ART 428
This height ceiling, he said, is based on the deed
1) AYALA LAND VS RAY BURTON 29 SCRA 48
FACTS:
On March 20, 1984, KARAMFIL bought from AYALA
a piece of land. The transaction was documented in a
Deed of Sale of even date, with certain special conditions
and restrictions on the use or occupancy of the land. The
said special conditions and restrictions were attached as
an annex to the deed of sale and incorporated in the
"Memorandum of Encumbrances" at the reverse side of
the title of the lot. On February 18, 1988, KARAMFIL
sold the lot to PALMCREST. This deed was submitted to
AYALA for approval. AYALA gave its written
conformity to the sale but reflecting in its approval the
same special conditions/restrictions as in the previous
sale.
PALMCREST in turn sold the lot to Ray Burton
Development Corporation (RBDC), now respondent, on
April 11, 1988. Sometime in June of 1989, RBDC
submitted to AYALA for approval a set of architectural
plans for the construction of a 5-storey office building on
the subject lot. Since the building was well within the 42-
meter height restriction, AYALA approved the
architectural plans.
The September 21, 1990 issue of the Business World
magazine featured the "Trafalgar Plaza" as a modern 27-
storey structure which will soon rise in Salcedo Village,
Makati City. Stunned by this information, AYALA,
through counsel, then sent a letter to RBDC demanding
the latter to cease the construction of the building which
dimensions do not conform to the previous plans it earlier
approved.
After trial on the merits, the trial court rendered a
Decision on April 28, 1994 in favor of RBDC.
Dissatisfied, AYALA appealed to the Court of Appeals
which affirmed the judgment of the trial court
ISSUE: Whether or not the trial court and the appellate
court erred in rendering judgement in favor of RBDC.
HELD: The erroneous annotation of the 23-meter height
restriction in RBDC's title was explained by Jose
Cuaresma, AYALA's Assistant Manager for Marketing
and Sales. Jose Cuaresma further clarified that the correct
height restriction imposed by AYALA on RBDC was 42
meters.
of restrictions attached as annex to the deed of sale, and
the same has been uniformly imposed on the transferees
beginning from the original deed of sale between AYALA
and KARAMFIL.
This clarificatory statement of Jose Cuaresma should
have cautioned the Court of Appeals from making the
unfounded and sweeping conclusion that RBDC can do
anything it wants on the subject property "as if no
restrictions and conditions were imposed thereon," What
is clear from the record, however, is that RBDC was the
party guilty of misrepresentation and/or concealment
when it resorted to the fraudulent scheme of submitting
two (2) sets of building plans, one (1) set conformed to
the Deed Restrictions, which was submitted to and
approved by AYALA, while another set violated the said
restrictions, and which it presented to the Makati City
Building Official in order to secure from the latter the
necessary building permit.
It is noteworthy that after the submission of the second set
of building plans to the Building Official, RBDC
continued to make representations to AYALA that it
would build the five-storey building in accordance with
the first set of plans approved by AYALA, AYALA relied
on RBDC's false representations and released the said
title. Hence, RBDC was in bad faith.
In the instant case, the stipulations in the Deed
Restrictions and Special Conditions are plain and
unambiguous which leave no room for interpretation
2) FAJARDO VS. FREEDOM TO BUILD
ELISEO FAJARDO JR., VS FREEDOM TO BUILD
INC.
G. R. No. 134692 August 1, 2000
FACTS:
Freedom to Build Inc., an owner-developer and seller of
low-cost housing sold to petitioner-spouses a house and
lot in the De La Costa Homes, in Barangka, Marikina,
Metro Manila. The Contract to sell executed between the
parties, contained a Restrictive Covenant providing
certain prohibitions, to wit:
“Easements. For the good of the entire community, the
homeowner must observe a two-meter easement in front.
1
No structure of any kind (store, garage, bodega, etc.) may
be built on the front easement.
“Upward expansion. A second storey is not prohibited.
But the second storey expansion must be placed above the
back portion of the house and should not extend forward
beyond the apex of the original building.
“Front expansion: 2nd Storey: No unit may be extended
in the front beyond the line as designed and implemented
by the developer in the 60 sq. m. unit. In other words, the
2nd floor expansion, in front, is 6 meters back from the
front property line and 4 meters back from the front wall
of the house, just as provided in the 60 sq. m. units.”
The above restrictions were also contained in Transfer
Certificate of Title No. N-115384 covering the lot issued
in the name of petitioner-spouses.
The controversy arose when the petitioners despite
repeated demand from the respondent, extended the roof
of their house to the property line and expanded the
second floor of their house to a point directly above the
original front wall. Respondent filed before the RTC an
action to demolish the unauthorized structures.
The RTC rendered a judgment against the petitioner
ordering them to immediately demolish and remove the
extension of their expanded housing unit that exceeds the
limitations imposed by the Restrictive Covenant,
otherwise the Branch Sheriff of this Court will execute the
this decision at the expense of the defendants.
On appeal, the CA affirmed the decision of the RTC.
Hence, this petition for review.
ISSUE: Whether or not the for the lack of a specific
provision, prescribing the penalty of the demolition in the
“Restrictive Covenant” in the event of the breach thereof,
the prayer of the respondent to demolish the structure
should fail.
RULING:
The Court held that the argument of the petitioner-spouses
has no merit; Article 1168 of the New Civil Code states
that: “When the obligation consists in not doing and the
obligor does what has been forbidden him, it shall be
undone at his expense.”
This Court is not unaware of its ruling in Ayala
Corporation vs. Ray Burton Development Corporation,
which has merely adjudged the payment of damages in
lieu of demolition.
In the aforementioned case, however, the elaborate
mathematical formula for the determination of
compensatory damages which takes into account the
current construction cost index during the immediately
preceding 5 years based on the weighted average of
wholesale price and wage indices of the National Census
and Statistics Office and the Bureau of Labor Statistics is
explicitly provided for in the Deed of Restrictions entered
into by the parties. This unique and peculiar circumstance,
among other strong justifications therein mentioned, is
not extant in the case at bar.
In sum, the Court holds that since the extension
constructed exceeds the floor area limits of the Restrictive
Covenant, petitioner spouses can be required to demolish
the structure to the extent that it exceeds the prescribed
floor area limits.
Wherefore, the assailed decision of the Court of Appeals
is AFFIRMED. No costs.
3) TAYAG VS LACSON
FACTS:
In March 1996 a group of farmer-tenants on three parcels
of land owned by the Lacsons assigned to petitioner
Tayag their rights as tenants/tillers for p50/sqm.
The said amount would be payable “when the legal
impediments to the sale of the property to the petitioner
no longer existed.” Tayag would have exclusive rights to
purchase the property if and when the Lacsons agreed to
sell the property.
Tayag gave varied sums of money to the farmers as partial
payments, and the farmers issued receipts.
Sometime later Tayag discovered that the farmers
changed their minds and would be selling their rights to
the Lacsons instead, prompting Tayag to pray for
Injunction against the farmers and Lacson.
In their defense, the Lacsons claimed that they did not
induce the farmers to violate their contracts with Tayag,
and that since the farmers were merely tenants, they had
2
no right to enter into any transactions involving Lacson
properties without the owners’ consent.
ISSUE: WON there was a valid option contract between
Tayag and the farmers by virtue of the deeds of
assignment. NO
HELD:
Option contract defined
An option is a contract by which the owner of the property
agrees with another person that he shall have the right to
buy his property at a fixed price within a certain time or
under, or in compliance with certain terms and conditions,
or which gives to the owner of the property the right to
sell or demand a sale. It imposes no binding obligation on
the person holding the option, aside from the
consideration for the offer. Until accepted, it is not,
properly speaking, treated as a contract.
The second party gets in praesenti, not lands, not an
agreement that he shall have the lands, but the right to call
for and receive lands if he elects.
Until accepted, it is not, properly speaking, treated as a
contract. An option contract is a separate and distinct
contract from which the parties may enter into upon the
conjunction of the option.
Farmers had no right to grant Tayag the option/right to
buy the property as they were merely tenants
In this case, the defendants-tenants-subtenants, under the
deeds of assignment, granted to the petitioner not only an
option but the exclusive right to buy the landholding. But
the grantors were merely the defendants-tenants, and not
the respondents, the registered owners of the property.
Not being the registered owners of the property, the
defendants-tenants could not legally grant to the
petitioner the option, much less the "exclusive right" to
buy the property. Nemo dat quod non habet, literally
meaning "no one gives what he doesn't have" applies in
this case.
Deeds of Assignment not valid; conditions stipulated did
not arise
The full payment of 50/sqm under Tayag and the farmers’
‘’option contracts’ were on the following conditions:
- that the Lacsons would agree to sell their property
- that the deeds of assignment were subject to the approval
of DAR
- that there was a prohibitive period within which the
farmers were able to sell their interest in the land
There is no showing in Tayag’s complaint that the farmers
had agreed to sell their property, and that the legal
impediments to the agreement no longer existed. They
had yet to submit the Deeds of Assignment to the
Department of Agrarian Reform which, in turn, had to act
on and approve or disapprove the same. Unless the DAR
approves the deeds, Tayag has no right to enforce the
same by asking the trial court to fix a period within which
to pay.
4) ROSS RICA SALES CENTER VS. SPS. ONG
ROSS RICA SALES CENTER vs. SPS. ONG
G.R. No. 132197. 08/16/2005, TINGA , J .
FACTS: The spouses Ong are the original owners of 3
parcels of land which they occupy. They sold it to
Mandaue Prime Estate Realty, which then sold it to Ross
Rica Sales Center, Inc. The spouses Ong filed an action to
annul the sale and transfer of property to Mandaue Prime
Estate Realty and at present, the case is still pending. In
the meantime, an ejectment case was filed against spouses
Ong in the MTC, which ruled against the latter. On appeal
to the RTC, the judgment was affirmed by a decision
dated March 1, 1997. The spouses Ong received a copy of
the decision on April 28, 1997.
The spouses Ong first filed a Notice of Appeal with the
RTC (May 8, 1997) but on the very next day filed a
Motion for Reconsideration, which was denied on June
23, 1997. The spouses Ong received a copy of the order
on July 9, 1997. On July 24, 1997 respondents filed with
the CA a motion for an additional 10 days to file their
Petition for Review, which they would eventually file on
July 30, 1997.
The CA gave their petition for review due course and
reversed the decision of the RTC on the finding that the
action filed was not one for unlawful detainer based on
two grounds: that the allegations fail to show that
petitioners were deprived of possession by force,
intimidation, threat, strategy or stealth; and that there is
no contract, express or implied, between the parties that
would qualify the case as one of unlawful detainer.
3
ISSUES/HELD
Whether the complaint satisfies the jurisdictional
requirements for a case of unlawful detainer properly
cognizable by the MTC
- YES. Well-settled is the rule that what determines the
nature of an action as well as which court has jurisdiction
over it are the allegations of the complaint and the
character of the relief sought.
In Javelosa vs. Court of the Appeals, it was held that the
allegation in the complaint that there was unlawful
withholding of possession is sufficient to make out a case
for unlawful detainer.
It is equally settled that in an action for unlawful detainer,
an allegation that the defendant is unlawfully withholding
possession from the plaintiff is deemed sufficient, without
necessarily employing the terminology of the law.
Hence, the phrase “unlawful withholding” has been held
to imply possession on the part of defendant, which was
legal in the beginning, having no other source than a
contract, express or implied, and which later expired as a
right and is being withheld by defendant.
In Rosanna B. Barba vs. Court of Appeals, the Supreme
Court held that a simple allegation that the defendant is
unlawfully withholding possession from plaintiff is
sufficient. Based on this premise, the allegation in the
Complaint that:
title and/or reconveyance, the rights asserted and the relief
prayed for are not the same.
“. . . . despite demand to vacate, the defendants have
refused and still refuse to vacate said lots, thus, unlawfully
withholding possession of said lots from plaintiffs and
depriving plaintiffs of the use of their lots;” is already
sufficient to constitute an unlawful detainer case.
