G.R. No.

L-18536 March 31, 1965

JOSE B. AZNAR, plaintiff-appellant, vs.RAFAEL YAPDIANGCO, defendant-appellee; TEODORO SANTOS, intervenor-appellee.

REGALA, J.:
This is an appeal, on purely legal questions, from a decision of the Court of First Instance of Quezon City, Branch IV, declaring the intervenor-appellee, Teodoro
Santos, entitled to the possession of the car in dispute.
The records before this Court disclose that sometime in May, 1959, Teodoro Santos advertised in two metropolitan papers the sale of his FORD FAIRLANE 500. In the
afternoon of May 28, 1959, a certain L. De Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence to answer the ad. However, Teodoro
Santos was out during this call and only the latter's son, Irineo Santos, received and talked with De Dios. The latter told the young Santos that he had come in behalf
of his uncle, Vicente Marella, who was interested to buy the advertised car.
On being informed of the above, Teodoro Santos instructed his son to see the said Vicente Marella the following day at his given address: 1642 Crisostomo Street,
Sampaloc, Manila. And so, in the morning of May 29, 1959, Irineo Santos went to the above address. At this meeting, Marella agreed to buy the car for P14,700.00 on
the understanding that the price would be paid only after the car had been registered in his name.
Irineo Santos then fetched his father who, together with L. De Dios, went to the office of a certain Atty. Jose Padolina where the deed of the sale for the car was
executed in Marella's favor. The parties to the contract thereafter proceeded to the Motor Vehicles Office in Quezon City where the registration of the car in
Marella's name was effected. Up to this stage of the transaction, the purchased price had not been paid.
From the Motor Vehicles Office, Teodoro Santos returned to his house. He gave the registration papers and a copy of the deed of sale to his son, Irineo, and
instructed him not to part with them until Marella shall have given the full payment for the car. Irineo Santos and L. De Dios then proceeded to 1642 Crisostomo
Street, Sampaloc, Manila where the former demanded the payment from Vicente Marella. Marella said that the amount he had on hand then was short by some
P2,000.00 and begged off to be allowed to secure the shortage from a sister supposedly living somewhere on Azcarraga Street, also in Manila. Thereafter, he ordered
L. De Dios to go to the said sister and suggested that Irineo Santos go with him. At the same time, he requested the registration papers and the deed of sale from
Irineo Santos on the pretext that he would like to show them to his lawyer. Trusting the good faith of Marella, Irineo handed over the same to the latter and
thereupon, in the company of L. De Dios and another unidentified person, proceeded to the alleged house of Marella's sister.
At a place on Azcarraga, Irineo Santos and L. De Dios alighted from the car and entered a house while their unidentified companion remained in the car. Once inside,
L. De Dios asked Irineo Santos to wait at the sala while he went inside a room. That was the last that Irineo saw of him. For, after a considerable length of time waiting
in vain for De Dios to return, Irineo went down to discover that neither the car nor their unidentified companion was there anymore. Going back to the house, he
inquired from a woman he saw for L. De Dios and he was told that no such name lived or was even known therein. Whereupon, Irineo Santos rushed to 1642
Crisostomo to see Marella. He found the house closed and Marella gone. Finally, he reported the matter to his father who promptly advised the police authorities.
That very same day, or on the afternoon of May 29, 1959 Vicente Marella was able to sell the car in question to the plaintiff-appellant herein, Jose B. Aznar, for
P15,000.00. Insofar as the above incidents are concerned, we are bound by the factual finding of the trial court that Jose B. Aznar acquired the said car from Vicente
Marella in good faith, for a valuable consideration and without notice of the defect appertaining to the vendor's title.
While the car in question was thus in the possession of Jose B. Aznar and while he was attending to its registration in his name, agents of the Philippine Constabulary
seized and confiscated the same in consequence of the report to them by Teodoro Santos that the said car was unlawfully taken from him.
In due time, Jose B. Aznar filed a complaint for replevin against Captain Rafael Yapdiangco, the head of the Philippine Constabulary unit which seized the car in
question Claiming ownership of the vehicle, he prayed for its delivery to him. In the course of the litigation, however, Teodoro Santos moved and was allowed to
intervene by the lower court.
At the end of the trial, the lower court rendered a decision awarding the disputed motor vehicle to the intervenor-appellee, Teodoro Santos. In brief, it ruled that
Teodoro Santos had been unlawfully deprived of his personal property by Vicente Marella, from whom the plaintiff-appellant traced his right. Consequently, although
the plaintiff-appellant acquired the car in good faith and for a valuable consideration from Vicente Marella, the said decision concluded, still the intervenor-appellee
was entitled to its recovery on the mandate of Article 559 of the New Civil Code which provides:
ART. 559. The possession of movable property acquired in good faith is equivalent to title. Nevertheless, one who lost any movable or has been unlawfully
deprived thereof, may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.
From this decision, Jose B. Aznar appeals.
The issue at bar is one and simple, to wit: Between Teodoro Santos and the plaintiff-appellant, Jose B. Aznar, who has a better right to the possession of the disputed
automobile?
We find for the intervenor-appellee, Teodoro Santos.
The plaintiff-appellant accepts that the car in question originally belonged to and was owned by the intervenor-appellee, Teodoro Santos, and that the latter was
unlawfully deprived of the same by Vicente Marella. However, the appellant contends that upon the facts of this case, the applicable provision of the Civil Code is
Article 1506 and not Article 559 as was held by the decision under review. Article 1506 provides:
ART. 1506. Where the seller of goods has a voidable title thereto, but his, title has not been voided at the time of the sale, the buyer acquires a good title
to the goods, provided he buys them in good faith, for value, and without notice of the seller's defect of title.
The contention is clearly unmeritorious. Under the aforequoted provision, it is essential that the seller should have a voidable title at least. It is very clearly
inapplicable where, as in this case, the seller had no title at all.
Vicente Marella did not have any title to the property under litigation because the same was never delivered to him. He sought ownership or acquisition of it by
virtue of the contract. Vicente Marella could have acquired ownership or title to the subject matter thereof only by the delivery or tradition of the car to him.
Under Article 712 of the Civil Code, "ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate
succession, and in consequence of certain contracts, by tradition." As interpreted by this Court in a host of cases, by this provision, ownership is not transferred by
contract merely but by tradition or delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the
mode of accomplishing the same (Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez and Co. v. International Bank, 37 Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51;
Kuenzle & Streiff v. Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co., 32 Phil. 180).
For the legal acquisition and transfer of ownership and other property rights, the thing transferred must be delivered, inasmuch as, according to settled
jurisprudence, the tradition of the thing is a necessary and indispensable requisite in the acquisition of said ownership by virtue of contract. (Walter Laston
v. E. Diaz & Co. & the Provincial Sheriff of Albay, supra.)
So long as property is not delivered, the ownership over it is not transferred by contract merely but by delivery. Contracts only constitute titles or rights to
the transfer or acquisition of ownership, while delivery or tradition is the method of accomplishing the same, the title and the method of acquiring it being
different in our law. (Gonzales v. Roxas, 16 Phil. 51)
In the case on hand, the car in question was never delivered to the vendee by the vendor as to complete or consummate the transfer of ownership by virtue of the
contract. It should be recalled that while there was indeed a contract of sale between Vicente Marella and Teodoro Santos, the former, as vendee, took possession of
the subject matter thereof by stealing the same while it was in the custody of the latter's son.
There is no adequate evidence on record as to whether Irineo Santos voluntarily delivered the key to the car to the unidentified person who went with him and L. De
Dios to the place on Azcarraga where a sister of Marella allegedly lived. But even if Irineo Santos did, it was not the delivery contemplated by Article 712 of the Civil
Code. For then, it would be indisputable that he turned it over to the unidentified companion only so that he may drive Irineo Santos and De Dios to the said place on
Azcarraga and not to vest the title to the said vehicle to him as agent of Vicente Marella. Article 712 above contemplates that the act be coupled with the intent of
delivering the thing. (10 Manresa 132)
The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for under it, the rule is to the effect that if the owner has lost a thing, or if he
has been unlawfully deprived of it, he has a right to recover it, not only from the finder, thief or robber, but also from third persons who may have acquired it in good
faith from such finder, thief or robber. The said article establishes two exceptions to the general rule of irrevindicability, to wit, when the owner (1) has lost the thing,
or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot retain the thing as against the owner, who may recover it without paying any
indemnity, except when the possessor acquired it in a public sale. (Del Rosario v. Lucena, 8 Phil. 535; Varela v. Finnick, 9 Phil. 482; Varela v. Matute, 9 Phil. 479;
Arenas v. Raymundo, 19 Phil. 46. Tolentino, id., Vol. II, p. 261.)
In the case of Cruz v. Pahati, et al., 52 O.G. 3053 this Court has already ruled
that
Under Article 559 of the new Civil Code, a person illegally deprived of any movable may recover it from the person in possession of the same and the only
defense the latter may have is if he has acquired it in good faith at a public sale, in which case, the owner cannot obtain its return without reimbursing the
price paid therefor. In the present case, plaintiff has been illegally deprived of his car through the ingenious scheme of defendant B to enable the latter to
dispose of it as if he were the owner thereof. Plaintiff, therefore, can still recover possession of the car even if it is in the possession of a third party who
 had acquired it in good faith from defendant B. The maxim that "no man can transfer to another a better title than he had himself" obtains in the civil as
well as in the common law. (U.S. v. Sotelo, 28 Phil. 147)
Finally, the plaintiff-appellant here contends that inasmuch as it was the intervenor-appellee who had caused the fraud to be perpetrated by his misplaced
confidence on Vicente Marella, he, the intervenor-appellee, should be made to suffer the consequences arising therefrom, following the equitable principle to that
effect. Suffice it to say in this regard that the right of the owner to recover personal property acquired in good faith by another, is based on his being dispossessed
without his consent. The common law principle that where one of two innocent persons must suffer by a fraud perpetrated by another, the law imposes the loss
upon the party who, by his misplaced confidence, has enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision of the
new Civil Code, specifically Article 559. Between a common law principle and a statutory provision, the latter must prevail in this jurisdiction. (Cruz v. Pahati, supra)
UPON ALL THE FOREGOING, the instant appeal is hereby dismissed and the decision of the lower court affirmed in full. Costs against the appellant.

G.R. No. 80298 April 26, 1990

EDCA PUBLISHING & DISTRIBUTING CORP., petitioner, vs.THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the name and style of "SANTOS
BOOKSTORE," and THE COURT OF APPEALS, respondents.
CRUZ, J.:
The case before us calls for the interpretation of Article 559 of the Civil Code and raises the particular question of when a person may be deemed to have been
"unlawfully deprived" of movable property in the hands of another. The article runs in full as follows:
Art. 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been
unlawfully deprived thereof, may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully deprived has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.
The movable property in this case consists of books, which were bought from the petitioner by an impostor who sold it to the private respondents. Ownership of the
books was recognized in the private respondents by the Municipal Trial Court, 1 which was sustained by the Regional Trial Court, 2 which was in turn sustained by the
Court of Appeals. 3 The petitioner asks us to declare that all these courts have erred and should be reversed.
This case arose when on October 5, 1981, a person identifying himself as Professor Jose Cruz placed an order by telephone with the petitioner company for 406
books, payable on delivery. 4 EDCA prepared the corresponding invoice and delivered the books as ordered, for which Cruz issued a personal check covering the
purchase price of P8,995.65. 5 On October 7, 1981, Cruz sold 120 of the books to private respondent Leonor Santos who, after verifying the seller's ownership from
the invoice he showed her, paid him P1,700.00. 6
Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before clearing of his first check, made inquiries with the De la Salle College
where he had claimed to be a dean and was informed that there was no such person in its employ. Further verification revealed that Cruz had no more account or
deposit with the Philippine Amanah Bank, against which he had drawn the payment check. 7 EDCA then went to the police, which set a trap and arrested Cruz on
October 7, 1981. Investigation disclosed his real name as Tomas de la Pea and his sale of 120 of the books he had ordered from EDCA to the private respondents. 8
On the night of the same date, EDCA sought the assistance of the police in Precinct 5 at the UN Avenue, which forced their way into the store of the private
respondents and threatened Leonor Santos with prosecution for buying stolen property. They seized the 120 books without warrant, loading them in a van belonging
to EDCA, and thereafter turned them over to the petitioner. 9
Protesting this high-handed action, the private respondents sued for recovery of the books after demand for their return was rejected by EDCA. A writ of preliminary
attachment was issued and the petitioner, after initial refusal, finally surrendered the books to the private respondents. 10 As previously stated, the petitioner was
successively rebuffed in the three courts below and now hopes to secure relief from us.
To begin with, the Court expresses its disapproval of the arbitrary action of the petitioner in taking the law into its own hands and forcibly recovering the disputed
books from the private respondents. The circumstance that it did so with the assistance of the police, which should have been the first to uphold legal and peaceful
processes, has compounded the wrong even more deplorably. Questions like the one at bar are decided not by policemen but by judges and with the use not of brute
force but of lawful writs.
Now to the merits
It is the contention of the petitioner that the private respondents have not established their ownership of the disputed books because they have not even produced a
receipt to prove they had bought the stock. This is unacceptable. Precisely, the first sentence of Article 559 provides that "the possession of movable property
acquired in good faith is equivalent to a title," thus dispensing with further proof.
The argument that the private respondents did not acquire the books in good faith has been dismissed by the lower courts, and we agree. Leonor Santos first
ascertained the ownership of the books from the EDCA invoice showing that they had been sold to Cruz, who said he was selling them for a discount because he was
in financial need. Private respondents are in the business of buying and selling books and often deal with hard-up sellers who urgently have to part with their books at
reduced prices. To Leonor Santos, Cruz must have been only one of the many such sellers she was accustomed to dealing with. It is hardly bad faith for any one in the
business of buying and selling books to buy them at a discount and resell them for a profit.
But the real issue here is whether the petitioner has been unlawfully deprived of the books because the check issued by the impostor in payment therefor was
dishonored.
In its extended memorandum, EDCA cites numerous cases holding that the owner who has been unlawfully deprived of personal property is entitled to its recovery
except only where the property was purchased at a public sale, in which event its return is subject to reimbursement of the purchase price. The petitioner is begging
the question. It is putting the cart before the horse. Unlike in the cases invoked, it has yet to be established in the case at bar that EDCA has been unlawfully deprived
of the books.
The petitioner argues that it was, because the impostor acquired no title to the books that he could have validly transferred to the private respondents. Its reason is
that as the payment check bounced for lack of funds, there was a failure of consideration that nullified the contract of sale between it and Cruz.
The contract of sale is consensual and is perfected once agreement is reached between the parties on the subject matter and the consideration. According to the Civil
Code:
Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the
price.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.
xxx xxx xxx
Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.
Art. 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one quoted, that ownership in the thing sold shall not pass to the buyer until full payment of the purchase
only if there is a stipulation to that effect. Otherwise, the rule is that such ownership shall pass from the vendor to the vendee upon the actual or constructive
delivery of the thing sold even if the purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to rescind the contract, or to criminal prosecution in the case of bouncing checks. But absent the stipulation
above noted, delivery of the thing sold will effectively transfer ownership to the buyer who can in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang,11 the plaintiff sold some cosmetics to Francisco Ang, who in turn sold them to Tan Sit Bin. Asiatic not having been paid by
Ang, it sued for the recovery of the articles from Tan, who claimed he had validly bought them from Ang, paying for the same in cash. Finding that there was no
conspiracy between Tan and Ang to deceive Asiatic the Court of Appeals declared:
Yet the defendant invoked Article 464 12 of the Civil Code providing, among other things that "one who has been unlawfully deprived of personal property
may recover it from any person possessing it." We do not believe that the plaintiff has been unlawfully deprived of the cartons of Gloco Tonic within the
scope of this legal provision. It has voluntarily parted with them pursuant to a contract of purchase and sale. The circumstance that the price was not
subsequently paid did not render illegal a transaction which was valid and legal at the beginning.
In Tagatac v. Jimenez,13 the plaintiff sold her car to Feist, who sold it to Sanchez, who sold it to Jimenez. When the payment check issued to Tagatac by Feist was
dishonored, the plaintiff sued to recover the vehicle from Jimenez on the ground that she had been unlawfully deprived of it by reason of Feist's deception. In ruling
for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appellant Trinidad C. Tagatac has been unlawfully deprived of her car. At first blush, it would seem that she was
unlawfully deprived thereof, considering that she was induced to part with it by reason of the chicanery practiced on her by Warner L. Feist. Certainly,
swindling, like robbery, is an illegal method of deprivation of property. In a manner of speaking, plaintiff-appellant was "illegally deprived" of her car, for
the way by which Warner L. Feist induced her to part with it is illegal and is punished by law. But does this "unlawful deprivation" come within the scope of
Article 559 of the New Civil Code?
xxx xxx xxx
 . . . The fraud and deceit practiced by Warner L. Feist earmarks this sale as a voidable contract (Article 1390 N.C.C.). Being a voidable contract, it is
susceptible of either ratification or annulment. If the contract is ratified, the action to annul it is extinguished (Article 1392, N.C.C.) and the contract is
cleansed from all its defects (Article 1396, N.C.C.); if the contract is annulled, the contracting parties are restored to their respective situations before the
contract and mutual restitution follows as a consequence (Article 1398, N.C.C.).
However, as long as no action is taken by the party entitled, either that of annulment or of ratification, the contract of sale remains valid and binding.
When plaintiff-appellant Trinidad C. Tagatac delivered the car to Feist by virtue of said voidable contract of sale, the title to the car passed to Feist. Of
course, the title that Feist acquired was defective and voidable. Nevertheless, at the time he sold the car to Felix Sanchez, his title thereto had not been
avoided and he therefore conferred a good title on the latter, provided he bought the car in good faith, for value and without notice of the defect in Feist's
title (Article 1506, N.C.C.). There being no proof on record that Felix Sanchez acted in bad faith, it is safe to assume that he acted in good faith.
The above rulings are sound doctrine and reflect our own interpretation of Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz acquired ownership over the books which he could then validly transfer to the private respondents. The fact that
he had not yet paid for them to EDCA was a matter between him and EDCA and did not impair the title acquired by the private respondents to the books.
One may well imagine the adverse consequences if the phrase "unlawfully deprived" were to be interpreted in the manner suggested by the petitioner. A person
relying on the seller's title who buys a movable property from him would have to surrender it to another person claiming to be the original owner who had not yet
been paid the purchase price therefor. The buyer in the second sale would be left holding the bag, so to speak, and would be compelled to return the thing bought by
him in good faith without even the right to reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos took care to ascertain first that the books belonged to Cruz before she agreed to purchase them. The
EDCA invoice Cruz showed her assured her that the books had been paid for on delivery. By contrast, EDCA was less than cautious in fact, too trusting in dealing
with the impostor. Although it had never transacted with him before, it readily delivered the books he had ordered (by telephone) and as readily accepted his
personal check in payment. It did not verify his identity although it was easy enough to do this. It did not wait to clear the check of this unknown drawer. Worse, it
indicated in the sales invoice issued to him, by the printed terms thereon, that the books had been paid for on delivery, thereby vesting ownership in the buyer.
Surely, the private respondent did not have to go beyond that invoice to satisfy herself that the books being offered for sale by Cruz belonged to him; yet she did.
Although the title of Cruz was presumed under Article 559 by his mere possession of the books, these being movable property, Leonor Santos nevertheless
demanded more proof before deciding to buy them.
It would certainly be unfair now to make the private respondents bear the prejudice sustained by EDCA as a result of its own negligence.1wphi1 We cannot see the
justice in transferring EDCA's loss to the Santoses who had acted in good faith, and with proper care, when they bought the books from Cruz.
While we sympathize with the petitioner for its plight, it is clear that its remedy is not against the private respondents but against Tomas de la Pea, who has
apparently caused all this trouble. The private respondents have themselves been unduly inconvenienced, and for merely transacting a customary deal not really
unusual in their kind of business. It is they and not EDCA who have a right to complain.
WHEREFORE, the challenged decision is AFFIRMED and the petition is DENIED, with costs against the petitioner.

G.R. No. L-20264 January 30, 1971

CONSUELO S. DE GARCIA and ANASTACIO GARCIA, petitioners, vs.HON. COURT OF APPEALS, ANGELINA D. GUEVARA and JUAN B. GUEVARA, respondents.
FERNANDO, J.:
This petition for certiorari to review a decision of respondent Court of Appeals was given due course because it was therein vigorously asserted that legal questions of
gravity and of moment, there being allegations of an unwarranted departure from and a patent misreading of applicable and controlling decisions, called for
determination by this Tribunal. The brief for petitioners-spouses, however, failed to substantiate such imputed failings of respondent Court. The performance did not
live up to the promise. On the basis of the facts as duly found by respondent Court, which we are not at liberty to disregard, and the governing legal provisions, there
is no basis for reversal. We affirm.
The nature of the case presented before the lower court by private respondent Angelina D. Guevara, assisted by her spouse, Juan B. Guevara, as plaintiffs, was noted
in the decision of respondent Court of Appeals thus: "Plaintiff seeks recovery of `one (1) lady's diamond ring 18 cts. white gold mounting, with one (1) 2.05 cts.
diamond-solitaire, and four (4) brills 0.10 cts. total weight' which she bought on October 27, 1947 from R. Rebullida, Inc."1 Then came a summary of now respondent
Guevara of her evidence: "Plaintiff's evidence tends to show that around October 11, 1953 plaintiff while talking to Consuelo S. de Garcia, owner of La Bulakea
restaurant recognized her ring in the finger of Mrs. Garcia and inquired where she bought it, which the defendant answered from her comadre. Plaintiff explained
that that ring was stolen from her house in February, 1952. Defendant handed the ring to plaintiff and it fitted her finger. Two or three days later, at the request of
plaintiff, plaintiff, her husband Lt. Col. Juan Guevara, Lt. Cementina of Pasay PD, defendant and her attorney proceeded to the store of Mr. Rebullida to whom they
showed the ring in question. Mr. Rebullida a examined the ring with the aid of high power lens and after consulting the stock card thereon, concluded that it was the
very ring that plaintiff bought from him in 1947. The ring was returned to defendant who despite a written request therefor failed to deliver the ring to plaintiff.
Hence, this case. Later on when the sheriff tried to serve the writ of seizure (replevin), defendant refused to deliver the ring which had been examined by Mr.
Rebullida, claiming it was lost."2
How the defendant, Consuelo S. de Garcia, the present petitioner before us, along with her husband Anastacio Garcia, sought to meet plaintiff's claim was narrated
thus: "On the other hand, defendant denied having made any admission before plaintiff or Mr. Rebullida or the sheriff. Her evidence tends to show that the ring
(Exhibit 1) was purchased by her from Mrs. Miranda who got it from Miss Angelita Hinahon who in turn got it from the owner, Aling Petring, who was boarding in her
house; that the ring she bought could be similar to, but not the same ring plaintiff purchased from Mr. Rebullida which was stolen; that according to a pawn-shop
owner the big diamond on Exhibit 1 was before the trial never dismantled. When dismantled, defendant's diamond was found to weigh 2.57 cts."3
Plaintiff lost in the lower court. She elevated the matter to respondent Court of Appeals with the judgment of the lower court being reversed. It is this decision now
under review.
These are the facts as found by respondent Court of Appeals: "That the ring brought by the parties for examination by Rafael Rebullida on December 14, 1953 was the
same ring purchased by plaintiff from R. Rebullida, Inc. on October 27, 1947 and stolen in February, 1952 has been abundantly established by plaintiff's evidence.
Before plaintiff lost the ring, she had been wearing it for six years and became familiar with it. Thus, when she saw the missing ring in the finger of defendant, she
readily and definitely identified it. Her identification was confirmed by Mr. Rafael Rebullida, whose candid testimony is entitled to great weight, with his 30 years
experience behind him in the jewelry business and being a disinterested witness since both parties are his customers. Indeed, defendant made no comment when in
her presence Rebullida after examining the ring and stock card told plaintiff that that was her ring, nor did she answer plaintiff's letter of demand, ... asserting
ownership. Further confirmation may be found in the extra-judicial admissions, contained in defendant's original and first amended answers ..."4
These further facts likewise appeal therein: "The foregoing proof is not counter-balanced by the denial on the part of defendant or the presentation of the ring,
Exhibit I, which has a diamond-solitaire 2.57 cts., or much heavier than the lost diamond weighing 2.05 cts. only. It is noteworthy that defendant gave a rather
dubious source of her ring. Aling Petring from whom the ring supposedly came turned out to be a mysterious and ephemeral figure. Miss Hinahon did not even know
her true and full name, nor her forwarding address. She appeared from nowhere, boarded three months in the house of Miss Hinahon long enough to sell her
diamond ring, disappearing from the scene a week thereafter. Indeed, the case was terminated without any hearing on the third-party and fourth-party complaints,
which would have shown up the falsity of defendant's theory. Moreover, Mrs. Baldomera Miranda, third-party defendant, who tried to corroborate defendant on the
latter's alleged attempt to exchange the ring defendant bought through her, is [belied] by her judicial admission in her Answer that appellee `suggested that she
would make alterations to the mounting and structural design of the ring to hide the true identity and appearance of the original one' (Cunanan vs. Amparo, 45 O.G.
3796). Finally, defendant is refuted by her own extra-judicial admissions ... although made by defendant's counsel. For an attorney who acts as counsel of record and
is permitted to act such, has the authority to manage the cause, and this includes the authority to make admission for the purpose of the litigation... Her proffered
explanation that her counsel misunderstood her is puerile because the liability to error as to the identity of the vendor and the exchange of the ring with another ring
of the same value, was rather remote."5
It is in the light of the above facts as well as the finding that the discrepancy as to the weight between the diamond-solitaire in Exhibit I and the lost diamond was due
to defendant having "substituted a diamond-solitaire of plaintiff with a heavier stone" that the decision was rendered, respondent Court reversing the lower court
and ordering defendant, now petitioner Consuelo S. de Garcia, to return plaintiff's ring or fact value of P1,000.00 and costs, as well as to pay plaintiff P1,000.00 as
attorney's fee and P1,000.00 as exemplary damages. Hence this appeal.
To repeat, there is no occasion to reverse respondent Court. It correctly applied the law to the facts as found.
1. The controlling provision is Article 559 of the Civil Code. It reads thus: "The possession of movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. If the possessor of a
movable lost of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing
the price paid therefor." Respondent Angelina D. Guevara, having been unlawfully deprived of the diamond ring in question, was entitled to recover it from petitioner
Consuelo S. de Garcia who was found in possession of the same. The only exception the law allows is when there is acquisition in good faith of the possessor at a
public sale, in which case the owner cannot obtain its return without reimbursing the price. As authoritative interpreted in Cruz v. Pahati, 6 the right of the owner
cannot be defeated even by proof that there was good faith by the acquisition by the possessor. There is a reiteration of this principle in Aznar v. Yapdiangco.7 Thus:
"Suffice it to say in this regard that the right of the owner to recover personal property acquired in good faith by another, is based on his being dispossessed without
his consent. The common law principle that where one of two innocent persons must suffer by a fraud perpetrated by the another, the law imposes the loss upon the
party who, by his misplaced confidence, has enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision of the new Civil
Code, specifically Article 559. Between a common law principle and statutory provision, the latter must prevail in this jurisdiction."8
2. It is thus immediately apparent that there is no merit to the contention raised in the first assigned error that her possession in good faith, equivalent to title,
sufficed to defeat respondent Guevara's claim. As the above cases demonstrate, even on that assumption the owner can recover the same once she can show illegal
deprivation. Respondent Court of Appeals was so convinced from the evidence submitted that the owner of the ring in litigation is such respondent. That is a factual
determination to which we must pay heed. Instead of proving any alleged departure from legal norms by respondent Court, petitioner would stress Article 541 of the
Civil Code, which provides: 'A possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to
show or prove it." She would accord to it a greater legal significance than that to which under the controlling doctrines it is entitled.lwph1.t The brief for
respondents did clearly point out why petitioner's assertion is lacking in support not only from the cases but even from commentators. Thus: "Actually, even under
the first clause, possession in good faith does not really amount to title, for the reason that Art. 1132 of the Code provides for a period of acquisitive prescription for
movables through `uninterrupted possession for four years in good faith' (Art. 1955 of the old Spanish Code, which provided a period of three years), so that many
Spanish writers, including Manresa, Sanchez Roman, Scaevola, De Buen, and Ramos, assert that under Art. 464 of the Spanish Code (Art. 559 of the New Civil Code),
the title of the possessor is not that of ownership, but is merely a presumptive title sufficient to serve as a basis of acquisitive prescription (II Tolentino, Civil Code of
the Phil. p. 258: IV Manresa, Derecho Civil Espaol, 6th Ed., p. 380). And it is for the very reason that the title established by the first clause of Art. 559 is only a
presumptive title sufficient to serve as a basis for acquisitive prescription, that the clause immediately following provides that `one who has lost any movable or has
been unlawfully deprived thereof, may recover it from the person in possession of the same.' As stated by the Honorable Justice Jose B. L. Reyes of this Court in Sotto
vs. Enage (C.A.), 43 Off. Gaz. 5075, Dec. 1947: `Article 559 in fact assumes that possessor is as yet not the owner; for it is obvious that where the possessor has come
to acquire indefeasible title by, let us say, adverse possession for the necessary period, no proof of loss or illegal deprivation could avail the former owner of the
chattel. He would no longer be entitled to recover it under any condition.' "9
The second assigned error is centered on the alleged failure to prove the identity of the diamond ring. Clearly the question raised is one of the fact. What the Court of
Appeals found is conclusive. Again, petitioner could not demonstrate that in reaching such a conclusion the Court of Appeals acted in an arbitrary manner. As made
mention of in the brief for respondents two disinterested witnesses, Mr. Rafael Rebullida as well as Lt. Col. Reynaldo Cementina of the Pasay City Police Department,
both of whom could not be accused of being biased in favor of respondent Angelina D. Guevara, did testify as to the identity of the ring.
The third assigned error of petitioners would find fault with respondent Court relying "on the weakness of the title or evidence" of petitioner Consuelo S. de Garcia. It
is true, in the decision under review, mention was made of petitioner Consuelo S. de Garcia making no comment when in her presence Rebullida, after examining the
ring the stock card, told respondent Angelina L. Guevara that that was her ring, nor did petitioner answer a letter of the latter asserting ownership. It was likewise
stated in such decision that there were extra-judicial admissions in the original and first amended answers of petitioner. In the appraisal of her testimony, respondent
Court likewise spoke of her giving a rather dubious source of her ring, the person from whom she allegedly bought it turning out "to be a mysterious and ephemeral
figure." As a matter of fact, as set forth a few pages back, respondent Court did enumerate the flaws in the version given by petitioner. From the weakness of the
testimony offered which, as thus made clear, petitioner, did not even seek to refute, she would raise the legal question that respondent Court relied on the
"weakness of [her] title or evidence" rather than on the proof justifying respondent Angelina D. Guevara's claim of ownership. Petitioner here would ignore the
finding of fact of respondent Court that such ownership on her part "has been abundantly established" by her evidence. Again here, in essence, the question raised is
one of fact, and there is no justification for us to reverse respondent Court.
The legal question raised in the fourth assignment of error is that the matter of the substitution of the diamond on the ring was a question raised for the first time on
appeal as it was never put in issue by the pleadings nor the subject of reception of evidence by both parties and not touched upon in the decision of the lower court.
Why no such question could be raised in the pleadings of respondent Angelina D. Guevara was clarified by the fact that the substitution came after it was brought for
examination to Mr. Rebullida. After the knowledge of such substitution was gained, however, the issue was raised at the trial according to the said respondent
resulting in that portion of the decision where the lower court reached a negative conclusion. As a result, in the motion for reconsideration, one of the points raised
as to such decision being contrary to the evidence is the finding that there was no substitution. It is not necessary to state that respondent Court, exercising its
appellate power reversed the lower court. What was held by it is controlling. What is clear is that there is no factual basis for the legal arguments on which the fourth
assigned error is predicated.
What is said takes care of the fifth assigned error that respondent Court was mistaken in its finding that there was such a substitution. Again petitioner would have us
pass on a question of credibility which is left to respondent Court of Appeals. The sixth assigned error would complain against the reversal of the lower court
judgment as well as petitioner Consuelo S. de Garcia being made to pay respondent Angelina D. Guevara exemplary damages, attorney's fees and costs. The reversal
is called for in the light of the appraisal of the evidence of record as meticulously weighed by respondent Court. As to the attorney's fees and exemplary damages, this
is what respondent Court said in the decision under review: "Likewise, plaintiff is entitled to recover reasonable attorney's fees in the sum of P1,000, it being just and
equitable under the circumstances, and another P1,000 as exemplary damages for the public good to discourage litigants from resorting to fraudulent devices to
frustrate the ends of justice, as defendant herein tried to substitute the ring, Exhibit 1, for plaintiff's ring." 10 Considering the circumstances, the cursory discussion of
the sixth assigned error on the matter by petitioner fails to demonstrate that respondent Court's actuation is blemished by legal defects.
WHEREFORE, the decision of respondent Court of Appeals of August 6, 1962 is hereby affirmed. With costs.

