Heirs of Roman Soriano vs. Hon.

Court of Appeals
G.R. No. 93401 June 26, 1991

Medialdea, J.:

Doctrine: There is ownership when a thing pertaining to one person is consistent

with the rights of others. Ownership confers certain rights to the owner, among
which are the right to enjoy the thing owned and the right to exclude other persons
from possession thereof. On the other hand, possession is defined as the holding of
a thing or enjoyment of a right.

Facts: The object of the dispute in this case is a parcel of land originally owned by
Adriano Soriano who died intestate in 1947. On June 30, 1967, his heirs leased the
property to spouses David de Vera and Consuelo Villasista for a period of fifteen (15)
years beginning July 1, 1967. Paragraph 5 of the contract of lease, provided that
Roman Soriano, one of the children of the late Adriano, will be the caretaker of the
property during the period of the lease.

During the effectivity of the lease contract, the heirs of Adriano Soriano entered into
an extrajudicial settlement of his estate. The property subject of this case was
adjudicated to seven (7) of his rune (9) children pro-indiviso.

On January 11, 1968, the property was divided into two (2) lots, Lot No. 60052 and
Lot No. 8459. The former lot was assigned to Lourdes, Candido and the heirs of
Dionisia while the latter lot was assigned to Francisco, Librada, Elcocadio and
Roman. The new owners of Lot No. 60052 sold the portions assigned to them to
spouses Braulio and Aquilina Abalos. Likewise, the new owners of Lot 8459, except
Roman, sold their shares to the Abalos spouses.

On March 14, 1968, the de Vera spouses ousted Roman as caretaker and appointed
Isidro Versoza and Vidal Versoza as his substitutes. Thereafter, Roman filed a case
for reinstatement and reliquidation against the de Vera spouses. On September 30,

1969, the Agrarian Court rendered a decision authorizing the ejectment of Roman.
On appeal, the decision was reversed by the Court of Appeals. However, before it
was executed, the parties entered into a post-decisional agreement wherein the de
Vera spouses allowed Roman Soriano to sub-lease the property until the termination
of the original lease on June 30 1982. This agreement was approved by the CAR
court in an order dated December 22, 1972.

On August 16, 1976, the Abalos spouses filed with the then Court of First Instance of
Pangasinan at Lingayen an application for registration of title. The application
claimed ownership of the entire lot No. 60052 and 3/4 pro-indiviso of Lot No. 8459.
The Director of Lands and Roman Soriano filed separate oppositions to the
application. The latters opposition alleged that the two (2) lots subject of the
application have not yet been subdivided and remained as one parcel; that he is the
co-owner pro-indiviso of the combined area of the two (2) lots and not just to onefourth (1/4) of Lot No. 8459 as alleged in the application; and that the applicants
source of ownership is voidable.

The Republic subsequently conceded that the land applied for was private and
disposable. The RTC, acting as a Land Registration Court, granted the application for
Registration.

Meanwhile, on April 13, 1983, after the expiration of the original lease and the sublease in favor of Roman Soriano, the Abalos spouses filed a case for unlawful
detainer against Roman Soriano. This case, however, was dismissed on motion of
the complainants, Abalos spouses.

For their part, Elcocadio, Librada, Roman, Francisco, Lourdes, Candido and the heirs
of Dionisia, filed a complaint to annul the deeds of sale they executed in favor of the
Abalos spouses or should the deeds be not annulled, to allow Roman, Elcocadio and
Librada to redeem those shares sold by Candido, Lourdes, Francisca and the heirs of
Dionisia and to uphold Roman Sorianos possession of the fishpond portion of the
property as a tenant-caretaker. After the dismissal of the case for unlawful detainer,
the Abalos spouses a motion for execution of the post-decisional order embodying
the agreement of Roman Soriano and the de Vera spouses allowing the former to
sublease the property.

Issue: Whether or not a motion for execution of a post decisional agreement

approved by the court in 1972 may still be filed eleven (11) years after.

Held: No. It should be noted that the meat of the post decisional agreement sought
to be executed was the creation of a sub- lessor and sub-lessee relationship
between the de Veras and Roman Soriano. While it appears from the above
resolution of the trial court that there was a basis for private respondents demand
for reasonable compensation for the use of the premises and for joint possession as
a co-owner, the filing of a motion for execution of the post decisional agreement
between the de Vera spouses and the petitioners predecessor, Roman Soriano, was
not the proper remedy. The pleading filed with the trial court was captioned Motion
for Execution. However, it was very clear that, under the circumstances they were
in, the relief demanded by the private respondents can properly be asked for in an
unlawful detainer case or in other proper proceedings. A case for unlawful detainer
was already brought by the private respondents against the petitioner but the
former sought its dismissal for reasons not known. Be that as it may, there is still a
pending civil action between the parties (Civil Case No. 15958) where possession is
one of the issues to be resolved.

The agrarian court erred in not dismissing outright the motion for execution filed by
private respondents. Said court, acting on the motion for execution had no
jurisdiction to entertain propositions outside of the scope of the agreement sought
to be executed. Further, the agreement sought to be enforced was approved by the
court on December 22, 1972, eleven (11) years and eight (8) months from the time
the motion for execution was filed on August 22, 1984. It is settled that under
Section 6, Rule 39 of the Rules of Court, execution of a judgment (or a final order)
may be made by motion within five (5) years from the date it becomes final and
executory. After the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced only by an ordinary action. Actions upon a
judgment or a final order of the court must be brought within ten (10) years from
the time the right of action accrues [(Article 1144 (3)] or within ten years counted
from the time the judgment became final. Furthermore, it is indubitable that the
agreement sought to be executed had already been executed by the parties. The
obligations of spouses De Vera, the original lessees, and of Roman Soriano, under
sub-lease agreement had already been complied with. Possession and rentals under
the contracts were already delivered. In fact, at the time the motion for execution
was filed the sub-lease contract had already expired. Hence, there was nothing
more to execute. Petition granted. Motion for execution denied.

Caveat: Anyone who claims this digest as his own without proper authority shall be
held liable under the law of Karma.

Digest by: 2S, San Beda Law 2010-2011

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Today is Saturday, October 11, 2014

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-13298

November 19, 1918

CORNELIO RAMOS, petitioner-appellant,

vs.
THE DIRECTOR OF LANDS, objector-appellee.

Basilio Aromin for appellant.

Office of the Solicitor-General Paredes for appellee.

MALCOLM, J.:

This is an appeal by the applicant and appellant from a judgment of the Court of
First Instance of Nueva Ecija, denying the registration of the larger portion of parcel
No. 1 (Exhibit A of the petitioner), marked by the letters A, B, and C on the plan,
Exhibit 1, of the Government.

One Restituto Romero y Ponce apparently gained possession of a considerable

tract of land located in the municipality of San Jose, Province of Nueva Ecija, in the
year 1882. He took advantage of the Royal Decree of February 13, 1894, to obtain a
possessory information title to the land, registered as such on February 8, 1896.
Parcel No. 1, included within the limits of the possessory information title of
Restituto Romero, was sold in February, 1907, to Cornelio Ramos, the instant
petitioner, and his wife Ambrosia Salamanca.

Ramos instituted appropriate proceedings to have his title registered. Opposition

was entered by the Director of Lands on the ground that Ramos had not acquired a
good title from the Spanish government and by the Director of Forestry on the
ground that the first parcel was forest land. The trial court agreed with the objectors
and excluded parcel No. 1 from registration. So much for the facts.

As to the law, the principal argument of the Solicitor-General is based on the

provisions of the Spanish Mortgage Law and of the Royal Decree of February 13,
1894, commonly known as the Maura Law. The Solicitor-General would emphasize
that for land to come under the protective gis of the Maura Law, it must have
been shown that the land was cultivated for six years previously, and that it was not
land which pertained to the "zonas forestales." As proof that the land was, even as
long ago as the years 1894 to 1896, forestal and not agricultural in nature is the
fact that there are yet found thereon trees from 50 to 80 years of age.

We do not stop to decide this contention, although it might be possible, following

the doctrine laid down by the United States Supreme Court with reference to

Mexican and Spanish grantes within the United States, where some recital is
claimed to be false, to say that the possessory information, apparently having taken
cognizance of the requisites for title, should not now be disturbed. (Hancock vs.
McKinney [1851], 7 Tex., 192; Hornsby and Roland vs. United States [1869], 10
Wall., 224.) It is sufficient, as will later appear, merely to notice that the predecessor
in interest to the petitioner at least held this tract of land under color of title.

Subsection 6 of section 54, of Act No. 926, entitled The Public Land Law, as
amended by Act No. 1908, reads as follows:

6. All persons who by themselves or their predecessors and interest have been in
the open, continuous, exclusive, and notorious possession and occupation of
agricultural public lands, as defined by said Act of Congress of July first, nineteen
hundred and two, under a bona fide claim of ownership except as against the
Government, for a period of ten years next preceding the twenty-sixth day of July,
nineteen hundred and four, except when prevented by war or force majeure, shall
be conclusively presumed to have performed all the conditions essential to a
government grant and to have received the same, and shall be entitled to a
certificate of title to such land under the provisions of this chapter.

There are two parts to the above quoted subsection which must be discussed.
The first relates to the open, continuous, exclusive, and notorious possession and
occupation of what, for present purposes, can be conceded to be agricultural public
land, under a bona fide claim of ownership.

Actual possession of 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. Relative
to actuality of possession, it is admitted that the petitioner has cultivated only about
one fourth of the entire tract. This is graphically portrayed by Exhibit 1 of the
Government, following:

The question at once arises: Is that actual occupancy of a part of the land
described in the instrument giving color of title sufficient to give title to the entire
tract of land?lawphil.net

The doctrine of constructive possession indicates the answer. The general rule is
that the possession and cultivation of a portion of a tract under claim of ownership
of all is a constructive possession of all, if the remainder is not in the adverse
possession of another. (Barr vs. Gratz's Heirs [1819], 4 Wheat., 213; Ellicott vs. Pearl
[1836], 10 Pet., 412; Smith vs. Gale [1892], 144 U. S., 509.) Of course, there are a
number of qualifications to the rule, one particularly relating to the size of the tract
in controversy with reference to the portion actually in possession of the claimant. It
is here only necessary to apply the general rule.

The claimant has color of title; he acted in good faith; and he has had open,
peaceable, and notorious possession of a portion of the property, sufficient to
apprise the community and the world that the land was for his enjoyment. (See arts.
446, 448, Civil Code.) Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of ground before it can be said that he is
in possession. Ramos and his predecessor in interest fulfilled the requirements of
the law on the supposition that he premises consisted of agricultural public land.