The long settled rule is that the issue of ownership cannot
be the subject of a collateral attack. In Apostol vs. Court
of Appeals, this Court had the occasion to clarify this:
Likewise, the case of Co Tiamco vs. Diaz provides for a
liberal approach in considering the sufficiency of a
complaint for unlawful detainer, thus:
“. . . The principle underlying the brevity and simplicity
of pleadings in forcible entry and unlawful detainer cases
rests upon considerations of public policy. Cases of
forcible entry and detainer are summary in nature, for they
involve perturbation of social order which must be
restored as promptly as possible and, accordingly,
technicalities or details of procedure should be carefully
avoided.”
Whether the case should be considered as one for
accion reivindicatoria, and thus the jurisdiction would
lie with the RTC
- NO. The issue involved in accion reivindicatoria is the
recovery of ownership of real property. This differs from
accion publiciana where the issue is the better right of
possession or possession de jure, and accion interdictal
where the issue is material possession or possession de
facto. In an action for unlawful detainer, the question of
possession is primordial, while the issue of ownership is
generally unessential.
Petitioners, in all their pleadings, only sought to recover
physical possession of the subject property. The mere fact
that they claim ownership over the parcels of land as well
did not deprive the MTC of jurisdiction to try the
ejectment case.
Even if respondents claim ownership as a defense to the
complaint for ejectment, the conclusion would be the
same, for mere assertion of ownership by the defendant in
an ejectment case will not oust the municipal court of its
summary jurisdiction.
This Court in Ganadin vs. Ramos stated that if what is
prayed for is ejectment or recovery of possession, it does
not matter if ownership is claimed by either party.
Therefore, the pending actions for Declaration of Nullity
of Deed of Sale and Transfer Certificates of Title and
quieting of title in Civil Case No. MAN-2356 will not
abate the ejectment case.
In Drilon vs. Gaurana, this Court ruled that the filing of
an action for reconveyance of title over the same property
or for annulment of the deed of sale over the land does not
divest the MTC of its jurisdiction to try the forcible entry
or unlawful detainer case before it, the rationale being
that, while there may be identity of parties and subject
matter in the forcible entry case and the suit for annulment
of
4
“. . . Under Section 48 of Presidential Decree No. 1529, a
certificate of title shall not be subject to collateral attack.
It cannot be altered, modified or cancelled, except in a
direct proceeding for that purpose in accordance with law.
The issue of the validity of the title of the respondents can
only be assailed in an action expressly instituted for that
purpose.
Whether or not the petitioners have the right to claim
ownership over the property is beyond the power of the
court a quo to determine in an action for unlawful
detainer.”
ART. 429
1) GERMAN MANAGEMENT & SERVICES INC
VS CA
177 SCRA 495 – Civil Law – Property – Doctrine of Self-
Help
In February 1982, the spouses Manuel and Cynthia Jose
contracted with German Management and Services, Inc.
for the latter to develop their landholdings into a
residential subdivision. The spouses also executed a
special power of attorney to that effect.
German Management started the project in February
1983, however, German Management discovered that the
land was being possessed by Ernest0 Villeza et al who
were the farmers tilling the said land at that time. German
Management spoke with Villeza et al but the farmers
refused to vacate the land as the farmers claimed that they
have been occupying the land for twelve years.
Nevertheless, German Management went on to develop
the property and demolished the properties of the farmers
without acquiring a court order. In turn, Villeza et al filed
a case of forcible entry against German Management. In
its defense, German Management invoked the Doctrine of
Self-help which provides that:
The owner or lawful possessor of a thing has the right to
exclude any person from the enjoyment and disposal
thereof. For this purpose, he may use such force as may
be reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of his
property. (Article 429, Civil Code)
ISSUE: Whether or not the doctrine of self-help is
applicable in this case.
HELD: No. The Doctrine of Self-help is not applicable
because at the time when German Management excluded
the farmers, there’s no longer an actual or threatened
unlawful physical invasion or usurpation. That actual or
threatened unlawful physical invasion by the farmers
have already lapsed 12 years ago when they began
occupying the said land. In fact, they were already
peaceably farming the land.
What should have been the remedy by German
Management?
German Management should have filed either accion
publiciana or accion reivindicatoria to lawfully eject the
farmers.
But the farmers are not the real owners and in fact, the
spouses Jose have a lawful title over the land?
Regardless of the actual condition of the title to the
property, the party in peaceable quiet possession shall not
be turned out by a strong hand, violence or terror. Further,
there is now a presumption of ownership in favor of the
farmers since they are the ones occupying the said
property. They can only be ejected either by accion
publiciana or accion reivindicatoria through which the
spouses Jose’s better right may be proven.
2) GRAND UNION SUPERMARKET INC. VS.
ESPINO JR.
FACTS:
Plaintiff Jose J. Espino, Jr., a civil engineer and an
executive of Procter and Gamble, was accused of
intentionally refusing to pay a “rat tail” file in one of the
South Supermarket stores in Makati, as he forgot to pay
such item as his wife paid for all the grocery items they
bought for the supermarket. The guards asked him to
follow their store procedures as to that situation, including
signing of an incident report.
As not to worsen the situation caused by the procedures
of the store, which was catching attention from other
people from the store, petitioner offered to pay defendant
Nelia Santos-Fandino a P5.00 bill and said he was paying
for the file whose cost was P3.85. Fandino took the P5.00
bill from plaintiff stating that such is only the petitioner’s
fine for having committed the act.
5
Plaintiff was shocked and objected vigorously that he was
not a common criminal, and they wanted to get back the
P5.00. But Fandino told them that the money would be
given as an incentive to the guards who apprehend
pilferers. The plaintiff then filed the present case to the
trial to claim for damages of the humiliation caused to him
by the incident and to the fine collection, which, the
plaintiff believes, the store owner has no legal ground to
collect such.
After trial, the Court of First Instance of Pasig, Rizal
dismissed the complaint, interposing the appeal to the
Court of Appeals, the latter reversed and set aside the
appealed judgment, granting damages, including
exemplary damages for collecting a fine to the plaintiff.
Not satisfied with the decision of the respondent court, the
petitioner instituted the present petition with the ground
that there is no basis for her to pay exemplary damages to
the plaintiff.
ISSUE:
Whether or not the petitioner legitimately exercised the
right of defense of property within the context of Article
429 of the Civil Code and is thus exempted to pay the
plaintiff with exemplary damages.
HELD:
Petitioners acted in good faith in trying to protect and
recover their property, a right which the law accords to
them. Under Article 429, New Civil Code, the owner or
lawful possessor of a thing has a right to exclude any
person from the enjoyment and disposal thereof and for
this purpose, he may use such force as may be reasonably
necessary to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of his property.
And since a person who acts in the fulfillment of a duty
or in the lawful exercise of a right or office exempts him
from civil or criminal liability, petitioner may not be
punished by imposing fine against the plaintiff or anyone
who may cause damage to his property, or for that matter,
to her store. We agree that petitioners acted upon probable
cause in stopping and investigating private respondent for
taking the file without paying for it, hence, the imposition
of exemplary damages as a warning to others by way of a
deterrent is without legal basis. We, therefore, eliminate
the grant of exemplary damages to the private respondent.
3) UCPB VS. BASCO
Respondent Ruben E. Basco had been
-employed with the petitioner (UCPB) for seventeen (17)
years.[3]
-stockholder thereof and owned 804 common shares of
stock at the par value of P1.00.[4]
-maintained a checking account with the bank
Basco was terminated for grave abuse of discretion and
authority, and breach of trust in the conduct of his job as
Bank Operations Manager of its Olongapo Branch.
However, the respondent still frequented the UCPB main
office in Makati City to solicit insurance policies from the
employees thereat.
Ongsiapco, UCPB First Vice-President issued a
Memorandum to Jesus Belanio of the Security
Department, instructed Belanio not to allow the
respondent access to all bank premises.[9]
Basco went to the UCPB Makati Branch to receive a
check from Rene Jolo, a bank employee, and to deposit
money with the bank for a friend.[18]He seated himself
on a sofa fronting the teller’s booth[19] where other
people were also seated.
Casil, another employee of the bank motioned to the
respondent to get the check. The latter stood up and
proceeded in the direction of Casil’s workstation. After
the respondent had taken about six to seven paces from
the sofa, Caspe and the company guard approached him.
The guards politely showed Ongsiapco’s Memorandum to
the respondent and told the latter that he was not allowed
to enter the DSD working area; it was lunch break and no
outsider was allowed in that area.[36]The respondent
looked at the Memorandum and complied.
ISSUES:
(a) whether or not the petitioner bank abused its right
when it issued, through petitioner Ongsiapco, the
Memorandum barring the respondent access to all bank
premises;
(b) whether or not petitioner bank is liable for nominal
damages in view of the incident involving its security
6
guard Caspe, who stopped the respondent from
proceeding to the working area of the ATM section to get
the check from Casil; and
HELD:
1) On the first issue, the petitioners aver that the petitioner
bank has the right to prohibit the respondent from access
to all bank premises under Article 429 of the New Civil
Code (doctrine of self-help)
We agree that the petitioner may prohibit non-employees
from entering the working area of the ATM section.
However, under the said Memorandum, even if the
respondent wished to go to the bank to encash a check
drawn and issued to him by a depositor of the petitioner
bank in payment of an obligation, or to withdraw from his
account therein, or to transact business with the said bank
and exercise his right as a depositor, he could not do so as
he was barred from entry into the bank.
Even if the respondent wanted to go to the petitioner bank
to confer with the corporate secretary in connection with
his shares of stock therein, he could not do so, since as
stated in the Memorandum of petitioner Ongsiapco, he
would not be allowed access to all the bank premises. The
said Memorandum, as worded, violates the right of the
respondent as a stockholder or a depositor of the petitioner
bank, for being capricious and arbitrary.
The Memorandum even contravenes Article XII,
paragraph 4 (4.1 and 4.2) of the Code of Ethics issued by
the petitioner bank itself, which provides that one whose
employment had been terminated by the petitioner bank
may, nevertheless, be allowed access to bank premises,
thus:
4.1 As a client of the Bank in the transaction of a regular
bank-client activity.
4.2 When the offending party is on official business
concerning his employment with the Bank
For another, the Memorandum, as worded, is contrary to
the intention of the petitioners. Evidently, the petitioners
did not intend to bar the respondent from access to all
bank premises under all circumstances. When he testified,
petitioner Ongsiapco admitted that a bank employee
whose services had been terminated may be allowed to
see an employee of the bank and may be allowed access
to the bank premises under certain conditions,
Petitioner Ongsiapco also testified that a former employee
who is a customer/client of the petitioner bank also has
access to the bank premises, except those areas reserved
for its officers and employees, such as the working areas:
2.) On the second issue, the Court of Appeals ruled that
the petitioner bank is liable for nominal damages to the
respondent despite its finding that the petitioners had the
right to issue the Memorandum. The CA ratiocinated that
the petitioner bank should have allowed the respondent to
walk towards the restricted area of the ATM section until
they were sure that he had entered such area, and only
then could the guards enforce the Memorandum of
petitioner Ongsiapco.
The Court of Appeals ruled that for such failure of the
security guards, the petitioner bank thereby abused its
right of self-help and violated the respondent's right as
one of its depositors:
With respect, however, to the second incident on January
31, 1996, it appears that although according to UCPB
security personnel they tried to stop plaintiff-appellee
from proceeding to the stairs leading to the upper floors,
which were limited to bank personnel only (TSN, pp. 6-
9, June 4, 1997), the said act exposed plaintiff-appellee to
humiliation considering that it was done in full view of
other bank customers.
UCPB security personnel should have waited until they
were sure that plaintiff-appellee had entered the restricted
areas and then implemented the memorandum order by
asking him to leave the premises. Technically, plaintiff-
appellee was still in the depositing area when UCPB
security personnel approached him. In this case, UCPB’s
exercise of its right to self-help was in excess and abusive
to the detriment of the right of plaintiff-appellee as
depositor of said Bank, hence, warranting the award of
nominal damages in favor of plaintiff-appellee.
