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FIRST DIVISION

G.R. No. 123713 April 1, 1998

HEIRS OF LEOPOLDO VENCILAO, SR., represented by their Administrator ELPIDIO VENCILAO, petitioners,
vs.
COURT OF APPEALS, SPOUSES SABAS and RUPERTA GEPALAGO, and DOMICIANO GEPALAGO, respondents.

BELLOSILLO, J.:

Between two (2) sets of claimants of real property those claiming ownership by acquisitive prescription, and those asserting ownership on the
basis of a deed of sale recorded in the certificate of title of the vendor as mortgagee and highest bidder in a foreclosure sale who has a better
right?

On 12 February 1990 the heirs of Leopoldo Vencilao Sr., represented by their Administrator Elpidio Vencilao, filed with the Regional Trial Court of
Bohol a complaint for quieting of title, recovery of possession and/or ownership, accounting and damages with prayer for the issuance of writs of
preliminary prohibitory and mandatory injunction against the spouses Sabas and Ruperta Gepalago. 1 The complaint was subsequently amended to
include an action for reconveyance and cancellation of title and to implead defendant Domiciano Gepalago. 2

The heirs of Leopoldo Vencilao Sr. alleged that they were the absolute owners of a parcel of land situated in Cambansag, San Isidro, Bohol, with an
area of 3,625 square meters having inherited the same from their father, Leopoldo Vencilao Sr., who during his lifetime was in peaceful, open,
notorious and uninterrupted possession and enjoyment of the property in the concept of owner, declared the property for taxation purposes under
Tax Declaration No. 37C6-344 and religiously paid the real estate taxes. He likewise had the property consistently declared as his own in other
documents, e.g., those relevant to the 1987 Comprehensive Agrarian Reform Program (CARP). After his death, his heirs continued to possess and
enjoy the property.

The Gepalago spouses, on the other hand, denied all the material allegations in the complaint and claimed that they were the registered owners of
a 5,970-square meter property located in Candungao Calapo, San Isidro, Bohol, and covered by TCT No. 16042, previously a portion of a 1,401,570
square-meter land originally owned by a certain Pedro Luspo. The entire parcel of land was mortgaged by Pedro Luspo to the Philippine National
Bank (PNB) as security for a loan. Since Luspo failed to pay the obligation upon maturity the mortgage was foreclosed. Thereafter PNB, the highest
bidder in the foreclosure sale, conveyed the whole property to fifty-six (56) vendees among whom were the spouses Sabas and Ruperta Gepalago
who acquired the 5,970 square-meter portion thereof. Since then, they had been the owner and possessor of the land until they donated the same
in 1988 to their son Domiciano Gepalago.

The trial court appointed a commissioner to survey the litigated property and determine the areas claimed by both parties. The commissioner
reported that the area claimed by the Vencilaos was included in the titled property of the Gepalagos. On the basis of the commissioner's report and
the other pieces of evidence presented by the parties, the trial court found the following: (a) The property claimed by the Gepalagos consisted of
5,970 square meters, while that of the Vencilaos covered an area of 22,401.58 square meters as indicated in the survey plan submitted by Engr.
Jesus H. Sarmiento, the court appointed commissioner; (b) Insofar as the survey plan and report submitted by Engr. Sarmiento were concerned,
these indubitably established the fact that the Vencilaos owned the excess area of 16,431.58 square meters which was clearly outside the area
claimed by the Gepalagos; (c) The lot in question had been titled to defendant Sabas Gepalago and subsequently titled to his son, defendant
Domiciano Gepalago, under Transfer Certificate of Title No. 18621 by virtue of a deed of donation executed on 25 October 1988 by Sabas Gepalago
in favor of Domiciano Gepalago; and, (d) As stated in the commissioner's report, "If the titled lot of Domiciano Gepalago is plotted in accordance
with the technical description appearing in the title, it will be relocated to more than 219 kilometers eastward away from its supposed actual
location. This amounts to its non-existence." 3

The trial court then ruled in favor of the Vencilaos holding that they had been in possession, cultivation and enjoyment of the litigated property for
more than thirty (30) years and that the improvements therein were introduced by them long before any title was ever issued to the Gepalagos.
The lower court added that there was ample evidence showing that the Gepalagos knew when they bought the property from PNB that the land
had long been possessed and enjoyed in the concept of owners by the Vencilaos. Thus, while under ordinary circumstances a certificate of title is
indefeasible, it is not so when a person with prior knowledge of the ownership and possession of the land by another obtains title to it.

The Gepalagos appealed the decision of the trial court. After due consideration, the Court of Appeals reversed the trial court and declared the
Gepalagos owners of the disputed property

Evidently, defendant-appellants spouses Gepalago were purchasers in good faith and for value. They acquired their share in the property
from the Philippine National Bank (PNB) which was the registered owner. Even assuming they had knowledge of the plaintiff-appellee'
possession of the said property at the time of the purchase, it was PNB which was the registered owner of the property. The title was
transferred to the bank after the foreclosure sale of the property mortgaged by the previous registered owner, Pedro Luspo. Thus where
the certificate of title is in the name of the vendor when the land is sold, the vendee for value has the right to rely on what appears on
the certificate of title. The rule that all persons dealing with property covered by Torrens Certificate of Title are not required to go beyond
what appears on the face of the title is well-settled.

Granting that plaintiff-appellees were possessors of the property for a long time, they never raised objections to the transactions
affecting the land. There was no action made or any protest recorded with the Register of Deeds.

Defendant-appellants' claim of ownership was evidenced by certificates of title issued in their names. A Torrens Certificate of Title is the
best evidence of ownership of a registered land. As against the allegations of plaintiff-appellees, defendants-appellants are the ones
entitled to the property. Defendants-appellant' ownership of the property was evidenced by a certificate of title while plaintiff-appellees
relied merely on tax declaration. Torrens title is generally a conclusive evidence of the ownership of the land referred to therein.
Defendant-appellants acquired the land in a foreclosure sale and there was no evidence to show that plaintiff-appellees were defrauded
when the property was mortgaged and then sold . . . . 4

The motion for reconsideration by the Vencilaos having been denied 5 they filed the instant petition for review.

In awarding the disputed land to petitioners, the trial court erroneously found that petitioners had been in possession and enjoyment of the
property for more than thirty (30) years. It should be noted that the land in dispute is a registered land placed under the operation of the Torrens
system way back in 1959, or more than thirty (30) years before petitioners instituted the present action in the court a quo, and for which Original
Certificate of Title No. 400 was issued. 6 The rule is well-settled that prescription does not run against registered land. Thus, under Sec. 47 of PD
1529, otherwise known as the Property Registration Decree, it is specifically provided that "no title to registered land in derogation of that of the
registered owner shall be acquired by prescription or adverse possession." A title, once registered, cannot be defeated even by adverse, open and
notorious possession. The certificate of title issued is an absolute and indefeasible evidence of ownership of the property in favor of the person
whose name appears therein. It is binding and conclusive upon the whole world. 7 All persons must take notice and no one can plead ignorance of
the registration. 8

Neither can the tax declarations and tax receipts presented by petitioners as evidence of ownership prevail over respondents' certificate of title
which, to reiterate, is an incontrovertible proof of ownership. It should be stressed that tax declarations and receipts do not by themselves
conclusively prove title to the land. 9 They only constitute positive and strong indication that the taxpayer concerned has made a claim either to the
title or to the possession of the property for which taxes have been paid. 10 Stated differently, tax declarations and tax receipts are only prima
facie evidence of ownership or possession.

But assuming ex gratia argumenti that petitioners had indeed acquired the land they were claiming by prescription, there likewise exists a serious
doubt on the precise identity of the disputed property. What petitioners claimed in their complaint was a parcel of land located in Cambansag, San
Isidro, Bohol, with an area of 3,625 square meters. 11 This clearly differs from the piece of land registered in the name of the Gepalagos, which is Lot
No. A-73 of the Subdivision Plan (LRC) Psd-60558, LRC Rec. No. H-4251, and located in Candungao Calapo, San Isidro, Bohol, with an area of 5,970
square meters. 12Even the commissioner's report failed to clarify the difference in the area and location of the property claimed. In order that an
action to recover ownership of real property may prosper, the person who claims that he has a better right to it must prove not only his ownership
of the same but also satisfactorily prove the identity thereof. 13

As a general rule, where the certificate of title is in the name of the vendor when the land is sold, the vendee for value has the right to rely on what
appears on the face of the title. 14 He is under no obligation to look beyond the certificate and investigate the title of the vendor appearing on the
face of the certificate. By way of exception, the vendee is required to make the necessary inquiries if there is anything in the certificate of title
which indicates any cloud or vice in the ownership of the property. 15 Otherwise, his mere refusal to believe that such defect exists, or his willful
closing of his eyes to the possibility of the existence of a defect in his vendor's title, will not make him an innocent purchaser for value if it
afterwards develops that the title was in fact defective, and it appears that he had such notice of the 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 a like situation. 16

Petitioners maintain that it is the exception, not the general rule, which should be applied in this case. They argue that respondents had knowledge
of prior possession and enjoyment by petitioners when they purchased the property. Thus, they were not innocent purchasers for value and could
not invoke the indefeasibility of their title.

We do not agree. The exception contemplates a situation wherein there exists a flaw in the title of the vendor and the vendee has knowledge or at
least ought to have known of such flaw at the time he acquired the property, in which case, he is not considered as an innocent purchaser for
value. In the instant case, we discern nothing from the records showing that the title of PNB, the vendor, was flawed. Petitioners not only failed to
substantiate their claim of acquisitive prescription as basis of ownership but they also failed to allege, and much less adduce, any evidence that
there was a defect in the title of PNB. In the absence of such evidence, the presumption leans towards the validity of the vendor's title.

Therefore, inasmuch as there was no flaw in the title of PNB, private respondents rightly believed that they could and did acquire likewise a
flawless title. Indeed, as a result of the deed of conveyance between PNB and private respondents, there was transmission of ownership and the
latter stepped into the shoes of the former hence entitled to all the defenses available to PNB, including those arising from the acquisition of the
property in good faith and for value.

Finally, another consideration that militates heavily against the present petition is the unusual silence of petitioners while the ownership of the
disputed land transferred from one person to another. There were at least three (3) transactions on record involving the property: first, the
contract of mortgage between Luspo and PNB whereby the property was used as security for the loan contracted by Luspo; second, the foreclosure
of mortgage upon the failure of Luspo to pay the loan and the subsequent sale of the property at public auction; and, third, the sale of the property
to fifty-six (56) vendees, among whom were the Gepalago spouses. Each of these transactions was registered and a corresponding transfer
certificate issued in favor of the new owner. Yet in all these, petitioners never instituted any action contesting the same nor registered any
objection thereto; instead, they remained silent. Thus, they are now estopped from denying the title of the present owner. Having failed to assert
their rights, if any, over the property warrants the presumption that they have either abandoned them or declined to assert them. Or, it could
likewise be inferred therefrom that petitioners themselves were not convinced in the validity of their claim.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals of 31 July 1995 as well as its Resolution of 14 December 1995 denying
reconsideration is AFFIRMED. Costs against petitioners.

SO ORDERED.

Davide, Jr., Vitug, Panganiban and Quisumbing, JJ., concur.


SECOND DIVISION
G.R. No. 138939 December 6, 2006
MR. and MRS. ALEJANDRO PANG-ODEN, petitioners, vs. ISABEL LEONEN, CATALINA G. LEONEN, CAYETANO LEONEN, MANUEL LEONEN, ANGEL
LEONEN, MARIA LEONEN, HERMINIA LEONEN, TERESITA L. ACOSTA, and FRANCISCO LEONEN, respondents.
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioner-spouses Alejandro Pang-oden and Saturnina Pang-oden assail and seek to
set aside the decision1 dated June 8, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 54494, as reiterated in its Resolution2 of January 7, 1999,
denying the petitioners' motion for reconsideration.

The assailed decision affirmed an earlier decision3 of the Regional Trial Court (RTC) of Balaoan, La Union, Branch 34, in Civil Case No 440, an action
for Recovery of Possession Based on Ownership, thereat commenced by the herein respondents against the petitioners.

Basically, the case involves a boundary dispute between petitioners and respondents. Both claim ownership of a strip of land consisting of 1,336.5
square meters.

The facts:
Petitioners and respondents are the owners of two (2) adjoining parcels of land located at Sudipen, La Union. Petitioners' land is at the eastern
portion while that of the respondents is at the western side. The two properties have a common boundary: a creek which ran from south to north,
such that petitioners' property was bounded by said creek on the west, while that of respondents was bounded by the same creek on the east.

Due to constant heavy rains and flood, water from the creek overflowed and destroyed the irrigation canal located at the north of the property in
dispute. In order to minimize the damage to the irrigation canal, the National Irrigation Administration (NIA) diverted the course of the creek so
rain water will not go directly to the irrigation canal. As a result, the course of the creek which originally ran from south to north and which used to
separate the respective properties of the parties was instead diverted to run from south to northwest, passing through the middle portion of the
respondents' property and resulting to the formation of a new creek. Consequently, the NIA asked the permission of Manuel Leonen, one of the
herein respondents, to allow it to use the new creek as an irrigation canal. Manuel Leonen consented. The portion segregated by the new creek,
consisting of 1,336.5 square meters, is the strip of land subject of this controversy.

According to the respondents, the property in question forms part of a bigger parcel of land with an area of 5,370 square meters declared in the
name of their father and predecessor-in-interest, Dionisio Leonen, under Tax Declaration No. 6473. For more than 50 years, they have been in
quiet, peaceful, adverse and uninterrupted possession of the disputed property. Sometime in 1976, however, Manuel Leonen saw the carabao of
petitioner Alejandro Pang-oden devouring the Leonens' sugar cane crops planted on the property in question. It was then that Manuel Leonen
discovered that petitioners had encroached on the 1,336.5-square meter portion of their property and had in fact occupied the same. Respondents
brought the matter before the local barangay authorities but Alejandro Pang-oden refused to surrender possession of said portion claiming that he
is the lawful owner thereof.

On September 25, 1992, after repeated demands to vacate the subject strip of land remained unheeded, the respondents filed a complaint
for Recovery of Possession Based on Ownership against the spouses Alejandro and Saturnina Pang-oden before the RTC of Balaoan, La Union,
thereat docketed as Civil Case No. 440.

In their Answer with Counterclaim, the spouses Alejandro and Saturnina Pang-oden claimed that the 1,336.5-square meter strip of land in question
was part of a bigger property with an area of 12,674-square meters originally owned by Alejandro's mother, Sotera Apusen, under Tax Declaration
No. 4506. They also averred that it was around the year 1950 when Manuel Leonen started cultivating the subject strip of land and planted crops
thereon, but only upon the mere tolerance of Alejandro's mother.

On November 23, 1995, the RTC rendered judgment for the respondents as plaintiffs thereat, adjudging the latter to be the lawful and exclusive
owners of the property in question, and ordering the spouses Pang-oden to vacate the same and pay the respondents the amount of P1,000.00
representing the yearly harvest of the land; P10,000.00 as attorney's fees; P10,000.00 as moral damages; and P5,000.00 as litigation expenses.

From the adverse decision of the trial court, the spouses went on appeal to the CA in CA G.R. CV No. 54494. On June 8, 1998, the CA came out with
its herein challenged decision affirming that of the trial court, minus the award of P1,000.00 for the yearly harvest of the land, thus:

WHEREFORE, the appealed Decision is AFFIRMED with the MODIFICATION that the order to pay xxx the amount of P1,000.00
representing the yearly harvest of the land from 1989 up to the time ownership and possession is finally restored is SET ASIDE.
Costs against defendants-appellants.

SO ORDERED.

Partly says the CA in its decision:


Based on the evidence submitted by plaintiffs-appellees [herein respondents], it was established that there was indeed an old creek that
used to separate the properties of plaintiffs-appellees and the defendants-appellants [herein petitioners] which originally ran from south
to north. It has likewise been established by overwhelming evidence that a new creek was later created that now runs from south to
northwest and thus cuts through plaintiffs-appellees' property.
xxx xxx xxx
These witnesses are, as aptly noted by the trial court, "disinterested witnesses testifying to a fact of public knowledge that there was an
original creek in the eastern boundary of the property of Dionisio Leonen." Their testimonies were properly found to be credible as they
were consistent with the cadastral survey and the survey plan submitted by plaintiffs-appellees.
xxx xxx xxx
xxx. And by the creation of the new creek that cuts through the property of plaintiffs-appellees, defendants-appellants cannot claim
ownership of the segregated portion (subject of this case) because as far as their property is concerned, the parcel of land left by Sotera
Apusen remains bounded on the west by the old creek and cannot extend to the portion segregated by the new creek. (Words in
brackets added).4
Their motion for reconsideration having been denied by the appellate court in its Resolution of January 7, 1999, the spouses Pang-oden are now
with this Court via the instant recourse, contending that the CA gravely erred:
I
XXX IN AWARDING THE OWNERSHIP OF THE PROPERTY IN SUIT (1,336.5 SQ. M. IN AREA) LOCATED WITHIN SITIO PANGASAAN,
NAMALTUGAN, SUDIPEN, LA UNION, TO RESPONDENTS WHEN THEIR PROPERTY IS LOCATED AT SITIO BIMMODET, NAMALTUGAN,
SUDIPEN LA UNION.
II
XXX IN AFFIRMING THE AWARDS OF P10,000.00 AS ATTORNEY'S FEES, P10,000.00 AS MORAL DAMAGES AND P5,000.00 AS LITIGATION
EXPENSES TO RESPONDENTS.
III
XXX IN NOT REVERSING THE DECISION OF THE TRIAL COURT SINCE RESPONDENTS' COMPLAINT LACKS THE REQUIRED QUANTUM OF
PROOF AND THE TESTIMONY OF THEIR WITNESSES ARE NOT IN HARMONY WITH THE STATE OF AFFAIRS IN THE LOCALITY. 5
We DENY.
In the main, the only issue to be resolved is: who, as between the petitioners and the respondents, own the strip of land subject of the suit.

Petitioners contend that no new creek was created and that the present creek is the same creek which bounds their property on the west, thus
making them the owners of the property in question. Likewise, the petitioners argue that both the trial and appellate courts should have relied on
the boundaries and exact location of the subject property. Finally, they fault the CA for giving credence to the conflicting testimonies of the
respondents' witnesses.

In assailing the appellate court's decision, petitioners impute errors which basically involve questions of fact and the appreciation of evidence by
the two courts below. This case furnishes another occasion for us to reiterate the settled principle that this Court's jurisdiction in a petition for
review under Rule 45 is limited to reviewing and correcting only errors of law, not of fact, the only power of the Court being to determine if the
legal conclusions drawn from the findings of fact are correct.6 Absent any showing that the findings complained of are totally devoid of support
from the evidence on record, or that the judgment itself is based on misapprehension of facts, such findings must stand. The Court is not expected
or required to examine or refute the oral and documentary evidence submitted by the parties.7 The Court finds no reason to depart from this
settled rule, it appearing that the findings of fact by the courts a quo are fully substantiated by the evidence extant on record. Likewise, the Court
has consistently ruled that the findings of fact by the CA, especially if such findings, as here, are affirmatory of those of the trial court, will not be
disturbed on appeal.8

The CA and the trial court relied on the testimonies of two (2) disinterested witnesses: Gregorio Libao, a retired employee of the NIA, and Anacleto
Dicta-an, a resident of Sudipen, La Union. Both testified as to the existence of an old creek which served as the common boundary of the respective
properties of the parties, and of the subsequent diversion of the creek to its present position which now cuts through the middle portion of the
respondents' property. Petitioners insist, however, that their testimonies are replete with inconsistencies and contradictions which render said
testimonies unworthy of belief. The Court disagrees. The two courts below both found their testimonies credible. Matters of credibility of
witnesses are best addressed to the sound judgment of the trial court, and this Court generally defers to the trial court's assessment because it has
the singular opportunity to observe the demeanor of witnesses and their manner of testifying.9 Besides, as correctly pointed out by the CA, the
inconsistencies cited by the petitioners refer to minor and collateral matters which do not affect the credibility of said witnesses.

For sure, the witnesses' testimonies were amply supported by the report and sketch plan prepared by the court-appointed commissioner, which
revealed the existence of an old creek running from south to north, and the creation of a new creek from south to northwest. The same sketch plan
showed that the location of the house of Sotera Apusen, mother of petitioner Alejandro Pang-oden, was bounded on the west by the old creek,
which creek bounds the lot of Dionisio Leonen on the east. This bolsters the fact that there was indeed an old creek which used to separate the
respective properties of the herein parties.

Worth mentioning is the provision of Article 434 of the Civil Code which ordains that "in an action to recover, the property must be identified, and
the plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim." Hence, in order that an action for the recovery
of property may prosper, it is indispensable that the party who prosecutes it must fully prove, not only his ownership of the thing claimed, but also
the identity of the same.10As we see it, the evidence presented in this case showed that the property subject of the dispute rightfully belongs to the
respondents, as it was established that the same is part of the parcel of land declared under the name of respondents' predecessor-in-interest,
Dionisio Leonen. Indeed, the verification survey of the contested property conducted by Juvenal Quitoriano, a geodetic engineer, revealed that it
was in the name of Dionisio Leonen. Too, the identity of the disputed strip of land has been proven in a conclusive manner as its location
corresponds with those given by the witnesses and the record of the ocular inspection. The cadastral survey of the property clearly identifies and
delineates the extent of the subject land. As the petitioners failed to substantiate their claim that the present creek is still the same creek which
bounds their property on the west, the respondents have the right to recover possession of the disputed strip of land.

In sum, the evidence on record clearly establish that there used to be an old creek originally running from south to north and separating the
property of the petitioners from that of the respondents. Then, due to expediency and necessity of protecting the irrigation canal in the area, the
course of that creek was subsequently diverted to run from south to northwest, cutting through the property of the respondents. Hence, the
portion segregated (the subject property) from respondents' land as a result of such diversion continues to be their property and they shall retain
ownership of the same.

We are, however, with the petitioners in their challenge as regards the trial court's award of moral damages, attorney's fees and expenses of
litigation, as affirmed by the CA. As it is, the trial court erred in this respect, as it did not disclose in the body of its decision the factual basis for such
awards. Whenever such awards are made, the court must explicitly state in the body of its decision, and not merely in its dispositive portion, the
legal reason for the award.11 Here, the trial court made the award only in the dispositive portion of its decision without stating the basis therefor in
the body thereof. The power of courts to grant damages and attorney's fees demands factual, legal and equitable justification; its basis cannot be
left to speculation or conjecture.12

WHEREFORE, the instant petition is DENIED and the assailed CA decision dated June 8, 1998 is AFFIRMED, with the MODIFICATION that the award
of moral damages, attorney's fees and litigation expenses is DELETED.

Costs against the petitioners. SO ORDERED.


THIRD DIVISION

G.R. No. 142546 August 9, 2001

HEIRS OF ANASTACIO FABELA, namely; Teodula Fabela Paguidopon, Ricardo Fabela, Irenita Fabela Zea(d), Carolina Fabela Arazo Donglas, and
Ampiloquio Fabela, petitioners,
vs.
HON. COURT OF APPEALS, HEIRS OF ROQUE NERI, namely: Roque Neri, Jr. Filomeno, Sherlina, Emeterio, Antonio, Nelcar and Claudia, all
surnamed Neri, respondents.