The second division of the law requires consideration of the term "agricultural
public land." The law affirms that the phrase is denied by the Act of Congress of July
1st, 1902, known as the Philippine bill. Turning to the Philippine Bill, we find in
sections 13 to 18 thereof that three classes of land are mentioned. The first is
variously denominated "public land" or "public domain," the second "mineral land,"
and the third "timber land." Section 18 of the Act of Congress comes nearest to a
precise definition, when it makes the determination of whether the land is more
valuable for agricultural or for forest uses the test of its character.

Although these sections of the Philippine Bill have come before the courts on
numerous occasions, what was said in the case of Jones vs. Insular Government
([1906], 6 Phil., 122), is still true, namely: "The meaning of these sections is not
clear and it is difficult to give to them a construction that will be entirely free from
objection." In the case which gave most serious consideration to the subject (Mapa
vs. Insular Government [1908], 10 Phil., 175), it was found that there does exist in
the Act of Congress a definition of the phrase "agricultural public lands." It was said
that the phrase "agricultural public lands" as used in Act No. 926 means "those
public lands acquired from Spain which are not timber or mineral lands."

The idea would appear to be to determine, by exclusion, if the land is forestal or

mineral in nature and, if not so found, to consider it to be agricultural land. Here,

again, Philippine law is not very helpful. For instance, section 1820 of the
Administrative Code of 1917 provides: "For the purposes of this chapter, 'public
forest' includes, except as otherwise specially indicated, all unreserved public land,
including nipa and mangrove swamps, and all forest reserves of whatever
character." This definition of "public forest," it will be noted, is merely "for the
purposes of this chapter." A little further on, section 1827 provides: "Lands in public
forests, not including forest reserves, upon the certification of the Director of
Forestry that said lands are better adapted and more valuable for agricultural than
for forest purposes and not required by the public interests to be kept under forest,
shall be declared by the Department Head to be agricultural lands." With reference
to the last section, there is no certification of the Director of Forestry in the record,
as to whether this land is better adapted and more valuable for agricultural than for
forest purposes.

The lexicographers define "forest" as "a large tract of land covered with a natural
growth of trees and underbrush; a large wood." The authorities say that he word
"forest" has a significant, not an insignificant meaning, and that it does not embrace
land only partly woodland. It is a tract of land covered with trees, usually of
considerable extent. (Higgins vs. Long Island R. Co. [1908], 114 N. Y. Supp., 262;
People vs. Long Island R. Co. [1908], 110 N. Y. Supp., 512.)

The foresters say that no legal definition of "forest" is practicable or useful. B. H.

Baden-Powell, in his work on Forest Law of India, states as follows:

Every definition of a forest that can be framed for legal purposes will be found
either to exclude some cases to which the law ought to apply, or on the other hand,
to include some with which the law ought not to interfere. It may be necessary, for
example, to take under the law a tract of perfectly barren land which at present has
neither trees, brushwood, nor grass on it, but which in the course f time it is hoped
will be "reboise;" but any definition wide enough to take in all such lands, would also
take in much that was not wanted. On the other hand, the definition, if framed with
reference to tree-growth, might (and indeed would be almost sure to) include a
garden, shrubbery, orchard, or vineyard, which it was not designed to deal with.

B. E. Fernow, in his work on the Economics of Forestry, states as follows:

A forest in the sense in which we use the term, as an economic factor, is by no

means a mere collection of trees, but an organic whole in which all parts, although
apparently heterogeneous, jumbled together by accident as it were and apparently
unrelated, bear a close relation to each other and are as interdependent as any
other beings and conditions in nature.

The Director of Forestry of the Philippine Islands has said:

During the time of the passage of the Act of Congress of July 1, 1902, this
question of forest and agricultural lands was beginning to receive some attention
and it is clearly shown in section 18 of the above mentioned Act; it leaves to the
Bureau of Forestry the certification as to what lands are for agricultural or forest
uses. Although the Act states timber lands, the Bureau has in its administration
since the passage of this act construed this term to mean forest lands in the sense
of what was necessary to protect, for the public good; waste lands without a tree
have been declared more suitable for forestry in many instances in the past. The
term 'timber' as used in England and in the United States in the past has been
applied to wood suitable for construction purposes but with the increase in
civilization and the application of new methods every plant producing wood has
some useful purpose and the term timber lands is generally though of as
synonymous with forest lands or lands producing wood, or able to produce wood, if
agricultural crops on the same land will not bring the financial return that timber will
or if the same land is needed for protection purposes.

xxx

xxx

xxx

The laws in the United States recognize the necessity of technical advice of duly
appointed boards and leave it in the hands of these boards to decide what lands are
more valuable for forestry purposes or for agricultural purposes.

In the Philippine Islands this policy is follows to as great an extent as allowable

under the law. In many cases, in the opinion of the Bureau of Forestry, lands without
a single tree on them are considered as true forest land. For instance, mountain
sides which are too steep for cultivation under ordinary practice and which, if
cultivated, under ordinary practice would destroy the big natural resource of the
soil, by washing, is considered by this bureau as forest land and in time would be
reforested. Of course, examples exist in the Mountain Province where steep hillsides

have been terraced and intensive cultivation practiced but even then the mountain
people are very careful not to destroy forests or other vegetative cover which they
from experience have found protect their water supply. Certain chiefs have lodged
protests with the Government against other tribes on the opposite side of the
mountain cultivated by them, in order to prevent other tribes from cutting timber or
destroy cover guarding their source of water for irrigation.

Dr. M. S. Shaler, formerly Dean of the Lawrence Scientific School, remarked that if
mankind could not devise and enforce ways dealing with the earth, which will
preserve this source of like "we must look forward to the time, remote it may be, yet
equally discernible, when out kin having wasted its great inheritance will fade from
the earth because of the ruin it has accomplished."

The method employed by the bureau of Forestry in making inspection of lands, in

order to determine whether they are more adapted for agricultural or forest
purposes by a technical and duly trained personnel on the different phases of the
conservation of natural resources, is based upon a previously prepared set of
questions in which the different characters of the land under inspection are
discussed, namely:

Slope of land: Level; moderate; steep; very steep.

Exposure: North; South; East; West.

Soil: Clay; sandy loam; sand; rocky; very rocky.

Character of soil cover: Cultivated, grass land, brush land, brush land and timber
mixed, dense forest.

If cultivated, state crops being grown and approximate number of hectares under
cultivation. (Indicate on sketch.)

For growth of what agricultural products is this land suitable?

State what portion of the tract is wooded, name of important timber species and
estimate of stand in cubic meters per hectare, diameter and percentage of each
species.

If the land is covered with timber, state whether there is public land suitable for
agriculture in vicinity, which is not covered with timber.

Is this land more valuable for agricultural than for forest purposes? (State reasons
in full.)

Is this land included or adjoining any proposed or established forest reserve or

communal forest? Description and ownership of improvements.

If the land is claimed under private ownership, give the name of the claimant, his
place of residence, and state briefly (if necessary on a separate sheet) the grounds
upon which he bases his claim.

When the inspection is made on a parcel of public land which has been applied
for, the corresponding certificate is forwarded to the Director of Lands; if it is made
on a privately claimed parcel for which the issuance of a title is requested from the
Court of Land Registration, and the inspection shows the land to be more adapted
for forest purposes, then the Director of Forestry requests the Attorney-General to
file an opposition, sending him all data collected during the inspection and offering
him the forest officer as a witness.

It should be kept in mind that the lack of personnel of this Bureau, the limited
time intervening between the notice for the trial on an expediente of land and the
day of the trial, and the difficulties in communications as well as the distance of the
land in question greatly hinder the handling of this work.

In the case of lands claimed as private property, the Director of Forestry, by

means of his delegate the examining officer, submits before the court all evidence
referring to the present forest condition of the land, so that the court may compare

them with the alleged right by the claimant. Undoubtedly, when the claimant
presents a title issued by the proper authority or evidence of his right to the land
showing that he complied with the requirements of the law, the forest certificate
does not affect him in the least as such land should not be considered as a part of
the public domain; but when the alleged right is merely that of possession, then the
public or private character of the parcel is open to discussion and this character
should be established not simply on the alleged right of the claimant but on the
sylvical condition and soil characteristics of the land, and by comparison between
this area, or different previously occupied areas, and those areas which still
preserve their primitive character.

Either way we look at this question we encounter difficulty. Indubitably, there

should be conservation of the natural resources of the Philippines. The prodigality of
the spendthrift who squanders his substance for the pleasure of the fleeting
moment must be restrained for the less spectacular but surer policy which protects
Nature's wealth for future generations. Such is the wise stand of our Government as
represented by the Director of Forestry who, with the Forester for the Government
of the United States, believes in "the control of nature's powers by man for his own
good." On the other hand, the presumption should be, in lieu of contrary proof, that
land is agricultural in nature. One very apparent reason is that it is for the good of
the Philippine Islands to have the large public domain come under private
ownership. Such is the natural attitude of the sagacious citizen.

If in this instance, we give judicial sanction to a private claim, let it be noted that
the Government, in the long run of cases, has its remedy. Forest reserves of public
land can be established as provided by law. When the claim of the citizen and the
claim of the Government as to a particular piece of property collide, if the
Government desires to demonstrate that the land is in reality a forest, the Director
of Forestry should submit to the court convincing proof that the land is not more
valuable for agricultural than for forest purposes. Great consideration, it may be
stated, should, and undoubtedly will be, paid by the courts to the opinion of the
technical expert who speaks with authority on forestry matters. But a mere formal
opposition on the part of the Attorney-General for the Director of Forestry,
unsupported by satisfactory evidence will not stop the courts from giving title to the
claimant.

We hold that the petitioner and appellant has proved a title to the entire tract of
land for which he asked registration, under the provisions of subsection 6, of section
54, of Act No. 926, as amended by Act No. 1908, with reference to the Philippine Bill
and the Royal Decree of February 13, 1894, and his possessory information.

Judgment is reversed and the lower court shall register in the name of the
applicant the entire tract in parcel No. 1, as described in plan Exhibit A, without
special finding as to costs. So ordered.

Today is Saturday, October 11, 2014

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-13298

November 19, 1918

CORNELIO RAMOS, petitioner-appellant,

vs.
THE DIRECTOR OF LANDS, objector-appellee.

Basilio Aromin for appellant.

Office of the Solicitor-General Paredes for appellee.

