Title 5 - Possesion

A.
Rizal Cement Co., Inc v. Villareal 135 SCRA 15
RIZAL CEMENT CO., INC. v. VILLAREAL
G.R. No. L- 30272. February 28,1985.
Cuevas, J.
DOCTRINE: Neither tax receipts nor declaration of ownership for
taxation purposes alone constitutes sufficient evidence of
ownership or of the right to possess realty. They must be
supported by other effective proofs. Neither can the survey plan
or technical descriptions prepared at the instance of the party
concerned be considered in his favour, the same being self-
serving.
FACTS: Respondents are applicants for the registration of 2
agricultural lands located in Rizal. They presented testimonial and
documentary evidence appearing that the property applied for,
designated as Lots Nos. 1 and 2 of Plan Psu-147662, have a total
area of 26,015 sq.m.; that these lots originally belonged to one
Maria Certeza; that upon her death, the property was involved in
a litigation between her grandchildren and Gonzalo Certeza and
that the lots were given by the latter to former Justice de Joya as
the latter's attorney's fees; that the lots were then sold by de Joya
to Filomeno Sta. Ana who, in turn sold the same to spouses
Victoriano Cervo and Ignacia Guillermo in 1939; that sometime in
November 1955, the said spouses sold the said lots to the herein
applicants as shown by a duly notarized deed of sale. The spouses
Cervo declared the property for taxation purposes in the name of
the wife, Ignacia Guillermo, and paid for the realty taxes due
thereon; that prior to the sale, the spouses Cervo had the two
parcels surveyed first in 1950 and then in 1955.
On the other hand, oppositor, (now petitioner) Rizal Cement
Company, claims to be the owner of the subject lots, having
bought the same from Maria Certeza, and to have been in
continuous and adverse possession of the property since 1911. To
substantiate its claim, Rizal Cement Co. submitted documentary
evidence, the most important of which are the following: (a) Plan
Psu-2260 which covers the survey of a big tract of land for the
company designated as Lots 1, 2 and 4 of the Plan with a total
area of 210,644 square meters (survey made in 1911 while plan
was approved in 1912); (b) A sketch plan of the geographical
position of the real proparties of Madrigal and Company; (c) Tax
Declaration No. 1066 secured in 1949 from the Rizal Provincial
Assessor which is a consolidation of all lands of the Rizal Cement
Company located in Darangan with a total area of 2,496,712
sq.m. and which includes the land in litigation; (d) Tax Declaration
No. 10570 which cancels Tax Declaration No. 1066; and (e) Real
estate tax receipts issued for Madrigal and Company, covering
among others the land applied for.
After trial, the CFI denied the application for registration of
respondents and ordered the issuance of a decree of registration
in the name of Rizal Cement Co, after finality of said decision.
Respondents appealed to the CA, which reversed and set aside
the CFIs decision in favour of the respondents. The CA denied
Rizals MR, hence this petition.
ISSUE: Whether the respondents had been in actual possession of
the land in question.
HELD: YES. As to who had been in actual possession of the land in
question, the CA gave credence to the testimony of the witnesses
for respondents applicants, namely: 1. Santiago Picadizo (one of
the tenants of the land); 2. Isaac Reyes (worked on of the 2
parcels of land since 1934 to the present); 3. Mr. Valentin
Marqueza (rebuttal witness who averred that he began to live in
Rizal since 1910 after buying a portion of the property from Maria
Certeza and avers that Rizal Cement intended to make a factory
by building a small house which was later on removed, and that
Rizal Cement did not take possession of the land and that it was
Maria Certeza who had the possession of the land until her death
and that the tenants gave the harvest of the land to Maria
Certeza.
The right to possess flows from ownership. No person will
suffer adverse possession by another of what belongs to him.
Were the Rizal Cement Co. the rightful owner of the land in
question, it would not have allowed the tenants to cultivate the
land and give the owner's share to appellants and/or their
predecessors. It would have opposed the survey for applicants'
vendors on May 21 and 28, 1950 and July 31, 1955, but did not as
shown in the surveyor's certificate, Exhibit E. If Rizal really bought
Lot 2 from Maria Certeza in 1909 as claimed, it has not been
explained how she could sell a portion thereof to Apolonia
Francisco, married to Valentin Marquez for P100.00 on April 15,
1924 by deed, Exhibit R,-an ancient document -as confirmed by
the husband in his deposition who as employee of oppositor
would have known of its acquisition. On the other hand,
applicants' vendors in mortgaging the two lots to Pedro Picones in
1952, Exhibits 0 and 01, for P11, 000.00, exercised a dominical
act; and Aniano Bautista's testimony that the Cervos were not
owners of the land challenges belief since Bautista was a witness
to Exhibits 0 and 0-1, being uncle of Picones.
Very significantly petitioner Rizal Cement did not present any
witness in actual possession of the land in question. As aptly
found by the appellate court, respondents possess the property in
the concept of an owner. Possession is acquired by the material
occupation of a thing or the exercise of a right or by the fact it is
subject to the action of our will, or by the proper acts and legal
formalities established for acquiring such right. Petitioner's
evidence, consisting of tax receipts, tax declaration and survey
plan are not conclusive and indisputable basis of one's ownership
of the property in question. Assessment alone is of little value as
proof of title. Mere tax declaration does not vest ownership of the
property upon the declarant. Settled is the rule that neither tax
receipts nor declaration of ownership for taxation purposes alone
constitutes sufficient evidence of ownership or of the right to
possess realty. They must be supported by other effective proofs.
Neither can the survey plan or technical descriptions prepared at
the instance of the party concerned be considered in his favor,
the same being self-serving.
The only documentary evidence which the Rizal Cement may
capitalize for its claim of ownership is the notation in applicants'
plan Exhibit D that the lots in question are portions of a previous
survey made in 1911 for oppositor, Plan Psu-2260. The survey
plan however has no original record in the Bureau of Lands. Be
that as it may, survey plans merely delimit areas sought to be
registered. Besides, the annotation relied upon by the lower court
in its judgm ent in favor of the oppositor is nothing more than
what it imports - a previous survey.

Wong v. Carpio 203 SCRA 118

IGNACIO WONG v. HON. LUCAS CARPIO and MANUEL MERCADO
G.R. No. L-50264. October 21, 1991.
Bidin, J.