Nominal damages are adjudicated in order that a right of
a plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized and not for
the purpose of indemnifying any loss suffered by him
(Japan Airlines vs. Court of Appeals, 294 SCRA 19).[51]
The petitioners contend that the respondent is not entitled
to nominal damages and that the appellate court erred in
7
so ruling for the following reasons: (a) the respondent
failed to prove that the petitioner bank violated any of his
rights; (b) the respondent did not suffer any humiliation
because of the overt acts of the security guards; (c) even
if the respondent did suffer humiliation, there was no
breach of duty committed by the petitioner bank since its
security guards politely asked the respondent not to
proceed to the working area of the ATM section because
they merely acted pursuant to the Memorandum of
petitioner Ongsiapco, and accordingly, under Article 429
of the New Civil Code, this is a case of damnum absque
injuria;[52] and (d) the respondent staged the whole
incident so that he could create evidence to file suit
against the petitioners.
We rule in favor of the petitioners.
The evidence on record shows that Casil was in the
working area of the ATM section on the ground floor
when he motioned the respondent to approach him and
receive the check. The respondent then stood up and
walked towards the direction of Casil. Indubitably, the
respondent was set to enter the working area, where non-
employees were prohibited entry; from there, the
respondent could go up to the upper floors of the bank’s
premises through the elevator or the stairway. Caspe and
the company guard had no other recourse but prevent the
respondent from going to and entering such working area.
The security guards need not have waited for the
respondent to actually commence entering the working
area before stopping the latter. Indeed, it would have been
more embarrassing for the respondent to have started
walking to the working area only to be halted by two
uniformed security guards and disallowed entry, in full
view of bank customers.
It bears stressing that the security guards were polite to
the respondent and even apologized for any
inconvenience caused him. The respondent could have
just motioned to Casil to give him the check at the lobby
near the teller’s booth, instead of proceeding to and
entering the working area himself, which the respondent
knew to be an area off-limits to non-employees. He did
not.
The respondent failed to adduce evidence other than his
testimony that people in the ground floor of the petitioner
bank saw him being stopped from proceeding to the
working area of the bank. Evidently, the respondent did
not suffer embarrassment, inconvenience or discomfort
which, however, partakes of the nature of damnum absque
injuria, i.e. damage without injury or damage inflicted
without injustice, or loss or damage without violation of
legal rights, or a wrong due to a pain for which the law
provides no remedy.[53] Hence, the award of nominal
damages by the Court of Appeals should be deleted.
On the third issue, we now hold that the petitioner bank is
not entitled to damages and attorney’s fees as its
counterclaim. There is no evidence on record that the
respondent acted in bad faith or with malice in filing his
complaint against the petitioners. Well-settled is the rule
that the commencement of an action does not per se make
the action wrongful and subject the action to damages, for
the law could not have meant to impose a penalty on the
right to litigate.
We reiterate case law that if damages result from a party’s
exercise of a right, it is damnum absque injuria.[54]
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The assailed Decision of the Court of
Appeals is REVERSED and SET ASIDE. The complaint
of the respondent in the trial court and the counterclaims
of the petitioners are DISMISSED.
ART. 432
1) TAN VS STANDARD OIL CO.
FACTS: Standard Vacuum Oil Company ordered the
delivery to the Rural Transit Company 1,925 gallons of
gasoline using a gasoline tank-truck trailer. The truck was
driven by Julito Sto. Domingo, who was helped Igmidio
Rico. While the gasoline was being discharged to the
underground tank, it caught fire, whereupon Julito Sto.
Domingo drove the truck across the Rizal Avenue
Extension and upon reaching the middle of the street he
abondoned the truck with continued moving to the
opposite side of the first street causing the buildings on
that side to be burned and detroyed. The house of Anita
Tan was among those destroyed.
Julito Sto. Domingo and Imigidio Rico charged with
arson through reckless imprudence after trial, both were
acquitted, the court holding that their negligence was not
proven and the fire was due to an unfortunate accident.
Anita Tan then brought the action against the Standard
Vacuum Oil Company and the Rural Transit Company;,
8
Defendants filed separate motions to dismiss alleging in
substance that plaintiff's action is barred by prior
judgment. And the rule that extinction of the penal action
does not carry with it extinction of the civil, unless the
extinction proceeds from the declaration in a final
judgment that the fact from which the civil might arise did
not exist.
ISSUE: WON the TAN can still go after Vacuum Oil and
Rural Transit
HELD: YES,
When the court acquitted the accused because the fire was
due to an unfortunate accident it actually said that the fire
was due to a fortuitous event for which the accused are
not to blame. It actually exonerated them from civil
liability. But the case takes a different aspect with respect
to the other defendants. For one thing, the principle of res
judicata cannot apply to them for the simple reason that
they were not included as co-accused in the criminal case.
Take, for instance, of the Standard Vacuum Oil Company.
this company is sued not precisely because of supposed
negligent acts of its two employees Julito Sto. Domingo
and Igmidio Rico but because of acts of its own which
might have contributed to the fire that destroyed the house
of the plaintiff. The precautions or measures which this
company has allegedly failed to take to prevent fire are
not clearly stated, but they are matters of evidence which
need not now be determined. Suffice it to say that such
allegation furnishes enough basis for a cause of action
against this company. There is no need for the plaintiff to
make a reservation of her right to file a separate civil
action
Second. In cases where the persons for whose benefit the
harm has been prevented shall be civilly liable in
proportion to the benefit which they have received.
Company can hardly be disputed, it appearing that the
damage caused to the plaintiff was brought about mainly
because of the desire of driver Julito Sto. Domingo to
avoid greater evil or harm, which would have been the
case had he not brought the tank-truck trailer to the middle
of the street, for then the fire would have caused the
explosion of the gasoline deposit of the company which
would have resulted in a conflagration of much greater
proportion and consequences to the houses nearby or
surrounding it. It cannot be denied that this company is
one of those for whose benefit a greater harm has been
prevented, and as such it comes within the purview of said
penal provision. The acquittal of the accused cannot,
therefore, be deemed a bar to a civil action against this
company because its civil liability is completely divorced
from the criminal liability of the accused. The rule
regarding reservation of the right to file a separate civil
action does not apply to it.
ART. 434
1) CORNELIO DEL FIERRO ET AL VS. SEQUUAN
DEL FIERRO VS. SEGUIRAN 152141 AUG 8,2011
FACTS:
The Complaint alleged that plaintiffs
(petitioners) were the owners and possessors of a parcel
of land identified as Lot Nos. 1625 and 1626, formerly
part of Lot No. 1197, situated at Barangay Locloc,
Palauig, Zambales. On July 26, 1964, Lodelfo and
Narciso Marcial unlawfully entered the land occupied by
plaintiffs. Plaintiffs sued them for forcible entry before
the Municipal Court of Palauig.
The municipal court ruled in favor of plaintiffs, which
decision was affirmed on appeal by the CFI of Iba,
Zambales, Branch II on August 1, 1973. Consequently,
Lodelfo and Narciso Marcial were ejected from the
premises. Meanwhile, on June 29, 1964, Marcial had
mortgaged the lots to the Rural Bank of San Marcelino,
Inc., which foreclosed the real estate mortgage on
December 26, 1972, and consolidated ownership over the
lots on April 22, 1982. On October 28, 1981, defendant
Rene S. Seguiran purchased from Lodelfo Marcial
(deceased) the subject lots. On November 9, 1981,
defendant purchased the subject lots again from the Rural
Bank of San Marcelino, Inc.
Moreover, plaintiffs alleged that Lodelfo Marcial,
predecessor-in-interest of defendant, had no legal right to
convey the said lots to plantiffs, since he was merely a
deforciant in the said lots. Further, defendant, with
evident bad faith, fraudulently applied with the Bureau of
Lands for a free patent over the said lots, alleging that he
was the actual possessor thereof, which constitutes a false
statement, since the plaintiffs were the ones in actual
possession. Despite knowing that the said lots were the
subject of legal controversy before the CFI of Iba,
Zambales, Branch II, defendant fraudulently secured a
certification from the Court of Olongapo to prove that the
said parcels of land were not subject of any court action.
9
As a consequence of the foregoing illegal and fraudulent
acts, defendant was able to secure OCT Nos. P-7013 and
P-7014 for Lot Nos. 1625 and 1626, respectively.
On May 20, 1988, defendant filed his
Answer,30 claiming that when he bought the land in
dispute on October, 28, 1981, Lodelfo Marcial was no
longer its owner, but the Rural Bank of San Marcelino,
Inc., since Marcial failed to redeem the land within the
one-year period of redemption. His only purpose for
buying the land from the mortgagor, Lodelfo Marcial in
November 1981 was for the peaceful turn-over of the
property to him by Marcial.
Defendant denied any fraud, illegality or bad faith in
securing OCT Nos. P-7013 and P-7014. He asserted that
when he secured a certification from the RTC on June 6,
1983, there was in truth no pending case involving the
subject properties in any court in Zambales; hence, no bad
faith could be attributed to him. Defendant prayed that
judgment be rendered by the trial court dismissing the
complaint and ordering plaintiffs to pay him actual, moral
and exemplary damages as well as attorney’s fees and the
expenses of litigation.
The trial court held that plaintiffs (petitioners) failed to
prove the identity of the property sought to be recovered.
The numerous documents they presented to prove
ownership of Lot Nos. 1625 and 1626 showed that the
properties covered by sale or pacto de retro are located at
Liozon, Palauig, Zambales, while Lot Nos. 1625 and
1626 are located at Locloc, Palauig, Zambales; and there
is no clear showing that parts of Liozon became Locloc.
Moreover, although the Del Fierros were declared as the
possessors of the property in the ejectment case (forcible
entry) filed by Generosa del Fierro against Lodelfo and
Narciso Marcial, the property concerned in the said case
is Lot No. 1197. There was no evidence as to the original
size of Lot No. 1197 and no proof that Lot Nos. 1625 and
1626 formed part of Lot No. 1197. Based on the
foregoing, the trial court dismissed plaintiffs’ complaint.
ISSUE: whether petitioners are entitled to reconveyance
of Lot Nos. 1625 and 1626, and whether the certificates
of title of respondent to the said lots should be cancelled.
HELD: NO
The requisites of reconveyance are provided for
in Article 434 of the Civil Code, thus:
Art. 434. In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his
title and not on the weakness of the defendant’s claim.
Article 434 of the Civil Code provides that to successfully
maintain an action to recover the ownership of a real
property, the person who claims a better right to it must
prove two (2) things: first, the identity of the land claimed;
and second, his title thereto.45
In regard to the first requisite, in an accion
reinvindicatoria, the person who claims that he has a
better right to the property must first fix the identity of the
land he is claiming by describing the location, area and
boundaries thereof.46 Anent the second requisite, i.e., the
claimant's title over the disputed area, the rule is that a
party can claim a right of ownership only over the parcel
of land that was the object of the deed.47
In this case, petitioners failed to prove the identity of the
parcels of land sought to be recovered and their title
thereto. Petitioners contend that they are the owners of
Lot Nos. 1625 and 1626 by virtue of the decision of the
Municipal Court of Palauig, Zambales in the ejectment
case (forcible entry)48 against Lodelfo and Narciso
Marcial, declaring them (petitioners) as the ones in
possession of the property, which decision was affirmed
on appeal.
However, as stated by the trial court and the Court of
Appeals, the property involved in the ejectment case was
Lot No. 1197, and it was never mentioned in the
respective decisions49 of the Municipal Court of Palauig,
Zambales and the CFI of Zambales, Branch II-Iba that the
portion intruded upon was Lot Nos. 1625 and 1626.
Moreover, petitioners failed to adduce in evidence the
technical description of Lot No. 1197 and failed to prove
that Lot Nos. 1625 and 1626 were part of or used to be
part of Lot No. 1197.