MALCOLM, J.:

This is an appeal by the applicant and appellant from a judgment of the Court of
First Instance of Nueva Ecija, denying the registration of the larger portion of parcel
No. 1 (Exhibit A of the petitioner), marked by the letters A, B, and C on the plan,
Exhibit 1, of the Government.

One Restituto Romero y Ponce apparently gained possession of a considerable

tract of land located in the municipality of San Jose, Province of Nueva Ecija, in the
year 1882. He took advantage of the Royal Decree of February 13, 1894, to obtain a
possessory information title to the land, registered as such on February 8, 1896.
Parcel No. 1, included within the limits of the possessory information title of
Restituto Romero, was sold in February, 1907, to Cornelio Ramos, the instant
petitioner, and his wife Ambrosia Salamanca.

Ramos instituted appropriate proceedings to have his title registered. Opposition

was entered by the Director of Lands on the ground that Ramos had not acquired a
good title from the Spanish government and by the Director of Forestry on the
ground that the first parcel was forest land. The trial court agreed with the objectors
and excluded parcel No. 1 from registration. So much for the facts.

As to the law, the principal argument of the Solicitor-General is based on the

provisions of the Spanish Mortgage Law and of the Royal Decree of February 13,
1894, commonly known as the Maura Law. The Solicitor-General would emphasize
that for land to come under the protective gis of the Maura Law, it must have
been shown that the land was cultivated for six years previously, and that it was not
land which pertained to the "zonas forestales." As proof that the land was, even as
long ago as the years 1894 to 1896, forestal and not agricultural in nature is the
fact that there are yet found thereon trees from 50 to 80 years of age.

We do not stop to decide this contention, although it might be possible, following

the doctrine laid down by the United States Supreme Court with reference to
Mexican and Spanish grantes within the United States, where some recital is
claimed to be false, to say that the possessory information, apparently having taken
cognizance of the requisites for title, should not now be disturbed. (Hancock vs.

McKinney [1851], 7 Tex., 192; Hornsby and Roland vs. United States [1869], 10
Wall., 224.) It is sufficient, as will later appear, merely to notice that the predecessor
in interest to the petitioner at least held this tract of land under color of title.

Subsection 6 of section 54, of Act No. 926, entitled The Public Land Law, as
amended by Act No. 1908, reads as follows:

6. All persons who by themselves or their predecessors and interest have been in
the open, continuous, exclusive, and notorious possession and occupation of
agricultural public lands, as defined by said Act of Congress of July first, nineteen
hundred and two, under a bona fide claim of ownership except as against the
Government, for a period of ten years next preceding the twenty-sixth day of July,
nineteen hundred and four, except when prevented by war or force majeure, shall
be conclusively presumed to have performed all the conditions essential to a
government grant and to have received the same, and shall be entitled to a
certificate of title to such land under the provisions of this chapter.

There are two parts to the above quoted subsection which must be discussed.
The first relates to the open, continuous, exclusive, and notorious possession and
occupation of what, for present purposes, can be conceded to be agricultural public
land, under a bona fide claim of ownership.

Actual possession of 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. Relative
to actuality of possession, it is admitted that the petitioner has cultivated only about
one fourth of the entire tract. This is graphically portrayed by Exhibit 1 of the
Government, following:

The question at once arises: Is that actual occupancy of a part of the land
described in the instrument giving color of title sufficient to give title to the entire
tract of land?lawphil.net

The doctrine of constructive possession indicates the answer. The general rule is
that the possession and cultivation of a portion of a tract under claim of ownership
of all is a constructive possession of all, if the remainder is not in the adverse
possession of another. (Barr vs. Gratz's Heirs [1819], 4 Wheat., 213; Ellicott vs. Pearl

[1836], 10 Pet., 412; Smith vs. Gale [1892], 144 U. S., 509.) Of course, there are a
number of qualifications to the rule, one particularly relating to the size of the tract
in controversy with reference to the portion actually in possession of the claimant. It
is here only necessary to apply the general rule.

The claimant has color of title; he acted in good faith; and he has had open,
peaceable, and notorious possession of a portion of the property, sufficient to
apprise the community and the world that the land was for his enjoyment. (See arts.
446, 448, Civil Code.) Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of ground before it can be said that he is
in possession. Ramos and his predecessor in interest fulfilled the requirements of
the law on the supposition that he premises consisted of agricultural public land.

The second division of the law requires consideration of the term "agricultural
public land." The law affirms that the phrase is denied by the Act of Congress of July
1st, 1902, known as the Philippine bill. Turning to the Philippine Bill, we find in
sections 13 to 18 thereof that three classes of land are mentioned. The first is
variously denominated "public land" or "public domain," the second "mineral land,"
and the third "timber land." Section 18 of the Act of Congress comes nearest to a
precise definition, when it makes the determination of whether the land is more
valuable for agricultural or for forest uses the test of its character.

Although these sections of the Philippine Bill have come before the courts on
numerous occasions, what was said in the case of Jones vs. Insular Government
([1906], 6 Phil., 122), is still true, namely: "The meaning of these sections is not
clear and it is difficult to give to them a construction that will be entirely free from
objection." In the case which gave most serious consideration to the subject (Mapa
vs. Insular Government [1908], 10 Phil., 175), it was found that there does exist in
the Act of Congress a definition of the phrase "agricultural public lands." It was said
that the phrase "agricultural public lands" as used in Act No. 926 means "those
public lands acquired from Spain which are not timber or mineral lands."

The idea would appear to be to determine, by exclusion, if the land is forestal or

mineral in nature and, if not so found, to consider it to be agricultural land. Here,
again, Philippine law is not very helpful. For instance, section 1820 of the
Administrative Code of 1917 provides: "For the purposes of this chapter, 'public
forest' includes, except as otherwise specially indicated, all unreserved public land,
including nipa and mangrove swamps, and all forest reserves of whatever

character." This definition of "public forest," it will be noted, is merely "for the
purposes of this chapter." A little further on, section 1827 provides: "Lands in public
forests, not including forest reserves, upon the certification of the Director of
Forestry that said lands are better adapted and more valuable for agricultural than
for forest purposes and not required by the public interests to be kept under forest,
shall be declared by the Department Head to be agricultural lands." With reference
to the last section, there is no certification of the Director of Forestry in the record,
as to whether this land is better adapted and more valuable for agricultural than for
forest purposes.

The lexicographers define "forest" as "a large tract of land covered with a natural
growth of trees and underbrush; a large wood." The authorities say that he word
"forest" has a significant, not an insignificant meaning, and that it does not embrace
land only partly woodland. It is a tract of land covered with trees, usually of
considerable extent. (Higgins vs. Long Island R. Co. [1908], 114 N. Y. Supp., 262;
People vs. Long Island R. Co. [1908], 110 N. Y. Supp., 512.)

The foresters say that no legal definition of "forest" is practicable or useful. B. H.

Baden-Powell, in his work on Forest Law of India, states as follows:

Every definition of a forest that can be framed for legal purposes will be found
either to exclude some cases to which the law ought to apply, or on the other hand,
to include some with which the law ought not to interfere. It may be necessary, for
example, to take under the law a tract of perfectly barren land which at present has
neither trees, brushwood, nor grass on it, but which in the course f time it is hoped
will be "reboise;" but any definition wide enough to take in all such lands, would also
take in much that was not wanted. On the other hand, the definition, if framed with
reference to tree-growth, might (and indeed would be almost sure to) include a
garden, shrubbery, orchard, or vineyard, which it was not designed to deal with.

B. E. Fernow, in his work on the Economics of Forestry, states as follows:

A forest in the sense in which we use the term, as an economic factor, is by no

means a mere collection of trees, but an organic whole in which all parts, although
apparently heterogeneous, jumbled together by accident as it were and apparently
unrelated, bear a close relation to each other and are as interdependent as any
other beings and conditions in nature.

The Director of Forestry of the Philippine Islands has said:

During the time of the passage of the Act of Congress of July 1, 1902, this
question of forest and agricultural lands was beginning to receive some attention
and it is clearly shown in section 18 of the above mentioned Act; it leaves to the
Bureau of Forestry the certification as to what lands are for agricultural or forest
uses. Although the Act states timber lands, the Bureau has in its administration
since the passage of this act construed this term to mean forest lands in the sense
of what was necessary to protect, for the public good; waste lands without a tree
have been declared more suitable for forestry in many instances in the past. The
term 'timber' as used in England and in the United States in the past has been
applied to wood suitable for construction purposes but with the increase in
civilization and the application of new methods every plant producing wood has
some useful purpose and the term timber lands is generally though of as
synonymous with forest lands or lands producing wood, or able to produce wood, if
agricultural crops on the same land will not bring the financial return that timber will
or if the same land is needed for protection purposes.

xxx

xxx

xxx

The laws in the United States recognize the necessity of technical advice of duly
appointed boards and leave it in the hands of these boards to decide what lands are
more valuable for forestry purposes or for agricultural purposes.

In the Philippine Islands this policy is follows to as great an extent as allowable

under the law. In many cases, in the opinion of the Bureau of Forestry, lands without
a single tree on them are considered as true forest land. For instance, mountain
sides which are too steep for cultivation under ordinary practice and which, if
cultivated, under ordinary practice would destroy the big natural resource of the
soil, by washing, is considered by this bureau as forest land and in time would be
reforested. Of course, examples exist in the Mountain Province where steep hillsides
have been terraced and intensive cultivation practiced but even then the mountain
people are very careful not to destroy forests or other vegetative cover which they
from experience have found protect their water supply. Certain chiefs have lodged
protests with the Government against other tribes on the opposite side of the
mountain cultivated by them, in order to prevent other tribes from cutting timber or
destroy cover guarding their source of water for irrigation.

Dr. M. S. Shaler, formerly Dean of the Lawrence Scientific School, remarked that if
mankind could not devise and enforce ways dealing with the earth, which will
preserve this source of like "we must look forward to the time, remote it may be, yet
equally discernible, when out kin having wasted its great inheritance will fade from
the earth because of the ruin it has accomplished."

The method employed by the bureau of Forestry in making inspection of lands, in

order to determine whether they are more adapted for agricultural or forest
purposes by a technical and duly trained personnel on the different phases of the
conservation of natural resources, is based upon a previously prepared set of
questions in which the different characters of the land under inspection are
discussed, namely:

Slope of land: Level; moderate; steep; very steep.

Exposure: North; South; East; West.

Soil: Clay; sandy loam; sand; rocky; very rocky.