GONZAGA-REYES, J.:
Petitioners, heirs of Anastacio Fabela, seek to annul the (1) decision of the respondent Court of Appeals dated June 17, 1999 1 which reversed and
set aside the appealed judgment by default of the Regional Trial Court of Misamis Oriental, Branch 18, Cagayan De Oro City2 in Civil Case No. 10459
declaring petitioners as the rightful owners of subject lot 868 of the Pls. 293 of Balacanas, Nabacaan, Villanueva, Misamis Oriental, and (2) its
resolution dated February 18,32000 denying petitioners' motion for reconsideration.
Sometime in December 1985, the heirs of Anastacio Fabela filed a complaint for reconveyance and damages against the heirs of Roque Neri, Sr.,
involving the subject lot 868, alleging among others, that plaintiffs' late grandfather, Anastacio Fabela, left two parcels of land in Nabacaan,
Misamis Oriental which were later identified as lot 868 with an area of 48,121 sq. meters and lot 870 consisting of 15,658 sq. meters which
originally formed part of their grandfather's big tract of land; that earlier in 1924, the parcel of land became the subject of litigation (Civil Case No.
2891) in the then Court of First Instance of Misamis Oriental between Carmelino Neri as plaintiff and Simeona Balhon and children heirs of
Anastacio Fabela as defendants and in connection therewith, the parties entered into an agreement embodied in an "Escritura de transaccion", a
notarized document in a Visayan dialect, which provided that Carmelino Neri, as vendee-a-retro had been entrusted with the possession of a parcel
of land for a period of fourteen (14) years from the date of the instrument which was May 10, 1924 and upon the expiration of said period,
Carmelino Neri was to restore the possession of the property to Simeona Balhon and her children-heirs of Anastacio Fabela, without need of
"redemption"; that sometime in 1977 or 1978, the Bureau of Lands conducted a cadastral survey on this land when a road (Barrio Abacan road)
was constructed across the land dividing it into two separate lots which are now known as lot 868 and 870; that Roque Neri Sr. declared these two
parcels of land in his name with the Bureau of Lands and the Assessor's office; that sometime in 1980, the Philippine Veterans Industrial
Development Corporation (PHIVIDEC), a government entity buying substantially all real properties at Nabacaan, Villanueva, Misamis Oriental,
negotiated with Roque Neri Sr. for the purchase of lot 870, however, the heirs of Anastacio Fabela, protested and consequently, Roque Neri Sr.
executed a waiver of rights over a portion of lot 870 stating that the 8,000 sq. meter portion of lot 870 was erroneously included in his name, thus
plaintiff heirs of Anastacio Fabela eventually received the proceeds of the sale; that with respect to lot 868, which was the lot in controversy, the
late Roque Neri Sr. continued to ignore plaintiffs' demand for the return of the said lot. Plaintiffs prayed for judgment declaring (1) the plan of lot
868, Pls-293 and the tax declarations issued subsequent to and by virtue of aforesaid plan as null and void, (2) the heirs of Anastacio Fabela as the
lawful owners of lot 868, and (3) the estate of Roque Neri Sr. liable for payment of damages.
Upon motion of plaintiffs heirs of Anastacio Fabela, defendants Sherlinda Neri Jamisolamin, Emeterio Neri and Antonio Neri, were declared in
default on April 14, 1986, Filomena Neri on September 26, 1986 while Nelchar and Claudia Neri on February 9, 1989, for their failure to file answer
despite receipt of summons and copy of the complaint. On the other hand, defendant Roque B. Neri, Jr. had filed his answer with Counterclaim, but
was likewise declared in default for failure to appear at pre-trial on August 12, 1988.
The case was submitted for decision on the basis of plaintiffs' evidence since all the defendants were declared in default. After trial and hearing ex-
parte, the trial court rendered judgment in favor of plaintiffs, the dispositive portion reads:4
"WHEREFORE, in view of the foregoing, judgment is rendered in favor of the heirs of the late Anastacio Fabela including those named in
the Complaint as plaintiffs, as co-owners of lot 868, Pls-293 subject of the complaint and as indicated in the plan (Exhibit D), as such
entitled to the full enjoyment and possession thereof. All other prayers or claims in the complaint are denied for lack of merit."
In finding that the property belonged to the heirs of Anastacio Fabela, the trial court concluded that in the "Escritura de Transaccion," Carmelino
Neri was obliged to restore the subject property in or about 1938 to the heirs of Anastacio Fabela; thus the fulfillment of that prestation of
Carmelino Neri was presumed under Section 5, par (ii), Rule 131, Rules of Court which enumerates among the disputable presumptions "that a
trustee or other person whose duty it was to convey real property to a particular person has actually conveyed it to him when such presumption is
necessary to perfect the title of such person or his successor-in interest." It thus found that the Fabela heirs have been in possession of lot 868
since 1938 up to the present and as such were entitled to the full enjoyment and possession as owners thereof.
On July 24, 1989, defendants heirs of Roque Neri Sr. filed a motion to set aside orders of default and judgment which the trial court denied in an
Order dated August 22, 1989, on the grounds that the motion had been filed out of time (after judgment) and that even if such motion would be
treated as a motion to set aside judgment/new trial under Section 1, Rule 37, Rules of Court, defendants' negligence was not excusable, much less
a mistake.5
Heirs of Roque Neri Sr. appealed to the respondent Court of Appeals. Considering, however, that the original records of the case from the trial
court had been lost or misplaced, the respondent court, pursuant to Rule 7 of the Revised Internal Rules of the Court of Appeals (RIRCA), set the
case for preliminary conference on December 17, 1998, which was reset to January 26, 1999, and the parties were informed of the loss of the
original records of the case. Counsel for defendants-appellants heirs of Roque Neri Sr. manifested her clients' willingness to submit the case for
decision, even without the original records and asked for thirty days to file memorandum, to which manifestation counsel for plaintiffs-appellees
heirs of Fabela interposed no objection. The respondent court granted appellants' prayer and gave plaintiffs-appellees twenty days to file their
counter memorandum and appellants ten (10) days to file reply memorandum, after which the case was submitted for decision.6
On June 17, 1999, the respondent Court of Appeals rendered its assailed decision reversing the trial court's judgment by default and dismissed the
complaint. It sustained the trial court's declaration of default against appellants heirs of Roque Neri, Sr. but found that the judgment of default was
contrary to the evidence or the law. It concluded that petitioners had not successfully adduced the required preponderance of evidence on their
claim of absolute ownership over lot 868, the court stated:7
"Art. 434 of the Civil Code states that "In an action to recover, the property must be identified, and the plaintiff must rely on the strength
of his title and not on the weakness of the defendant's claims. The possessor of the property has the presumption of title in his favor.
Hence, any person who claims that he has a better right to the property, as owner thereof, must prove (1) that he has a better title than
the defendant to the property, and (2) the identity of the property. The identity of the land sought to be recovered may be established
through the survey plan of the property. Ownership may be proved by any evidence admissible in law, such as titles and certificates, long
possession and tax declarations or receipts.
Appellees claimed that Lots 868 and 870 are owned by their grandfather Anastacio Fabela. The records of the Bureau of Lands, as well as
the survey plan presented in court, however, indicate Roque Neri, Sr. as the registered claimant of both lots. The original of the 'Escritura
de Transaccion' on which appellees relied heavily, was not presented in court. Its probative value, however, remains doubtful since said
document does not really prove appellees' absolute ownership of the subject property, nor was Lot 868 explicitly referred to as the
property being entrusted to the vendee-a-retro (Carmelino Neri).
On the other hand, the waiver of rights executed in 1980 by Roque Neri, Sr. appears to refer only to a portion of Lot 870 (the parcel of
land sold to PHIVIDEC), and not to Lot 868. The old tax declaration presented by appellees and which supposedly covered the two (2) lots
did not specify the lot number, nor was there any evidence presented that the original parcel of land actually consisted of eighteen (18)
hectares. Their allegation that both lots have already been partitioned among the heirs of Anastacio Fabela was not substantiated by any
document or writing evidencing such extra-judicial partition. The fourteen (14) years of the agreed temporary possession of the land by
the defendants-appellants had lapsed a long time ago, and this was prior to the 1971 public survey conducted by the Bureau of Lands. It
appears appellees did not exert diligent efforts to regain possession or resume paying taxes on the land thereafter, prior to the purchase
of Lot 870 by PHIVIDEC. The fact that appellees were the ones paid by PHIVIDEC for the portion of Lot 870 does not automatically lead to
the conclusion that they also absolutely own Lot 868. Most significant yet, is appellees' failure to adequately explain why they had not at
all registered their claim over the property with the Bureau of Lands during and after the public survey in the municipality.
Roque Neri, Sr., appellants' predecessor-in-interest, meanwhile registered his claim or interest on the land and declared it for taxation
purposes. Appellees' claim of possession was through the land's caretaker and administrator, Delfin Sia, but at the same time admitting
that appellants similarly benefit from the fruits of the land. Regarding tax declarations, it has been held that while tax declarations and
receipts are not conclusive evidence of ownership, yet, when coupled with proof of actual possession, they are strong evidence of
ownership. Thus, where it was shown that plaintiff has never paid the land tax, while the defendant has faithfully done so for many years,
there being no explanation offered, it was held that such payment of taxes should be taken into consideration in favor of defendant.
Being the exclusive possessors of the subject property who have declared the same for tax purposes through the years, defendants-
appellants are entitled to such favorable presumption of ownership which so far had not been overturned by plaintiffs-appellees.
The foregoing considered, it is clear that plaintiffs had not successfully proved by the required preponderance of evidence their claim of
absolute ownership of Lot 868. It is an invariable rule laid down in numerous decisions, that a person who claims the ownership of
property is in duty bound to clearly identify the land claimed, in accordance with the titles on which he founds (sic) his right to ownership,
and he shall not be permitted to rely upon the defects in defendant's title. Failure to prove his right of ownership will bar an action to
recover the property; his right to recover must be founded on positive title or right, and not merely on negative ones, such as the lack or
insufficiency of title on the part of the defendant. The possessor has a presumption of title, and unless the plaintiff proves he has a better
right, he cannot recover the property from the defendant."
Appellees' motion for reconsideration was denied in a resolution dated February 18, 2000.
Hence this petition for review on certiorari filed by the heirs of Anastacio Fabela alleging that the respondent court (1) departed from the stringent
jurisprudence on default and appeals filed out of time and (2) erred in the appreciation of the findings of fact of the lower court.
Anent the first assigned error, petitioners fault the respondent court for reversing the decision of the trial court despite its complete agreement
with the findings of the trial court that respondents were properly declared in default. They contend that the reasons cited by private respondents
for their failure to file answer and to appear at the pre-trial were not meritorious and that private respondents' affidavit attached to the motion for
reconsideration did not declare how Roque Neri Sr. acquired lot 868.
We are not persuaded.
Section 1, Rule 188 of the old Rules of Court which is the law applicable in the instant case provides:
"Judgment by default If the defendant fails to answer within the time specified in these rules, the court shall, upon motion of the
plaintiff and proof of such failure, declare the defendant in default. Thereupon, the court shall proceed to receive the plaintiff's evidence
and render judgment granting him such relief as the complaint and the facts proven may warrant. This provision applies where no answer
is made to a counterclaim, cross-claim, or third-party complaint within the period provided in this rule."
Favorable relief can be granted only after the court has ascertained that the evidence offered and the facts proven by the presenting party,
petitioners in this case, warrant the grant of the same. 9 In this sense, the law gives the defaulting parties some measure of protection because
plaintiffs, despite the default of defendants, are still required to substantiate their allegations in the complaint. The judgment of default against
defendants who have not appeared or filed their answers does not imply a waiver of all their rights, except their right to be heard and to present
evidence to support their allegations.10 Otherwise, it would be meaningless to require presentation of evidence if every time the other party is
declared in default, a decision would automatically be rendered in favor of the non-defaulting party and exactly according to the tenor of his
prayer.11 Since the trial court rendered a judgment of default against private respondents, the latter took the appropriate remedy which is an
ordinary appeal under Section 2 Rule 41, par (3)12 , of the Rules of Court providing in part as follow:
"A party who has been declared in default may likewise appeal from the judgment rendered against him as contrary to the evidence or to
the law, even if no petition for relief to set aside the order of default had been presented by him in accordance with Rule 38."
Thus, notwithstanding the respondent court's complete agreement with the trial court's findings that all the respondents were properly declared in
default, it found that the judgment by default was contrary to the evidence or the law and thus reversed the trial court decision.
Anent the second error, petitioners claim that the respondent court erred in concluding that petitioners' predecessor Roque Neri, Sr. appeared as
the registered claimant of lot 868 and 870 which was contrary to the findings of the trial court that the "plan showing lot 868 (Exh. D-2) and lot 870
(Exh. D-1) although appearing to have been approved by Jose F. Gatus, OIC, Regional Director, on July 17, 1986 does not on its face indicate for
whom it had been approved"; that Neri Sr. failed to produce evidence of ownership on how he acquired the subject Lot No. 868. They further claim
that the execution in their favor by Roque Neri Sr. of a waiver of right over lot 870 where the former acknowledged the erroneous inclusion of the
lot in his name was a strong admission against interest on Neri's part. They also contend that the respondent court erred in doubting the probative
value of the "Escritura de Transaccion" only for the reason that the original was not presented in court.
These arguments essentially raise factual issues which normally are not reviewable by this Court in a petition under Rule 45 which is generally
limited only to question of law.13 While certain exceptions to this rule are recognized such as when the factual findings of the respondent Court of
Appeals are at variance with those of the Regional Trial Court, the Court does not, in all cases of disagreement of facts between these two courts,
automatically delve into the record to determine the facts for itself.14 Admittedly, there have been instances when this Court made independent
findings of fact on the points that the trial court and the appellate court disagreed but we did not do so as a matter of course. When the dispute
between the two courts are merely on probative value, we limit our review of the evidence ascertaining if the findings of the Court of Appeals are
supported by the record. And, so long as the findings of the said court are consistent with, or not palpably contrary to, the evidence on record, we
decline to make a review on the probative value of the evidence.15 In the instant case, We find no cogent reason to disturb the factual findings of
the respondent court and its conclusion that petitioners failed to establish their case by preponderance of evidence.
The invariable applicable rule is to the effect that in order to maintain an action for recovery of ownership, the person who claims that he has a
better right to the property must prove not only his ownership of the property claimed but also the identity thereof. 16 The party who desires to
recover must fix the identity of the land claimed by describing the location, area and boundaries thereof.17
In the instant case, petitioners based their claim of ownership on the "1924 Escritura de Transaccion", the original copy of which was not presented
in the trial court, while the photocopy was also lost when the original records were elevated to the respondent court. This was the only piece of
evidence that would establish petitioners' ownership and the identity of subject lot 868. In ruling for petitioners heirs of Anastacio Fabela as the
absolute owners of lot 868, the trial court found that in the Escritura, "it appears that the portion which is now identified as lot 868 had been
entrusted to the possession of Carmelino Neri, as vendee-a retro, for a period of 14 years from the date of the instrument which was May 10, 1924
and upon the expiration of which said Carmelino Neri was to restore the possession of the property to Simeona Balhon and her children heirs of
Anastacio Fabela, namely Petra Buenaventura, Julio and Pedro, all surnamed Fabela, without need of 'redemption'," and "that fulfillment of Neri's
obligation was presumed to have taken place." We note, however, that nowhere in the trial court's narration of facts were the boundaries of the
parcel of land indicated with particularity, nor the parcel of land referring to as lot 868. What really defines a piece of land is not the area
mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits.18
Moreover, the testimony of petitioner heir Teodula Fabela Paguidopon which was quoted in part in petitioners' own memorandum 19 did not also
clearly establish the relation of the said "Escritura de Transaccion" to lot 868, to wit:
"Q: Now, that bigger lot has the cadastral lot number before?
A: No because that was not yet surveyed.
Q: Do you know who owns this lot?
A: Our grandfather Anastacio Fabela.
Q: Now while it was still in the hands of Anastacio Fabela while he was still alive, do you know what was the total area of the mother
lot?
A: Yes, it was estimated by our father and we estimated it to be 18 hectares.
Q: Do you have evidence to prove that it was indeed 18 hectares?
A: Yes, ma'am.
Q: I am showing to you an old document but only a xerox copy thereof entitled escritura de transaccion notarized by Uldarico Akut in
the year 1924, kindly take a look and see where is the 18 hectares which you have just mentioned?
A: This one.
xxx xxx xxx
ATTY. LLEGO:
"x x x We will have this marked as our Exhibits A, A-1 to A-3."
xxx xxx xxx
(TSN of 2/9/89 pages 16 to 18 (topmost)
COURT:
Plaintiff is ordered to prepare the English translation of that document.
xxx xxx xxx
(TSN of 2/9/89 page 18)
"ATTY. LLEGO: (continuing)
Q: You have pointed this portion as your basis for saying that the area is 18 hectares. Now kindly read this paragraph on the
description of the land for purposes of record. (witness is ready (sic)
Which, we pray that that portion being read into the record by witness be marked as our Exhibit A-4.
COURT:
Mark it. (page 18 bottom to page 19 middle portion of the page)."
Unfortunately, the description of the eighteen (18) hectare land which should had been read and incorporated into the transcript for purposes of
record, was omitted in the quoted portion, to establish the exact location, area and boundary of the 18 hectare lot in relation to lot 868. The
omission has created serious doubts as to the specific identity of the lot which petitioners sought to recover. Moreover, even in the petitioners'
complaint filed before the trial court, there was no allegation of the metes and bounds of the subject lot, the complaint reads:
"3) a. That the grandfather of plaintiffs-the late Anastacio Fabela, had left among others, the following property, to wit:
a) Lot 870
Area: 15,658 sq. m.
Location: Nabacaan, Misamis Oriental
b) Lot 868
Area: 48,121 sq. m.
Location: Nabacaan, Misamis Oriental
b. That the above described parcels of land are adjacent to each other as shown by a photocopy of the sketch plan from the Bureau of
Lands hereto enclosed and marked as Annex "B";
c. That these two parcels since time immemorial used to be one big parcel of land, until in 1977 or 1978, when a government cadastral
survey in Villanueva, Misamis Oriental, was undertaken by the Bureau of Lands, wherein a road was provided and made to appear across
the big parcel of land, causing it to be divided physically and for which the government surveyors assigned two lots numbers for what
used to be one big parcel of land, thus the appearance of Lot 870 and Lot 868; This once one big chunk of land never had a cadastral
number in the past;"
Notably, the total area of lots 868 and 870 would only be about 63,679 sq. meters or about six (6) hectares which fails to correspond to the
eighteen (18) hectare parcel of land allegedly owned by the late Anastacio Fabela which was the subject of the "Escritura de Transaccion" and
testified to by Teodula Fabela Paguidopon. Petitioners failed to identify the land with that degree of certainty required to support their affirmative
allegation of ownership.
Moreover, the respondent court found, and we agree, that the waiver of rights executed in 1980 by Roque Neri Sr., in favor of petitioners referred
only to a portion of lot 870 and not to lot 868. Thus such waiver which petitioners capitalized on as an admission against Neri's interest did not in
any way support petitioners' claim of ownership of lot 868. Said waiver reads:20
"ACKNOWLEDGMENT OF ADJUDICATION AND QUITCLAIM
KNOW ALL MEN BY THESE PRESENTS:
That I, Roque Neri, Sr., of legal age, widower, Filipino, with residence and postal address at Villanueva, Misamis Oriental, Philippines, do
hereby ACKNOWLEDGE AND CONFIRM that the certain portion of a parcel of land located at Balacanas, Villanueva, Misamis Oriental
under Lot No. 870 of Pls. 923 of Villanueva Public Land. Subdivision containing a total area of SIXTEEN THOUSAND SQUARE METERS
(16,000 sq. m.) which portion is more particularly described as follows:
North Roque Neri, Sr.
East Nabacaan Road
West Tayum Creek
South Lot 869
containing an area of EIGHT THOUSAND SQUARE METERS (8,000 sq. m.) is hereby adjudicated in favor of the Heirs of Anastacio Fabela.
That the above described portion of a parcel of land actually belongs and owned by said Heirs of Anastacio Fabela.
That the above described portion of land was erroneously included in the land survey conducted by the Bureau of Lands in my name.
That I hereby quitclaim and renounce whatever interest, rights and participation I have over the described portion of real property of
which the Heirs of Anastacio Fabela were the lawful owners.
In witness whereof, I have hereunto set my hand this 18th day of August 1980 in Villanueva, Misamis Oriental, Philippines.

SGD. ILLEGIBLE
T/ROQUE NERI, SR."

A simple reading of the instrument would readily show that only 8,000 sq. meters of the entire 16,000 sq. meters included in lot 870 was
adjudicated in favor of the heirs of Anastacio Fabela as belonging to them. In fact, petitioners in their memorandum admitted that only 8,000 sq.
meters was given to them and yet they did not take any positive action to assert their ownership of the entire lot 870. Petitioners have accordingly
no sound basis to claim lot 868 by virtue of such instrument. As the appellate court succinctly stated, "the fact that appellees were the ones paid by
PHIVIDEC for the portion of lot 870 does not automatically lead to the conclusion that they also absolutely own lot 868. Most significantly, is
appellees failure to adequately explain why they had not at all registered their claim over the property with the Bureau of Lands during and after
the public survey in the municipality." Finally, petitioners also failed to allege much less establish that they are in possession of the subject lot.
On the other hand, the respondent court found, and this finding was not refuted, that petitioners' own witness, Norberto Dumat-ol, a
representative of the Bureau of Lands, testified that when a cadastral survey was conducted in 1971, the registered claimant of lot 868 based on
their official record was Roque Neri Sr. Petitioners' allegation that Neri Sr., committed fraud in the registration in his name of these two (2) parcels
of lot was not substantiated. The survey plan for lot 868 was approved for Roque Neri Sr. and he had also declared lot 868 for taxation purposes
which was admitted by petitioners as their complaint prayed for the annulment of the plan and tax declaration. Although a tax declaration is not
considered as conclusive proof of ownership the same is admissible in evidence to show the nature of the possession of the claimant of the
property for which taxes have been paid. We accordingly find well-taken the respondent court's conclusion as follows:
"Thus, where it was shown that plaintiff has never paid the land tax, while the defendant has faithfully done so for many years, there
being no explanation offered, it was held that such payment of taxes should be taken into consideration in favor of defendant. Being the
exclusive possessors of the subject property who have declared the same for tax purposes through the years, defendants-appellants are
entitled to such favorable presumption of ownership which so far had not been overturned by plaintiffs-appellees."
In civil cases, the burden of proof is on the plaintiff to establish his case by preponderance of evidence.21 If he claims a right granted or created by
law, he must prove his claim by competent evidence. He must rely on the strength of his own evidence and not upon the weakness of that of his
opponent.22 When the record does not show that the land which is the subject matter of the action for recovery of ownership has been exactly
determined, such action cannot prosper, inasmuch as the petitioners' ownership rights in the land claimed do not appear satisfactorily and
conclusively proven at the trial.23
WHEREFORE, the petition is DENIED and the decision of the respondent Court of Appeals is AFFIRMED.
SO ORDERED.
Melo, Vitug and Panganiban, JJ ., concur.
Sandoval-Gutierrez, J ., is on leave.
SECOND DIVISION
G.R. No. 143491 December 6, 2006
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
EFREN M. CARRASCO, respondent.
GARCIA, J.:
Petitioner Republic of the Philippines, thru this petition for review on certiorari under Rule 45 of the Rules of Court, seeks to annul and set aside
the Decision1 dated June 14, 2000 of the Court of Appeals (CA) in CA-G.R. CV No. 59566, affirming in toto an earlier decision2 of the Regional Trial
Court (RTC) of Morong, Rizal, Branch 80, which ordered the registration in the name of herein respondent Efren C. Carrasco of a parcel of land
situated at Tandang Kutyo, Sampaloc, Tanay, Rizal.
The factual antecedents:
On October 1, 1996, in the RTC of Morong, Rizal, respondent Efren M. Carrasco filed an application for registration of title over a 17,637-square
meter land situated at Sitio Ulang Tubig, Tandang Kutyo, Sampaloc, Tanay, Province of Rizal.
In his application, docketed as Land Registration Case (LRC) No. 215-T and raffled to Branch 80 of the court, respondent alleged that he is the
owner in fee simple of the land sought to be registered; that said land is alienable and disposable and not within any military or whatever kind of
reservation; that to the best of his knowledge, the land has never been mortgaged or encumbered or that any person has any interest thereon,
legal or equitable; and that the subject land is declared for taxation purposes in his name. Among the documents attached to the application were
the individual plan and technical description of the land; Diazo polyester film (SEPIA) of the original survey subdivision plan SGS-No. 04-000518-D of
which the subject land is a part; respondent's Affidavit of Ownership dated August 22, 1996, therein stating that he took possession of the land in
1990 from his predecessor, Norberto Mingao, who has occupied the land for the last 25 years; the latter's Deed of Waiver dated December 16,
1991, thereunder waiving his claim over the land in favor of the respondent; a Certification from the Land Registration Authority as to the status of
the land; Tax Declaration No. 017-4224 for the year 1996 in respondent's name; and an official receipt dated September 13, 1996 of realty tax
payment.
Petitioner Republic, through the Office of the Solicitor General (OSG), filed an opposition to the application. There being no private oppositor, the
trial court issued an order of general default on November 10, 1997 and proceeded on the same day with the markings of the respondent's
documents and the reception ex parte of his evidence.
Thereafter, or on November 26, 1997, the respondent testified in support of his application. He likewise adduced the testimony of one Teosito
Avesado. Hereunder is the trial court's summation of respondent's testimonial evidence:
Petitioner Efren Carrasco testified on November 26, 1997 that he is single, 24 years of age, a farmer and residing at Tanay, Rizal, a
Filipino; that he owned a parcel of land located at Sitio Ulang Tubig, Barangay Tandang Kutyo, Tanay, Rizal with an area of 17,637 sq.
meters; that the said land has not been the subject of Original Registration of Title as amended by PD 1529; that he acquired the said land
from Norberto Mingao as his compensation for having worked with him and his acquisition as evidenced by a Waiver executed by
Norberto Mingao in favor of petitioner on December 16, 1991 which he caused to be marked Exhibit "E;" that he also produced and
showed to the Court as proof of his ownership to the land an original survey subdivision plan No. SGS-04-000518-0, which he caused to
be marked Exhibit "F" and the particular Lot No. 16 on the map as Exhibit "F-1;" that he caused the survey of the property by a duly
licensed Geodetic Engineer in the person of Engineer Modesto Allado who prepared the technical descriptions of the property now
marked Exhibit "G" and issued a surveyors certificate which was marked Exhibit "H;" that the land sought to be registered was declared
for taxation purposes as shown in Tax Declaration No. 017-4224 in the name of Efren Carrasco which was marked Exhibit "I;" that the
taxes for the said property was paid under Official Receipt No. 215109 dated September 13, 1996 marked Exhibit "J;" that the boundary
owners of his property sought to be registered are: on the East, Miguel Taclas, on the North, Maximo Mondragon, on the South, Allan
Alcantara and on the West, Jesus Consulta; that he has been in continuously, openly, adversely in possession of the said property in the
concept of an owner, while his predecessors-in-interest has likewise been in possession of the same in the concept of an owner
continuously, openly, and adversely for more than 25 years; that there are no other persons claiming possession over the property; that
the same property has not been mortgaged or encumbered to any other persons or entities; that the property subject matter of the case
is not within a military or naval reservation.
On cross-examination, he testified and clarified that he was employed in the land of Norberto Mingao, clearing and planting on the vast
property he owns; that his father also had worked for Norberto Mingao for a very long time and for the services that he and his father
rendered, he was given by Mingao about 17,637 square meters of the more or less 600,000 square meters of land he owns; that in 1950
his father took over the possession of the land, cultivated the same and planted fruit trees and growing crops; the said land was given by
Mr. Mingao to his father because of the services he rendered to Mingao by clearing, planting and cultivating his vast track of lands; that it
was in 1990 that he occupied the possession of his father by virtue of the Deed of Waiver executed by Mingao in his favor.
The second witness of petitioner is Teosito Avesado, 69 years old, a businessman and a resident of B.F. Homes Phase 3, Paraaque,
Metro Manila; that he personally knows the applicant in this case as he is one of the workers of Norberto Mingao, that he knew the land
sought to be registered because he used to visit Mingao in that area as they happened to be the President and Vice President of the
Magellan Agricultural Corporation respectively; that he is interested in the petition so that people working with Mingao should be given
the rightful ownership and title to the land they hold; that Mr. Mingao had started to occupy a vast tract of land during the early 1940s
and because of his appreciation to the services of his workers who worked for him in the land for a very long time, he gave a portion of
his land to applicant.3
In a decision4 dated February 4, 1998, the trial court, upon a finding that the respondent has sufficiently established his ownership of the land in
question, ordered the registration thereof in his name, thus:
Wherefore, it is hereby decreed that the property described as Lot 16, SGS-000518-D located at Tandang Kutyo, Sampaloc, Tanay, Rizal
with an area of 17,637 square meters may now be registered and confirmed in the name of Efren N. Carrasco pursuant to the provisions
of the Land Registration Act, and the corresponding title to the property be issued in his name after payment of the required fees.
Let copies of this Decision be furnished the Solicitor General, the Land Registration Authority, the Department of Environment and
Natural Resources, the Provincial Government of Rizal, the Office of the District Engineer of Rizal, the Municipality of Tanay, Rizal and the
parties concerned.
SO ORDERED.
Insisting that (1) the land being applied for registration is not alienable public agricultural land; and (2) respondent is not qualified to register the
same under Presidential Decree (P.D.) No. 1529,5 the Republic, through the OSG, appealed to the CA whereat its appellate recourse was docketed
as CA-G.R. CV No. 59566.
During the pendency of the appeal, the respondent filed a motion with the appellate court praying for the admission of additional evidence, which
additional evidence included an Affidavit of Ownership dated June 1, 1998 of Norberto Mingao. In its resolution of February 9, 1999, however, the
CA merely noted the motion.
Eventually, in the herein assailed decision dated June 14, 2000, the CA dismissed the Republic's appeal and affirmed in toto the appealed decision
of the trial court, to wit:
WHEREFORE, the judgment appealed from is hereby AFFIRMED in toto.
SO ORDERED.
In its decision, the CA held that the subject land is alienable in view of the certification from the Department of Environment and Natural Resources
(DENR) that the land was verified to be within the alienable and disposable land of the public domain and outside of any civil or military
reservation. On the issue of whether the respondent was qualified to have the land registered in his name, the CA ruled in the affirmative having
found the evidence sufficient to establish respondent's and Mingao's ownership and possession of the land in accordance with the rule laid down
in Republic v. Court of Appeals6 that occupation and cultivation for more than 30 years by an applicant and his predecessor-in-interest vest title on
such applicant so as to segregate the land from the mass of the public domain.
Unable to accept the judgment, the Republic is now with this Court via the present petition on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER COURT'S RULING THAT RESPONDENT IS QUALIFIED TO APPLY
FOR THE REGISTRATION OF TITLE OVER THE SUBJECT PARCEL OF LAND UNDER P.D. NO. 1529.
II
ASSUMING ARGUENDO THAT RESPONDENT IS QUALIFIED TO APPLY FOR REGISTRATION OF THE QUESTIONED LOT, STILL THE HONORABLE
COURT OF APPEALS ERRED IN RULING THAT BASED ON JURISPRUDENCE, REPUBLIC V. COURT OF APPEALS, 235 SCRA 567 (1994),
RESPONDENT HAD BEEN IN POSSESSION THEREOF WITHIN THE PERIOD PRESCRIBED BY LAW FOR THE SAME TO BE ACQUIRED THROUGH
JUDICIAL CONFIRMATION OF IMPERFECT TITLE.7
In his Comment,8 respondent maintains that he is entitled to apply for registration of title over the subject property because his open, adverse and
continuous possession thereof for more than 30 years has ripened into ownership. In any event, respondent argues that the CA has found his
evidence sufficient to establish his and his predecessor-in-interest's ownership and possession of the land, which factual finding is conclusive on
this Court.
The petition is impressed with merit.
While the rule is well-settled that findings of fact of appellate courts are conclusive upon this Court, there are, however, recognized exceptions
thereto, among which is where the findings of fact are not supported by the record or are so glaringly erroneous as to constitute a serious abuse of
discretion.9 Such exceptions obtain in this case.
Basically, the pivotal issue is whether the respondent was able to sufficiently prove his possession, in the concept of an owner, of the land sought
to be registered for the period required by law so as to entitle him to the registration thereof in his name.
We resolve the issue in the negative.
Before one can register his title over a parcel of land, he must show that: (1) he, by himself or through his predecessors-in-interest, has been in
open, continuous, exclusive and notorious possession and occupation thereof under a bona fideclaim of ownership since June 12, 1945 or earlier;
and (2) the land subject of the application is alienable and disposable land of the public domain.10
For sure, Section 14, paragraph (1), of the Property Registration Decree (P.D. No. 1529) explicitly states:
SEC. 14. Who may apply. The following persons may file in the proper Court of First Instance [now the Regional Trial Court] an
application for registration of title to land, whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since
June 12, 1945, or earlier.
We have no disagreement with the finding of the CA that the subject property is part of the alienable and disposable agricultural lands of the public
domain, having been classified as such by the DENR, an appropriate government agency for the purpose. We part ways, however, with the CA in its
conclusion that the respondent has established his ownership of the land in question for the period of possession required by law.
Respondent anchors his claim of ownership on his allegation of continuous, open and adverse possession in the concept of an owner by himself
and through his predecessor-in-interest, Norberto Mingao, for more than 30 years.11 Bearing in mind the rule that a person who seeks registration
of title to a piece of land must prove his claim by clear and convincing evidence,12 we find respondent's evidence in this respect insufficient.
To begin with, the respondent failed to prove that Norberto Mingao from whom he allegedly derived his title, was the owner of the subject land
and hence can transmit rights over the same in his favor.
In his Deed of Waiver dated December 16, 1991, Mingao merely claimed ownership of the land and that he is waiving his right and interest thereon
in favor of the respondent. Significantly, the same Waiver did not even specifically state when his (Mingao's) possession started. While, as rightly
found by the CA, Mingao has been in possession of the land since 1950 based on Mingao's Affidavit of Ownership dated June 1, 1998 which was
presented while the case was pending appeal with the CA, nonetheless, without more, said affidavit is not adequate to prove the fact of possession
beginning that date. Indeed, it may not be amiss to point out that Mingao did not even testify in this case.
The Court cannot give full credence to respondent's Affidavit of Ownership dated August 22, 1996 for he simply alleged therein that Mingao had
occupied the land for the last 25 years. Likewise, respondent's testimony regarding Mingao's possession and ownership, aside from being self-
serving, consists merely of general statements with no specifics even as to when his predecessor began occupying the land. Indeed, such is hardly
the well-nigh incontrovertible evidence required in cases of this nature. Respondent must present proof of specific acts of ownership to
substantiate his claim and cannot just offer general statements which are mere conclusions of law than factual evidence of possession.
In the same vein, Teosito Avesado's testimony cannot be relied upon to corroborate respondent's claim as to Mingao's possession as owner of the
land, more so, when we are not sufficiently convinced as to said witness' personal acquaintance with Mingao or knowledge regarding the latter's
intention to give the subject land to the respondent.
Furthermore, there is no proof that Mingao declared the land in his name for taxation purposes or paid taxes due thereon. True, a tax declaration
by itself is not sufficient to prove ownership. Nonetheless, it may serve as sufficient basis for inferring possession. 13 As we held in Republic v.
Alconaba:14
While tax receipts and declarations are not incontrovertible evidence of ownership, they constitute, at the least, proof that the holder
has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes not only manifests one's
sincere and honest desire to obtain title to the property, but also announces an adverse claim against the State and all other interested
parties with an intention to contribute needed revenues to the government. Such an act strengthens one's bona fide claim of acquisition
of ownership.
Hence, since Mingao's possession and ownership of the subject land were not sufficiently proven, Mingao himself cannot validly transmit his rights
over the land in respondent's favor. At any rate, the mode by which respondent alleged to have taken possession and ownership of the land is not
one of those provided for under Article 712 of the Civil Code. 15
To show how he acquired possession of the subject land from Mingao, respondent presented his Affidavit of Ownership dated August 22, 1996 and
Mingao's Deed of Waiver dated December 16, 1991. But said documents cannot show that there was a valid transmission of rights. As it were,
respondent's Affidavit of Ownership merely stated that he has taken possession of the subject land in 1990 from Mingao. On the other hand,
Mingao's Deed of Waiver is not, as aforestated, a mode of acquiring ownership.
The waiver cannot even be considered a donation because it does not comply with the formalities required in order for a donation of an
immovable to be valid pursuant to Article 749 of the Civil Code16 because respondent's acceptance thereof is lacking.
Also, prescription cannot be availed of to acquire ownership not only because the respondent's possession was not in the concept of an owner, but
also because he failed to comply with the required period. Respondent cannot tack his possession to that of Mingao's since there is no privity
between them, the transmission of rights not having been proven. Thus, respondent's possession must be reckoned only from the time of his
actual possession which, as admitted by him, commenced in 1990.
But even assuming, in gratia argumenti, that respondent may validly derive his right of possession from Mingao, still, he may not rightfully apply
for confirmation of title to the land in question. For, as the CA correctly found, and which the respondent does not dispute, Mingao's possession
started only in 1950 which is 5 years later than the reckoning point of June 12, 1945 under the Property Registration Decree (P.D. No. 1529). It is
thus clear that respondent failed to comply with the period of possession and occupation not only as required by Section 14(1), supra, of the
Property Registration Decree but also by the Public Land Act or Commonwealth Act (C.A.) No. 141, the pertinent provision of which is Section 48(b):
Section 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or
an interest therein, but whose titles have not been perfected or completed, may apply to the Court of first Instance of the province
where the land is located for confirmation of their claims and the issuance of a certificate of title therefore, under the Land Registration
Act, to wit:
xxx xxx xxx x
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12,
1945, or earlier, immediately preceding the filing of the application for confirmation of title except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title under the provisions of this chapter.
Clearly then, the reliance placed by the appellate court in Republic v. Court of Appeals17 where we ruled that occupation and cultivation for more
than 30 years by an applicant and his predecessor-in-interest vest title on such applicant so as to segregate the land from the mass of public land, is
erroneous. Said ruling has been effectively superseded by subsequent legislations which amended Section 48(b) the Public Land Act. The case
of Republic v. Doldol,18 cited in Igtiben v. Republic,19 provides a summary of these amendments, to wit:
The original Section 48(b) of C.A. No. 141 provided for possession and occupation of lands of the public domain since July 26, 1894. This
was superseded by R.A. No. 1942 which provided for a simple thirty-year prescriptive period of occupation by an applicant for judicial
confirmation of imperfect title. The same, however, has already been amended by Presidential Decree No. 1073, approved on January 25,
1977. As amended Section 48(b) now reads:
Section 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or
an interest therein, but whose titles have not been perfected or completed, may apply to the Court of first Instance of the province
where the land is located for confirmation of their claims and the issuance of a certificate of title therefore, under the Land Registration
Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12,
1945, or earlier, immediately preceding the filing of the application for confirmation of title except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title under the provisions of this chapter. (Emphasis supplied.)
As presently phrased, the law requires that possession of lands of the public domain must be from June 12, 1945 or earlier for the land to be
acquired through judicial confirmation of imperfect or incomplete title.
In sum, the respondent could not have acquired an imperfect title to the land in question because he has not proved possession openly,
continuously and adversely in the concept of an owner since June 12, 1945, the period of possession required by law. At best, he can only prove
possession since 1990, the date which he admitted to have taken possession of the subject parcel of land from Mingao.
WHEREFORE, the petition is GRANTED. Accordingly, the assailed decision dated June 14, 2000 of the CA in CA-G.R. CV No.
59566 is REVERSED and SET ASIDE and LRC No. 215-T of the RTC of Morong, Rizal, Branch 80, is ordered DISMISSED.
No costs.
SO ORDERED.
FIRST DIVISION