Further, the documents presented by petitioners to prove
their title over Lot Nos. 1625 and 1626 showed that the
properties covered therein were located in Barrio Liozon,
Palauig, Zambales, while Lot Nos. 1625 and 1626 are
located in Barrio Locloc, Palauig, Zambales. In addition,
petitioners failed to establish which of the deeds of sale,
donation or documents evidencing transfer of properties
to their father, Miguel del Fierro, which were adduced in
evidence, covered Lot Nos. 1625 and 1626.
A perusal of the documents ( DEED OF SALE IN
SPANISH )would readily show that the lots indicated in
the Spanish deeds of conveyence were located in Barrio
Lioson and not in Locloc, Palauig, Zambales, the actual
location of the Lot Nos. 1625 and 1626. As to the tax
declarations, the real properties declared therein, although
situated in Locloc, Palauig, Zambales were not designated
as Lot Nos. 1625 and 1626 until the year 1985, the same
year the said lots were titled in the name of defendant-
appellee. And even without such designation of Lot Nos.
10
1625 and 1626, plaintiffs-appellants failed to show that
the separate lots which their predecessor-in-interest, Don
Miguel del Fierro, had acquired in the 1920’s, were the
very same land (or included therein) which have been
designated as Lot Nos. 1625 and 1626, or which was
covered by the land supposedly donated by their
grandfather to Don Miguel del Fierro. In other words, the
identity of the land being claimed by plaintiffs-appellants
could not be clearly established on the basis of either the
Spanish deeds of purchase and donation or the old tax
declarations presented by plaintiffs-appellants.50
Based on the foregoing, petitioners failed to prove the
identity of the properties sought to be recovered and their
title thereto.
As regards the second issue raised, petitioners
contend that the Partial Pre-Trial Order stated that during
the pre-trial conference the following facts were
stipulated on:
1) By the plaintiffs and intervenor – that Lot 1625
is actually occupied by the Del Fierros, while Lot
1626, Cad. Lot 364-D of the Palauig is occupied
by the heirs of Francisco Santos, who is already
deceased. The defendant did not admit this fact.
2) The plaintiffs and defendants—that there
exists a decision rendered by the then Court of
First Instance of Zambales thru Honorable Judge
Pedro Cenzon in favor of the plaintiffs in this
case, affirming the decision of the Municipal
Trial Court of Palauig, Zambales where it was
stated that the plaintiffs are the ones in possession
of Lots 1625 and 1626, which is docketed as Civil
Case No. 706-I entitled "Generosa Jimenez Vda.
de Del Fierro, et al. versus Leodolfo Marcial, et
al." The intervenor did not admit this fact.52
Petitioners contend that the said judicial admission is
binding and conclusive on the respondent and it cannot
just be ignored by the trial court without doing violence
to Section 4, Rule 129 of the Rules of Evidence.
Petitioners also contend that the decision of the appellate
court in the ejectment case (Civil Case No. 706-I), filed
by petitioners against Lodelfo Marcial, respondent’s
predecessor-in-interest, is conclusive as to petitioners’
possession of Lot Nos. 1625 and 1626. Since petitioners
are in possession, respondent fraudulently applied for and
procured free patents, as the consideration in qualifying
as a patentee is that the applicant is in actual possession
of the land applied for.
Moreover, the undisputed possession of petitioners and
their predecessors of the land as early as 1920s had long
converted the parcels of land to private land and no longer
part of the public domain.
Petitioners’ contention does not persuade.
As stated by the trial court and the Court of Appeals, the
ejectment case entitled Generosa Jimenez Vda. de Del
Fierro, et al. v. Leodolfo Marcial, et al. involved Lot No.
1197, and there was no mention of Lot Nos. 1625 and
1626 therein. The land involved in the ejectment case was
described by the plaintiffs (petitioners) in their
Complaint54 as follows:
Consisting of 21.3196 hectares, more or less, and
bounded on the North by Leoncia Apostol, Heirs of P.
Lesaca, Justa Ponce and P. Artiquera; East by Hrs. of
Potenciano Lesaca, M. Abdon, P. Artiquera, David Abdon
and D. Abdon; South by P. Garcia, Barrio Road and
Maximo Abdon and West by River and Beach. It is
designated as Lot No. 1197 of the Palauig Cadastre and
declared for taxation purposes in the name of the Heirs of
Miguel del Fierro under Tax Declaration No. 18324 and
assessed at P5,330.00.55
Moreover, in this case, petitioners failed to prove that Lot
Nos. 1625 and 1626 were part of Lot No. 1197. The
Survey Map56 of Lot 1626 showed that Lot Nos. 1197,
1625, and 1626 are distinct lots. The cadastral survey of
Lot Nos. 1625 and 1626 was conducted sometime in
1962.57 The ejectment case was filed in 1964, after the
cadastral survey of Lot Nos. 1625 and 1626, yet
petitioners did not mention in their complaint that the
ejectment case involved Lot Nos. 1625 and 1626.
In view of the foregoing, the Partial Pre-trial
Order mistakenly stated that petitioners were declared as
the ones in possession of Lot Nos. 1625 and 1626 in the
ejectment case. Even the trial court stated during the pre-
trial conference held on October 28, 1988 that there was
no mention of Lot Nos. 1625 and 1626 in the decision of
the CFI of Zambales, Branch II-Iba in the ejectment case
(Civil Case No. 706-I).
Moreover, contrary to the contention of petitioners,
respondent did not admit that petitioners and the
intervenors were in possession of Lot Nos. 1625 and
1626, respectively, which fact was clearly stated in the
Partial Pre-trial Order.
2) DATU KIRAM SAMPACO VS. HADJI SERAD
MINGA LANTUD (FULL TEXT)
11
3) ROGELIO JAKOSALEM ET AL VS ROBERTO
BARANGAN
facts of the case
 Respondent Col. Roberto S. Barangan entered
into a Land Purchase Agreement with Citadel
Realty Corporation. Upon full payment of the
purchase price, a Deed of Absolute Sale was
executed in his favor.
o The TCT over the land was likewise
transferred to his name.
 Barangan was unable to physically occupy the
subject land as he was then a member of the
Philippine Air Force. Thus, he was often assigned
to different stations in the Philippines.
 Upon his retirement from the government
service, he went to visit his property and
discovered that it was being occupied by
petitioner Godofredo B. Dulfo and his family.
 Barangan sent a letter to Dulfo demanding that
they vacate the property.
o Dulfo, through his son-in-law Atty.
Rogelio J. Jakosalem, replied that the
said property was owned by them
through a Deed of Assignment from the
previous owner, Samson.
 Barangan filed a complaint for violation of the
anti-squatting law before the Barangay. No
amicable settlement was reached; hence, the
complaint was filed before the Prosecutor’s
Office.
o Case dismissed as the issue of ownership
must be resolved in a civil action.
 Barangan filed a complaint for recovery of
possession before the RTC of Antipolo, and
presented the following as evidence:
o Testimony of Estardo (caretaker of the
subdivision) to the effect that the Dulfos
were previously occupying an adjacent
lot, but then started squatting on
Barangan’s property;
o Testimony of an employee of the
Municipal Assessor of Rizal, to prove
that Barangan was the registered owner
of the lot; and
o Testimony of Engr. Jonco, to prove that
the lot owned by Barangan and that
occupied by Dulfo were one and the
same.
 RTC: Dismissed the case. Prescription and laches
already set in, and Barangan was not able to
sufficiently prove his claim.
 CA: Reversed.
issue
Whether or not Barangan is entitled to recover possession
of the property. YES.
Ratio
The property was sufficiently identified.
 Barangan offered the testimonies of Engr. Jonco,
who conducted the relocation survey, and
Estardo, the caretaker of the subdivision, who
showed Barangan the exact location of the
property.
 He likewise submitted the Verification Survey
Plan of the lot based on the technical description
in the TCT.
Barangan was able to prove his title thereto.
 Barangan presented the following in evidence:
o Land Purchase Agreement;
o Deed of Absolute Sale; and
o TCT.
Laches and prescription do not apply.
 Prescription does not apply to registered land
covered by the Torrens system.
 Under PD 1529, no title to registered land in
derogation to that of the registered owner shall be
acquired by prescription or adverse possession.

ART. 435
1) ATO & MCIAA VS GAPUCO
FACTS:
1. Respondent was the owner of Cadastral Lot No. 72
consisting of 995 square meters located in the vicinity of
the Lahug Airport in Cebu City.
2. The Lahug Airport had been turned over by the US
Army to RP sometime in 1947 through the Surplus
Property Commission, which accepted it in behalf of the
Philippine Government. In 1947, the Surplus Property
Commission was succeeded by the Bureau of
Aeronautics, which office was supplanted by the National
Airport Corporation (NAC). The NAC was in turn
12
dissolved and replaced with the Civil Aeronautics
Administration (CAA).
3. Sometime in 1949, the NAC informed the owners of
the various lots surrounding the Lahug Airport, including
the herein respondent, that the government was acquiring
their lands for purposes of expansion. Some landowners
were convinced to sell their properties on the assurance
that they would be able to repurchase the same when these
would no longer be used by the airport. Others, including
Gopuco, refused to do so.
4. Thus, on 16 April 1952, the CAA filed a complaint
with the CFI of Cebu for the expropriation of Lot No. 72
and its neighboring realties.
5. CFI promulgated a Decision:
a. Declaring the expropriation of [the subject lots,
including Lot No. 72] justified and in lawful exercise of
the right of eminent domain
b. Declaring a balance of P1,990 in favor of Apolonio Go
Puco, Jr. with legal interest from November 16, 1947 until
fully paid.
c. After the payment of the foregoing financial obligation
to the landowners, directing the latter to deliver to the
plaintiff the corresponding Transfer Certificates of Title
to their respective lots; and upon the presentation of the
said titles to the Register of Deeds, ordering the latter to
cancel the same and to issue, in lieu thereof, new Transfer
Certificates of Title in the name of the plaintiff.
6. No appeal was taken from the above Decision on Lot
No. 72, and the judgment of condemnation became final
and executory. Thereafter, on 23 May 1962, absolute title
to Lot No. 72 was transferred to the Republic of the
Philippines under TCT No. 25030.
7. Subsequently, when the Mactan International Airport
commenced operations, the Lahug Airport was ordered
closed by then President Corazon C. Aquino in a
Memorandum of 29 November 1989. Lot No. 72 was thus
virtually abandoned.
8. On 16 March 1990, Gopuco wrote the Bureau of Air
Transportation, seeking the return of his lot and offering
to return the money previously received by him as
payment for the expropriation. This letter was ignored.
9. In the same year, Congress passed RA 6958 creating
MCIAA and in part providing for the transfer of the assets
of the Lahug Airport thereto. Consequently, on 08 May
1992, ownership of Lot No. 72 was transferred to MCIAA
under TCT No. 120356.
10. Respondent filed an amended complaint for recovery
of ownership with RTC. He alleged that:
a. The original purpose for which the property was
expropriated had ceased or otherwise been abandoned,
and title to the property had therefore reverted to him.
b. that when the original judgment of expropriation had
been handed down, and before they could file an appeal
thereto, the CAA offered them a compromise settlement
whereby they were assured that the expropriated lots
would be resold to them for the same price as when it was
expropriated in the event that the Lahug Airport would be
abandoned.
c. Respondent claims to have accepted this offer.
However, he failed to present any proof on this matter,
and later admitted that insofar as the said lot was
concerned, no compromise agreement was entered into by
the government and the previous owners.
11. The trial court rendered a Decision dismissing the
complaint.
12. Respondent appealed to the Court of Appeals, which
overturned the RTC decision, ordered the herein
petitioners to reconvey Lot No. 72 to Gopuco upon
payment of the reasonable price as determined by it.
13. Motion for Reconsideration was denied. Hence
appeal.
ISSUE: WHETHER THE COURT OF APPEALS
ERRED IN HOLDING THAT RESPONDENT HAS
THE RIGHT TO RECLAIM OWNERSHIP OVER THE
SUBJECT EXPROPRIATED LOT.
HELD: SC resolve to grant the petition.