FIRST DIVISION
DANIEL So vs. Food fest Land Inc.
G. R. No. 183628.
Food fest land inc. vs. Daniel So.
GR. NO. 183670, April 7, 2010.
DECISION
CARPIO MORALES, J.
Food Fest Land Inc. (Food Fest) entered into a September 14, 1999 Contract of Lease with Daniel T. So (So) over a commercial space in San Antonio Village,
Makati City for a period of three years (1999-2002) on which Food Fest intended to operate a Kentucky Fried Chicken carry out branch.
Before forging the lease contract, the parties entered into a preliminary agreement dated July 1, 1999, the pertinent portion of which stated:
The lease shall not become binding upon us unless and until the government agencies concerned shall authorize, permit or license
us to open and maintain our business at the proposed Lease Premises. We shall promptly make an application for permits, licenses
and authority for our business and shall exercise due diligence to obtain it, provided, however, that you shall assist us by submitting
such documents and papers and comply with such other requirements as the governmental agencies may impose. We shall give
notice to you when the permits, license and authorities have been obtained. We shall also notify you if any of the required permits,
licenses and authorities shall not be be (sic) given or granted within fifteen days (15) from your conform (sic)hereto. In such case, the
agreement may be canceled and all rights and obligations hereunder shall cease. (underscoring supplied)
While Food Fest was able to secure the necessary licenses and permits for the year 1999, it failed to commence business operations. For the year 2000,
Food Fests application for renewal of barangay business clearance was held in abeyance until further study of [its] kitchen facilities.
As the barangay business clearance is a prerequisite to the processing of other permits, licenses and authority by the city government, Food Fest was
unable to operate. Fearing further business losses, Food Fest, by its claim, communicated its intent to terminate the lease contract to So who, however, did not
accede and instead offered to help Food Fest secure authorization from the barangay. On Sos advice, Food Fest wrote requests addressed to city officials for
assistance to facilitate renewal.
In August 2000, Food Fest, for the second time, purportedly informed So of its intent to terminate the lease, and it in fact stopped paying rent.
So later sent a November 22, 2000 demand letter to Food Fest for the payment of rental arrearages and reiterated his offer to help it secure clearance
from the barangay. Thus So wrote: With regard to securing permits from the barangay & the City Hall, [with] which I am trying to help you, some form of
representation, maybe not in cash, would definitely help in forging a longer term relationship. Food Fest demurred to the offer.
By letter of March 26, 2001, So again demanded payment of rentals from Food Fest from September 2000 to March 2001 amounting to P123,200.00. Food
Fest denied any liability, however, and started to remove its fixtures and equipment from the premises.
On April 2, 2001, So sent Food Fest a Final Notice of Termination with demand to pay and to vacate.

On April 26, 2001, So filed a complaint for ejectment and damages against Food Fest before the Metropolitan Trial Court (MeTC) of Makati City.
 Branch 64 of the MeTC, by Decision of July 4, 2005, rendered judgment in favor of So, disposing as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against defendant, Food Fest
Land, Inc., as follows:

a. Ordering the defendant to pay the unpaid rentals from August 2000 until March 2001 with penalties accrued thereon. The
security deposit in the sum of Sixty Four Thousand Pesos (Php64,000.00) is forfeited in favor of the plaintiff;
b. Ordering the defendant to pay liquidated damages in a sum equivalent to 25% of the total sum due and demandable;
c. Ordering the defendant to pay the plaintiff a sum equivalent to 25% of the total claim as and for attorneys fees; and
d. The costs of suit.

SO ORDERED.

On appeal, Branch 143 of the Regional Trial Court (RTC), by Decision of November 30, 2006, reversed the MeTC Decision, disposing as follows:

WHEREFORE, premises considered, the judgment of the lower court dated 04 July 2005 is hereby REVERSED and SET ASIDE,
ordering plaintiff Daniel T. So to pay defendant Food Fest the amount of Thirty Two Thousand Pesos (P32,000.00) as reimbursement
for rentals paid for the months of July and August 2000; Twenty Thousand Pesos (P20,000.00) as exemplary damages; Twenty
Thousand Pesos (P20,000.00) as attorneys fees and costs of suit.

SO ORDERED.

In reversing the MeTC, the RTC found that Food Fest already vacated the leased premises before So filed the complaint for ejectment; and whereas
possession is the only issue for resolution in an ejectment case, Sos cause of action only pertained to collection of the rental arrears.

As to Sos claim for payment of arrears, the RTC noted that since the claim exceeded the jurisdictional amount over which it can cognize, the RTC, applying
Sec. 8, Rule 40 of the Rules of Court, treated the case as if it was originally filed with it.

On the merits, the RTC held that Food Fests failure to secure the authority to commence business operations resulted in the termination of its contractual
obligations to So, including the obligation to pay rent.

On petition for review, the Court of Appeals, by Decision of April 18, 2008, upheld the RTCs jurisdiction over the complaint. It, however, declared that Food
Fests obligation to pay rent was not extinguished upon its failure to secure permits to operate. Thus, it disposed:

WHEREFORE, premises considered, the assailed decision dated November 30, 2006 of the RTC, Branch 143, Makati City is
hereby REVERSED and SET ASIDE, ordering respondent FFLI to pay petitioner Daniel T. So the following:

1. Unpaid rentals from August 2000 until March 31, 2001 with penalties accrued thereon. The security deposit is forfeited in
favor of petitioner So;
2. Temperate damages in the amount of P50,000.00;
3. P20,000.00 as attorneys fees; and
4. Costs of suit.

SO ORDERED.

The parties respective motions for reconsideration having been denied, they filed their respective petitions before this Court which, by Resolution of
October 6, 2008, resolved to consolidate G.R. No. 183628 (Daniel T. So vs. Food Fest Land, Inc.) with G.R. No. 183670 (Food Fest Land, Inc. vs. Daniel T. So).

So maintains that the MeTC had jurisdiction over his complaint for ejectment. For, So contends, Food Fest did not vacate the leased premises before his
filing (on April 26, 2001) of the complaint.

So admitted in his Complaint, however, that Food Fest started pulling out equipment and other machineries from the premises even before the final notice
was received by it on April 2, 2001.

13. In or the last few days of March 2001, defendant FOOD FEST LAND, INC. started to remove and pull out its equipment,
appliances, fittings, furnishings, movable articles and other accessories and facilities that it had earlier placed and installed in the
leased premises, but due to its wanton lack of care in doing so, so much damage and destruction was caused to the leased premises,
resulting in the breakage of and damage to the concrete walls and partition in the building as well as the steel gate leading to the
leased premises and other parts of the building and its premises. (emphasis and underscoring supplied)

Two elements are paramount in possession there must be occupancy, apprehension or taking, and there must be intent to possess. In the present case,
given the immediately quoted allegation-admission of So, intent to possess was not present on Food Fests part.
In another vein, So claims that Food Fest did not exercise care in removing the installations and fixtures, thereby causing destruction to the premises to
thus entitle him to damages, as well as to damages corresponding to unrealized profits (lucrum cessans) to answer for the period during which the unit was not
rented out.

Unrealized profits fall under the category of actual or compensatory damages. If there exists a basis for a reasonable expectation that profits would have
continued to be generated had there been no breach of contract, indemnification for damages based on such expected profits is proper. This is, however, subject to
the rule that a party is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved.

Other than the photographs evincing damage to the premises, no evidence was proffered to show Sos entitlement to unrealized profits. That the leased
unit was not subsequently leased is not solely attributable to Food Fest. As borne by the records, no renovation was undertaken by So for almost three years
following Food Fests vacation of the premises in 2001. The quotations issued by construction companies for purposes of renovation were issued only in 2004.
So is not without recourse under the lease contract, however. Thus the pertinent provisions of the lease contract provide:

7. LIABILITY OF LESSEE FOR DAMAGES- LESSEE hereby agrees that any damage to the leased premises or its appurtenances caused by
said LESSEE or its agents, employees, customers, guests or any other person without the fault of LESSOR shall be LESSEEs sole
responsibility and liability, which damage shall, upon demand by LESSOR be repaired promptly at its expense.

16. TERMINATION OF THE LEASE- LESSEE agrees to return and surrender the leased premises at the expiration of the term of
this lease in as good condition as reasonable wear and tear will permit and without delay whatsoever, devoid of all occupants,
furniture, machinery, equipment and signages, articles and effects of any kind, other than such alterations or improvements which
cannot be removed without damaging the leased premises.
 23. PENALTY CLAUSE Any and all accounts payable by LESSEE under this Contract of Lease and other charges which may be claimed
against LESSEE, but not paid by LESSEE to LESSOR within fifteen (15) days from due date shall be subject to penalty charges of ONE
PERCENT (1%) per month from due date until the account is paid in full.

23.1. Should LESSOR be compelled to seek judicial relief against LESSEE the latter shall, in addition to any other claim for damages
pay as liquidated damages to LESSOR an amount equivalent to twenty-five percent (25%) of the amount due, but in no case less than
P500.00: and an attorneys fee in the amount equivalent to 25% of the amount claimed but in no case less than P3,000.00 as well as
all expenses of litigation.

Respecting Sos claim for renovation expenses, the same must be denied absent proof as to the actual cost of renovation. Only firm offers or quotations
from construction companies are in the records. Following Article 2224 of the Civil Code, however, the appellate courts award of temperate damages is in order.

This Court notes that the appellate court did not award liquidated damages in contravention of the contract. As for the appellate courts award of
P20,000.00 as attorneys fees, the contractual stipulation should prevail.

As for Food Fests invocation of the principle of rebus sic stantibus as enunciated in Article 1267 of the Civil Code to render the lease contract functus
officio, and consequently release it from responsibility to pay rentals, the Court is not persuaded. Article 1267 provides:

Article 1267. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may
also be released therefrom, in whole or in part.

This article, which enunciates the doctrine of unforeseen events, is not, however, an absolute application of the principle of rebus sic stantibus, which
would endanger the security of contractual relations. The parties to the contract must be presumed to have assumed the risks of unfavorable developments. It is,
therefore, only in absolutely exceptional changes of circumstances that equity demands assistance for the debtor.

Food Fest claims that its failure to secure the necessary business permits and licenses rendered the impossibility and non-materialization of its purpose in
entering into the contract of lease, in support of which it cites the earlier-quoted portion of the preliminary agreement dated July 1, 1999 of the parties.

The cause or essential purpose in a contract of lease is the use or enjoyment of a thing. A partys motive or particular purpose in entering into a contract
does not affect the validity or existence of the contract; an exception is when the realization of such motive or particular purpose has been made a condition upon
which the contract is made to depend. The exception does not apply here.

It is clear that the condition set forth in the preliminary agreement pertains to the initial application of Food Fest for the permits, licenses and authority to
operate. It should not be construed to apply to Food Fests subsequent applications. Consider the following qualification in the preliminary agreement:

xxx We shall also notify you if any of the required permits, licenses and authorities shall not be be (sic) given or granted within
fifteen days (15) from your conform (sic) hereto. In such case, the agreement may be canceled and all rights and obligations
hereunder shall cease. (underscoring supplied)

Food Fest was able to secure the permits, licenses and authority to operate when the lease contract was executed. Its failure to renew these permits,
licenses and authority for the succeeding year, does not, however, suffice to declare the lease functus officio, nor can it be construed as an unforeseen event to
warrant the application of Article 1267.

Contracts, once perfected, are binding between the contracting parties. Obligations arising therefrom have the force of law and should be complied with
in good faith. Food Fest cannot renege from the obligations it has freely assumed when it signed the lease contract.

WHEREFORE, the Court of Appeals Decision of April 18, 2008 is AFFIRMED with MODIFICATION.

Food Fest is ORDERED to pay So liquidated damages in the amount equivalent to 25% of the total sum due and demandable. Further, So is ORDERED to
pay attorneys fees in the amount equivalent to 25% of the total sum due and demandable. In all other respects, the decision is AFFIRMED.

SO ORDERED.

ESTELITA VILLAMAR,Petitioner,- versus -BALBINO MANGAOIL, Respondent.

G.R. No. 18866, April 11, 2012.

DECISION
REYES, J.:

The Case

Before us is a petition for review on certiorar under Rule 45 of the Rules of Court filed by Estelita Villamar (Villamar) to assail the Decision rendered by the Court of
Appeals (CA) on February 20, 2009 in CA-G.R. CV No. 86286, the dispositive portion of which reads:

WHEREFORE, the instant appeal is DISMISSED. The assailed decision is AFFIRMED in toto.

SO ORDERED

The resolution issued by the CA on July 8, 2009 denied the petitioner's motion for reconsideration to the foregoing.

The ruling of Branch 23, Regional Trial Court (RTC) of Roxas, Isabela, which was affirmed by the CA in the herein assailed decision and resolution, ordered the (1)
rescission of the contract of sale of real property entered into by Villamar and Balbino Mangaoil (Mangaoil); and (2) return of the down payment made relative to the
said contract.

Antecedents Facts

The CA aptly summarized as follows the facts of the case prior to the filing by Mangaoil of the complaint[6] for rescission of contract before the RTC:

Villamar is the registered owner of a 3.6080 hectares parcel of land [hereinafter referred as the subject property] in San Francisco, Manuel, Isabela covered by
Transfer Certificate of Title (TCT) No. T-92958-A. On March 30, 1998, she entered into an Agreement with Mangaoil for the purchase and sale of said parcel of land,
under the following terms and conditions:
1. The price of the land is ONE HUNDRED AND EIGHTY THOUSAND (180,000.00) PESOS per hectare but only the 3.5000 hec. shall be paid and the rest shall be given
free, so that the total purchase or selling price shall be [P]630,000.00 only;
2. ONE HUNDRED EIGHTY FIVE THOUSAND (185,000.00) PESOS of the total price was already received on March 27, 1998 for payment of the loan secured by the
certificate of title covering the land in favor of the Rural Bank of Cauayan, San Manuel Branch, San Manuel, Isabela [Rural Bank of Cauayan], in order that the
certificate of title thereof be withdrawn and released from the said bank, and the rest shall be for the payment of the mortgag[e]s in favor of Romeo Lacaden and
Florante Parangan;

3. After the release of the certificate of title covering the land subject-matter of this agreement, the necessary deed of absolute sale in favor of the PARTY OF THE
SECOND PART shall be executed and the transfer be immediately effected so that the latter can apply for a loan from any lending institution using the corresponding
certificate of title as collateral therefor, and the proceeds of the loan, whatever be the amount, be given to the PARTY OF THE FIRST PART;

4. Whatever balance left from the agreed purchase price of the land subject matter hereof after deducting the proceed of the loan and the [P]185,000.00 already
received as above-mentioned, the PARTY OF THE SECOND PART shall pay unto the PARTY OF THE FIRST PART not later than June 30, 1998 and thereafter the parties
shall be released of any obligations for and against each other; xxx

On April 1, 1998, the parties executed a Deed of Absolute Sale whereby Villamar (then Estelita Bernabe) transferred the subject parcel of land to Mangaoil for and in
consideration of [P]150,000.00.

In a letter dated September 18, 1998, Mangaoil informed Villamar that he was backing out from the sale agreed upon giving as one of the reasons therefor:

3. That the area is not yet fully cleared by incumbrances as there are tenants who are not willing to vacate the land without giving them back the amount that they
mortgaged the land.

Mangaoil demanded refund of his [P]185,000.00 down payment. Reiterating said demand in another letter dated April 29, 1999, the same, however, was
unheeded.[7] x x x (Citations omitted)

On January 28, 2002, the respondent filed before the RTC a complaint[8] for rescission of contract against the petitioner. In the said complaint, the respondent sought
the return of P185,000.00 which he paid to the petitioner, payment of interests thereon to be computed from March 27, 1998 until the suit's termination, and the
award of damages, costs and P20,000.00 attorney's fees. The respondent's factual allegations were as follows:

5. That as could be gleaned the Agreement (Annex A), the plaintiff [Mangaoil] handed to the defendant [Villamar] the sum of [P]185,000.00 to be applied as follows;
[P]80,000 was for the redemption of the land which was mortgaged to the Rural Bank of Cauayan, San Manuel Branch, San Manuel, Isabela, to enable the plaintiff to
get hold of the title and register the sale x x x and [P]105,000.00 was for the redemption of the said land from private mortgages to enable plaintiff to posses[s] and
cultivate the same;

6. That although the defendant had already long redeemed the said land from the said bank and withdrawn TCT No. T-92958-A, she has failed and refused, despite
repeated demands, to hand over the said title to the plaintiff and still refuses and fails to do so;

7. That, also, the plaintiff could not physically, actually and materially posses[s] and cultivate the said land because the private mortgage[e]s and/or present
possessors refuse to vacate the same;

xxxx

11. That on September 18, 1998, the plaintiff sent a letter to the defendant demanding a return of the amount so advanced by him, but the latter ignored the same,
x x x;

12. That, again, on April 29, 1999, the plaintiff sent to the defendant another demand letter but the latter likewise ignored the same, x x x;

13. That, finally, the plaintiff notified the defendant by a notarial act of his desire and intention to rescind the said contract of sale, xxx;

x x x x.[9] (Citations omitted)

In the respondents answer to the complaint, she averred that she had complied with her obligations to the respondent. Specifically, she claimed having caused the
release of TCT No. T-92958-A by the Rural Bank of Cauayan and its delivery to a certain Atty. Pedro C. Antonio (Atty. Antonio). The petitioner alleged that Atty.
Antonio was commissioned to facilitate the transfer of the said title in the respondent's name. The petitioner likewise insisted that it was the respondent who
unceremoniously withdrew from their agreement for reasons only the latter knew.

The Ruling of the RTC

On September 9, 2005, the RTC ordered the rescission of the agreement and the deed of absolute sale executed between the respondent and the petitioner. The
petitioner was, thus directed to return to the respondent the sum of P185,000.00 which the latter tendered as initial payment for the purchase of the subject
property. The RTC ratiocinated that:

There is no dispute that the defendant sold the LAND to the plaintiff for [P]630,000.00 with down payment of [P]185,000.00. There is no evidence presented if there
were any other partial payments made after the perfection of the contract of sale.

Article 1458 of the Civil Code provides:

Art. 1458. By the contract of sale[,] one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to
pay therefore a price certain in money or its equivalent.

As such, in a contract of sale, the obligation of the vendee to pay the price is correlative of the obligation of the vendor to deliver the thing sold. It created or
established at the same time, out of the same course, and which result in mutual relations of creditor and debtor between the parties.

The claim of the plaintiff that the LAND has not been delivered to him was not refuted by the defendant. Considering that defendant failed to deliver to him the
certificate of title and of the possession over the LAND to the plaintiff, the contract must be rescinded pursuant to Article 1191 of the Civil Code which, in part,
provides:

Art. 1191. The power of rescind obligations is implied in reciprocal ones in case one of the obligors should not comply with what is incumbent upon him.[10]

The petitioner filed before the CA an appeal to challenge the foregoing. She ascribed error on the part of the RTC when the latter ruled that the agreement and deed
of sale executed by and between the parties can be rescinded as she failed to deliver to the respondent both the subject property and the certificate of title covering
the same.

The Ruling of the CA

On February 20, 2009, the CA rendered the now assailed decision dismissing the petitioners appeal based on the following grounds:

Burden of proof is the duty of a party to prove the truth of his claim or defense, or any fact in issue necessary to establish his claim or defense by the amount of
evidence required by law. In civil cases, the burden of proof is on the defendant if he alleges, in his answer, an affirmative defense, which is not a denial of an
essential ingredient in the plaintiff's cause of action, but is one which, if established, will be a good defense i.e., an avoidance of the claim, which prima facie, the
plaintiff already has because of the defendant's own admissions in the pleadings.

Defendant-appellant Villamar's defense in this case was an affirmative defense. She did not deny plaintiff-appellees allegation that she had an agreement with
plaintiff-appellee for the sale of the subject parcel of land. Neither did she deny that she was obliged under the contract to deliver the certificate of title to plaintiff-
appellee immediately after said title/property was redeemed from the bank. What she rather claims is that she already complied with her obligation to deliver the
title to plaintiff-appellee when she delivered the same to Atty. Antonio as it was plaintiff-appellee himself who engaged the services of said lawyer to precisely work
for the immediate transfer of said title in his name. Since, however, this affirmative defense as alleged in defendant-appellant's answer was not admitted by plaintiff-
appellee, it then follows that it behooved the defendant-appellant to prove her averments by preponderance of evidence.

Yet, a careful perusal of the record shows that the defendant-appellant failed to sufficiently prove said affirmative defense. She failed to prove that in the first place,
Atty. Antonio existed to receive the title for and in behalf of plaintiff-appellee. Worse, the defendant-appellant failed to prove that Atty. Antonio received said title as
allegedly agreed upon.

We likewise sustain the RTC's finding that defendant-appellant V[i]llamar failed to deliver possession of the subject property to plaintiff-appellee Mangaoil. As
correctly observed by the RTC - [t]he claim of the plaintiff that the land has not been delivered to him was not refuted by the defendant. Not only that. On cross-
examination, the defendant-appellant gave Us insight on why no such delivery could be made, viz.: x x x x

Q: So, you were not able to deliver this property to Mr. Mangaoil just after you redeem the property because of the presence of these two (2) persons, is it not?
xxx
A: Yes, sir.
Q: Forcing you to file the case against them and which according to you, you have won, is it not?
A: Yes, sir.
Q: And now at present[,] you are in actual possession of the land?
A: Yes, sir. x x x

With the foregoing judicial admission, the RTC could not have erred in finding that defendant-[appellant] failed to deliver the possession of the property sold, to
plaintiff-appellee.

Neither can We agree with defendant-appellant in her argument that the execution of the Deed of Absolute Sale by the parties is already equivalent to a valid and
constructive delivery of the property to plaintiff-appellee. Not only is it doctrinally settled that in a contract of sale, the vendor is bound to transfer the ownership of,
and to deliver the thing that is the object of the sale, the way Article 1547 of the Civil Code is worded, viz.:

Art. 1547. In a contract of sale, unless a contrary intention appears, there is:

(1) An implied warranty on the part of the seller that he has a right to sell the thing at the time when the ownership is to pass, and that the buyer shall from that time
have and enjoy the legal and peaceful possession of the thing;

(2) An implied warranty that the thing shall be free from any hidden defaults or defects, or any change or encumbrance not declared or known to the buyer.
x x x.
shows that actual, and not mere constructive delivery is warrantied by the seller to the buyer. (P)eaceful possession of the thing sold can hardly be enjoyed in a mere
constructive delivery.

The obligation of defendant-appellant Villamar to transfer ownership and deliver possession of the subject parcel of land was her correlative obligation to plaintiff-
appellee in exchange for the latter's purchase price thereof. Thus, if she fails to comply with what is incumbent upon her, a correlative right to rescind such contract
from plaintiff-appellee arises, pursuant to Article 1191 of the Civil Code.[11] x x x (Citations omitted)

The Issues

Aggrieved, the petitioner filed before us the instant petition and submits the following issues for resolution:

I.
WHETHER THE FAILURE OF PETITIONER-SELLER TO DELIVER THE CERTIFICATE OF TITLE OVER THE PROPERTY TO RESPONDENT-BUYER IS A BREACH OF OBLIGATION IN
A CONTRACT OF SALE OF REAL PROPERTY THAT WOULD WARRANT RESCISSION OF THE CONTRACT;

II.
WHETHER PETITIONER IS LIABLE FOR BREACH OF OBLIGATION IN A CONTRACT OF SALE FOR FAILURE OF RESPONDENT[-]BUYER TO IMMEDIATELY TAKE ACTUAL
POSSESSION OF THE PROPERTY NOTWITHSTANDING THE ABSENCE OF ANY STIPULATION IN THE CONTRACT PROVIDING FOR THE SAME;

III.
WHETHER THE EXECUTION OF A DEED OF SALE OF REAL PROPERTY IN THE PRESENT CASE IS ALREADY EQUIVALENT TO A VALID AND CONSTRUCTIVE DELIVERY OF THE
PROPERTY TO THE BUYER;

IV.
WHETHER OR NOT THE CONTRACT OF SALE SUBJECT MATTER OF THIS CASE SHOULD BE RESCINDED ON SLIGHT OR CASUAL BREACH;

V.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE RTC ORDERING THE RESCISSION OF THE CONTRACT OF SALE[.][12]

The Petitioner's Arguments

The petitioner avers that the CA, in ordering the rescission of the agreement and deed of sale, which she entered into with the respondent, on the basis of her
alleged failure to deliver the certificate of title, effectively imposed upon her an extra duty which was neither stipulated in the contract nor required by law. She
argues that under Articles 1495[13] and 1496[14] of the New Civil Code (NCC), the obligation to deliver the thing sold is complied with by a seller who executes in
favor of a buyer an instrument of sale in a public document. Citing Chua v. Court of Appeals,[15] she claims that there is a distinction between transferring a
certificate of title in the buyer's name, on one hand, and transferring ownership over the property sold, on the other. The latter can be accomplished by the seller's
execution of an instrument of sale in a public document. The recording of the sale with the Registry of Deeds and the transfer of the certificate of title in the buyer's
name are necessary only to bind third parties to the transfer of ownership.[16]

The petitioner contends that in her case, she had already complied with her obligations under the agreement and the law when she had caused the release of TCT
No. T-92958-A from the Rural Bank of Cauayan, paid individual mortgagees Romeo Lacaden (Lacaden) and Florante Parangan (Paranga), and executed an absolute
deed of sale in the respondent's favor. She adds that before T-92958-A can be cancelled and a new one be issued in the respondent's favor, the latter decided to
withdraw from their agreement. She also points out that in the letters seeking for an outright rescission of their agreement sent to her by the respondent, not once
did he demand for the delivery of TCT.

The petitioner insists that the respondent's change of heart was due to (1) the latter's realization of the difficulty in determining the subject property's perimeter
boundary; (2) his doubt that the property he purchased would yield harvests in the amount he expected; and (3) the presence of mortgagees who were not willing to
give up possession without first being paid the amounts due to them. The petitioner contends that the actual reasons for the respondent's intent to rescind their
agreement did not at all constitute a substantial breach of her obligations.

The petitioner stresses that under Article 1498 of the NCC, when a sale is made through a public instrument, its execution is equivalent to the delivery of the thing
which is the contract's object, unless in the deed, the contrary appears or can be inferred. Further, in Power Commercial and Industrial Corporation v. CA,[17] it was
ruled that the failure of a seller to eject lessees from the property he sold and to deliver actual and physical possession, cannot be considered a substantial breach,
when such failure was not stipulated as a resolutory or suspensive condition in the contract and when the effects and consequences of the said failure were not
specified as well. The execution of a deed of sale operates as a formal or symbolic delivery of the property sold and it already authorizes the buyer to use the
instrument as proof of ownership.[18]

The petitioner argues that in the case at bar, the agreement and the absolute deed of sale contains no stipulation that she was obliged to actually and physically
deliver the subject property to the respondent. The respondent fully knew Lacaden's and Parangan's possession of the subject property. When they agreed on the
sale of the property, the respondent consciously assumed the risk of not being able to take immediate physical possession on account of Lacaden's and Parangan's
presence therein.