DOCTRINE: Possession in good faith ceases from the moment
defects in the title are made known to the possessors, by
extraneous evidence or by suit for recovery of the property by the
true owner. Whatever may be the cause or the fact from which it
can be deduced that the possessor has knowledge of the defects
of his title or mode of acquisition, it must be considered sufficient
to show bad faith. Such interruption takes place upon service of
summons.
FACTS: In 1972, Private respondent Manuel Mercado and William
Giger executed a deed of sale with a right to repurchase a parcel
of land, LOT 3, situated in Colonga, Sta. Maria, Davao del Sur for
PHP 3,500.00. In 1973, Giger again asked an additional amount of
P2,500.00 from Mercado and so he required William Giger to sign
a new deed of Pacto de Retro Sale. Mercado began harvesting
only the coconut fruits and he paid the taxes on the land for Mr.
Giger. He went periodically to the land to make copra but he
never placed any person on the land in litigation to watch it.
Neither did he reside on the land as he is a businessman and
storekeeper by occupation and resides at Lower Sta. Maria, Davao
del Sur while the land in litigation is at Colongan, Sta. Maria.
Neither did he put any sign or hut to show that he is in actual
possession. He knew defendants' laborers were in the land in suit
as early as August, 1976 and that they have a hut there but he
did not do anything to stop them. Instead plaintiff was happy that
there were people and a hut on the land in suit.
Before July, 1976, Petitioner Ignacio Wong went to the land in
litigation to find out if there were other people residing there or
claiming it besides the owner and he found none. So, in July,
1976, Ignacio Wong bought the parcel of land in litigation from
William Giger and his wife Cecilia Valenzuela. Wong asked for the
delivery of the title to him and so he has in his possession the TCT
in the name of William Giger. Wong declared the land in suit for
taxation purposes in his name. He tried to register the pacto de
retro sale with the Register of Deeds by paying the registration
fee but due to some technicalities, the pacto de retro sale could
not be registered. Wong placed laborers on the land in suit, built a
small farm house after making some clearings and fenced the
boundaries. He also placed signboards.
On September 27, 1976, Mercado again went to the land in
suit to make copras. That was the time the matter was brought to
the attention of the police of Sta. Maria, Davao del Sur and the
incident entered in the police blotter. Then on November 18,
1976, Wong ordered the hooking of the coconuts from the land in
litigation and nobody disturbed him. But on November 29, 1976,
Wong received a copy of Mercado's complaint for forcible entry
with summons to answer which is the case now before the Court.
During the pendency of this instant complaint for forcible entry,
spouses William Giger and Cecilia Valenzuela filed a case for
reformation of instrument with the Court of First Instance of Digos,
Davao del Sur against plaintiff Mercado. On the basis of the
aforestated undisputed facts, the Municipal found in favor of the
petitioner. On appeal, the CFI of Davao del Sur, ruled in favor of
Manuel Mercado. Hence, this petition.
ISSUES:
1. Whether or not defendant Manuel Mercado established prior
possession of the lot in question.
2. Whether or not petitioner Wong is liable to pay rent.
HELD:
1. YES. It should be stressed that "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 for acquiring such right." (Art. 531, Civil
Code; Rizal Cement Co., Inc. vs. Villareal, 135 SCRA 15 [1985]). In
the instant case, it is clear that possession passed from vendor
William Giger to private respondent Manuel Mercado by virtue of
the first sale a retro. Accordingly, the later sale a retro in favor of
petitioner failed to pass the possession of the property because
there is an impediment the possession exercised by private
respondent. Possession as a fact cannot be recognized at the
same time in two different personalities except in the cases of co-
possession. Should a question arise regarding the fact of
possession, the present possessor shall be preferred; if there are
two possessions, the one longer in possession, if the dates of
possession are the same, the one who presents a title; and if
these conditions are equal, the thing shall be placed in judicial
deposit pending determination of its possession or ownership
through proper proceedings (Art. 538, Civil Code).
2. YES. It should be noted that possession acquired in good faith
does not lose this character except in the case and from the
moment facts exist which show that the possessor is not unaware
that he possesses the thing improperly or wrongfully. (Art. 528,
Civi l Code). Possession in good faith ceases from the moment
defects in the title are made known to the possessors, by
extraneous evidence or by suit for recovery of the property by the
true owner. Whatever may be the cause or the fact from which it
can be deduced that the possessor has knowledge of the defects
of his title or mode of acquisition, it must be considered sufficient
to show bad faith. Such interruption takes place upon service of
summons. A perusal of the records of the case shows that
petitioner received private respondent's complaint for forcible
entry with summons on November 29, 1976. His good faith
therefore ceased on November 29,1976. Accordingly, the
computation of the payment of monthly rental should start from
December, 1976.

Somodio v. Court of Appelas 235 SCRA 307

NICANOR SOMODIO v. COURT OF APPEALS
G.R. No. 82680. August 15, 1994.
Quiasion, J .:
DOCTRINE: 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.
FACTS: A piece of land in General Santo City was sold to Wilfredo
Mabugat. Nicanor Somodio contributed one-half of the purchase
price, Mabugat executed an Affidavit of Trust, recognizing the
right of Somodio over one-half portion of the lot. After they
partitioned the property, Somodio immediately took possession of
his portion and planted ipil-ipil trees, coconut trees and other fruit
bearing trees. IN 1976, he allowed Ayco to enter the premises and
construct a nipa hut thereon. When the time came that he wanted
to remove Ayco, the latter refused, and Somodio filed suit for
unlawful detainer. On June 1983, Ebeneco Purisima entered the
property and started constructing a structure. A forcible entry
case was filed against Purisima. 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. Ayco,
on the other hand, did not present any evidence but merely
anchored his right to possess the property on the evidence of
Purisima.
During suit, the MTC and RTC ruled in favor of Somodio, but
the Court of Appeals set Aside the judgment, stating that Somodio
did not clearly and conclusively establish physical, prior
possession over the lot.
ISSUE: Whether Somodio had prior possession over the lot in
controversy.
HELD: YES. 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.
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. 6328-X.
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.
Maglucot- Aw v. Maglucot 329 SCRA 78
MAGLUCOT-AW v. MAGLUCOT
G.R. No. 132518. March 28, 2000.
Kapunan, J.
DOCTRINE: Parties to a partition proceeding, who elected to take
under partition, and who took possession of the portion allotted to
them, are estopped from questioning the title to partition allotted
to another party.
FACTS: Petitioner filed a complaint for the recovery of possession
and damages alleging that they are the owners of lot no. 1639-D
which was originally part of lot no. 1639 which was covered by
OCT no. 67 issued in the names of Hermogenes Olis, Pascual Olis,
Bartolome Maglucot, Anselmo Lara, and Tomas Maglucot.