1. CFI reasoned that the planned expansion of the airport
justified the exercise of eminent domain:
a. Although the Mactan Airport is being constructed, it
does not take away the actual usefulness and importance
of the Lahug Airport; it is handling the air traffic both
civilian and military. Then, no evidence was adduced to
13
show how soon is the Mactan Airport to be placed in
operation and whether the Lahug Airport will be closed
immediately thereafter. It is for the other departments of
the Government to determine said matters. The Court
cannot substitute its judgment for those of the said
departments or agencies. In the absence of such a
showing, the Court will presume that the Lahug Airport
will continue to be in operation.
2. By the time Gopuco had filed his action for recovery
of ownership of Lot No. 72, Lahug Airport had indeed
ceased to operate. Nevertheless, the trial court held:
a. When real property has been acquired for public use
unconditionally, either by eminent domain or by
purchase, the abandonment or non-use of the real
property, does not ipso facto give to the previous owner
of said property any right to recover the same.
3. The Court of Appeals nevertheless ruled that:
a. The foundation of the right to exercise the power of
eminent domain is genuine necessity. Condemnation is
justified only if it is for the public good and there is
genuine necessity of a public character. Thus, when such
genuine necessity no longer exists as when the State
abandons the property expropriated, government interest
must yield to the private right of the former land owner,
whose property right was disturbed as a consequence of
the exercise of eminent domain.
4. In this petition, the MCIAA reiterates that the Republic
of the Philippines validly expropriated Lot No. 72 through
the proceedings in Civil Case No. R-1881, the judgment
of which had long become final and executory. It further
asserts that said judgment vested absolute and
unconditional title in the government, specifically on the
petitioners, there having been no condition whatsoever
that the property should revert to its owners in case the
Lahug Airport should be abandoned.
5. When private land is expropriated for a particular
public use, and that particular public use is abandoned,
does the land so expropriated return to its former owner?
a. Depends upon the character of the title acquired by the
expropriator, whether it be the State, a province, a
municipality, or a corporation which has the right to
acquire property under the power of eminent domain.
b. If, for example, land is expropriated for a particular
purpose, with the condition that when that purpose is
ended or abandoned the property shall return to its former
owner, then, of course, when the purpose is terminated or
abandoned the former owner reacquires the property so
expropriated.
c. When land has been acquired for public use in fee
simple, unconditionally, either by the exercise of eminent
domain or by purchase, the former owner retains no rights
in the land, and the public use may be abandoned or the
land may be devoted to a different use, without any
impairment of the estate or title acquired, or any reversion
to the former owner
6. Although she was upheld by both the RTC of Cebu and
the Court of Appeals, on appeal we held that “the terms
of the judgment (in Civil Case No. R-1881) are clear and
unequivocal and granted title to Lot No. 941 in fee simple
to the Republic of the Philippines. There was no condition
imposed to the effect that the lot would return to
CHIONGBIAN or that CHIONGBIAN had a right to
repurchase the same if the purpose for which it was
expropriated is ended or abandoned or if the property was
to be used other than as the Lahug Airport.”
7. Moreover, we held that although other lot owners were
able to successfully reacquire their lands by virtue of a
compromise agreement, since CHIONGBIAN was not a
party to any such agreement, she could not validly invoke
the same.
8. A compromise agreement, when not contrary to law,
public order, public policy, morals, or good customs, is a
valid contract which is the law between the parties. Note
that respondent has not shown that any of the compromise
agreements were in any way tainted with illegality,
irregularity or imprudence. Indeed, anyone who is not a
party to a contract or agreement cannot be bound by its
terms, and cannot be affected by it. Since Gopuco was not
a party to the compromise agreements, he cannot legally
invoke the same. Gopuco argues that there is present, in
cases of expropriation, an “implied contract” that the
properties will be used only for the public purpose for
which they were acquired. No such contract exists.
9. In this case, the judgment on the propriety of the taking
and the adequacy of the compensation received have long
become final. We have also already held that the terms of
that judgment granted title in fee simple to the Republic
14
of the Philippines. Therefore, pursuant to our ruling in
Fery, no rights to Lot No. 72, either express or implied,
have been retained by the herein respondent.
10. The trial court was thus correct in denying Gopuco’s
claim for the reconveyance of Lot No. 72 in his favor.
However, for failure of the petitioners to present any
proof that this case was clearly unfounded or filed for
purposes of harassment, or that the herein respondent
acted in gross and evident bad faith, the reimposition of
litigation expenses and costs has no basis. It is not sound
public policy to set a premium upon the right to litigate
where such right is exercised in good faith, as in the
present case.
2) REPUBLIC VS. LIM
FACTS: In 1938, the Republic instituted a special
civil action for expropriation of a land in Lahug, Cebu
City for the purpose of establishing a military reservation
for the Philippine Army. The said lots were registered in
the name of Gervasia and Eulalia Denzon. The Republic
deposited P9,500 in the PNB then took possession of the
lots. Thereafter, on May 1940, the CFI rendered its
Decision ordering the Republic to pay the Denzons the
sum of P4,062.10 as just compensation. The Denzons
appealled to the CA but it was dismissed on March 11,
1948. An entry of judgment was made on April 5, 1948.
In 1950, one of the heirs of the Denzons, filed with the
National Airports Corporation a claim for rentals for the
two lots, but it "denied knowledge of the matter." On
September 6, 1961, Lt. Cabal rejected the claim but
expressed willingness to pay the appraised value of the
lots within a reasonable time.
For failure of the Republic to pay for the lots, on
September 20, 1961, the Denzons’ successors-in-interest,
Valdehueza and Panerio, filed with the same CFI an
action for recovery of possession with damages against
the Republic and AFP officers in possession of the
property.
On November 1961, Titles of the said lots were issued in
the names of Valdehueza and Panerio with the annotation
"subject to the priority of the National Airports
Corporation to acquire said parcels of land, Lots 932 and
939 upon previous payment of a reasonable market
value".
On July 1962, the CFI promulgated its Decision in favor
of Valdehueza and Panerio, holding that they are the
owners and have retained their right as such over lots
because of the Republic’s failure to pay the amount of
P4,062.10, adjudged in the expropriation proceedings.
However, in view of the annotation on their land titles,
they were ordered to execute a deed of sale in favor of the
Republic.
They appealed the CFI’s decision to the SC. The latter
held that Valdehueza and Panerio are still the registered
owners of Lots 932 and 939, there having been no
payment of just compensation by the Republic. SC still
ruled that they are not entitled to recover possession of the
lots but may only demand the payment of their fair market
value.
Meanwhile, in 1964, Valdehueza and Panerio mortgaged
Lot 932 to Vicente Lim, herein respondent, as security for
their loans. For their failure to pay Lim despite demand,
he had the mortgage foreclosed in 1976. The lot title was
issued in his name.
On 1992, respondent Lim filed a complaint for quieting
of title with the RTC against the petitioners herein. On
2001, the RTC rendered a decision in favor of Lim,
declaring that he is the absolute and exclusive owner of
the lot with all the rights of an absolute owner including
the right to possession. Petitioners elevated the case to the
CA. In its Decision dated September 18, 2003, it sustained
the RTC Decision saying: “...This is contrary to the rules
of fair play because the concept of just compensation
embraces not only the correct determination of the
amount to be paid to the owners of the land, but also the
payment for the land within a reasonable time from its
taking. Without prompt payment, compensation cannot be
considered "just"...”
Petitioner, through the OSG, filed with the SC a petition
for review alleging that they remain as the owner of Lot
932.
ISSUE: Whether the Republic has retained
ownership of Lot 932 despite its failure to pay
respondent’s predecessors-in-interest the just
compensation therefor pursuant to the judgment of the
CFI rendered as early as May 14, 1940.
HELD: One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his
15
private property without due process of law; and in
expropriation cases, an essential element of due process is
that there must be just compensation whenever private
property is taken for public use.7 Accordingly, Section 9,
Article III, of our Constitution mandates: "Private
property shall not be taken for public use without just
compensation." The Republic disregarded the foregoing
provision when it failed and refused to pay respondent’s
predecessors-in-interest the just compensation for Lots
932 and 939.
The Court of Appeals is correct in saying that
Republic’s delay is contrary to the rules of fair play. In
jurisdictions similar to ours, where an entry to the
expropriated property precedes the payment of
compensation, it has been held that if the compensation is
not paid in a reasonable time, the party may be treated as
a trespasser ab initio.
As early as May 19, 1966, in Valdehueza, this Court
mandated the Republic to pay respondent’s predecessors-
in-interest the sum of P16,248.40 as "reasonable market
value of the two lots in question." Unfortunately, it did
not comply and allowed several decades to pass without
obeying this Court’s mandate.
It is tantamount to confiscation of private property. While
it is true that all private properties are subject to the need
of government, and the government may take them
whenever the necessity or the exigency of the occasion
demands, however from the taking of private property by
the government under the power of eminent domain, there
arises an implied promise to compensate the owner for his
loss.
There is a recognized rule that title to the property
expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation. So, how
could the Republic acquire ownership over Lot 932 when
it has not paid its owner the just compensation, required
by law, for more than 50 years? Clearly, without full
payment of just compensation, there can be no transfer of
title from the landowner to the expropriator.
SC ruled in earlier cases that expropriation of lands
consists of two stages. First is concerned with the
determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its
exercise.
The second is concerned with the determination by the
court of "the just compensation for the property sought to
be taken." It is only upon the completion of these two
stages that expropriation is said to have been completed
In Republic v. Salem Investment Corporation, we ruled
that, "the process is not completed until payment of just
compensation." Thus, here, the failure of the Republic to
pay respondent and his predecessors-in-interest for a
period of 57 years rendered the expropriation process
incomplete.
Thus, SC ruled that the special circumstances prevailing
in this case entitle respondent to recover possession of the
expropriated lot from the Republic.
While the prevailing doctrine is that "the non-payment of
just compensation does not entitle the private landowner
to recover possession of the expropriated lots, however,
in cases where the government failed to pay just
compensation within five (5) years from the finality of the
judgment in the expropriation proceedings, the owners
concerned shall have the right to recover possession of
their property.
After all, it is the duty of the government, whenever it
takes property from private persons against their will, to
facilitate the payment of just compensation. In
Cosculluela v. Court of Appeals, we defined just
compensation as not only the correct determination of the
amount to be paid to the property owner but also the
payment of the property within a reasonable time.
Without prompt payment, compensation cannot be
considered "just."
3)NAPOCOR VS. HEIRS OF MACABANGKIT
SANGKAY
FACTS:
• Pursuant to its legal mandate under Republic Act
No. 6395 (An Act Revising the Charter of the National
Power Corporation), NPC undertook the Agus River
Hydroelectric Power Plant Project in the 1970s to
generate electricity for Mindanao. The project included
the construction of several underground tunnels to be used
in diverting the water flow from the Agus River to the
hydroelectric plants.[2]
16
• 1997: Respondents sued NPC in the RTC for the
recovery of damages and of the property, with the
alternative prayer for the payment of just compensation
Allegations: that one of the underground tunnels
of NPC that diverted the water flow of the Agus River for
the operation of the Hydroelectric Project in Agus V,
Agus VI and Agus VII traversed their land
that the underground tunnel had been constructed
without their knowledge and consent; that the presence of
the tunnel deprived them of the agricultural, commercial,
industrial and residential value of their land
• NPC’s Answer: the Heirs of Macabangkit had no
right to compensation under section 3(f) of Republic Act
No. 6395, under which a mere legal easement on their
land was established; that their cause of action, should
they be entitled to compensation, already prescribed due
to the tunnel having been constructed in 1979; and that by
reason of the tunnel being an apparent and continuous
easement, any action arising from such easement
prescribed in five years
• RTC ruled in favor of the plaintiffs finding that
an underground tunnel was constructed therein
Ordered NPC to pay P113,532,500.00 as actual
damages or just compensation
NPC to pay rental fees
• the RTC issued a supplemental decision stating
that respondents’ land or properties are condemned in
favor of defendant National Power Corporation, upon
payment of the aforesaid sum
• the Heirs of Macabangkit filed an urgent motion
for execution of judgment pending appeal.[9]
• The RTC granted the motion and issued a writ of
execution
• NPC assailed such decision by filing a writ by
petition for certiorari in the CA
• CA: affirmed the decision of the RTC
Rationale:
the testimonies of NPCs witness Gregorio
Enterone and of the respondents witness Engr. Pete
Sacedon, the topographic survey map, the sketch map,
and the ocular inspection report sufficiently established
the existence of the underground tunnel traversing the
land of the Heirs of Macabangkit
Section 3(i) of R.A. No. 6395, being silent about
tunnels, did not apply to the present case
• Contention of NPC: the CA should have applied
Section 3(i) of Republic Act No. 6395, which provided a
period of only five years from the date of the construction
within which the affected landowner could bring a claim
against it; and that even if Republic Act No. 6395 should
be inapplicable, the action of the Heirs of Macabangkit
had already prescribed due to the underground tunnel
being susceptible to acquisitive prescription after the
lapse of 10 years pursuant to Article 620 of the Civil Code
due to its being a continuous and apparent legal easement
under Article 634 of the Civil Code.
