaintiffs not since May, 1945, but since the year 1932, and that when he (Enriquez) bought lot No. 2059 of the Tacloban cadastre, contiguous and adjacent to said Lot No. 676, he thought that the latter was included in the parcel he had bought, and so in good faith, he had occupied and rented it to tenants together with his parcel, but that the rentals received by him did not reach the sum of P2,552 claimed by the plaintiffs; that furthermore, during the said period, he had been paying the real estate taxes on the said lot in question; and that under the provisions of Articles 526, 527, 528, and, 544 of the New Civil Code, he should be considered as a possessor in good faith and entitled to the fruits received by him. By way of counterclaim, he alleged that in connection with the demand of plaintiffs for reimbursement, which he had refused, they had filed fabricated charges of estafa against him in the Municipal Court of the City of Tacloban on September 16, 1953, and that on October 30 of the same year, the Municipal Court dismissed the charges on the ground that there was no crime of estafa committed, and that the case involved was more of a civil nature; that as a result of the filing of the false charges, he suffered humiliation, embarrassment and mental anguish, thereby causing him damages in the amount of P5,000, and compelling him to employ the services of counsel in the amount of P500; and finally, he asked the court to render judgment on the pleadings. The plaintiffs answering the counterclaim, admit having filed the criminal charges against the defendant and the dismissal of the same, but that they disagreed with the order of the Municipal Court and intended to revive the same criminal case in the Court of First Instance of Leyte; and that as regards defendant's petition for judgment on the pleadings, they had no objections, provided the defendant in his prayer for judgment "is understood to admit all the material and relevant allegations of the plaintiffs' complaint", including the allegations that the defendant had unjustly enriched himself in the amount of P2,552; and that because of his refusal to pay said amount they were compelled to bring the present action, incurring damages in the amount of P200 as attorney's fees. Acting upon the motion for judgment of the pleadings, the trial court rendered judgment, and applying the articles of the Civil Code aforementioned, it dismissed the complaint as well as the counterclaim. Plaintiffs in their notice of appeal stated that they were appealing the judgment to the "Supreme Court on pure question of law". The appeal, however, was first taken to the Court of Appeals, which tribunal later certified the appeal to us on the ground that it involved only question of law. Plaintiffs in their appeal brief, claim that the trial court erred in rendering judgment on the pleadings. However, as already stated, they informed the court that they had no objection to the petition of the defendant for judgment on the pleadings, although they imposed the condition that defendant admit that he had received the amount of their demand from the rentals on the property in question, and that he refused to pay the same to them. We believe that the trial court was fully justified in dismissing the complaint. Under the law (the Old as well as the New Civil Code), a person occupying the property of another is deemed to be a possessor in good faith, and that he who alleges bad faith on the part of the possessor has the burden of proof. In the present case, the defendant claimed good faith, alleging that the lot in question was adjacent to his, and that he believed in good faith that it formed part of it. This claim was not disproved by the plaintiffs, neither did they submit evidence to show bad faith on the part of the defendant. As a possessor in good faith, the defendant was entitled to the fruits

received by him until June, 1950, when he was advised by the plaintiff that the lot belonged to them. As regards the dismissal of the counterclaim, the defendant equally failed to prove that the plaintiffs acted in bad faith and with ulterior motives in filing the criminal charges against him. It may be presumed that they believed in good faith that his refusal to reimburse the rentals received by him constituted estafa, until they were disabused in said belief by the Municipal Court holding that the responsibility of defendant was civil rather than criminal. Moreover, the defendant had received rentals from the lot of the plaintiffs for so many years, which on the claim of good faith, as a possessor he does not have to remburse to them, and so it is a matter of justice and equity that he forego his claim for alleged damages contained in his counterclaim. In view of the foregoing, the judgment appealed from is hereby affirmed. No costs. Bengzon, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Endencia, and Felix, JJ., concur. Paras, C.J., concurs in the result.

PADILLA, J., dissenting: It appears that the parcel of land acquired by purchase by the defendant and the one adjoining it owned by the plaintiffs are registered under the Land Registration Act (Act No. 496). The fact that the defendant found it unoccupied or abandoned and that he was made to believe that the parcel of land he had acquired by purchase included the adjoining parcel of land owned by and registered in the name of the plaintiffs, does not render him a possessor in good faith. Were this a matter of a few square meters and with a standing wall pointing out the boundary of the parcel of land acquired by the party who claims to be a possessor in good faith of a small adjacent strip of land within the area of an adjoining registered parcel of land belonging to another, good faith of the former might be accepted and believed, as held in Co Tao vs. Chan Chico, 46 Off, Gaz. 5514. But one who purchases a parcel of land registered under the Torrens system must be presumed to know the area and boundaries of the acquired parcel of land. Assuming that he was told that the adjoining parcel of land owned by another, also registered under the same system, was included in the parcel of land he had acquired by purchase, that does not make him a possessor in good faith of the parcel of land belonging to the other. He should have first inquired and verified the information given him, and should not have relied upon it and proceeded to lease it to other parties. Law, equity and justice demand that he turn over the rentals he had collected from the parcel of land which he does not own to the rightful owners, as no one is allowed to unjustly enrich himself at the expense of another. The case should be remanded to the trial court for determination of the amount the defendant had collected and the amount of taxes which he claims he had paid for the parcel of land owned by the plaintiffs, and after determination thereof and offsetting one against the other, to order the defendant to pay the balance to the plaintiffs. Republic of the Philippines SUPREME COURT Manila EN BANC