Subsequently, Tomas and respondent's predecessor-in-interest
filed a petition to subdivide the lot into six portions and was
granted. Then in 1963, respondents rented portions of lot 1639-d
paying rentals therefore. They likewise built houses on their
corresponding leased lots. However, in 1992, they stopped paying
rentals claiming ownership over the subject lot. Petitioners
maintained that there was a valid partition and that the
respondents are stopped from claiming to be co-owners of the
subject lot in view of their agreement in 1946 and ruled that the
sketch plan and tax declarations relied upon by petitioners are not
conclusive evidence to partition.
ISSUE: Whether or not the respondents are estopped from
questioning the title to partition.
HELD: YES. Parties to a partition proceeding, who elected to take
under partition, and who took possession of the portion allotted to
them, are estopped from questioning the title to partition allotted
to another party. Here, respondents already occupied the lots in
accordance with the sketch plan. This occupation continued until
this action was filed. They cannot now be heard to question the
possession and ownership of the other co-owners who took
exclusive possession of lot 1639-d also in accordance with the
sketch plan. Also, the payment of rentals reveals that
respondents' possession of the land is that of a holder and not as
owner thereof. One who possess as a mere holder acknowledges
in another a superior right which he believes to be ownership.
Hence, petitioners were in possession of the subject lot in the
concept of an owner from 1952 up to the time the present action
was commenced. Petition was granted.
Cequena v. Bolante 330 SCRA 216
FERNANDA MENDOZA CEQUENA AND RUPERTA MENDOZA LIRIO v.
HONORATA BOLANTE
G.R. No. 137944. April 6, 2000.
Panganiban, J.
DOCTRINE: For all intents and purposes, a possessor, even if
physically ousted is still deemed to be the legal possessor.
FACTS: Before 1954, the land in question was originally declared
for tax purposes under the name of Sinforoso Mendoza, father of
respondent. Sinforoso died in 1930. Petitioners were daughters of
Margarito Mendoza. The tax declaration in the name of Sinforoso
was cancelled, and subsequently placed the tax declaration under
the name of Margarito. The respondent was the occupant of that
land. During the cadastral survey of the land, the brother of
petitioner and Honorata had a dispute over the ownership of the
property. The trial court said that petitioners are the lawful owner
of the property. However, in a turn of events, the appellate court
held that the probative value of petitioners' tax receipts and
declarations paled in comparison with the respondent's proof of
ownership of the disputed parcel. Actual, physical, exclusive and
continuous possession by respondent since 1985 indeed gave her
a better title under Art. 538 of the Civil Code.
ISSUE: Whether or not the respondent, Honorata had a better
right over the property
HELD: The Court of Appeals ruled that the respondent was the
preferred possessor under Art. 538 of the Civil Code because she
was in notorious, actual, exclusive and continuous possession of
the land since 1985. The petitioners dispute this ruling. They
contend that she came into possession through force and
violence, contrary to Art 536 of the Civil Code. We concede that
despite their dispossession in 1985, the petitioners did not lose
legal possession because possession cannot be acquired through
force or violence. To all intents and purposes, a possessor even if
physically ousted, is still deemed the legal possessor. Indeed,
anyone who can prove prior possession, regardless of its
character, may recover such possession. However, possession by
the petitioners does not prevail over that of the respondent.
Possession by the former before 1985 was not exclusive, as the
latter also acquired it before 1985. The records show that the
petitioners' father and brother, as well as the respondent and her
mother were simultaneously in adverse possession of the land.
Before 1985, the subject land was occupied and cultivated by the
respondent's father (Sinforoso), who was the brother of
petitioners' father (Margarito), as evidenced by Tax Declaration
No. 26425. When Sinforoso died in 1930, Margarito took
possession of the land and cultivated it with his son Miguel. At the
same time, respondent and her mother continued residing on the
lot. Possession cannot be acquired through force or violence.
Carbonilla v. Abiera, GR No. 177637, July 26, 2010
B.
Aragon v. Insular Government 19 Phil. 223
JUAN M. ARAGON v. INSULAR GOVERNMENT
G.R. No. L-6019, March 25, 1911. Carson, J.
DOCTRINE: In a case of gradual encroachment or erosion by the
ebb and flow of the tide, private property may not become
"property of public ownership" where it appears that the owner
has to all intents and purposes abandoned it and permitted it to
be totally destroyed, so as to become a part of the "playa" (shore
of the sea), "rada" (roadstead), or the like.
FACTS: Juan Aragon filed for their land for an application for
registry. Thereupon, the Government of the Philippine Islands,
through its proper representatives, objected to the application for
registry on the ground that the land in question is a part of the
public domain as defined in Article 339 of the Civil Code since the
land lies on shores and also, alleged to have violated Article 1 of
The Law of Waters (Ley de Aguas) on the same ground that it lies
on the shore. The latter law defined shores as: "Shore" is
understood to be that space which is alternatively covered and
uncovered by water with the movement of the tides. Its interior or
terrestial limit is marked by the lone reached by the highest tides
and equinoctials. Where the tides are not perceptible the shore
begins at the line reached by the water during tempests and
ordinary storms.
At the time of the application, the land in question was so
located that at high tide it was completely covered by the waters
of the Bay of Manila, though the receding waters left it completely
bare at low tide.
However, it is noteworthy that in the year 1892 a possessory
title to the land in question was duly registered in favor of
Inocencio Aragon, one of the predecessors in interest of these
applicants; that for a long period of years, and perhaps from a
time beyond which the memory of man runneth not to the
contrary, the applicant and their predecessors in interest have
been in possession of the parcel of land in question, under and
undisputed claim of ownership; that it is located toward the
center of one of the most valuable residential sections of the city
of Manila, and that for many years a house stood upon this land,
and was occupied by some of the predecessors in interest of the
applicants in these proceedings; that with some relatively small
expenditure by way of a "fill" or a "retaining wall" it would still be
a valuable building lot for residential purposes; that the adjoining
lots extend toward the bay to a line formed by the extension of
the outer boundary line of the lot in question, and that these
adjoining lots would be in substantially the same physical
condition, by relation to the ebb and flow of the tide, as lot in
question, but for low retaining walls which protect them against
the incoming sea; that the water which spreads over the lot in
question at high tide is of but little depth, and would be wholly
excluded by a very limited amount of "filling" materials or a low
retaining wall; that there are strong reasons to believe that the
land in question was originally well above the ebb and flow of the
tide; and that only in later years have the waters risen to such a
height along the shores of the Bay of Manila at this point as to
cover the land in question completely at high tide; though it does
not definitely appear whether this is due to changes in the current
and flow of the waters in the bay, or to the gradual sinking of the
land along the coast.