• National Power Corporation (NPC) seeks the
review on certiorari of the decision of the CA
ISSUE: WON NPC is liable for payment of just
compensation?
RULING: Yes.
1. Factual findings of the RTC are binding since it
was affirmed by the RTC
the evidence on the tunnel was substantial, for the
significance of the topographic survey map and the sketch
map (as indicative of the extent and presence of the tunnel
construction) to the question on the existence of the tunnel
was strong
These two (2) pieces of documentary evidence
readily point the extent and presence of the tunnel
construction coming from the power cavern near the small
man-made lake which is the inlet and approach tunnel, or
at a distance of about two (2) kilometers away from the
land of the plaintiffs-appellees, and then traversing the
entire and the whole length of the plaintiffs-appellees
property, and the outlet channel of the tunnel is another
small man-made lake
The ocular inspection done by the RTC actually
confirmed the existence of the tunnel
17
2. Five-year prescriptive period under Section 3(i)
of Republic Act No. 6395 does not apply to claims for just
compensation
prescription did not bar the present action to
recover just compensation
Section 3(i) includes no limitation except those
enumerated after the term works. Accordingly, the term
works is considered as embracing all kinds of
constructions, facilities, and other developments that can
enable or help NPC to meet its objectives of developing
hydraulic power expressly provided under paragraph (g)
of Section 3.[23] The CAs restrictive construal of Section
3(i) as exclusive of tunnels was obviously unwarranted,
for the provision applies not only to development works
easily discoverable or on the surface of the earth but also
to subterranean works like tunnels
the prescriptive period provided under Section
3(i) of Republic Act No. 6395 is applicable only to an
action for damages, and does not extend to an action to
recover just compensation like this case
JUST COMPENSATION (inverse condemnation)
DAMAGES
has the objective to recover the value of property taken in
fact by the governmental defendant, even though no
formal exercise of the power of eminent domain has been
attempted by the taking agency. seeks to vindicate a legal
wrong through damages, which may be actual, moral,
nominal, temperate, liquidated, or exemplary
Just compensation is the full and fair equivalent of the
property taken from its owner by the expropriator. The
measure is not the takers gain, but the owner’s loss. The
word just is used to intensify the meaning of the word
compensation in order to convey the idea that the
equivalent to be rendered for the property to be taken shall
be real, substantial, full, and ample When a right is
exercised in a manner not conformable with the norms
enshrined in Article 19[28] and like provisions on human
relations in the Civil Code, and the exercise results to the
damage of another, a legal wrong is committed and the
wrongdoer is held responsible
Basis: Constitution statutory enactments
arises from the exercise by the State of its power of
eminent domain against private property for public use
emanates from the transgression of a right
Due to the need to construct the underground
tunnel, NPC should have first moved to acquire the land
from the Heirs of Macabangkit either by voluntary tender
to purchase or through formal expropriation proceedings.
In either case, NPC would have been liable to pay to the
owners the fair market value of the land, for Section 3(h)
of Republic Act No. 6395 expressly requires NPC to pay
the fair market value of such property at the time of the
taking
3. The construction constitutes taking of the land as
to entitle the owners to just compensation
there was a full taking on the part of NPC,
notwithstanding that the owners were not completely and
actually dispossessed.
It is settled that the taking of private property for
public use, to be compensable, need not be an actual
physical taking or appropriation.[36] Indeed, the
expropriators action may be short of acquisition of title,
physical possession, or occupancy but may still amount to
a taking
As a result, NPC should pay just compensation
for the entire land
Just compensation was based on the valuation of
the OIC of the City Assessors Office who testified that,
within that area, that area is classified as industrial and
residential. That plaintiffs land is adjacent to many
subdivisions and that is within the industrial
classification. He also issued a certificate stating that the
appraised value of plaintiffs land ranges fromP400.00 to
P500.00 per square meter
the fixing of just compensation must be based on
the prevailing market value at the time of the filing of the
complaint, instead of reckoning from the time of the
taking pursuant to Section 3(h) of Republic Act No. 6395
Compensation that is reckoned on the market
value prevailing at the time either when NPC entered or
when it completed the tunnel, as NPC submits, would not
be just, for it would compound the gross unfairness
already caused to the owners by NPCs entering without
the intention of formally expropriating the land, and
18
without the prior knowledge and consent of the Heirs of
Macabangkit
NPCs entry denied elementary due process of law
to the owners since then until the owners commenced the
inverse condemnation proceedings
ART. 437
1. NAPOCOR VS. IBRAHIM
Facts:
Ibrahim owns a parcel of land located in Lanao del Norte.
In 1978, NAPOCOR took possession of the sub-terrain
area of the land and constructed underground tunnels on
the said property.
The tunnels were apparently being used by NAPOCOR in
siphoning the water of Lake Lanao and in the operation of
NAPOCOR’s Agus projects.
In 1991, Maruhom (one of the co-heirs of Ibrahim)
requested Marawi City Water District for a permit to
construct or install a motorized deep well on the parcel of
land but it was rejected on the grounds that the
construction would cause danger to lives and property by
reason of the presence of the underground tunnels.
Maruhom demanded NAPOCOR to pay damages and to
vacate the sub-terrain portion of the land.
Issue: WON Ibrahim is the rightful owner of the sub-
terrain area of the land.
If yes, are they entitled to the payment of just
compensation.
Held: YES. The sub-terrain portion of the property
belongs to Ibrahim.
The Supreme Court cited Article 437 of the Civil Code
which provides that: The owner of a parcel of land is the
owner of its surface and of everything under it, and he can
construct thereon any works or make any plantations and
excavations which he may deem proper, without
detriment to servitudes and subject to special laws and
ordinances. xxx
Hence, the ownership of land extends to the surface as
well as to the subsoil under it. Therefore, Ibrahim owns
the property as well as the sub-terrain area of the land
where the underground tunnels were constructed.
On the issue of just compensation, the Supreme Court also
said that Ibrahim should be paid a just compensation.
Ibrahim could have dug upon their property and built
motorized deep wells but was prevented from doing so by
the authorities because of the construction of the tunnels
underneath the surface of the land.
Ibrahim still had a legal interest in the sub-terrain portion
insofar as they could have excavated the same for the
construction of the deep wells. It has been shown that the
underground tunnels have deprived the plaintiffs of the
lawful use of the land and considerably reduced its value.
It was held that: If the government takes property without
expropriation and devotes the property to public use, after
many years, the property owner may demand payment of
just compensation in the event restoration of possession is
neither convenient nor feasible. This is in accordance with
the principle that persons shall not be deprived of their
property except by competent authority and for public use
and always upon payment of just compensation.
RIGHT OF ACCESSION
ART. 445
1. PHILIPPINE SUGAR ESTATE DEVELOPMENT
VS. POIZAT
- read full case
2. CALTEX PHIL, INC. VS. FELIAS
CALTEX vs. FELISA FELIAS G.R. No. L-14309
June 30, 1960
FACTS The Lot No. 107 was originally owned by the
spouses Felias (parents of Felisa). In 1927, a building was
construct- ed there by Felisa and husband Sawamo- to. In
1928, spouses Felias donated it to their daughter, Felisa,
as a result OCT was cancelled and TCT was issued
making it her paraphernal property. In 1941, CFI rendered
judgment in a civil case involving Sawamoto, ordering
him to pay for damages. A writ of execu- tion was levied
19
upon Lot No. 107, together with the improvements. It was
sold in auc- tion to Caltex. Felisa filed the present action
to declare herself exclusive owner of the Lot. Trial Court
declared Dysecko as owner, and the sale at auction null
and void. CA modified trial court by declaring Felisa
Felias exclusive owner of Lot, in- stead of Dysekco
ISSUE Whether or not a paraphernal lot becomes
conjugal ipso facto upon con- struction of a conjugal
house thereon.
HELD ART. 158. … Buildings constructed at the expense
of partnership during the marriage on land belonging to
one of the spouses, also pertain to the partnership, but the
value of the land shall be reim- bursed to the spouse who
owns the same. However, when the building was
constructed, the land was not yet owned by Felisa.
Applicable was "the familiar rule of accessory following
the principal". In other words, when the lot was donated
to Felisa, the lot became her paraphernal property as well
as the building thereon. The donation transmitted to her
the rights of a landowner over a building construct- ed on
it. Therefore at the time of the levy and sale of the sheriff,
Lot No. 107 was paraphernal property of Felisa. As such,
it was not answerable for the obligations of her husband.
The building constructed on Lot was destroyed during the
last war, so that "at the time the Sheriff executed the final
deed of sale in favor of Caltex, that house was no longer
in existence.” CA is affirmed.
3. FRANCISCO MUNOZ JR. VS. ERLINDA
RAMIREZ
FACTS:
Respondent-spouses mortgaged a residential lot (which
the wife inherited) to the GSIS to secure a housing loan
(200k). Thereafter, they used the money loaned to
construct a residential house on said lot.
It is alleged that MUNOZ granted the spouses a 600k
loan, which the latter used to pay the debt to GSIS. The
balance of the loan (400k) will be delivered by MUNOS
upon surrender of the title over the property and an
affidavit of waiver of rights (over the property) to be
executed by the husband. While the spouses were able to
turn over the title, no affidavit was signed by the husband.
Consequently, MUNOZ refused to give the 400k balance
of the loan and since the spouses could no longer return
the 200k (which was already paid to GSIS), MUNOZ kept
the title over the property and subsequently, caused the
issuance of a new one in his own name.
The spouses then filed a case for the annulment of the
purported sale of the property in favor of MUNOZ. The
RTC ruled that the property was the wife’s exclusive
paraphernal property (since she inherited it from her
father) and as such, the sale is valid even without the
husband’s consent.
The CA reversed and ruled that while the property was
originally exclusive paraphernal property of the wife, it
became conjugal property when it was used as a collateral
for a housing loan that was paid through conjugal funds.
Hence, the sale is void.
ISSUE (1): Is the property paraphernal or conjugal?
RULING: PARAPHERNAL. As a general rule, all
property acquired during the marriage is presumed to be
conjugal unless the contrary is proved. In this case, clear
evidence that the wife inherited the lot from her father has
sufficiently rebutted this presumption of conjugal
ownership. Consequently, the residential lot is the wife’s
exclusive paraphernal property (pursuant to Article 92
and 109 of FC).
It was error for the CA to apply Article 158 of the CC and
the ruling on Calimlim-Canullas. True, respondents were
married during the effectivity of the CC and thus its
provisions should govern their property relations. With
the enactment of the FC however, the provisions of the
latter on conjugal partnership of gains superseded those
of the CC. Thus, it is the FC that governs the present case
and not the CC. And under Article 120 of the FC (which
supersedes Article 158 of the CC), when the cost of the
improvement and any resulting increase in the value are
more than the value of the property at the time of the
improvement, the entire property shall belong to the
conjugal partnership, subject to reimbursement;
otherwise, the property shall be retained in ownership by
the owner-spouse, likewise subject to reimbursement for
the cost of improvement.