Character of soil cover: Cultivated, grass land, brush land, brush land and timber
mixed, dense forest.

If cultivated, state crops being grown and approximate number of hectares under
cultivation. (Indicate on sketch.)

For growth of what agricultural products is this land suitable?

State what portion of the tract is wooded, name of important timber species and
estimate of stand in cubic meters per hectare, diameter and percentage of each
species.

If the land is covered with timber, state whether there is public land suitable for
agriculture in vicinity, which is not covered with timber.

Is this land more valuable for agricultural than for forest purposes? (State reasons
in full.)

Is this land included or adjoining any proposed or established forest reserve or

communal forest? Description and ownership of improvements.

If the land is claimed under private ownership, give the name of the claimant, his
place of residence, and state briefly (if necessary on a separate sheet) the grounds
upon which he bases his claim.

When the inspection is made on a parcel of public land which has been applied
for, the corresponding certificate is forwarded to the Director of Lands; if it is made
on a privately claimed parcel for which the issuance of a title is requested from the
Court of Land Registration, and the inspection shows the land to be more adapted
for forest purposes, then the Director of Forestry requests the Attorney-General to
file an opposition, sending him all data collected during the inspection and offering
him the forest officer as a witness.

It should be kept in mind that the lack of personnel of this Bureau, the limited
time intervening between the notice for the trial on an expediente of land and the
day of the trial, and the difficulties in communications as well as the distance of the
land in question greatly hinder the handling of this work.

In the case of lands claimed as private property, the Director of Forestry, by

means of his delegate the examining officer, submits before the court all evidence
referring to the present forest condition of the land, so that the court may compare
them with the alleged right by the claimant. Undoubtedly, when the claimant
presents a title issued by the proper authority or evidence of his right to the land
showing that he complied with the requirements of the law, the forest certificate
does not affect him in the least as such land should not be considered as a part of
the public domain; but when the alleged right is merely that of possession, then the

public or private character of the parcel is open to discussion and this character
should be established not simply on the alleged right of the claimant but on the
sylvical condition and soil characteristics of the land, and by comparison between
this area, or different previously occupied areas, and those areas which still
preserve their primitive character.

Either way we look at this question we encounter difficulty. Indubitably, there

should be conservation of the natural resources of the Philippines. The prodigality of
the spendthrift who squanders his substance for the pleasure of the fleeting
moment must be restrained for the less spectacular but surer policy which protects
Nature's wealth for future generations. Such is the wise stand of our Government as
represented by the Director of Forestry who, with the Forester for the Government
of the United States, believes in "the control of nature's powers by man for his own
good." On the other hand, the presumption should be, in lieu of contrary proof, that
land is agricultural in nature. One very apparent reason is that it is for the good of
the Philippine Islands to have the large public domain come under private
ownership. Such is the natural attitude of the sagacious citizen.

If in this instance, we give judicial sanction to a private claim, let it be noted that
the Government, in the long run of cases, has its remedy. Forest reserves of public
land can be established as provided by law. When the claim of the citizen and the
claim of the Government as to a particular piece of property collide, if the
Government desires to demonstrate that the land is in reality a forest, the Director
of Forestry should submit to the court convincing proof that the land is not more
valuable for agricultural than for forest purposes. Great consideration, it may be
stated, should, and undoubtedly will be, paid by the courts to the opinion of the
technical expert who speaks with authority on forestry matters. But a mere formal
opposition on the part of the Attorney-General for the Director of Forestry,
unsupported by satisfactory evidence will not stop the courts from giving title to the
claimant.

We hold that the petitioner and appellant has proved a title to the entire tract of
land for which he asked registration, under the provisions of subsection 6, of section
54, of Act No. 926, as amended by Act No. 1908, with reference to the Philippine Bill
and the Royal Decree of February 13, 1894, and his possessory information.

Judgment is reversed and the lower court shall register in the name of the
applicant the entire tract in parcel No. 1, as described in plan Exhibit A, without
special finding as to costs. So ordered.

Arellano, C.J., Torres, Johnson, Street and Fisher, JJ., concur.

The Lawphil Project - Arellano Law Foundation

Today is Saturday, October 11, 2014

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 82680 August 15, 1994

NICANOR SOMODIO, petitioner,

vs.
COURT OF APPEALS, EBENECER PURISIMA, and FELOMINO AYCO, respondents.

Jose V. Panes for petitioner.

Vencer, Purisima & Associates for private respondents.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court to reverse and set aside the Decision dated September 29, 1987 and the
Resolution dated February 2, 1988 of the Court of Appeals in CA-G.R. SP No. 11602.

On October 21, 1974, Jose Ortigas executed an instrument designated as a

Transfer of Rights, conveying to Wilfredo Mabugat the possession of a residential lot
situated at Rajah Muda, Bula, General Santos City and described in the said
instrument as:

Lot No. (Unnumbered), bounded on the North by Temporary Road, on the South
by Customs Zone (Sarangani Bay), on the East by Public Land, and on the West by
Public Land.

Nicanor Somodio, herein petitioner, contributed one-half of the purchase price.

On October 22, 1974, Mabugat executed an Affidavit of Trust expressly recognizing
the right of petitioner over one-half undivided portion of the lot. Later, petitioner
discovered in the District Land Office that the lot was numbered "6328-X, Csd 2281D." Thereafter, petitioner and Mabugat partitioned the property into two portions,
with petitioner taking the western part. Immediately after the partition, petitioner
took possession of his portion and planted thereon ipil-ipil trees, coconut trees and
other fruit-bearing trees.

In 1976, petitioner began construction of a structure with a dimension of 22-by18 feet on his lot. His employment, however, took him to Kidapawan, North

Cotabato, and he left the unfinished structure to the case of his uncle. He would
visit the property every three months or on weekened when he had time.

Sometime in October 1977, petitioner allowed respondent Felomino Ayco, to

transfer his hut to petitioner's lot. About six years later, petitioner demanded that
Ayco vacate the premises but such demand proved futile. Hence, on August 23,
1983, petitioner filed an action for unlawful detainer with damages against
respondent Ayco before the Municipal Trial Court, Branch I, General Santos,
docketed as Civil Case No. 2032-II.

Meanwhile, on June 26, 1983, respondent Ebenecer Purisima entered the land
and constructed a house thereon. Four days later, petitioner filed against
respondent Purisima a complaint for forcible entry before the same court docketed
as Civil Case No. 2013-I. Said case was later consolidated with Civil Case No. 2032II.

In his answer, respondent Purisima averred that the lot was a portion of the land
subject of his application for miscellaneous sales patent with the Bureau of Lands.
Purisima described the lot in question as:

Lot No. 6328-Y, CSD-2281-D, Bula, General Santos, Cotabato. Bounded on the
North by 6328-X; on the South by Sarangani Bay; on the East by a Municipal Road;
and on the West by Lot No. 6328-W, containing an area of 1,095 square meters and
covered by Tax Declaration No. 9647 (Rollo, p. 36; Emphasis supplied).

Respondent Purisima contended that his father, a geodetic engineer, had

surveyed the parcel of land comprising of Lots Nos. 6427 and 6328 for the Small
Farmers Fishpond Association, Inc. in February 1958, and that his father's survey
plan was approved by the Director of Lands in 1960. Respondent Ayco, on the other
hand, did not present any evidence but merely anchored his right to possess the
property on the evidence of Purisima.

On April 30, 1986, the trial court rendered a decision finding that respondent
Purisima built his house "almost on the spot where Somodio's unfinished house"
stood "thru stealth and strategy," not knowing that the house was built on Lot No.

6328-X and not on Lot No. 6328-Y, the lot said respondent was claiming (Rollo, p.
43). The court went on to state that:

. . . . He (private respondent Purisima) was a frequent visitor in Rajah Muda and

had sometimes stayed with Mrs. Maturan in Judge Purisima's house on the adjoining
lots, and could not have remained unaware of the possession of Somodio. He must
have depended on the thought that it was his father who made the subdivision
survey and had fenced an area which he had claimed. He did not exactly verify that
the area fenced by his father had an area of only 1,095 square meters, which did
not include the are Lot No. 6328-X could eventually be standing on his property, for
Lot No. 6328-X is not claimed by him and has not been applied for even by his
father. His father has been abroad and has not taken steps to apply for Lot No.
6328-X. This lot is not declared for taxation purposes in the name of any claimantapplicant. Unless and until there would be an administrative proceedings and the
title ultimately issued in favor of an applicant, the possession of the actual claimant
and occupant has to be respected and maintained in the interest of public order . . .
(Rollo, pp. 43-44).

The Municipal Trial Court further held that petitioner was the actual possessor of
Lot No. 6328-X. The court did not believe respondent Ayco's claim that the
administratrix of the estate of respondent Purisima's father authorized him to build
a hut on Lot No. 6328-X in 1976. At any rate, the court said that respondent Ayco
was willing to vacate the premises provided he be given financial assistance to do
so (Rollo, pp. 43-44).

Nothing that the ocular inspection of the area showed that the houses of
respondents Purisima and Ayco were "inside Lot No. 6328-X" and not on Lot No.
6328-Y, the Municipal Trial Court held that the case became one which entailed
mere removal of the houses from the lot in question. Accordingly, the court ordered
private respondents to remove their respective houses, to deliver the land to
petitioner, and to pay attorney's fees and litigation expenses.

On appeal, the Regional Trial Court, Branch 22, General Santos City, affirmed in
toto the decision of the Municipal Trial Court. Respondent then elevated the cases
on a petition for review to the Court of Appeals, which, in its decision dated
September 27, 1987, set aside the decisions of the two trial courts and ordered the
dismissal of the two complaints filed by petitioner.

The Court of Appeals held that herein petitioner had not "clearly and conclusively
established physical, prior possession over Lot No. 6328-X."

Petitioner's motion for the reconsideration of the decision of the Court of Appeals
having been denied, he filed the instant petition for review on certiorari.

We grant the petition.

II

The procedural issue raised by private respondents should first be resolved. The
issue is whether the instant petition is proper considering that petitioner "merely
touch(es) upon questions of fact which had been carefully considered" by the Court
of Appeals (Rollo, p. 92). As a general rule, the findings of fact of the Court of
Appeals are binding on this Court. This rule, however, is not without exceptions, one
of which is when the factual findings of the Court of Appeals and the trial court are
contrary to each other. In such a case, this Court may scrutinize the evidence on
record in order to arrive at the correct findings based on the record (Valenzuela v.
Court of Appeals, 191 SCRA 1 [1990]; Roman Catholic Bishop of Malolos, Inc. v.
Intermediate Appellate Court, 191 SCRA 411 [1990]).