ISSUE: Whether or not petitioner Aragon will lose possession and
ownership over the land in question.
HELD: No, the Court ruled that the ownership of Aragon over the
land cannot be disturbed and shall remain on the petitioners
possession and ownership. The following pertinent provisions on
the Civil Code states that:
Article 446.Every possessor has a right to be respected in his
possession; and should he be disturbed therein, he must be
protected or possession must be restored to him by the means
established in the laws of procedure.
Article 460.The possessor may lose his possession
1.By the abandonment of the thing.
2.By transfer to another for a good or valuable
consideration.
3.By the destruction or total loss of the thing or by the
thing becoming unmarketable.
4.By the possession of another, even against the will of
the former possessor, if the new possession has lasted
more than one year.
Under the above-stated provisions of the code, it seems
quite clear that if the Government is justified in disturbing the
possession of the applicants, it can only be on the ground that
they have abandoned their property, or that it has been totally
destroyed and has now become a part of the public domain by the
erosive action of the sea. It is quite clear that applicants have
never abandoned their possession under a claim of ownership of
this land. The Court held that the facts above stated fully sustain
a finding that there has been no such destructive or total loss of
the property as would justify a holding that the owners have lost
possession. Doubtless the property has been injured by the
erosive action of the sea. Doubtless the owners in order to
profitably enjoy the possession of this property will be compelled
to make some relatively small expenditures by way of a "fill" or a
retaining wall. But the actual condition of the property as it
appears from the record makes a claim that it has been totally
lost or destroyed preposterous and wholly untenable.
Furthermore, if the applicants have not lost their right of
possession, the Government's claim of ownership, on the ground
that this is a part of the playa (shore) of Manila Bay, necessarily
falls to the ground.
In a case of gradual encroachment or erosion by the ebb and
flow of the tide, private property may not become "property of
public ownership," as defined in article 339 of the code, where it
appears that the owner has to all intents and purposes
abandoned it and permitted it to be totally destroyed, so as to
become a part of the "playa" (shore of the sea), "rada"
(roadstead), or the like. The Honorable Courts ruling in this case
is merely that it affirmatively appears that the owners of the land
in question have never in fact nor in intent abandoned it, and that
keeping in mind its location and actual condition it can not be said
to have been totally destroyed for the purposes for which it was
held by them, so as to have become a part of the playa (shore) of
the Bay of Manila.

Catholic Vicar Apostolic of Mountain Province v. CA 183

SCRA 639
CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN PROVINCE v.
COURT OF APPEALS
G.R. No. 80294-95, September 21, 1988.
Gancayco, J.
DOCTRINE: The bailees' failure to return the subject matter of
commodatum to the bailor did not mean adverse possession on
the part of the borrower. The bailee held in trust the property
subject matter of commodatum. The adverse claim comes when it
declared the lots for taxation purposes.
FACTS: The documents and records presented reveal that the
whole controversy started when the defendant Catholic Vicar
Apostolic of the Mountain filed an application for registration of
title over Lots Poblacion Central, La Trinidad, Benguet. On March
22, 1963 the Heirs of Juan Valdez and the Heirs of Egmidio
Octaviano filed their Answer/Opposition asserting ownership and
title thereto. After trial on the merits, the land registration court
promulgated its Decision, dated November 17, 1965, confirming
the registrable title of VICAR to the said lots. The Heirs of Juan
Valdez and the Heirs of Egmidio Octaviano appealed the decision
of the land registration court to the then Court of Appeals, which
reversed the decision of the land registration court and dismissing
the VICAR's application as to Lots 2 and 3, the lots claimed by the
two sets of oppositors in the land registration.
ISSUE: Whether or not a decision of the Court of Appeals
promulgated a long time ago can properly be considered res
judicata by respondent Court of Appeals in the present two cases
between petitioner and two private respondents.
HELD: The petition is bereft of merit. The Decision of the Court of
Appeals did not positively declare private respondents as owners
of the land, neither was it declared that they were not owners of
the land, but it held that the predecessors of private respondents
were possessors of Lots 2 and 3, with claim of ownership in good
faith from 1906 to 1951. When petitioner applied for registration
of Lots 2 and 3 in 1962, it had been in possession in concept of
owner only for eleven years. Ordinary acquisitive prescription
requires possession for ten years, but always with just title.
Extraordinary acquisitive prescription requires 30 years. The Court
of Appeals found that petitioner did not meet the requirement of
30 years possession for acquisitive prescription over Lots 2 and 3.
Neither did it satisfy the requirement of 10 years possession for
ordinary acquisitive prescription because of the absence of just
title. Private respondents were able to prove that their
predecessors' house was borrowed by petitioner Vicar after the
church and the convent were destroyed. They never asked for the
return of the house, but when they allowed its free use, they
became bailors in commodatum and the petitioner the bailee. The
bailees' failure to return the subject matter of commodatum to
the bailor did not mean adverse possession on the part of the
borrower. The bailee held in trust the property subject matter of
commodatum. The adverse claim of petitioner came only in 1951
when it dec lared the lots for taxation purposes. The action of
petitioner Vicar by such adverse claim could not ripen into title by
way of ordinary acquisitive prescription because of the absence of
just title.
The Court of Appeals found that the predecessors-in-interest
and private respondents were possessors under claim of
ownership in good faith from 1906; that petitioner Vicar was only
a bailee in commodatum ; and that the adverse claim and
repudiation of trust came only in 1951.
Supapo v. Spouses de Jesus, GR No. 198356, April 20,
2015
C.
EDCA Publishing & Distributing Corp. v. Santos 134 SCRA
614
EDCA PUBLISHING & DISTRIBUTING CORP. v. SPOUSES SANTOS
G.R. No. 80298, April 26, 1990.
Cruz, J.
DOCTRINE: If the possessor of a movable lost or of which the
owner has been unlawfully deprived has acquired it on good faith
at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefore.