G.R. No. 168464 January 23, 2006

ZENAIDA RAMOS-BALALIO, Petitioner,


vs.
ROLANDO RAMOS, EUSEBIO I. RAMOS EVANGELISTO GARCIA, Respondents.

YNARES-SANTIAGO, J.:

This petition assails the Decision1 of the Court of Appeals dated February 16, 2005 in CA-G.R. CV No. 58644 reversing the Decision2 of the Regional
Trial Court (RTC) of Roxas, Isabela, Branch 23, dated July 17, 1996, in Civil Case No. Br. 23-357 which ruled that herein petitioner Zenaida Ramos-
Balalio had a superior right to possess Lot No. 204, Pls-15, situated at Muoz, Roxas, Isabela, as well as its Resolution3 dated June 14, 2005 denying
the motion for reconsideration.

As culled from the records, petitioner Zenaida and her brother Alexander (now deceased) are the children of spouses Susana Bueno and Abundio
Ramos. The spouses started occupying Lot No. 204 in 1938. Abundio died in 1944. Susana met her second husband, respondent Eusebio Ramos in
1946, with whom she had five children, one of whom is respondent Rolando.

In the interim, prior to 1958, Susana discovered that Felimon Domingo applied for a sales patent over the subject parcel of land which she opposed.
The Bureau of Lands resolved the dispute, thus:

In the light of the foregoing facts, it is clear that Felimon B. Domingo has not entered, possessed or cultivated the land in question and therefore he
has not acquired any preference right thereto. Upon the other hand contestant Susana Bueno Vda. de Ramos and her children have sufficiently
established their right of preference over the land except the one hectare Cemetery site, on the basis of their continuous occupation and
cultivation and their valuable improvements introduced thereon.

Wherefore, it is ordered that the Sales Application No. 21992 of Felimon B. Domingo be as hereby it is rejected, forfeiting in favor of the
Government whatever amount have been paid on account thereof. The land in question shall be subdivided so as to exclude therefrom the one
hectare portion in the northwestern part of the land, which shall be reserved as barrio cemetery site, while the remaining area is hereby allocated
to SUSANA BUENO VDA DE RAMOS who shall file an appropriate application therefore within sixty (60) days after the survey thereof at her own
expense, it not appearing that this Office has received the homestead (new) application allegedly filed by her for the same land.

SO ORDERED.4

It was alleged that as Susana accompanied her husband Eusebio, a soldier, wherever he was assigned, Susanas father, George Bueno, and
daughter, petitioner Zenaida continued the cultivation and possession of the subject land. Sometime later, Susana sold the land to petitioner who,
in turn, partitioned it among herself, her brother, Alexander, and respondent Rolando and his siblings. The partition was not registered but Deeds
of Sale were executed in favor of Rolando and Alexander.

Petitioner thereafter mortgaged her share; however, it came to her knowledge that respondents Rolando and Eusebio had usurped her share and
deprived the mortgagees of possession over the land. After settling the mortgage, petitioner filed a case for recovery of inheritance, possession
and damages with a petition for preliminary mandatory injunction.

The trial court had the land surveyed. Subdividing the land into Lots 204-A to 204-H5 based on the actual possessor or occupant, the survey plan
revealed the following:

1. Plaintiff Zenaida Ramos Balalio has no possession, occupation, and cultivation whatsoever of lot 204, Pls-15;

2. Rolando Ramos is in possession and cultivation of lot 204-F, lot 204-G and lot 204-C, with a total area of 43,957 sq. m., more or less;

3. Eusebio Ramos is occupying and cultivating lot 204-A with an area of 4,994 sq. m., more or less;

4. Lot 204-B consisting of 17,685 sq. m., more or less, is possessed and cultivated by Evangelisto Garcia, another intervenor. His
occupation is very much less than the two (2) hectares sold to him by Alexander Ramos. It is short by 2,311 sq. m., more or less;

5. The total area of the land in question, after deducting one (1) hectare occupied by the cemetery is 73,150 sq. m., more or less.6

On July 17, 1996, the trial court rendered its decision holding that petitioner was deprived of her right to cultivation and possession of her share of
Lot No. 204 and thus ruled:

AS A CONSEQUENCE OF ALL THE FOREGOING, judgment is hereby rendered in favor of plaintiff, Zenaida Ramos and against Rolando Ramos,
defendant, and Eusebio Ramos, intervenor.

1. Ordering Eusebio Ramos to vacate lot 204-A and surrender it to Evangelisto Garcia because he is not entitled to any portion of the lot
in question, it being the conjugal property of the first marriage of Susana Bueno to Abundio Ramos;

2. Evangelisto Garcia is adjudicated the first two (2) hectares from the North and East of the cemetery, as he validly bought the area from
Alexander Ramos. He is presently occupying only 17,689 sq. m., more or less. His possession now is increased to two (2) hectares which
includes the area being possessed by Eusebio Ramos;
3. The remaining portion of the share of Alexander Ramos is 4,410 sq. m., more or less. This is adjudicated in favor of his heirs. This
portion now corresponds to the area immediately South of the area of Evangelisto Garcia, the partition being from East to West;

4. The middle portion consisting of 24,410 sq. m., more or less, and immediately South of the cemetery, and also South of the portion
adjudicated to the heirs of Alexander is now given to Zenaida Ramos Balalio as her valid share of lot 204, the partition being also East to
West;

5. South of the share of Zenaida consisting also of 24,410 sq. m., more or less, is the valid share of Rolando Ramos and his full blooded
brother and sisters namely Robin, Corazon, Myrna and Mila, all surnamed Ramos;

6. Rolando Ramos and Eusebio Ramos are ordered jointly and severally to pay Zenaida Ramos:

a. Ten Thousand (P10,000.00) Pesos as attorneys fees;

b. One thousand Five Hundred (P1,500.00) Pesos as appearance fees of her lawyer;

c. Ten Thousand (P10,000.00) Pesos as incidental expenses relative to the case;

d. One Hundred Thousand Eight Hundred (P100,800.00) Pesos as the reasonable owners share of the produce of the land of
Zenaida Ramos from 1975 to the present, with an interest of 6% per annum until fully paid;

7. The Clerk of Court and the Sheriff are ordered to repair to the land in question and partition said land in accordance with the tenor of
this decision;

8. And to pay the cost.

SO ORDERED.7

On appeal, the Court of Appeals found that neither Zenaida nor Alexander complied with the homestead application requirements in order to
acquire superior vested right. As a consequence, it reversed the decision of the trial court, to wit:

As a consequence of the foregoing, the Court rules in favor of appellants as to the fourth error and finds that the contract supposedly dividing that
property among Zenaida, Rolando Ramos and Alexander Ramos cannot be enforced because neither of the parties therein can claim any vested
right over the subject parcel land which is still part of the public domain.

Also, prescinding from the above ruling, the intervention of Eusebio Ramos and Evangelisto Garcia should likewise be dismissed. As to Eusebio,
since Susana never filed an application for homestead, her right never ripened to ownership which she could have transmitted to her heirs. As to
Evangelisto Garcia who supposedly purchased that share of Alexander (an heir of Susana), since the vendor never inherited anything from Susana
there was nothing which he (Evangelisto) could have bought. In fine, neither of the intervenors could claim any right which they can enforce in
court.

WHEREFORE, the Decision of the Regional Trial Court of Roxas, Isabela, Branch 23, in Civil Case No. Br. 23-357 is REVERSED and the "Complaint"
filed by plaintiff-appellee as well as the respective "Answer in Intervention" of Eusebio Ramos and Evangelisto Garcia are all hereby ordered
DISMISSED.

SO ORDERED.8

Hence, this petition on the following assigned errors:

7.1. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE TRIAL COURTS DECISION AND DISMISSING THE
PETITIONERS COMPLAINT.

7.2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER IS NOT IN PRIOR POSSESSION OF THE SAID
LAND, AND DECLARING THAT SHE HAS NO RIGHT WHATSOEVER TO THE DISPUTED LAND.

7.3. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE ISSUE OF ACCION PUBLICIANA IN THE CASE AT BAR AND CONFINED
ITSELF TO THE CLAIM OF RECOVERY OF INHERITANCE.9

The petition is partly meritorious.

Under the Regalian doctrine, all lands of the public domain belong to the State and those lands not appearing to be clearly within private
ownership are presumed to belong to the State.10 Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and
national parks. Alienable lands of the public domain shall be limited to agricultural lands.11

Commonwealth Act No. 141 (1936), or the Public Land Act, as amended by Presidential Decree No. 1073 (1977), remains to be the general law
governing the classification and disposition of alienable lands of the public domain. It enumerates the different modes of acquisition of these lands
and prescribes the terms and conditions to enable private persons to perfect their title to them. It is, therefore, the applicable law to the case
before us.
A homestead patent, such as the subject of the instant case, is one of the modes to acquire title to public lands suitable for agricultural purposes.
Under the Public Land Act, a homestead patent is one issued to any citizen of this country, over the age of 18 years or the head of a family, and
who is not the owner of more than 2412 hectares of land in the country.13 To be qualified, the applicant must show that he has resided continuously
for at least one year in the municipality where the land is situated and must have cultivated at least one-fifth of the land applied for.14

In the case at bar, petitioner Zenaida asserts her right to a parcel of agricultural land that her parents Susana and Abundio had possessed since
1938. She claims that, for some time, the cultivation of this land was left to her and her grandfather and that, following the death of her father
Abundio, the land was allegedly sold to her by her mother Susana.

Zenaidas argument is flawed because it assumes that her parents had perfected their title over the land and that they could validly convey the
same to third persons, whether by sale or by inheritance. However, a careful examination of the records shows that petitioner has not satisfactorily
established that a valid application for homestead patent was filed by her parents. The decision of the Bureau of Lands in 1958 only addressed
Zenaidas familys right of preference over the land, in view of their possession and cultivation of the land. Nonetheless, the Bureau of Lands
ordered the filing of an appropriate application for its registration which indicates that as of that time, there was as yet no valid application filed. 15

The purported sale, therefore, between petitioner and her mother cannot be given effect, nor can it be a source of right for Zenaida, because
Susana did not have the authority to sell what did not belong to her. The invalidation of the sale consequently nullifies the partition of the property
among Zenaida, Alexander, and Rolando and his siblings because Zenaida could not have disposed of the land which she did not own.

For the same reason, neither Eusebio nor Rolando can claim any right whatsoever as heirs of Susana. Their claim evidently relies on the provision of
the Public Land Act which states:

Section 105. If at any time the applicant or grantee shall die before the issuance of the patent or the final grant of the land, or during the life of the
lease, or while the applicant or grantee still has obligations pending towards the Government, in accordance with this Act, he shall be succeeded in
his rights and obligations with respect to the land applied for or granted or leased under this Act by his heirs in law, who shall be entitled to have
issued to them the patent or final concession if they show that they have complied with the requirements therefor, and who shall be subrogated
in all his rights and obligations for the purposes of this Act. (Emphasis added)

The reliance is misplaced because the cited provision speaks of an applicant, grantee, or lessee. Susana was not one of these. In her lifetime,
despite her possession and cultivation of the land, she failed to apply for a homestead patent and to acquire any vested right that Eusebio or
Rolando can inherit. As such, the land remains part of the public domain. Furthermore, Eusebio and Rolando cannot invoke their prior possession
and occupation of the land because the same cannot be considered as adverse, open, public, peaceful and to the exclusion of all.

Hence, the subject land remains to be part of the public domain and rightfully belongs to the State. As held by the Court of Appeals, none of the
parties obtained a defensible title to the property which can be upheld by the Court. Nonetheless, the possession of the land is different from the
issue of its ownership. Petitioner argues that her petition may be treated as an accion publiciana and not merely an action for recovery of
inheritance.

An accion publiciana is an action for the recovery of the right to possess and is a plenary action in an ordinary civil proceeding to determine the
better right of possession of realty independently of title.16 In this case, the issue is whether Zenaida, as an applicant for public land, may be
considered as having any right to the land occupied, which may entitle her to sue in courts for the return of the possession thereof.

We find that Zenaida has proven prior possession of the portion of land she claims as her share, which possession antedates the filing of the
homestead application. She produced evidence showing that she has filed a verified application for the registration of the land with the Bureau of
Lands on August 10, 1971,17 which is still pending. The documents remain uncontested and the application has not been assailed by any of the
parties to the case. She alleged that during the lifetime of her mother, she and her maternal grandfather cultivated and occupied the land.

Moreover, Zenaida presented tax declarations both in her name and that of her predecessor-in-interest (mother Susana Bueno) covering the
property. Time and again, we have held that although tax declarations or realty tax payments of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind would be paying taxes for a
property that is not in his actual or at least constructive possession.18 They constitute at least proof that the holder has a claim of title over the
property. The voluntary declaration of a piece of property for taxation purposes manifests not only ones sincere and honest desire to obtain title
to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed
revenues to the Government.19

All told, petitioner Zenaidas uncontested and verified application for a homestead patent coupled with her open and notorious occupation of the
land convinces us of her preferential right to possess the land claimed, which entitles her to be protected by the law in such possession.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated February 16, 2005 is MODIFIED, insofar as to grant
petitioner Zenaida Ramos-Balalio preferential possession of the portion of Lot 204, Pls-15, situated in Muoz, Roxas, Isabela, as delineated in the
Decision of the Regional Trial Court of Roxas, Isabela, Branch 23, dated July 17, 1996.

SO ORDERED.
FIRST DIVISION

G.R. No. 160990 September 11, 2006

REPUBLIC OF THE PHILIPPINES, petitioner,


vs.
SPOUSES RICARDO B. ENRIQUEZ and ELIZA M. ENRIQUEZ, respondents.

AUSTRIA-MARTINEZ, J.:

For resolution by the Court is a petition for review under Rule 45 of the Rules of Court, filed by the Republic of the Philippines questioning the
Decision1 dated November 28, 2003 rendered by the Court of Appeals (CA) in CA-G.R. CV No. 68973. The assailed Decision affirmed the Decision of
the Regional Trial Court (RTC) of Daet, Camarines Norte, Branch 39, granting the application for registration of title of land filed by respondents.

Respondents filed their verified petition for confirmation and registration of title to two parcels of land located in Gahonon, Daet, Camarines Norte
on January 16, 1997.2 One parcel, Lot 1711, Pls-488-D, consists of 455 square meters. The other parcel (hereafter referred to as "Parcel 2"),
described in Psu-05-006497-D, contains 297 square meters.

Petitioner, through the Director of Lands, filed an Opposition on the grounds that respondents or their predecessors-in-interest have not been in
continuous, exclusive, and notorious possession of the property since June 12, 1945 or prior thereto; that respondents' evidence is not competent
or sufficient to establish their claim; and that the parcel of land applied for is a portion of the public domain.3

On September 28, 1998, the RTC rendered its Decision with the following dispositive portion:

WHEREFORE, title of the applicants to the 455-square meter parcel of land described on Plan-051603-0022344 (Exh. "M") and the 297-
square meter parcel of land described on plan Psu-05-006497-D (Exh. "M-1") is hereby confirmed and the same is ordered registered in
the name of spouses Ricardo B. Enriquez and Eliza M. Enriquez, both of legal age, Filipino citizens and residents of Batobalani, Paracale,
Camarines Norte.

Once this decision shall have become final, let an order for the issuance of decree be issued.

SO ORDERED.4

Petitioner filed an appeal with the CA on grounds of lack of jurisdiction due to respondents' failure to present the original tracing cloth plan of the
subject lots, and respondents' failure to prove open, continuous, exclusive, and adverse possession for more than 30 years. Finding no error, the CA
denied the appeal and affirmed the RTC Decision in the assailed Decision dated November 28, 2003. 5

Hence, herein petition based on the following grounds:

THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE TRIAL COURT WHICH GRANTED THE APPLICATION FOR LAND
REGISTRATION, DESPITE THE FACT THAT THE TRIAL COURT HAS NOT ACQUIRED JURISDICTION TO PROCEED WITH THE CASE FOR FAILURE
OF RESPONDENTS TO PRESENT THE ORIGINAL TRACING CLOTH PLAN OR THE DIAZO POLYESTER FILM.

II

THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE TRIAL COURT GRANTING THE APPLICATION FOR LAND
REGISTRATION DESPITE THE FAILURE OF RESPONDENTS TO PROVE THAT THEY AND THEIR PREDECESSORS-IN-INTEREST HAD BEEN IN
OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION OF THE SUBJECT LOTS IN THE CONCEPT OF OWNERS FOR AT LEAST
THIRTY YEARS.6

These issues, notably, are questions of fact that petitioner had already previously raised in its appeal before the CA. The general rule is that
questions of fact are beyond the province of Rule 45 of the Rules of Court.7 Said rule, however, admits of certain exceptions, to wit:

(1) when the factual findings of the Court of Appeals and the trial court are contradictory;

(2) when the findings are grounded entirely on speculations, surmises, or conjectures;

(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd, or impossible;

(4) when there is grave abuse of discretion in the appreciation of facts;

(5) when the appellate court, in making its findings, goes beyond the issues of the case, and such findings are contrary to the admissions
of both appellant and appellee;

(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;

(7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will justify a different conclusion;
(8) when the findings of fact are themselves conflicting;

(9) when the findings of fact are conclusions without citation of the specific evidence on which they are based; and

(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are contradicted by the
evidence on record. 8 (Emphasis supplied)

After going over the evidence extant in the record of this case, the Court finds that the CA failed to notice a relevant fact which, if properly
considered, will justify a different conclusion, thus necessitating a review of the case. Particularly, the Court is referring to the fact that there exists
a material discrepancy in the technical description of Parcel 2 applied for as will be discussed forthwith.

Before one can register his title over a parcel of land, the applicant must show that (a) he, by himself or through his predecessors-in-interest, has
been in open, continuous, exclusive and notorious possession and occupation of the subject land under a bona fide claim of ownership since June
12, 1945 or earlier; and (b) the land subject of the application is alienable and disposable land of the public domain. 9

One of the mandatory requirements in applications of original registration of land is the submission in evidence of the original tracing cloth plan or
the "sepia copy" (Diazo Polyester Film), duly approved by the Bureau of Lands. This is to establish the true identity of the land to ensure that it does
not overlap a parcel of land or a portion thereof already covered by a previous land registration, and to forestall the possibility that it will be
overlapped by a subsequent registration of any adjoining land. Failure to comply with this requirement is fatal to petitioner's application for
registration.10

Nevertheless, in several cases, the Court allowed substantial compliance with this rule. In Recto v. Republic of the Philippines,11 this Court held that
blueprint copies of the original tracing cloth plan from the Bureau of Lands and other evidence could also provide sufficient identification to
identify a piece of land for registration purposes, as the property was sufficiently identified by: 1) the blueprint copy of the plan and technical
description which were both approved by the Land Management Services of the Department of Environment and Natural Resources (DENR); and 2)
the report of the Land Management Sector stating that the subject property is not a portion of, nor identical to any previously approved isolated
survey. The applicants in the Recto case also submitted a certified true copy of the original tracing cloth plan to the CA as well as a certification
from the Land Registration Authority attesting that the original plan in diazo polyester film was on file.

In Republic of the Philippines v. Hubilla,12 the Court also deemed as substantial compliance the submission of the following in lieu of the original
tracing cloth plan, to wit: 1) a blueprint copy of the subdivision plan approved by the Director of Lands; 2) a technical description approved by the
Land Management Bureau of the DENR; 3) a certification from the DENR Community Environment and Natural Resources Office (CENRO) which
states that the Property has not been forfeited for non-payment of real estate taxes, is entirely within the alienable and disposable zone as of
December 31, 1925, has not been previously titled and is not covered by any previous public land application; and 4) a report of the Land
Management Bureau stating that the Property is not recorded in their lot and plan index cards as being subject of a previous public land
application. The applicants also filed a motion to admit original tracing cloth plan with the Court of Appeals during the pendency of the appeal and
attached thereto the original plan, which the Court noted as the same as the blueprint subdivision plan offered as evidence before the trial court.

In the present case, there is no question that respondents did not submit the original of the tracing cloth plan of Lots 1711, Pls-488-D and Psu-05-
006497-D. Applying the exception, the CA ruled that the same may be dispensed with as there are on record the blueprint copies of the properties
and "other evidences," which sufficiently establish the nature, identity, location and extent of the subject properties. The CA also ruled that the
case of Director of Lands v. Tesalona,13 cited by petitioner, does not apply in this case since there is no discrepancy in the area of the land as stated
in the application and in the blue print.

Petitioner, however, insists that there exists a material discrepancy in the area of Parcel 2.

The Court went over the records of this case and indeed, as borne by respondents' own evidence, there exists a significant discrepancy in the area
of Lot Psu-05-006497-D creating a doubt as to the actual area, such that the exception to the rule on the presentation of the original tracing cloth
plan cannot be applied.

In the Deed of Absolute Sale dated December 2, 1994 between Rosalinda Oloya and respondents, Parcel 2 was described as follows:

Parcel 2 A parcel of land situated at Gahonon, Daet, Camarines Norte, Philippines. Bounded on the north by irrigation canal; on the
South lot owned by Mrs. of Tomas Cootauco; on the West lot No. 1710 -____ and on the East lo [sic] No. 1710 ____. Declared under Tax
Decl. No. 018-0991 containing an area of 250 Sq. m more or less.14

This is confirmed in the Provincial Assessor's Property Field Appraisal & Assessment Sheet for the years 199315 and 1994,16 and the Declaration of
Real Property in the names of Rosalinda Oloya and Tomas Cootauco, although the boundaries set therein were as follows:

Northeast: Lot 1711

Northwest: Road lot

Southeast: Road lot

Southwest: National road

Meanwhile, in the 1996 blue print copy of the survey plan17 and the technical description issued by the Lands Management Services,18 Parcel 2
already contained an area of 297 square meters, and bounded as follows:

Southwest: National Road


Northwest: property of Samuel Magana

Northeast: Lot 1711, Pls 488-D

Southeast property of Emeteria Abodago

Moreover, the Court notes that in a Certification dated October 15, 1992, issued by the Office of the CENRO, Daet, Camarines Norte, there already
exists a previous survey plan over the same property but which measures 250 square meters. It was stated therein: "THIS IS TO CERTIFY that per
records filed in this Office, shows that the parcel of land with an area of 250 square meters as surveyed by Engr. Virgilio F. Jimenez for Tomas
Cootauco, located at Gahonon, Daet, Camarines Norte x x x."19

Respondents failed to satisfactorily explain the reason for the difference in the area. What respondent Ricardo Enriquez merely said on this score
was: "When the relocation survey was conducted and the exact boundaries were determined, it was found out that the area is actually 297 and not
250."20 Such bare testimony does not suffice to clarify the difference in the area, as shown in the pertinent documents on record. Respondent
Enriquez did not conduct the survey, and it does not appear that he has technical know-how in this regard. It could have been different had the
original tracing cloth plan been submitted in evidence, since it is the best evidence to identify a piece of land for registration purposes, 21 or at the
very least, the geodetic engineer who surveyed the property should have testified with regard to the increase in the area.