Upon a review of the records, we are convinced that petitioner indeed enjoyed
priority of possession over Lot No. 6328-X, notwithstanding respondent Purisima's
claim to the contrary.

In ejectment cases, the only issue for resolution is who is entitled to the physical
or material possession of the property involved, independent of any claim of
ownership set forth by any of the party-litigants. Anyone of them who can prove
prior possession de facto may recover such possession even from the owner
himself. This rule holds true regardless of the character of a party's possession,
provided, that he has in his favor priority of time which entitles him to stay on the
property until he is lawfully ejected by a person having a better right by either
accion publiciana or accion reivindicatoria (De Luna v. Court of Appeals, 212 SCRA
276 [1992]).

Petitioner took possession of the property sometime in 1974 when he planted the
property to coconut trees, ipil- ipil trees and fruit trees. In 1976, he started the
construction of a building on the property. It is immaterial that the building was
unfinished and that he left for Kidapawan for employment reasons and visited the
property only intermittently. Possession in the eyes of the law does not mean that a
man has to have his feet on every square meter of ground before it can be said that
he is in possession (Ramos v. Director of Lands, 39 Phil. 175 [1918]). It is sufficient
that petitioner was able to subject the property to the action of his will.

Article 531 of the Civil Code of the Philippines provides:

Possession is acquired by the material occupation of a thing or the exercise of a

right, or by the fact that it is subject to the action of our will, or by the proper acts
and legal formalities established for acquiring such right.

Even if the Court of Appeals is correct in its finding that petitioner started
introducing improvements on the land only in 1981, he still enjoyed priority of
possession because respondent Purisima entered the premises only in 1983.

It should be emphasized that the Court of Appeals noted that none of the parties
had produced tax declarations or applications as public land claimants. As such,
what should have been scrutinized is who between the claimants had priority of
possession.

Moreover, neither is the fact that respondent Purisima's father surveyed the
property of help to his cause. As the Court of Appeals found, respondent Purisima's
father surveyed the land for the Small Farmers Fishpond Association, Inc., not for
himself. Although respondent Purisima now claims that Lot No. 6328-X was in
payment of his fee for the services of his father and that he caused the construction
of a perimeter wall in the area, these facts do not mean that respondent Purisima
himself had prior possession. He did not present any proof that his father had
authorized him to enter the land as his successor-in-interest. Neither did he present
proof that between 1958, when his father allegedly took possession of the land, and
1983, when said respondent himself entered the land, his father ever exercised
whatever right of possession he should have over the property. Under these
circumstances, priority in time should be the pivotal cog in resolving the issue of
possession.

The Court of Appeals opined that petitioner had not properly identified the lot he
had occupied. The matter of identification of the land, however, had been resolved
by respondent Purisima's admission in his pleadings, as well as by two ocular
inspections.

In his answer to the complaint, respondent Purisima claimed possession over Lot
No. 6328-Y, while petitioner identified the lot adjacent to it, Lot
NO. 6328-X, as the area where private respondents built their houses. That these
two lots are distinct from one another was resolved by the ocular inspection
conducted by a Senior Geodetic Engineer of the Office of the City Engineer, who
found that "south of lot 6328-H across a 10 meter wide road is lot 6328-Y and from
thence to the south is lot 6328-X." On June 13, 1985, the Municipal Trial Court judge
himself went to the premises in question and discovered that aside from the houses
of respondents Purisima and Ayco, five other houses had been built on Lot No. 6328X.

Petitioner's prior possession over the property, however, is not synonymous with
his right of ownership over the same. As earlier stated, resolution of the issue of
possession is far from the resolution of the issue of ownership. Forcible entry is
merely a quieting process and never determines the actual title to an estate
(German Management & Services, Inc. v. Court of Appeals, 177 SCRA 495 [1989];
Manuel v. Court of Appeals, 199 SCRA 603 [1991].

WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE
and that of the trial courts REINSTATED. Costs against private respondents.

SO ORDERED.

Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Cruz, J., On official leave.

The Lawphil Project - Arellano Law Foundation

SECOND DIVISION

[G.R. No. 109595. April 27, 2000]

CRISTETA CHUA-BURCE, petitioner, vs. COURT OF APPEALS AND PEOPLE OF THE

PHILIPPINES, respondents.

DECISION

QUISUMBING, J.:

Subject of the present appeal by certiorari is the decision dated November 27, 1992
of the Court of Appeals in CA-G.R. CR No. 12037, (a) affirming in toto the trial
courts decision finding petitioner guilty of estafa, and (b) denying her Motion for
Reconsideration in a Resolution dated March 25, 1993. The Regional Trial Court,
Calapan, Oriental Mindoro, Branch 40, rendered a joint decision finding petitioner
guilty of estafa under Article 315, par. 1 (b) of the Revised Penal Code, in Criminal
Case No. C-2313, and likewise found petitioner liable for the amount of P150,000.00
in Civil Case No. R-3733. Only the criminal case is before us for review. h Y

The uncontroverted facts, as found by the Court of Appeals, are as follows:

On August 16, 1985, Ramon Rocamora, the Manager (of Metropolitan Bank and
Trust Company, Calapan Branch, Oriental Mindoro) requested Fructuoso Peaflor,
Assistant Cashier, to conduct a physical bundle count of the cash inside the vault,
which should total P4,000,000.00, more or less. During this initial cash count, they

discovered a shortage of fifteen bundles of One Hundred Pesos denominated bills

totalling P150,000.00. The One Hundred Peso bills actually counted was
P3,850,000.00 as against the balance of P4,000,000.00 in the Cash in Vault (CIV)
Summary Sheet, or a total shortage of P150,000.00. The next day, to determine if
there was actually a shortage, a re-verification of the records and documents of the
transactions in the bank was conducted. There was still a shortage of P150,000.00.

The bank initiated investigations totalling four (4) in all. The first was by Ramon
Rocamora, the Manager. The second was by the banks internal auditors headed by
Antonio Batungbakal. Then, the banks Department of Internal Affairs conducted an
independent investigation. Thereafter, the National Bureau of Investigation (NBI)
came in to investigate. All of these investigations concluded that there was a
shortage of P150,000.00, and the person primarily responsible was the banks Cash
Custodian, Cristeta Chua-Burce, the herein accused. Jksm

On November 4, 1985, unable to satisfactorily explain the shortage of P150,000.00,

the accuseds service with the bank was terminated.

To recover the missing amount, Metropolitan Bank and Trust Company (Metrobank)
filed a Civil Case for Sum of Money and Damages with Preliminary Attachment and
Garnishment docketed as Civil Case No. R-3733 against petitioner and her husband,
Antonio Burce. Esm

Prior to the filing of the Answer, the following Information for Estafa was filed
against petitioner:

"That on or about the 16th day of August 1985, and for a period prior and
subsequent thereto, the above-named accused, with unfaithfulness or abuse of
confidence, and with intent to defraud, did then and there wilfully, unlawfully, and
feloniously, in her capacity as Cash Custodian of the Metrobank, Calapan Branch,
take from the Banks Vault the amount of ONE HUNDRED FIFTY THOUSAND
(P150,000.00) PESOS, which is under her direct custody and/or accountability,
misappropriate and convert to her own personal use and benefit, without the
knowledge and consent of the offended party, despite repeated demands for her to
account and/or return the said amount, she refused and failed, and still fails and
refuses to the damage and prejudice of the Metrobank, Calapan Branch, in the
aforementioned amount of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS.

Contrary to Article 315 of the Revised Penal Code.

Calapan, Oriental Mindoro, November 27, 1985."[1]

Both civil and criminal cases were raffled to the same branch of the Regional Trial
Court of Calapan, Oriental Mindoro, Branch 40. Esmsc

Thereafter, petitioner moved for the suspension of the criminal case on the ground
of the existence of a prejudicial question, viz., that the resolution of the civil case
was determinative of her guilt or innocence in the criminal case.[2] The trial court,
over the vehement opposition of the private and public prosecutors, granted the
motion and suspended the trial of the criminal case.[3] On petition for certiorari to
the Court of Appeals, the appellate court ruled that there was no prejudicial
question.[4]

Petitioner was arraigned and assisted by counsel de parte, entered a plea of not
guilty.[5] While the trial of the criminal case was suspended, the trial of the civil
case continued. At the time of arraignment, the civil case was already submitted for
decision. Hence, during the pre-trial conference of the criminal case, the parties
agreed to adopt their respective evidence in the civil case as their respective
evidence in the criminal case.[6] The trial court ordered the parties to submit their
written agreement pursuant to Section 4 of Rule 118 of the Rules of Court.[7]
Thereafter, petitioner, duly assisted by her counsel, with the conforme of the public
prosecutor, entered into the following pre-trial agreement:[8]

"COMES NOW, the accused, assisted by counsel, and unto this Honorable Court
most respectfully submits this Pre-Trial agreement:

1. That the evidence already adduced by the plaintiff in Civil Case No. R-3733 will be
adopted by the prosecution as its evidence in Criminal Case No. C-2313;

2. That the evidence to be adduced by the defendant in Civil Case No. R-3733 will
also be adopted as evidence for the defense in Criminal Case No. C-2313.

WHEREFORE, premises considered, it is prayed that the foregoing pre-trial

agreement be admitted in compliance with the Order of this Court dated April 19,
1988.

RESPECTFULLY SUBMITTED.

Calapan, Oriental Mindoro, August 20, 1990.

CRISTETA CHUA-BURCE (sgd.)

Accused

Assisted By:

RODRIGO C. DIMAYACYAC (sgd.)

Defense Counsel

San Vicente, Calapan

Oriental Mindoro

IBP O.R. No. 292575

May 11, 1990

Quezon City

With Conformity:

EMMANUEL S. PANALIGAN (sgd.)