The petitioner likewise laments that the CA allegedly misappreciated the evidence offered before it when it declared that she failed to prove the existence of Atty.
Antonio. For the record, she emphasizes that the said lawyer prepared and notarized the agreement and deed of absolute sale which were executed between the
parties. He was also the petitioners counsel in the proceedings before the RTC. Atty. Antonio was also the one asked by the respondent to cease the transfer of the
title over the subject property in the latter's name and to return the money he paid in advance.

The Respondent's Contentions

In the respondent's comment,[19] he seeks the dismissal of the instant petition. He invokes Articles 1191 and 1458 to argue that when a seller fails to transfer the
ownership and possession of a property sold, the buyer is entitled to rescind the contract of sale. Further, he contends that the execution of a deed of absolute sale
does not necessarily amount to a valid and constructive delivery. In Masallo v. Cesar,[20] it was ruled that a person who does not have actual possession of real
property cannot transfer constructive possession by the execution and delivery of a public document by which the title to the land is transferred. In Addison v. Felix
and Tioco,[21] the Court was emphatic that symbolic delivery by the execution of a public instrument is equivalent to actual delivery only when the thing sold is
subject to the control of the vendor.

Our Ruling

The instant petition is bereft of merit.

There is only a single issue for resolution in the instant petition, to wit, whether or not the failure of the petitioner to deliver to the respondent both the physical
possession of the subject property and the certificate of title covering the same amount to a substantial breach of the former's obligations to the latter constituting a
valid cause to rescind the agreement and deed of sale entered into by the parties.

We rule in the affirmative.

The RTC and the CA both found that the petitioner failed to comply with her obligations to deliver to the respondent both the possession of the subject property and
the certificate of title covering the same.

Although Articles 1458, 1495 and 1498 of the NCC and case law do not generally require the seller to deliver to the buyer the physical possession of the property
subject of a contract of sale and the certificate of title covering the same, the agreement entered into by the petitioner and the respondent provides otherwise.
However, the terms of the agreement cannot be considered as violative of law, morals, good customs, public order, or public policy, hence, valid.

Article 1458 of the NCC obliges the seller to transfer the ownership of and to deliver a determinate thing to the buyer, who shall in turn pay therefor a price certain in
money or its equivalent. In addition thereto, Article 1495 of the NCC binds the seller to warrant the thing which is the object of the sale. On the other hand, Article
1498 of the same code provides that when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which
is the object of the contract, if from the deed, the contrary does not appear or cannot clearly be inferred.

In the case of Chua v. Court of Appeals,[22] which was cited by the petitioner, it was ruled that when the deed of absolute sale is signed by the parties and notarized,
then delivery of the real property is deemed made by the seller to the buyer.[23] The transfer of the certificate of title in the name of the buyer is not necessary to
confer ownership upon him.

In the case now under our consideration, item nos. 2 and 3 of the agreement entered into by the petitioner and the respondent explicitly provide:

2. ONE HUNDRED EIGHTY FIVE THOUSAND (P185,000.00) PESOS of the total price was already received on March 27, 1998 for payment of the loan secured by the
certificate of title covering the land in favor of the Rural Bank of Cauayan, San Manuel Branch, San Manuel, Isabela, in order that the certificate of title thereof be
withdrawn and released from the said bank, and the rest shall be for the payment of the mortgages in favor of Romeo Lacaden and Florante Parangan;

3. After the release of the certificate of title covering the land subject-matter of this agreement, the necessary deed of absolute sale in favor of the PARTY OF THE
SECOND PART shall be executed and the transfer be immediately effected so that the latter can apply for a loan from any lending institution using the corresponding
certificate of title as collateral therefor, and the proceeds of the loan, whatever be the amount, be given to the PARTY OF THE FIRST PART;[24] (underlining supplied)

As can be gleaned from the agreement of the contending parties, the respondent initially paid the petitioner P185,000.00 for the latter to pay the loan obtained from
the Rural Bank of Cauayan and to cause the release from the said bank of the certificate of title covering the subject property. The rest of the amount shall be used to
pay the mortgages over the subject property which was executed in favor of Lacaden and Parangan. After the release of the TCT, a deed of sale shall be executed and
transfer shall be immediately effected so that the title covering the subject property can be used as a collateral for a loan the respondent will apply for, the proceeds
of which shall be given to the petitioner.

Under Article 1306 of the NCC, the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they
are not contrary to law, morals, good customs, public order or public policy.

While Articles 1458 and 1495 of the NCC and the doctrine enunciated in the case of Chua do not impose upon the petitioner the obligation to physically deliver to the
respondent the certificate of title covering the subject property or cause the transfer in the latter's name of the said title, a stipulation requiring otherwise is not
prohibited by law and cannot be regarded as violative of morals, good customs, public order or public policy. Item no. 3 of the agreement executed by the parties
expressly states that transfer [shall] be immediately effected so that the latter can apply for a loan from any lending institution using the corresponding certificate of
title as collateral therefore. Item no. 3 is literal enough to mean that there should be physical delivery of the TCT for how else can the respondent use it as a collateral
to obtain a loan if the title remains in the petitioners possession. We agree with the RTC and the CA that the petitioner failed to prove that she delivered the TCT
covering the subject property to the respondent. What the petitioner attempted to establish was that she gave the TCT to Atty. Antonio whom she alleged was
commissioned to effect the transfer of the title in the respondent's name. Although Atty. Antonio's existence is certain as he was the petitioners counsel in the
proceedings before the RTC, there was no proof that the former indeed received the TCT or that he was commissioned to process the transfer of the title in the
respondent's name.

It is likewise the petitioners contention that pursuant to Article 1498 of the NCC, she had already complied with her obligation to deliver the subject property upon
her execution of an absolute deed of sale in the respondents favor. The petitioner avers that she did not undertake to eject the mortgagors Parangan and Lacaden,
whose presence in the premises of the subject property was known to the respondent.
We are not persuaded.

In the case of Power Commercial and Industrial Corporation[25] cited by the petitioner, the Court ruled that the failure of the seller to eject the squatters from the
property sold cannot be made a ground for rescission if the said ejectment was not stipulated as a condition in the contract of sale, and when in the negotiation
stage, the buyer's counsel himself undertook to eject the illegal settlers.

The circumstances surrounding the case now under our consideration are different. In item no. 2 of the agreement, it is stated that part of the P185,000.00 initially
paid to the petitioner shall be used to pay the mortgagors, Parangan and Lacaden. While the provision does not expressly impose upon the petitioner the obligation
to eject the said mortgagors, the undertaking is necessarily implied. Cessation of occupancy of the subject property is logically expected from the mortgagors upon
payment by the petitioner of the amounts due to them.

We note that in the demand letter[26] dated September 18, 1998, which was sent by the respondent to the petitioner, the former lamented that the area is not yet
fully cleared of incumbrances as there are tenants who are not willing to vacate the land without giving them back the amount that they mortgaged the land. Further,
in the proceedings before the RTC conducted after the complaint for rescission was filed, the petitioner herself testified that she won the ejectment suit against the
mortgagors only last year.[27] The complaint was filed on September 8, 2002 or more than four years from the execution of the parties' agreement. This means that
after the lapse of a considerable period of time from the agreement's execution, the mortgagors remained in possession of the subject property.

Notwithstanding the absence of stipulations in the agreement and absolute deed of sale entered into by Villamar and Mangaoil expressly indicating the
consequences of the former's failure to deliver the physical possession of the subject property and the certificate of title covering the same, the latter is entitled to
demand for the rescission of their contract pursuant to Article 1191 of the NCC.

We note that the agreement entered into by the petitioner and the respondent only contains three items specifying the parties' undertakings. In item no. 5, the
parties consented to abide with all the terms and conditions set forth in this agreement and never violate the same.[28]

Article 1191 of the NCC is clear that the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is
incumbent upon him. The respondent cannot be deprived of his right to demand for rescission in view of the petitioners failure to abide with item nos. 2 and 3 of the
agreement. This remains true notwithstanding the absence of express stipulations in the agreement indicating the consequences of breaches which the parties may
commit. To hold otherwise would render Article 1191 of the NCC as useless.

Article 1498 of the NCC generally considers the execution of a public instrument as constructive delivery by the seller to the buyer of the property subject of a
contract of sale. The case at bar, however, falls among the exceptions to the foregoing rule since a mere presumptive and not conclusive delivery is created as the
respondent failed to take material possession of the subject property.

Further, even if we were to assume for argument's sake that the agreement entered into by the contending parties does not require the delivery of the physical
possession of the subject property from the mortgagors to the respondent, still, the petitioner's claim that her execution of an absolute deed of sale was already
sufficient as it already amounted to a constructive delivery of the thing sold which Article 1498 of the NCC allows, cannot stand.

In Philippine Suburban Development Corporation v. The Auditor General,[29] we held:

When the sale of real property is made in a public instrument, the execution thereof is equivalent to the delivery of the thing object of the contract, if from the deed
the contrary does not appear or cannot clearly be inferred.

In other words, there is symbolic delivery of the property subject of the sale by the execution of the public instrument, unless from the express terms of the
instrument, or by clear inference therefrom, this was not the intention of the parties. Such would be the case, for instance, x x x where the vendor has no control over
the thing sold at the moment of the sale, and, therefore, its material delivery could not have been made.[30] (Underlining supplied and citations omitted)

Stated differently, as a general rule, the execution of a public instrument amounts to a constructive delivery of the thing subject of a contract of sale. However,
exceptions exist, among which is when mere presumptive and not conclusive delivery is created in cases where the buyer fails to take material possession of the
subject of sale. A person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public
instrument.

In the case at bar, the RTC and the CA found that the petitioner failed to deliver to the respondent the possession of the subject property due to the continued
presence and occupation of Parangan and Lacaden. We find no ample reason to reverse the said findings. Considered in the light of either the agreement entered
into by the parties or the pertinent provisions of law, the petitioner failed in her undertaking to deliver the subject property to the respondent.

IN VIEW OF THE FOREGOING, the instant petition is DENIED. The February 20, 2009 Decision and July 8, 2009 Resolution of the Court of Appeals, directing the
rescission of the agreement and absolute deed of sale entered into by Estelita Villamar and Balbino Mangaoil and the return of the down payment made for the
purchase of the subject property, are AFFIRMED. However, pursuant to our ruling in Eastern Shipping Lines, Inc. v. CA,[31] an interest of 12% per annum is imposed
on the sum of P185,000.00 to be returned to Mangaoil to be computed from the date of finality of this Decision until full satisfaction thereof.

SO ORDERED.

G.R. No. 152809 August 3, 2006

MERCEDES MORALIDAD, Petitioner,vs.SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.
DECISION
GARCIA, J.:
Under consideration is this petition for review on certiorari under Rule 45 of the Rules of Court to nullify and set aside the following issuances of the Court of Appeals
(CA) in CA-G.R. SP No. 61610, to wit:
1. Decision dated September 27, 2001, 1 affirming an earlier decision of the Regional Trial Court (RTC) of Davao City which reversed that of the Municipal Trial Court in
Cities (MTCC), Davao City, Branch 1, in an action for unlawful detainer thereat commenced by the petitioner against the herein respondents; and
2. Resolution dated February 28, 2002, 2 denying petitioners motion for reconsideration.
At the heart of this controversy is a parcel of land located in Davao City and registered in the name of petitioner Mercedes Moralidad under Transfer Certificate of
Title (TCT) No. T-123125 of the Registry of Deeds of Davao City.
In her younger days, petitioner taught in Davao City, Quezon City and Manila. While teaching in Manila, she had the good fortune of furthering her studies at the
University of Pennsylvania, U.S.A. While schooling, she was offered to teach at the Philadelphia Catholic Archdiocese, which she did for seven (7) years. Thereafter,
she worked at the Mental Health Department of said University for the next seventeen (17) years.
During those years, she would come home to the Philippines to spend her two-month summer vacation in her hometown in Davao City. Being single, she would
usually stay in Mandug, Davao City, in the house of her niece, respondent Arlene Pernes, a daughter of her younger sister, Rosario.
Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at the outskirts of Davao City was infested by NPA rebels and many women and
children were victims of crossfire between government troops and the insurgents. Shocked and saddened about this development, she immediately sent money to
Araceli, Arlenes older sister, with instructions to look for a lot in Davao City where Arlene and her family could transfer and settle down. This was why she bought the
parcel of land covered by TCT No. T-123125.
Petitioner acquired the lot property initially for the purpose of letting Arlene move from Mandug to Davao City proper but later she wanted the property to be also
available to any of her kins wishing to live and settle in Davao City. Petitioner made known this intention in a document she executed on July 21, 1986. 3 The
document reads:
I, MERCEDES VIA MORALIDAD, of legal age, single, having been born on the 29th day of January, 1923, now actually residing at 8021 Lindbergh Boulevard,
Philadelphia, Pennsylvania, U.S.A., wishes to convey my honest intention regarding my properties situated at Palm Village Subdivision, Bajada, Davao City, 9501,
and hereby declare:
1. That it is my desire that Mr. and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like;
2. That anybody of my kins who wishes to stay on the aforementioned real property should maintain an atmosphere of cooperation, live in harmony and must avoid
bickering with one another;
3. That anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose
thereof;
4. That anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own;
5. That any proceeds or income derived from the aforementioned properties shall be allotted to my nearest kins who have less in life in greater percentage and lesser
percentage to those who are better of in standing.
xxx xxx xxx
Following her retirement in 1993, petitioner came back to the Philippines to stay with the respondents on the house they build on the subject property. In the course
of time, their relations turned sour because members of the Pernes family were impervious to her suggestions and attempts to change certain practices concerning
matters of health and sanitation within their compound. For instance, Arlenes eldest son, Myco Pernes, then a fourth year veterinary medicine student, would
answer petitioner back with clenched fist and at one time hurled profanities when she corrected him. Later, Arlene herself followed suit. Petitioner brought the
matter to the local barangay lupon where she lodged a complaint for slander, harassment, threat and defamation against the Pernes Family. Deciding for petitioner,
the lupon apparently ordered the Pernes family to vacate petitioners property but not after they are reimbursed for the value of the house they built thereon.
Unfortunately, the parties could not agree on the amount, thus prolonging the impasse between them.
Other ugly incidents interspersed with violent confrontations meanwhile transpired, with the petitioner narrating that, at one occasion in July 1998, she sustained
cuts and wounds when Arlene pulled her hair, hit her on the face, neck and back, while her husband Diosdado held her, twisting her arms in the process.
Relations having deteriorated from worse to worst, petitioner, on July 29, 1998, lodged a formal complaint before the Regional Office of the Ombudsman for
Mindanao, charging the respondent spouses, who were both government employees, with conduct unbecoming of public servants. This administrative case,
however, did not prosper.
Then, on August 3, 1998, petitioner filed with the MTCC of Davao City an unlawful detainer suit against the respondent spouses. Petitioner alleged that she is the
registered owner of the land on which the respondents built their house; that through her counsel, she sent the respondent spouses a letter demanding them to
vacate the premises and to pay rentals therefor, which the respondents refused to heed.
In their defense, the respondents alleged having entered the property in question, building their house thereon and maintaining the same as their residence with
petitioners full knowledge and express consent. To prove their point, they invited attention to her written declaration of July 21, 1986, supra, wherein she expressly
signified her desire for the spouses to build their house on her property and stay thereat for as long as they like.
The MTCC, resolving the ejectment suit in petitioners favor, declared that the respondent spouses, although builders in good faith vis--vis the house they built on
her property, cannot invoke their bona fides as a valid excuse for not complying with the demand to vacate. To the MTCC, respondents continued possession of the
premises turned unlawful upon their receipt of the demand to vacate, such possession being merely at petitioners tolerance, and sans any rental. Accordingly, in its
decision dated November 17, 1999, 4 the MTCC rendered judgment for the petitioner, as plaintiff therein, to wit:
WHEREFORE, judgment is hereby rendered in favor of herein plaintiff and against the defendants, as follows:
a) Directing the defendants, their agents and other persons acting on their behalf to vacate the premises and to yield peaceful possession thereof to plaintiff;
b) Ordering defendants to pay P2,000.00 a month from the filing of this complaint until they vacate premises;
c) Sentencing defendants to pay the sum of P120,000.00 5 as attorneys fees and to pay the cost of suit.
Defendants counterclaim are hereby dismissed except with respect to the claim for reimbursement of necessary and useful expenses which should be litigated in an
ordinary civil actions. (sic)
Dissatisfied, the respondent spouses appealed to the RTC of Davao City.
In the meantime, petitioner filed a Motion for Execution Pending Appeal. The motion was initially granted by the RTC in its Order of February 29, 2000, but the Order
was later withdrawn and vacated by its subsequent Order dated May 9, 2000 6 on the ground that immediate execution of the appealed decision was not the prudent
course of action to take, considering that the house the respondents constructed on the subject property might even be more valuable than the land site.
Eventually, in a decision 7 dated September 30, 2000, the RTC reversed that of the MTCC, holding that respondents possession of the property in question was not, as
ruled by the latter court, by mere tolerance of the petitioner but rather by her express consent. It further ruled that Article 1678 of the Civil Code on reimbursement
of improvements introduced is inapplicable since said provision contemplates of a lessor-lessee arrangement, which was not the factual milieu obtaining in the case.
Instead, the RTC ruled that what governed the parties relationship are Articles 448 and 546 of the Civil Code, explaining thus:
Since the defendants-appellees [respondents] are admittedly possessors of the property by permission from plaintiff [petitioner], and builders in good faith, they
have the right to retain possession of the property subject of this case until they have been reimbursed the cost of the improvements they have introduced on the
property.
Indeed, this is a substantive right given to the defendants by law, and this right is superior to the procedural right to [sic] plaintiff to immediately ask for their removal
by a writ of execution by virtue of a decision which as we have shown is erroneous, and therefore invalid. (Words in brackets supplied),
and accordingly dismissed petitioners appeal, as follows:
WHEREFORE, in view of the foregoing, the Decision appealed from is REVERSED and declared invalid. Consequently, the motion for execution pending appeal is
likewise denied.
Counter-claims of moral and exemplary damages claimed by defendants are likewise dismissed. However, attorneys fees in the amount of fifteen thousand pesos is
hereby awarded in favor of defendants-appellants, and against plaintiffs.
SO ORDERED. 8
Therefrom, petitioner went to the CA in CA-G.R. SP No. 61610.
On September 27, 2001, the CA, while conceding the applicability of Articles 448 and 546 of the Civil Code to the case, ruled that it is still premature to apply the
same considering that the issue of whether respondents right to possess a portion of petitioners land had already expired or was already terminated was not yet
resolved. To the CA, the unlawful detainer suit presupposes the cessation of respondents right to possess. The CA further ruled that what governs the rights of the
parties is the law on usufruct but petitioner failed to establish that respondents right to possess had already ceased. On this premise, the CA concluded that the
ejectment suit instituted by the petitioner was premature. The appellate court thus affirmed the appealed RTC decision, disposing:
WHEREFORE, premises considered, the instant petition for review is hereby denied for lack of merit. Accordingly, the petitioners complaint for Unlawful Detainer is
DISMISSED.
SO ORDERED.
With the CAs denial of her motion for reconsideration in its Resolution of February 28, 2002, petitioner is now before this Court raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE UNLAWFUL DETAINER CASE FOR BEING PREMATURE WHICH DECISION IS NOT IN
ACCORDANCE WITH LAW AND JURISPRUDENCE.
II. WHETHER OR NOT THE COURT OF APPEALS ERRED IN APPLYING ARTICLES 448 AND 546 AND THE PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF ARTICLE
1678 OF THE CIVIL CODE.
The Court rules for the petitioner.
The Court is inclined to agree with the CA that what was constituted between the parties herein is one of usufruct over a piece of land, with the petitioner being the
owner of the property upon whom the naked title thereto remained and the respondents being two (2) among other unnamed usufructuaries who were simply
referred to as petitioners kin. The Court, however, cannot go along with the CAs holding that the action for unlawful detainer must be dismissed on ground of
prematurity.
Usufruct is defined under Article 562 of the Civil Code in the following wise:
ART. 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law
otherwise provides.
Usufruct, in essence, is nothing else but simply allowing one to enjoy anothers property. 9 It is also defined as the right to enjoy the property of another temporarily,
including both the jus utendi and the jus fruendi, 10 with the owner retaining the jus disponendi or the power to alienate the same. 11
It is undisputed that petitioner, in a document dated July 21, 1986, supra, made known her intention to give respondents and her other kins the right to use and to
enjoy the fruits of her property. There can also be no quibbling about the respondents being given the right "to build their own house" on the property and to stay
thereat "as long as they like." Paragraph #5 of the same document earmarks "proceeds or income derived from the aforementioned properties" for the petitioners
"nearest kins who have less in life in greater percentage and lesser percentage to those who are better of (sic) in standing." The established facts undoubtedly gave
respondents not only the right to use the property but also granted them, among the petitioners other kins, the right to enjoy the fruits thereof. We have no quarrel,
therefore, with the CAs ruling that usufruct was constituted between petitioner and respondents. It is thus pointless to discuss why there was no lease contract
between the parties.
However, determinative of the outcome of the ejectment case is the resolution of the next issue, i.e., whether the existing usufruct may be deemed to have been
extinguished or terminated. If the question is resolved in the affirmative, then the respondents right to possession, proceeding as it did from their right of usufruct,
likewise ceased. In that case, petitioners action for ejectment in the unlawful detainer case could proceed and should prosper.
The CA disposed of this issue in this wise:
xxx Section 1, Rule 70 of the 1997 Rules of Civil Procedure, as amended, provides xxx
xxx xxx xxx
From the foregoing provision, it becomes apparent that for an action for unlawful detainer to prosper, the plaintiff [petitioner] needs to prove that defendants
[respondents] right to possess already expired and terminated. Now, has respondents right to possess the subject portion of petitioners property expired or
terminated? Let us therefore examine respondents basis for occupying the same.
It is undisputed that petitioner expressly authorized respondents o occupy portion of her property on which their house may be built. Thus "it is my desire that Mr.
and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like." From this statement, it seems that petitioner had given the respondents
the usufructuary rights over the portion that may be occupied by the house that the latter would build, the duration of which being dependent on how long
respondents would like to occupy the property. While petitioner had already demanded from the respondents the surrender of the premises, this Court is of the
opinion that the usufructuary rights of respondents had not been terminated by the said demand considering the clear statement of petitioner that she is allowing
respondents to occupy portion of her land as long as the latter want to. Considering that respondents still want to occupy the premises, petitioner clearly cannot
eject respondents. 12
We disagree with the CAs conclusion of law on the matter. The term or period of the usufruct originally specified provides only one of the bases for the right of a
usufructuary to hold and retain possession of the thing given in usufruct. There are other modes or instances whereby the usufruct shall be considered terminated or
extinguished. For sure, the Civil Code enumerates such other modes of extinguishment:
ART. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention clearly appears;
(2) By expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the usufruct;
(7) By prescription. (Emphasis supplied.)
The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof states
"[T]hat anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose
thereof" (Emphasis supplied). What may be inimical to the purpose constituting the usufruct may be gleaned from the preceding paragraph wherein petitioner made
it abundantly clear "that anybody of my kins who wishes to stay on the aforementioned property should maintain an atmosphere of cooperation, live in harmony and
must avoid bickering with one another." That the maintenance of a peaceful and harmonious relations between and among kin constitutes an indispensable
condition for the continuance of the usufruct is clearly deduced from the succeeding Paragraph #4 where petitioner stated "[T]hat anyone of my kins who cannot
conform with the wishes of the undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of the following: the loss of the atmosphere
of cooperation, the bickering or the cessation of harmonious relationship between/among kin constitutes a resolutory condition which, by express wish of the
petitioner, extinguishes the usufruct.
From the pleadings submitted by the parties, it is indubitable that there were indeed facts and circumstances whereby the subject usufruct may be deemed
terminated or extinguished by the occurrence of the resolutory conditions provided for in the title creating the usufruct, namely, the document adverted to which the
petitioner executed on July 21, 1986.
As aptly pointed out by the petitioner in her Memorandum, respondents own evidence before the MTCC indicated that the relations between the parties "have
deteriorated to almost an irretrievable level." 13 There is no doubt then that what impelled petitioner to file complaints before the local barangay lupon, the Office of
the Ombudsman for Mindanao, and this instant complaint for unlawful detainer before the MTCC is that she could not live peacefully and harmoniously with the
Pernes family and vice versa.
Thus, the Court rules that the continuing animosity between the petitioner and the Pernes family and the violence and humiliation she was made to endure, despite
her advanced age and frail condition, are enough factual bases to consider the usufruct as having been terminated.
To reiterate, the relationship between the petitioner and respondents respecting the property in question is one of owner and usufructuary. Accordingly,
respondents claim for reimbursement of the improvements they introduced on the property during the effectivity of the usufruct should be governed by applicable
statutory provisions and principles on usufruct. In this regard, we cite with approval what Justice Edgardo Paras wrote on the matter:
If the builder is a usufructuary, his rights will be governed by Arts. 579 and 580. In case like this, the terms of the contract and the pertinent provisions of law should
govern (3 Manresa 215-216; se also Montinola vs. Bantug, 71 Phil. 449). 14 (Emphasis ours.)
By express provision of law, respondents, as usufructuary, do not have the right to reimbursement for the improvements they may have introduced on the property.
We quote Articles 579 and 580 of the Civil Code:
Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he
does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do
so without damage to the property. (Emphasis supplied.)
Art. 580. The usufructuary may set off the improvements he may have made on the property against any damage to the same.
Given the foregoing perspective, respondents will have to be ordered to vacate the premises without any right of reimbursement. If the rule on reimbursement or
indemnity were otherwise, then the usufructuary might, as an author pointed out, improve the owner out of his property. 15 The respondents may, however, remove
or destroy the improvements they may have introduced thereon without damaging the petitioners property.
Out of the generosity of her heart, the petitioner has allowed the respondent spouses to use and enjoy the fruits of her property for quite a long period of time. They
opted, however, to repay a noble gesture with unkindness. At the end of the day, therefore, they really cannot begrudge their aunt for putting an end to their right of
usufruct. The disposition herein arrived is not only legal and called for by the law and facts of the case. It is also right.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the CA are REVERSED and SET ASIDE. Accordingly, the decision of the MTCC is
REINSTATED with MODIFICATION that all of respondents counterclaims are dismissed, including their claims for reimbursement of useful and necessary expenses.
No pronouncement as to costs.
SO ORDERED.

G.R. NO. 202247, June 19, 2013 - SIME DARBY PILIPINAS, INC., Petitioner, v. JESUS B. MENDOZA, Respondent.

CARPIO, J.:
The Case

Before us is a petition tor review on certiorari1 assailing the Decision2 dated 30 March 2012 and Resolution3 dated 6 June 2012 of the Court of Appeals in CA-G.R. CV
No. 89178.cralaw lawlibrary
The Facts

Petitioner Sime Darby Pilipinas, Inc. (Sime Darby) employed Jesus B. Mendoza (Mendoza) as sales manager to handle sales, marketing, and distribution of the
company's tires and rubber products. On 3 July 1987, Sime Darby bought a Class A club share4 in Alabang Country Club (ACC) from Margarita de Araneta as
evidenced by a Deed of Absolute Sale.5 The share, however, was placed under the name of Mendoza in trust for Sime Darby since the By-Laws6 of ACC state that only
natural persons may own a club share.7 As part of the arrangement, Mendoza endorsed the Club Share Certificate8 in blank and executed a Deed of Assignment,9 also
in blank, and handed over the documents to Sime Darby. From the time of purchase in 1987, Sime Darby paid for the monthly dues and other assessments on the
club share.

When Mendoza retired in April 1995, Sime Darby fully paid Mendoza his separation pay amounting to more than P3,000,000. Nine years later, or sometime in July
2004, Sime Darby found an interested buyer of the club share for P1,101,363.64. Before the sale could push through, the broker required Sime Darby to secure an
authorization to sell from Mendoza since the club share was still registered in Mendozas name. However, Mendoza refused to sign the required authority to sell or
special power of attorney unless Sime Darby paid him the amount of P300,000, claiming that this represented his unpaid separation benefits. As a result, the sale did
not push through and Sime Darby was compelled to return the payment to the prospective buyer.

On 13 September 2005, Sime Darby filed a complaint10 for damages with writ of preliminary injunction against Mendoza with the Regional Trial Court (RTC) of Makati
City, Branch 132. Sime Darby claimed that it was the practice of the company to extend to its senior managers and executives the privilege of using and enjoying the
facilities of various club memberships, i.e. Manila Golf and Country Club, Quezon City Sports Club, Makati Sports Club, Wack Wack Golf Club, and Baguio Golf and
Country Club. Sime Darby added that during Mendozas employment with the company until his retirement in April 1995, Sime Darby regularly paid for the monthly
dues and other assessments on the ACC Class A club share. Further, Sime Darby alleged that Mendoza sent a letter11 dated 9 August 2004 to ACC and requested all
billings effective September 2004 be sent to his personal address. Despite having retired from Sime Darby for less than 10 years and long after the employment
contract of Mendoza with the company has been severed, Mendoza resumed using the facilities and privileges of ACC, to the damage and prejudice of Sime Darby.
Thus, Sime Darby prayed that a restraining order be issued, pending the hearing on the issuance of a writ of preliminary injunction, enjoining Mendoza from availing
of the clubs facilities and privileges as if he is the owner of the club share.