It should be stressed that a person who seeks registration of title to a piece of land must prove the claim by clear and convincing evidence, and is
duty bound to identify sufficiently and satisfactorily the property. Otherwise stated, all facts must indicate that no other person, including the
government, will be prejudiced by the adjudication of the land to the applicant.22

Given respondents' failure to identify with certainty the area of Parcel 2 as described in Lot Psu-05-006497-D, the RTC should have therefore
denied the application for registration of title over said property.

The foregoing conclusion, however, does not hold true with regard to Lot 1711, Pls-488-D. All the evidence on record sufficiently identified the
property as the one applied for by respondents, and containing the corresponding metes and bounds as well as area. Consequently, the original
tracing cloth plan need not be presented in evidence, applying the exception set forth in the Hubilla23 and Recto24 cases.

On the issue of open, continuous, exclusive and notorious possession of the subject lots, the Court will settle the issue only vis--vis Lot 1711, Pls-
488-D, since as earlier stated, the application for the registration of title over Parcel 2 should be denied.

In Republic v. Jacob,25 the Court explained the concept of possession and occupation referred to in cases of registration of title, viz.:

Indeed, the law speaks of "possession and occupation." Possession is broader than occupation because it includes constructive
possession. Unless, therefore, the law adds the word "occupation," it seeks to delimit the all-encompassing effect of constructive
possession. Taken together with the words "continuous," "exclusive" and "notorious," the word "occupation" seems to highlight the facts
that for an applicant to qualify, her possession of the property must not be a mere fiction.

Actual possession of a land consists in the manifestation of acts of dominion of such a nature as a party would naturally exercise over her
own property. A mere casual cultivation of portions of land by the claimant does not constitute sufficient basis for a claim of ownership.
Such possession is not exclusive and notorious as it gives rise to a presumptive grant from the State. The applicant is burdened to offer
proof of specific acts of ownership to substantiate the claim over the land. The good faith of the person consists in the reasonable belief
that the person from whom she received the property was the owner thereof and could transfer ownership.

Records bear out that Lot 1711, Pls-488-D was originally part of a 707-square meter property owned by Concepcion Pabico. In an Escritura de
Compra Venta dated April 23, 1941, the property was sold to Tomas Cootauco.26 After the death of Cootauco, his heirs sold the property, which
was already partitioned into to two portions, Parcel 1 consisting of 455 square meters and Parcel 2 consisting of 250 square meters, to Rosalinda
Buag Oloya by virtue of a "Deed of Absolute Sale" dated October 22, 1992.27 The sale was confirmed in an "Extra-Judicial Settlement of Estate
with Confirmation of Sale" executed on October 22, 1992.28 Oloya, in turn, sold these two parcels of land to respondents in a "Deed of Absolute
Sale" dated December 2, 1994.29

Records also show that as early as 1963, Cootauco has already declared Lot 1711, Pls-488-D for taxation purposes,30 and realty taxes have been
paid thereon since 1964.31 It has been ruled that while tax declarations and realty tax payment of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of the possession in the concept of owner for no one in his right mind would be paying taxes for a
property that is not in his actual or at least constructive possession. They constitute at least proof that the holder has a claim of title over the
property. The voluntary declaration of a piece of property for taxation purposes manifests not only one's sincere and honest desire to obtain title
to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed
revenues to the Government. Such an act strengthens one's bona fideclaim of acquisition of ownership.32

Given the sufficiency of proof of respondents' compliance with the legal requirements, in that Lot 1711, Pls-488-D has been identified with
certainty, and that respondents and their predecessor-in-interest have been in open, continuous, exclusive and notorious possession and
occupation of the same since 1963, or for 34 years, the application for the registration of title of Lot 1711, Pls-488-D was therefore correctly
granted by the RTC and affirmed by the CA.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated November 28, 2003 of the Court of Appeals in CA-G.R. CV No. 68973
affirming the Decision of the Regional Trial Court is AFFIRMED with MODIFICATION to the effect that the Decision of the Regional Trial Court dated
September 28, 1998 is MODIFIED whereby the application for original registration of the 297-square meter parcel of land described in plan Psu-05-
006497-D is DENIED.

SO ORDERED.
FIRST DIVISION
G.R. No. 157593 March 22, 2007
SPS. ALBERTO and JOCELYN AZANA, Petitioners,
vs.
CRISTOPHER LUMBO and ELIZABETH LUMBO-JIMENEZ, Respondents.
CORONA, J.:
In this appeal by certiorari, spouses Alberto and Jocelyn Azana assail the decision 1 dated September 17, 2002 and resolution2 dated March 12, 2003
of the Court of Appeals (CA) in CA-G.R. CV No. 60973. After a re-evaluation of the evidence on record, the appellate court held that the trial courts
factual findings were contrary to the evidence presented and, on that basis, reversed the latters ruling.
Originally, respondents filed an action for quieting of title3 in the Regional Trial Court (RTC) of Kalibo, Aklan. The subject matter of the action was a
piece of real property located in the island of Boracay, a prime tourist destination. It was designated as Lot 64 during the national reservation
survey of Boracay on April 14, 1976.
Respondents alleged that they were the owners of Lot 64. They claimed that, in a deed of absolute sale dated December 1, 1996, the spouses
Emilio and Estela Gregorio sold Lot 64 to petitioners. This cast a cloud over their title.
To support their claim of ownership, respondents stated that Lot 64 was originally part of the 8.0488-hectare land bought in a public auction by
their parents, which they inherited entirely; that such sale in the public auction was evidenced by a final bill of sale dated September 18, 1939; that
Lot 64 was separately designated during the national reservation survey only because it was also being claimed by the spouses Gregorio; and that,
if Lots 63 and 64 were combined, the boundaries of the resulting lot coincided with the boundaries of the lot purchased under the final bill of sale.
For their part, petitioners claim that they purchased Lot 64 from the spouses Gregorio in good faith; that the spouses Gregorio became the lawful
owners of Lot 64 by virtue of a deed of absolute sale dated March 25, 1976 executed by Ignacio Bandiola in favor of Estela Gregorio whereby
Bandiola transferred to Gregorio a parcel of land with an area of 3.4768 hectares; and that Lot 64 was part of this 3.4768-hectare land.
According to the RTC of Kalibo, Aklan, respondents failed to establish the identity of the lot sold under the final bill of sale. Consequently, their
claim of title over Lot 64 also had to fail. In the words of the court a quo:
Assaying the evidence presented by the parties in relation to their respective submissions, the Court noted that the land acquired by [respondents]
parents at the public auction is not solely bounded on the North and East by [the] Visayan Sea, but also by Anunciacion Gelito and Guillermo
Sualog, respectively. Indeed, [respondents] own survey plan discloses that Lots 63 and 64 [are] bounded by Lot 62 and seashore.
Hence, it is not clear that the land acquired by [respondents] parents at an auction sale includes Lot 64. The Court could probably sustain
[respondents] theory if the said land is solely bounded on the North and East by [the] Visayan Sea or seashore. There would be no space for any
intervening lot.4 (citations omitted)
Finding equiponderance of evidence5, the trial court ruled in favor of petitioners and upheld the validity of the sale of Lot 64 to them.
On review, the CA arrived at a different conclusion. It declared respondents as owners of Lot 64 and nullified the sale by the spouses Gregorio to
petitioners. The appellate court agreed with respondents that Lot 64 was part of the 8.0488-hectare property described in the final bill of sale. As
opposed to the findings of the trial court, the appellate court was satisfied that the boundaries of the lot resulting from the merger of Lots 63 and
64 coincided with the boundaries of the 8.0488 hectare property. Moreover, the CA noted that the areas of Lots 63 and 64 were 7.0300 hectares
and 1.2012 hectares respectively, meaning that the area resulting from the combination of the two lots was equivalent to "8.0000 hectares, more
or less, which [was] the total area being claimed by the [respondents]".6
Aggrieved, the spouses Gregorio and the spouses Azana filed in this Court separate petitions for review on certiorari under Rule 45 of the Rules of
Court. The petitions were separately docketed as G.R. No. 157617 7 and G.R. No. 157593, respectively. The Court instantly denied both petitions for
essentially raising questions of fact which are generally beyond our review.
Thereafter, both the Gregorios and petitioners filed their respective motions for reconsideration. The Court denied the MR 8 of the spouses
Gregorio, in effect denying G.R. No. 157617 with finality.
Meanwhile, the MR of the spouses Azana was granted. As a general rule, it is not the Supreme Courts function to review, examine and evaluate or
weigh the probative value of the evidence presented. 9 The factual findings of the trial and appellate courts are binding on this Court and are given
great weight and respect.10 However, the rule is not absolute. In instances where there is divergence in the findings and conclusions of the trial
court, on one hand, and the appellate court, on the other, the Court may give the petition due course and re-examine the evidence on
record.11Satisfied that the foregoing exception applies to this case, the Court ordered the reinstatement of G.R. No. 157593 (this petition).
Respondents oppose the petition on the ground that it is already barred by prior judgment. They argue that the dismissal of the Gregorios petition
(G.R. No. 157617) was a final judgment constituting a bar to the institution of a similar petition.
Respondents position is incorrect. Res judicata calls for the concurrence of the following requisites: (1) there is final judgment or order; (2) the
court rendering it has jurisdiction over the subject matter and the parties; (3) the judgment or order is on the merits and (4) there is, between the
two cases, identity of parties, subject matter and causes of action.12Here, the first requisite is absent. The Courts resolution denying the spouses
Gregorios petition is not the final judgment contemplated by the first requisite. Rather, "final judgment" entails a decision which perpetually
settles the controversy and lays to rest all questions raised. At that point, there was no final judgment because the spouses Azanas appeal of the
CA decision was still pending before us. Stated differently, there was yet no final judgment which could be entered and executed.
We now proceed to consider the documents relied upon by the parties.
To prove their claim, petitioners submitted a deed of absolute sale of real property 13 dated March 25, 1976 to show that Ignacio Bandiola sold to
Estela Gregorio 3.4768 hectares of land located in Manoc-Manoc, Malay, Aklan. The property was particularly described as follows:
THE PORTION SOLD CONSISTS of 3.4768 hectares, more or less, located at the southern side of the whole parcel and with the following pertinent
boundaries: on the North by Visayan Sea and Ernesto Bandiola; on the East by Visayan Sea; on the South by Felicitas Lumbo, D. Pelayo, and D.
Magapi; and on the West by Teodorica Bandiola.14
They also presented the corresponding tax declaration15 which reiterated the same property boundaries.
Petitioners point out that a portion of this property was separately declared for realty tax purposes under ARP/TD No. 93-011-1020/1021 as Lot 64
with an area of 1.48 hectares.16 The tax declaration indicated that the boundaries of Lot 64 were:
North: Visayan Sea South: Lot 63
West: lot 99-pt East: Visayan Sea
In the hope of strengthening their case, petitioners narrated the supposed origin of the disputed property. They claimed that the 3.4768-hectare
property was taken from the consolidated lots owned by Ignacio Bandiola, i.e., three contiguous parcels of land with individual areas of 8.7766
hectares, 6550 square-meters and 4994 square-meters.17]From this land mass, Ignacio Bandiola carved out 3.4768 hectares and sold the same to
Estela Gregorio. Allegedly, this portion included Lot 64 which Estela Gregorio, in turn, sold to petitioners.
Granting for the sake of argument that petitioners preceding allegations are true, it follows that Ignacio Bandiolas lots, if taken as one, must have
extended to the Visayan Sea in the east to have roped in Lot 64. It also follows that at least one of the lots should have the Visayan Sea as its
eastern boundary. However, this conclusion is belied by the tax declarations petitioners themselves presented. Not one of the tax declarations
stated that any of Bandiolas lots was bound in the east by the Visayan Sea. On the contrary, all the tax declarations stated that each of the lots was
bound in the east by a particular land mass:
Tax Declaration No. 3066
Land Area: 8.7766 hectares
Boundaries: North Visayan Sea
East Lorenzo Lumbo, Vanancio Maming
West Conchita Tirol, Visayan Sea
South Moises Pelayo, Paula Gelito18
Tax Declaration No. 3087
Land Area: 0.6550 hectare
Boundaries: North Visayan Sea
East Felicitas Alag de Lumbo
West Felicitas Alag de Lumbo
South Quirica Lumbo19
Tax Declaration No. 3068
Land Area: 0.4994 hectare
Boundaries: North Ignacio Bandiola
East Anunciacion Gelito and F.A. Lumbo
West Ignacio Bandiola
South Gertrudes Casimero & Salvador Magapi20
Petitioners strained to explain the discrepancy by pointing out that "Lot 64 was but a mere portion of the three parcels of land covered by the
[three] tax declarations. xxx. It [was] therefore, quite unlikely that Lot 64 would have the exact same boundaries as any or all of these [three]
parcels."21
We find their explanation wanting. If, indeed, Lot 64 was part of Ignacio Bandiolas mass of properties it would have been in its south-east corner,
occupying part of its southern and eastern perimeter. 22 Therefore, the parcels of land covered by the three tax declarations must reflect southern
and/or eastern boundaries similar to those of Lot 64. But, as explained earlier, none of the lots was enclosed or partly enclosed in the east by the
sea. It is highly unlikely that the corner portion of the mother property would not have similar boundaries as those of the latter on at least two
sides.
The Court is not inclined to pronounce which of the documents presented by petitioners is true and correct. It is enough to say that the evidence
they presented cast doubt on the validity of their claim. Petitioners failed to establish, by preponderance of evidence, the exact perimeters of the
land which they claim as their own.
On the other hand, respondents anchor their claim over Lot 64 on a final bill of sale23 dated September 18, 1939. Apparently, the document was
executed in favor of Lorenzo and Felicitas Lumbo who bought an 8.0488-hectare property in a public auction. It stated:
That on September 30, 1937, the real property under Tax Declaration No. 6523 was forfeited to the Government in the manner and form
prescribed by Act 3995 known as the Assessment Law, for non-payment of land taxes corresponding to the years 1931 to 1937, inclusive, the
description of which follows:
A parcel of cocal land situated in the barrio of Manocmanoc, municipality of Buruanga, province of Capiz, Philippines, having an area of 80, 488
square meters more or less. Bounded on the North by Visayan Sea; on the East by the property of Guillermo Sualog and Visayan Sea; on the South
by the property of Moises Pelayo; and on the West by the properties of Venancio Maming and Lucino Gelito, and assessed at P1040.00. x x x.24
The trial court discredited the final bill of sale by highlighting the fact that the property bought at the public auction was not solely bound on the
north and east by the Visayan Sea but also by the properties of Anuncion Gelito and Guillermo Sualog, respectively. With this, the trial court
deduced that there was an intervening space which should not have been there if the lot referred to in the document included Lot 64. Thus, the
final bill of sale must pertain to a different parcel of land.
We find the trial courts conclusion inaccurate. The Gelito and Sualog properties were not located between the Visayan Sea and the disputed
property. Otherwise, the tax declarations and final bill of sale would have indicated that the Lumbo property was solely bound in the north by the
Gelito property and in the east by the Sualog property. A cursory look at the survey map25 reveals that the perimeter of the Lumbo property ran
along the Visayan Sea and Gelitos property in the north, and the Visayan Sea and Sualogs property in the east. Naturally, the tax declarations and
final bill of sale included the two properties mentioned as part of the boundaries of the Lumbo property.
Petitioners underscore the seeming irregularities in the description of the property under the final bill of sale, a deed of sale dated May 20, 1939
and the tax declarations for the years 1991 and 1993 in the names of respondents. They posit that these irregularities negate respondents claim of
legal or equitable title and ultimately justify the resolution of the case in their favor.
A deed of absolute sale26 was executed on May 20, 1939 between Pantaleon Maming and the respondents parents, stipulating the sale to the
Lumbos of "an approximate area of [five hectares], being a part of the land under Tax No. 6523 in the name of Pantaleon Maming".27 Petitioners
emphasize the fact that the property sold under the final bill of sale was the same lot under Tax Declaration No. 6523. This discrepancy supposedly
blurred the identification of the property claimed by respondents.
We disagree.
The CA sufficiently reconciled the difference in the land areas in the two deeds:
xxx. It may be asked why there were two deeds of sale covering the same property. We find credence in [respondents] explanation. The public
auction was held on 13 September 1938 and therefore Pantaleon Maming had up to 13 September 1939 to redeem the property. Before the
expiration of the period of redemption, Lorenzo Lumbo bought [five] hectares of the [eight]-hectare property in an attempt, as [respondents] put
it, to persuade Maming not to redeem the property. This can be inferred from the price of P500.00 he paid for the [five] hectares while in the
auction sale held, he bought the entire 8.0488 hectares for only P56.78. xxx.28
Next, petitioners highlight the tax declarations filed by respondents for the years 199129 and 199330 covering Lot 63 only. In the absence of contrary
evidence, tax declarations, being official documents, enjoy a presumption of truth as to their contents. Petitioners contend that, unlike them,
respondents never actually declared Lot 64 as theirs and cannot therefore claim ownership of the property.
Jurisprudence is consistent that tax declarations are not conclusive evidence of ownership of the properties stated therein. 31 A disclaimer is even
printed on their face that they are "issued only in connection with real property taxation [and] should not be considered as title to the property."
At best, tax declarations are an indicia of possession in the concept of an owner.32 However, non-declaration of a property for tax purposes does
not necessarily negate ownership.33
From the foregoing, the fact that both tax declarations in the names of respondents covered Lot 63 only did not necessarily mean they did not own
Lot 64 as they were in fact able to present a document evidencing ownership of both properties the final bill of sale.
Clearly, respondents have been able to establish by preponderance of evidence that they are the rightful owners of Lot 64.
When an owner of real property is disturbed in any way in his rights over the property by the unfounded claim of others, he may bring an action for
quieting of title. The purpose of the action is to remove the cloud on his title created by any instrument, record, encumbrance or proceeding which
is apparently valid or effective but is in truth and in fact invalid and prejudicial to his title.34
Here, the deeds of sale executed in favor of petitioners and the spouses Gregorio were prima facie valid and enforceable. However, further scrutiny
and investigation established that petitioners predecessor-in-interest, Ignacio Bandiola, could not have owned the disputed lot. Consequently, the
subsequent conveyances of Lot 64 to the spouses Gregorio and thereafter, to petitioners, were null and void. Therefore, respondents, as the
adjudged owners of Lot 64, are entitled to have the aforementioned deeds of sale nullified to remove any doubt regarding their ownership of the
lot.
While the appellate court adequately explained its decision, it failed to categorically declare the deeds of sale as null and void in its dispositive
portion. Since it is the dispositive portion of the decision which shall be carried out, it is important that the status of the deeds of sale be clearly
stated therein.
WHEREFORE, the petition is hereby DENIED. The decision dated September 17, 2002 and resolution dated March 12, 2003 of the Court of Appeals
are AFFIRMED with the MODIFICATION that the deed of absolute sale dated March 25, 1976, in so far as it covers Lot 64, and the deed of absolute
sale dated December 1, 1996 are hereby declared null and void.
Costs against petitioners.
SO ORDERED.
FIRST DIVISION

G.R. No. 168222 April 18, 2006

SPS. TEODULO RUMARATE, (deceased) and ROSITA RUMARATE; deceased TEODULO RUMARATE is represented herein by his Heirs/Substitutes,
namely, ANASTACIA RUMARATE, CELSO RUMARATE, MARINA RUMARATE, ROMEO RUMARATE, GUILLERMO RUMARATE, FIDEL RUMARATE,
MERLINDA RUMARATE, MARISSA RUMARATE, CLEMENCIA RUMARATE, SANCHO RUMARATE and NENITA RUMARATE, Petitioners,
vs.
HILARIO HERNANDEZ, JOAQUIN HERNANDEZ, SALVADOR HERNANDEZ, BENJAMIN HERNANDEZ, LEONORA HERNANDEZ-LAZA, VICTORIA
HERNANDEZ-MERCURIO, RODRIGOHERNANDEZ, BERNARDO HERNANDEZ, LOURDES HERNANDEZ-CABIDA, MARIO SALVATIERRA, ADELAIDA
FONTILA-CIPRIANO, and THE REGISTER OF DEEDS OF QUEZON PROVINCE, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the May 26, 2005 Decision1 of the Court of Appeals in CA-G.R. CV No. 57053, which reversed and set aside the
March 31, 1997 Decision2 of the Regional Trial Court of Calauag, Quezon, Branch 63, in Civil Case No. C-964, declaring petitioners as owners of Lot
No. 379 with an area of 187,765 square meters and located in Barrio Catimo,3 Municipality of Guinayangan, Province of Quezon.

The facts show that on September 1, 1992, petitioner spouses Teodulo Rumarate (Teodulo) and Rosita Rumarate filed an action for reconveyance
of real property and/or quieting of title with damages against respondent heirs of the late spouses Cipriano Hernandez and Julia Zoleta.4 Teodulo
averred that Lot No. 379 was previously possessed and cultivated by his godfather, Santiago Guerrero (Santiago), a bachelor, who used to live with
the Rumarate family in San Pablo City. Between 1923 and 1924, Santiago and the Rumarate family transferred residence to avail of the land
distribution in Catimo, Guinayangan, Quezon. From 1925 to 1928, Santiago occupied Lot No. 379 cultivating five hectares thereof. Before moving to
Kagakag, Lopez, Quezon in 1929, Santiago orally bequeathed his rights over Lot No. 379 to Teodulo and entrusted to him a copy of a Decision of the
Court of First Instance (CFI) of Tayabas dated April 21, 1925 recognizing his (Santiago) rights over Lot No. 379. 5 Since Teodulo was only 14 years old
then, his father helped him cultivate the land.6 Their family thereafter cleared the land, built a house7 and planted coconut trees, corn, palay and
vegetables thereon.8 In 1960, Santiago executed an "Affidavit (quit-claim)"9 ratifying the transfer of his rights over Lot No. 379 to Teodulo. Between
1960 and 1970, three conflagrations razed the land reducing the number of coconut trees growing therein to only 400, but by the time Teodulo
testified in 1992, the remaining portions of the land was almost entirely cultivated and planted with coconuts, coffee, jackfruits, mangoes and
vegetables.10 From 1929, Teodulo and later, his wife and 11 children possessed the land as owners and declared the same for taxation, the earliest
being in 1961.11

In 1970, Teodulo discovered that spouses Cipriano Hernandez and Julia Zoleta, respondents predecessors-in-interest, were able to obtain a title
over Lot No. 379. He did not immediately file a case against respondents because he was advised to just remain on the land and pay the
corresponding taxes thereon.12

Respondents, on the other hand, claimed that on November 11, 1964, Santiago sold the questioned lot to their parents, the spouses Cipriano
Hernandez and Julia Zoleta, for P9,000.00.13 Respondents alleged that on April 21, 1925, the CFI of Tayabas rendered a Decision written in Spanish,
declaring Lot No. 379 as a public land and recognizing Santiago as claimant thereof in Cadastral Proceeding No. 12. However, no title was issued to
Santiago because he failed to file an Answer. Spouses Cipriano Hernandez and Julia Zoleta filed a motion to re-open Cadastral Proceeding No. 12,
alleging that though no title was issued in the name of Santiago, the same decision is, nevertheless, proof that Santiago was in possession of Lot
No. 379 since 1925 or for more than 30 years. Having succeeded in the rights of Santiago, the spouses prayed that Cadastral Proceeding No. 12 be
re-opened and that the corresponding title over Lot No. 379 be issued in their name. On September 13, 1965, the CFI of Tayabas rendered a
decision adjudicating Lot No. 379 in favor of the spouses, in whose name Original Certificate of Title (OCT) No. O-1184414 was issued on the same
date.15 Cipriano Hernandez planted coconut trees on the land through the help of a certain Fredo 16 who was instituted as caretaker. In 1970, Fredo
informed Cipriano Hernandez that he will no longer stay on the land because there are people instructing him to discontinue tilling the same.17

After the death of the spouses,18 respondents executed a deed of partition over the subject lot and were issued TCT No. T- 237330 on June 28,
1988 in lieu of OCT No. O-11844.19

Respondent Joaquin Hernandez (Joaquin) testified that in 1964, he accompanied his father in inspecting the lot which was then planted with
coconut trees.20 Thereafter, he visited the land twice, once in 1966 and the other in 1970. From 1966 up to the time he testified, his family declared
the lot for taxation and paid the taxes due thereon. 21 Joaquin explained that after the death of his father in 1971, he no longer visited the land and
it was only when the complaint was filed against them when he learned that petitioners are in actual possession of the property.22 He added that
his siblings had planned to convert Lot No. 379 into a grazing land for cattle but decided to put it off for fear of the rampant operations then of the
New Peoples Army between the years 1965-1970.23

On March 31, 1997, the trial court rendered a decision in favor of petitioners. It held that since the latter possessed the land in the concept of an
owner since 1929, they became the owners thereof by acquisitive prescription after the lapse of 10 years, pursuant to the Code of Civil Procedure.
Thus, when Santiago sold the lot to respondents parents in 1964, the former no longer had the right over the property and therefore transmitted
no title to said respondents. The dispositive portion of the trial courts decision, reads:

WHEREFORE, in the light of all the foregoing considerations judgment is hereby rendered in favor of the plaintiffs and against the defendants, to
wit:

1. Declaring that the parcel of land (Lot No. 379 of the Cadastral Survey of Guinayangan, Cadastral Case No. 12, LRC Cadastral Record No.
557), situated in Brgy. Katimo, Tagkawayan, Quezon had been fraudulently, deceitfully and mistakenly registered in the names of the
spouses Cipriano Hernandez and Julia Zoleta;

2. Declaring that herein defendants [heirs] of spouses Cipriano Hernandez and Julia Zoleta have no better rights than their
parents/predecessors-in-interest, they having stepped only on (sic) their shoes;

3. Declaring that the plaintiff Rosita Victor Rumarate and substitute plaintiffs-[heirs] of the deceased Teodulo Rumarate are the true, real
and legal owners/or the owners in fee simple absolute of the above described parcel of land;

4. Ordering the defendants to convey the above-described parcel of land to plaintiff Rosita Victor Rumarate and to the substitute
plaintiffs (heirs) of the deceased Teodulo Rumarate;
5. Ordering the Register of Deeds for Quezon Province in Lucena City to cancel Transfer Certificate of Title No. T-237330 and to issue in
lieu thereof a new certificate of title in favor of plaintiff Rosita Victor Rumarate and the substitute plaintiffs (heirs) of the deceased
plaintiff Teodulo Rumarate, in accordance with law and settled jurisprudence; and

6. Ordering the defendants to pay the costs of the suit.1avvphil.net

SO ORDERED.24

Respondents appealed to the Court of Appeals which on May 26, 2005, reversed and set aside the decision of the trial court. It ruled that Teodulo
did not acquire title over Lot No. 379, either by donation or acquisitive prescription; that Teodulos bare allegation that Santiago orally bequeathed
to him the litigated lot is insufficient to prove such transfer of ownership; and that even assuming that the property was truly donated by Santiago
to Teodulo in 1929, or in the 1960 Affidavit, said conveyance is void for not complying with the formalities of a valid donation which require the
donation and the acceptance thereof by the donee to be embodied in a public instrument. Both requirements, however, are absent in this case
because in 1929, the alleged donation was not reduced to writing while the purported 1960 donation was never accepted in a public document by
Teodulo. The appellate court thus surmised that since it was not established that Santiago donated Lot No. 379 to Teodulo, it follows that the latter
also failed to prove that he possessed the land adversely, exclusively and in the concept of an owner, a vital requisite before one may acquire title
by acquisitive prescription. In conclusion, the Court of Appeals ruled that even assuming further that Teodulo had a right over the property, his
cause of action is now barred by laches because he filed an action only in 1992 notwithstanding knowledge as early as 1970 of the issuance of title
in the name of spouses Cipriano Hernandez and Julia Zoleta. The decretal portion of the decision states:

WHEREFORE, premises considered, the instant appeal is GRANTED. The assailed March 31, 1997 decision of the Regional Trial Court of Calauag,
Quezon, Branch 63, in Civil Case No. C-964 is hereby REVERSED and SET ASIDE. No costs.