FACTS: On October 5, 1981, a person identifying himself as
Professor Jose Cruz placed an order by telephone with the
petitioner company for 406 books, payable on delivery. EDCA
prepared the corresponding invoice and delivered the books as
ordered, for which Cruz issued a personal check covering the
purchase price of P8,995.65. On October 7, 1981, Cruz sold 120 of
the books to private respondent Leonor Santos who, after
verifying the sellers ownership from the invoice he showed her,
paid him P1,700. Meanwhile, EDCA having become suspicious
over a second order by Cruz even before clearing of his first
check, made inquiries with the De La Salle College where he had
claimed to be a dean and was informed that there was no such
person in its employ. Further verification revealed that Cruz had
no more account or deposit with the Philippine Amanah Bank,
against which he had drawn the payment check. In an
entrapment operation, Cruz was arrested and in the investigation
disclosed his real name as Tomas de la Pea and his sale of 120 of
the books he had ordered from EDCA to the private respondents.
On the night of the same date, EDCA sought the assistance
of the police, which forced their way into the store of the private
respondents and threatened Leonor Santos with prosecution for
buying stolen property. They seized the 120 books without
warrant, and thereafter turned them over to the petitioner. Private
respondents sued for recovery of the books after demand for their
return was rejected by EDCA. A writ of preliminary attachment
was issued and the petitioner, after initial refusal, finally
surrendered the books to the private respondents. The lower
courts and the Court of Appeals ruled in favor of the respondents.
Hence, this petition.
ISSUE: Whether or not petitioner has been unlawfully
deprived of the books because the checks issued by the impostor
in payment therefore was dishonored.
HELD: NO. Art. 559 provides: The possession of movable property
acquired in good faith is equivalent to a title. Nevertheless, one
who has lost any movable or has been unlawfully deprived
thereof, may recover it from the person in possession of the
same.
If the possessor of a movable lost or of which the owner has
been unlawfully deprived has acquired it in good faith at a public
sale, the owner cannot obtain its return without reimbursing the
price paid therefore.
Actual delivery of the books having been made, Cruz
acquired ownership over the books which he could then validly
transfer to the private respondents. The fact that he had not yet
paid for them to EDCA was matter between him and EDCA and did
not impair the title acquired by the private respondents to the
books.
One may well imagine the adverse consequences if the
phrase unlawfully deprived were to be interpreted in the
manner suggested by petitioner. A person relying on the sellers
title who buys a movable property from him would have to
surrender it to another person claiming to be the original owner
who had not yet been paid the purchase price therefore. The
buyer in the second sale would be left holding the bag, so to
speak, and would be compelled to return the thing bought by him
in good faith without even the right to reimbursement of the
amount he had paid for it.
It bears repeating that in the case at bar, Santos took care to
ascertain first that the books belonged to Cruz before she agreed
to purchase them. The EDCA invoice Cruz showed her assured her
that the books had been paid for on delivery. By contrast, EDCA
was less than cautious - in fact, too trusting in dealing with the
impostor. Although it had never transacted with him before, it
readily delivered the books he had ordered and as readily
accepted his personal check in payment. It did not verify his
identity although it was easy enough to do this. It did not wait to
clear the check of this unknown drawer. Worse, it indicated in the
sales invoice issued to him, by printed terms thereon, that the
books had been paid for on delivery, thereby vesting ownership in
the buyer.
De Garcia v. CA 37 SCRA 129
DE GARCIA v. COURT OF APPEALS
G.R. No. L-20264 January 30, 1971.
Fernando, J.
DOCTRINE: One who has lost or has been unlawfully deprived of a
movable may recover the same from the person in possession of
the same and the only defense the latter may have is if he has
acquired it in good faith at a public sale in which case the owner
cannot obtain its return without reimbursing the price paid
therefore. The only exception provided by law is when the
possessor acquired the property through a public sale, in which
case, the owner cannot recover without reimbursement.
FACTS: Guevarra was the owner of a ladys diamond ring with
white gold mounting, solitaire 2 karat diamond as well as 4 brills.
It was stolen from her house. On a relevant date, while she was
talking to Garcia, an owner of a restaurant, she recognized the
ring on the latters finger and asked how she acquired the same.
Garcia averred that she bought it from her comadre. Guevarra
made Garcia know that the ring was stolen from her place days
before. It was ascertained the ring was indeed Guevarras but
despite written demands, Garcia refused to return the ring.
ISSUE: Whether a person who has been unlawfully deprived of
possession of a movable may recover the same.
HELD: YES. The controlling provision is Article 559 of the Civil
Code. It reads thus: "The possession of movable property acquired
in good faith is equivalent to a title. Nevertheless, one who has
lost any movable or has been unlawfully deprived thereof may
recover it from the person in possession of the same. If the
possessor of a movable lost of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefor."
Respondent Angelina D. Guevara, having been unlawfully
deprived of the diamond ring in question, was entitled to recover
it from petitioner Consuelo S. de Garcia who was found in
possession of the same. The only exception the law allows is
when there is acquisition in good faith of the possessor at a public
sale, in which case the owner cannot obtain its return without
reimbursing the price. As authoritative interpreted in Cruz v.
Pahati, the right of the owner cannot be defeated even by proof
that there was good faith by the acquisition by the possessor.
There is a reiteration of this principle in Aznar v. Yapdiangco.
Thus: "Suffice it to say in this regard that the right of the owner to
recover personal property acquired in good faith by another, is
based on his being dispossessed without his consent. The
common law principle that where one of two innocent persons
must suffer by a fraud perpetrated by the another, the law
imposes the loss upon the party who, by his misplaced
confidence, has enabled the fraud to be committed, cannot be
applied in a case which is covered by an express provision of the
new Civil Code, specifically Article 559. Between a common law
principle and statutory provision, the latter must prevail in this
jurisdiction."
Hence, Guevarra who was unlawfully deprived of the ring
was entitled to recover it from de Garcia who was found in
possession of the same.
Dizon v. Suntay 47 SCRA 160
DOMINADOR DIZON v. LOURDES G. SUNTAY
G.R. No. L-30817. September 29, 1972.
Fernando, J.
DOCTRINE: One who has lost any movable or has been unlawfully
deprived thereof may recover it from the person in possession of
the same.
FACTS: Suntay is the owner of a 3-carat diamond ring which was
delivered to Clarita Sison for sale on commission. After the lapse
of a considerable time without Sis on having returned to Suntay
the latters ring, Suntay made demands on Sison. Turns out that
the ring was pledged by Claritas niece, evidently in connivance
with her, with the defendant Dizons pawnshop for PhP 2, 600.00.