Prosecuting Fiscal

Pursuant to the pre-trial agreement, the public prosecutor filed a Motion to Adopt
Evidence.[9] Both the pre-trial agreement and said Motion were granted by the trial
court.[10]

On March 18, 1991, the trial court rendered a consolidated decision[11] finding
petitioner (a) guilty of estafa under Article 315 (1) (b) of the Revised Penal Code in
the criminal case, and (b) liable for the amount of P150,000.00 in the civil case. The
dispositive portion of decision provides -

- In Criminal Case No. C-2313 -

WHEREFORE, the Court hereby finds the accused Cristeta Chua-Burce guilty beyond
reasonable doubt of the crime of Estafa, punishable under Art. 315, paragraph 1 (b)
of the Revised Penal Code, which imposes a penalty of prision correccional in its
maximum period to prision mayor in its minimum period but considering that the
amount involved exceeds P22,000.00, the penalty provided for shall be imposed in
its maximum period, adding one year for each additional P10,000.00, but the total
amount not to exceed twenty years. Esmmis

Applying the Indeterminate Sentence Law, the imposable penalty shall be one
degree lower as minimum of arresto mayor with a penalty range of One Month and
One Day to Six Months, as minimum to prision mayor in its maximum period, as
maximum, or a penalty of Six years to Twelve Years. Considering the mitigating
circumstance of voluntary surrender, the court hereby imposes upon the accused to
suffer imprisonment from SIX (6) MONTHS of arresto mayor in its maximum period,

as minimum, to EIGHT (8) YEARS of prision mayor, in its minimum period, as

maximum. The civil liability shall not be imposed in this case due to a separate civil
action. Esmso

- In Civil Case No. R-3733 -

WHEREFORE, judgment is hereby rendered in favor of the plaintiff Metrobank,

ordering defendants Cristeta Chua-Burce and Antonio Burce, spouses, to pay
Metrobank the amount of P150,000.00 representing the amount misappropriated
with the legal rate of six percent (6%) per annum from August 15, 1985 until fully
paid and to pay the costs of suit.

SO ORDERED."

Petitioner seasonably appealed her conviction in the criminal case to the Court of
Appeals. Petitioner filed a separate appeal in the civil case.

In a decision dated November 27, 1992,[12] the Court of Appeals affirmed the trial
courts decision in toto. Petitioners Motion for Reconsideration was likewise denied.
[13] Hence, the recourse to this Court. Msesm

Petitioner raises the following issues:[14]

1. IS THE RESULT OF POLYGRAPH EXAMINATION ADMISSIBLE IN EVIDENCE?

2. CAN THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT ADMIT IN EVIDENCE
THE EVIDENCE WHICH WAS ALREADY DENIED ADMISSION IN THE ORDER OF THE
FORMER JUDGE OF THE SAME COURT?

3. DOES PRIMA FACIE PRESUMPTION OF MISAPPROPRIATION OR CONVERSION

EXISTS (sic) AGAINST THE PETITIONER WHEN THERE WERE OTHER PERSONS WHO
HAD DIRECT AND GREATER ACCESS IN THE CASH-IN-VAULT?

4. IS RULE 111 SECTION 2 (a) OF THE REVISED RULES ON CRIMINAL PROCEDURE

APPLICABLE IN (sic)THE CASE AT BAR?

5. WAS THERE A VALID PROCEEDING WHEN THE FISCAL WAS NOT ACTUALLY
PRESENT AND DID NOT CONTROL AND SUPERVISE THE PROSECUTION OF THE
CASE? Exsm

In gist, (1) petitioner contends that the trial court erred in taking into account the
results of the polygraph examination as circumstantial evidence of guilt considering
the inherent unreliability of such tests, and the fact that the previous trial judge who
handled the case already ruled such evidence as inadmissible; (2) petitioner insists
that there can be no presumption of misappropriation when there were other
persons who had access to the cash in vault; and (3) petitioner questions the
validity of the trial of criminal case considering that the pre-trial agreement
dispensed with the intervention of the public prosecutor in a full-blown trial of the
criminal case. Kyle

The Office of the Solicitor General, for the State, contends that the guilt of petitioner
has been proven beyond reasonable doubt by the following facts which were duly
established during trial - first, petitioner was the cash custodian who was directly
responsible and accountable for the cash-in-vault. Second, the other persons who
had access to the vault facilities never used the duplicate keys to open the safety
deposit boxes and the cash safe from where the P100.00 bill denominations were
located. In fact, the duplicate keys were offered in evidence still in their sealed
envelopes. Third, alterations and superimposition on the cash-in-vault summary
sheet were made by petitioner to cover the cash shortage. Lastly, there was a valid
joint trial of the civil and criminal cases.

The crucial issues, in our mind, are (1) whether there was a valid trial of the criminal
case, and (2) whether the elements of the crime of estafa under Article 315 (1) (b)
of the Revised Penal Code were duly proven beyond reasonable doubt. Kycalr

First, petitioner assails the validity of the proceedings in the trial court on the
ground that the public prosecutor did not intervene and present any evidence
during the trial of the criminal case. The records clearly show that the pre-trial
agreement was prepared by petitioner with the conforme of the public prosecutor.
Thereafter, petitioner filed a consolidated memorandum for both civil and criminal
cases. Section 5 of Rule 110[15] requires that all criminal actions shall be
prosecuted under the direction and control of the public prosecutor. The rationale
behind the rule is "to prevent malicious or unfounded prosecutions by private
persons."[16] The records show that the public prosecutor actively participated in
the prosecution of the criminal case from its inception. It was during pre-trial
conference when the parties agreed to adopt their respective evidence in the civil
case to the criminal case. This is allowed under Section 2 (e) of Rule 118 of the
Rules of Court[17] which provides that during pre-trial conference, the parties shall
consider "such other matters as will promote a fair and expeditious trial." The
parties, in compliance with Section 4 of Rule 118,[18] reduced to writing such
agreement. Petitioner, her counsel, and the public prosecutor signed the
agreement. Petitioner is bound by the pre-trial agreement, and she cannot now
belatedly disavow its contents.[19]

On the second issue. Petitioner was charged with the crime of estafa under Article
315 (1) (b) of the Revised Penal Code.[20] In general, the elements of estafa are: (1)
that the accused defrauded another (a) by abuse of confidence or (b) by means of
deceit; and (2) that damage or prejudice capable of pecuniary estimation is caused
to the offended party or third person.[21] Deceit is not an essential requisite of
estafa with abuse of confidence, since the breach of confidence takes the place of
the fraud or deceit, which is a usual element in the other estafas.[22]

The elements of estafa through conversion or misappropriation under Art. 315 (1)
(b) of the Revised Penal Code are:[23]

(1) that personal property is received in trust, on commission, for administration or

under any other circumstance involving the duty to make delivery of or to return the
same, even though the obligation is guaranteed by a bond;

(2) that there is conversion or diversion of such property by the person who has so
received it or a denial on his part that he received it;

(3) that such conversion, diversion or denial is to the injury of another and

(4) that there be demand for the return of the property.

Have the foregoing elements been met in the case at bar? We find the first element
absent. When the money, goods, or any other personal property is received by the
offender from the offended party (1) in trust or (2) on commission or (3) for
administration, the offender acquires both material or physical possession and
juridical possession of the thing received.[24] Juridical possession means a
possession which gives the transferee a right over the thing which the transferee
may set up even against the owner.[25] In this case, petitioner was a cash
custodian who was primarily responsible for the cash-in-vault. Her possession of the
cash belonging to the bank is akin to that of a bank teller, both being mere bank
employees. Calrky

In People v. Locson,[26] the receiving teller of a bank misappropriated the money

received by him for the bank. He was found liable for qualified theft on the theory
that the possession of the teller is the possession of the bank. We explained in
Locson that -

"The money was in the possession of the defendant as receiving teller of the bank,
and the possession of the defendant was the possession of the bank. When the
defendant, with grave abuse of confidence, removed the money and appropriated it
to his own use without the consent of the bank, there was the taking or
apoderamiento contemplated in the definition of the crime of theft."[27]

In the subsequent case of Guzman v. Court of Appeals,[28] a travelling sales agent

misappropriated or failed to return to his principal the proceeds of things or goods
he was commissioned or authorized to sell. He was, however, found liable for estafa
under Article 315 (1) (b) of the Revised Penal Code, and not qualified theft. In the
Guzman case, we explained the distinction between possession of a bank teller and
an agent for purposes of determining criminal liability -

"The case cited by the Court of Appeals (People vs. Locson, 57 Phil. 325), in support
of its theory that appellant only had the material possession of the merchandise he
was selling for his principal, or their proceeds, is not in point. In said case, the

receiving teller of a bank who misappropriated money received by him for the bank,
was held guilty of qualified theft on the theory that the possession of the teller is
the possession of the bank. There is an essential distinction between the possession
by a receiving teller of funds received from third persons paid to the bank, and an
agent who receives the proceeds of sales of merchandise delivered to him in agency
by his principal. In the former case, payment by third persons to the teller is
payment to the bank itself; the teller is a mere custodian or keeper of the funds
received, and has no independent right or title to retain or possess the same as
against the bank. An agent, on the other hand, can even assert, as against his own
principal, an independent, autonomous, right to retain money or goods received in
consequence of the agency; as when the principal fails to reimburse him for
advances he has made, and indemnify him for damages suffered without his fault
(Article 1915, [N]ew Civil Code; Article 1730, old)." Mesm

Petitioner herein being a mere cash custodian had no juridical possession over the
missing funds. Hence, the element of juridical possession being absent, petitioner
cannot be convicted of the crime of estafa under Article 315, No. 1 (b) of the
Revised Penal Code.[29]

WHEREFORE, the petition is hereby granted and petitioner is ACQUITTED of the

crime of estafa under Article 315 (1) (b) of the Revised Penal Code. Petitioner is
ordered RELEASED from custody unless she is being held for some other lawful
cause. No costs. Slx

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

[1] RTC Records, pp. 1-2.

[2] Id. at 52.

[3] Id. at 74.

[4] Id. at 179-185.

[5] Id. at 190.

[6] Id. at 199.

THIRD DIVISION

[G.R. No. 116220. December 6, 2000]

SPOUSES ROY PO LAM and JOSEFA ONG PO LAM, petitioners, vs. COURT OF APPEALS
and FELIX LIM now JOSE LEE, respondents.

RESOLUTION

MELO, J.:

On October 13, 1999, this Division, under the ponencia of Mr. Justice Purisima
handed down a decision declaring petitioners, the spouses Roy Po Lam and Josefa
Ong Po Lam, as transferees pendente lite and not purchasers in good faith of Lots
No. 1557 and 1558 and ordering them to reconvey said lots to private respondent
Jose Lee.

Forthwith, petitioners filed a motion for reconsideration which was received hereat
on November 15, 1999. Respondents thereupon filed their opposition, as well as a
separate comment, to which petitioners submitted a reply.

Regrettably, however, for one reason or another, the motion for reconsideration
remained unacted upon until the retirement of Justice Purisima in October, 2000,
notwithstanding the fact that it was calendared or placed in the Courts agenda a
number of times, as well as the urgings of both parties to have the matter resolved.