SO ORDERED.25

Hence, the instant appeal.

The issue to be resolved is to whom should Lot No. 379 be awarded? To petitioners who possessed and cultivated the lot since 1929 up to the
present, but do not have a certificate of title over the property, or to respondents who have a certificate of title but are not in possession of the
controverted lot?

In an action for quieting of title, the court is tasked to determine the respective rights of the parties so that the complainant and those claiming
under him may be forever free from any danger of hostile claim.26 Under Article 47627of the Civil Code, the remedy may be availed of only when, by
reason of any instrument, record, claim, encumbrance or proceeding, which appears valid but is, in fact, invalid, ineffective, voidable or
unenforceable, a cloud is thereby cast on the complainants title to real property or any interest therein. Article 477 of the same Code states that
the plaintiff must have legal or equitable title to, or interest in the real property which is the subject matter of the suit.

For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable
title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his
title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.28

In Evangelista v. Santiago,29 it was held that title to real property refers to that upon which ownership is based. It is the evidence of the right of the
owner or the extent of his interest, by which means he can maintain control and, as a rule, assert a right to exclusive possession and enjoyment of
the property.

In the instant case, we find that Teodulos open, continuous, exclusive, notorious possession and occupation of Lot No. 379, in the concept of an
owner for more than 30 years vested him and his heirs title over the said lot. The law applicable at the time Teodulo completed his 30-year
possession (from 1929 to 1959) of Lot No. 379, in the concept of an owner was Sec. 48(b) of Commonwealth Act No. 141 or the Public Land Act, as
amended by Republic Act (RA) No. 1942, effective June 22, 195730 which provides:

Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance (now Regional Trial Courts) of the
province where the land is located for confirmation of their claims and the issuance of a certificate of title thereafter, under the Land Registration
Act (now Property Registration Decree), to wit:

xxxx

(b) Those who by themselves or through their predecessors-in-interest have been, in continuous, exclusive, and notorious possession and
occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title, except when prevented by war or force majeure. Those shall be conclusively
presumed to have performed all the conditions essential to a government grant and shall be entitled to a certificate of title under the provisions of
this chapter.

When the conditions specified therein are complied with, the possessor is deemed to have acquired, by operation of law, a right to a government
grant, without necessity of a certificate of title being issued, and the land ceases to be part of the public domain. The confirmation proceedings
would, in truth be little more than a formality, at the most limited to ascertaining whether the possession claimed is of the required character and
length of time; and registration thereunder would not confer title, but simply recognize a title already vested. The proceedings would not originally
convert the land from public to private land, but only confirm such conversion already effected by operation of law from the moment the required
period of possession became complete. 31

In the instant case, the trial court gave full faith and credence to the testimony of Teodulo and his witnesses that his (Teodulos) possession of the
land since 1929 was open, continuous, adverse, exclusive, and in the concept of an owner. It is a settled rule in civil cases as well as in criminal
cases that in the matter of credibility of witnesses, the findings of the trial courts are given great weight and highest degree of respect by the
appellate court considering that the latter is in a better position to decide the question, having heard the witnesses themselves and observed their
deportment and manner of testifying during the trial.32

A careful examination of the evidence on record shows that Teodulo possessed and occupied Lot No. 379 in the concept of an owner. Since 1929,
Teodulo cultivated the controverted land, built his home, and raised his 11 children thereon. In 1957, he filed a homestead application over Lot No.
379 but failed to pursue the same.33 After his demise, all his 11 children, the youngest being 28 years old,34 continued to till the land. From 1929 to
1960, Santiago never challenged Teodulos possession of Lot No. 379 nor demanded or received the produce of said land. For 31 years Santiago
never exercised any act of ownership over Lot No. 379. And, in 1960, he confirmed that he is no longer interested in asserting any right over the
land by executing in favor of Teodulo a quitclaim.

Indeed, all these prove that Teodulo possessed and cultivated the land as owner thereof since 1929. While the oral donation in 1929 as well as the
1960 quitclaim ceding Lot No. 379 to Teodulo are void for non-compliance with the formalities of donation, they nevertheless explain Teodulo and
his familys long years of occupation and cultivation of said lot and the nature of their possession thereof.

In Bautista v. Poblete,35 the Court sustained the registration of a parcel of land in the name of the successors-in-interest of the donee
notwithstanding the invalidity of the donation inasmuch as said donee possessed the property in the concept of an owner. Thus

There is no question that the donation in question is invalid because it involves an immovable property and the donation was not made in a public
document as required by Article 633 of the old Civil Code, in connection with Article 1328 of the same Code (concerning gifts propter nuptias), but
it does not follow that said donation may not serve as basis of acquisitive prescription when on the strength thereof the donee has taken
possession of the property adversely and in the concept of owner.

It follows therefore that Teodulos open, continuous, exclusive, and notorious possession and occupation of Lot No. 379 for 30 years, or from 1929
to 1959 in the concept of an owner, earned him title over the lot in accordance with Sec. 48 (b) of the Public Land Act. Considering that Lot No. 379
became the private property of Teodulo in 1959, Santiago had no more right to sell the same to spouses Cipriano Hernandez and Julia Zoleta in
1964. Consequently, the latter and herein respondents did not acquire ownership over Lot No. 379 and the titles issued in their name are void.

Interestingly, respondents adopted the theory that Santiago acquired title over Lot No. 379 not from the April 21, 1925 Decision of the CFI of
Tayabas which merely recognized his rights over said lot, but from his more than 30 years of possession since 1925 up to 1964 when he sold same
lot to their (respondents) predecessors-in-interest, the spouses Cipriano Hernandez and Julia Zoleta. On the basis of said claim, said spouses filed
an action for, and successfully obtained, confirmation of imperfect title over Lot No. 379, pursuant to Sec. 48 (b) of the Public Land Act.

However, the records do not support the argument of respondents that Santiagos alleged possession and cultivation of Lot No. 379 is in the nature
contemplated by the Public Land Act which requires more than constructive possession and casual cultivation. As explained by the Court in Director
of Lands v. Intermediate Appellate Court:36

It must be underscored that the law speaks of "possession and occupation." Since these words are separated by the conjunction and, the clear
intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive
possession. When, therefore, the law adds the word occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken
together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for one to qualify under
paragraph (b) of the aforesaid section, his possession of the land must not be mere fiction. As this Court stated, through then Mr. Justice Jose P.
Laurel, in Lasam vs. The Director of Lands:

"x x x Counsel for the applicant invokes the doctrine laid down by us in Ramos vs. Director of Lands (39 Phil. 175, 180). (See also Rosales vs. Director
of Lands, 51 Phil. 302, 304). But it should be observed that the application of the doctrine of constructive possession in that case is subject to
certain qualifications, and this court was careful to observe that among these qualifications is one particularly relating to the size of the tract in
controversy with reference to the portion actually in possession of the claimant. While, therefore, 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, possession under paragraph 6
of section 54 of Act No. 926, as amended by paragraph (b) of section 45 of Act No. 2874, is not gained by mere nominal claim. The mere planting of
a sign or symbol of possession cannot justify a Magellan-like claim of dominion over an immense tract of territory. Possession as a means of
acquiring ownership, while it may be constructive, is not a mere fiction x x x."

Earlier, in Ramirez vs. The Director of Lands, this Court noted:

"x x x The mere fact of declaring uncultivated land for taxation purposes and visiting it every once in a while, as was done by him, does not
constitute acts of possession."

In the instant case, Santiagos short-lived possession and cultivation of Lot No. 379 could not vest him title. While he tilled the land in 1925, he
ceased to possess and cultivate the same since 1928. He abandoned the property and allowed Teodulo to exercise all acts of ownership. His brief
possession of Lot No. 379 could not thus vest him title. Nemo potest plus juris ad alium transferre quam ipse habet. No one can transfer a greater
right to another than he himself has. Hence, spouses Cipriano Hernandez and Julia Zoleta and herein respondents did not acquire any right over the
questioned lot and the title issued in their names are void, because of the legal truism that the spring cannot rise higher than the source.37

Furthermore, spouses Cipriano Hernandez and Julia Zoleta cannot be considered as purchasers in good faith because they had knowledge of facts
and circumstances that would impel a reasonably cautious man to make such inquiry.38 The Court notes that Santiago was not residing in Lot No.
379 at the time of the sale. He was already 81 years old, too old to cultivate and maintain an 18-hectare land. These circumstances should have
prompted the spouses to further inquire who was actually tilling the land. Had they done so, they would have found that Teodulo and his family are
the ones possessing and cultivating the land as owners thereof.

In the same vein, respondents could not be considered as third persons or purchasers in good faith and for value or those who buy the property
and pay a full and fair price for the same39 because they merely inherited Lot No. 379 from spouses Cipriano Hernandez and Julia Zoleta.

Then too, even if Santiago acquired title over Lot No. 379 by virtue of the April 21, 1925 Decision of the CFI of Tayabas, and not on account of his
alleged 30-year possession thereof, we will still arrive at the same conclusion. This is so because the declaration of this Court that petitioners are
the rightful owners of the controverted lot is based on Teodulos own possession and occupation of said lot under a bona fide claim of acquisition
of ownership, regardless of the manner by which Santiago acquired ownership over same lot.

On the issue of prescription, the settled rule is that an action for quieting of title is imprescriptible, as in the instant case, where the person seeking
relief is in possession of the disputed property. A person in actual possession of a piece of land under claim of ownership may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right, and that his undisturbed possession gives him the
continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his
title.40 Considering that petitioners herein continuously possessed Lot No. 379 since 1929 up to the present, their right to institute a suit to clear
the cloud over their title cannot be barred by the statute of limitations.

Neither could petitioners action be barred by laches because they continuously enjoyed the possession of the land and harvested the fruits thereof
up to the present to the exclusion of and without any interference from respondents. They cannot therefore be said to have slept on their rights as
they in fact exercised the same by continuously possessing Lot No. 379.
On the contrary, we find that it is respondents who are actually guilty of laches. Though not specifically pleaded, the Court can properly address the
issue of laches based on petitioners allegation in the complaint that "[n]either spouses Cipriano Hernandez and Julia Zoleta x x x nor [herein
respondents] had taken steps to possess or lay adverse claim to said parcel of land from the date of their registration of title in November, 1965 up
to the present."41 Such averment is sufficient to impute abandonment of right on the part of respondents. At any rate, laches need not be
specifically pleaded. On its own initiative, a court may consider it in determining the rights of the parties. 42

The failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier
constitutes laches. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert
it has either abandoned it or declined to assert it. While it is by express provision of law that no title to registered land in derogation of that of the
registered owner shall be acquired by prescription or adverse possession, it is likewise an enshrined rule that even a registered owner may be
barred from recovering possession of property by virtue of laches. 43

In applying the doctrine of laches, we have ruled that where a party allows the following number of years to lapse from the emergence of his cause
of action without enforcing his claim, laches sets in: 36 years; 12 years; 50 years; 34 years; 37 years; 32 years; 20 years; 47 years; 11 years; 25 years;
40 years; 19 years; 27 years; 7 years; 44 years; 4 years; and 67 years.44

The elements of laches are: (1) conduct of a party on the basis of which the other party seeks a remedy; (2) delay in asserting ones rights, despite
having had knowledge or notice of the other partys conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or
notice on the part of a party that the person against whom laches is imputed would assert the right; and (4) injury or prejudice to the party
asserting laches in the event the suit is allowed to prosper.45

All these elements are present in this case. Petitioners continuous possession and occupation of Lot No. 379 should have prompted the
respondents to file an action against petitioners, but they chose not to. Respondents cannot deny knowledge of said possession by petitioners as
they even asserted in their Answer that in 1970, Teodulo ousted the tenant they (respondents) instituted in the lot. From 1970 up to the filing of
petitioners complaint in 1992, or after 22 years, respondents never bothered to assert any right over Lot No. 379. Respondent Joaquin Hernandez
testified that he and his siblings had a plan to convert the land into a grazing land for cattle but decided to put it off for fear of the rampant
operations of the New Peoples Army between the years 1965-1970. However, even after said years, respondents took no step to implement their
plan. Worse, among the siblings of spouses Cipriano Hernandez and Julia Zoleta who are all living in the Philippines, 46 only Joaquin Hernandez
visited the land and only thrice, i.e., once in each years of 1964, 1966 and 1970. Thereafter, not one of them paid visit to Lot No. 379, up to the
time Joaquin Hernandez testified in 1996,47 despite the fact that two of them are living only in Calauag, Quezon; one in Agdangan, Quezon;48 and
two in Lucena City.49 Neither did they send a notice or correspondence to petitioners invoking their right over the property. From all indications,
the late spouses Cipriano Hernandez and Julia Zoleta as well respondents, have neglected Lot No. 379. Were it not for this action instituted by
petitioners in 1992, their conflicting claims over the property could not have been settled. It goes without saying that to lose a property that has
been in the family from 1929 up to the present, or for 77 years will certainly cause irreparable pecuniary and moral injury to petitioners, especially
so if the same ancestral land will be lost under most unfair circumstances in favor of respondents who appear to have no real interest in cultivating
the same.

Finally, payment of taxes alone will not save the day for respondents. Only a positive and categorical assertion of their supposed rights against
petitioners would rule out the application of laches. It means taking the offensive by instituting legal means to wrest possession of the property
which, however, is absent in this case. Respondents payment of taxes alone, without possession could hardly be construed as an exercise of
ownership. What stands out is their overwhelming passivity by allowing petitioners to exercise acts of ownership and to enjoy the fruits of the
litigated lot for 22 years without any interference.

In sum, the Court finds that Lot No. 379 should be adjudicated in favor of petitioners.

One last point. Notwithstanding this Courts declaration that Lot No. 379 should be awarded in favor of petitioners, their title over the same is
imperfect and is still subject to the filing of the proper application for confirmation of title under Section 48 (b) of the Public Land Act, where the
State and other oppositors may be given the chance to be heard. It was therefore premature for the trial court to direct the Register of Deeds of
Lucena City to issue a certificate of title in the name of petitioners.

Nevertheless, the imperfect title of petitioners over Lot No. 379 is enough to defeat the certificate of title issued to respondents.50

WHEREFORE, the petition is GRANTED and the May 26, 2005 Decision of the Court of Appeals in C.A. GR. CV No. 57053, is REVERSED and SET
ASIDE. The March 31, 1997 Decision of the Regional Trial Court of Calauag, Quezon, Branch 63, in Civil Case No. C-964, awarding Lot No. 379 in
favor petitioners and ordering the cancellation of respondents Transfer Certificate of Title No. T- 237330, is REINSTATED with
the MODIFICATION deleting the trial courts order directing the Register of Deed of Lucena City to issue a certificate of title in the name of
petitioners.

SO ORDERED.
EN BANC

G.R. No. L-17951 February 28, 1963

CONRADO C. FULE and LOURDES F. ARAGON, petitioners, vs. EMILIA E. DE LEGARE and COURT OF APPEALS, respondents.

REGALA, J.:

This is a petition for certiorari to review the decision of the Court of Appeals, promulgated on November 16, 1960, in Civil Case No. 15728-R,
entitled" Emilia E. Legare, plaintiff-appellant, versus Conrado C. Fule and Lourdes F. Aragon, defendants-appellants..

The facts of this case as found by the Court of Appeals in its decision are as follows:

This is an action for annulment of certain deeds of sale and conveyance covering a parcel of land, together with the improvements
existing thereon, situated in the municipality of San Juan, province of Rizal, and for damages.

It appears in evidence that the plaintiff, Emilia E. de Legare, was the owner of a parcel of land, together with a residential house erected
thereon, situated at No. 146 Sta. Mesa Boulevard Extension, San Juan, Rizal, her ownership being evidenced by Transfer Certificate of
Title No. 21253, issued by the Office of the Register of Deeds of the province of Rizal. She was living in that house together with
defendant John W. Legare, her adopted son, and a maid named Purita Tarrosa. On September 26, 1951, the plaintiff, thru a public deed,
constituted on the above mentioned house and lot a first class mortgage in favor of defendant Tomas Q. Soriano to guarantee the
payment of a loan in the amount of P8,000.00. This deed of mortgage was on the same date recorded in the Office of the Register of
Deeds of the province of Rizal and annotated in the memorandum of encumbrances of transfer certificate of title No. 21253. On account
of certain partial payments made by the plaintiff and the contracting by the latter of additional loans in small amounts from Tomas Q.
Soriano the debt guaranteed by the above mentioned mortgage was reduced to the sum of P7,000.00 as of February 23, 1953. These
transactions, however, were not annotated on the memorandum of encumbrances of the above mentioned certificate of title.

At about 9:00 o'clock in the evening of March 29, 1953, while the plaintiff, John W. Legare, and Purita Tarrosa were seated in the drawing
room of the house above referred to, an unknown man intruded into the room, approached the plaintiff, covered her mouth, and,
pressing a knife on her side, demanded that she give him P10,000.00 if she did not like to be killed. The plaintiff replied that she did not
have that amount. Thereupon, the intruder told the plaintiff to raise the necessary amount as he would come back the following morning
and once more threatened to kill her if she would fail to do so. After having made that threat, the intruder left the house. John W. Legare
did not call for help nor made any attempt to defend his mother, and when Purita Tarrosa stood up to go down the house to call for a
policeman, he held the latter by the hand and slapped her on the face when she persisted in going down, telling her that the man had
companions waiting downstairs.

After the intruder was gone John W. Legare approached the plaintiff, and exhibiting to her a paper told her to sign it as with the same he
could secure from the U.S. Veterans Administration the amount which they needed to deliver to that intruder. The plaintiff, who did not
know how to read nor write, although she could sign her name, asked John W. Legare what that paper was. The latter answered that it
was an application for payment of compensation. As plaintiff had confidence in John W. Legare and prior to that occasion she had
received from the U.S. Veterans Administration a letter concerning some compensation she was to receive, she signed that paper. After
the paper was signed by the plaintiff, John W. Legare had Purita Tarrosa sign it as a witness, without however, allowing the latter to read
it.

After that paper was thus signed, John W. Legare told the plaintiff and Purita Tarrosa to pack up their things as they were leaving the
house to hide in a hotel, adding that the men who came earlier that evening were Huks. Early the next morning John W. Legare took the
plaintiff and Purita Tarrosa to the Windsor Hotel in the City of Manila, and after conducting them to a room in the hotel, told them not to
leave the room or peep out of the window as they might be seen by the men who came to their house in the previous evening. This
advise given, John W. Legare left the hotel. The plaintiff and Purita Tarrosa stayed in that hotel for about a month and a half. John W.
Legare occasionally visited them there. In one of said occasional visits the plaintiff told John that she wanted to go home. The latter told
her that it was not yet safe for her to go home. On May 7, 1953, however, John W. Legare came to the hotel, gave the plaintiff a five-peso
bill, and told her that she could use the amount for transportation expenses if she wanted to leave the hotel. On the following morning
the plaintiff and Purita Tarrosa left the hotel and went direct to her house at Sta. Mesa Boulevard Extension. When they arrived at the
house, however, they found that it was occupied by strangers, and that all her furniture and personal belongings had disappeared.
Inquiring from those strangers how they happened to occupy the house, the latter told her that John W. Legare had sold the house to
them and that it was no longer hers. The plaintiff thereupon sought the help of her attorney. It was then discovered that the paper which
John W. Legare had the plaintiff and Purita Tarrosa sign in the evening of March 29, 1953 was a deed of sale of the lot and house in
question in favor of John W. Legare for the sum of P12,000.00, and that it was supposed to have been executed on the 7th day of April,
1953, and acknowledged before a notary public on that date. Exhibit X.

It further appears that sometime prior to May 9, 1953, John W. Legare approached Elias B. Fermin, the real estate broker who intervened
in the securing of the loan contracted by the plaintiff from Tomas Q. Soriano, and sought said broker's help to sell the lot and house in
question. Elias B. Fermin accepted the commission and offered the property in sale to defendants spouses Conrado C. Fule and Lourdes F.
Aragon. Conrado C. Fule read the title papers in the hand of John W. Legare and inspected the premises, and satisfied with the result of
his inspection, he agreed to purchase the property for P12,000.00 on condition that the sum of P7,000, the unpaid balance of plaintiff's
indebtedness to Tomas Q. Soriano secured by a mortgage thereon, would be deducted from the price, and that he would assume said
mortgage. The terms offered by Conrado C. Fule being acceptable to John W. Legare and Tomas Soriano, the parties proceeded to
formalize the contract. Accordingly, on May 9, 1953, defendant Tomas Q. Soriano executed a deed of absolute sale thereof, free of all
liens and encumbrances, in favor of defendant spouses Conrado C. Fule and Lourdes F. Aragon, Exhibit X-2, and said spouses in turn
executed in favor of Tomas Q. Soriano a deed of mortgage covering the property for the sum of P7,000.00. Exhibit X-3. These three
deeds, together with transfer certificate of Title No. 21253, issued in the name of the plaintiff, were on that same date presented for
registration in the Office of the Register of Deeds of the province of Rizal. The latter, following the usual procedure, recorded, first, the
deed of sale executed by the plaintiff in favor of defendant John W. Legare (Exhibit 1) and issued in the name of the latter transfer
certificate of title No. 30126 which cancelled transfer certificate of title No. 21253 (Exhibit Y), then the deed of sale executed by John W.
Legare in favor of the spouses Conrado C. Fule and Lourdes F. Aragon (Exhibit X-2) and issued in favor of the latter transfer certificate of
title No. 30127 (Exhibit Y-1), which cancelled transfer certificate of title No. 30126, and then annotated on the memorandum of
encumbrances of transfer certificate of title No. 30127 the deed of mortgage (Exhibit X-1) executed in favor of Tomas Q. Soriano by said
spouses. Once these were accomplished, Elias B. Fermin and John W. Legare went back to the house of the spouses Conrado C. Fule and
Lourdes P. Aragon and gave the transfer certificate of title No. 30127. Thereupon said spouses delivered to John W. Legare the balance of
the purchase price of the property after deducting therefrom the amount of the mortgage constituted thereon in favor of Tomas Q.
Soriano, the brokerage fees and the expenses incident to the execution and registration of said deeds and issuance of new certificates of
title, which amounted to a little P4,000.00.

Upon the evidence, the trial court rendered judgment, the dispositive part of which reads as follows:

IN VIEW OF ALL THE FOREGOING, this Court hereby orders:

1) the cancellation of Certificates of Title Nos. 30127 and 10126, thereby leaving valid TCT No. 21253 in the name of Emilia E. de Legare
together with the encumbrance thereon in favor of Tomas Q. Soriano;

2) the delivery of the possession of the premises to the plaintiff and the monthly rental of P150.00 a month from May 9, 1953, up to and
including the date on which the delivery is to be made, this obligation being understood to be joint and several insofar as the defendants
Fule and Aragon are concerned;

3) the award of P5,000.00 as moral damages in favor of the plaintiff and enforceable against John W. Legare for the fraud perpetrated by
the latter on the former;

4) the award of P1,000.00 as attorney's is fees enforceable against the defendants Fule and Aragon;

And on the cross-claim, the court orders

1) John W. Legare to refund to the spouses Fule and Aragon the amount paid by the latter on account of the sale contained in Exhibit X-2
plus interest thereon at the legal rate from the date of the cross-claim;

2) the award of P5,000.00 as moral damages in favor of the spouses Fule and Aragon and enforceable against John W. Legare for the
misrepresentation made by him;.

3) the reimbursement to the spouses Fule and Aragon by John W. Legare of all amounts which may be paid by the former to the plaintiff
by way of rentals for the premises involved herein, as well as attorney's fees in the amount of P1,000.00. SO ORDERED.

The Court of Appeals, in deciding the appeal, entered a judgment the dispositive portion of which follows:.

WHEREFORE, modified as indicated above, i.e., the transfer certificate of title No. 21253 issued in the name of Emilia E. de Legare is
revived with the mortgage in favor of appellee Tomas Q. Soriano annotated on its memorandum of encumbrances but reduced to the
amount of P7,000.00, and that the award of attorney's fees in the amount of P1,000.00 to be paid by the spouses Conrado C. Fule and
Lourdes F. Aragon, in favor of the plaintiff, is eliminated therefrom, the judgment appealed from is hereby affirmed in all other respects,
without special pronouncement as to costs in this instance. IT IS SO ORDERED.

In elevating the judgment of the Court of Appeals to this Tribunal for review, herein petitioners discussed 6 assignments of error. However, this
Court is of the view that, in effect and substance, only one issue was raised.We have always refrained from reviewing factual findings of the Court
of Appeals and the first two errors assigned were but attempts at disputing the same. The other four were simply detailed aspects of the one, sole
issue, to wit:

Were the herein petitioners purchasers in good faith and for value of the properties here contested?

Guided by the facts found by the Court of Appeals, We hold the herein petitioners innocent purchasers for value of the house and lot here
disputed. In consequence, they are here adjudged the lawful owners thereof.

A purchaser in good faith is one who buys property of another, without notice that some other persons has a right to, or interest in, such property
and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other persons in
the property. Good faith consists in an honest intention to abstain from taking any unconscientious advantage of another (Cui and Joven v. Henson,
51 Phil. 606). We have measured the conduct of the petitioner spouses by this yardstick.

These facts were uncontroverted. The negotiation and transaction which eventually caused the certificate of title to be transferred from the herein
respondent to the petitioner spouses were conducted by a real estate broker licensed since 1938. Nothing in John W. Legare's person or behaviour
suggested anything suspicious. He was the adopted son of the herein respondent, and, to the time that he was contracting with the petitioner
spouses, he had not been known to commit crime or dishonesty. On the contrary, John has had previous dealings with the real estate broker during
which he exhibited the expected degree of trustworthiness.

It should be noted that the deed of sale was regular upon its face, and no one would have questioned its authenticity since it was duly
acknowledged before a notary public. Moreover, even if the petitioners had the opportunity to compare the signature of the respondent on the
deed of conveyance with a specimen of her genuine signature, the effort, nonetheless, would have been in vain since the respondent's signature
on the document was admittedly hers. Lastly, it should not be overlooked that the respondent, during the whole period of the negotiation, was
nowhere available to confirm or deny the execution of the deed. She was then in hiding, or, hidden, at the Windsor Hotel in Manila.
The diligence and precaution observed by the petitioners themselves could hardly have been wanting. The records show that they did not rely
solely and fully upon the deed of sale in favor of John W. Legare and the fact that John had then in his possession the corresponding certificate of
title of the registered owner. They demanded more. They insisted that the sale in favor of John W. Legare be first registered and that the transfer in
their favor be thereafter likewise registered. It was only after all these were complied with that they paid the purchase price. In other words, the
petitioner spouses relied not really on the documents exhibited to them by John W. Legare, but, on the registerability of those documents. This in
Our view, satisfies the measure of good faith contemplated by law.

It is true that at the time the herein petitioners purchased the properties from John W. Legare, he was not yet the registered owner of the same.
This fact alone, however, could not have caused the herein petitioners to lose their status as innocent purchasers for value. It should be recalled
that although the title was in the name of the respondent Emilia E. de Legare, the certificate of title was in the possession of her adopted son, John.
Under Section 55 of Act 496, as amended, John's possession of the certificate and his subsequent production of it to the herein petitioners
operated as a "conclusive authority from the registered owner to the register of deeds to enter a new certificate."

SEC. 55. xxx xxx xxx


The production of the owner's duplicate certificate whenever any voluntary instrument is presented for registration shall be conclusive
authority from the registered owner to the register of deeds to enter a new certificateor to make a memorandum or registration in
accordance with such instrument, and the new certificate or memorandum shall be binding upon the registered owner and upon all
persons claiming under him, in favor of every purchaser for value and in good faith. ....

While it was true that the transfer in favor of John was still unregistered when he sought to sell the property to the herein petitioners, it was not
true that the latter observed no precaution whatsoever from the complication of such non-registration. As already discussed above, the petitioners
required that the registration of the previous sale (from the respondent to John W. Legare) be first attended to and completed. After that was done
and the certificate of title thereof was issued to John by the Register of Deeds, they still withheld payment till the second sale (from John to the
petitioners) has in turn registered and the corresponding certificate of title therefor was issued in their names. It was only after all these were
followed that the entire negotiation was terminated with the payment of the balance of the purchase price. All these, We hold, were adequate
safeguards against the objection interposed. A contrary conclusion would operate to weaken the reliance of the general public on the
indefeasibility of titles registered under the Torrens System.

We have so far demonstrated the good faith of the petitioner spouses. By the very facts established by the Court of Appeals, however, there is still
another reason why the property herein in question should be adjudged to the petitioners.