When Suntay found out about the pledge, she filed a case
against Sison and thereafter wrote a letter to Dizon asking for the
delivery to her of her ring pledged. Dizon refused, hence, an
action was filed with the CFI of Manila for the recovery of the ring.
The CFI granted the action and declared Suntay as having the
right of possession of the ring in question.
ISSUE: Whether Suntay has the right of possession over the
diamond ring.
HELD: YES. The controlling provision is Article 559 of the Civil
Code which provides in part that one who has lost any movable or
has been unlawfully deprived thereof may recover it from the
person in possession of the same. Suntay having been unlawfully
deprived of the ring in question, is entitled to recover it from
Dizon who was found in possession of the same. Neither can
Dizons defense of estoppels stand. Estoppel has its roots in
equity with good faith as its basis. How then can petitioner in all
seriousness assert that his appeal finds support in the doctrine of
estoppels?
Neither the promptings of equity nor the mandates of moral
right and natural justice come to his rescue. He is engaged in a
business where presumably ordinary prudence would manifest
itself to ascertain whether or not an individual who is offering
jewelry by way of a pledge is entitled to do so. If no such care be
taken, perhaps because of the difficulty of resisting opportunity
for profit, he should be the last to complain if thereafter the right
of the true owner of such jewelry should be recognized.
Ledesma v. CA 213 SCRA 195
JAIME LEDESMA v. COURT OF APPEALS and CITIWIDE MOTORS INC.
G.R. No. 86051. September 1, 1992.
Davide, Jr, J.
DOCTRINE: The three requisites so that acquisition of movable
property would be equivalent to title are: (1) possession in good
faith; (2) owner voluntarily parted with the possession of the
thing; and (3) possession is in the concept of an owner.
FACTS: A person representing himself to be Jojo Consunji,
purchased purportedly for his father, one Rustico Consunji, two
brand new motor vehicles from Citiwide Motors an Isuzu Gemini
and a Holden Premier Model. Citiwide delivered the motor
vehicles to Consunji and the latter in turn issued two managers
checks as full payment of the two motor vehicles. When Citiwide
deposited the said checks, the same were dishonored by the bank
on the ground that it was tampered with the correct amount of
P101.00 having been raised to P101,000.00. Citiwide reported the
criminal act that transpired. Based on the findings of the
Constabulary, it turned out that the impostor Jojo Consunji was
actually one Armando Suarez who has a long line of criminal
cases against him for estafa using his similar modus operandi.
The Holden Premiere was recovered by Citiwide when it was found
abandoned somewhere in Quezon City while the Isuzu Gemini was
already transferred by Suarez to herein petitioner Jaime Ledesma.
Citiwide instituted an action for replevin for the recovery of the
said motor vehicle. Ledesma interposed that he purchased the
same in good faith from its registered owner, one Pedro Neyra.
The lower court ruled in favor of Ledesma. On appeal, the CA
ruled that Citiwide had been unlawfully deprived of the vehicle
and hence Ledesma is bound to return the same. Hence, this
petition.
ISSUE: Whether Citiwide Motors was unlawfully deprived of the
cars when it sold the same to the purported father of the impostor
Jojo Consunji.
HELD: NO. Under Article 559 of the Civil Code, a party who has (a)
lost any movable or (b) has been unlawfully deprived thereof can
recover the same from the present possessor even if the latter
acquired it in good faith and has therefore title thereto. The Court
noted that there are three requisites to make possession of
movable property equivalent to title: (1) possession should be in
good faith; (2) owner voluntarily parted with the possession of the
thing; and (3) possession is in the concept of an owner. In light of
the foregoing, when one had been unlawfully deprived of a thing,
he has not voluntarily parted of it and thus possessor cannot
validly acquire title to the said thing. In the instant case, the Court
noted that there is a perfected unconditional contract of sale
between Citiwide and the original vendee (Amando Suarez, or Jojo
Consunji). Consequently, Citiwide cannot be said to have been
unlawfully deprived of the motor vehicles as it had voluntarily
transferred title to the same. Thus, Ledesma, a buyer in good
faith and for value cannot be deprived of the motor vehicle.

Subic Bay Legend Resorts and Casinos, Inc v. Fernandez

GR No. 193426, September 29, 2014
D.
Azarcon and Abobo v. Eusebio 105 SCRA 569
LEONARDO AZARCON, MANUEL AZARCON and ESTEBAN ABOBO v.
VICTOR EUSEBIO
G.R. No. L-11977. April 29, 1959.
Labrador, J.:
DOCTRINE: A person who has been ordered to leave certain
premises is ordinarily not prohibited from taking with him his own
effects and possession, unless there is an express prohibition to
this effect.
FACTS: Respondent Victor Eusebio and petitioners herein had a
dispute over the possession of a certain parcel of public land in
the year 1954. Victor Eusebio had filed a lease application, No. V-
79, for a parcel of land known as lot No. 3807, containing an area
of about 349 hectares. A portion thereof was occupied by
petitioners herein, Leonardo L. Azarcon and his companions,
under a homestead application. The conflict between the lessee
and the homesteaders was ordered to be investigated on May 25,
1955 by the Director of Lands and again on August 3, 1955 by the
Secretary of Agriculture and natural Resources. Before the dispute
could be settled and on April 28, 1954, Victor Eusebio filed a
complaint in the Court of First Instance of Nueva Ecija, alleging
that he had acquired a big parcel of land, 349 hectares in area, by
lease from the Bureau of Lands (lease application No. V-79); that
while he was in possession thereof defendants occupied a portion,
known as lot No. 2807, containing an area of six hectares more or
less. Defendant Leonardo Azarc on answered the complaint
alleging that he is in actual possession of a portion of 24 hectares
since 1941 by virtue of a homestead application, No. V-42995;
that the lease application of plaintiff is subsequent to said
homestead application of Leonardo Azarcon; that Azarcon had
occupied the land since 1941 with interruption during the war and
again in 1950 up to the time of the filing of the action.
While the case was pending in the Court of Appeals, a writ
for the execution of the judgment of the lower court was issued
on October 3, 1955. Various petitions were submitted by the
parties, and among them was that of defendants-appellants
asking for the lifting of the writ of execution.
The evidence shows that in spite of the receipt by the
defendants of the notice of the writ of execution of October 3,
1955, which writ of execution commanded defendants "to
forthwith remove from said premises and that plaintiff have
restitution of the same," defendants appellants nevertheless
entered the land to gather palay which was then pending harvest.
ISSUE: Whether the defendant-appellants had a right over the
palay.