On 15 November 2005, Mendoza filed an Answer alleging ownership of the club share. Mendoza stated that Sime Darby purchased the Class A club share and
placed it under his name as part of his employee benefits and bonus for past exemplary service. Mendoza admitted endorsing in blank the stock certificate covering
the club share and signing a blank assignment of rights only for the purpose of securing Sime Darbys right of first refusal in case he decides to sell the club share.
Mendoza also alleged that when he retired in 1995, Sime Darby failed to give some of his retirement benefits amounting to P300,000. Mendoza filed a separate
Opposition to Sime Darbys application for restraining order and preliminary injunction stating that there was no showing of grave and irreparable injury warranting
the relief demanded.

On 3 January 2006, the RTC denied Sime Darbys prayer for restraining order and preliminary injunction. Sime Darby then filed a Motion for Summary Judgment
explaining that a trial was no longer necessary since there was no issue as to any material fact. On 13 March 2006, the trial court denied the motion. Thereafter, trial
on the merits ensued.

Sime Darby presented three witnesses: (1) Atty. Ronald E. Javier, Sime Darbys Vice-President for Legal Affairs and Corporate Secretary, who testified that Mendoza
refused to give Sime Darby his authorization to sell the club share unless he was paid P300,000 as additional retirement benefit and that Sime Darby was compelled
to institute the case and incurred legal expenses of P200,000; (2) Ranel A. Villar, ACCs Membership Department Supervisor, who testified that the club share was
registered under the name of Mendoza since ACCs By-Laws prohibits juridical persons from acquiring a club share and attested that Sime Darby paid for the monthly
dues of the share since it was purchased in 1987; and (3) Ira F. Cascon, Sime Darbys Treasurer since 1998, who testified that she asked Mendoza to endorse ACC
Stock Certificate No. A-1880 at the back and to sign the assignment of rights, as required by Sime Darby.

On the other hand, Mendoza presented two witnesses: (1) himself; and (2) Ranel Villar, the same employee of ACC who also testified for Sime Darby, who confirmed
that the club share could not be sold to a corporation like Sime Darby. In his testimony, Mendoza testified that (1) he owns the disputed club share; (2) Sime Darby
allowed him to personally choose the share that he liked as part of his benefits; (3) as a condition for membership in ACC, he had to personally undergo an interview
with regard to his background and not the companys; (4) though he retired in 1995, he only started paying the club share dues in 2004 because after his retirement,
he migrated to the United States until he came back in 1999 and since then he had been going back and forth to the United States; (5) in May 2004, he met with Atty.
Ronald E. Javier, Sime Darbys representative, to discuss the supposed selling of the club share which he refused since there were still unpaid retirement benefits due
him; and (6) ACC recognizes him as the owner of the club share.

On 30 April 2007, the trial court rendered a Decision in favor of Sime Darby. The dispositive portion states:chanroblesvirtualawlibrary
WHEREFORE, premises considered, judgment is hereby rendered enjoining defendant Jesus B. Mendoza, from making use of Stock Certificate No. 1880 of the Alabang
Golf and Country Club, Inc., and ordering defendant Jesus B. Mendoza to pay the plaintiff P100,000.00 as temperate damages, and P250,000.00 as attorneys fees and
litigation expenses.

SO ORDERED.12

Mendoza filed an appeal with the Court of Appeals. On 30 March 2012, the appellate court reversed the ruling of the trial court.13 The appellate court ruled that Sime
Darby failed to prove that it has a clear and unmistakable right over the club share of ACC. The dispositive portion of the Decision states:chanroblesvirtualawlibrary
WHEREFORE, in view of all the foregoing, the appealed decision of the Regional Trial Court is REVERSED and SET ASIDE. Resultantly, the Complaint in Civil Case No.
05-821, is hereby DISMISSED.

SO ORDERED.14

Sime Darby filed a Motion for Reconsideration which the Court of Appeals denied in a Resolution15 dated 6 June 2012.

Hence, the instant petition.cralaw lawlibrary

The Issues

The issues for our resolution are: (1) whether Sime Darby is entitled to damages and injunctive relief against Mendoza, its former employee; and (2) whether the
appellate court erred in declaring that Mendoza is the owner of the club share.cralaw lawlibrary
The Courts Ruling

The petition has merit.

Section 3, Rule 58 of the Rules of Court, which provides for the grounds for the issuance of a preliminary injunction, states:chanroblesvirtualawlibrary
SEC. 3. Grounds for issuance of preliminary injunction. A preliminary injunction may be granted when it is established:chanroblesvirtualawlibrary

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually;nadcralavvonlinelawlibrary

(b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.

In Medina v. Greenfield Development Corp.,16 we held that the purpose of a preliminary injunction is to prevent threatened or continuous irremediable injury to some
of the parties before their claims can be thoroughly studied and adjudicated. Its sole aim is to preserve the status quo until the merits of the case can be heard fully.
Thus, to be entitled to an injunctive writ, Sime Darby has the burden of establishing the following requisites:chanroblesvirtualawlibrary
(1) a right in esse or a clear and unmistakable right to be protected;nadcralavvonlinelawlibrary
(2) a violation of that right;nadcralavvonlinelawlibrary
(3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage.

In the present case, petitioner Sime Darby has sufficiently established its right over the subject club share. Sime Darby presented evidence that it acquired the Class
A club share of ACC in 1987 through a Deed of Sale. Being a corporation which is expressly disallowed by ACCs By-Laws to acquire and register the club share under
its name, Sime Darby had the share registered under the name of respondent Mendoza, Sime Darbys former sales manager, under a trust arrangement. Such fact
was clearly proved when in the application form17 dated 17 July 1987 of the ACC for the purchase of the club share, Sime Darby placed its name in full as the owner of
the share and Mendoza as the assignee of the club share. Also, in connection with the application for membership, Sime Darby sent a letter18 dated 17 September
1987 addressed to ACC confirming that Mendoza, as Sime Darbys Sales Manager, is entitled to club membership benefit of the Company.

Even during the trial, at Mendozas cross-examination, Mendoza identified his signature over the printed words name of assignee as his own and when confronted
with his Reply-Affidavit, he did not refute Sime Darbys ownership of the club share as well as Sime Darbys payment of the monthly billings from the time the share
was purchased.19 Further, Mendoza admitted signing the club share certificate and the assignment of rights, both in blank, and turning it over to Sime Darby. Clearly,
these circumstances show that there existed a trust relationship between the parties.

While the share was bought by Sime Darby and placed under the name of Mendoza, his title is only limited to the usufruct, or the use and enjoyment of the clubs
facilities and privileges while employed with the company. In Thomson v. Court of Appeals,20 we held that a trust arises in favor of one who pays the purchase price of
a property in the name of another, because of the presumption that he who pays for a thing intends a beneficial interest for himself. While Sime Darby paid for the
purchase price of the club share, Mendoza was given the legal title. Thus, a resulting trust is presumed as a matter of law. The burden then shifts to the transferee to
show otherwise.

Mendoza, as the transferee, claimed that he only signed the assignment of rights in blank in order to give Sime Darby the right of first refusal in case he decides to sell
the share later on. A right of first refusal, in this case, would mean that Sime Darby has a right to match the purchase price offer of Mendozas prospective buyer of
the club share and Sime Darby may buy back the share at that price. However, Mendozas contention of the right of first refusal is a self-serving statement. He did
not present any document to show that there was such an agreement between him and the company, not even an acknowledgment from Sime Darby that it actually
intended the club share to be given to him as a reward for his performance and past service.

In fact, the circumstances which occurred after the purchase of the club share point to the opposite. First, Mendoza signed the share certificate and assignment of
rights both in blank. Second, Mendoza turned over possession of the documents to Sime Darby. Third, from the time the share was purchased in 1987 until 1995,
Sime Darby paid for the monthly bills pertaining to the share. Last, since 1987, the monthly bills were regularly sent to Sime Darbys business address until Mendoza
requested in August 2004, long after he retired from the employ of the company, that such bills be forwarded to his personal address starting September 2004.

It can be gathered then that Sime Darby did not intend to give up its beneficial interest and right over the share. The company merely wanted Mendoza to hold the
share in trust since Sime Darby, as a corporation, cannot register a club share in its own name under the rules of the ACC. At the same time, Mendoza, as a senior
manager of the company, was extended the privilege of availing a club membership, as generously practiced by Sime Darby.

However, Mendoza violated Sime Darbys beneficial interest and right over the club share after he was informed by Atty. Ronald E. Javier of Sime Darbys plan to sell
the share to an interested buyer. Mendoza refused to give an authorization to sell the club share unless he was paid P300,000 allegedly representing his unpaid
retirement benefit. In August 2004, Mendoza tried to appropriate the club share and demanded from ACC that he be recognized as the true owner of the share as the
named member in the stock certificate as well as in the annual report issued by ACC. Despite being informed by Sime Darby to stop using the facilities and privileges
of the club share, Mendoza continued to do so. Thus, in order to prevent further damage and prejudice to itself, Sime Darby properly sought injunction in this case.

As correctly observed by the RTC in its Decision dated 30 April 2007:chanroblesvirtualawlibrary

In order for a writ of preliminary injunction to issue, the following requisites must be present: (a) invasion of the right sought to be protected is material and
substantial; (b) the right of the complainant is clear and unmistakable, and (c) there is an urgent and paramount necessity for the writ to prevent serious damage. The
twin requirements of a valid injunction are the existence of a right and its actual or threatened violations.

All the elements are present in the instant case. Plaintiff bought the subject share in 1987. As the purchaser of the share, it has interest and right over it. There is a
presumption that the share was bought for the use of the defendant while the latter is still connected with the plaintiff. This is because when the share was
registered under the name of defendant, the latter signed the stock certificate in blank as well as the deed of assignment and placed the certificate under the
possession of the plaintiff. Hence, plaintiff did not intend to relinquish its interest and right over the subject, rather it intended to have the share held in trust by
defendant, until a new grantee is named. This can be inferred from plaintiffs witness testimony that plaintiff required the defendant to sign the said documents so
that the plaintiff can be assured that its ownership of the property is properly documented. Thirdly, plaintiffs payments of monthly billings of the subject share
bolster defendant possession in trust rather than his ownership over the share. With this, the right of plaintiff over the share is clear and unmistakable. With
defendants continued use of the subject share despite that he is not anymore connected with plaintiff, and with plaintiffs demand upon the defendant to desist
from making use of the club facilities having [been] ignored, clearly defendant violated plaintiffs right over the use and enjoyment thereof. Hence, plaintiff is entitled
to its prayer for injunction.nadcralavvlawlibrary

xxxx

As to [the] second issue, plaintiff claimed for temperate or moderate damages.nadcralavvlawlibrary

xxxx

In the present case, it was established that sometime in July 2004, plaintiff tried to sell the share but defendant refused to give the authority. Thus, plaintiff was
forced to return the amount of P1,100,000 to the buyer. Additionally, plaintiff cannot make use of the facilities of the club because defendant insists on enjoying it
despite the fact that he is no longer connected with the plaintiff. With this, the Court deems it proper to impose upon the defendant P100,000 as temperate
damages.

Further, plaintiff having established its right to the relief being claimed and inasmuch as it was constrained to litigate in order to protect its interest as well as incurred
litigation expenses, attorney's fees are hereby awarded in the amount of 1!250,000.21

In sum, we grant the damages and injunctive relief sought by Sime Darby, as the true owner of the ACC Class "A" club share. Sime Darby has the right to be protected
from Mendoza's act of using the facilities and privileges of ACC. Since the records show that Sime Darby was dissolved on 31 December 2011, it has three years to
convey its property and close its affairs as a body corporate under the Corporation Code.22 Thus, Sime Darby may choose to dispose of the club... share in any manner
it sees fit without undue interference from Mendoza, who lost his right to use the club share when he retired from the company.

WHEREFORE, we GRANT the petition. We SET ASIDE the 30 March 2012 Decision and 6 June 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 89178. We
REINSTATE the 30 April2007 Decision of the Regional Trial Court of Makati City, Branch 132 in Civil Case No. 05-821.

SO ORDERED.

UNISOURCE COMMERCIAL AND DEVELOPMENT CORPORATION,Petitioner, - versus -JOSEPH CHUNG, KIAT CHUNG and KLETO CHUNG,
G.R. No. 173252, July 17, 2009

DECISION

QUISUMBING, J.:

The instant petition assails the Decision[1] dated October 27, 2005 and the Resolution[2] dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No. 76213. The
appellate court had reversed and set aside the Decision[3] dated August 19, 2002 of the Regional Trial Court of Manila, Branch 49, in Civil Case No. 00-97526.
The antecedent facts are as follows:

Petitioner Unisource Commercial and Development Corporation is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. 176253[4]
of the Register of Deeds of Manila. The title contains a memorandum of encumbrance of a voluntary easement which has been carried over from the Original
Certificate of Title of Encarnacion S. Sandico. The certified English translation[5] of the annotation reads:

By order dated 08 October 1924 of the Court of First Instance of Manila, Chamber IV (AP-7571/T-23046), it is declared that Francisco Hidalgo y Magnifico has the right
to open doors in the course of his lot described as Lot No. 2, Block 2650 of the map that has been exhibited, towards the left of the Callejon that is used as a passage
and that appears as adjacent to the said Lot 2 and to pass through the land of Encarnacion Sandico y Santana, until the bank of the estero that goes to the Pasig River,
and towards the right of the other Callejon that is situated between the said Lot 2 and Lot 4 of the same Block N.[6]

As Sandicos property was transferred to several owners, the memorandum of encumbrance of a voluntary easement in favor of Francisco M. Hidalgo was consistently
annotated at the back of every title covering Sandicos property until TCT No. 176253 was issued in petitioners favor. On the other hand, Hidalgos property was
eventually transferred to respondents Joseph Chung, Kiat Chung and Cleto Chung under TCT No. 121488.[7]

On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of Voluntary Easement of Right of Way[8] on the ground that the dominant estate has an
adequate access to a public road which is Matienza Street. The trial court dismissed the petition on the ground that it is a land registration case. Petitioner moved for
reconsideration. Thereafter, the trial court conducted an ocular inspection of the property. In an Order[9] dated November 24, 2000, the trial court granted the
motion and made the following observations:

1. The dominant estate is a property enclosed with a concrete fence with no less than three (3) doors in it, opening to an alley belonging to the servient estate owned
by the petitioner. The alley is leading to Matienza St.;

2. The dominant estate has a house built thereon and said house has a very wide door accessible to Matienza St. without any obstruction. Said street is perpendicular
to J.P. Laurel St.

It is therefore found that the dominant estate has an egress to Matienza St. and does not have to use the servient estate.[10]

In their Answer,[11] respondents countered that the extinguishment of the easement will be of great prejudice to the locality and that petitioner is guilty of laches
since it took petitioner 15 years from acquisition of the property to file the petition.

In a Decision dated August 19, 2002, the trial court ordered the cancellation of the encumbrance of voluntary easement of right of way in favor of the dominant
estate owned by respondents. It found that the dominant estate has no more use for the easement since it has another adequate outlet to a public road which is
Matienza Street. The dispositive portion of the decision reads:

IN VIEW OF ALL THE FOREGOING, the Court hereby orders the cancellation of the Memorandum of Encumbrance annotated in TCT No. 176253 which granted a right
of way in favor of the person named therein and, upon the finality of this decision, the Register of Deeds of the City of Manila is hereby directed to cancel said
encumbrance.

With respect to the other prayers in the petition, considering that the same are mere incidents to the exercise by the owners of right of their ownership which they
could well do without the Courts intervention, this Court sees no need to specifically rule thereon. The Court cannot award plaintiffs claims for damages and
attorneys fees for lack of sufficient bases therefor.

SO ORDERED.[12]

Respondents appealed to the Court of Appeals. On October 27, 2005, the appellate court reversed the decision of the trial court and dismissed the petition to cancel
the encumbrance of voluntary easement of right of way.

The appellate court ruled that when petitioners petition was initially dismissed by the executive judge, the copy of the petition and the summons had not yet been
served on respondents. Thus, when petitioner moved to reconsider the order of dismissal, there was no need for a notice of hearing and proof of service upon
respondents since the trial court has not yet acquired jurisdiction over them. The trial court acquired jurisdiction over the case and over respondents only after the
summons was served upon them and they were later given ample opportunity to present their evidence.

The appellate court also held that the trial court erred in canceling the encumbrance of voluntary easement of right of way. The appellate court ruled that Article
631(3)[13] of the Civil Code, which was cited by the trial court, is inapplicable since the presence of an adequate outlet to a highway extinguishes only legal or
compulsory easements but not voluntary easements like in the instant case. There having been an agreement between the original parties for the provision of an
easement of right of way in favor of the dominant estate, the same can be extinguished only by mutual agreement or by renunciation of the owner of the dominant
estate.

The decretal portion of the decision reads:

WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the assailed decision is REVERSED and SET ASIDE. Accordingly, the petition to cancel the
encumbrance of right of way is dismissed for lack of merit.

No costs.

SO ORDERED.[14]

Before us, petitioner alleges that the Court of Appeals erred in:

I.
BRUSHING ASIDE PETITIONERS CONTENTION THAT THE EASEMENT IS PERSONAL SINCE THE ANNOTATION DID NOT PROVIDE THAT IT IS BINDING ON THE HEIRS OR
ASSIGNS OF SANDICO.

II.
NOT CONSIDERING THAT THE EASEMENT IS PERSONAL SINCE NO COMPENSATION WAS GIVEN TO PETITIONER.

III.
DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT.

IV.
TREATING THE EASEMENT AS PREDIAL.[15]

Petitioner contends that the fact that Sandico and Hidalgo resorted to judicial intervention only shows that they contested the existence of the requisite factors
establishing a legal easement. Besides, the annotation itself provides that the easement is exclusively confined to the parties mentioned therein, i.e., Sandico and
Hidalgo. It was not meant to bind their heirs or assigns; otherwise, they would have expressly provided for it. Petitioner adds that it would be an unjust enrichment
on respondents part to continue enjoying the easement without adequate compensation to petitioner. Petitioner also avers that to say that the easement has
attached to Hidalgos property is erroneous since such property no longer exists after it has been subdivided and registered in respondents respective names.[16]
Petitioner further argues that even if it is bound by the easement, the same can be cancelled or revoked since the dominant estate has an adequate outlet without
having to pass through the servient estate.

Respondents adopted the disquisition of the appellate court as their counter-arguments.

The petition lacks merit.

As defined, an easement is a real right on anothers property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his property, for the benefit of another person or tenement. Easements are established either by law or by the will
of the owner. The former are called legal, and the latter, voluntary easements.[17]

In this case, petitioner itself admitted that a voluntary easement of right of way exists in favor of respondents. In its petition to cancel the encumbrance of voluntary
easement of right of way, petitioner alleged that [t]he easement is personal. It was voluntarily constituted in favor of a certain Francisco Hidalgo y Magnifico, the
owner of [the lot] described as Lot No. 2, Block 2650.[18] It further stated that the voluntary easement of the right of way in favor of Francisco Hidalgo y Magnifico
was constituted simply by will or agreement of the parties. It was not a statutory easement and definitely not an easement created by such court order because [the]
Court merely declares the existence of an easement created by the parties.[19] In its Memorandum[20] dated September 27, 2001, before the trial court, petitioner
reiterated that [t]he annotation found at the back of the TCT of Unisource is a voluntary easement.[21]

Having made such an admission, petitioner cannot now claim that what exists is a legal easement and that the same should be cancelled since the dominant estate is
not an enclosed estate as it has an adequate access to a public road which is Callejon Matienza Street.[22] As we have said, the opening of an adequate outlet to a
highway can extinguish only legal or compulsory easements, not voluntary easements like in the case at bar. The fact that an easement by grant may have also
qualified as an easement of necessity does not detract from its permanency as a property right, which survives the termination of the necessity.[23] A voluntary
easement of right of way, like any other contract, could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate.[24]

Neither can petitioner claim that the easement is personal only to Hidalgo since the annotation merely mentioned Sandico and Hidalgo without equally binding their
heirs or assigns. That the heirs or assigns of the parties were not mentioned in the annotation does not mean that it is not binding on them. Again, a voluntary
easement of right of way is like any other contract. As such, it is generally effective between the parties, their heirs and assigns, except in case where the rights and
obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.[25] Petitioner cites City of Manila v. Entote[26] in
justifying that the easement should bind only the parties mentioned therein and exclude those not so mentioned. However, that case is inapplicable since the issue
therein was whether the easement was intended not only for the benefit of the owners of the dominant estate but of the community and the public at large.[27] In
interpreting the easement, the Court ruled that the clause any and all other persons whomsoever in the easement embraces only those who are privy to the owners
of the dominant estate, Lots 1 and 2 Plan Pcs-2672 and excludes the indiscriminate public from the enjoyment of the right-of-way easement.[28]

We also hold that although the easement does not appear in respondents title over the dominant estate, the same subsists. It is settled that the registration of the
dominant estate under the Torrens system without the annotation of the voluntary easement in its favor does not extinguish the easement. On the contrary, it is the
registration of the servient estate as free, that is, without the annotation of the voluntary easement, which extinguishes the easement.[29]

Finally, the mere fact that respondents subdivided the property does not extinguish the easement. Article 618 [30] of the Civil Code provides that if the dominant
estate is divided between two or more persons, each of them may use the easement in its entirety, without changing the place of its use, or making it more
burdensome in any other way.

WHEREFORE, the instant petition is DENIED. The Decision dated October 27, 2005 and the Resolution dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No.
76213 are AFFIRMED.

SO ORDERED.

G.R. No. 194336 March 11, 2013

PILAR DEVELOPMENT CORPORATION, Petitioner,
vs.
RAMON DUMADAG, EMMA BACABAC, RONALDO NAVARRO, JIMMY PAGDALIAN, PAY DELOS SANTOS, ARMANDO TRILLOS, FELICISIMO TRILLOS, ARCANGEL
FLORES, EDDIE MARTIN, PRESILLA LAYOG, CONRADO CAGUYONG, GINA GONZALES, ARLENE PEDROSA, JOCELYN ABELINO, ROQUE VILLARAZA, ROLANDO
VILLARAZA, CAMILO GENOVE, NILDA ROAYANA, SUSAN ROAYANA, JUANCHO PANGANIBAN, BONG DE GUZMAN, ARNOLD ENVERSO, DONNA DELA RAZA, EMELYN
HAGNAYA, FREDDIE DE LEON, RONILLO DE LEON, MARIO MARTINEZ, and PRECY LOPEZ, Respondents.
DECISION
PERALTA, J.:
Challenged in this petition for review on certiorari under Rule 45 of the Rules of Civil Procedure are the March 5, 2010 Decision1 and October 29, 2010 Resolution2 of
the Court of Appeals (CA) in CA-G.R. CV No. 90254, which affirmed the May 30, 2007 Decision3 of the Las Pias Regional Trial Court, Branch 197 (trial court) dismissing
the complaint filed by petitioner.
On July 1, 2002, petitioner filed a Complaint4 for accion publiciana with damages against respondents for allegedly building their shanties, without its knowledge and
consent, in its 5,613-square-meter property located at Daisy Road, Phase V, Pilar Village Subdivision, Almanza, Las
Pias City. It claims that said parcel of land, which is duly registered in its name under Transfer Certificate of Title No. 481436 of the Register of Deeds for the Province
of Rizal, was designated as an open space of Pilar Village Subdivision intended for village recreational facilities and amenities for subdivision residents.5 In their
Answer with Counterclaim,6 respondents denied the material allegations of the Complaint and briefly asserted that it is the local government, not petitioner, which
has jurisdiction and authority over them.
Trial ensued. Both parties presented their respective witnesses and the trial court additionally conducted an ocular inspection of the subject property.
On May 30, 2007, the trial court dismissed petitioners complaint, finding that the land being occupied by respondents are situated on the sloping area going down
and leading towards the Mahabang Ilog Creek, and within the three-meter legal easement; thus, considered as public property and part of public dominion under
Article 5027 of the New Civil Code (Code), which could not be owned by petitioner. The court held:
x x x The land title of [petitioner] only proves that it is the owner in fee simple of the respective real properties described therein, free from all liens and
encumbrances, except such as may be expressly noted thereon or otherwise reserved by law x x x. And in the present case, what is expressly reserved is what is
written in TCT No. T-481436, to wit "that the 3.00 meter strip of the lot described herein along the Mahabang Ilog Creek is reserved for public easement purposes.
(From OCT 1873/A-50) and to the limitations imposed by Republic Act No. 440. x x x"8
The trial court opined that respondents have a better right to possess the occupied lot, since they are in an area reserved for public easement purposes and that only
the local government of Las Pias City could institute an action for recovery of possession or ownership.
Petitioner filed a motion for reconsideration, but the same was denied by the trial court in its Order dated August 21, 2007.9 Consequently, petitioner elevated the
matter to the Court of Appeals which, on March 5, 2010, sustained the dismissal of the case.
Referring to Section 210 of Administrative Order (A.O.) No. 99-21 of the Department of Environment and Natural Resources (DENR), the appellate court ruled that the
3-meter area being disputed is located along the creek which, in turn, is a form of a stream; therefore, belonging to the public dominion. It said that petitioner could
not close its eyes or ignore the fact, which is glaring in its own title, that the 3-meter strip was indeed reserved for public easement. By relying on the TCT, it is then
estopped from claiming ownership and enforcing its supposed right. Unlike the trial court, however, the CA noted that the proper party entitled to seek recovery of
possession of the contested portion is not the City of Las Pias, but the Republic of the Philippines, through the Office of the Solicitor General (OSG), pursuant to
Section 10111 of Commonwealth Act (C.A.) No. 141 (otherwise known as The Public Land Act).
The motion for reconsideration filed by petitioner was denied by the CA per Resolution dated October 29, 2010, hence, this petition.
Anchoring its pleadings on Article 63012 of the Code, petitioner argues that although the portion of the subject property occupied by respondents is within the 3-
meter strip reserved for public easement, it still retains ownership thereof since the strip does not form part of the public dominion. As the owner of the subject
parcel of land, it is entitled to its lawful possession, hence, the proper party to file an action for recovery of possession against respondents conformably with Articles
42813 and 53914 of Code.
We deny.
An easement or servitude is a real right on another's property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his or her property, for the benefit of another person or tenement; it is jus in re aliena, inseparable from the estate
to which it actively or passively belongs, indivisible, perpetual, and a continuing property right, unless extinguished by causes provided by law.15 The Code defines
easement as an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner or for the benefit of a community, or
of one or more persons to whom the encumbered estate does not belong.16 There are two kinds of easement according to source: by law or by will of the owners
the former are called legal and the latter voluntary easement.17 A legal easement or compulsory easement, or an easement by necessity constituted by law has for its
object either public use or the interest of private persons.18
While Article 630 of the Code provides for the general rule that "the owner of the servient estate retains the ownership of the portion on which the easement is
established, and may use the same in such a manner as not to affect the exercise of the easement," Article 635 thereof is specific in saying that "all matters
concerning easements established for public or communal use shall be governed by the special laws and regulations relating thereto, and, in the absence thereof, by
the provisions of this Title Title VII on Easements or Servitudes."
In the case at bar, the applicability of DENR A.O. No. 99-21 dated June 11, 1999, which superseded DENR A.O. No. 97-0519 dated March 6, 1997 and prescribed the
revised guidelines in the implementation of the pertinent provisions of Republic Act (R.A.) No. 1273 and Presidential Decree (P.D.) Nos. 705 and 1067, cannot be
doubted. Inter alia, it was issued to further the governments program of biodiversity preservation. Aside from Section 2.1 above-quoted, Section 2.3 of which further
mandates:
2.3 Survey of Titled Lands:
2.3.1 Administratively Titled Lands:
The provisions of item 2.1.a and 2.1.b shall be observed as the above. However, when these lands are to be subdivided, consolidated or consolidated-subdivided, the
strip of three (3) meters which falls within urban areas shall be demarcated and marked on the plan for easement and bank protection.
The purpose of these strips of land shall be noted in the technical description and annotated in the title.
xxxx
2.3.3 Complex Subdivision or Consolidation Subdivision Surveys for Housing/Residential, Commercial or Industrial Purposes:
When titled lands are subdivided or consolidated-subdivided into lots for residential, commercial or industrial purposes the segregation of the three (3) meter wide
strip along the banks of rivers or streams shall be observed and be made part of the open space requirement pursuant to P.D. 1216.
The strip shall be preserved and shall not be subject to subsequent subdivision. (Underscoring supplied)
Certainly, in the case of residential subdivisions, the allocation of the 3-meter strip along the banks of a stream, like the Mahabang Ilog Creek in this case, is required
and shall be considered as forming part of the open space requirement pursuant to P.D. 1216 dated October 14, 1977.20 Said law is explicit: open spaces are "for
public use and are, therefore, beyond the commerce of men" and that "[the] areas reserved for parks, playgrounds and recreational use shall be non-alienable public
lands, and non-buildable."
Running in same vein is P.D. 1067 or The Water Code of the Philippines21 which provides:
Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban areas,
twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along their margins, are subject to the easement of public use in the interest of
recreation, navigation, floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation, floatage,
fishing or salvage or to build structures of any kind. (Underscoring supplied)
Thus, the above prove that petitioners right of ownership and possession has been limited by law with respect to the 3-meter strip/zone along the banks of
Mahabang Ilog Creek. Despite this, the Court cannot agree with the trial courts opinion, as to which the CA did not pass upon, that respondents have a better right to
possess the subject portion of the land because they are occupying an area reserved for public easement purposes. Similar to petitioner, respondents have no right or
title over it precisely because it is public land. Likewise, we repeatedly held that squatters have no possessory rights over the land intruded upon.22 The length of time
that they may have physically occupied the land is immaterial; they are deemed to have entered the same in bad faith, such that the nature of their possession is
presumed to have retained the same character throughout their occupancy.23
As to the issue of who is the proper party entitled to institute a case with respect to the 3-meter strip/zone, We find and so hold that both the Republic of the
Philippines, through the OSG and the local government of Las Pias City, may file an action depending on the purpose sought to be achieved. The former shall be
responsible in case of action for reversion under C.A. 141, while the latter may also bring an action to enforce the relevant provisions of Republic Act No. 7279
(otherwise known as the Urban Development and Housing Act of 1992).24 Under R.A. 7279, which was enacted to uplift the living conditions in the poorer sections of
the communities in urban areas and was envisioned to be the antidote to the pernicious problem of squatting in the metropolis,25 all local government units (LGUs)
are mandated to evict and demolish persons or entities occupying danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways,
and other public places such as sidewalks, roads, parks, and playgrounds.26 Moreover, under pain of administrative and criminal liability in case of non-compliance,27
it obliges LGUs to strictly observe the following:
Section 29. Resettlement. - Within two (2) years from the effectivity of this Act, the local government units, in coordination with the National Housing Authority, shall
implement the relocation and resettlement of persons living in danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and
in other public places such as sidewalks, roads, parks and playgrounds. The local government unit, in coordination with the National Housing Authority, shall provide
relocation or resettlement sites with basic services and facilities and access to employment and livelihood opportunities sufficient to meet the basic needs of the
affected families.1wphi1
Section 30. Prohibition Against New Illegal Structures. - It shall be unlawful for any person to construct any structure in areas mentioned in the preceding section.
After the effectivity of this Act, the barangay, municipal or city government units shall prevent the construction of any kind or illegal dwelling units or structures
within their respective localities. The head of any local government unit concerned who allows, abets or otherwise tolerates the construction of any structure in
violation of this section shall be liable to administrative sanctions under existing laws and to penal sanctions provided for in this Act.
Yet all is not lost for petitioner. It may properly file an action for mandamus to compel the local government of Las Pias City to enforce with reasonable dispatch the
eviction, demolition, and relocation of respondents and any other persons similarly situated in order to give flesh to one of the avowed policies of R.A. 7279, which is
to reduce urban dysfunctions, particularly those that adversely affect public health, safety, and ecology.28
Indeed, as one of the basic human needs, housing is a matter of state concern as it directly and significantly affects the general welfare.29
WHEREFORE, the petition is DENIED. The March 5, 2010 Decision and October 29, 2010 Resolution of the Court of Appeals in CA-G.R. CV No. 90254, which affirmed
the May 30, 2007 Decision of the Las Pias RTC, Branch 197, dismissing petitioner's complaint, is hereby AFFIRMED.
SO ORDERED.