Although the deed of sale in favor of John W. Legare was fraudulent, the fact remains that he was able to secure a registered title to the house and
lot. It was this title which he subsequently conveyed to the herein petitioners. We have indeed ruled that a forged or fraudulent deed is a nullity
and conveys no title (Director of Lands v. Addison, 49 Phil. 19). However, We have also laid down the doctrine that there are instances when such a
fraudulent document may become the root of valid title. One such instance is where the certificate of title was already transferred from the name
of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee
had the right to rely upon what appeared in the certificate (Inquimboy vs. Cruz, G.R. No. L-13953, July 28, 1960).

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without
prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1wph1.t

We have been constrained to adopt the conclusion here set forth because under the Torrens system, "registration is the operative act that gives
validity to the transfer or creates a lien upon the land (Secs. 50 and 51, Land Registration Act). Consequently, where there was nothing in the
certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to
explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his
right thereto. If the rule were otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens system seeks to insure would
entirely be futile and nugatory. (Reynes vs. Barrera, 68 Phil. 656; De Lara and De Guzman vs. Ayroso, 50 O.G. No. 10, 4838). The public shall then be
denied of its foremost motivation for respecting and observing the Land Registration Act. In the end, the business community stands to be
inconvenienced and prejudiced immeasurably.

Furthermore, when the Register of Deeds issued a certificate of title in the name of John W. Legare, and thereafter registered the same, John W.
Legare, insofar as third parties were concerned, acquired a valid title to the house and lot here disputed. When, therefore, he transferred this title
to the herein petitioners, third persons, the entire transaction fell within the purview of Article 1434 of the Civil Code. The registration in John W.
Legare's name effectively operated to convey the properties to him.

ART. 1434. When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title
thereto, such title passes by operation of law to the buyer or grantee.

This Court sympathizes with the respondent. It is aware of the treacherous, painful fraud committed on her by her adopted son. But positive
provisions of law and settled jurisprudence cannot be subordinated to that feeling.

Besides, the records of this case reveal that the herein respondent is herself not entirely free from blame. We note that when John presented to
her the document which turned out to be a bed of conveyance in his favor, she readily affixed her signature thereto upon the simple
representation of John that it was a document pertaining to her claim with the U.S. Veterans Administration. She could have asked her maid to
read the contents of the same for her and yet she did not. These, We believe, amount to a lack of prudence and precaution on the part of Mrs.
Emilia de Legare.

IN VIEW OF THE FOREGOING, the decision of the Court of Appeals is hereby reversed and set aside. A new one is here entered dismissing the
respondent's complaint and declaring the petitioners herein the lawful owners of the properties here involved. Without pronouncement as to
costs.

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes. J.B.L. and Dizon, JJ., concur.
Bengzon, C.J., concurs in the result. Barrera and Makalintal, JJ., took no part.
FIRST DIVISION
G.R. No. L-106528 December 21, 1993
PHILIPPINE COLUMBIAN ASSOCIATION, petitioner, vs. THE HONORABLE DOMINGO D. PANIS as Judge, Regional Trial Court of Manila, Branch 41,
THE HONORABLE RICARDO DIAZ, as Judge, Regional Trial Court of Manila, Branch 27, the CITY OF MANILA, ANTONIO GONZALES, JR., KARLO
BUTIONG, LEONARDO AQUINO, EDILBERTO LOPEZ, ANTILANO FERRER, LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ, PATRICIO DE GUZMAN,
RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO FERNANDEZ, DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA VELEZ, LUSITO
ALMADRONES, MYRNA BARREDO EBREO, FULGENCIO CORSINO, PEDRO VELASQUEZ, JUAN INOBAYA, NENITA ARCE, MAGNO ORTINEZ,
ARMANDO PARAGAS, HIPOLITO ESTABILLO, FELICIANO FAUSTINO, VIRGILIO EDIC, JOSE TINGZON, JOSUE MARIANO, MARIA YERO, MA.
DOLORES QUIZON, ISIDERO TAGUILIG, CIRIACO MENDOZA, JUAN ROMERO, JOSE LAGATA, FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO
LACHICA, PIO RAJALES, REGINA VIERNES, JUAN ROMERO, DOMINGO EDIC, EDUARDA GONZALES, PABLO QUIRANTE, LEONORA SANTIA, MARIA
RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA, DOMINADOR ADAO, JUAN PANTERA, FRISCA MANDOT, SOCORRO SANTOS AND
GLORIA JEBUNAN, respondents.
QUIASON, J.:

This is an appeal by certiorari to review: (1) the decision of the Court of Appeals in CA-G.R. SP No. 23338, which dismissed the petition
for certiorari filed by herein petitioner, assailing the orders of (a) respondent Judge Domingo D. Panis of the Regional Trial Court, Branch 41,
Manila, in Civil Case No. 90-53531, and (b) respondent Judge Ricardo D. Diaz, of the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-
53346; and (2) its Resolution dated July 30, 1992, which denied the motion for reconsideration of the decision.

Philippine Columbian Association, petitioner herein, is a non-stock, non-profit domestic corporation and is engaged in the business of providing
sports and recreational facilities for its members. Petitioner's office and facilities are located in the District of Paco, Manila, and adjacent thereto, is
a parcel of land consisting of 4,842.90 square meters owned by petitioner.

Private respondents are the actual occupants of the said parcel of land, while respondents Antonio Gonzales, Jr. and Karlo Butiong were duly-
elected councilors of the City of Manila.

In 1982, petitioner instituted ejectment proceedings against herein private respondents before the metropolitan Trial Court of Manila. Judgment
was rendered against the said occupants, ordering them to vacate the lot and pay reasonable compensation therefor. This judgment was affirmed
by the Regional Trial Court, the Court of Appeals and subsequently by the Supreme Court in G.R. No. 85262.

As a result of the favorable decision, petitioner filed before the Metropolitan Trial Court of Manila, a motion for execution of judgment, which was
granted on April 9, 1990. A writ of demolition was later prayed and likewise issued by the same court on May 30, 1990.

On June 8, 1990, private respondents filed with the Regional Trial Court, Branch 27, Manila, a petition for injunction and prohibition with
preliminary injunction and restraining order against the Metropolitan Trial Court of Manila and petitioner herein (Civil Case No. 90-53346) to enjoin
their ejectment from and the demolition of their houses on the premises in question.

On June 28, 1990, the City of Manila filed a complaint docketed as Civil Case No. 90-53531 against petitioner before the Regional Trial Court,
Branch 41, Manila, for the expropriation of the 4,842.90 square meter lot subject of the ejectment proceedings in Civil Case No. 90-53346.
Petitioner, in turn, filed a motion to dismiss the complaint, alleging, inter alia, that the City of Manila had no power to expropriate private land; that
the expropriation is not for public use and welfare; that the expropriation is politically motivated; and, that the deposit of P2 million in the City of
Manila representing the provisional value of the land, was insufficient and was made under P.D. 1533, a law declared unconstitutional by the
Supreme Court.

On September 14, 1990, the Regional Trial Court, Branch 41, Manila, denied petitioner's motion to dismiss and entered an order of condemnation
declaring that the expropriation proceeding was properly instituted in accordance with law. The Court also ordered the parties to submit, within
five days, the names of their respective nominees as commissioners to ascertain just compensation for the land in question.

Petitioner filed a motion for reconsideration of the order denying its motion to dismiss, and later a motion to defer compliance with the order
directing the submission of the names of nominees to be appointed commissioners. The City of Manila, however, filed an ex-parte motion for the
issuance of a writ of possession over the subject lot, mentioning the P2 million deposit with the Philippine National Bank, representing the
provisional value of the land.

In separate orders dated October 5 and 8, 1990, the court issued the writ of possession, and at the same time, denied petitioner's motion to defer
compliance and motion for reconsideration.

On September 21, 1990, as a result of the expropriation proceedings, the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346 issued
an order, granting the writ of preliminary injunction prayed for by the private respondents. A motion for reconsideration filed by petitioner was
denied.

Petitioner filed before the Court of Appeals a petition before the Court of Appeals a petition assailing the orders dated September 14, 1990, and
October 5 and 8, 1990 of Branch 41 of the Regional Trial Court, and the Order dated September 21, 1990 of Branch 27 of the same court (CA-G.R.
SP No. 23338). The Court of Appeals rendered a Decision on November 31, 1992, denying the petition, and a Resolution on July 30, 1992, denying
consideration thereof.

Hence, this petition.

The land subject of this case is the 4,842.90 square meter lot, which was formerly a part of the Fabie Estate. As early as November 11, 1966, the
Municipal Board of the City of Manila passed Ordinance No. 5971, seeking to expropriate the Fabie Estate. Through negotiated sales, the City of
Manila acquired a total of 18,017.10 square meters of the estate, and thereafter subdivided the land into home lots and distributed the portions to
the actual occupants thereof.
The remaining area of 4,842.90 square meters, more or less, was sold in 1977 by its owner, Dolores Fabie-Posadas, to petitioner. Since the time of
the sale, the lot has been occupied by private respondents. On 23, 1989, the City Council of Manila, with the approval of the Mayor, passed
Ordinance No. 7704 for the expropriation of the 4,842.90 square meter lot.

Petitioner claims that expropriation of the lot cannot prosper because:


(1) the City of Manila has no specific power to expropriate private property under the 1987 Constitution; and (2) assuming that it has such power,
this was exercised improperly and illegally in violation of the Public use requirement and petitioner's right to due process.

Petitioner argues that under the 1987 Constitution, there must be a law expressly authorizing local governments to undertake urban land reform
(Art. XIII, Sec. 9).

Petitioner forgot that the Revised Charter of the City of Manila, R.A. No. 409, expressly authorizes the City of Manila to "condemn private property
for public use" (Sec. 3) and "to acquire private land . . . and subdivide the same into home lots for sale on easy terms to city residents" (Sec. 100).

The Revised Charter of the City of Manila expressly grants the City of Manila general powers over its territorial jurisdiction, including the power of
eminent domain, thus:

General powers. The city may have a common seal and alter the same at pleasure, and may take, purchase, receive, hold,
lease, convey, and dispose of real and personal property for the general interest of the city, condemn private property for public
use, contract and be contracted with, sue and be sued, and prosecute and defend to final judgment and execution, and exercise
all the powers hereinafter conferred (R.A. 409, Sec. 3; Emphasis supplied).

Section 100 of said Revised Charter authorizes the City of Manila to undertake urban land reform, thus:

Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same into home lots for sale on
easy terms for city residents, giving first priority to the bona fide tenants or occupants of said lands, and second priority to
laborers and low-salaried employees. For the purpose of this section, the city may raise the necessary funds by appropriations
of general funds, by securing loans or by issuing bonds, and, if necessary, may acquire the lands through expropriation
proceedings in accordance with law, with the approval of the President . . . (Emphasis supplied).

The City of Manila, acting through its legislative branch, has the express power to acquire private lands in the city and subdivide these lands into
home lots for sale to bona fide tenants or occupants thereof, and to laborers and low-salaried employees of the city. That only a few could actually
benefit from the expropriation of the property does not diminish its public use character. It is simply not possible to provide all at once land and
shelter for all who need them (Sumulong v. Guerrero, 154 SCRA 461 [1987] ).

Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estates (Province of
Camarines Sur v. Court of Appeals, G.R. No. 103125, May 17, 1993; J.M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970] ). It
is therefore of no moment that the land sought to be expropriated in this case is less than half a hectare only (Pulido v. Court of Appeals, 122 SCRA
63 [1983]).

Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions (Sumulong
v. Guerrero, supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public
use now includes the broader notion of indirect public benefit or advantage, including in particular, urban land reform and housing.

This concept is specifically recognized in the 1987 Constitution which provides that:
xxx xxx xxx
The state shall, by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of
urban land reform and housing which will make available at affordable cost decent housing and basic services to
underprivileged and homeless citizens in urban centers and resettlement areas. It shall also promote adequate employment
opportunities to such citizens. In the implementation of such program the State shall respect the rights of small property
owners (Art. XIII, Sec. 9; Emphasis supplied).
xxx xxx xxx

The due process requirement in the expropriation of subject lot has likewise been complied with. Although the motion to dismiss filed by petitioner
was not set for hearing as the court is required to do (National Housing Authority v. Valenzuela, 159 SCRA 396 [1988]), it never questioned the lack
of hearing before the trial and appellate courts. It is only now before us that petitioner raises the issue of due process.

Indeed, due process was afforded petitioner when it filed its motion for reconsideration of the trial court's order, denying its motion to dismiss.

The Court of Appeals, in determining whether grave abuse of discretion was committed by respondent courts, passed upon the very same issues
raised by petitioner in its motion to dismiss, which findings we uphold. Petitioner therefore cannot argue that it was denied its day in court.

The amount of P2 million representing the provisional value of the land is an amount not only fixed by the court, but accepted by both parties. The
fact remains that petitioner, albeit reluctantly, agreed to said valuation and is therefore estopped from assailing the same. It must be remembered
that the valuation is merely provisional. The parties still have the second stage in the proceedings in the proper court below to determine
specifically the amount of just compensation to be paid the landowner (Revised Rules of Court, Rule 67, Sec. 5; National Power Corporation v.
Jocson, 206 SCRA 520 [1992] ).

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED. Cruz, Davide, Jr. and Bellosillo, JJ., concur.


FIRST DIVISION
G.R. No. L-47553 January 31, 1981
JANE L. GARCIA, MAYORICO P. SANDICO, BELEN R. GARCIA and DANILO DIOKNO, petitioners, vs. COURT OF APPEALS (Special Tenth Division) and
NATIONAL POWER CORPORATION, respondents.

FERNANDEZ, J.:
This is a petition for certiorari instituted by Jane L. Garcia, Mayorico P. Sandico, Belen R. Garcia, and Danilo Diokno against the Court of Appeals
(Special Tenth Division), and the National Power Corporation seeking the following relief :
WHEREFORE, premises considered, it is most respectfully prayed of the Court:
1. That the Decision of the Court of Appeals respecting Block 19, wherein it has adjudged private respondent entitled to acquire
title and ownership over the property by paying a compensation of PO.07 per square meter be reversed and that the Decision
of the Court of First Instance of Pampanga adjudging the private respondent to compensate herein petitioners for Block 19 in
the amount of P15.00 per square meter with interest at the legal rate from June 30, 1954 be upheld:
2. That, in the alternative to the petition next preceding, the private respondent be adjudged to pay rentals for the use of Block
19 at the rate of P2.00 per square meter per annum from June 30, 1954 until the same is vacated by it;
Petitioners further pray for such other reliefs as may be just and equitable in the premises.
Quezon City for Manila, Philippines, January 31, 1978. 1
The record discloses that on August 8, 1969, the private respondent National Power Corporation filed a complaint for eminent domain with the
Court of First Instance of Pampanga, Branch Five, docketed as Civil Case No. 3584 2 praying that it be allowed to acquire right of way easements
over the property of petitioners consisting of two adjoining parcels of land (Lots Nos. 633 and 634) with a total area of 15.98 hectares; that the said
complaint alleges that the proposed right-of-way is needed to construct the 69 KV Mexico-Balibago power line which will encompass some 2,835
square meters of petitioner's property; 3 that on March 2, 1970, the defendants, petitioners herein, filed an answer asking that the complaint for
expropriation be dismissed and on the first and second counter-claims praying for the following:
1. Under the first cause of action, sentencing the plaintiff to pay the defendants rentals at the annual rate of P2.00 per square
meter for the use and occupancy of Block 19 with a total area of not less than 20,439 square meters, starting from the year
1957 and for as long as plaintiff uses and occupies the same; back rentals to bear interest at the rate of 1 2 % per annum, until
paid.
2. Under the second cause of action, sentencing plaintiff alternatively, i.e., in the event that expropriation be granted as prayed
for in the complaint - to pay defendants as compensation for the total encompassed in Block 10 (not less than 6,000 square
meters) at the price of P20.00 per square meter, with 12 % interest computed from date of possession, until paid. 4
that on March 30, 1970, the plaintiff was placed in possession of the property sought to be expropriated 5 upon a previous deposit on March 12,
1970 of a provisional amount of P5,670; 6 that after the issues were joined evidence was submitted by both parties to the Clerk of Court, Andres B.
Paras, as lone Commissioner, who submitted his Report 7 with the following recommendation:
CONCLUSION
All told this Commissioner respectfully recommends that judgment be rendered;
(1) Expropriating the areas covered by Block 19 (20,439 sq. meters) and Block 10 (6,190 sq. meters) of the subdivision plan
(Exhibit 3) of the defendant's properties in favor of the plaintiff;
(2) Ordering plaintiff to pay the defendants Juana Garcia Sandico, Belen Garcia Diokno and Bienvenido Garcia (a) by way of just
compensation, the amount of P15.00 per square meter for the Total area encomposed in Block 19 and Block 10, supra, with 6%
interest computed from March 16, 1970, until paid, (b) an amount to be fixed by the Court as and for attorney's fees.
San Fernando, Pampanga, September 8,1971.
RESPECTFULLY SUBMITTED:
(Sgd) ANDRES B. PARAS
Commissioner 8
that mainly on the basis of the above report, the lower court rendered a decision, the dispositive part of which reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered:
a) Expropriating the area covered by Block 10 (6,190 square meters) and Block 19 (20,439 square meters) of the subdivision
plan of defendants' properties, with an aggregate area of 26,629 square meters, in favor of the plaintiff;
b) Ordering the plaintiff to pay the defendants Juan Garcia Sandico, Belen Garcia Diokno and Bienvenido Garcia the amount of P
15.00 per square meter for the area herein expropriated which totals P399,435.00, with interest at the legal rate computed as
follows:
A) For the area covered by Block 10, from June 30, 1954;
B) For the area covered by Block 19, from March 30, 1970.
until fully paid and to pay Five (5%) per cent of the amount involved as and for attorney's fees and expenses of litigation, and to
pay the costs of the suit.
SO ORDERED.
San Fernando, Pampanga, November 16,1971.
(Sgd) HONORIO ROMERO
Judge 9
that the plaintiff, private respondent National Power Corporation, appealed to the Court of Appeals; 10 that on October 28, 1977, the Court of
Appeals rendered its decision modifying the trial court's decision as follows:
Wherefore, judgment is hereby rendered:
1. Expropriating in favor of the plaintiff the area covered by Block 10 (6,190 square meters) and Block 19
(20,439 square meters) of the subdivision plan of the defendants' property;
2. Ordering the plaintiff to pay the defendants Juan Garcia Sandico, Belen Garcia Diokno and Bienvenido
Garcia the purchase price of Block 10 (6,190 square meters) in the amount of P87,180.00 at P15.00 per
square meter and at the same time ordering the Provincial Treasurer of Pampanga to release to the said
defendants the amount of P5,670 deposited with him on February 26, 1970 as evidenced by Official Receipt
No. 2497123 dated March 11, 1970 with interest at the legal rate on the amount of P187,180.00 from
March 30, 1970;
3. Ordering the plaintiff to pay to the same defendants the amount of P14,511.69 as the market value for
Block 19 (20,439 square meters) at PO.07 per square meter with legal interest from July 1, 1957.
The judgment of the lower court awarding attorney's fees and costs are hereby eliminated.
SO ORDERED; 11
that on November 24, 1977, the petitioners filed a motion for reconsideration of the decision of the Court of Appeals which was denied in its
resolution dated December 13, 1977 ; 12 and that the petitioners appealed to this Court assigning as sole error allegedly committed by the Court of
Appeals the following:
THE COURT OF APPEALS IN ITS DECISION OF OCTOBER 28,1977 IN CA-GR NO. 55720-R ERRED IN FIXING THE AMOUNT OF JUST
COMPENSATION AT P0.07 PER SQUARE METER, WHEN THE LOWER COURT FINDS THIS TO BE P15.00 PER SQUARE METER. 13
The facts, as found by the Court of Appeals, are:
The defendants own Lot 633 and Lot 634 located in Mexico, Pampanga. Lot 633 has an area of 85,212 square meters. Lot 634
has an area of 74,613 square meters. Total area is 159,825 square meters.
According to the defendants' pleadings (p. 34, Record on Appeal), not denied in the plaintiff's pleading, the National Power
Corporation occupied as early as 1957 portions of the two (2) lots for the construction of "steel towers and high power lines for
230 KV Ambuklao-Manila Line and 69 KV Mexico-Tarlac Line." The portions of the two (2) lots occupied has an area of 20,439
square meters. It is designated as Block 19 in the sketch plan (Exhibit 3). Up to now the plaintiff has not paid anything for the
portion occupied, either as rental or as purchase price.
As early as March 10, 1960 these two (2) lots were surveyed for the purpose of converting them into 'Conching Subdivision'
(Exhibit 3) for residential purposes. The two (2) lots were subdivided into 19 blocks (Block No. 1 to 19). Except Block 19 which
has been occupied by the NPC since 1957, the other blocks were subdivided into residential lots, totalling 350 lots in all. Block
19 occupied by the NPC was not subdivided into lots because of the steel towers and the power lines of the NPC, which make
the said block dangerous for residential purposes.
The plan and the technical descriptions were duly approved by the court as early as August 23, 1962 (Exh. 2-A). The subdivision
plan was in turn approved by the Land Registration Commission on July 23,1962 and by the Municipal Council of Mexico,
Pampanga on January 22, 1962 (Exhibit 4).
After the subdivision plan was approved, steps were taken to improve the property. Asphalted roads and gutters have been
constructed. According to the Commissioner's Report, "there are men working in the construction of an asphalt road and work
is being done in full blast." The same report states that there are more or less 25 houses of strong materials constructed in the
area.
According to the defendants' evidence, not rebutted by the plaintiff, there are about 100 to 150 willing buyers of lots in the
subdivision.
May 8, 1969 the NPC instituted the instant action for expropriation of a 'right-of-way easement over a portion of the two (2)
lots. In Lot 633 the plaintiff wants to expropriate a portion consisting of 1,470 square meters. In Lot 634 the area to be
expropriated is 2,835 square meters. Total area to be expropriated is 2,835 square meters (Exhibit A). The entire area to be
expropriated is within Block 10 of Conching Subdivision (Exhibit 3) which is adjacent to Block 19. (Vide, Exhibit 3). The plaintiff
intends to use the area to be expropriated for the "construction and maintenance of its 69 KV Mexico-Balibago Transmission
Line." The plaintiff offers to pay to the defendants an easement fee in the nominal sum of P1.00 and 10.00 for its tower to be
constructed. 14
Anent the error assigned by the petitioners, the pertinent portions of the decision of the Court of Appeals are:
The final question involves the determination of the just compensation. Just compensation is the market value of the property.
It should be determined at the time of the taking. It is the price which it will command where it is offered for sale by one who
desires, but is not obliged to sell, and is bought by one who is under no necessity of having it. (Manila Railway Co. vs. Velasquez,
32, Phil. 286; Manila Railroad Co. vs. Caligsihan, 40 Phil., 326).
The market value must be determined as of the time the plaintiff takes possession. Thus when possession is ahead of the filing
of the complaint, the date of possession determines the market value. (Republic vs. PNB, L-14158, 41261).
We first determine the market value of Block 10 consisting of 6,190 square meters. The defendants' witnesses, namely, Garcia
Sandico (tsn., January 9, 1971 p. 27), Gonzalo Mapayo (tsn., Feb. 6, 1971), Igino Sason (tsn., Feb. 6, 1971), Igino Sason (tsn., May
8, 1971), and Jose Angeles (tsn., May 15, 1975) all testified that the prices of the residential lots in the subdivision as of 1971
was P15.00 to P20.00 per square meter. The contract to sell dated November 18, 1965 (Exhibit 5) shows that the price per
square meter is P15.00. Another contract to sell dated October 9, 1967 (Exhibit 5-A) shows a purchaser price of P15.00 per
square meter. A request for reservation date July 6, 1970 (Exhibit 6) shows a purchase price of P17.00 per square meter. Other
requests for reservation in 1969 and 1970 show a purchase price ranging from P15.00 to P17.00 per square meter (Exhibits 6-A
to 6-H, inclusive.)
On the other hand, the plaintiff presented only a tax declaration to prove the market value. A tax declaration is only prima facie evidence of market
value which may be overcome by satisfactory evidence presented by the owners of the property to be expropriated.
We therefore agree with the finding of the lower court that the price of Block 10 consisting of 6,190 square meters at P15,00
per square meter is P92,850.00. It appears, however, that as of February 26, 1970 the plaintiff deposited with the Provincial
Treasurer of Pampanga the amount of P5,670 for the compensation of the property. Deducting P5,670 from P92,850.00 the
unpaid balance for Block 10 is P87,180.00.
Block 19 presents a different problem. Said property was occupied, according to the allegations of the defendants' counterclaim
not denied in the plaintiff's reply thereto, in 1957 by the plaintiff. In other words, the possession of the property took place 13
years before the defendants filed their counterclaim praying for the damages with respect to the occupation of Block 19. The
defendants did not present evidence as to the market value of Block 19 as of 1957. The tax declaration therefore should
constitute the prima facie evidence of the market value for the purpose of determining the just compensation. (Province of
Ilocos Norte vs. Compania General de Tabacos, L-7361, April 20, 1956, 53 O.G. 7687). As per tax declaration (Exhibits B, B- 1) the
market value should be P.07 per square meter or a total amount of P14,511.69 for Block 19 which consists of 20,439 square
meters. 15
The error raised refers solely to Block 19 of the petitioners' property.
It is apparent that the substantial reduction of what compensation has to be paid for Block 19 came about as a result of the application of the
doctrine enunciated in the case of the Republic vs. Phil. National Bank, et al., 16 clarifying the question petition as to what date the market value of
condemned property should be fixed, that "where the taking of the property precedes the institution of the condemnation proceedings, the value
should be fixed as of the time of the taking". A careful reading of this case and the cases 17 mentioned therein shows certain material facts which
are not Identical to the case at bar, to wit: 1) the properties in question became the subject of expropriation proceedings initiated by the plaintiff
Government, and 2) that the possession or "taking" of the Government of the properties in question, whether it was made before or after the filing
of the complaint for expropriation was made for purposes of eminent domain or with the intent to
expropriate. 18 Hence, the Court of Appeals, in reducing the amount from P15.00 per square meter to P0.07 per square meter, made the value
stated in the tax declaration of Block 19 in 1957 its basis on the assumption that in the said year 1957 the private respondent had taken possession
of the land for the purpose of eminent domain and on the further presumption that subsequent thereto an action for expropriation was entered in
court over this property. However, these facts assumed by the Court of Appeals are not borne by the evidence on record.
Civil Case No. 3584 of the Court of First Instance of Pampanga, Branch V, entitled "National Power Corporation vs. Jane L. Garcia, et al.," is an action
for expropriation but what was sought to be expropriated in the action was a right of way for the use of private respondent in the construction of
its 69 KV Mexico-Balibago transmission line. This purpose of private respondent is stated in paragraph 5 of the Complaint 19 and indicated and
shaded in red on the sketch attached to the complaint as Annex "A". 20 Said paragraph reads:
The plaintiff needs right-of-way easements over portions of the parcels of land hereinabove described for the consideration and
maintenance of its KV Mexico-Balibago transmission line, which portions are indicated and shaded in red on the sketches
attached hereto, marked as Annex "A".
The writ of possession directed the Sheriff "to place the plaintiff National Power Corporation in immediate possession of what is needed of the
defendants' lands for a right-of-way easement subject of this expropriation proceedings." 21 The Ambuklao-Manila and Mexico-Tarlac transmission
lines established as early as 1953 and 1957 traversing properties covered by Block 19 were not the subject matter of the said action.
Moreover, in the second paragraph of private respondents' answer to defendant's compulsory counterclaim, 22 it is alleged that the construction of
the Ambuklao-Manila and Mexico-Tarlac transmission lines were with the permission of petitioners' predecessor-in-interest, their father,
Eutiquiano Garcia. As shown by the transcript of the stenographic notes of the proceedings of June 26, 1971, 23 Mr. Eladio Espiritu, a witness of the
private respondent, attempted to establish that the entry of private respondent to petitioners' property was with the consent of their predecessor.
Likewise, as found by the Commissioner in his Report, 24 all that the plaintiff, private respondent herein, could show was an alleged authority to
construct the Ambuklao-Manila line only, allegedly signed by defendants' father (Exhibit "M"), pending completion of the negotiation of the
compensation to be paid. Exhibit "M", in clear and unmistakable terms, states the nature of the possession that the private respondent was
granted at the time. The title of this document is "PERMISSION TO OCCUPY LAND" which undoubtedly grants to the National Power Corporation a
privilege and the same is subject to the terms and conditions embodied in the document. 25 As the private respondent's entry was gained through
permission, it did not have the intention to acquire ownership either by voluntary purchase or by the exercise of eminent domain. And the fact
remains that the private respondent never completed the negotiation as to compensation. Not only this, private respondent went on to construct
another line the 69 KV Mexico-Tarlac without defendants' permission nor a court authorization. 26 All these prove the private respondent's
intention not to expropriate Block 19, as it did not seek so in the action it instituted on August 8, 1969. Neither did it have the intention to do so in
1953 as shown by the terms in Exhibit "M". It is clear, therefore, that the private respondent not only did not take possession with intent to
expropriate Block 19, but that it did not institute expropriation proceedings over the same.
Consequently, since the areas covered by Block 19 were never entered into or possessed for purposes of eminent domain, nor did they become the
subject of an action for eminent domain, neither the date of entry nor the filing of the action by private respondent for expropriation of a "right-of-
way" easement on December 8, 1969 could be reckoned with as the basis for the determination of just compensation.
Hence, the conclusion of the Court of Appeals that the fair market value of the property in question based on the tax assessment in 1957 is an error
of law, as it is a conclusion predicated on the wrong assumption that there was a taking or possession of Block 19 in 1957 for purposes of
expropriation and that there was an action for expropriation of the same.
It is significant that the expropriation of Block 19 came about only when the trial court declared that inasmuch as the private respondent cannot
acquire easement of right-of-way over Block 19, much less own it through prescription, the only way for the private respondent to justify its
continued occupation of Block 19 is to expropriate the same. This declaration of the trial court was affirmed by the Court of Appeals. The
petitioners cannot legally impugn now for the first time on appeal to this Court the trial court's directive to expropriate Block 19 for public use.
Well-settled is the rule that questions not raised in the lower court cannot now be raised for the first time on appeal. 27 Hence, the expropriation of
Block 19 is final.
By virtue of the special and peculiar circumstances of the case at bar, there being no taking of the property in question for purposes of eminent
domain nor condemnation proceedings instituted over the same to speak of, the time as of which the market value should be fixed is the time
when the trial court made its order of expropriation. It is the date of appropriation or the investing date which as everyone knows required more
than a day, sometimes weeks to carry through as would an ordinary real estate purchase and sale. Hence, in estimating the market value, all the
capabilities of the property and all the uses to which it may be applied or for which it is adapted are to be considered and not merely the condition
it is in the time and the use to which it is then applied by the owner. All the facts as to the condition of the property and its surroundings, its
improvements and capabilities may be shown and considered in estimating its value.
Anent the compensation to be paid for Block 19, the reasons relied upon by the trial court which appear just, equitable, and in consonance with
established jurisprudence are:
In the mind of the Court, the contentions so advanced by the plaintiff cannot be maintained, and the authority just cited is not
applicable in the instant case. In the first place, it was clearly shown by the defendants that the properties herein involved have
been converted into a subdivision way back in 1962. In support of this, the defendants presented the order of this Court
approving the subdivision plan, which was likewise approved by the Land Registration Commission, and the resolution of the
municipal council of Mexico-Pampanga relative to the same subdivision. Moreover, as earlier discuss the Court is guided by the
Commissioner's Report and Findings of the ocular inspection in determining the nature of the properties involved. In effect,
therefore, the Court is of the opinion that the evidence presented by the defendants outweigh the evidence presented for the
plaintiff by preponderance.
Furthermore, by the testimonies of the witnesses, it was established that the properties, being converted into a subdivision sell
at P15.00 to P20.00 per square meter and there are many willing buyers at this price range. However, the plaintiff, in an effort
to contradict this claim presented the appraisal made by the provincial appraisal committee for the province of Pampanga,
which appraisal gave the valuation of P6.00 to P8.00 per square meter for lots adjoining the lots of the defendants. These prices
or evaluation, however, in the opinion of the Court, cannot be and are not the determinative factors in determining the value of
the defendants' properties. It has been established by the evidence on record and confirmed by the report of the
Commissioner, that the Conching Subdivision, where the subject properties form parts, are located along the national highway;
that it is near the town proper of Mexico, Pampanga were the school and church sites are situated. In giving valuation to
properties, these factors, namely, the relation or distance of the premises towards the national highway, to the town proper,
and to other commercial sites such as schools and churches, must be given consideration. In this particular case, the properties,
being along the national highway, near the town proper of Mexico, Pampanga and likewise near the school and church sites,
must be given valuation commensurate to its standing. This being the case, the Court believes that the value of P15.00 per
square meter is reasonable to be given to the defendants' properties. The defendants therefore are entitled to the payment of
P15.00 per square meter for their properties object of this expropriation proceedings which are Blocks 10 and 19 of the
subdivision plan with an aggregate area of 26,439 square meters.
The fair market value of Block 19 should be fixed at P15.00 per square meter.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. NO. 55720-R is hereby modified as to Block 19 of the subdivision plan of petitioners'
property and the private respondent, National Power Corporation, is ordered to pay to the petitioners the amount of P306,585.00 as the market
value for Block 19 (20,439 square meters) at P15.00 per square meter with legal interests from March 30, 1970. No pronouncement as to costs.
SO ORDERED.
Makasiar, Guerrero and De Castro, JJ., concur.
Teehankee, Chairman, J., in the result.
Melencio-Herrera, J., took no part.
EN BANC