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G.R. No. L-5028

February 20, 1909

JUANA VALENCIA, plaintiff-appellant, vs. CARMEN AYALA DE ROXAS, defendant-appellee. Hartigan and Rohde for appellant. Rosado, Sanz and Opisso for appellee. WILLARD, J.: After the judgment of this court in the case of Carmen Ayala de Roxas vs. Juana Valencia (9 Phil Rep., 322) had been entered, the record was returned to the court below where an execution was issued directing the sheriff to put the plaintiff in that suit, who is the defendant in this suit, in possession of the real property there in question. The defendant in that suit, who is the plaintiff in this suit, then brought this action, asking that she be not ejected from the property until the defendant had paid her for the improvements which she had made thereon, which she alleged were of the value of P8,000. A preliminary injunction was granted restraining the eviction until the termination of the suit. The defendant in her answer set up a counterclaim for the use and occupation of the premises from the 1st day of September, 1901. The judgment of the court below acquitted the defendant of the complaint, and ordered judgment against the plaintiff on the counterclaim for the sum of P15 a month as rent from the 1st day of September, 1901. From this judgment the plaintiff has appealed. Article 453 of the Civil Code is as follows: Necessary expenses are refunded to every possessor, but only the possessor in good faith may retain the thing until they are repaid to him. Useful expenses are paid the possessor in good faith with the same right of retention, the person who has defeated him in his possession having the option of refunding the amount of the expenses or paying him the increase in value the thing has acquired by reason thereof. So far as the plaintiff's claim to recover for the improvements is based upon the first paragraph of this article, it can not be sustained. The improvements consisted in filling the lot and erecting a house thereon. The term "necessary expenses" was considered in this court in the case of Alburo vs. Villanueva (7 Phil. Rep., 277), and it was there held that the filling in and improvement of a lot could not be brought under this head. The construction of the house, of course, could not, because that was not at all necessary for the preservation of the lot. The plaintiff's principal reliance is, however, upon the second paragraph of article 453, and her claim is that she was a possessor in good faith. The status of the plaintiff with reference to third property was conclusively settled by the decision in the former case. (Sec. 306, Code of Civil Procedure.) In that case it was said (9 Phil. Rep., 324): We hold in this case that the defendant did not occupy this land as owner, but was there by the mere tolerance of the plaintiff, and, consequently, that she, the defendant, has not acquired the ownership thereof.

The question whether a person who occupies by the mere tolerance of the owner is entitled to recover for the improvements, has already been decided by this court. In the case of De Guzman vs. Rivera (4 Phil. Rep., 620), the court said (p. 624): From the foregoing it follows that the plaintiff occupied the land unlawfully and by mere tolerance of the actual owners thereof. She did not acquire when she bought the house any more rights than those which the former tenant had. She acted in bad faith when she instituted this action and she can not now avail herself of the provisions of articles 361 and 434 and other corresponding articles of the Civil Code. Without considering the other objections raised to the complaint, we hold that it can not be maintained because the plaintiff was not an occupant in good faith. The only evidence in the case to show the value of the use of the land occupied by the plaintiff from the 1st of September, 1901, is the following agreement made by the parties at the trial: The parties agree that the lot next to the lot mentioned in the complaint, occupied by the Chinese Pio Barretto, pays as rent to Doa Carmen Ayala P237 a month for an area of 4,000 meters. The lot occupied by the plaintiff has an area of 479.49 square meters. There is no evidence to show whether the location of the lot occupied by Barretto is better or worse than the situation of the lot occupied by the plaintiff. There is no evidence to show what the natural features of the two properties are so that it can not be said that one is just as valuable as the other for the purposes of leasing. The mere isolated fact that one piece of property is actually rented for a certain sum of money is not sufficient evidence of the value of the use of an adjoining piece of property without some evidence to show that they are similarly situated and that one, for the purposes of renting, has the same value as the other. The judgment of the court below acquitting the defendant of the complaint is affirmed. It is reversed so far as it orders judgment against the plaintiff for P15 a month from the 1st day of September, 1901, and the plaintiff is hereby acquitted of the counterclaim contained to either party in this court. Arellano, C. J., Torres, Mapa, Johnson, and Carson, JJ., concur.

11