G.R. No. 170846 February 6, 2007

NATIONAL POWER CORPORATION, Petitioner,
vs.
AURELLANO S. TIANGCO, LOURDES S. TIANGCO and NESTOR S. TIANGCO, Respondents.
DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner National Power Corporation (NPC) seeks the annulment and setting aside of the
Decision1 dated March 14, 2005 of the Court of Appeals (CA) in CA-G.R. CV No. 53576, as reiterated in its Resolution2 of December 2, 2005 which denied the
petitioners motion for reconsideration. The assailed decision modified that of the Regional Trial Court (RTC) of Tanay, Rizal, Branch 80, by increasing the amount of
just compensation due the respondents in an expropriation case filed against them by the petitioner.
The facts:
Herein respondents Aurellano, Lourdes and Nestor, all surnamed Tiangco, are the owners of a parcel of land with an area of 152,187 square meters at Barangay
Sampaloc, Tanay, Rizal and registered in their names under TCT No. M-17865 of the Registry of Deeds of Rizal.
On the other hand, petitioner NPC is a government-owned and controlled corporation created for the purpose of undertaking the development and generation of
power from whatever source. NPCs charter (Republic Act No. 6395) authorizes the corporation to acquire private property and exercise the right of eminent
domain.1awphi1.net
NPC requires 19,423 square meters of the respondents aforementioned property, across which its 500Kv Kalayaan-San Jose Transmission Line Project will traverse.
NPCs Segregation Plan3 for the purpose shows that the desired right-of-way will cut through the respondents land, in such a manner that 33,392 square meters
thereof will be left separated from 99,372 square meters of the property. Within the portion sought to be expropriated stand fruit-bearing tress, such as mango,
avocado, jackfruit, casuy, santol, calamansi, sintones and coconut trees.
On November 20, 1990, after repeated unsuccessful negotiations with the respondents, NPC filed with the RTC of Tanay, Rizal a complaint for expropriation4 against
them. In time, the respondents filed their answer.
On March 14, 1991, the trial court issued a Condemnation Order, granting NPC the right to take possession of the area sought to be expropriated. In the same Order,
the court directed the parties to nominate their respective commissioners, with a third member to be nominated and appointed by the court itself, to determine the
proper amount of just compensation to be paid to the respondents. As constituted in the manner thus indicated, the board of commissioners was composed of the
following: for NPC, Atty. Restituto Mallo of its Legal Department; for the respondents, Mr. Basilio Afuang, a geodetic engineer and a real estate broker by profession;
and for the court, Clerk of Court V Ms. Amelia de Guzman Carbonell.
On April 5, 1991, the trial court issued an order directing NPC to pay and deposit with the Rizal Provincial Treasurer the amount of P81,204.00, representing the
temporary provisional value of the area subject of the expropriation prior to the taking of possession thereof. On April 22, 1991, with NPC having complied with the
deposit requirement, a writ of possession was issued in its favor.
Thereafter, an ocular inspection of the premises was conducted and hearings before the board of commissioners were held, during which the Municipal Assessor of
Tanay, Rizal was presented. He submitted a record of the Schedule of Values for taxation purposes and a certification to the effect that the unit value of the
respondents property is P21,000.00 per hectare.
On August 7, 1993, commissioner Basilio Afuang for the respondents filed his report. He pegged the price of the area sought to be expropriated at P30.00 per square
meter or P582,690.005 in the aggregate; and for the improvements thereon, Afuang placed a valuation of P2,093,950.00. The figures are in contrast with the
respondents own valuation of P600,600.00, for the area, and P4,935,500.00, for the improvements.
On September 14, 1993, NPC filed an amended complaint to acquire only 19,423 square meters of the respondents property. The original area of 20,220 square
meters initially sought to be expropriated under the original complaint turned out to be in excess of the area required.
For its part, NPC made it clear that it is interested only in acquiring an easement of right-of-way over the respondents property and that ownership of the area over
which the right-of-way will be established shall remain with the respondents. For this reason, NPC claims that it should pay, in addition to the agreed or adjudged
value of the improvements on the area, only an easement fee in an amount equivalent to ten per cent (10%) of the market value of the property as declared by the
respondents or by the Municipal Assessor, whichever is lower, as provided for under Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938.6
The court-appointed commissioner, Ms. Amelia de Guzman Carbonell, found that the risk and dangerous nature of the transmission line project essentially deprive
the respondents of the use of the area. Nonetheless, she recommended that the determination of just compensation should be relegated to "expert appraisers."7
From the evidence before it, the trial court made a determination that the market value of the property is P2.09 per square meter, or P40,594.07 for the entire
19,423 square meters needed by NPC, and not the P30.00 per square meter claimed by the respondents. Neither did the trial court consider NPCs reliance on Section
3-A of Republic Act No. 6395, as amended by Presidential Decree 938, the court placing more weight on the respondents argument that expropriation would result in
the substantial impairment of the use of the area needed, even though what is sought is a mere aerial right-of-way. The court found as reasonable the amount of
P324,750.00 offered by NPC for the improvements, as the same is based on the official current schedule of values as determined by the Municipal Assessor of Tanay,
Rizal.
Hence, in its decision8 of February 19, 1996, the trial court rendered judgment as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1. Expropriating in favor of [NPC] a parcel of land covering a total area of 19,423 sq.m. covered by TCT No. M-17860 owned by the [respondents];
2. Ordering the amount of P40,594.07 as just compensation for the 19,423 square meters of land affected by the expropriations; and the amount of
P324,750.00 as reasonable compensation for the improvements on the land expropriated with legal interest from the time of possession by the plaintiff.
No pronouncement as to costs.
SO ORDERED. (Words in brackets supplied.)
The respondents moved for reconsideration, presenting for the first time a document entitled "Bureau of Internal Revenue Circular of Appraisal," which shows that
for the year 1985, lands in Barangay Sampaloc were valued at P30.00 per square meter; for the year 1992, at P80.00 per square meter; and for year 1994, at P100.00
per square meter. Respondents maintain that the price of P30.00 per square meter for the needed area of 19,423 square meters is the reasonable amount and
should be the basis for fixing the amount of just compensation due them. The trial court denied the motion, stating that the BIR circular in question was belatedly
filed and therefore NPC could not have opposed its presentation.
From the aforesaid decision of the trial court, both NPC and the respondents went on appeal to the CA whereat the separate appeals were consolidated and
docketed as CA-G.R. CV No. 53576. The appellate court found merit in the respondents appeal, and disregarded the P2.09 per square meter valuation of the trial
court, which was based on a 1984 tax declaration. Instead, the CA placed reliance upon a 1993 tax declaration, "being only two years removed from the time of
taking."9 The appellate court determined the time of taking to be in 1991. Thus, the greater value of P913,122.00 as declared in Tax Declaration No. 011-2667 dated
July 23, 1993 should be the basis for determining just compensation. With regard to the value of improvements, the appellate court found NPCs valuation more
favorable, being based on the current (1991) schedule of values for trees in the provinces of Rizal and Laguna. Hence, in its decision10 of March 14, 2005, the CA
rendered judgment, to wit:
WHEREFORE, the instant Appeal is GRANTED. The decision of the Regional Trial Court of Tanay, Rizal, Branch 80 dated February 19, 1996 is hereby MODIFIED and the
compensation awarded for the 19,423 square meters of land affected is increased to P116,538.00, and the reasonable compensation for the improvements thereon is
likewise increased to P325,025.00, with legal interest from the time of possession by the plaintiff-appellee NAPOCOR. No pronouncement as to costs.
SO ORDERED.
NPC moved for reconsideration, but its motion was denied by the appellate court in its resolution11 of December 2, 2005.
Hence, NPCs instant petition for review, submitting for our resolution only the following issues with respect to the amount of just compensation that must be paid
the respondents for the expropriated portion (19,423 square meters) of their property:
1. Is it to be based on the 1984 or the 1993 valuation?
2. Should NPC pay for the value of the land being taken, or should it be limited to what is provided for under P.D. 938, that is, ten per cent (10%) of its market
value as declared by the owner or the assessor (whichever is lower), considering that the purpose for which the property is being taken is merely for the
establishment of a safe and free passage for its overhead transmission lines?
There is no issue as to the improvements. Since the P325,025.00 valuation therefor is the very price set by the NPC commissioner, to which the corporation did not
object but otherwise adopts, the Court fixes the amount of P325,025.00 as just compensation for the improvements.
We now come to the more weighty question of what amount is just by way of compensation for the 19,423 square-meter portion of the respondents property.
In eminent domain cases, the time of taking is the filing of the complaint, if there was no actual taking prior thereto. Hence, in this case, the value of the property at
the time of the filing of the complaint on November 20, 1990 should be considered in determining the just compensation due the respondents. So it is that in
National Power Corporation v. Court of Appeals, et al.,12 we ruled:
Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence, many rulings of this Court have equated just compensation with
the value of the property as of the time of filing of the complaint consistent with the above provision of the Rules. So too, where the institution of the action precedes
entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint.
The trial court fixed the value of the property at its 1984 value, while the CA, at its 1993 worth. Neither of the two determinations is correct. For purposes of just
compensation, the respondents should be paid the value of the property as of the time of the filing of the complaint which is deemed to be the time of taking the
property.
It was certainly unfair for the trial court to have considered a property value several years behind its worth at the time the complaint in this case was filed on
November 20, 1990. The landowners are necessarily shortchanged, considering that, as a rule, land values enjoy steady upward movement. It was likewise erroneous
for the appellate court to have fixed the value of the property on the basis of a 1993 assessment. NPC would be paying too much. Petitioner corporation is correct in
arguing that the respondents should not profit from an assessment made years after the taking.
The expropriation proceedings in this case having been initiated by NPC on November 20, 1990, property values on such month and year should lay the basis for the
proper determination of just compensation. In Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,13 the Court ruled that the
equivalent to be rendered for the property to be taken shall be substantial, full, ample and, as must apply to this case, real. This must be taken to mean, among
others, that the value as of the time of taking should be the price to be paid the property owner.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. In this case, this simply means the propertys
fair market value at the time of the filing of the complaint, or "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 be given and received therefor."14 The measure is not the takers gain, but the owners loss.
In the determination of such value, the court is not limited to the assessed value of the property or to the schedule of market values determined by the provincial or
city appraisal committee; these values consist but one factor in the judicial valuation of the property.15 The nature and character of the land at the time of its taking is
the principal criterion for determining how much just compensation should be given to the landowner16 All the facts as to the condition of the property and its
surroundings, as well as its improvements and capabilities, should be considered.17
Neither of the two determinations made by the courts below is therefore correct. A new one must be arrived at, taking into consideration the foregoing
pronouncements.
Now, to the second issue raised by petitioner NPC.
In several cases, the Court struck down NPCs consistent reliance on Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938.18 True, an
easement of a right-of-way transmits no rights except the easement itself, and the respondents would retain full ownership of the property taken. Nonetheless, the
acquisition of such easement is not gratis. The limitations on the use of the property taken for an indefinite period would deprive its owner of the normal use thereof.
For this reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary equivalent of the land taken.19
While the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property, no cogent reason appears why
said power may not be availed of to impose only a burden upon the owner of the condemned property, without loss of title and possession.20 However, if the
easement is intended to perpetually or indefinitely deprive the owner of his proprietary rights through the imposition of conditions that affect the ordinary use, free
enjoyment and disposal of the property or through restrictions and limitations that are inconsistent with the exercise of the attributes of ownership, or when the
introduction of structures or objects which, by their nature, create or increase the probability of injury, death upon or destruction of life and property found on the
land is necessary, then the owner should be compensated for the monetary equivalent of the land, in accordance with our ruling in NPC v. Manubay Agro-Industrial:
As correctly observed by the CA, considering the nature and the effect of the installation power lines, the limitations on the use of the land for an indefinite period
would deprive respondent of normal use of the property. For this reason, the latter is entitled to payment of a just compensation, which must be neither more nor
less than the monetary equivalent of the land.21
The evidence suggests that NPCs transmission line project that traverses the respondents property is perpetual, or at least indefinite, in nature. Moreover, not to be
discounted is the fact that the high-tension current to be conveyed through said transmission lines evidently poses a danger to life and limb; injury, death or
destruction to life and property within the vicinity. As the Court held in NPC v. Chiong,22 it is not improper to assume that NPC will erect structures for its transmission
lines within the property. What is sought to be expropriated in this case is, at its longest extent, 326.34 meters, and through it may be built several structures, not
simply one. Finally, if NPC were to have its way, respondents will continue to pay the realty taxes due on the affected portion of their property, an imposition that,
among others, merits the rejection of NPCs thesis of payment of a mere percentage of the propertys actual value.
WHEREFORE, the instant petition is GRANTED in part in that the decision of the Court of Appeals dated March 14, 2005 vis a vis the award of P116,538.00, as and by
way of just compensation for the 19,423 square meters of the respondents property, is SET ASIDE, and the case is ordered REMANDED to the court of origin for the
proper determination of the amount of just compensation for the portion thus taken, based on our pronouncements hereon. The same decision, however, is
AFFIRMED, insofar as it pertains to the award of P325,025.00 for the improvements, with legal interest from the time of actual possession by the petitioner.
No pronouncement as to costs.
SO ORDERED.

National Power Corporation vs. Yunita Tuazon, Rosauro Tuazon and Maria Teresa Tuazon
GR. NO. 193023, June 22, 2011.

DECISION

BRION, J.:

This is a petition for review filed under Rule 45 of the Rules of Court, seeking the reversal of the decision (dated March 15, 2010) of the Court of Appeals
(CA) in CA-G.R. CV No. 82480, which set aside the order of the Regional Trial Court (RTC) of Tarangnan, Samar, Branch 40, and remanded the case back to the RTC for
determination of just compensation. The RTC had dismissed the complaint of respondents Yunita Tuazon, Rosauro Tuazon and Maria Teresa Tuazon against the
National Power Corporation (NAPOCOR) for payment of just compensation and damages.

ANTECEDENTS

The antecedent facts are not in dispute.

The respondents are co-owners of a 136,736-square-meter coconut land in Barangay Sta. Cruz, Tarangnan, Samar. The land has been declared for tax
purposes in the name of the respondents predecessor-in-interest, the late Mr. Pascual Tuazon. Sometime in 1996, NAPOCOR installed transmission lines on a
portion of the land for its 350 KV Leyte-Luzon HVDC Power TL Project. In the process, several improvements on the land were destroyed. Instead of initiating
expropriation proceedings, however, NAPOCOR entered into a mere right-of-way agreement with Mr. Tuazon for the total amount of TWENTY SIX THOUSAND
NINE HUNDRED SEVENTY EIGHT and 21/100 PESOS (P26,978.21). The amount represents payments for damaged improvements (P23,970.00), easement and tower
occupancy fees (P1,808.21), and additional damaged improvements (P1,200.00).

In 2002, the respondents filed a complaint against NAPOCOR for just compensation and damages, claiming that no expropriation proceedings were
made and that they only allowed NAPOCOR entry into the land after being told that the fair market value would be paid. They also stated that lots similarly
located in Catbalogan, Samar, likewise utilized by NAPOCOR for the similar projects, were paid just compensation in sums ranging from P2,000.00 to P2,200.00 per
square meter, pursuant to the determination made by different branches of the RTC in Samar.

Instead of filing an answer, NAPOCOR filed a motion to dismiss based on the full satisfaction of the respondents claims. The RTC granted the motion in
this wise:

ORDER

Acting on the Motion to Dismiss and the Opposition thereto and after a very careful study of the arguments raised by the Parties,
the court resolves in favor of the Defendant.

Accordingly, the Court hereby orders the DISMISSAL of this case without costs.

IT IS SO ORDERED.

Tarangnan, Samar, Philippines, February 3, 2004.

(Sgd.) ROBERTO A. NAVIDAD

Acting Presiding Judge

The assailed decision of the Court of Appeals

The respondents filed an ordinary appeal with the CA. In its Appellees Brief, NAPOCOR denied that expropriation had occurred. Instead, it claimed to
have lawfully established a right-of-way easement on the land per its agreement with Mr. Tuazon, which agreement is in accord with its charter, Republic Act No.
(R.A.) 6395. NAPOCOR maintained that Section 3-A(b) of R.A. 6395 gave it the right to acquire a right-of-way easement upon payment of just compensation
equivalent to not more than 10% of the market value of a private lot traversed by transmission lines.

The CA disagreed with the RTC. Citing National Power Corporation v. Hon. Sylvia G. Aguirre-Paderanga, etc., et al. and National Power Corporation v.
Manubay Agro-Industrial Development Corporation, the CA pointed out that the demolition of the improvements on the land, as well as the installation of
transmission lines thereon, constituted taking under the power of eminent domain, considering that transmission lines are hazardous and restrictive of the lands
use for an indefinite period of time. Hence, the CA held that the respondents were entitled, not just to an easement fee, but to just compensation based on the
full market value of the respondents land. Citing Export Processing Zone Authority v. Hon. Ceferino E. Dulay, etc., et al., the CA maintained that NAPOCOR cannot
hide behind the mantle of Section 3-A(b) of R.A. 6395 as an excuse of dismissing the claim of appellants since the determination of just compensation is a judicial
function. No statute, decree, or executive order can mandate that its own determination shall prevail over the courts findings, the CA added. The dispositive of the
assailed decision reads:

In sum, after establishing that NAPOCORs acquisition of the right-of-way easement over the portion of the appellants land was a
definite taking under the power of eminent domain, NAPOCOR is liable to pay appellants [referring to the respondents herein] just
compensation and not only easement fee.

IN LIGHT OF ALL THE FOREGOING, the Order dated February 3, 2004 of the RTC, Br. 40, Tarangnan, Samar is hereby REVERSED and
SET ASIDE. The instant case is hereby REMANDED to the RTC, Br. 40 of Tarangnan, Samar for the proper determination of just compensation.

The Petition

The present petition reiterates that by installing transmission lines, NAPOCOR did not expropriate the respondents land, but merely established a right-of-way
easement over it. The petition relies heavily on the lack of transfer of the lands title or ownership. NAPOCOR maintains that since the respondents claim involved an
easement, its charter a special law should govern in accordance with Article 635 of the Civil Code. NAPOCOR insists that its agreement with the respondents predecessor-
in-interest and the easement fee that was paid pursuant thereto were authorized by its charter and are, thus, valid and binding. Finally, the petitioner alleges that establishing
right-of-way easements over lands traversed by its transmission lines was the only mode by which it could acquire the properties needed in its power generation and
distribution function. It claims that R.A. 8974, specifically its implementing rules, supports this position.
THE COURT RULING

We find the petition devoid of merit and AFFIRM the remand of the case to the RTC for the determination of just compensation.

The petitioner pleads nothing new. It essentially posits that its liability is limited to the payment of an easement fee for the land traversed by its transmission
lines. It relies heavily on Section 3-A(b) of R.A. 6395 to support this position.

This position has been evaluated and found wanting by this Court in a plethora of cases, including Manubay which was correctly cited by the CA in the assailed
decision.

In Manubay, NAPOCOR sought the reversal of a CA decision that affirmed the payment, as ordered by the RTC in Naga City, of the full value of a property
traversed by NAPOCORs transmission lines for its 350 KV Leyte-Luzon HVDC Power Transmission Project. Through then Associate Justice Artemio V. Panganiban, the
Court echoing the 1991 case of National Power Corporation v. Misericordia Gutierrez, et al. formulated the doctrinal issue in Manubay, as follows:

How much just compensation should be paid for an easement of a right of way over a parcel of land that will be traversed by high-
powered transmission lines? Should such compensation be a simple easement fee or the full value of the property? This is the question to be
answered in this case.

In holding that just compensation should be equivalent to the full value of the land traversed by the transmission lines, we said:

Granting arguendo that what petitioner acquired over respondents property was purely an easement of a right of way, still, we
cannot sustain its view that it should pay only an easement fee, and not the full value of the property. The acquisition of such an easement falls
within the purview of the power of eminent domain. This conclusion finds support in similar cases in which the Supreme Court sustained the
award of just compensation for private property condemned for public use. Republic v. PLDT held thus:

x x x. Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the
expropriated property; but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of
condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to
an easement of right of way.

True, an easement of a right of way transmits no rights except the easement itself, and respondent retains full ownership of the
property. The acquisition of such easement is, nevertheless, not gratis. As correctly observed by the CA, considering the nature and the effect
of the installation power lines, the limitations on the use of the land for an indefinite period would deprive respondent of normal use of the
property. For this reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary
equivalent of the land.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is
not the takers gain, but the owners loss. The word just is used to intensify the meaning of the word compensation and to convey thereby the
idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample.

In eminent domain or expropriation proceedings, the just compensation to which the owner of a condemned property is entitled is
generally the market value. Market value 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 be given and received therefore. (Emphasis ours; citations omitted.)

We find it significant that NAPOCOR does not assail the applicability of Manubay in the present case. Instead, NAPOCOR criticizes the application of
Gutierrez which the CA had cited as authority for the doctrine that eminent domain may also be availed of to impose only a burden upon the owner of condemned
property, without loss of title and possession. NAPOCOR assails Gutierrez as irrelevant on the ground that the expropriation proceedings were instituted in January
1965, when the NAPOCOR Charter had not been amended with the insertion of Section 3-A(b) in 1976. To NAPOCOR, Section 3-A(b) provides for a fixed formula in
the computation of just compensation in cases of acquisition of easements of right-of-way. Heavily relying on Section 3-A(b), therefore, NAPOCOR argues:

Absent any pronouncement regarding the effect of Section 3-A (b) of R.A. 6395, as amended, on the computation of just compensation to be
paid to landowners affected by the erection of transmission lines, NPC v. Gutierrez, supra, should not be deemed controlling in the case at bar.

We do not find NAPOCORs position persuasive.

The application of Gutierrez to the present case is well taken. The facts and issue of both cases are comparable. The right-of-way easement in the case
similarly involved transmission lines traversing privately owned land. It likewise held that the transmission lines not only endangered life and limb, but restricted as well
the owners use of the land traversed. Our pronouncement in Gutierrez that the exercise of the power of eminent domain necessarily includes the imposition of right-of-
way easements upon condemned property without loss of title or possession therefore remains doctrinal and should be applied.
 NAPOCORs protest against the relevancy of Gutierrez, heavily relying as it does on the supposed conclusiveness of Section 3-A(b) of R.A. 6395 on just
compensation due for properties traversed by transmission lines, has no merit. We have held in numerous cases that Section 3-A(b) is not conclusive upon the courts.
In National Power Corporation v. Maria Bagui, et al., we categorically held:

Moreover, Section 3A-(b) of R.A. No. 6395, as amended, is not binding on the Court. It has been repeatedly emphasized that the
determination of just compensation in eminent domain cases is a judicial function and that any valuation for just compensation laid down in
the statutes may serve only as a guiding principle or one of the factors in determining just compensation but it may not substitute the court's
own judgment as to what amount should be awarded and how to arrive at such amount. (Citations omitted.)

The determination of just compensation in expropriation cases is a function addressed to the discretion of the courts, and may not be usurped by any
other branch or official of the government. This judicial function has constitutional raison dtre; Article III of the 1987 Constitution mandates that no private property
shall be taken for public use without payment of just compensation. In National Power Corporation v. Santa Loro Vda. de Capin, et al., we noted with approval the
disquisition of the CA in this matter:

The [herein petitioner] vehemently insists that its Charter [Section 3A (b) of R.A. 6395] obliges it to pay only a maximum of 10% of
the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined
by the assessor, whichever is lower. To uphold such a contention would not only interfere with a judicial function but would also render as
useless the protection guaranteed by our Constitution in Section 9, Article III of our Constitution that no private property shall be taken for
public use without payment of just compensation.

The same principle further resolves NAPOCORs contention that R.A. 8974, specifically its implementing rules, supports NAPOCORs claim that it is liable to
the respondents for an easement fee, not for the full market value of their land. We amply addressed this same contention in Purefoods where we held that:
While Section 3(a) of R.A. No. 6395, as amended, and the implementing rule of R.A. No. 8974 indeed state that only 10% of the
market value of the property is due to the owner of the property subject to an easement of right-of-way, said rule is not binding on the Court.
Well-settled is the rule that the determination of just compensation in eminent domain cases is a judicial function. In Export Processing Zone
Authority v. Dulay, the Court held that any valuation for just compensation laid down in the statutes may serve only as guiding principle or one
of the factors in determining just compensation but it may not substitute the court's own judgment as to what amount should be awarded and
how to arrive at such amount. The executive department or the legislature may make the initial determinations but when a party claims a
violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute,
decree, or executive order can mandate that its own determination shall prevail over the court's findings. Much less can the courts be
precluded from looking into the "justness" of the decreed compensation. (Citations omitted.)

That the respondents predecessor-in-interest did not oppose the installation of transmission lines on their land is irrelevant. In the present petition,
NAPOCOR insinuates that Mr. Tuazons failure to oppose the instillation now estops the respondents from their present claim. This insinuation has no legal basis. Mr.
Tuazons failure to oppose cannot have the effect of thwarting the respondents right to just compensation. In Rafael C. de Ynchausti v. Manila Electric Railroad & Light
Co., et al., we ruled:

The owner of land, who stands by, without objection, and sees a public railroad constructed over it, can not, after the road is
completed, or large expenditures have been made thereon upon the faith of his apparent acquiescence, reclaim the land, or enjoin its use by
the railroad company. In such case there can only remain to the owner a right of compensation. (Goodin v. Cin. And Whitewater Canal Co., 18
Ohio St., 169.)

One who permits a railroad company to occupy and use his land and construct its road thereon without remonstrance or complaint,
cannot afterwards reclaim it free from the servitude he has permitted to be imposed upon it. His acquiescence in the company's taking
possession and constructing its works under circumstances which made imperative his resistance, if he ever intended to set up illegality, will be
considered a waiver. But while this presumed waiver is a bar to his action to dispossess the company, he is not deprived of his action for
damages for the value of the land, or for injuries done him by the construction or operation of the road. (St. Julien v. Morgan etc., Railroad Co.,
35 La. Ann., 924.)

In sum, we categorically hold that private land taken for the installation of transmission lines is to be paid the full market value of the land as just
compensation. We so ruled in National Power Corporation v. Benjamin Ong Co, and we reiterate this ruling today:

As earlier mentioned, Section 3A of R.A. No. 6395, as amended, substantially provides that properties which will be traversed by
transmission lines will only be considered as easements and just compensation for such right of way easement shall not exceed 10 percent of
the market value. However, this Court has repeatedly ruled that when petitioner takes private property to construct transmission lines, it is
liable to pay the full market value upon proper determination by the courts. (Citations omitted.)

WHEREFORE, premises considered, we DENY the present petition for review and AFFIRM the assailed decision of the Court of Appeals, promulgated on
March 15, 2010, in CA-G.R. CV No. 82480.

SO ORDERED.