HELD: YES. Under the law a person who is in possession and who
is being ordered to leave a parcel of land while products thereon
are pending harvest, has the right to a part of the net harvest, as
expressly provided by Article 545 of the Civil Code.
ART. 545. If at the time the good faith ceases, there should
be any natural or industrial fruits, the possessor shall have a
right to a part of the expenses of cultivation, and to a part of
the net harvest, both in proportion to the time of the
possession.
xxx xxx xxx
As the order of execution did not expressly prohibit the
defendants-appellants from gathering the pending fruits, which
fruits were the result of their possession and cultivation of the
land, it cannot be said that the defendants-appellants committed
an act which is clear violation of the courts' order. Besides, the
defendants-appellants had presented, after receipt of the order of
execution, a motion to set aside the said order of execution, and
this motion to stay execution was granted. Defendants
furthermore presented a bond in accordance with the order of the
court and had it approved by the Court of First Instance. It was
perhaps in expectation of this resolution of the court setting aside
the order of execution that defendants -appellants may have felt
justified in entering the land and harvesting the fruits existing
thereon.
We are not ready to conclude that the defendants-appellants
can be held to have committed a clear defiance of the order of
the court. Their act in harvesting the pending fruits was not only
justified by law but was not expressly prohibited by the court's
order, and was even ratified when the court ordered the
suspension of the execution. There was, therefore, no open, clear
and contumacious refusal to obey a definite order of the court
such as would constitute contempt. Furthermore, a person who
has been ordered to leave certain premises is ordinarily not
prohibited from taking with him his own effects and possession,
unless there is an express prohibition to this effect. No such,
prohibition was contained in the order for the defendants to leave
the land. There may have been a technical violation of an order
not to enter the premises, but not of one prohibiting them from
removing anything therefrom. Such technical violation of the
order cannot be considered as one amounting to a defiance of the
court's authority, punishable as contempt.
Cordero v. Cabral 123 SCRA 532
FELIPA CORDERO, MAURO OCAMPO, CASIMIRO OCAMPO and
ELISEA OCAMPO v. VICTORIA CABRAL, ALEJANDRO BERBOSO,
DALMACIO MONTAOS and CA
G.R. No. L-36789. July 25, 1983.
Abad Santos, J.
DOCTRINE: Possessors in bad faith shall reimburse the fruits
received and those which the legitimate possessor could have
received from the time their good faith ceased, or from the
moment facts exist that they are unaware that their possession is
improper or wrongful.
FACTS: Plaintiffs herein Felipa Cordero et.al. are the successors in
interest of Gregorio Ocampo, who owned a parcel of land,
measuring 78, 181 square meters located at Meycauayan,
Bulacan. They filed a civil case against defendants Victoria Cabral,
et. al. due to their alleged illegal possession of a 4,303 square
meter rice land included in the aforementioned property they
inherited from Ocampo. Due to such illegal possession, they
averred that they were deprived of harvesting at least 10 cavans
of palay at the rate of P10.00 per cavan from the harvest time of
1958 up to the time of their filing of the case. On their reply, the
defendant denied the allegations of the plaintiffs arguing among
other things that they are the true owners of the 4,303 square
meter land and that there was an error in the inclusion of the said
land in the title of the plaintiffs. This is so since their predecessor,
late Antonio Rodriguez and Gregorio Ocampo had an oral sale
regarding the disputed land and from then on Ocampo admitted,
acknowledged, and recognized their possession of the same.
These contentions were rebutted by the plaintiffs saying that the
oral sale they were referring to never materialized. If their
predecessors were in possession of the said land before, such was
due to Ocampos mere toleration. The trial court dismissed the
said complaint of the plaintiffs. On appeal, CA affirmed the
decision of the lower court ruling on one hand that the disputed
land was part of the land originally registered in the name of the
plaintiffs predecessor in interest but the said title cannot be used
to defeat the personal agreement between the parties
predecessors in interest. It thus held that such agreement should
be binding upon the plaintiffs as much as it is binding upon their
predecessor in interest, Ocampo. Hence, this petition.
ISSUE: Whether Cabral, et. al. are possessors in bad faith.
HELD: YES. The Court resolved first the issue of ownership in the
case at bar. It ruled that the disputed land is included in the
original title issued to the predecessor in interest of the plaintiffs.
There was no error or fraud attendant of such inclusion. It held
that CA erred in its finding that Ocampo orally sold the land in
question to Rodriguez. It is a clear fact in the case at bar that the
respondents are in possession of the land. As much as there is no
evidence that they are possessors in bad faith, the Court noted
that their good faith ceased when the respondents were served
with summons to answer the complaint filed by herein plaintiffs.
Consequently, as possessors in bad faith, the Court ruled that
they shall reimburse the fruits received and those which the
legitimate possessor could have received from the time that their
good faith ceased, i.e. from the time of service of summons.
E.
Mendoza and Enriquez v. De Guzman 52 Phil 164
MARTIN MENDOZA v. M ANUEL DE GUZMAN
G.R. No. L- 28721. October 5, 1928.
Malcolm, J.
DOCTRINE: In as much as the one who intend retention, one who
is not actually a possessor in good faith within the meaning of the
law, seeks to be reimbursed for the necessary and useful
expenditures, it is only just that he should account to the owners
of the property any fruits, rents or even crops he had gathered
from it.
FACTS: By virtue of a court order, Martin Mendoza was put in
possession of the disputed property. In a cadastral proceeding,
said lot was adjudicated in favor of Martin Mendoza and Natalio
Enriquez in equal parts pro diviso subject to the right of retention
on the part of Manuel De Guzman until he shall have been
indemnified for the improvements existing on the land. From the
time Leandra Solis and Bernardo Solis, as well as Manuel de
Guzman who was working on the land, were ejected from the
disputed land, Martin Mendoza possessed it until June 25, 1924,
when de Guzman obtained the writ of possession and since then
De Guzman has had dominion over the land.
An action was filed requesting the court to determine the
value of necessary and useful expenses incurred by Manuel De
Guzman in introducing the improvements, require the defendant
to render an accounting of the fruits received by him and order
that the value of the fruits be applied to the payment of the
necessary and useful expenses.
ISSUE: Whether or not the defendant has the right to be
indemnified.