In this case, the husband only paid a small portion of the
GSIS loan (60k). Thus, it is fairly reasonable to assume
that the value of the residential lot is considerably more
than the contribution paid by the husband. Thus, the
property remained the exclusive paraphernal property of
20
the wife at the time she contracted with MUNOZ; the
written consent of the husband was not necessary.
ISSUE (2): Was the transaction a sale or equitable
mortgage?
RULING: EQUITABLE MORTGAGE. Under Article
1602 of the CC, a contract is presumed an equitable
mortgage when: (a) price of sale with right to repurchase
is unusually inadequate; (b) vendor remains in possession
as lessee or otherwise; (c) upon or after the expiration of
the right to repurchase, another instrument extending the
period of redemption is executed; (d) purchase retains for
himself a part of the purchase price; (e) vendor binds
himself to pay the taxes on the thing sold; and, (f) in any
other case it may be fairly inferred that the real intention
of the parties is for the transaction to secure the payment
of a debt.
In this case, considering that (a) the spouses remained in
possession of the property (albeit as lessees thereof); (b)
MUNOZ retained a portion of the ‘purchase price’
(200k); (c) it was the spouses who paid real property taxes
on the property; and, (d) it was the wife who secure the
payment of the principal debt with the subject property —
the parties clearly intended an equitable mortgage and not
a contract of sale.
ART. 447
1. PACIFIC FARMS, INC. VS. ESGUERRA
FACTS:
On several occasions, the Company sold and delivered
lumber and construction materials to the Insular Farms,
Inc. which the latter used in the construction of the
aforementioned six buildings at its
compound in Bolinao, Pangasian. Of the total
procurement price of P15,000, the sum of P4,710.18has
not been paid by the Insular Farms, Inc. The
Company instituted a civil case with the
CIR of Pangasinan to recover the said unpaid balance
fromthe Insular Farms, Inc. The trial court rendered judg
ment in favor of the Company's claim. Thecorresponding
writ of execution was issued because there was no appeal
instituted by Insular, Inc. The Pacific Farms, Inc.
filed a third-party claim asserting ownership over the
levied buildings which it had acquired from the Insular
Farms, Inc. by virtue of a deed of absolute
sale executed about
Seven months before the Company filed the civil action.
Shielded by an indemnity bond put up by
theCompany and the Cosmopolitan InsuranceCompany,
Inc., the sheriff proceeded with theannounced public auc
tion and sold the levied buildings to the Company.
ISSUE:
WON the Company is entitled to a material man’s lien to
be paid by Pacific Farms, Inc?
HELD: YES. Therefore, applying article 447 by analogy,
we perforce consider the buildings as the principal and the
lumber and construction materials that went into their
construction as the accessory. Thus Pacific Farms, if it
does own the six buildings, must bear the obligation to
pay for the value of the said materials; the
Company- which apparently has no desire to remove the
materials, and, even if it were minded to
do so, cannot remove them without necessarily
damaging the buildings has the corresponding right
to recover the value of the unpaid lumber and
construction materials. Of course, the character of a buyer
in good faith and for value, if really possessed by the
PacificFarms, could possibly exonerate it from makingc
ompensation. But the Pacific Farm's stance that it is an
innocent purchaser for value and in good faith is
open to grave doubt because of certain facts
of substantial import (evident from the records) that
cannot escape notice.
In the deed of absolute sale, exhibit 1, the Insular Farms,
Inc. (vendor) was represented in the
contract by its president, J. Antonio Araneta. The latter
was a director of the appellee (Pacific Farms,Inc.) and
was the counsel who signed the complaint filed by the
appellee in the court below.
J. Antonio Araneta was, therefore, not only the
president of the Insular Farms, Inc. but also a director
and counsel of Pacific Farms.
During the trial of civil case the Insular Farms, Inc. was
represented by Attorney AmadoSantiago, Jr. of the law
firm of J. Antonio Araneta. The latter was one of the
counsels of the Pacific Farms, Inc.
21
They cannot claim ignorance of the
pendency of civil case because the Insular Farms,
Inc. was defended by the same lawyer from the
same law firm that commenced the present action.
Pacific Farms merely folded
its arms indisinterest and waited, so to speak. Not until a
decision was rendered therein in favor of theCompany, a
writ of execution issued, and the six buildings levied
upon by the sheriff, did it file a third-party claim over the
levied buildings.
2. MARTIN VS. MARTIN
- read full case
ART. 448
1. FILOMENA BENEDICTO VS. ANTONIO
VILLAFLORES
FACTS:
Maria Villaflores (Maria) was the owner of Lot 2-A,with
an area of 277 square meters, in Bulacan. In1980, Maria
sold a portion of Lot 2-A to her nephew. Antonio
Villaflores.
Antonio then took possession of the portion sold to him
and constructed a house thereon.
Twelve (12) years later, Maria executed in favor of Anto
nio a Kasulatan ng Bilihang Tuluyan covering the entire
Lot 2-A. However, Antonio did not register the sale or
pay the real property taxes for the subject land.
In 1994, Maria sold the same Lot 2-A to Filomena.
Filomena registered the sale with theRegistry of Deeds.
Consequently, Transfer of Certificate of Title was issued
in the name of Filomena. Since then Filomena paid the
real property taxes for the subject parcel of land.
In September 2000, Filomena filed a case for Accion
Publiciana with Cancellation of Notice of Adverse Claim
against Antonio.
She alleged at the time of the sale, she was not aware that
Antonio had any claim or interest over the subject
property.
Antonio assured her that there was no impediment to her
acquisition of the land, and promised to vacate the
property five (5) years after the sale. In
August1999, Antonio requested an extension of one (1)
year, and offered to pay a monthly rental which she
granted. However, in 2000, Antonio refused to vacate the
property and, instead, claimed absolute ownership of Lot
2-A.
Antonio asserted absolute ownership over Lot 2-
A. He alleged that he purchased the subjectproperty. He
averred that Filomena was aware of the
sale; hence, the subsequent sale in favor of Filomena was
rescissible, fraudulent, fictitious, or simulated.
RTC rendered a decision sustaining Filomena’sownershi
p. According to the RTC, Filomena was the one who
registered the sale in good faith; as such,
she has better right than Antonio. It rejected
Antonio’s allegation
of bad faith on the part of Filomena because no sufficien
t evidence was adduced to prove it. It declared Antonio a
builder in good faith.
CA affirmed the decision of the RTC and remanded
the case to the RTC for further proceedings to determine
the respective rights of the parties under Articles 448 and
546 of the Civil Code.
ISSUE: WON Antonio is a builder in good faith
HELD: YES.
It is not disputed that the construction of Antonio’s house
was undertaken long before the sale
in favor of Filomena; that when Filomena bought
the property from
Maria, Antonio’s house which he used as residence had
already been erected on the
property. Thus, we sustain the finding that Antonio is a b
uilder ingood
faith.Under Article 448, a landowner is given the option
toeither appropriate the improvement as his own upon
payment of the proper amount of indemnity, or sell the
land to the possessor in good faith.
Relatedly, Article 546provides that
a builder in good faith is entitled to
fullreimbursement for all the necessary and usefulex
22
penses incurred; it also gives him right of retention
until full reimbursement is made.
The builder in good faith can compel the landowner to
make a choice between appropriating the building by
paying the proper indemnity or obliging the builder to pay
the price of the land. The choice belongs to the owner of
the land, a rule that accords with the principle of accession
,i.e., that the accessory follows the principal and not the
other way around.
2. PEDRO ANGELES VS. ESTELITA PASCUAL
- read full case
3. PNB VS. DE JESUS
FACTS:
It would appear that on 10 June 1995, respondent filed a
complaint against petitioner before the Regional Trial
Court of Occidental Mindoro for recovery of ownership
and possession, with damages, over the questioned
property. In his complaint, respondent stated that he had
acquired a parcel of land situated in Mamburao,
Occidental Mindoro, with an area of 1,144 square meters
covered by TCT No. T-17197, and that on 26 March 1993,
he had caused a verification survey of the property and
discovered that the northern portion of the lot was being
encroached upon by a building of petitioner to the extent
of 124 square meters. Despite two letters of demand sent
by respondent, petitioner failed and refused to vacate the
area.
Petitioner, in its answer, asserted that when it acquired the
lot and the building sometime in 1981 from then Mayor
Bienvenido Ignacio, the encroachment already was in
existence and to remedy the situation, Mayor Ignacio
offered to sell the area in question (which then also
belonged to Ignacio) to petitioner at P100.00 per square
meter which offer the latter claimed to have accepted.
The sale, however, did not materialize when, without the
knowledge and consent of petitioner, Mayor Ignacio later
mortgaged the lot to the Development Bank of the
Philippines. He also contends that he is a builder in good
faith.
ISSUE:
Whether or not being a builder in good faith matters under
article 448.
HELD:
Article 448, of the Civil Code refers to a piece of land
whose ownership is claimed by two or more parties, one
of whom has built some works (or sown or planted
something) and not to a case where the owner of the land
is the builder, sower, or planter who then later loses
ownership of the land by sale or otherwise for, elsewise
stated, “where the true owner himself is the builder of
works on his own land, the issue of good faith or bad faith
is entirely irrelevant.”
4. GEMINIANO VS. CA
FACTS:
It appears that subject lot was originally owned by the
petitioners' mother, Paulina Amado vda. de Geminiano.
On a 12-square-meter portion of that lot stood the
petitioners' unfinished bungalow, which the petitioners
sold to the private respondents, with an alleged promise
to sell to the latter that portion of the lot occupied by the
house. Subsequently, the petitioners' mother executed
a contract of lease over a 126 square-meter portion of the
lot, including that portion on which the house stood, in
favor of the private respondents for P40.00 per month for
a period of 7 years.
The private respondents then introduced additional
improvements and registered the house in their names.
After the expiration of the lease contract, however, the
petitioners' mother refused to accept the monthly rentals.
It turned out that the lot in question was the subject of a
suit, which resulted in its acquisition by one Maria Lee in
1972. Lee sold the lot to Lily Salcedo, who in turn sold it
to the spouses Dionisio. Spouses Dionisio executed a
Deed of Quitclaim over the said property in favor of the
petitioners.
The petitioners sent a letter addressed to private
respondent Mary Nicolas demanding that she vacate the
premises and pay the rentals in arrears within twenty days
from notice.
Upon failure of the private respondents to heed the
demand, the petitioners filed a complaint for unlawful
detainer and damages.
23
ISSUE: WON Art. 448 is applicable to this case.
HELD: NO.
The private respondents claim they are builders in good
faith, hence, Article 448 of the Civil Code should apply.
They rely on the lack of title of the petitioners' mother at
the time of the execution of the contract of lease, as well
as the alleged assurance made by the petitioners that the
lot on which the house stood would be sold to them.
But being mere lessees, the private respondents knew that
their occupation of the premises would continue only for
the life of the lease. Plainly, they cannot be considered as
possessors nor builders in good faith.
Article 448 of the Civil Code, in relation to Article 546 of
the same Code, which allows full reimbursement of useful
improvements and retention of the premises until
reimbursement is made, applies only to a possessor in
good faith, i.e., one who builds on land with the belief that
he is the owner thereof. It does not apply where one's only
interest is that of a lessee under a rental contract;
otherwise, it would always be in the power of the tenant
to "improve" his landlord out of his property.
And even if the petitioners indeed promised to sell, it
would not make the private respondents possessors or
builders in good faith so as to be covered by the provisions
of Article 448 of the Civil Code. The latter cannot raise
the mere expectancy of ownership of the aforementioned
lot because the alleged promise to sell was not fulfilled
nor its existence even proven.
5. NATIONAL HOUSING AUTHORITY VS.
GRACE BAPTIST CHURCH
FACTS:
On June 13, 1986, Respondent Grace Baptist
Church wrote a letter to NHA manifesting their intent to
purchase Lot 4 and 17 of the General Mariano Alvarez
Resettlement Project in Cavite. The latter granted request
hence respondent entered into possession of the lots and
introduced improvements thereon. On February 22,
1991, NHA passed a resolution approving the sale of the
subject lots to respondent Church for 700 per square
meter, a total of P430,500. respondents were duly
informed.