G.R. No. 186069 January 30, 2013

SPOUSES JESUS L. CABAHUG AND CORONACION M. CABAHUG, Petitioners,
vs.
NATIONAL POWER CORPORATION, Respondent.
DECISION
PEREZ, J.:
This Rule 45 Petition for Review on Certiorari seeks the reversal of (a) the 16 May 2007 Decision1 rendered by the Eighteenth Division of the Court of Appeals (CA) in
CA-G.R. CV No. 67331 which reversed the 14 March 2000 Decision rendered by the Regional Trial Court (RTC), Branch 17, Palompon, Leyte, in Civil Case No. PN-0213
and ordered the dismissal of the complaint for just compensation tiled by petitioners Spouses Jesus L. Cabahug and Coronacion M. Cabahug (Spouses Cabahug)
against respondent National Power Corporation (NPC);2 and (b) the CA's Resolution dated 9 January 2009, denying the motion for reconsideration of the 16 May 2007
Decision for lack of merit.3
The facts are not in dispute.
The Spouses Cabahug are the owners of two parcels of land situated in Barangay Capokpok, Tabango, Leyte, registered in their names under Transfer Certificate of
Title (TCT) Nos. T-9813 and T-1599 of the Leyte provincial registry.4 They were among the defendants in Special Civil
Action No. 0019-PN, a suit for expropriation earlier filed by NPC before the RTC, in connection with its Leyte-Cebu Interconnection Project. The suit was later
dismissed when NPC opted to settle with the landowners by paying an easement fee equivalent to 10% of value of their property in accordance with Section 3-A of
Republic Act (RA) No. 6395.5 In view of the conflicting land values presented by the affected landowners, it appears that the Leyte Provincial Appraisal Committee,
upon request of NPC, fixed the valuation of the affected properties at P45.00 per square meter.6
On 9 November 1996, Jesus Cabahug executed two documents denominated as Right of Way Grant in favor of NPC. For and in consideration of the easement fees in
the sums of P112,225.50 and P21,375.00, Jesus Cabahug granted NPC a continuous easement of right of way for the latters transmissions lines and their
appurtenances over 24,939 and 4,750 square meters of the parcels of land covered by TCT Nos. T-9813 and T-1599, respectively. By said grant, Jesus Cabahug agreed
not to construct any building or structure whatsoever, nor plant in any area within the Right of Way that will adversely affect or obstruct the transmission line of NPC,
except agricultural crops, the growth of which will not exceed three meters high. Under paragraph 4 of the grant, however, Jesus Cabahug reserved the option to
seek additional compensation for easement fee, based on the Supreme Courts 18 January 1991 Decision in G.R. No. 60077, entitled National Power Corporation v.
Spouses Misericordia Gutierrez and Ricardo Malit, et al. (Gutierrez).7
On 21 September 1998, the Spouses Cabahug filed the complaint for the payment of just compensation, damages and attorneys fees against NPC which was
docketed as Civil Case No. PN-0213 before the RTC. Claiming to have been totally deprived of the use of the portions of land covered by TCT Nos. T-9813 and T-1599,
the Spouses Cabahug alleged, among other matters, that in accordance with the reservation provided under paragraph 4 of the aforesaid grant, they have demanded
from NPC payment of the balance of the just compensation for the subject properties which, based on the valuation fixed by the Leyte Provincial Appraisal
Committee, amounted to P1,202,404.50.8 In its answer, on the other hand, NPC averred that it already paid the full easement fee mandated under Section 3-A of RA
6395 and that the reservation in the grant referred to additional compensation for easement fee, not the full just compensation sought by the Spouses Cabahug.9
Acting on the motion for judgment on the pleadings that was filed by the Spouses Cabahug, the RTC went on to render a Decision dated 14 March 2000. Brushing
aside NPCs reliance on Section 3-A of RA 6395, the RTC applied the ruling handed down by this Court in Gutierrez to the effect that NPCs easement of right of way
which indefinitely deprives the owner of their proprietary rights over their property falls within the purview of the power of eminent domain.10 As a consequence, the
RTC disposed of the complaint in the following wise:
WHEREFORE, premises considered, judgment is hereby rendered for the Spouses Cabahug and against NPC, ordering NPC:
1. To pay the Spouses Cabahug the sum of ONE MILLION THREE HUNDRED THIRTY SIX THOUSAND and FIVE PESOS (P1,336,005.00) together with the legal
rate of interest thereon per annum reckoned from January 3, 1997 less the amount previously paid by NPC to the Spouses Cabahug for easement fee only;
2. To pay the Spouses Cabahug the sum equivalent to FIVE (5%) PERCENT of the amount mentioned in the next preceding paragraph for attorneys fees;
and
3. To pay the Spouses Cabahug the sum of TWENTY THOUSAND (P20,000.00) PESOS for actual damages and litigation expenses plus costs of the
proceedings.
SO ORDERED.11
Aggrieved by the foregoing decision, the NPC perfected the appeal which was docketed as CA-G.R. CV No. 67331 before the CA which, on 16 May 2007, rendered the
herein assailed decision, reversing and setting aside the RTCs appealed decision. Finding that the facts of a case are different from those obtaining in Gutierrez and
that Section 3-A of RA 6395 only allows NPC to acquire an easement of right of way over properties traversed by its transmission lines,12 the CA succinctly ruled as
follows:
Unfortunately, the Spouses Cabahug had already accepted the payment of easement fee, pursuant to R.A. 6395, as amended, way back in 1996. Therefore, NPCs
easement of right of way has for all legal intents and purposes, been established as far back as 1996. Since vested right has already accrued in favor of NPC, to allow
the Spouses Cabahug to pursue this case when the easement of right of way had already been consummated would be in violation of the contract. The contracting
parties, the Spouses Cabahug and NPC had already conformed with the terms and conditions of the agreement. To allow the Spouses Cabahug to again collect from
NPC payment of just compensation would amount to unjust enrichment at the expense of NPC and would sanction violation of the parties contract, which the
Spouses Cabahug cannot do in the case at bench. Further, the award of attorneys fees and litigation expenses and the costs of suit in favor of the Spouses Cabahug
cannot be justified in the case at bar since it appears that the complaint actually has no legal basis.13
The Spouses Cabahugs motion for reconsideration of the 16 May 2007 Decision14 was denied for lack of merit in the CAs Resolution dated 9 January 2009. Hence,
this petition for review on certiorari.15 In urging the reversal of the CAs assailed Decision and Resolution, the Spouses Cabahug argue that the CA erred: (a) in
disregarding paragraph 4 of the Grant of Right of Way whereby Jesus Cabahug reserved the right to seek additional compensation for easement fee; and (b) in not
applying this Courts ruling in Gutierrez case.16 In representation of NPC, on the other hand, the Office of the Solicitor General (OSG) argues that the sums paid in
1996 by way of easement fees represent the full amount allowed by law and agreed upon by the parties. Considering that Gutierrez concerned the payment of just
compensation for property expropriated by the NPC, the OSG maintains the CA did not err in according scant consideration to the Spouses Cabahugs invocation of
the ruling in said case.17
We find the petition impressed with merit.
The CA regarded the Grant of Right of Way executed by Jesus Cabahug in favor of NPC as a valid and binding contract between the parties, a fact affirmed by the OSG
in its 8 October 2009 Comment to the petition at bench.18 Given that the parties have already agreed on the easement fee for the portions of the subject parcels
traversed by NPCs transmissions lines, the CA ruled that the Spouses Cabahugs attempt to collect further sums by way of additional easement fee and/or just
compensation is violative of said contract and tantamount to unjust enrichment at the expense of NPC. As correctly pointed out by the Spouses Cabahug, however,
the CAs ruling totally disregards the fourth paragraph of the Grant executed by Jesus Cabahug which expressly states as follows:
That I hereby reserve the option to seek additional compensation for Easement Fee, based on the Supreme Court Decision in G.R. No. 60077, promulgated on January
18, 1991, which jurisprudence is designated as "NPC vs. Gutierrez" case.19
From the foregoing reservation, it is evident that the Spouses Cabahugs receipt of the easement fee did not bar them from seeking further compensation from NPC.
Even by the basic rules in the interpretation of contracts, we find that the CA erred in holding that the payment of additional sums to the Spouses Cabahug would be
violative of the parties contract and amount to unjust enrichment. Indeed, the rule is settled that a contract constitutes the law between the parties who are bound
by its stipulations20 which, when couched in clear and plain language, should be applied according to their literal tenor.21 Courts cannot supply material stipulations,
read into the contract words it does not contain22 or, for that matter, read into it any other intention that would contradict its plain import.23 Neither can they rewrite
contracts because they operate harshly or inequitably as to one of the parties, or alter them for the benefit of one party and to the detriment of the other, or by
construction, relieve one of the parties from the terms which he voluntarily consented to, or impose on him those which he did not.24
Considering that Gutierrez was specifically made the point of reference for Jesus Cabahugs reservation to seek further compensation from NPC, we find that the CA
likewise erred in finding that the ruling in said case does not apply to the case at bench. Concededly, the NPC was constrained to file an expropriation complaint in
Gutierrez due to the failure of the negotiations for its acquisition of an easement of right of way for its transmission lines. The issue that was eventually presented for
this Courts resolution, however, was the propriety of making NPC liable for the payment of the full market value of the affected property despite the fact that
transfer of title thereto was not required by said easement. In upholding the landowners right to full just compensation, the Court ruled that the power of eminent
domain may be exercised although title is not transferred to the expropriator in an easement of right of way. Just compensation which should be neither more nor
less than the money equivalent of the property is, moreover, due where the nature and effect of the easement is to impose limitations against the use of the land for
an indefinite period and deprive the landowner its ordinary use.
Even without the reservation made by Jesus Cabahug in the Grant of Right of Way, the application of Gutierrez to this case is not improper as NPC represents it to be.
Where the right of way easement, as in this case, similarly involves transmission lines which not only endangers life and limb but restricts as well the owner's use of
the land traversed thereby, the ruling in Gutierrez remains doctrinal and should be applied.25 It has been ruled that the owner should be compensated for the
monetary equivalent of the land if, as here, the easement is intended to perpetually or indefinitely deprive the owner of his proprietary rights through the imposition
of conditions that affect the ordinary use, free enjoyment and disposal of the property or through restrictions and limitations that are inconsistent with the exercise
of the attributes of ownership, or when the introduction of structures or objects which, by their nature, create or increase the probability of injury, death upon or
destruction of life and property found on the land is necessary.26 Measured not by the takers gain but the owners loss, just compensation is defined as the full and
fair equivalent of the property taken from its owner by the expropriator.271wphi1
Too, the CA reversibly erred in sustaining NPCs reliance on Section 3-A of RA 6395 which states that only 10% of the market value of the property is due to the owner
of the property subject to an easement of right of way. Since said easement falls within the purview of the power of eminent domain, NPCs utilization of said
provision has been repeatedly struck down by this Court in a number of cases.28 The determination of just compensation in eminent domain proceedings is a judicial
function and no statute, decree, or executive order can mandate that its own determination shall prevail over the court's findings.29 Any valuation for just
compensation laid down in the statutes may serve only as a guiding principle or one of the factors in determining just compensation, but it may not substitute the
court's own judgment as to what amount should be awarded and how to arrive at such amount.30 Hence, Section 3A of R.A. No. 6395, as amended, is not binding
upon this Court.31
In this case, the Leyte Provincial Appraisal Committee fixed the valuation of the affected properties at P45.00 per square meter at the instance of NPC. Considering
that the installation of the latters transmission lines amounted to the taking of 24,939 and 4,750 square meters from the parcels of land covered by TCT Nos. T-9813
and T-1599 or a total of 29,689 square meters, the RTC correctly determined that the Spouses Cabahug are entitled to P1,336,005.00 (29,689 x P45.00) by way of just
compensation for their properties. Inasmuch as NPC had already paid the sums of P112,225.50 and P21,375.00 as easement fee, the sum of P133,600.50 should be
deducted from P1,336,005.00 for a remaining balance of P1,202,404.50. To this latter sum, the RTC also correctly imposed legal interest since the Spouses Cabahug,
as landowners, are entitled to the payment of legal interest on the compensation for the subject lands from the time of the taking of their possession up to the time
that full payment is made by petitioner. In accordance with jurisprudence, the legal interest allowed in payment of just compensation for lands expropriated for
public use is six percent (6%) per annum.32
For want of a statement of the rationale for the award in the body of the RTCs 14 March 2000 Decision, we are constrained, however, to disallow the grant of
attorneys fees in favor of the Spouses Cabahug in an amount equivalent to 5% of the just compensation due as well as the legal interest thereon. Considered the
exception rather than the general rule, the award of attorneys fees is not due every time a party prevails in a suit because of the policy that no premium should be
set on the right to litigate.33 The RTC's award of litigation expenses should likewise be deleted since, like attorney's fees, the award thereof requires that the reasons
or grounds therefor must be set forth in the decision of the court.34 This is particularly true in this case where the litigation expenses awarded were alternatively
categorized by the RTC as actual damages which, by jurisprudence, should be pleaded and adequately proved. Time and again, it has been ruled that the fact and
amount of actual damages cannot be based on speculation, conjecture or guess work, but must depend on actual proof.35
WHEREFORE, premises considered, the petition is GRANTED and the CA's assailed 16 May 2007 Decision and 9 January 2009 Resolution are, accordingly, REVERSED
and SET ASIDE. In lieu thereof, another is entered REINSTATING the RTC's 14 March 2000 Decision, subject to the MODIFICATION that the awards of attorney's fees,
actual damages and/or litigation expenses are DELETED.
SO ORDERED.

CRISPIN DICHOSO, JR., EVELYN DICHOSO VALDEZ, and ROSEMARIE DICHOSO PE BENITO, Petitioners,- versus -PATROCINIO L. MARCOS,Respondent.
G.R. No. 180282, April 11, 2011.

DECISION

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside the Court of Appeals (CA) Decision[1] dated January 31,
2007 and Resolution[2] dated October 23, 2007 in CA-G.R. CV No. 85471. The assailed Decision reversed and set aside the July 15, 2005 decision[3] of the Regional
Trial Court (RTC) of Laoag City, Branch 14, in Civil Case No. 12581-14; while the assailed Resolution denied the Motion for Reconsideration filed by petitioners Crispin
Dichoso, Jr., Evelyn Dichoso Valdez, and Rosemarie Dichoso Pe Benito.

The facts of the case, as culled from the records, are as follows:

On August 2, 2002, petitioners filed a Complaint for Easement of Right of Way[4] against respondent Patrocinio L. Marcos. In their complaint, petitioners alleged that
they are the owners of Lot No. 21553 of the Cadastral Survey of Laoag City, covered by Transfer Certificate of Title No. T-31219; while respondent is the owner of Lot
No. 1. As petitioners had no access to a public road to and from their property, they claimed to have used a portion of Lot No. 1 in accessing the road since 1970.
Respondent, however, blocked the passageway with piles of sand. Though petitioners have been granted another passageway by the spouses Benjamin and Sylvia
Arce (Spouses Arce), the owners of another adjacent lot, designated as Lot No. 21559-B, the former instituted the complaint before the RTC and prayed that:

WHEREFORE, it is respectfully prayed of this Honorable Court that judgment be rendered:

1. Granting the plaintiffs right of way over an area of 54 square meters more or less of Lot 01 by paying the defendant the amount of P54,000.00, and that the right
be annotated on defendants title;

2. Ordering the defendant to pay the plaintiffs the sum of P30,000.00 as damages for attorneys fees and costs of suit;

Other reliefs, just and equitable under the premises, are likewise sought.[5]

Instead of filing an Answer, respondent moved[6] for the dismissal of the complaint on the ground of lack of cause of action and noncompliance with the requisite
certificate of non-forum shopping.

During the hearing on respondents motion to dismiss, the parties agreed that an ocular inspection of the subject properties be conducted. After the inspection, the
RTC directed the parties to submit their respective position papers.

In a resolution[7] dated May 12, 2004, the RTC denied respondents motion to dismiss and required the latter to answer petitioners complaint.

In his Answer,[8] respondent denied that he allowed anybody to use Lot No. 1 as passageway. He stated that petitioners claim of right of way is only due to
expediency and not necessity. He also maintained that there is an existing easement of right of way available to petitioners granted by the Spouses Arce. Thus, there
is no need to establish another easement over respondents property.

In an Order[9] dated July 6, 2005, the RTC declared that respondents answer failed to tender an issue, and opted to render judgment on the pleadings and thus
deemed the case submitted for decision.

On July 15, 2005, the RTC rendered a decision[10] in favor of petitioners, the dispositive portion of which reads, as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered, as follows:

1. granting plaintiffs a right of way over an area of 54 square meters more or less over Lot 01 owned by defendant Patrocinio L. [Marcos] appearing in the Laoag
City Assessors sketch (Annex A) found on page 28 of the record of the case;

2. ordering plaintiffs to pay defendant the amount of P54,000.00 as proper indemnity; and

3. ordering the Register of Deeds of Laoag City to duly annotate this right of way on defendants title to the property.

SO ORDERED.[11]

The RTC found that petitioners adequately established the requisites to justify an easement of right of way in accordance with Articles 649 and 650 of the Civil Code.
The trial court likewise declared petitioners in good faith as they expressed their willingness to pay proper indemnity.[12]

On appeal, the CA reversed and set aside the RTC decision and consequently dismissed petitioners complaint. Considering that a right of way had already been
granted by the (other) servient estate, designated as Lot No. 21559-B and owned by the Spouses Arce, the appellate court concluded that there is no need to
establish an easement over respondents property. The CA explained that, while the alternative route through the property of the Spouses Arce is longer and
circuitous, said access road is adequate. It emphasized that the convenience of the dominant estate is never the gauge for the grant of compulsory right of way. Thus,
the opening of another passageway is unjustified.[13]

Aggrieved, petitioners come before this Court, raising the following issues:

I.
CAN PETITIONERS BE ENTITLED TO A GRANT OF LEGAL EASEMENT OF RIGHT OF WAY FROM THEIR LANDLOCKED PROPERTY THROUGH THE PROPERTY OF PRIVATE
RESPONDENT WHICH IS THE SHORTEST ROUTE IN GOING TO AND FROM THEIR PROPERTY TO THE PUBLIC STREET AND WHERE THEY USED TO PASS?

II.
CAN RESPONDENT REFUSE TO GRANT A RIGHT OF WAY ON THE DESIRED PASSAGEWAY WHICH HE CLOSED SINCE THERE IS ANOTHER PASSAGEWAY WHICH IS MORE
CIRCUITOUS AND BURDENSOME AND IS BELATEDLY OFFERED UNTO PETITIONERS?
III.
CAN PETITIONERS BE COMPELLED TO AVAIL OF A LEGAL EASEMENT OF RIGHT OF WAY THROUGH THE PROPERTY OF ARCE WHICH WAS BELATEDLY OFFERED BUT HAS
BEEN FORECLOSED BY THE BANK AND WHEREIN THE LATTER IS NOT A PARTY TO THE CASE?[14]

The petition is without merit.

It is already a well-settled rule that the jurisdiction of this Court in cases brought before it from the CA by virtue of Rule 45 of the Rules of Court is limited to
reviewing errors of law. Findings of fact of the CA are conclusive upon this Court. There are, however, recognized exceptions to the foregoing rule, namely:

(1) when the findings are grounded entirely on speculation, surmises, or conjectures;

(2) when the inference made is manifestly mistaken, absurd, or impossible;

(3) when there is grave abuse of discretion;

(4) when the judgment is based on a misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when, in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the
appellee;

(7) when the findings are contrary to those of the trial court;

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

(9) when the facts set forth in the petition, as well as in the petitioner's main and reply briefs, are not disputed by the respondent; and

(10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.[15]

The present case falls under the 7th exception, as the RTC and the CA arrived at conflicting findings of fact and conclusions of law.

The conferment of a legal easement of right of way is governed by Articles 649 and 650 of the Civil Code, quoted below for easy reference:[16]

Article 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other
persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper
indemnity.

Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the
servient estate without a permanent way, the indemnity shall consist in the payment of the damages caused by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the proprietors own acts.

Article 650. The easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the
distance from the dominant estate to a public highway may be the shortest.

To be entitled to an easement of right of way, the following requisites should be met:

1. The dominant estate is surrounded by other immovables and has no adequate outlet to a public highway;
2. There is payment of proper indemnity;
3. The isolation is not due to the acts of the proprietor of the dominant estate; and
4. The right of way claimed is at the point least prejudicial to the servient estate; and insofar as consistent with this rule, where the distance from the dominant
estate to a public highway may be the shortest.[17]
Petitioners may be correct in the theoretical reading of Articles 649 and 650 of the Civil Code, but they nevertheless failed to show sufficient factual evidence to
satisfy the above-enumerated requirements.[18]

It must be stressed that, by its very nature, and when considered with reference to the obligations imposed on the servient estate, an easement involves an abnormal
restriction on the property rights of the servient owner and is regarded as a charge or encumbrance on the servient estate. It is incumbent upon the owner of the
dominant estate to establish by clear and convincing evidence the presence of all the preconditions before his claim for easement of right of way may be granted.[19]
Petitioners failed in this regard.

Admittedly, petitioners had been granted a right of way through the other adjacent lot owned by the Spouses Arce. In fact, other lot owners use the said outlet in
going to and coming from the public highway. Clearly, there is an existing outlet to and from the public road.

However, petitioners claim that the outlet is longer and circuitous, and they have to pass through other lots owned by different owners before they could get to the
highway. We find petitioners concept of what is adequate outlet a complete disregard of the well-entrenched doctrine that in order to justify the imposition of an
easement of right of way, there must be real, not fictitious or artificial, necessity for it. Mere convenience for the dominant estate is not what is required by law as
the basis of setting up a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing the easement, the same should not be
imposed.[20]

We quote with approval the CAs observations in this wise:

As it shows, [petitioners] had been granted a right of way through the adjacent estate of Spouses Arce before the complaint below was even filed. [Respondent]
alleged that this right of way is being used by the other estates which are similarly situated as [petitioners]. [Petitioners] do not dispute this fact. There is also a
reason to believe that this right of way is Spouses Arces outlet to a public road since their property, as it appears from the Sketch Map, is also surrounded by other
estates. The fact that Spouses Arce are not insisting on a right of way through respondents property, although an opening on the latters property is undoubtedly the
most direct and shortest distance to P. Gomez St. from the formers property, bolsters our conviction that they have adequate outlet to the highway which they are
now likewise making available to [petitioners].

The convenience of the dominant estate has never been the gauge for the grant of compulsory right of way. To be sure, the true standard for the grant of the legal
right is adequacy. Hence, when there is already an existing adequate outlet from the dominant estate to a public highway, as in this case, even when the said outlet,
for one reason or another, be inconvenient, the need to open up another servitude is entirely unjustified.[21]
Thus, in Cristobal v. CA,[22] the Court disallowed the easement prayed for because an outlet already exists which is a path walk located at the left side of petitioners
property and which is connected to a private road about five hundred (500) meters long. The private road, in turn, leads to Ma. Elena Street, which is about 2.5
meters wide, and finally, to Visayas Avenue. This outlet was determined by the Court to be sufficient for the needs of the dominant estate.
Also in Floro v. Llenado,[23] we refused to impose a right of way over petitioners property although private respondents alternative route was admittedly
inconvenient because he had to traverse several ricelands and rice paddies belonging to different persons, not to mention that said passage is impassable during the
rainy season.

And in Ramos v. Gatchalian Realty, Inc.,[24] this Court refused to grant the easement prayed for even if petitioner had to pass through lots belonging to other
owners, as temporary ingress and egress, which lots were grassy, cogonal, and greatly inconvenient due to flood and mud because such grant would run counter to
the prevailing jurisprudence that mere convenience for the dominant estate does not suffice to serve as basis for the easement.[25]

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated January 31, 2007 and Resolution dated October 23, 2007 in CA-G.R.
CV No. 85471 are AFFIRMED.

SO ORDERED.

G.R. No. L-3422 June 13, 1952

HIDALGO ENTERPRISES, INC., petitioner, vs.GUILLERMO BALANDAN, ANSELMA ANILA and THE COURT OF APPEALS, respondents.
Quisumbing, Sycip, Quisumbing and Salazar for petitioner.
Antonio M. Moncado for respondents.
BENGZON, J.:
This is an appeal by certiorari, from a decision of the Court of Appeals requiring Hidalgo Enterprises, Inc. to pay Guillermo Balandan and his wife, damages in the sum
of P2,000 for the death of their son Mario.
It appears that the petitioner Hidalgo Enterprises, Inc. "was the owner of an ice-plant factory in the City of San Pablo, Laguna, in whose premises were installed two
tanks full of water, nine feet deep, for cooling purposes of its engine. While the factory compound was surrounded with fence, the tanks themselves were not
provided with any kind of fence or top covers. The edges of the tanks were barely a foot high from the surface of the ground. Through the wide gate entrance, which
is continually open, motor vehicles hauling ice and persons buying said commodity passed, and any one could easily enter the said factory, as he pleased. There was
no guard assigned on the gate. At about noon of April 16, 1948, plaintiff's son, Mario Balandan, a boy barely 8 years old, while playing with and in company of other
boys of his age entered the factory premises through the gate, to take a bath in one of said tanks; and while thus bathing, Mario sank to the bottom of the tank, only
to be fished out later, already a cadaver, having been died of "asphyxia secondary to drowning."
The Court of Appeals, and the Court of First Instance of Laguna, took the view that the petitioner maintained an attractive nuisance (the tanks), and neglected to
adopt the necessary precautions to avoid accidents to persons entering its premises. It applied the doctrine of attractive nuisance, of American origin, recognized in
this Jurisdiction in Taylor vs. Manila Electric 16 Phil., 8.
The doctrine may be stated, in short, as follows: One who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children
in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of tender years who is injured
thereby, even if the child is technically a trespasser in the premises. (See 65 C.J.S., p. 455.)
The principle reason for the doctrine is that the condition or appliance in question although its danger is apparent to those of age, is so enticing or alluring to children
of tender years as to induce them to approach, get on or use it, and this attractiveness is an implied invitation to such children (65 C.J.S., p. 458).
Now, is a swimming pool or water tank an instrumentality or appliance likely to attract the little children in play? In other words is the body of water an attractive
nuisance?
The great majority of American decisions say no.
The attractive nuisance doctrine generally is not applicable to bodies of water, artificial as well as natural, in the absence of some unusual condition or
artificial feature other than the mere water and its location.
There are numerous cases in which the attractive nuisance doctrine has not been held not to be applicable to ponds or reservoirs, pools of water, streams,
canals, dams, ditches, culverts, drains, cesspools or sewer pools, . . . (65 C.J.S., p. 476 et seg. citing decisions of California, Georgia, Idaho, Illinois, Kansas,
Iowa, Louisiana, Miss., Missouri, Montana, Oklahoma, Pennsylvania, Tennessee, Texas, Nebraska, Wisconsin.)
In fairness to the Court of Appeals it should be stated that the above volume of Corpus Juris Secundum was published in 1950, whereas its decision was promulgated
on September 30, 1949.
The reason why a swimming pool or pond or reservoir of water is not considered an attractive nuisance was lucidly explained by the Indiana Appellate Court as
follows:
Nature has created streams, lakes and pools which attract children. Lurking in their waters is always the danger of drowning. Against this danger children
are early instructed so that they are sufficiently presumed to know the danger; and if the owner of private property creates an artificial pool on his own
property, merely duplicating the work of nature without adding any new danger, . . . (he) is not liable because of having created an "attractive nuisance."
Anderson vs. Reith-Riley Const. Co., N. E., 2nd, 184, 185; 112 Ind. App., 170.
Therefore, as petitioner's tanks are not classified as attractive nuisance, the question whether the petitioner had taken reasonable precautions becomes immaterial.
And the other issue submitted by petitioner that the parents of the boy were guilty of contributory negligence precluding recovery, because they left for Manila on
that unlucky day leaving their son under the care of no responsible individual needs no further discussion.
The appealed decision is reversed and the Hidalgo Enterprises, Inc. is absolved from liability. No costs.

EMILIO GANCAYCO vs. CITY GOVERNMENT OF QUEZON CITY AND METRO MANILA DEVELOPMENT AUTHORITY
GR NO. 177807
x----------------------x
METRO MANILA DEVELOPMENT AUTHORITY, vs. JUSTICE EMILIO A. GANCAYCO (Retired),
G.R. No. 177933, October 11, 2011.