G.R. No. L-10278 November 23, 1915

THE MANILA RAILROAD COMPANY, plaintiff-appellant,


vs.
ROMANA VELASQUEZ, MELECIO ALLAREY and DEOGRACIAS MALIGALIG, defendants-appellants.

TRENT, J.:

This action was instituted by the Manila Railroad Company for the purpose of expropriating twelve small parcels of land for a railroad station site at
Lucena, Province of Tayabas.

The original defendants were Romana Velasquez, Melecio Allarey, and Deogracias Maligalig. After the filing of the complaint Simeon Perez, Filemon
Perez, and Francisco Icasiano, having bought Romana Velasquez' interest, were included as defendants. The commissioners fixed the value of the
twelve parcels at P81,412.75, and awarded P600 to Simeon Perez as damages for the removal of an uncompleted camarin. Upon hearing, the
commissioners' report was approved and the plaintiff directed to pay to the "Tayabas Land company" the total amount awarded, with interest and
costs. The plaintiff company alleges that that amount is grossly excessive, pointing out that the land has never been used except for rice culture.

Upon this appeal we are asked to review the evidence and reduce the appraised value of the condemned land in accordance with our findings
rendering judgment accordingly. Has this court, under the law, authority to take such action? And along with this question it must be decided
whether the Courts of First Instance have such power over the reports of commissioners. Section 246 of the Code of Civil Procedure reads:

Action of Court Upon Commissioners' Report. Upon the filing of such report in court, the court shall, upon hearing, accept the same
and render judgment in accordance therewith; or for cause shown, it may recommit the report to the commissioners for further report of
facts; or it may set aside the report and appoint new commissioners; or it may accept the report in part and reject it in part, and may
make such final order and judgment as shall secure to the plaintiff the property essential to the exercise of this rights under the law, and
to the defendant just compensation for the land so taken; and the judgment shall require payment of the sum awarded as provided in
the next section, before the plaintiff can enter upon the ground and appropriate it to the public use.

From this section it clearly appears that the report of the commissioners on the value of the condemned land is not final. The judgment of the court
is necessary to give effect to their estimated valuation. (Crawford vs. Valley R.R. Co., 25 Grat., 467.) Nor is the report of the commissioners
conclusive, under any circumstances, so that the judgment of the court is a mere detail or formality requisite to the proceedings. The judgment of
the court on the question of the value of the land sought to be condemned is rendered after a consideration of the evidence submitted to the
commissioners, their report, and the exceptions thereto submitted upon the hearing of the report. By this judgment the court may accept the
commissioners' report unreservedly; it may return the report for additional facts; or it may set the report aside and appoint new commissioners; or
it may accept the report in part or reject it in part, and "make such final order and judgment as shall secure to the plaintiff the property essential to
the exercise of this rights under the law, and to the defendant just compensation for the land so taken." Any one of these methods of disposing of
the report is available to and may be adopted by the court according as they are deemed suited to secure to the plaintiff the necessary property
and to the defendant just compensation therefor. But can the latter method produce a different result in reference to any part of the report from
that recommended by the commissioner?

Section 246 expressly authorizes the court to "accept the report in part and reject it in part." If this phrase stood alone, it might be said that the
court is only empowered to accept as a whole certain parts of the report and reject as a whole other parts. That is, if the commissioners fixed the
value of the land taken at P5,000, the improvements at P1,000, and the consequential damages at P500, the court could accept the report in full as
to any one item and reject it as to any other item, but could not accept or reject a part of the report in such a way as to change any one of the
amounts. But the court is also empowered "to make such final order and judgment as shall secure to the plaintiff the property essential to the
exercise of this rights under the law, and to the defendant just compensation for the land so taken." The court is thereby expressly authorized to
issue such orders and render such judgment as will produce these results. If individual items which make up the total amount of the award in the
commissioners' report could only be accepted or rejected in their entirety, it would be necessary to return the case, so far as the rejected portions
of the report were concerned, for further consideration before the same or new commissioners, and the court could not make a "final order and
judgment" in the cause until the rejected portions of the report had been reported to it. Thus, in order to give the quotation from 246 its proper
meaning, it is obvious that the court may, in its discretion correct the commissioners' report in any manner deemed suitable to the occasion so that
final judgment may be rendered and thus end the litigation. The "final order and judgment" are reviewable by this court by means of a bill of
exceptions in the same way as any other "action." Section 496 provides that the Supreme Court may, in the exercise of its appellate jurisdiction,
affirm, reverse, or modify any final judgment, order, or decree of the Court of First Instance, and section 497, as amended by Act No. 1596,
provides that if the excepting party filed a motion in the Court of First Instance for a new trial upon the ground that the evidence was insufficient to
justify the decision and the judge overruled such motion and due exception was taken to his ruling, the Supreme Court may review the evidence
and make such findings upon the facts by a preponderance of the evidence and render such final judgment as justice and equity may require. So it
is clear from these provisions that this court, in those cases where the right to eminent domain has been complied with, may examine the
testimony and decide the case by a preponderance of the evidence; or, in other words, retry the case upon the merits and render such order or
judgment as justice and equity may require. The result is that, in our opinion, there is ample authority in the statute to authorize the courts to
change or modify the report of the commissioners by increasing or decreasing the amount of the award, if the facts of the case will justify such
change or modification. As it has been suggested that this conclusion is in conflict with some of the former holdings of this court upon the same
question, it might be well to briefly review the decisions to ascertain whether or not, as a matter of fact, such conflict exists.

In City of Manila vs. Tuason (R.G. No. 3367, decided March 23, 1907, unreported), the Court of First Instance modified the report of the
commissioners as to some of the items and confirmed it as to others. On appeal, the Supreme Court remanded the cause, apparently for the
reason that the evidence taken by the commissioners and the lower court was not before it, and perhaps also because the commissioners adopted
a wrong principle of assessing damages.

In Manila Railway Co. vs. Fabie (17 Phil. Rep., 206) the majority report of the commissioners appraised the land at P56,337.18, while a dissenting
commissioners estimated it at P27,415.92. The Court of First Instance, after taking additional evidence upon the consequential benefits to the
remainder of defendants' land by the construction of the railroad, and also as to the rental value of various pieces of land in the locality, fixed the
value of the land at the sum estimated by the dissenting commissioner. The defendants appealed to this court. This court remarked that the only
evidence tending to support the majority report of the commissioners consisted of deeds of transfer of real estate between parties in that
community showing the prices paid by the vendees in such conveyances. It was held that without its being shown that such transfers had been
made in the ordinary course of business and competition, and that the parties therein stated were not fictitious, such deeds were incompetent as
evidence of the value of the condemned land. As to the action of the court in fixing the price of the land at P27,415.92, the court said:
Conceding, without deciding, that he also had the right to formulate an opinion of his own as to the value of the land in question,
nevertheless, if he formulate such an opinion, he must base it upon competent evidence. The difficulty with the case is that it
affirmatively appears from the record on appeal that there is an entire absence of competent evidence to support the finding either of
the commissioners or of the court, even if the court had a right to make a finding of his own at all under the circumstances.

In the Manila Railroad Co. vs. Attorney-General (22 Phil. Rep., 192) the only question raised was the value of certain improvements on the
condemned portion of a hacienda, such improvements consisting mainly of plants and trees and belonging to a lessee of the premises. The total
damages claimed were P24,126.50. The majority report of the Commission allowed P19,478, which amount was reduced by the Court of First
Instance to P16,778. The plaintiff company, upon appeal to this court, alleged that the damages allowed were grossly excessive and that the
amount allowed by the commissioners should have been reduced by at least P17,000; while the defendant urged that the damages as shown by
the record were much greater than those allowed, either by the commissioners or by the court. In disposing of the case this court said:

The only ground upon which the plaintiff company bases its contention that the valuations are excessive is the minority report of one of
the commissioners. The values assigned to some of the improvements may be excessive but we are not prepared to say that such is the
case. Certainly there is no evidence in the record which would justify us in holding this values to be grossly excessive. The commissioners
in their report go into rather minute detail as to the reasons for the conclusions reached and the valuations fixed for the various items
included therein. There was sufficient evidence before the commissioners to support the valuations fixed by them except only those later
modified by the court below. The trial court was of opinion that the price of P2 each which was fixed for the orange trees (naranjitos) was
excessive, and this was reduced to P1.50 for each tree; this on the ground that the evidence discloses that these trees were
comparatively young at the time of the expropriation, and that the value fixed by the majority report of the commissioners was that of
full-grown or nearly full-grown trees. We are of opinion that this reduction was just and reasonable. Aside from the evidence taken into
consideration by the trial judge we find no evidence in the record in support of the contention of the railroad plaintiff that the valuations
fixed in the majority report of the commissioners and by the trial court are grossly excessive, and plaintiff company having wholly failed
to offer evidence in support of its allegations in this regard when the opportunity so to do was provided in accordance with law, it has no
standing in this court to demand a new trial based on its unsupported allegations of grossly excessive valuation of the property by the
commissioners and the court below.

This court affirmed the finding of damages made by the trial court with the exception of an item for damages caused by fire to improvements on
lands adjoining those condemned, which was held not to be a proper matter to be considered in condemnation proceedings. The court here
approved of the action of the Court of First Instance in reducing the amount of damages fixed by the commissioners as to the value of the young
orange trees on the strength of the evidence of record.

In Manila Railroad Company vs. Caligsahan (R.G. No. 7932, decided March 25, 1913, unreported), it appears that the lower court approved in toto
the report of the commissioners. On appeal, This Supreme Court reversed the lower court and remanded the case with orders to appoint new
commissioners, saying:

Under the evidence in this case the award is excessive. Section 246 of the Code of Civil Procedure giving to the court the power to "make
such final order and judgment as shall secure to the party the property essential to the exercise of his rights under the law, and to the
defendant just compensation for the land so taken," we exercise that right in this case for the purpose of preventing the defendants from
obtaining that which would be more than `just compensation' under all the evidence of the case.

The judgment is reversed and the cause remanded, with instructions to the lower court to appoint a new commission and to proceed
from that point de novo.

We will now examine the case (Philippine Railway Co. vs. Solon, 13 Phil. Rep., 34) relied upon the support the proposition that the courts should
not interfere with the report of the commissioners to correct the amount of damages except in cases of gross error, showing prejudice or
corruption.

In that case the property belonging to the appellant which the company sought to appropriate was his interest as tenant in a tract of land
belonging to the Government, together with a house standing thereon and other property belonging to him. He asked that he be awarded for all
the property taken P19,398.42. The commissioners allowed him P10,745.25. At the hearing had upon the report, the court reduced this amount
and allowed the appellant P9,637.75. The commissioners took a large amount of evidence relative to the amount of damages. The testimony was
conflicting as to the value of the house, two witnesses fixing it at over P12,000; and another at P14,000; one at P8,750; another at P6,250; and
another at P7,050.95. The commissioners fixed the value of the house alone at P9,500, and the court at P8,792.50. This court said:

Nor do we decide whether, in a case where the damages awarded by the commissioners are grossly excessive or grossly insufficient, the
court can, upon the same evidence presented before the commissioners, itself change the award. We restrict ourselves to deciding the
precise question presented by this case, in which it is apparent that, in the opinion of the court below, the damages were not grossly
excessive, for its own allowance was only P1,000 less than the amount allowed by the commissioners, and the question is whether in
such a case the court can substitute its own opinion upon the evidence presented before the commissioners for the opinion which the
commissioners themselves formed, not only from that evidence but also from a view of the premises which by law they were required to
make.

Referring to the manner in which the trial court arrived at its valuation of the various items, including the house, this court said:

Without considering the correctness of the rule adopted by the court for determining the value of the property it is sufficient to say that
the evidence before the commissioners as to the value of the property taken was contradictory and that their award was not palpably
excessive or inadequate. Under such circumstances, we are of the opinion that the court had no right to interfere with it.

From the foregoing it is clear that (1) the testimony was conflicting; (2) that the award as allowed by the commissioners was well within the
amounts fixed by the witnesses; and (3) that the award was not grossly excessive. That it was not grossly excessive is shown by the difference
between the amount fixed by the commissioners and that fixed by the court, this difference being P1,117.50, a reduction of a little over 10 per
cent.

In City of Manila vs. Estrada (25 Phil. Rep., 208), the city sought to expropriate an entire parcel of land with its improvements for use in connection
with a public market. The commissioners, after viewing the premises and receiving evidence, being unable to agree, submitted two reports to the
court. In the majority report the value of the land was fixed at P20 per square meter and in the minority report at P10. The Court of First Instance
fixed the value at P15 per square meter. Upon appeal this court, after reviewing the evidence, held that P10 per square meter was a just
compensation for the land taken and rendered judgment accordingly, saying:
After a careful examination of the entire record in this case and the law applicable to the questions raised therein, we are of the opinion
that P10 per square meter is a just compensation for the land taken.

From the above review of the cases it will be seen that this court has not only not decided that the courts cannot interfere with the report of the
commissioners unless prejudice or fraud has been shown, but the decisions, aside from the case of the City of Manila vs. Estrada, tend to show the
contrary; that is, an award which is grossly excessive or grossly insufficient in the opinion of the court can be increased or decreased, although
there be nothing which tends to indicate prejudice or fraud on the part of the commissioners. The case of the City of Manila vs. Estrada is direct
authority supporting the conclusions which we have reached in the case at bar. And we are not without authority outside of this jurisdiction which
supports the view we have taken in the case under consideration. In Morgan's Louisiana & Texas R.R. Co. vs. Barton (51 La. Ann., 1338), the court,
in considering a procedural law similar to our own, stated:

On the question of the value of the land, 8.34 acres, the commissioners have allowed $2,500, or $300 per acre. The defendant has put in
the record the testimony of witnesses claimed to support the allowance. Without disregarding this testimony, it is sufficient to say that
the opinions of the witnesses do not seem to be based on any fact calculated to show the value of the land. ... On the other hand the
plaintiff has placed before us the titles of defendant of recent date showing the price paid by him (the defendant) for the entire body of
land of which the 8 acres are part; the acts of sale of land in the same neighborhood, and of the same quality; the assessment of
defendant's property, and other testimony on this issue of value. ... Giving all possible weight, or rather restricting the testimony of the
plaintiffs' witnesses to its due influence, and giving, we think, necessary effect to the acts by which defendant purchased, the acts of sale
of other land, the assessment of value, with due allowance for under assessment, and the other testimony of record, we reach the
conclusion that the award gives two-thirds more than the value of the land. We fix the value of the land at $833.33.

See also T. & P.R.R. Co. vs. Southern Develop. Co. (52 La. Ann., 535), where the court held the appraisement too low and after discussing the
evidence, increased the amount of the award accordingly. A similar case is Abney vs.Railroad Co. (105 La., 446). See also T. & P.R.R. Co. vs. Wilson
(108 La., 1; 32 So., 173); and Louisiana Western R. Co. vs. Crossman's Heirs (111 La., 611; 35 So., 784), where the point is touched upon.

In Missouri the statute (1 Mo. Ann. Stat., sec. 1268) directs that "the court shall make such order therein as right and justice may require, and may
order a new appraisement, upon good cause shown." Owing to a constitutional restriction, this provision has been construed to apply only to
damages and benefits resulting to land owners in consequence of proposed improvements, the cash value of property expropriated being an issue
triable, at the instance of either party by a jury subsequent to the findings of the commissioners. Subject to this restriction, however, it has been
held that the above provision of law gives the court the right increase or decrease the amount awarded by the commissioners. In the late case of
Tarkio Drainage District vs. Richardson (237 Mo., 49), the court presents a lengthy review of its decisions on this subject.

The question now arises, when may the courts, with propriety, overrule the award of the commissioners in whole or in part, and substitute their
own valuation of the condemned property? We shall consider this question in two ways: first, as one of procedure under section 246, above
quoted; and second, as to the evidence which must appear in the record in order to justify such action.

From a mere reading of section 246 and the remarks just made, it should be clear that the court is permitted to act upon the commissioners' report
in one of several ways, at its own discretion. The whole duty of the court in considering the commissioners' report is to satisfy itself that just
compensation will be made to the defendant by its final judgment in the matter, and in order to fulfill its duty in this respect the court will be
obliged to exercise its discretion in dealing with the report as the particular circumstances of the case may require. But generally speaking, when
the commissioners' report cannot with justice be approved by the court, one of three or four circumstances will usually present itself, each of
which has for its antidote one of the methods of dealing with the report placed at the disposal of the court by section 246. Thus, if it be successfully
established that the commissioners refused to hear competent evidence material to the case, then all the evidence in the case would not be before
the court. The court could not, with reason, attempt to either approve or change the report, as it stood, for the reason that all the evidence of the
case would not have been considered by the commissioners not have been presented to the court; and the remedy would be to "recommit the
report of the commissioners for further report of facts." Again, if improper conduct, fraud, or prejudice be charged against the commissioners and
this charge be sustained it would be safer to set aside the award thus vitiated and "appoint new commissioners" who could render a report not
tainted by these things. But when the only error of the commissioners is that they have applied illegal principles to the evidence submitted to
them; or that they have disregarded a clear preponderance of the evidence; or that they have used an improper rule of assessment in arriving at
the amount of the award, then, in such a case, if the evidence be clear and convincing, the court should ordinarily be able, by the use of those
correct legal principles which govern the case, to determine upon the amount which should be awarded without returning the report to the
commissioners. When the matter stands in this light, it becomes the duty of the court to make "final order and judgment" in which the proper
award will be made and thus end the litigation between the parties.

Now, what evidence as to value must the record contain in order to justify the court in disregarding the valuation fixed upon the condemned
property by the commissioners and substituting therefor its own finding of value? It is almost a universal practice in the United States to submit the
question of value in expropriation cases to a jury or commission, usually of local property owners, and one of the things they are specially
instructed to do is to view or inspect the condemned property. The purpose of this view and the additional weight which would should be given to
the award of the appraisers because of the view are questions often discussed. After a careful examination of a number of adjudicated cases, we
have concluded that the following cases, all agreeing in principle, correctly state the purpose of the view.

In Denver Co. vs. Howe (49 Colo., 256 112 P., 779), it was said: "The jury viewed the premises and were better able to judge of the number of acres
in each, as well as other conditions affecting the land. The facts ascertained by the view of the premises are not in the record, whether they were
regarded as so much additional evidence, or were used to better understand and apply the evidence adduced at the trial. Keeping in view the
evidence relating to the special value of the building site, the value of improvements and of the ground, it will be found that the verdict is within
and supported by the values as testified to, and these values, as fixed by the several witnesses, represented to each the market value, as conceded
by appellants. The verdict is supported by the evidence of market value and on that ground would have to be sustained if the matter complained of
in the instruction had been entirely omitted."

In Gorgas vs. Railroad Co. (114 Pa., 1; 22 Atl., 715), it was said: "A view may sometimes be of the highest importance, where there is a conflict of
testimony. It may enable the jurors to see on which side the truth lies. And if the witnesses on the one side or the other have testified to a state of
facts which exists only in their imagination, as to the location of the property, the manner in which it is cut by the road, the character of the
improvements, or any other physical fact bearing upon the case, they surely cannot be expected to ignore the evidence of their sense and give
weight to testimony which their view shows to be false. ... The true in such cases is believed to be that the jury in estimating the damages shall
consider the testimony as given by the witnesses, in connection with the facts as they appear upon the view; and upon the whole case, as thus
presented, ascertain the difference between the market value of the property immediately before and immediately after the land was taken. This
difference is the proper measure of damages."
In Close vs. Samm (27 Iowa, 503), subsequently approved in Guinn vs. Railway Co. (131 Iowa, 680, 683; 109 N.W., 209), it was said: "The question
then arises as to the purposes and intent of this statute. It seems to us that it was to enable the jury, by the view of the premises or place to better
understand and comprehend the testimony of the witnesses respecting the same, and thereby the more intelligently to apply the testimony to the
issues on trial before them, and not to make them silent witnesses in the case, burdened with testimony unknown top both parties, and in respect
to which no opportunity for cross-examination or correction of error, if any, could be afforded either party. If they are thus permitted to include
their personal examination, how could a court ever properly set aside their verdict as being against the evidence, or even refuse to set it aside
without knowing the facts ascertained by such personal examination for the jury? It is a general rule certainly, if not universal, that the jury must
base their verdict upon the evidence delivered to them in open court, and they may not take into consideration facts known to them personally,
but outside of the evidence produced before them in court. If a party would avail himself of the facts known to a juror, he must have him sworn
and examined as other witnesses."

In C.K. & W.R. Co. vs. Mouriquand (45 Kan., 170), the court approved of the practice of instructing the jury that their view of the premises was to be
used in determining the value of conflicting testimony, saying: "Had the jury disregarded all the sworn evidence, and returned a verdict upon their
own view of the premises, then it might be said that the evidence which the jurors acquired from making the view had been elevated to the
character of exclusive and predominating evidence. This is not allowable. The evidence of the witnesses introduced in the court on the part of the
landowner supports by substantial testimony given by witnesses sworn upon the trial, we would set it aside, but as the jury only took into
consideration the result of their view of the premises, in connection with the sworn evidence produced before them, to determine between
conflicting evidence, the instruction was not so erroneous as to require a new trial."

In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746; 52 S.E., 803; 3 L.R.A., N.S., 333), it was said: "A jury cannot be left to roam without any
evidence in the ascertainment and assessment of damages. The damages which the law allows to be assessed in favor of a landowner whose
property has been taken or damaged under the right of eminent domain are purely compensatory. The land actually appropriated by the telegraph
company amounted to only a fraction of an acre; and while it appeared that the construction and maintenance of the telegraph line would cause
consequential damages to the plaintiff, no proof was offered from which any fair and reasonable estimate of the amount of damages thereby
sustained could be made. The jury should have been supplied with the data necessary in arriving at such an estimate. In the absence of this
essential proof, a verdict many times in excess of the highest proved value of the land actually taken must necessarily be deemed excessive.
Judgment reversed."

In New York, where the question has doubtless been raised more often than anywhere else, the late cases illustrate the rule, perhaps the most
clearly. The appellate division, supreme court, in In re Titus Street in city of New York (123 N.Y.S., 1018), where it appeared that the city's witnesses
testified that the property was worth $9,531 and the commissioners awarded $2,000 less, said:

We do not think that this is meeting the requirements of the law; we do not believe that it is within the province of commissioners to
arbitrarily set up their own opinion against that of the witnesses called by the city, and to award damages largely below the figure to
which the moving party is committed, without something appearing in the record to justify such action. When a party comes into court
and makes an admission against his interest, no court or judicial tribunal is justified in assuming that the admission is not true without at
least pointing out the reason for discrediting it; it carries with it the overcome by the mere fact that the commissioners might themselves
have reached a different conclusion upon the viewing of the premises. ... This view of the commissioners, it seems to us, is for the
purpose of enabling the commissioners to give proper weight and effect to the evidence before them, and it might justify them in giving
larger damages than some of the witnesses thought proper, or even less than some of them declared to be sustained, but where the
evidence produced by the moving party in a proceeding for taking property for public purposes fixes a sum, without any disagreement in
the testimony on that side, we are of the opinion that the case do not justify a holding that the commissioners are authorized to ignore
such testimony and to substitute their own opinion, in such a manner as to preclude the supreme court from reviewing the
determination. That is not in harmony with that due process of law which is always demanded where rights of property are involved, and
would make it possible for a corrupt commission to entirely disregard the rights of the individual to the undisturbed enjoyment of his
property, or its equivalent.