HELD: YES. The amount of the indemnification is the amount of
the expenditures which is the necessary and useful expenses
incurred by the defendant. In the case at bar, the plaintiff have
chosen to take the improvements introduced on the land and are
disposed to pay the amount of the necessary and useful expenses
incurred by the defendant. In as much as the one who intend
retention, one who is not actually a possessor in good faith within
the meaning of the law, seeks to be reimbursed for the necessary
and useful expenditures, it is only just that he should account to
the owners of the property any fruits, rents or even crops he had
gathered from it.
Necessary expenses are those made for the preservation of
the thing, without which the thing would deteriorate or be lost
and those that augment the income of the things upon which they
are expanded. Among the necessary expenditures are those
incurred for cultivation, production, upkeep, etc.
Under the law, necessary expenses shall be refunded to
every possessor but only those in good faith may retain the thing
until he has been reimbursed and useful expenses shall be
refunded only to the possessor in good faith with the same right
of retention.
Robles and Martin v. Lizzaraga Hermanos, etc 42 Phil 584
EVARISTA ROBLES and ENRIQUE MARTIN v. LIZARRAGA
HERMANOS and the REGISTER OF DEED OF ILOILO
G.R. No. L-16662. December 21, 1921.
Romualdez, J.
DOCTRINE: Necessary expenditures shall be refunded to every
possessor, but only the possessor in good faith may retain the
thing until they are repaid to him. Useful expenditures shall be
paid the possessor in good faith with the same right to retention,
the person who has defeated him in his possession having the
opinion of refunding the amount of such expenditures or paying
him the increase in value which the thing has acquired by reason
thereof.
FACTS: Anastasia de la Rama died, leaving six children, to wit,
Magdalena, Jose, Evarista, Zacarias, Felix, and Purificacion,
surnamed Robles, and some properties, among which is house No.
4 on Iznart Street in the city of Iloilo, concerning which a
controversy arose which developed into the three cases now
under consideration. The children and heirs of Anastasia de la
Rama entered into partnership with Lizarraga Hermanos in
liquidation and settlement of their accounts, by virtue of which
the competent court awarded to said partnership the properties
left by the deceased, including the aforesaid house No. 4 on Iznart
Street. Evarista Robles, one of the aforesaid heirs, since before
the death of her mother Anastasia de la Rama, has been with her
husband occupying the aforesaid house No. 4 on Iznart Street, at
the beginning, by permission of her mother, later on by the
consent of her coheirs, and lastly by agreement with the
partnership, Lizarraga Hermanos, to whom it had been awarded,
having made some improvements on the house, the value of
which is fixed at P4,500, and paying to said partnership P40
monthly as rent of the upper story. Lizarraga Hermanos notified
Evarista Robles that beginning April next the rent of the upper
story of the house would be raised to P60 a month, and that, if
she did not agree to the new rate of rent, she might vacate the
house. Evarista Robles refused to pay such a new rate of rent and
to vacate the house, and Lizarraga Hermanos brought suit against
her for ejectment. Evarista Robles sued Lizarraga Hermanos
afterwards to recover the value of the improvements, and
demanded, in another action, that said value be noted on the
certificate of title as an encumbrance.
ISSUE: Whether Evarista Robles and Enrique Martin has the right
to retain the property until she is paid for the value of the
improvements.
HELD: YES. Article 434 provides that "good faith is always
presumed and the burden of proving bad faith on the part of the
possessor rests upon the person alleging it." Lizarraga Hermanos
did not allege, nor prove in the first instance the bad faith
characterizing Evarista Robles' possession, who, as shown in the
records and heretofore stated, began to occupy the house by
permission of the former owner, her mother Anastasia de la
Rama, and continued later in the occupation by the consent of her
coheirs, and afterwards by considering herself the future owner of
the building by virtue of the contract with the present owner,
Lizarraga Hermanos. The evidence shows that said improvements
were begun about the end of December, 1916, after the
agreement with Lizarraga Hermanos for the sale thereof to
Evarista Robles. If the improvements are useful and Evarista
Robles' possession was in good faith, the conclusion set out in
article 453 of the Civil Code, supra, is inevitable; Evarista Robles
is the owner of such improvements, and entitled to
reimbursement therefor, and to retain the building until the same
is made.

Metropolitan Waterworks and Sewerage System v. CA 143

SCRA 623
METROPOLITAN WASTE AND SEWERAGE SYSTEM v. COURT OF
APPEALS
G.R. No. L-54526. August 25, 1986.
Feria, J.
DOCTRINE: The right given to a possessor in bad faith to remove
improvements applies only to improvements for pure luxury or
mere pleasure, provided the thing suffers no injury thereby and
the lawful possessor does not prefer to retain them by paying the
value they have at the time he enters into possession.
FACTS: The City of Dagupan filed a complaint against the former
National Waterworks and Sewerage Authority now the
Metropolitan Waterworks and Sewerage System, for recovery of
the ownership and possession of the Dagupan Waterworks
System. NAWASA interposed as one of its special defenses R.A.
1383 which vested upon it the ownership, possession and control
of all waterworks systems throughout the Philippines and as one
of its counterclaims the reimbursement of the expenses it had
incurred for necessary and useful improvem ents amounting to
P255,000.00. The trial court found NAWASA to be a possessor in
bad faith and hence not entitled to the reimbursement claimed by
it. The Court of Appeals affirmed the judgment of the trial court.
MWSS appealed to the Court arguing that the pertinent laws on
the subject, particularly Articles 546, 547 and 549 of the Civil
Code of the Philippines, do not definitely settle the question of
whether a possessor in bad faith has the right to remove useful
improvements.
ISSUE: Whether MWSS has the right to remove all the useful
improvements introduced by NAWASA to the Dagupan
Waterworks System, notwithstanding the fact that NAWASA was
found to be a possessor in bad faith.
HELD: NO. It is provided under Article 449 of the Civil Code of the
Philippines that "he who builds, plants or sows in bad faith on the
land of another, loses what is built, planted or sown without right
to indemnity." As a builder in bad faith, NAWASA lost whatever
useful improvements it had made without right to indemnity.
Under Article 546 of same law, only a possessor in good faith shall
be refunded for useful expenses with the right of retention until
reimbursed. Article 547 provides that only a possessor in good
faith may remove useful improvements if the can be done without
damage to the principal thing and if the person who recovers the
possession does not exercise the option of reimbursing the useful
expenses. Thus, the right given to a possessor in bad faith to
remove improvements applies only to improvements for pure
luxury or mere pleasure, provided the thing suffers no injury
thereby and the lawful possessor does not prefer to retain them
by paying the value they have at the time he enters into
possession..