DECISION

SERENO, J.:

Before us are consolidated Petitions for Review under Rule 45 of the Rules of Court assailing the Decision promulgated on 18 July 2006 and the Resolution
dated 10 May 2007 of the Court of Appeals in CA-G.R. SP No. 84648.
The Facts
In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of land located at 746 Epifanio delos Santos Avenue (EDSA), Quezon City with an area
of 375 square meters and covered by Transfer Certificate of Title (TCT) No. RT114558.
On 27 March 1956, the Quezon City Council issued Ordinance No. 2904, entitled An Ordinance Requiring the Construction of Arcades, for Commercial
Buildings to be Constructed in Zones Designated as Business Zones in the Zoning Plan of Quezon City, and Providing Penalties in Violation Thereof.
An arcade is defined as any portion of a building above the first floor projecting over the sidewalk beyond the first storey wall used as protection for
pedestrians against rain or sun.
Ordinance No. 2904 required the relevant property owner to construct an arcade with a width of 4.50 meters and height of 5.00 meters along EDSA, from
the north side of Santolan Road to one lot after Liberty Avenue, and from one lot before Central Boulevard to the Botocan transmission line.
At the outset, it bears emphasis that at the time Ordinance No. 2904 was passed by the city council, there was yet no building code passed by the national
legislature. Thus, the regulation of the construction of buildings was left to the discretion of local government units. Under this particular ordinance, the city council
required that the arcade is to be created by constructing the wall of the ground floor facing the sidewalk a few meters away from the property line. Thus, the building
owner is not allowed to construct his wall up to the edge of the property line, thereby creating a space or shelter under the first floor. In effect, property owners
relinquish the use of the space for use as an arcade for pedestrians, instead of using it for their own purposes.
 The ordinance was amended several times. On 8 August 1960, properties located at the Quezon City-San Juan boundary were exempted by Ordinance No.
60-4477 from the construction of arcades. This ordinance was further amended by Ordinance No. 60-4513, extending the exemption to commercial buildings from
Balete Street to Seattle Street. Ordinance No. 6603 dated 1 March 1966 meanwhile reduced the width of the arcades to three meters for buildings along V. Luna
Road, Central District, Quezon City.
The ordinance covered the property of Justice Gancayco. Subsequently, sometime in 1965, Justice Gancayco sought the exemption of a two-storey
building being constructed on his property from the application of Ordinance No. 2904 that he be exempted from constructing an arcade on his property.
On 2 February 1966, the City Council acted favorably on Justice Gancaycos request and issued Resolution No. 7161, S-66, subject to the condition that
upon notice by the City Engineer, the owner shall, within reasonable time, demolish the enclosure of said arcade at his own expense when public interest so
demands.
Decades after, in March 2003, the Metropolitan Manila Development Authority (MMDA) conducted operations to clear obstructions along the sidewalk of
EDSA in Quezon City pursuant to Metro Manila Councils (MMC) Resolution No. 02-28, Series of 2002. The resolution authorized the MMDA and local government
units to clear the sidewalks, streets, avenues, alleys, bridges, parks and other public places in Metro Manila of all illegal structures and obstructions.
On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco alleging that a portion of his building violated the National Building Code of
the Philippines (Building Code) in relation to Ordinance No. 2904. The MMDA gave Justice Gancayco fifteen (15) days to clear the portion of the building that was
supposed to be an arcade along EDSA.
Justice Gancayco did not comply with the notice. Soon after the lapse of the fifteen (15) days, the MMDA proceeded to demolish the party wall, or what
was referred to as the wing walls, of the ground floor structure. The records of the present case are not entirely clear on the extent of the demolition; nevertheless,
the fact of demolition was not disputed. At the time of the demolition, the affected portion of the building was being used as a restaurant.
On 29 May 2003, Justice Gancayco filed a Petition with prayer for a temporary restraining order and/or writ of preliminary injunction before the Regional
Trial Court (RTC) of Quezon City, docketed as Civil Case No. Q03-49693, seeking to prohibit the MMDA and the City Government of Quezon City from demolishing his
property. In his Petition, he alleged that the ordinance authorized the taking of private property without due process of law and just compensation, because the
construction of an arcade will require 67.5 square meters from the 375 square meter property. In addition, he claimed that the ordinance was selective and
discriminatory in its scope and application when it allowed the owners of the buildings located in the Quezon City-San Juan boundary to Cubao Rotonda, and Balete
to Seattle Streets to construct arcades at their option. He thus sought the declaration of nullity of Ordinance No. 2904 and the payment of damages. Alternately, he
prayed for the payment of just compensation should the court hold the ordinance valid.
The City Government of Quezon City claimed that the ordinance was a valid exercise of police power, regulating the use of property in a business zone. In
addition, it pointed out that Justice Gancayco was already barred by estoppel, laches and prescription.
Similarly, the MMDA alleged that Justice Gancayco could not seek the nullification of an ordinance that he had already violated, and that the ordinance
enjoyed the presumption of constitutionality. It further stated that the questioned property was a public nuisance impeding the safe passage of pedestrians. Finally,
the MMDA claimed that it was merely implementing the legal easement established by Ordinance No. 2904.
The RTC rendered its Decision on 30 September 2003 in favor of Justice Gancayco. It held that the questioned ordinance was unconstitutional, ruling that it
allowed the taking of private property for public use without just compensation. The RTC said that because 67.5 square meters out of Justice Gancaycos 375 square
meters of property were being taken without compensation for the publics benefit, the ordinance was confiscatory and oppressive. It likewise held that the ordinance
violated owners right to equal protection of laws. The dispositive portion thus states:
WHEREFORE, the petition is hereby granted and the Court hereby declares Quezon City Ordinance No. 2094, Series of 1956 to be
unconstitutional, invalid and void ab initio. The respondents are hereby permanently enjoined from enforcing and implementing the said
ordinance, and the respondent MMDA is hereby directed to immediately restore the portion of the party wall or wing wall of the building of the
petitioner it destroyed to its original condition.

IT IS SO ORDERED.
The MMDA thereafter appealed from the Decision of the trial court. On 18 July 2006, the Court of Appeals (CA) partly granted the appeal. The CA upheld
the validity of Ordinance No. 2904 and lifted the injunction against the enforcement and implementation of the ordinance. In so doing, it held that the ordinance was
a valid exercise of the right of the local government unit to promote the general welfare of its constituents pursuant to its police powers. The CA also ruled that the
ordinance established a valid classification of property owners with regard to the construction of arcades in their respective properties depending on the location.
The CA further stated that there was no taking of private property, since the owner still enjoyed the beneficial ownership of the property, to wit:
Even with the requirement of the construction of arcaded sidewalks within his commercial lot, appellee still retains the beneficial
ownership of the said property. Thus, there is no taking for public use which must be subject to just compensation. While the arcaded sidewalks
contribute to the public good, for providing safety and comfort to passersby, the ultimate benefit from the same still redounds to appellee, his
commercial establishment being at the forefront of a busy thoroughfare like EDSA. The arcaded sidewalks, by their nature, assure clients of the
commercial establishments thereat some kind of protection from accidents and other hazards. Without doubt, this sense of protection can be a
boon to the business activity therein engaged.

Nevertheless, the CA held that the MMDA went beyond its powers when it demolished the subject property. It further found that Resolution No. 02-28
only refers to sidewalks, streets, avenues, alleys, bridges, parks and other public places in Metro Manila, thus excluding Justice Gancaycos private property. Lastly, the
CA stated that the MMDA is not clothed with the authority to declare, prevent or abate nuisances. Thus, the dispositive portion stated:
WHEREFORE, the appeals are PARTLY GRANTED. The Decision dated September 30, 2003 of the Regional Trial Court, Branch 224,
Quezon City, is MODIFIED, as follows:
1) The validity and constitutionality of Ordinance No. 2094, Series of 1956, issued by the City Council of Quezon City, is UPHELD; and
2) The injunction against the enforcement and implementation of the said Ordinance is LIFTED.
SO ORDERED.

This ruling prompted the MMDA and Justice Gancayco to file their respective Motions for Partial Reconsideration.
On 10 May 2007, the CA denied the motions stating that the parties did not present new issues nor offer grounds that would merit the reconsideration of
the Court.
Dissatisfied with the ruling of the CA, Justice Gancayco and the MMDA filed their respective Petitions for Review before this Court. The issues raised by the
parties are summarized as follows:
I. WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE VALIDITY OF ORDINANCE NO. 2904.
II. WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.
III. WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCOS BUILDING IS A PUBLIC NUISANCE.
IV. WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY OF JUSTICE GANCAYCO.

The Courts Ruling

Estoppel

The MMDA and the City Government of Quezon City both claim that Justice Gancayco was estopped from challenging the ordinance, because, in 1965, he
asked for an exemption from the application of the ordinance. According to them, Justice Gancayco thereby recognized the power of the city government to regulate
the construction of buildings.
To recall, Justice Gancayco questioned the constitutionality of the ordinance on two grounds: (1) whether the ordinance takes private property without
due process of law and just compensation; and (2) whether the ordinance violates the equal protection of rights because it allowed exemptions from its application.
On the first ground, we find that Justice Gancayco may still question the constitutionality of the ordinance to determine whether or not the ordinance
constitutes a taking of private property without due process of law and just compensation. It was only in 2003 when he was allegedly deprived of his property when
the MMDA demolished a portion of the building. Because he was granted an exemption in 1966, there was no taking yet to speak of.
Moreover, in Acebedo Optical Company, Inc. v. Court of Appeals, we held:
It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner acquiesced in the special conditions
imposed by the City Mayor in subject business permit does not preclude it from challenging the said imposition, which is ultra vires or beyond
the ambit of authority of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's authority are null and
void and cannot be given any effect. The doctrine of estoppel cannot operate to give effect to an act which is otherwise null and void or ultra
vires. (Emphasis supplied.)
 Recently, in British American Tobacco v. Camacho, we likewise held:
We find that petitioner was not guilty of estoppel. When it made the undertaking to comply with all issuances of the BIR, which at
that time it considered as valid, petitioner did not commit any false misrepresentation or misleading act. Indeed, petitioner cannot be faulted
for initially undertaking to comply with, and subjecting itself to the operation of Section 145(C), and only later on filing the subject case praying
for the declaration of its unconstitutionality when the circumstances change and the law results in what it perceives to be unlawful
discrimination. The mere fact that a law has been relied upon in the past and all that time has not been attacked as unconstitutional is not a
ground for considering petitioner estopped from assailing its validity. For courts will pass upon a constitutional question only when
presented before it in bona fide cases for determination, and the fact that the question has not been raised before is not a valid reason for
refusing to allow it to be raised later. (Emphasis supplied.)

Anent the second ground, we find that Justice Gancayco may not question the ordinance on the ground of equal protection when he also benefited from
the exemption. It bears emphasis that Justice Gancayco himself requested for an exemption from the application of the ordinance in 1965 and was eventually
granted one. Moreover, he was still enjoying the exemption at the time of the demolition as there was yet no valid notice from the city engineer. Thus, while the
ordinance may be attacked with regard to its different treatment of properties that appears to be similarly situated, Justice Gancayco is not the proper person to do
so.
Zoning and the regulation of the
construction of buildings are valid
exercises of police power .
In MMDA v. Bel-Air Village Association, we discussed the nature of police powers exercised by local government units, to wit:
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the legislature to
make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not
repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. The
power is plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the
general welfare.

It bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of
individuals not possessing legislative power. The National Legislature, however, may delegate this power to the President and administrative
boards as well as the lawmaking bodies of municipal corporations or local government units. Once delegated, the agents can exercise only such
legislative powers as are conferred on them by the national lawmaking body.
To resolve the issue on the constitutionality of the ordinance, we must first determine whether there was a valid delegation of police power. Then we can
determine whether the City Government of Quezon City acted within the limits of the delegation.
It is clear that Congress expressly granted the city government, through the city council, police power by virtue of Section 12(oo) of Republic Act No. 537,
or the Revised Charter of Quezon City, which states:
To make such further ordinances and regulations not repugnant to law as may be necessary to carry into effect and discharge the
powers and duties conferred by this Act and such as it shall deem necessary and proper to provide for the health and safety, promote the
prosperity, improve the morals, peace, good order, comfort, and convenience of the city and the inhabitants thereof, and for the protection of
property therein; and enforce obedience thereto with such lawful fines or penalties as the City Council may prescribe under the provisions of
subsection (jj) of this section.

Specifically, on the powers of the city government to regulate the construction of buildings, the Charter also expressly provided that the city government
had the power to regulate the kinds of buildings and structures that may be erected within fire limits and the manner of constructing and repairing them.
With regard meanwhile to the power of the local government units to issue zoning ordinances, we apply Social Justice Society v. Atienza. In that case, the
Sangguniang Panlungsod of Manila City enacted an ordinance on 28 November 2001 reclassifying certain areas of the city from industrial to commercial. As a result
of the zoning ordinance, the oil terminals located in those areas were no longer allowed. Though the oil companies contended that they stood to lose billions of
pesos, this Court upheld the power of the city government to pass the assailed ordinance, stating:
In the exercise of police power, property rights of individuals may be subjected to restraints and burdens in order to fulfil the
objectives of the government. Otherwise stated, the government may enact legislation that may interfere with personal liberty, property,
lawful businesses and occupations to promote the general welfare. However, the interference must be reasonable and not arbitrary. And to
forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare must have a reasonable relation to the
end in view.
The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the area where the depot is
situated from industrial to commercial. A zoning ordinance is defined as a local city or municipal legislation which logically arranges,
prescribes, defines and apportions a given political subdivision into specific land uses as present and future projection of needs. As a result of
the zoning, the continued operation of the businesses of the oil companies in their present location will no longer be permitted. The power to
establish zones for industrial, commercial and residential uses is derived from the police power itself and is exercised for the protection and
benefit of the residents of a locality. Consequently, the enactment of Ordinance No. 8027 is within the power of the Sangguniang Panlungsod
of the City of Manila and any resulting burden on those affected cannot be said to be unjust... (Emphasis supplied)

In Carlos Superdrug v. Department of Social Welfare and Development, we also held:

For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of
police power because property rights, though sheltered by due process, must yield to general welfare.
Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that
they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the
alleged confiscatory effect of the provision in question, there is no basis for its nullification in view of the presumption of validity which
every law has in its favor. (Emphasis supplied.)

In the case at bar, it is clear that the primary objectives of the city council of Quezon City when it issued the questioned ordinance ordering the
construction of arcades were the health and safety of the city and its inhabitants; the promotion of their prosperity; and the improvement of their morals, peace,
good order, comfort, and the convenience. These arcades provide safe and convenient passage along the sidewalk for commuters and pedestrians, not just the
residents of Quezon City. More especially so because the contested portion of the building is located on a busy segment of the city, in a business zone along EDSA.
Corollarily, the policy of the Building Code, which was passed after the Quezon City Ordinance, supports the purpose for the enactment of Ordinance No.
2904. The Building Code states:

Section 102. Declaration of Policy. It is hereby declared to be the policy of the State to safeguard life, health, property, and public welfare,
consistent with the principles of sound environmental management and control; and to this end, make it the purpose of this Code to provide
for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design quality
of materials, construction, occupancy, and maintenance.

Section 1004 likewise requires the construction of arcades whenever existing or zoning ordinances require it. Apparently, the law allows the local
government units to determine whether arcades are necessary within their respective jurisdictions.
Justice Gancayco argues that there is a three-meter sidewalk in front of his property line, and the arcade should be constructed above that sidewalk rather
than within his property line. We do not need to address this argument inasmuch as it raises the issue of the wisdom of the city ordinance, a matter we will not and
need not delve into.
To reiterate, at the time that the ordinance was passed, there was no national building code enforced to guide the city council; thus, there was no law of
national application that prohibited the city council from regulating the construction of buildings, arcades and sidewalks in their jurisdiction.
The wing walls of the building are not
nuisances per se.
 The MMDA claims that the portion of the building in question is a nuisance per se.
We disagree.
The fact that in 1966 the City Council gave Justice Gancayco an exemption from constructing an arcade is an indication that the wing walls of the building
are not nuisances per se. The wing walls do not per se immediately and adversely affect the safety of persons and property. The fact that an ordinance may declare a
structure illegal does not necessarily make that structure a nuisance.

Article 694 of the Civil Code defines nuisance as any act, omission, establishment, business, condition or property, or anything else that (1) injures or
endangers the health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or disregards decency or morality; (4) obstructs or interferes with the
free passage of any public highway or street, or any body of water; or, (5) hinders or impairs the use of property. A nuisance may be per se or per accidens. A nuisance
per se is that which affects the immediate safety of persons and property and may summarily be abated under the undefined law of necessity.
Clearly, when Justice Gancayco was given a permit to construct the building, the city council or the city engineer did not consider the building, or its
demolished portion, to be a threat to the safety of persons and property. This fact alone should have warned the MMDA against summarily demolishing the
structure.
Neither does the MMDA have the power to declare a thing a nuisance. Only courts of law have the power to determine whether a thing is a nuisance. In
AC Enterprises v. Frabelle Properties Corp., we held:
We agree with petitioner's contention that, under Section 447(a)(3)(i) of R.A. No. 7160, otherwise known as the Local Government
Code, the Sangguniang Panglungsod is empowered to enact ordinances declaring, preventing or abating noise and other forms of nuisance. It
bears stressing, however, that the Sangguniang Bayan cannot declare a particular thing as a nuisance per se and order its condemnation. It
does not have the power to find, as a fact, that a particular thing is a nuisance when such thing is not a nuisance per se; nor can it authorize
the extrajudicial condemnation and destruction of that as a nuisance which in its nature, situation or use is not such. Those things must be
determined and resolved in the ordinary courts of law. If a thing be in fact, a nuisance due to the manner of its operation, that question
cannot be determined by a mere resolution of the Sangguniang Bayan. (Emphasis supplied.)

MMDA illegally demolished

the property of Justice Gancayco.

MMDA alleges that by virtue of MMDA Resolution No. 02-28, Series of 2002, it is empowered to demolish Justice Gancaycos property. It insists that the
Metro Manila Council authorized the MMDA and the local government units to clear the sidewalks, streets, avenues, alleys, bridges, parks and other public places in
Metro Manila of all illegal structures and obstructions. It further alleges that it demolished the property pursuant to the Building Code in relation to Ordinance No.
2904 as amended.
However, the Building Code clearly provides the process by which a building may be demolished. The authority to order the demolition of any structure
lies with the Building Official. The pertinent provisions of the Building Code provide:
SECTION 205. Building Officials. Except as otherwise provided herein, the Building Official shall be responsible for carrying out the
provisions of this Code in the field as well as the enforcement of orders and decisions made pursuant thereto.

Due to the exigencies of the service, the Secretary may designate incumbent Public Works District Engineers, City Engineers and Municipal
Engineers act as Building Officials in their respective areas of jurisdiction.
The designation made by the Secretary under this Section shall continue until regular positions of Building Official are provided or unless sooner
terminated for causes provided by law or decree.

xxx xxx xxx

SECTION 207. Duties of a Building Official. In his respective territorial jurisdiction, the Building Official shall be primarily responsible for
the enforcement of the provisions of this Code as well as of the implementing rules and regulations issued therefor. He is the official charged
with the duties of issuing building permits.

In the performance of his duties, a Building Official may enter any building or its premises at all reasonable times to inspect and determine
compliance with the requirements of this Code, and the terms and conditions provided for in the building permit as issued.

When any building work is found to be contrary to the provisions of this Code, the Building Official may order the work stopped and
prescribe the terms and/or conditions when the work will be allowed to resume. Likewise, the Building Official is authorized to order the
discontinuance of the occupancy or use of any building or structure or portion thereof found to be occupied or used contrary to the
provisions of this Code.

xxx xxx xxx

SECTION 215. Abatement of Dangerous Buildings. When any building or structure is found or declared to be dangerous or ruinous,
the Building Official shall order its repair, vacation or demolition depending upon the degree of danger to life, health, or safety. This is
without prejudice to further action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the
Philippines. (Emphasis supplied.)

MMDA v. Trackworks Rail Transit Advertising, Vending and Promotions, Inc. is applicable to the case at bar. In that case, MMDA, invoking its charter and
the Building Code, summarily dismantled the advertising media installed on the Metro Rail Transit (MRT) 3. This Court held:
It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks' billboards, signages and other
advertising media. MMDA simply had no power on its own to dismantle, remove, or destroy the billboards, signages and other advertising
media installed on the MRT3 structure by Trackworks. In Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc.,
Metropolitan Manila Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila Development Authority v. Garin, the
Court had the occasion to rule that MMDA's powers were limited to the formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installing a system, and administration. Nothing in Republic Act No. 7924 granted MMDA
police power, let alone legislative power.

Clarifying the real nature of MMDA, the Court held:

...The MMDA is, as termed in the charter itself, a "development authority". It is an agency created for the purpose of laying down
policies and coordinating with the various national government agencies, people's organizations, non-governmental organizations and the
private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in
nature and these are actually summed up in the charter itself, viz:

Sec.2. Creation of the Metropolitan Manila Development Authority.- xxx.

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory
authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of local government
units concerning purely local matters.

The Court also agrees with the CA's ruling that MMDA Regulation No. 96-009 and MMC Memorandum Circular No. 88-09 did not
apply to Trackworks' billboards, signages and other advertising media. The prohibition against posting, installation and display of billboards,
signages and other advertising media applied only to public areas, but MRT3, being private property pursuant to the BLT agreement between
the Government and MRTC, was not one of the areas as to which the prohibition applied. Moreover, MMC Memorandum Circular No. 88-09
did not apply to Trackworks' billboards, signages and other advertising media in MRT3, because it did not specifically cover MRT3, and because
 it was issued a year prior to the construction of MRT3 on the center island of EDSA. Clearly, MMC Memorandum Circular No. 88-09 could not
have included MRT3 in its prohibition.

MMDA's insistence that it was only implementing Presidential Decree No. 1096 (Building Code) and its implementing rules and
regulations is not persuasive. The power to enforce the provisions of the Building Code was lodged in the Department of Public Works and
Highways (DPWH), not in MMDA, considering the law's following provision, thus:

Sec. 201. Responsibility for Administration and Enforcement. -

The administration and enforcement of the provisions of this Code including the imposition of penalties for administrative violations
thereof is hereby vested in the Secretary of Public Works, Transportation and Communications, hereinafter referred to as the
"Secretary."

There is also no evidence showing that MMDA had been delegated by DPWH to implement the Building Code. (Emphasis
supplied.)

Additionally, the penalty prescribed by Ordinance No. 2904 itself does not include the demolition of illegally constructed buildings in case of violations.
Instead, it merely prescribes a punishment of a fine of not more than two hundred pesos (P200.00) or by imprisonment of not more than thirty (30) days, or by both
such fine and imprisonment at the discretion of the Court, Provided, that if the violation is committed by a corporation, partnership, or any juridical entity, the
Manager, managing partner, or any person charged with the management thereof shall be held responsible therefor. The ordinance itself also clearly states that it is
the regular courts that will determine whether there was a violation of the ordinance.

As pointed out in Trackworks, the MMDA does not have the power to enact ordinances. Thus, it cannot supplement the provisions of Quezon City
Ordinance No. 2904 merely through its Resolution No. 02-28.
Lastly, the MMDA claims that the City Government of Quezon City may be considered to have approved the demolition of the structure, simply because
then Quezon City Mayor Feliciano R. Belmonte signed MMDA Resolution No. 02-28. In effect, the city government delegated these powers to the MMDA. The powers
referred to are those that include the power to declare, prevent and abate a nuisance and to further impose the penalty of removal or demolition of the building or
structure by the owner or by the city at the expense of the owner.
MMDAs argument does not hold water. There was no valid delegation of powers to the MMDA. Contrary to the claim of the MMDA, the City Government
of Quezon City washed its hands off the acts of the former. In its Answer,1[34] the city government stated that the demolition was undertaken by the MMDA only,
without the participation and/or consent of Quezon City. Therefore, the MMDA acted on its own and should be held solely liable for the destruction of the portion of
Justice Gancaycos building.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. SP No. 84648 is AFFIRMED.

SO ORDERED.

[G.R. No. 141007. September 13, 2005]

ADORACION REYES BAUTISTA, LIBRADA REYES VDA. DE PONCIANO, ESTELA REYES QUIAMBAO, MARCELO REYES, JR., JOSE SINO, LEONILA SINO and DOMINADOR
SINO, petitioners, vs. CELIA REYES POBLETE, MELENCIO REYES POBLETE, ELVIRA REYES POBLETE, JULIA REYES POBLETE, and REMEDIOS POBLETE TORIO,
respondents.

DECISION

CORONA, J.:

Before us is a petition for review assailing the decision dated January 7, 1999 of the Court of Appeals:

WHEREFORE, the judgment herein appealed from is hereby REVERSED, and the lower court is hereby directed to issue a decree of registration over Lot No. 1243 in
favor of the applicants.
SO ORDERED.

This controversy stems from a petition for the registration, filed by private respondents, of a 6.2556 hectare parcel of land identified as Lot 1243.
In their application, private respondents, the successors-in-interest of Socorro Reyes vda. de Poblete (Socorro), claimed that Lot 1243 was donated by Marcelo Reyes
Sr. (Marcelo Sr.) to Socorro, his daughter by a second marriage; that the cadastral survey of Lot 1243 had been undertaken primarily for and in the name of Socorro;
that they purchased the same land from their parents Socorro and Juan Poblete; and that they and their predecessors in interest have been in open, continuous,
peaceful and notorious possession of the subject lot in the concept of owner for more than 50 years. Thus, they prayed that the land be registered in their names as
co-owners.
Petitioners, Marcelo Sr.s children by his third marriage, opposed said application alleging that Lot 1243 had been acquired by the deceased Marcelo Reyes, Sr. by
purchase from a certain Juan Aranda. Hence, said lot should be awarded to them as their fathers lawful heirs.
In the course of the proceedings, private respondents presented three witnesses, namely, Socorro Reyes Poblete, Pantaleon Garcia Ancero and Cecilia Poblete. The
material portions of their testimonies were summarized by the appellate court as follows:

SOCORRO REYES VDA. DE POBLETE, an octogenarian, testified that Lot No. 1243 was given to her by her father, Marcelo Reyes, Sr. in 1932, by way of a deed of
donation which was destroyed when her house was burned.
Her father was married twice. By his first marriage, he had two daughters, Candida and Carmen. By his second marriage, he also had two daughters, Socorro and
Henerosa, who is already dead. He had other children, who are the oppositors in this case. Her father had given her sisters Candida and Carmen other parcels of land
also. The oppositors Sinos (or Seno) were given five carabaos and financial support.
She had Lot No. 1243 planted to sugar cane and palay, and had the same surveyed by the Bureau of Lands in her name (Exh. F). She also had it tax declared in her
name (Exh. G) and had been paying the taxes thereon until she sold it to her children, the petitioners herein (Exh. I). She did not have the land registered at once
because she thought that it first had to be tax declared.
PANTALEON GARCIA ANCERO testified that he was working in Lot No. 1243 since 1942 or 1943 first as a tenant of Socorro Reyes and thereafter of petitioner Celia
Poblete. The latter sold the property two years ago to a Chinaman, and he was paid P700,000.00.
Of the oppositors, he knows only Marcelo Reyes, Jr. who was a candidate for councilor and asked his help in the election campaign, and Dominador Seno who went to
the field he was cultivating twice to get a share of the harvest.
CELIA POBLETE testified that on August 10, 1983, she and her sisters bought Lot No. 1243 for P39,000.00 from her mother, who acquired it more than fifty years
before from her father Marcelo Reyes, Sr. She brought the deed of sale to the Provincial Capitol and had the tax declaration transferred to her and her and her sisters
names (Exh. J), and they have been paying the real estate tax since then (Exh. K). Their mother and they have been in possession of the property for 60 years already.
The oppositors are half brothers and sisters of her mother, and they had good relations before. The oppositors knew about the exclusive possession of Lot No. 1243
by their mother, because they lived only some 150 meters away and saw their mother harvesting the fruits of the land. They sometimes even asked her for some of
the harvest of the land but they never made a claim on it.
The applicants sold the property to Winthrop Corporation for P20 million, of which P3 million has been paid, and the balance to be paid upon registration of the
land.[3]

To buttress their claim over Lot 1243, private respondents ventured to prove that it was Marcelo Sr.s practice to give all his children by each of his three wives similar
gifts of land; that pursuant to this practice, Marcelo Sr. gave a six-hectare lot to his daughters by the first marriage, Candida and Carmen Reyes; that Lot 1243
measuring 6.25 hectares was given to his daughter by a second marriage, private respondents mother Socorro; that another six-hectare lot was given to his children
by a third marriage, petitioners Adoracion B. Bautista, Librada R. Ponciano, Estela R. Quiambao and Marcelo Reyes, Jr.; and finally, Marcelo Sr. gave five carabaos and
financial support to his illegitimate children, petitioners Jose, Leonila and Dominador, all surnamed Sino.
Private respondents failed to present the deed of donation by which Marcelo Sr. allegedly gave Lot 1243 to Socorro, claiming that the deed was burned when fire
razed their house sometime in 1980. Thus, the trial court dismissed the petition for registration.
On appeal, the Court of Appeals considered private respondents contention that even if the donation may have been invalid, the same could still serve as basis for
acquisitive prescription. Consequently, the appellate court reversed the trial courts decision and ordered the issuance of a decree of registration over Lot 1243 in
favor of private respondents. Hence, this petition.
Perusal of the records reveals that Socorro Reyes was already in physical possession of Lot 1243 as early as 1934, even before the death of Marcelo Sr., and had the
land planted to sugarcane and palay. Socorro filed her application as claimant of Lot 1243 with the Bureau of Lands way back in 1940 when the latter conducted a
cadastral survey. This was evidenced by the Cadastral Cost Register bearing on record that Socorro paid the amount of P4.24, the owners proportionate cost for the
cadastral survey of Lot 1243.
Socorros claim in Cad. 285, Carmona Cadastre, Case 2 was approved on August 5, 1941. The following year, she had the land tenanted by a certain Pantaleon Ancero.
In 1948, Socorro registered Lot 1243 in her name under tax declaration no. 1430 and, thereafter, religiously paid the real estate tax on the property.
On August 1, 1983, Socorro sold Lot 1243 to her children, the private respondents.
On October 27, 1983, private respondents obtained a Declaration of Real Property in their favor under PD 464 otherwise known as The Real Property Tax Code.
Finally, on August 28, 1991, private respondents filed a Petition for Registration of Title to Lot 1243 before the lower court in order to perfect the sale of the lot to
Winthrop Realty Corporation for P20,694,600.
Petitioners insist that Socorro expressly and impliedly recognized their rights as her co-heirs when she was entrusted with the management of the land in 1934; that
the harvest had always been divided among the heirs, with petitioner Dominador Sino representing the others in getting their respective shares; that there was a
demand for partition but it did not push through because the land was tenanted.
However, other than the bare allegation of cestui que trust, petitioners failed to present proof of their claim. There was no evidence showing that Socorro managed
Lot 1243 on behalf of Marcelo Sr.s heirs, including petitioners.
Furthermore, petitioner Marcelo Jr. admitted that Lot 1243 was the only property left by his father Marcelo Sr. when he died; that Marcelo Sr. gave a six-hectare lot
to his (Marcelo Jr.s) mother which they sold in 1951, bolstering private respondents claim that Marcelo Sr. had given land to each of his four families.
Petitioners were obviously engaged in a fishing expedition when they opposed private respondents petition for registration of Lot 1243. Petitioner Marcelo, Jr. was
not even sure if they were co-owners of the property. This uncertainty explained why none of the petitioners was ever in actual possession of the property. He also
admitted that he did not know if Socorro inherited any property from their father. They were allegedly surprised when they learned that the property was already in
Socorros name.
The fact that petitioner Dominador Sino allegedly got a share of the harvest twice did not disprove at all that the entire harvest belonged to Socorro. At most, these
two occasions only proved Socorros generosity to him, considering that he was an illegitimate child and received almost nothing by way of inheritance. Marcelo Sr.,
died in 1932 under the regime of the old Civil Code which granted no successional rights to illegitimate children. Corollarily, the inheritance rights established by the
new Civil Code in favor of illegitimate children could be claimed only by those whose parents died after the effectivity of the law on August 30, 1950.[4] Thus,
petitioners Jose, Leonila and Dominador never really had any cause of action against private respondents.
Quite telling too was the admission of Felino Quiambao, petitioners attorney-in-fact, that neither he nor any of petitioners (except Jose Sino) had ever been to the
disputed land despite the fact that they lived only 150 meters away from the residence of Socorro in Carmona, Cavite; that they never filed any answer or objection
to the claim of Socorro in the cadastral proceedings over Lot 1243.[5]
There is a close parallelism between this case and Pensader v. Pensader [6] wherein the Court held that:

It was not shown that such possession was in common with the plaintiffs. As above stated, the origin of said possession is adverse to such community, namely, the
donation, which although it is not established by a sufficient documentary evidence, stands in this case as a circumstance explaining the exclusive character of the
possession of Maria Revelar and Alejandra Pensader and that of their common successor in interest Silverio P. Revelar.