From these authorities and keeping in mind the local law on the subject, we think the correct rule to be that, if the testimony of value and damages
is conflicting, the commissioners may resort to their knowledge of the elements which affect the assessment and which were obtained from a view
of the premises, in order to determine the relative weight of conflicting testimony, but their award must be supported by the evidence adduced at
their hearings and made of record, or it cannot stand; or, in other words, the view is intended solely for the purpose of better understanding the
evidence submitted. To allow the commissioners to make up their judgment on their own individual knowledge of disputed facts material to the
case, or upon their private opinions, would be most dangerous and unjust. It would deprive the losing party of the right of cross-examination and
the benefit of all the tests of credibility which the law affords. It would make each commissioner the absolute judge of the accuracy and value of his
own knowledge or opinions and compel the court to affirm the report on the facts when all of such facts were not before it. The evidence of such
knowledge or of the grounds of such opinions could not be preserved in a bill of exceptions or questioned upon appeal. It is no hardship upon any
of the parties to require that the award must be based upon the evidence. It is the duty of each party to submit what evidence of value he has and
if he fails to do so he can not complain if the appraisement in kept within the bounds of the evidence presented to the commissioners.

In those cases where the testimony as to value and damages in conflicting the commissioners should always set forth in full their reasons for
accepting the testimony of certain witnesses and rejecting that the others, especially in those cases where a view of the premises has been made.

The commissioners are required by law to be disinterested landowners of the province, selected by the court with a view to their ability to arrive at
a judicious decision in the assessment of damages. The judgment of men with these qualifications upon the price of real property is entitled to
some considerable weight. Being local men, it may be assumed that they are familiar with the local land values, the needs of the community in that
line, and the adaptability of particular sites to commercial purposes. Then, too, their view of the premises enables commissioners to better
understand the evidence submitted to them, as we have said above. The declarations of witnesses as to the value of the land, as to its condition, or
the conditions of improvements which may be located upon it, and comparisons made between the condemned land and other land in the vicinity
may all be better understood by the commissioners if they have viewed the premises. It is, therefore, no slight divergence from the seeming
preponderance of the evidence of record, as viewed by the court, which will justify the court in brushing aside the commissioners' report and
appraising the property itself, based only upon a perusal of the evidence which was submitted to them. It is in those cases where the evidence
submitted to the commissioners as to the value varies greatly that the real difficulty lies. In these cases it is clear that some of the evidence must be
untrustworthy. Hence, it is necessary to reject that evidence which shows the price to be greatly higher or lower than the just compensation to
which the defendant owner is entitled. If, after making due allowance for the superior facilities which the commissioners had for arriving at the
correct value of the property, the court is clearly of the opinion that the evidence relied upon by them is untrustworthy, and that other evidence
rejected by the commission and which fixes the value of the property at a figure greatly at variance with their valuation of the property bears the
earmarks of truth, then it becomes the duty of the court to substitute for the commissions' award the amount indicated by such evidence. That the
estimated value made by the appraisers is to be given "great weight;" that such valuation is not to be "lightly set aside;" that it will not be set aside
"if there is substantial testimony to support it," unless error is "plainly manifest;" "unless it is apparent that injustice has been done;" "unless the
commissioners have clearly gone astray or adopted erroneous principles;" "unless the commissioners acted upon wrong principles, or their award
is grossly inadequate;" unless the award is "palpably excessive or inadequate;" unless it is "grossly inadequate or unequal," is the burden of all the
cases.

Let us now examine the evidence, keeping these legal principles in mind. The only discussion of the evidence of value made by the lower court was
as follows:

To determine this question (the value of the land) the court abides by and refers to the report of the commissioners dated July 10, 1913,
because it understands that it must accept this report in all its parts for the reason that the prices fixed in the said report of P3.75 per
square meter for parcel 21-B, that of P3.50 per square meter for parcel 21-A, and that of P2 per square meter for the rest of the parcels
(naming them) are reasonable and just; the compensation which is made in the said report for the damages occasioned to the defendant
Simeon Perez being also reasonable and just.

It will be seen that the lower court relied entirely upon the findings of the commissioners. The commissioners justified their appraisement of the
land at a price so greatly in excess of its value as agricultural land upon the following considerations. First, the construction of the provincial
building and the high school had increased the price of land in their vicinity. Second, the neighborhood of these building had become a choice
residential district. Third, the population in the vicinity had increased since it became known that the condemned property had been selected as a
station site by the railroad company. We propose to discuss the evidence of value precisely along these lines, starting first, however, with its value
as agricultural land, the only use to which it has ever been put.

The condemned land is not located in the commercial district of the town of Lucena, but is located near the provincial building and the high school.
The land has been used from time out of mind solely for the cultivation of rice. Deogracias Maligalig, one of the defendants, testified that rice land
in the municipality of Lucena was worth P500 per cavan (hectare). Melecio Allarey, another defendant, testified that such land was worth from
P300 to P400 per hectare. Agustin testified that such land was worth between P400 and P500 per hectare if not under irrigation, and if under
irrigation, more than P1,000. Ambrosio Zaballero, owner of more than 30 parcels of land in the municipality of Lucena, said that the site of the
railroad station was nothing but a rice field prior to the coming of the railroad, worth from P300 to P400 per hectare. Cayo Alzona, the only witness
for the plaintiff, testified that, in Candelaria, rice land was worth between P200 and P250 per hectare, he having purchased an uncleared parcel of
the rice land for P150 per hectare. It seems fair to accept the statement of the two defendants, Maligalig and Allarey, and fix the price of the
condemned land for agricultural purposes at P500 per hectare.

Witnesses for the defendants, including three of the latter, fixed the value of the condemned land at prices ranging from P5 to P8 per square
meter. The remaining defendant, Icasiano, did not testify before the commissioners. But in his answer filed about seven months after purchasing
the land for P0.81 per square meter, he alleged that his parcel was worth P5 per square meter. So that we have all of the defendants and several
other witnesses estimating the value of the condemned land at about the same figure, or from P50,000 to P80,000 per hectare.

The defendant, Melecio Allarey, testified that he owned 30,000 square meters of land in the vicinity of the railroad station site, 2,895 square
meters of which was wanted by the plaintiff company. Upon being asked what the value of his land was, he promptly replied that it was worth
P5.50 per square meters. Asked if he were making his will whether he would list this property at a total value of P150,000, he evaded a direct reply
by saying that he would divide it among his children. Asked if he considered himself the owner of land valued at P150,000, he replied that for his
purpose he figured on that price. Asked if he would declare the land to be worth that sum in his sworn tax declaration, he replied that he would
accept the figures fixed upon by the tax appraisers. His testimony shows clearly that he did not desire to commit himself positively to the assertion
that his three hectares of land was worth P150,000. His ambiguous and evasive replies on cross-examination do not at all harmonize with his
unequivocal statement in his direct examination that his land was worth P5.50 per square meter. Apparently, when confronted with the price
per hectare, which this estimate would put upon his land, he was somewhat astounded. Indeed, we are inclined to believe that one of the reasons
for the high value placed upon the condemned land by all the witnesses is that they were estimating the price per square meter instead of per
hectare, which is the customary method of fixing the price of agricultural land. A perusal of the remainder of the testimony of defendant Allarey
shows that he is paying annual taxes on his 30,000 square meters of land amounting to between P12 and P13. He also naively informs us that he
has not been able to till the land lately because he has no carabaos or other work animals.

Several of the witnesses for the defendants testified to having purchased land in the vicinity of the station site for residential purposes. Thus, Edard
testified that he paid P1,400 for 220 square meters in 1910. Andres Dinlasan sold 119 square meters for P10 per square meter on June 6, 1912. He
could give no reason why the purchaser had paid so much for the land, but in response to a question said the purchaser had some more land
joining it. Agustin bought 1,900 square meters in 1910 for P2 per square meter. Esteban Lagos paid P1,000 for a plot 16 by 18 meters in 1911. A
most remarkable thing about these purchases is that, as choice residential sites, they are so extremely small. With the possible exception of the
parcel purchased by Agustin, the parcels in question are hardly generous enough to permit of the construction of even a modest mansion. Cayo
Alzona testified that he purchased 2,200 square meters in 1906 for P350, and that he purchased a little less than one hectare in 1912, all in the
vicinity of the station site, for which he paid P1,500. It will be noted that there is considerable difference between these figures and the prices at
which the other witnesses testified they purchased land in that neighborhood. That the evidence of sales of nearby land was competent, there can
be no doubt.

In Aledo Terminal Ry. Co. vs. Butler (246 Ill., 406; 92 N.E., 909), the court said: "Evidence of voluntary sales of other lands in the vicinity and
similarly situated is admissible in evidence to aid in estimating the value of the tract sought to be condemned, but the value of such testimony
depends upon the similarity of the land to that in question and the time when such sales were made and the distance such lands are from those
the value of which is the subject of inquiry."

In an earlier case, the supreme court of Illinois stated the rule as follows: "The theory upon which evidence of sales of other similar property in the
neighborhood, at about the same time, is held to be admissible is that it tends to show the fair market value of the property sought to be
condemned. And it can not be doubted that such sales, when made in a free and open market, where a fair opportunity for competition has
existed, become material and often very important factors in determining the value of the particular property in question." (Peoria Gas Light
Co. vs. Peoria Term. Ry. Co., 146 Ill., 372; 21 L.R.A., 373; 34 N.E. 550.)

The supreme court of Massachusetts, in Fourth National Bank vs. Com. (212 Mass., 66; 98 N.E., 86), affirms the rule as follows: "It long has been
settled that in the assessment of damages where lands are acquired by eminent domain evidence is admissible of the price received from sales of
land similar in character, and situated in the vicinity, if the transactions are not so remote in point of time that a fair comparison practically is
impossible."

In Hewitt vs. Price (204 Mo., 31), it was said: "It is sufficient to say upon this proposition that the law is well settled in this State upon the subject,
and while the value or selling price of similar property may be taken into consideration in determining the value of the piece of property in
litigation, it is equally true that the location and character of such property should be similar and the sale of such other property should at least be
reasonably near in point of time to the time at which the inquiry of the value of the property in dispute is directed."

In Laing vs. United New Jersey R.R. & C. Co. (54 N.J.L., 576; 33 Am. St. Rep., 682; 25 A., 409), it was said: "Generally in this and other states evidence
of sales of land in the neighborhood is competent on an inquiry as to the value of land, and if the purchases or sales were made by the party
against whom the evidence was offered it might stand as an admission. But such testimony is received only upon the idea that there is substantial
similarity between the properties. The practice does not extend, and the rule should not be applied, to cases where the conditions are so dissimilar
as not easily to admit of reasonable comparison, and much must be left to the discretion of the trial judge in the determination of the preliminary
question whether the conditions are fairly comparable."

Evidence of other sales made in good faith is competent if the character of such parcels as sites for business purposes, dwellings, or for whatever
other use which enhances the pecuniary value of the condemned land is sufficiently similar to the latter that it may be reasonably assumed that
the price of the condemned land would be approximately near the price brought by the parcels sold. The value of such evidence, of course,
diminishes as the differences between the property sold and the condemned land increase. The property must be in the immediate neighborhood,
that is, in the zone of commercial activity with which the condemned property is identified, and the sales must be sufficiently near in point of time
with the date of the condemnation proceedings as to exclude general increases or decreases in property values due to changed commercial
conditions in the vicinity. No two estates are ever exactly alike, and as the differences between parcels sold and the land condemned must
necessarily be taken into consideration in comparing values, we think it much better that those differences should be shown as part of the
evidence of such sales, as is the practice in Iowa. (Town of Cherokee vs. S.C. & I.F. Town Lot and Land Co., 52 Iowa, 279; 3 N.W., 42.) And where
these differences are so great that the sales in question can form no reliable standard for comparison, such evidence should not be admitted.
(Presbrey vs. Old Colony & Newport R. Co., 103 Mass., 1.)

Aside from the bare fact that the real estate transactions referred to by the witnesses were somewhere in the vicinity of the condemned land,
there is nothing to guide us as to the relative value of the condemned land. The differences which must have existed between the various parcels
of land in the vicinity we are left to imagine. And while the commissioners' view of the condemned land undoubtedly assisted them in forming their
estimate of value, still counsel should not have relied upon their astuteness to discover differences in values, but should have brought them
specifically to the attention of the commissioners. It seems rather unusual, also, that the bare statements of witnesses should be accepted as to the
prices which nearby parcels brought, in view of the insistence of counsel that the condemned land is nothing more than agricultural land. These
sales should have been thoroughly investigated to determine whether they were made bona fide and, if so, whether they were not attended by
unusual circumstances which materially increased the purchase price.

But while these transfers of nearby land are interesting as bearing upon the value of the condemned land, the record also shows several transfers
of the latter itself after it became generally known that it had been selected by the railroad company as the site for its Lucena station. We take it
that these transactions, in which the defendants were themselves parties, offer a far more certain basis for estimating the value of the land than do
their testimony before the commissioners or the testimony of other witnesses as to fancy prices paid for neighboring parcels. Romana Velasquez,
who owned the major portion of the condemned land, disposed of hers to her nephews surnamed Perez. Her first sale was on July 21, 1912. This
parcel contained 16,094 square meters and brought at this time P6,500, or a little more than P0.40 per square meter. A month later Perez sold this
parcel to one Icasiano for P13,000, or a little less than P0.81 per square meter. Sra. Velasquez' next sale was of three parcels, the first two of which
contained approximately 23,000 square meters, while the area of the third was described as three gantas of rice. The total price of the three
parcels was P2,500 of a little over P0.10 per meter. In one of these parcels was located approximately 8,700 square meters of the condemned land
which the commissioners reported at a price higher than any of the rest.

On May 26, 1913, Icasiano, the then owner of the parcel containing 16,094 square meters, sold it to the Tayabas Land Company for P18,000; and
on July 1, 1913, some twenty days after the commissioners had rendered their report, all of the remaining owners of the condemned land sold
their holdings, parcel by parcel, as it had been assessed by the commissioners, to the same company for P1.05 per square meter, with the
exception of Simeon Perez who sold the two parcels owned by him at P2.27 and P2.11, respectively. Here is the most convincing argument that all
the witnesses who placed values on the condemned property, ranging from P5 per square meter to P8 per meter, were seriously in error. After all
the speculation concerning the land, after the commissioners had reported its value at prices ranging from P2 to P3.75 per square meter, the
owners sold the land, parcel by parcel, as it had been assessed by the commissioners for a little more than P1 per meter, with exception of Simeon
Perez who accepted P2.11 and P2.27 for the two parcels which the commissioners had appraised at P3.50 and P3.75 per meter, respectively. It is
unfortunate that the commissioners did not have an opportunity to consider the deeds executed by the defendants in favor of the Tayabas Land
Company. With the commissioners' valuation of the land before them, the Tayabas Land Company was actually able to purchase from the
defendant all of the condemned land at a greatly inferior price. The defendants were not able to resist an offer of P1 and P2 per meter for their
holdings, notwithstanding their fervid declarations before the commissioners that their property was worth P5 per meter, and notwithstanding the
official report by a board composed of local men that it was worth from P2 to P3.75 per meter. This, of course, does not include the defendant
Icasiano who sold out to the land company after the commission had been appointed but before it had begun its labors. It is to be remembered,
however, that he both bought and sold the land after the railroad company had made known its intention of expropriating it, and that in his answer
to the complaint he alleged his land to be worth P5 per meter.

Now, what was the object of the Tayabas Land Company in purchasing the land? Evidently it was not with the intention of making any use of it, for
the railroad company had long since taken possession. They, as well as the owners, were simply speculating on the probability that the award of
the commissioners would be approved by the court. It was little more than a sporty guess on each side as to what would be allowed for the land by
the final judgment of the court. The company believed the award would exceed P1.05 per meter, and the defendants thought the risk that the
award would be in a lesser amount was so great that they let the land go for the price the company offered them. Nor is it at all certain that the
prices inserted in these deeds of sale were not fictitiously inflated. The circumstances under which the sales were made would readily suggest the
expediency of inserting fictitious prices in the deeds.

The moment a parcel of land is wanted by a public service corporation the price, for some occult reason, immediately soars far beyond what the
owner would think of asking or receiving in the open market. Owners ask fabulous prices for it and neighbors look on with an indulgent smile or
even persuade themselves that the land is worth the price for which the owner holds out in view of the fact that it is wanted by a corporation,
whose financial resources are popularly supposed to be inexhaustible. The resultant good to a community due to the investment of new capital,
the increased employment of labor, and the services the corporation will render are for the moment forgotten; and persons called upon for
opinions as to the price of the desired property, unconsciously perhaps, relax from that sound business acumen which guides them in their daily
affairs, while they are considering, not the price which they would care to pay if they wanted the land, but the price which the corporation ought to
pay in view of the fact that it is a corporation.

The owner of condemned land is entitled to just compensation. That is all the law allows him. "Compensation" means an equivalent for the value of
the land (property) taken. Anything beyond that is more and anything short of that is less than compensation. To compensate is to render
something which is equal in value to that taken or received. The word "just" is used to intensify the meaning of the word "compensation;" to
convey the idea that the equivalent to be rendered for the property taken shall be real, substantial, full, ample. "Just compensation." therefore, as
used in section 246 of the Code of Civil Procedure, means a fair and full equivalent for the loss sustained.

The exercise of the power being necessary for the public good, and all property being held subject to its exercise when, and as the public
good requires it, it would be unjust to the public that it should be required to pay the owner more than a fair indemnity for such loss. To
arrive at this fair indemnity, the interests of the public and of the owner and all the circumstances of the particular appropriation should
be taken into consideration. (Lewis on Eminent Domain, sec. 462.)

The compensation must be just to the public as well as to the owners. (Searl vs. School District 133 U.S., 533; 33 L. ed. 740.) Section 244 of our code
says that:

The commissioners shall assess the value of the property taken and used and shall also assess the consequential damages to the property
not taken an deduct from such consequential damages the consequential benefits to be derived by the owners from the public use of the
land taken.

"To assess" is to perform a judicial act. The commissioners' power is limited to assessing the value and to determining the amount of the damages.
There it stops; they can go no further. The value and damages awarded must be a just compensation and no more and no less. But in fixing these
amounts, the commissioners are not to act ad libitum. They are to discharge the trust reposed in them according to well established rules and form
their judgment upon correct legal principles. To deny this is to place them where no one else in this country is placed, above the law and beyond
accountability.

There is no question but that the compensation to which a defendant owner is entitled is the market value of the condemned property, to which,
of course, must be added his consequential damages if any, or from which must be deducted his consequential benefits, if any. Such was our
holding in Manila Railway Co. vs. Fabie (17 Phil. Rep., 206). But as stated in Packard vs. Bergen Neck Ry. Co. (54 N.J.L., 553; 23 A., 506):

The difficulty is not with the rule, but with its application. For the determination of the market value of land, which is that sum of money
which a person, desirous but not compelled to buy and an owner willing but not compelled to sell, would agree on as a price to the given
and received therefor, is beyond doubt difficult. The test is logically and legally correct, but is cannot be applied to land with the accuracy
with which it can be applied to stocks, bonds and personal property generally. Still it is this test which admittedly must be applied, even
when the value of the land and the damages are found in separate sums.

It is a very difficult matter to limit the scope of the inquiry as to what the market value of condemned property is. The market value of a piece of
land is attained by a consideration of all those facts which make it commercially valuable. Whether evidence considered by those whose duty it is
to appraise the land is of that nature is often a very difficult matter to decide. The Supreme Court of the United States, in a carefully worded
statement, marks out the scope of the inquiry as follows:

In determining the value of the appropriated for public purposes, the same considerations are to be regarded as in a sale of property
between private parties. The inquiry in such cases must be: What is that property worth in the market, viewed not merely with reference
to the uses to which it is at the time applied, but with reference to the uses to which it is plainly adapted; that is to say, what is it worth
from its availability for valueless uses? ... As a general thing, we should say that the compensation to the owner is to be estimated by
reference to the uses for which the property is suitable, having regard to the existing business or wants of the community, or such as may
be reasonably expected in the immediate future. (Boom Co. vs. Patterson, 98 U.S., 403.)

This passage is quoted with approval in the late case of St. Loui I.M. & S.R. Co. vs. Theodore Maxfield Co. (94 Ark., 135; 26 L.R.A., N.S., 1111; 126
S.W., 83), a very well considered case.

The supreme court of Missouri has also formulated an exceedingly clear statement of the matter in the Stock Yards Case (120 Mo., 541):

The market value of the property means its actual value, independent of the location of plaintiff's road thereon, that is, the fair value of
the property as between one who wants to purchase and one who wants to sell it; not what could be obtained for it in peculiar
circumstances when greater than its fair price could be obtained; nor its speculative value; nor the value obtained through the necessities
of another. Nor, on the other hand, is it to be limited to that price which the property would bring when forced off at auction under the
hammer. The question is, if the defendant wanted to sell its property, what could be obtained for it upon the market from parties who
wanted to buy and would give its full value.lawph!1.net

These views are practically in accord with Lewis on Eminent Domain (2d ed.), section 478, where the rule is stated as follows:

The market value of property is the price which it will bring when it is offered for sale by one who desire, but is not obliged to sell it, and
is bought by one who is under no necessity of having it. In estimating its value all the capabilities of the property, and all the uses to
which it may be applied or for which it is adapted are to be considered, and not merely the condition it is in at the time and the use to
which it is then applied by the owner. It is not a question of the value of the property to the owner. Nor can the damages be enhanced by
his unwillingness to sell. On the other hand, the damages cannot be measured by the value of the property to the party condemning it,
nor by its need of the particular and its surroundings, its improvements and capabilities, may be shown and considered in estimating its
value. (Approved in Seaboard Air Line vs. Chamblin, 18 Va., 42.)

Now, what was the utility of the land condemned? So far as the record shows, its possible uses were, first, for the cultivation of rice; second, as a
residential site owing to its proximity to the provincial building and the high school; and third, as a railroad station site.

Its location from a farmer's point of view would doubtless enhance its value, since it was so close to the town of Lucena that the marketing of crops
was a decidedly simple matter. For this reason it was more valuable as agriculture land than other farms farther away from town.

As a residential site it seems to have been so far a complete failure. How long the high school had stood there the record does not state. But
although the provincial building had stood near it for several years, not a single homebuilder had selected any portion of the condemned land as a
site for his residence. We note that all those who testified at the hearing before the commissioners to having purchased land in the vicinity for
home sites, purchased other land than that condemned. Nor does the record contain any intimation that any of the owners of the land had ever
attempted to dispose of any part of it as building lots. As a residential site, therefore, its value was decidedly problematical. Possibly, in the next
dozen years a few houses might have been built upon the land, but, judging by the past record, its development along this line would have been
extremely slow.
As a railroad station site, the record gives no indication that it is the sole possible location for that purpose in Lucena. It is not shown that its
location for that purpose is at all superior to other side of town. Hence, possessing no exclusivenatural advantages for this purpose, it is a foregone
conclusion that the railroad company would not willingly pay P81,00 for such a site when it could have purchased another site for, say, P1,500.

Here it seems proper to say that the appearance of the railroad in the town of Lucena was the occasion for an incipient real estate boom in the
vicinity of the provincial building and the high school. Several of the witnesses for the defendants testified what they would offer; if they were in
the market for land in the vicinity of the station site, and the witness Alzona, the single witness who testified for the plaintiff, testified that some
owner of land near the provincial buildingwere asking between P50 and P700 for lost of 400 square meters. It is clear that these hypothetical
purchases and sales do not offer any reliable basis upon which to calculate the actual market value of the land. The fond dreams of the owners of a
sudden shift of the business center on the town of Lucena to their vicinity, or of its becoming a choice residential district, are not capital in hand.

Proof must be limited to showing the present condition of the property and the uses to which it is naturally adapted. It is not competent
for the owner to show to what use he intended to put the property, nor what plans he had for its improvement, nor the probable future
use of the property. Nothing can be allowed for damages to an intended use. (Lewis on Eminent Domain, 2d ed., sec. 709.)

From the evidence we have discussed above, it is apparent that a good price for rice land in the vicinity of Lucena is P500 per hectare. With his as a
basis, at what would the prospective buyer estimate the possibility of the land being used as a residential site sometime in the future and its
possible advantages as a railroad site? Certainly at nothing like the estimates contained in the report of the commissioners. To secure an adequate
return on such a large investment as P80,000, every meter of the land would have to be put to immediate use as residential sites, supposing that
people could be induced to buy it for that purpose at such figures or to pay the necessarily large rent therefor based on such a valuation. And to
hold out for such a figure in case a railroad company wanted the land as a depot site would mean that the company would locate its depot at some
other place. It seems to us that, either as a residential site or as a railroad station site, its value should be principally regulated by the value of other
agricultural land on the outskirts of the town. In other words, the chance that it would be wanted for either of these purposes owing to its superior
location was but slightly greater than that of other agricultural land adjacent to the town. We are, therefore, led to the conclusion that the price at
which practically half of the condemned land was, sold by Romana Velasquez to the defendant, Filemon Perez, is a most liberal estimate of its
value. We refer to her sale of the parcel of 16,094 square meters for P6,500. This parcel comprises practically one-half of the entire station site and
no outside land was included in the transaction. The sale was made after it became known that the land sold was to be part of the station site, and
a statement to this effect was included in the deed. Both parties being aware that the land was to be condemned by the plaintiff company, it
cannot be said that they were not aware of all the latent utility of the land. For these reasons, the price which this parcel brought should serve as
an excellent criterion of the value of the entire station site. And while no explanation is given of why the sale occurred, since, of course, no one
would but it with the expectation of using it himself when he knew that it would shortly be occupied by the railroad company, still there is not
sufficient indication that it was sold for speculative purposes or that the element of speculation entered into the transaction to enable us to say
that the price was inflated and exceeded the actual market value of the condemned land as agricultural land to be worth P500 per hectare, and
leaves a little more than P3,500 for its potential value as a residential district and as a railroad station site. This is, furthermore, approximately 400
per cent higher than Sra. Velasquez' second sale (some for months later) to Simeon Perez, when she sold about 23,000 square meters in the same
neighborhood for a little over P1,000 per hectare.

It is to be further noted that the average assessed valuation of the condemned property is somewhat less than P0.08 per square meter, while the
highest assessed valuation of any of it is only P0.23 per square meter, which is carried by some 5,973 square meters, or less than one-sixth of the
whole. It is also to be noted that these 5,973 square meters were appraised by the commissioners as being worth exactly what the 16,094 square
meters were worth, the latter being assessed for taxation purposes at only P0.03 per square meter.

At the price we have fixed, we are of the opinion that any consequential damages which may have been occasioned to any of the defendants by
the condemnation proceedings is amply cared for.

The defendants, Simeon Perez, was awarded P600 damages by the commissioners for being compelled to remove a building in course of
construction at the time the expropriation proceedings were started. This building was designed to serve partly as a warehouse and partly for
stores. He commenced its construction about the middle of December, 1912, after it became known that he plaintiff company wanted the land for
a railroad station. Construction work was ordered stopped by the court. From the vague description of this order in the record, we presume it was
the order of the court of date of January 22, 1913, placing the plaintiff in possession of the land under the provisions of Act No. 1258 as amended
by Act No. 1592. Until such action was taken by the railroad company, or until the commissioners were appointed and had appraised the land, we
know of no legal provision which would prohibit the owner from doing with the land what he pleased. The Act in question gives t the company "the
right t enter immediately upon the possession of the land involved." (Sec. 3.) This amendment to Act No. 1258 was enacted especially for the
benefit of railroad companies, and affords full protection to them if they act with due diligence. Until some such positive assertion of its desire to
expropriate the land, no reason is seen why the company might not ask for a dismissal of the proceedings in accordance with section 127 of the
Code of Civil Procedure. The right of the owner to the enjoyment of his property ought not to be made to depend so entirely upon the whims of a
third party. No attempt was made to meet the statement of Perez that he had expended a large sum of money on the construction of the building.
The commissioners probably saw the structure or some of the materials which entered into it and are in a much better position to judge of the
amount expended upon the work than are we. They have fixed that amount at P600. In the absence of positive evidence in the record showing this
findings to be grossly excessive, we must accept it as correct.

For the foregoing, reasons, the judgment of the court below is modified by reducing the award for the parcel containing 16,094 square meters to
the sum of P6,500. The damages for the remaining parcels will be fixed at the same proportionate amount. As thus modified the judgment
appealed from is affirmed. No costs will be allowed on this appeal. The amount as herein fixed, together with interest, will be deposited with the
clerk of the Court of First Instance of Tayabas, subject to the rights of the defendants and the Tayabas Land Company. So ordered.

Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.