Thus, with Justice Purisima leaving the Court and, in accordance with A.M. No. 99-899 promulgated by the Court En Banc on February 15, 2000, the matter of the
motion for reconsideration was assigned by raffle to herein ponente for study and
the preparation of the appropriate action.

A review of the facts, uncontroverted though they are, is in order.

Lots No. 1557 and 1558 are prime commercial lots located in the heart of Legaspi
Citys commercial district. These were sold by Lim Kok Chiong to the Legaspi
Avenue Hardware Company (hereafter referred to as LAHCO) sometime in the early
60s. On December 4, 1964, however, Felix Lim, Lim Kok Chiongs brother, filed a
complaint with the then Court of First Instance of Albay against his brother and
LAHCO to annul the deeds of sale covering said lots on the ground that the sale
included the 3/14 pro-indiviso portion of the lots which Felix Lim had inherited from
his foster parents. The complaint was docketed as Civil Case No. 2953 of the Court
of First Instance of Albay.

On January 27, 1965, Felix Lim filed with the Register of Deeds of Albay a notice of
lis pendens over the two lots. The same was inscribed on Transfer Certificates of
Title No. 2580 and 2581, covering Lots No. 1557 and 1558, respectively. Later, the
trial court, on motion of Felix Lim, dropped the case against Lim Kok Chiong. On
March 15, 1969, the trial court rendered a decision declaring LAHCO to be the
absolute owner of the two above-mentioned lots. As a consequence of its decision,
the trial court ordered the cancellation of the notice of lis pendens inscribed on the
titles of the two lots. Pursuant to this order, the notice of lis pendens inscribed on
TCT No. 2580 was cancelled. However, the notice of lis pendens annotated on TCT
No. 2581 remained uncancelled, allegedly because the duplicate owners copy of
said TCT was with the Continental Bank, Lot No. 1558 having been mortgaged by
LAHCO to said bank.

Aggrieved, Felix Lim appealed to the Court of Appeals. On May 28, 1970, and
during the pendency of the appeal, CA-G.R. No. 44770-R, LAHCO sold the two lots to

herein petitioners, the spouses Roy Po Lam and Josefa Ong Po Lam. On May 20,
1974, petitioners, by virtue of the court order adverted to earlier, had the notice of
lis pendens still inscribed on TCT No. 2581 cancelled. Felix Lim did not move for the
reinstatement of the cancelled notices of lis pendens on TCT No. 2580 and 2581.
Thereafter, said certificates of title were themselves cancelled and replaced by TCT
No. 8102 and 13711, respectively, in the name of petitioners.

On April 29, 1980, the Court of Appeals affirmed the decision of the trial court in
Civil Case No. 2953, appellant Felix Lims counsel receiving a copy of thereof on May
16, 1980. On May 23, 1980, counsel for Felix Lim filed a motion for extension of
time to file a motion for reconsideration. The appellate court gave Felix Lim up to
June 20, 1980 to file one. On June 17, 1980, he filed a motion for reconsideration,
which was, however, denied. Without leave of court, Felix Lim filed, on July 14,
1980, a second motion for reconsideration. This was acted upon favorably by the
Court of Appeals on March 11, 1981, with the appellate court declaring that Felix
Lim, by returning P20,000.00 to LAHCO, could exercise the right of redemption over
the two lots sold by Lim Kok Chiong to LAHCO. Although LAHCO asked this Court for
an extension of time to file a petition for review, none was ever filed, for which
reason the Court remanded the case to the trial court for execution.

On November 12, 1981, Felix Lim moved, in Civil Case No. 2953, to have the March
11, 1981 resolution of the Court of Appeals annotated on TCT No. 8102 and 13711.
He also moved for the issuance of a writ of execution to enforce said resolution.
Likewise, he filed a motion praying that the Clerk of Court execute a deed of
conveyance over the disputed lots in his favor. All these motions were denied by
the trial court on the ground that the Po Lam spouses could not be bound thereby
since they were not impleaded as party-litigants in Civil Case No. 2953 or CA-G.R.
No. 44770-R. However, the trial court reserved to Felix Lim the right to institute an
action on whether or not the acquisition of the properties in question by spouses
Roy Po Lam and Josefa Ong Po Lam were made in good faith or bad faith.

In consonance with this ruling, Felix Lim filed a complaint for reconveyance and
annulment of the sale and titles of said lots with the Regional Trial Court of Legaspi
City, which was docketed therein as Civil Case No. 6767.

On September 19, 1985, Felix Lim filed with the trial court, in the old case, Civil
Case No. 2953, a motion to include as defendants the Po Lam spouses, as well as to
execute the March 11, 1981 resolution of the Court of Appeals. Both motions were

denied. On appeal (CA-G.R. No. 08533-CV), the Court of Appeals upheld the denial.
Felix Lim appealed the decision to this Court.

In the meantime, in June, 1970, or one month after the Po Lam spouses had
purchased the two lots from LAHCO, they leased the commercial building erected on
Lot No. 1557 to private respondent Jose Lee for one year. After the contract expired,
Jose Lee continued to occupy the same, paying monthly rentals therefor. However,
after September 15, 1981, Jose Lee refused to pay rentals to the Po Lam spouses,
informing them that he would deposit the same in court since Felix Lim had
promised to sell the property to him. Lees failure to pay rentals prompted the Po
Lam spouses to file an unlawful detainer case against him with the Metropolitan Trial
Court of Legaspi City.

On October 29, 1990, Felix Lim assigned all his rights to and interests in the
disputed lots to Jose Lee, who then substituted Felix Lim as party plaintiff, now
private respondent.

On December 19, 1993, the Metropolitan Trial Court of Legaspi City declared the Po
Lam spouses to be the lawful owners of Lot No. 1557. On appeal, said judgment
was affirmed by the regional trial court and thereafter, by the Court of Appeals in
CA-G.R. No. 12316-SP. Aggrieved, Jose Lee filed an appeal with this Court, which
consolidated the case with the appeal filed in CA-G.R. No. 08533-CV where the trial
court in the original 1965 case refused to have petitioners impleaded as defendants,
and to execute the March 11, 1981 resolution of the Court of Appeals, were upheld
by the appellate court.

It must be mentioned that in both CA-G.R. No. 12316-SP and CA-G.R. No. 08533-CV,
the appellate court ruled that the March 11, 1981 resolution of the Court of Appeals
in CA-G.R. No. 44770-R was null and void on the ground that the decision it had
issued earlier on April 29, 1980 had already become final and executory when the
above-said resolution was promulgated. The appellate court ruled that Felix Lims
counsel should not have filed a motion for extension of time to file a motion for
reconsideration, the same being a prohibited pleading under the rule laid down in
Habaluyas v. Japson (138 SCRA 46 [1985]). Being a prohibited pleading, it was held
that the extension granted to Lim did not arrest the running of the 15-day period.
Thus, when Lim filed his motion for reconsideration on June 17, 1980, the same was
already filed out of time, he having received a copy of the judgment of affirmance
on May 16, 1980.

The above finding of the appellate court was, however, debunked by this Court in
G.R. No. 84145-55 (Lim v. Court of Appeals, 188 SCRA 23 [1988]) where we held
that Habaluyas v. Japson (supra) must be applied prospectively so that when
petitioner Lim filed thru registered mail on May 23, 1980 his motion for extension of
time to file a motion for reconsideration, the motion was deemed properly filed
contrary to the respondent courts ruling that it was a prohibited pleading.

Ruling on the appeals filed from CA-G.R. No. 12316-SP and CA-G.R. No. 08533-CV,
this Court thus declared, on February 18, 1988, in Lim vs. CA cited in the
immediately preceding paragraph that:

ACCORDINGLY, the decisions appealed from are modified. The portions of the
appealed decisions dealing with the March 11, 1981 resolution in CA-G.R. No.
44770-R are reversed and set aside and the said resolution is ordered reinstated.
The decisions are affirmed in all other respects. Costs against private respondents.

SO ORDERED.

In the interim, Civil Case No. 6767 for reconveyance and annulment of sale and
titles filed by Felix Lim (now Jose Lee) went on until, on January 14, 1992, the
Regional Trial Court of Legaspi City rendered a decision declaring the spouses Roy
Po Lam and Josefa Ong Po Lam as transferees pendente lite and not purchasers in
good faith. It held that the Po Lam spouses were bound by the March 11, 1981
resolution rendered in CA-G.R. No. 44770-R. The Po Lam spouses forthwith
appealed to the Court of Appeals (CA-G.R. CV No. 37452) but said Court, on June
30, 1993, affirmed the trial courts decision.

The Po Lam spouses thus filed a petition for certiorari with this Court. On October
13, 1999, we denied the petition and affirmed in toto the decision of the Court of
Appeals in CA-G.R. CV No. 37452. We held that the Po Lam spouses could not be
deemed buyers in good faith, ratiocinating in the process:

As to Lot 1558, there is no question that they (petitioners) cannot be deemed

buyers in good faith. The annotation of lis pendens on TCT No. 2581 which covers

Lot 1558, served as notice to them that the said lot is involved in a pending
litigation. Settled is the rule that one who deals with property subject of a notice of
lis pendens cannot invoke the right of a purchaser in good faith. Neither can he
acquire better rights than those of his predecessor in interest. A transferee
pendente lite stands in the shoes of the transferor and is bound by any judgment or
decree which may be rendered for or against the transferor. It is thus beyond cavil
that the herein petitioners, who purchased Lot 1558 subject of a notice of lis
pendens, are not purchasers in good faith and are consequently bound by the
Resolution dated March 11, 1981 of the Court of Appeals.

Can petitioners then be treated purchasers in good faith of Lot 1557 covered by TCT
No. 2580 considering that the notice of lis pendens thereon had been already
cancelled at the time of the sale? We rule in the negative. It is a firmly settled
jurisprudence that a purchaser cannot close his eyes to facts which should put a
reasonable man on guard and claim that he acted in good faith in the belief that
there was no defect in the title of the vendor. His mere refusal to believe that such
a defect exist, or his willful closing of his eyes to the possibility of the existence of a
defect on his vendors title, will not make him innocent purchaser for value, if it
develops afterwards that the title was in fact defective, and it appears that he had
notice of such defect as would have led to its discovery had he acted with that
measure of precaution which may reasonably be required of a prudent man in like
situation.