The ruling was reiterated in Espique v. Espique[7] where the Court made the following pronouncement:

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.

The appellate court, upon meticulous review of the records, found that private respondents possession of Lot 1243 since 1934 was adverse, continuous, open, public,
peaceful and uninterrupted, and in the concept of an owner. This case was filed only in 1991. All this time, Socorro was exercising acts of dominion over the land such
as enjoying its fruits to the exclusion of all others, having the land cadastrally surveyed in her name and faithfully paying realty taxes on Lot 1243 in her name.
Assuming but not conceding that there existed an implied trust between the parties, Socorros aforementioned acts of dominion clearly repudiated such trust. It is the
essence of the statute of limitations that, whether the party had the right to the possession or not, if he entered under the claim of such right and remained in
possession for the period required for acquisitive prescription, the right of action of a party claiming title is barred by that adverse possession. The right given by the
statute of limitations does not depend on and has no necessary connection to the validity of the claim under which the possession is held.[8]
The donation of Lot 1243 to Socorro was made in 1932. She took possession of the land immediately thereafter. Under the Code of Civil Procedure which was then in
force, ten years of adverse possession by the person claiming to be the owner, in whatever way such occupancy may have commenced, shall vest in the actual
possessor of the land a full and complete title.[9]
It is a settled rule that findings of fact of the Court of Appeals are binding upon this Court if borne out by the evidence on record. We find no reversible error in the
appellate courts decision. Thus, we declare that no co-ownership existed between petitioners and respondents. Socorro obtained possession of the land even before
Marcelo Sr. died. After his death, Socorro continued to enjoy exclusive possession of the land with no objection from petitioners. The land was cadastrally surveyed
and tax-declared in her name, again with no protestation from petitioners. It was only when Lot 1243 was sold for P20.7 million that petitioners suddenly fantasized
about being co-owners thereof and wanted to share in the bonanza.
WHEREFORE, the petition is hereby DENIED and the assailed decision AFFIRMED.
Costs against petitioners.

SO ORDERED.
G.R. No. 164748 January 27, 2006
THE SECRETARY OF EDUCATION and DR. BENITO TUMAMAO, Schools Division Superintendent of Isabela, Petitioners,
vs.
HEIRS OF RUFINO DULAY, SR., represented by IGNACIA VICENTE, RUFINO DULAY, JR., SUSANA DULAY, ADELAIDA DULAY, LUZVIMINDA DULAY and CECILIA DULAY,
Respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 78314 which affirmed the Decision2 of the Regional Trial Court
(RTC) of Santiago City, Isabela, Branch 35, in Civil Case No. 35-2397.
The spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of land located in Rizal, Santiago, Isabela, with an area of 29,002 square meters. The lot
was covered by Original Certificate of Title No. P-6776.
On August 3, 1981, the spouses Dulay executed a deed of donation3 over a 10,000-square-meter portion of their property in favor of the Ministry of Education and
Culture (now the Department of Education, Culture and Sports [DECS]). The deed provided, among others:
That for and in consideration of the benefits that may be derived from the use of the above described property which is intended for school purposes, the said
DONORS do by by (sic) these presents TRANSFER AND CONVEY by way of DONATION unto the DONEE, its successors and assigns, the above property to become
effective upon the signing of this document.4
The property was subdivided. On April 13, 1983, Transfer Certificate of Title (TCT) No. T-1433375 covering the portion identified as Lot 8858-A was issued in the name
of the Ministry of Education and Culture, represented by Laurencio C. Ramel, the Superintendent of Schools of Isabela. However, the property was not used for
school purposes and remained idle.
Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal National High School building on a parcel of land it acquired from Alejandro
Feliciano. The school site was about 2 kilometers away from the land donated by the spouses Dulay.
In a letter6 to the DECS Secretary dated August 19, 1994, the spouses Dulay requested that the property be returned to them considering that the land was never
used since 1981, or a period of more than 13 years. On August 28, 1994, the Barangay Council of Rizal, Santiago City issued Resolution No. 397 recognizing the right of
the donors to redeem the subject parcel of land because of the DECS failure to utilize it for the intended purpose. It further resolved that the Rizal National High
School no longer needed the donated land "considering its distance from the main campus and [the] failure to utilize the property for a long period of time."
On December 22, 1994, Rufino Dulay, Sr. passed away at the age of 80.8 His heirs sought the help of the Sangguniang Panlungsod of Santiago City via an undated
letter9 requesting the approval of a resolution allowing them to redeem the donated property. The Sangguniang Panlungsod denied the request inasmuch as the city
government was not a party to the deed of donation.10
On August 31, 1997, the heirs of Dulay, Sr., herein respondents, filed a complaint for the revocation of the deed of donation and cancellation of TCT No. T-143337
before the RTC of Santiago City, Isabela, Branch 35, against the DECS Secretary and Dr. Benito Tumamao, the Schools Division Superintendent of Isabela. Respondents
alleged that there was a condition in the deed of donation: that the DECS, as donee, utilize the subject property for school purposes, that is, the construction of a
building to house the Rizal National High School. Respondents alleged that the DECS did not fulfill the condition and that the land remained idle up to the present.
Respondents also averred that the donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more than what he could give by will.
Petitioners, through the Office of the Solicitor General (OSG), interposed the following defenses: (a) the DECS complied with said condition because the land was
being used by the school as its technology and home economics laboratory; (b) the donation was not inofficious for the donors were the owners of five other parcels
of land, all located at Rizal, Santiago City; (c) the DECS acquired the disputed property by virtue of purchase made on December 8, 1997 by the barangay of Rizal,
Santiago City in the amount of P18,000.00 as certified by its former Barangay Captain, Jesus San Juan;11 and (d) the action of the respondents had prescribed. The
OSG also claimed that students planted a portion of the land with rice, mahogany seedlings, and fruit-bearing trees; the produce would then be sold and the proceeds
used for the construction of a school building on the subject property.
In their Reply,12 respondents denied that the donated land was being used as a technology and home economics laboratory, and averred that there were no
improvements on the property. Moreover, the fact that rice was planted on the lot was contrary to the intended purpose of the donation. The respondents likewise
denied that the property had been sold to the barangay. While the other properties of the late donor had been sold, the deeds thereon had not been registered, and
the tax declarations not yet transferred in the names of the purchasers.
Thereafter, trial ensued. On March 6, 2001, an ocular inspection of the property was conducted by the parties and their respective counsels, including the Presiding
Judge. It was confirmed that the land was barren, save for a small portion which was planted with palay. A demolished house was also found in the periphery of the
donated lot.13
On December 26, 2002, the trial court rendered its decision in favor of respondents. The fallo reads:
WHEREFORE, in the light of the foregoing considerations, the Court hereby DECLARES the deed of donation, Exhibit "A," executed by the late Rufino Dulay, Sr. and his
wife Ignacia Vicente over a portion of the land covered by O.C.T. No. P-6776 and now covered by T.C.T. No. T-143337 in the name of the donee Department of
Education and Culture as REVOKED. The defendant DECS is ORDERED to execute the deed of reconveyance of the land in favor of the plaintiffs heirs of Rufino Dulay,
Sr.
SO ORDERED.14
In revoking the deed of donation, the trial court ruled that the donation was subject to a resolutory condition, namely, that the land donated shall be used for school
purposes. It was no longer necessary to determine the intended "school purpose" because it was established that the donee did not use the land. Thus, the condition
was not complied with since the property was donated in July 1981. Moreover, the DECS did not intend to use the property for school purposes because a school had
already been built and established in another lot located in the same barangay, about two kilometers away from the subject land. Finally, the trial court rejected
petitioners contention that the donation was inofficious.
Aggrieved, the OSG appealed the decision to the CA.
On July 30, 2004, the appellate court rendered judgment affirming the decision. The court held that the DECS failed to comply with the condition in the donation, that
is, to use the property for school purposes. The CA further ruled that the donation was onerous considering that the donee was burdened with the obligation to
utilize the land for school purposes; therefore, the four-year prescriptive period under Article 764 of the New Civil Code did not apply. Moreover, the CA declared that
a deed of donation is considered a written contract and is governed by Article 1144 of the New Civil Code, which provides for a 10-year prescriptive period from the
time the cause of action accrues. According to the CA, the respondents cause of action for the revocation of the donation should be reckoned from the expiration of
a reasonable opportunity for the DECS to comply with what was incumbent upon it.
Petitioners filed a motion for reconsideration, which the CA denied.
Petitioners seek relief from this Court via petition for review on certiorari, contending that:
I.
THE DEPARTMENT OF EDUCATION, THROUGH THE RIZAL NATIONAL HIGH SCHOOL, HAD COMPLIED WITH THE CONDITION IMPOSED IN THE DEED OF
DONATION.
II.
RESPONDENTS RIGHT TO SEEK THE REVOCATION OF THE DEED OF DONATION, IF THERE BE ANY, IS ALREADY BARRED BY PRESCRIPTION AND LACHES.15
The Court shall resolve the issues raised by petitioners seriatim.
The donee failed to comply with the condition imposed in the deed of donation
The issue of whether or not petitioner DECS was able to comply with the condition imposed in the deed of donation is one of fact. There is a question of fact when
the doubt or difference arises as to the truth or falsehood of alleged facts or when the query necessarily solicits calibration of the whole evidence considering mostly
the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to each other and to the whole and probabilities of the
situation.16 Under Rule 45 of the 1997 Rules of Civil Procedure, only questions of law may be raised in a petition for review on certiorari, for the simple reason that
this Court is not a trier of facts. It is not for the Court to calibrate the evidence on record, as this is the function of the trial court. Although there are well-defined
exceptions to the rule, nevertheless, after a review of the records, we find no justification to depart therefrom. Moreover, the trial courts findings of facts, as
affirmed by the appellate court on appeal, are binding on this Court, unless the trial and appellate courts overlooked, misconstrued or misinterpreted facts and
circumstances of substance which, if considered, would change the outcome of the case. The case has been reviewed thoroughly, and we find no justification to
reverse the CA decision.
Petitioners, through the OSG, maintain that the condition (to use the property for school purposes) is not limited to the construction of a school building, but includes
utilizing it as a technology and home economics laboratory where students and teachers plant palay, mahogany seedlings, and fruit-bearing trees. The OSG insists
that the donee did not specify in the deed that the property should be used for the construction of a school building. According to the OSG, the proceeds of the
harvest were used and are still being used by the Rizal National High School for the construction and improvement of its present school site. Moreover, it was verified
that there was palay planted on the donated property during the ocular inspection on the property.
In their comment on the petition, respondents dispute petitioners contentions, and aver that no evidence was presented to prove that, indeed, palay, mahogany
seedlings and fruit-bearing trees were planted on the property. Respondents also emphasized that when the trial court inspected the subject property, it was
discovered to be barren and without any improvement although some portions thereof were planted with palay. Petitioners even failed to adduce evidence to
identify the person who planted the palay.
The contention of petitioners has no merit.
As gleaned from the CA decision, petitioners failed to prove that the donated property was used for school purposes as indicated in the deed of donation:
We find it difficult to sustain that the defendant-appellants have complied with the condition of donation. It is not amiss to state that other than the bare allegation
of the defendant-appellants, there is nothing in the records that could concretely prove that the condition of donation has been complied with by the defendant-
appellants. In the same breadth, the planting of palay on the land donated can hardly be considered and could not have been the "school purposes" referred to and
intended by the donors when they had donated the land in question. Also, the posture of the defendant-appellants that the land donated is being used as technology
and home economics laboratory of the Rizal National High School is far from being the truth considering that not only is the said school located two kilometers away
from the land donated but also there was not even a single classroom built on the land donated that would reasonably indicate that, indeed, classes have been
conducted therein. These observations, together with the unrebutted ocular inspection report made by the trial court which revealed that the land donated remains
idle and without any improvement thereon for more than a decade since the time of the donation, give Us no other alternative but to conclude that the defendant-
appellants have, indeed, failed to comply with what is incumbent upon them in the deed of donation.17
In its Order18 dated March 6, 2001, the RTC reiterated that during the ocular inspection of the property conducted in the presence of the litigants and their counsel, it
observed that "the land was barren; there were no improvements on the donated property though a portion thereof was planted with palay [and a demolished house
built in 1979.]"
Moreover, petitioners failed to adduce a shred of evidence to prove that the palay found in the property was planted by DECS personnel or at its instance or even by
students of the Rizal National High School. No evidence was adduced to prove that there were existing plans to use the property for school purposes. Petitioners even
debilitated their cause when they claimed in the trial court that the barangay acquired the property by purchase, relying on the certification of former Barangay
Captain Jesus San Juan.
The right to seek the revocation of donation had not yet prescribed when respondents filed their complaint
Anent the second issue, we reject the contention of the OSG that respondents cause of action is already barred by prescription under Article 764 of the New Civil
Code, or four years from the non-compliance with the condition in the deed of donation. Since such failure to comply with the condition of utilizing the property for
school purposes became manifest sometime in 1988 when the DECS utilized another property for the construction of the school building, the four-year prescriptive
period did not commence on such date. Petitioner was given more than enough time to comply with the condition, and it cannot be allowed to use this fact to its
advantage. It must be stressed that the donation is onerous because the DECS, as donee, was burdened with the obligation to utilize the land donated for school
purposes. Under Article 733 of the New Civil Code, a donation with an onerous cause is essentially a contract and is thus governed by the rules on contract.19 We fully
agree with the ruling of the appellate court:
xxx With this, [we] decline to apply the four-year prescriptive period for the revocation of donation provided under Article 764 of the New Civil Code and instead
apply the general rules on contracts since Article 733 of the same Code, specifically provided that onerous donations shall be governed by the rules on contracts.
Corollarily, since a deed of donation is considered a written contract, it is governed by Article 1144 of the New Civil Code, which provides that the prescriptive period
for an action arising from a written contract is ten (10) years from the time the cause of action accrues. In the case of donation, the accrual of the cause of action is
from the expiration of the time within which the donee must comply with the conditions or obligations of the donation. In the instant case, however, it must be noted
that the subject donation fixed no period within which the donee can comply with the condition of donation. As such, resort to Article 1197 of
the New Civil Code is necessary. Said article provides that if the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a
period was intended, the courts may fix the duration thereof. Indeed, from the nature and circumstances of the condition of the subject donation, it can be inferred
that a period was contemplated by the donors. The donors could not have intended their property to remain idle for a very long period of time when, in fact, they
specifically obliged the defendant-appellants to utilize the land donated for school purposes and thus put it in good use. xxx20
In Central Philippine University v. Court of Appeals,21 a case squarely in point, we have established that the legal possibility of bringing the action begins with the
expiration of a reasonable opportunity for the donee to fulfill what has been charged upon it by the donor. Likewise, we held that even if Article 1197 of the New Civil
Code provides that the courts may fix the duration when the obligation does not determine the period but from its nature and circumstances it can be inferred that a
period was intended, the general rule cannot be applied because to do so would be a mere technicality and would serve no other purpose than to delay or lead to an
unnecessary and expensive multiplication of suits.22
Altogether, it has been 16 years since the execution of the deed of donation. Petitioner DECS failed to use the property for the purpose specified in the deed of
donation. The property remained barren and unutilized. Even after respondents sought the return of the property before the courts, petitioner DECS still failed to
draw up plans to use the property for school purposes. In fine, petitioner DECS has no use for the property; hence, the same shall be reverted to the respondents.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 78314 dated July 30, 2004 is AFFIRMED.
SO ORDERED.

SECOND DIVISION
G.R. No. 172804 January 24, 2011
GONZALO VILLANUEVA, represented by his heirs, Petitioner,
vs.
SPOUSES FROILAN and LEONILA BRANOCO, Respondents.
DECISION
CARPIO, J.:
The Case
This resolves the petition for review1 of the ruling2 of the Court of Appeals dismissing a suit to recover a realty.
The Facts
Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs,3 sued respondents, spouses Froilan and Leonila Branoco (respondents), in the Regional Trial
Court of Naval, Biliran (trial court) to recover a 3,492 square-meter parcel of land in Amambajag, Culaba, Leyte (Property) and collect damages. Petitioner claimed
ownership over the Property through purchase in July 1971 from Casimiro Vere (Vere), who, in turn, bought the Property from Alvegia Rodrigo (Rodrigo) in August
1970. Petitioner declared the Property in his name for tax purposes soon after acquiring it.
In their Answer, respondents similarly claimed ownership over the Property through purchase in July 1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo
donated the Property in May 1965. The two-page deed of donation (Deed), signed at the bottom by the parties and two witnesses, reads in full:
KNOW ALL MEN BY THESE PRESENTS:
That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas, a resident of Barrio Bool, municipality of Culaba, subprovince of Biliran, Leyte del
Norte, Philippines, hereby depose and say:
That as we live[d] together as husband and wife with Juan Arcillas, we begot children, namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS,
and by reason of poverty which I suffered while our children were still young; and because my husband Juan Arcillas aware as he was with our destitution separated
us [sic] and left for Cebu; and from then on never cared what happened to his family; and because of that one EUFRACIA RODRIGUEZ, one of my nieces who also
suffered with our poverty, obedient as she was to all the works in our house, and because of the love and affection which I feel [for] her, I have one parcel of land
located at Sitio Amambajag, Culaba, Leyte bearing Tax Decl. No. 1878 declared in the name of Alvegia Rodrigo, I give (devise) said land in favor of EUFRACIA
RODRIGUEZ, her heirs, successors, and assigns together with all the improvements existing thereon, which parcel of land is more or less described and bounded as
follows:
1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo Uyvico; and West, by Public land; 2. It has an area of 3,492 square meters more or less; 3. It
is planted to coconuts now bearing fruits; 4. Having an assessed value of P240.00; 5. It is now in the possession of EUFRACIA RODRIGUEZ since May 21, 1962 in the
concept of an owner, but the Deed of Donation or that ownership be vested on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I already devise in favor of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and
that if the herein Donee predeceases me, the same land will not be reverted to the Donor, but will be inherited by the heirs of EUFRACIA RODRIGUEZ;
That I EUFRACIA RODRIGUEZ, hereby accept the land above described from Inay Alvegia Rodrigo and I am much grateful to her and praying further for a longer life;
however, I will give one half (1/2) of the produce of the land to Apoy Alve during her lifetime.4
Respondents entered the Property in 1983 and paid taxes afterwards.
The Ruling of the Trial Court
The trial court ruled for petitioner, declared him owner of the Property, and ordered respondents to surrender possession to petitioner, and to pay damages, the
value of the Propertys produce since 1982 until petitioners repossession and the costs.5 The trial court rejected respondents claim of ownership after treating the
Deed as a donation mortis causa which Rodrigo effectively cancelled by selling the Property to Vere in 1970.6 Thus, by the time Rodriguez sold the Property to
respondents in 1983, she had no title to transfer.
Respondents appealed to the Court of Appeals (CA), imputing error in the trial courts interpretation of the Deed as a testamentary disposition instead of an inter
vivos donation, passing title to Rodriguez upon its execution.
Ruling of the Court of Appeals
The CA granted respondents appeal and set aside the trial courts ruling. While conceding that the "language of the [Deed is] x x x confusing and which could admit of
possible different interpretations,"7 the CA found the following factors pivotal to its reading of the Deed as donation inter vivos: (1) Rodriguez had been in possession
of the Property as owner since 21 May 1962, subject to the delivery of part of the produce to Apoy Alve; (2) the Deeds consideration was not Rodrigos death but her
"love and affection" for Rodriguez, considering the services the latter rendered; (3) Rodrigo waived dominion over the Property in case Rodriguez predeceases her,
implying its inclusion in Rodriguezs estate; and (4) Rodriguez accepted the donation in the Deed itself, an act necessary to effectuate donations inter vivos, not
devises.8 Accordingly, the CA upheld the sale between Rodriguez and respondents, and, conversely found the sale between Rodrigo and petitioners predecessor-in-
interest, Vere, void for Rodrigos lack of title.
In this petition, petitioner seeks the reinstatement of the trial courts ruling. Alternatively, petitioner claims ownership over the Property through acquisitive
prescription, having allegedly occupied it for more than 10 years.9
Respondents see no reversible error in the CAs ruling and pray for its affirmance.
The Issue
The threshold question is whether petitioners title over the Property is superior to respondents. The resolution of this issue rests, in turn, on whether the contract
between the parties predecessors-in-interest, Rodrigo and Rodriguez, was a donation or a devise. If the former, respondents hold superior title, having bought the
Property from Rodriguez. If the latter, petitioner prevails, having obtained title from Rodrigo under a deed of sale the execution of which impliedly revoked the earlier
devise to Rodriguez.
The Ruling of the Court
We find respondents title superior, and thus, affirm the CA.
Naked Title Passed from Rodrigo to Rodriguez Under a Perfected Donation
We examine the juridical nature of the Deed whether it passed title to Rodriguez upon its execution or is effective only upon Rodrigos death using principles
distilled from relevant jurisprudence. Post-mortem dispositions typically
(1) Convey no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should
retain the ownership (full or naked) and control of the property while alive;
(2) That before the [donors] death, the transfer should be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by
means of a reserved power in the donor to dispose of the properties conveyed;
(3) That the transfer should be void if the transferor should survive the transferee.10
Further
[4] [T]he specification in a deed of the causes whereby the act may be revoked by the donor indicates that the donation is inter vivos, rather than a
disposition mortis causa[;]
[5] That the designation of the donation as mortis causa, or a provision in the deed to the effect that the donation is "to take effect at the death of the
donor" are not controlling criteria; such statements are to be construed together with the rest of the instrument, in order to give effect to the real intent
of the transferor[;] [and]
(6) That in case of doubt, the conveyance should be deemed donation inter vivos rather than mortis causa, in order to avoid uncertainty as to the
ownership of the property subject of the deed.11
It is immediately apparent that Rodrigo passed naked title to Rodriguez under a perfected donation inter vivos. First. Rodrigo stipulated that "if the herein Donee
predeceases me, the [Property] will not be reverted to the Donor, but will be inherited by the heirs of x x x Rodriguez," signaling the irrevocability of the passage of
title to Rodriguezs estate, waiving Rodrigos right to reclaim title. This transfer of title was perfected the moment Rodrigo learned of Rodriguezs acceptance of the
disposition12 which, being reflected in the Deed, took place on the day of its execution on 3 May 1965. Rodrigos acceptance of the transfer underscores its essence as
a gift in presenti, not in futuro, as only donations inter vivos need acceptance by the recipient.13 Indeed, had Rodrigo wished to retain full title over the Property, she
could have easily stipulated, as the testator did in another case, that "the donor, may transfer, sell, or encumber to any person or entity the properties here donated
x x x"14 or used words to that effect. Instead, Rodrigo expressly waived title over the Property in case Rodriguez predeceases her.
In a bid to diffuse the non-reversion stipulations damning effect on his case, petitioner tries to profit from it, contending it is a fideicommissary substitution clause.15
Petitioner assumes the fact he is laboring to prove. The question of the Deeds juridical nature, whether it is a will or a donation, is the crux of the present
controversy. By treating the clause in question as mandating fideicommissary substitution, a mode of testamentary disposition by which the first heir instituted is
entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the inheritance,16 petitioner assumes that the Deed is a will. Neither
the Deeds text nor the import of the contested clause supports petitioners theory.
Second. What Rodrigo reserved for herself was only the beneficial title to the Property, evident from Rodriguezs undertaking to "give one [half] x x x of the produce
of the land to Apoy Alve during her lifetime."17 Thus, the Deeds stipulation that "the ownership shall be vested on [Rodriguez] upon my demise," taking into account
the non-reversion clause, could only refer to Rodrigos beneficial title. We arrived at the same conclusion in Balaqui v. Dongso18 where, as here, the donor, while
"b[inding] herself to answer to the [donor] and her heirs x x x that none shall question or disturb [the donees] right," also stipulated that the donation "does not pass
title to [the donee] during my lifetime; but when I die, [the donee] shall be the true owner" of the donated parcels of land. In finding the disposition as a gift inter
vivos, the Court reasoned:
Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the donor] guaranteed to [the donee] and her heirs and successors, the right to said
property thus conferred. From the moment [the donor] guaranteed the right granted by her to [the donee] to the two parcels of land by virtue of the deed of gift, she
surrendered such right; otherwise there would be no need to guarantee said right. Therefore, when [the donor] used the words upon which the appellants base their
contention that the gift in question is a donation mortis causa [that the gift "does not pass title during my lifetime; but when I die, she shall be the true owner of the
two aforementioned parcels"] the donor meant nothing else than that she reserved of herself the possession and usufruct of said two parcels of land until her
death, at which time the donee would be able to dispose of them freely.19 (Emphasis supplied)
Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for her to reserve partial usufructuary right over it.20
Third. The existence of consideration other than the donors death, such as the donors love and affection to the donee and the services the latter rendered, while
also true of devises, nevertheless "corroborates the express irrevocability of x x x [inter vivos] transfers."21 Thus, the CA committed no error in giving weight to
Rodrigos statement of "love and affection" for Rodriguez, her niece, as consideration for the gift, to underscore its finding.
It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed tending to serve his cause (e.g. "the ownership shall be vested on [Rodriguez] upon
my demise" and "devise"). Dispositions bearing contradictory stipulations are interpreted wholistically, to give effect to the donors intent. In no less than seven cases
featuring deeds of donations styled as "mortis causa" dispositions, the Court, after going over the deeds, eventually considered the transfers inter vivos,22 consistent
with the principle that "the designation of the donation as mortis causa, or a provision in the deed to the effect that the donation is to take effect at the death of the
donor are not controlling criteria [but] x x x are to be construed together with the rest of the instrument, in order to give effect to the real intent of the transferor."23
Indeed, doubts on the nature of dispositions are resolved to favor inter vivos transfers "to avoid uncertainty as to the ownership of the property subject of the
deed."24
Nor can petitioner capitalize on Rodrigos post-donation transfer of the Property to Vere as proof of her retention of ownership. If such were the barometer in
interpreting deeds of donation, not only will great legal uncertainty be visited on gratuitous dispositions, this will give license to rogue property owners to set at
naught perfected transfers of titles, which, while founded on liberality, is a valid mode of passing ownership. The interest of settled property dispositions counsels
against licensing such practice.25
Accordingly, having irrevocably transferred naked title over the Property to Rodriguez in 1965, Rodrigo "cannot afterwards revoke the donation nor dispose of the
said property in favor of another."26 Thus, Rodrigos post-donation sale of the Property vested no title to Vere. As Veres successor-in-interest, petitioner acquired no
better right than him. On the other hand, respondents bought the Property from Rodriguez, thus acquiring the latters title which they may invoke against all adverse
claimants, including petitioner.
Petitioner Acquired No Title Over the Property
Alternatively, petitioner grounds his claim of ownership over the Property through his and Veres combined possession of the Property for more than ten years,
counted from Veres purchase of the Property from Rodrigo in 1970 until petitioner initiated his suit in the trial court in February 1986.27 Petitioner anchors his
contention on an unfounded legal assumption. The ten year ordinary prescriptive period to acquire title through possession of real property in the concept of an
owner requires uninterrupted possession coupled with just title and good faith.28 There is just title when the adverse claimant came into possession of the property
through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right.29
Good faith, on the other hand, consists in the reasonable belief that the person from whom the possessor received the thing was the owner thereof, and could
transmit his ownership.30
Although Vere and petitioner arguably had just title having successively acquired the Property through sale, neither was a good faith possessor. As Rodrigo herself
disclosed in the Deed, Rodriguez already occupied and possessed the Property "in the concept of an owner" ("como tag-iya"31) since 21 May 1962, nearly three years
before Rodrigos donation in 3 May 1965 and seven years before Vere bought the Property from Rodrigo. This admission against interest binds Rodrigo and all those
tracing title to the Property through her, including Vere and petitioner. Indeed, petitioners insistent claim that Rodriguez occupied the Property only in 1982, when
she started paying taxes, finds no basis in the records. In short, when Vere bought the Property from Rodrigo in 1970, Rodriguez was in possession of the Property, a
fact that prevented Vere from being a buyer in good faith.
Lacking good faith possession, petitioners only other recourse to maintain his claim of ownership by prescription is to show open, continuous and adverse possession
of the Property for 30 years.32 Undeniably, petitioner is unable to meet this requirement.1avvphil
Ancillary Matters Petitioner Raises Irrelevant
Petitioner brings to the Courts attention facts which, according to him, support his theory that Rodrigo never passed ownership over the Property to Rodriguez,
namely, that Rodriguez registered the Deed and paid taxes on the Property only in 1982 and Rodriguez obtained from Vere in 1981 a waiver of the latters "right of
ownership" over the Property. None of these facts detract from our conclusion that under the text of the Deed and based on the contemporaneous acts of Rodrigo
and Rodriguez, the latter, already in possession of the Property since 1962 as Rodrigo admitted, obtained naked title over it upon the Deeds execution in 1965.
Neither registration nor tax payment is required to perfect donations. On the relevance of the waiver agreement, suffice it to say that Vere had nothing to waive to
Rodriguez, having obtained no title from Rodrigo. Irrespective of Rodriguezs motivation in obtaining the waiver, that document, legally a scrap of paper, added
nothing to the title Rodriguez obtained from Rodrigo under the Deed.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 6 June 2005 and the Resolution dated 5 May 2006 of the Court of Appeals.
SO ORDERED.