In the case under consideration, there exist circumstances which should have
placed the herein petitioners on guard. As aptly stressed upon by the respondent
court, while it is true that when the petitioners purchased Lot 1557, the notice of lis
pendens affecting said lot had been cancelled, it could not be denied that such
inscription appears on the Transfer Certificate of Title of the said lot together with
the cancellation of the notice of lis pendens. This fact coupled with the noncancellation of the notice of lis pendens on Transfer Certificate of Title No. 2581
covering Lot 1558, should have sufficiently alerted the petitioners vis--vis a
possible defect in the title of LACHO, especially so that Lots 1557 and 1558 were
simultaneously sold to the petitioners in a single deed of sale executed on May 28,
1969.

Undeterred, the Po Lam spouses filed a motion for reconsideration, alleging, inter
alia, that it was error to hold them as purchasers in bad faith.

The motion for reconsideration is impressed with merit.

It must be stressed that the sole basis for finding petitioners to be purchasers in bad
faith was the subsistence of the notice of lis pendens inscribed on TCT No. 2581,
which covered Lot No. 1558, at the time petitioners-spouses purchased the lots in
dispute. And since Lot No. 1558 was sold simultaneously with Lot No. 1557, even if
the notice of lis pendens on Lot No. 1557 had already been cancelled, petitioners
were held to be purchasers in bad faith even in regard to Lot No. 1557.

However, it must be pointed out that even if a notice of lis pendens on TCT No. 2581
(Lot No. 1558) was still subsisting at the time petitioners bought the property from
LAHCO, there also was a court order ordering that the annotation be cancelled, as in
fact, it was cancelled on May 20, 1974.

A possessor in good faith has been defined as one who is unaware that there exists
a flaw which invalidates his acquisition of the thing (See Article 526, Civil Code).
Good faith consists in the possessors belief that the person from whom he received
the thing was the owner of the same and could convey his title (Pio v. CA, 198
SCRA 434 [1991]). In this case, while petitioners bought Lot No. 2581 from LAHCO
while a notice of lis pendens was still annotated thereon, there was also existing a
court order canceling the same. Hence, petitioners cannot be considered as being
aware of a flaw which invalidates their acquisition of the thing since the alleged
flaw, the notice of lis pendens, was already being ordered cancelled at the time of
the purchase. On this ground alone, petitioners can already be considered buyers in
good faith.

More importantly, however, the notice of lis pendens inscribed on TCT No. 2581 was
cancelled on May 20, 1974, pursuant to the order of the trial court in Civil Case No.
2953. Felix Lim did not move for the reinstatement of the cancelled notices of lis
pendens. What is the effect of this cancellation? To follow the prior ruling of the
Court in the instant case, the cancellation of the notice of lis pendens would have no
effect. Regardless of the cancellation of the notice of lis pendens, the Po Lam
spouses are still considered as having notice of a possible defect in the title of
LAHCO, making them purchasers in bad faith.

As we shall elucidate, hewing to such an interpretation misunderstands the nature

and effect of a notice of lis pendens. The meaning, nature, recording, and effects of

a notice of lis pendens are clearly stated in Section 14, Rule 13 of the 1997 Rules of
Civil Procedure, thus:

SEC. 14. Notice of lis pendens. In an action affecting the title or the right of
possession of real property, the plaintiff and the defendant, when affirmative relief
is claimed in his answer, may record in the office of the registry of deeds of the
province in which the property is situated a notice of the pendency of the action.
Said notice shall contain the names of the parties and the object of the action or
defense, and a description of the property in that province affected thereby. Only
from the time of filing such notice for record shall a purchaser, or encumbrancer of
the property affected thereby, be deemed to have constructive notice of the
pendency of the action, and only of its pendency against the parties designated by
their real names.

The notice of lis pendens hereinabove mentioned may be cancelled only upon order
of the court, after proper showing that the notice is for the purpose of molesting the
adverse party, or that it is not necessary to protect the right of the party who
caused it to be recorded.

Lis pendens literally means a pending suit or a pending litigation; and the doctrine
of lis pendens has been defined as the jurisdiction, power, or control which a court
acquires over property involved in a suit, pending the continuance of the action, and
until final judgment therein (54 C.J.S. Lis Pendens 1). A notice of lis pendens is an
announcement to the whole world that a particular real property is in litigation,
serving as a warning that one who acquires an interest over said property does so
at his own risk, or that he gambles on the result of the litigation over the said
property (AFPMBAI v. CA, G.R. No. 104769, March 3, 2000). The filing of a notice of
lis pendens charges all strangers with a notice of the particular litigation referred to
therein and, therefore, any right they may thereafter acquire on the property is
subject to the eventuality of the suit (Laroza v. Guia, 134 SCRA 341 [1985]). Notice
of lis pendens has been conceived and, more often than not, availed of, to protect
the real rights of the registrant while the case involving such rights is pending
resolution or decision. With the notice of lis pendens duly recorded, and while it
remains uncancelled, the registrant could rest secure that he would not lose the
property or any part of it during the litigation (People v. Regional Trial Court of
Manila, 178 SCRA 299 [1989]).

The filing of a notice of lis pendens in effect (1) keeps the subject matter of the
litigation within the power of the court until the entry of the final judgment so as to
prevent the defeat of the latter by successive alienations; and (2) binds a purchaser
of the land subject of the litigation to the judgment or decree that will be
promulgated thereon whether such a purchaser is a bona fide purchaser or not; but
(3) does not create a non-existent right or lien (Somes v. Government, 62 Phil. 432
[1935]).

The doctrine of lis pendens is founded upon reason of public policy and necessity,
the purpose of which is to keep the subject matter of the litigation within the power
of the court until the judgment or decree shall have been entered; otherwise by
successive alienations pending the litigation, its judgment or decree shall be
rendered abortive and impossible of execution (Laroza v. Guia, supra; People v.
Regional Trial Court of Manila, supra). The doctrine of lis pendens is based on
considerations of public policy and convenience, which forbid a litigant to give rights
to others, pending the litigation, so as to affect the proceedings of the court then
progressing to enforce those rights, the rule being necessary to the administration
of justice in order that decisions in pending suits may be binding and may be given
full effect, by keeping the subject matter in controversy within the power of the
court until final adjudication, that there may be an end to litigation, and to preserve
the property that the purpose of the pending suit may not be defeated by
successive alienations and transfers of title (54 C.J.S. Lis Pendens, supra).

From the above, it can be seen that the basis of the doctrine of lis pendens is public
policy and convenience, under the view that once a court has taken cognizance of a
controversy, it should be impossible to interfere with consummation of the
judgment by any ad interim transfer, encumbrance, or change of possession (51 Am
Jur 2d, Lis Pendens, 3).

However, to hold that the Po Lam spouses are still bound by the results of the
litigation over the property, despite and notwithstanding the cancellation of the
notices of lis pendens prior to the termination of litigation, would consider the
doctrine of lis pendens as one of implied or constructive notice. This view is
erroneous.

While the doctrine of lis pendens is frequently spoken of as one of implied or

constructive notice, according to many authorities, the doctrine is not founded on
any idea of constructive notice, since its true foundation rests, as has already been

stated, on principles of public policy and necessity. The lis pendens annotation,
although considered a general notice to all the world, . . . it is not correct to speak
of it as part of the doctrine of notice; the purchaser pendente lite is affected, not by
notice, but because the law does not allow litigating parties to give to others,
pending the litigation, rights to the property in dispute as to prejudice the opposite
party. The doctrine rests upon public policy, not notice (Tirado v. Sevilla, 188 SCRA
321 [1990]). The doctrine of lis pendens, as generally understood and applied by
the courts of this country, is not based upon presumption of notice, but upon a
public policy, imperatively demanded by a necessity which can be met and
overcome in no other way. It is careless use of language which has led judges to
speak of it as notice, because it happens to have in some instance similar effect
with notice (Smith v. Kimball, 13 P. 801, 36 Kan. 474).

And since the doctrine rests on public policy, not notice, upon the cancellation of
the notice of lis pendens, the Po Lam spouses cannot then be considered as having
constructive notice of any defect in the title of LAHCO as to make them transferees
pendente lite and purchasers in bad faith of Lots No. 1557 and 1558. To hold
otherwise would render nugatory the cancellation of the notices of lis pendens
inscribed on TCT Nos. 2580 and 2581. Differently stated, to hold the Po Lam
spouses still bound by the notice of lis pendens inscribed on TCT No. 2581 despite
its subsequent cancellation on May 20, 1974, would render said cancellation an
empty, unavailing, and purposeless act, which could not have been the intent of
the law. Lex neminem cogit ad van seu inutilia peragenda. The law will not compel
one to do useless things.

As adverted to earlier, while the notice of lis pendens is duly recorded and as long
as it remains uncancelled, the litigant can rest secure that he would not lose the
property or any part of it during litigation. Conversely, cancellation of the notice of
pendency terminates the effects of such notice. Therefore, with the cancellation of
the notices of lis pendens on TCT No. 2580 and 2581, the effects of such notice
were terminated, resulting in the Po Lam spouses not being bound thereby. In fine,
they cannot be considered transferees pendente lite and purchasers in bad faith of
the property.

Moreover, since its operation is arbitrary and it may be harsh in particular instances,
the doctrine of lis pendens is to be strictly construed and applied. It should not be
extended without strict necessity (54 C.J.S. Lis Pendens 1). To consider the Po Lam
spouses still bound by the notice of lis pendens even after the same had been
cancelled would be extending the doctrine when there is no reason therefor.

Lastly, Felix Lims claim is barred by the equitable principle of laches. At the time
the notices of lis pendens were cancelled in 1969 and 1974, Felix Lim did not move
to reinstate the same. Nor did he act when TCT No. 2580 and 2581 were replaced
by TCT No. 8102 and 13711. Instead, he waited seven years, or until 1981, to have
his claim on the disputed pieces of property recognized. Felix Lims long inaction
and passivity in asserting his rights over the disputed property precludes him from
recovering them from petitioners-spouses.

WHEREFORE, premises considered, the Motion for Reconsideration of petitionersspouses Roy Po Lam and Josefa Ong Po Lam is hereby GRANTED. Consequently, the
decision dated October 13, 1999, is VACATED and SET ASIDE. A new judgment is
hereby entered declaring petitioners-spouses to be PURCHASERS IN GOOD FAITH
and Transfer Certificates of Title No. 8102 and 13711 in their name valid, without
prejudice on the part of private respondent Jose Lee to file a separate action for
reimbursement for the value of said property from the Legaspi Avenue Hardware
Company.

SO ORDERED.

Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.