On April 8, 1991, respondent church tendered a
check amounting to P55,350 contending that this was the
agreed price. NHA avers stating that the price now (1991)
is different from before (1986).
The trial court rendered a decision in favour of
NHA stating that there was no contract of sale, ordering
to return the said lots to NHA and to pay NHA rent of 200
pesos from the time it took possession of the lot.
Respondent Church appealed to the CA which
affirms the decision of RTC regarding “no contract of
sale” but modifying it by ordering NHA to execute the
sale of the said lots to Church for 700 per square, with 6%
interest per annum from March 1991. Petitioner NHA
filed a motion for reconsideration which was denied.
Hence this petition for review on certiorari
ISSUE:
WON NHA can be compelled to sell the lots under market
value?
HELD:
No, because the contract has not been perfected.
The Church despite knowledge that its intended
contract of sale with the NHA had not been perfected
proceeded to introduce improvements on the land. On the
other hand, NHA knowingly granted the Church
temporary use of the subject properties and did not
prevent the Church from making improvements thereon.
Thus the Church and NHA, who both acted in bad faith
shall be treated as if they were both in good faith. In this
connection Art 448 provides: “the owner of the land in
which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the
works, sowing or planting, after payment of the indemnity
provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land and if its value
is considerably more than that of the building or trees. In
such case, he shall pay reasonable rent, if the owner of
the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree, on
case of disagreement, court shall fix.”
24
6. SPS. NUGID VS. CA
FACTS:
Pedro P. Pecson owned a commercial lot on which he
built a four-door two-storey apartment building. For
failure to pay realty taxes, the lot was sold at public
auction by the City Treasurer to Mamerto Nepomuceno,
who in turn sold it for P103,000 to the spouses Juan and
Erlinda Nuguid.
Pecson challenged the validity of the auction sale before
the RTC of Quezon City, the RTC upheld the spouses’
title but declared that the four-door two-storey apartment
building was not included in the auction sale. This was
affirmed by the CA and by the SC.
The Nuguids became the uncontested owners of
commercial lot. The Nuguid spouses moved for delivery
of possession of the lot and the apartment building.
ISSUE:
WON the Nuguids should reimburse Pecson for the
benefits derived from the apartment building.
HELD: YES.
Since petitioners opted to appropriate the improvement
for themselves as early as June 1993, when they applied
for a writ of execution despite knowledge that the auction
sale did not include the apartment building, they could not
benefit from the lot’s improvement, until they reimbursed
the improver in full, based on the current market value of
the property.
Under Article 448, the landowner is given the option,
either to appropriate the improvement as his own upon
payment of the proper amount of indemnity or to sell the
land to the possessor in good faith. Relatedly, Article 546
provides that a builder in good faith is entitled to full
reimbursement for all the necessary and useful expenses
incurred; it also gives him right of retention until full
reimbursement is made.
The right of retention is considered as one of the measures
devised by the law for the protection of builders in good
faith. Its object is to guarantee full and prompt
reimbursement as it permits the actual possessor to remain
in possession while he has not been reimbursed (by the
person who defeated him in the case for possession of the
property) for those necessary expenses and useful
improvements made by him on the thing possessed.
Given the circumstances of the instant case where the
builder in good faith has been clearly denied his right of
retention for almost half a decade, we find that the
increased award of rentals by the RTC was reasonable and
equitable. The petitioners had reaped all the benefits from
the improvement introduced by the respondent during
said period, without paying any amount to the latter as
reimbursement for his construction costs and expenses.
They should account and pay for such benefits.
7. CARRASCOSO, JR. VS. CA
FACTS:
El Dorado Plantation, Inc. (El Dorado) was the registered
owner of a land situated in Sablayan, Occidental Mindoro.
At a special meeting of El Dorado’s Board of Directors, a
Resolution was passed authorizing Feliciano Leviste, then
President of El Dorado, to negotiate the sale of the
property and sign all documents and contracts bearing
thereof. Through a Deed of Sale of Real Property, El
Dorado, through Feliciano Leviste, sold the property to
Carrascoso, Jr.
PLDT commenced construction of improvements on the
1,000 hectare portion of the property immediately after
the execution of Agreement to Buy and Sell.
Lauro Leviste (Lauro), a stockholder and member of the
Board of Directors of El Dorado, through his counsel,
Atty. Benjamin Aquino, called the attention of the Board
to Carrascoso’s failure to pay the balance of the purchase
price of the property. He wants a rescission of the sale
made by the El Dorado Plantation, Inc. to Mr. Carrascoso.
ISSUE: WON PLDT is in good faith when it built its
improvements on the subject land.
HELD:
In the case at bar, it is undisputed that PLDT commenced
construction of improvements on the 1,000 hectare
portion of the property immediately after the execution of
the July 11, 1975 Agreement to Buy and Sell with the full
consent of Carrascoso. Thus, until March 15, 1977 when
the Notice of Lis Pendens was annotated on Carrascoso’s
25
TCT No. T-6055, PLDT is deemed to have been in good
faith in introducing improvements on the 1,000 hectare
portion of the property. After March 15, 1977, however,
PLDT could no longer invoke the rights of a builder in
good faith.
Should El Dorado then opt to appropriate the
improvements made by PLDT on the 1,000 hectare
portion of the property, it should only be made to pay for
those improvements at the time good faith existed on the
part of PLDT or until March 15, 1977, to be pegged at its
current fair market value.
The commencement of PLDT’s payment of reasonable
rent should start on March 15, 1977 as well, to be paid
until such time that the possession of the 1,000 hectare
portion is delivered to El Dorado, subject to the
reimbursement of expenses as aforestated, that is, if El
Dorado opts to appropriate the improvements.
8. SPS. RASDAS VS. ESTENOR
FACTS:
The dispute centers on a parcel of land with an situated in
Ilagan, Isabela. Respondent filed a Complaint For
Recovery Of Ownership And Possession With Damages
against. The complaint was docketed and tried by the
RTC of Ilagan. In the same complaint, respondent
asserted that he was the owner of the subject property,
which was then in the possession of petitioners. The RTC
decided in favor of petitioners. The CA reversed the
judgment of the RTC and declared respondent as the
owner of the subject property. Thereafter, a Writ of
Execution and Writ of Demolition was issued against
petitioners, who were ordered to demolish their houses,
structures, and improvements on the property.
Petitioners alleged that they were entitled to just
compensation relating to the value of the houses they had
built on the property, owing to their purported status as
builders in good faith. They claimed that the CA decision
did not declare them as builders in bad faith, and thus,
they were entitled to be reimbursed of the value of their
houses before these could be demolished. They posited
that without such reimbursement, they could not be
ejected from their houses.
ISSUE:
WON petitioners are in good faith.
HELD: NO.
The father of the petitioners (and their predecessor-in-
interest) had already known that he did not own the
property, and that his stay therein was merely out of
tolerance. Such conclusion in fact bolstered the eventual
conclusion that respondents were the owners of the land
and that petitioners should vacate the same.
These premises remaining as they are, it is clear that
petitioners are not entitled to the just compensation they
seek through the present complaint. Under Article 448 of
the Civil Code, the builder in bad faith on the land of
another loses what is built without right to indemnity.
Petitioners were in bad faith when they built the structures
as they had known that the subject property did not belong
to them.
Art. 448
9) ROSALES VS. CASTELLFORT ‘
Spouses-petitioners Rodolfo V. Rosales and Lily
Rosqueta-Rosales (petitioners) are the registered owners
of a parcel of land with an area of approximately 315
square meters, covered by Transfer Certificate of Title
(TCT) No. 368564 and designated as Lot 17, Block 1 of
Subdivision Plan LRC Psd-55244 situated in Los Baños,
Laguna.
On August 16, 1995, petitioners discovered that a house
was being constructed on their lot, without their
knowledge and consent, by respondent Miguel Castelltort
(Castelltort).
It turned out that respondents Castelltort and his wife
Judith had purchased a lot, Lot 16 of the same Subdivision
Plan, from respondent Lina Lopez-Villegas (Lina)
through her son-attorney-in-fact Rene Villegas (Villegas)
but that after a survey thereof by geodetic engineer
Augusto Rivera, he pointed to Lot 17 as the Lot 16 the
Castelltorts purchased.
Petitioners filed a complaint for recovery of possession
and damages.
To the complaint, the Castelltorts claimed in their Answer
with Counterclaim that they were builders in good faith.
Lina soon filed a Motion for Intervention.
26
In her Answer to the complaint, Lina alleged that the
Castelltorts acted in good faith in constructing the house
on petitioners’ lot as they in fact consulted her before
commencing any construction thereon, they having relied
on the technical description of the lot sold to them, Lot
16, which was verified by her officially designated
geodetic engineer.
ISSUE: Whether or not Miguel Castelltort is a builder in
good faith.
HELD:
A builder in good faith is one who builds with the belief
that the land he is building on is his, or that by some title
one has the right to build thereon, and is ignorant of any
defect or flaw in his title.
Article 527 of the Civil Code provides that good faith is
always presumed, and upon him who alleges bad faith on
the part of a possessor rests the burden of proof.
The records indicate that at the time Castelltort began
constructing his house on petitioners’ lot, he believed that
it was the Lot 16 he bought and delivered to him by
Villegas. The confusion in the identification of Lot 16 was
eventually traced to the error committed by geodetic
engineer Augusto Rivera’s employees in placing stone
monuments on petitioners’ property, instead of on Lot 16,
the lot sold to Castelltort, based on the survey made by
the engineer in 1992.
As correctly found by the CA, both parties having acted
in good faith at least until August 21, 1995, the applicable
provision in this case is Article 448 of the Civil Code
which reads:
Art. 448. The owner of the land on which
anything has been built, sown or planted
in good faith, shall have the right to
appropriate as his own the works, sowing
or planting, after payment of the
indemnity provided for in Articles 546
and 548, or to oblige the one who built or
planted to pay the price of the land, and
the one who sowed, the proper rent.
However, the builder or planter cannot be
obliged to buy the land if its value is
considerably more than that of the
building or trees. In such case, he shall
pay reasonable rent, if the owner of the
land does not choose to appropriate the
building or trees after proper indemnity.
The parties shall agree upon the terms of
the lease and in case of disagreement, the
court shall fix the terms thereof.
The choice belongs to the owner of the land, a rule that
accords with the principle of accession, i.e., that the
accessory follows the principal and not the other way
around. Even as the option lies with the landowner, the
grant to him, nevertheless, is preclusive.
The landowner cannot refuse to exercise either option and
compel instead the owner of the building to remove it
from the land.
Possession acquired in good faith does not lose this
character except in the case and from the moment facts
exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully. The good
faith ceases or is legally interrupted from the moment
defects in the title are made known to the possessor, by
extraneous evidence or by suit for recovery of the
property by the true owner.
In the case at bar, Castelltort’s good faith ceased on
August 21, 1995 when petitioners personally apprised
him of their title over the questioned lot.
Considering that appellants had ceased as builders in good
faith at the time that appellant Miguel was notified of
appellees’ lawful title over the disputed property, the
payment of reasonable rent should accordingly
commence at that time since he can no longer avail of the
rights provided under the law for builders in good faith.
10) FRANCISCO MUNOZ, JR. VS. ERLINDA
RAMIREZ, ET AL.
FACTS:Respondent-spouses mortgaged a residential lot
(which the wife inherited) to the GSIS to secure a housing
loan (200k). Thereafter, they used the money loaned
to construct a residential house on said lot.
It is alleged that MUNOZ granted the spouses a 600k
loan, which the latter used to pay the debt to GSIS. The
27
balance of the loan (400k) will be delivered by MUNOS
upon surrender of the title over the property and an
affidavit of waiver of rights (over the property) to be
executed by the husband. While the spouses were able to
turn over the title, no affidavit was signed by the
husband. Consequently, MUNOZ refused to give the
400k balance of the loan and since the spouses could no
longer return the 200k (which was already paid to GSIS),
MUNOZ kept the title over the property and
subsequently, caused the issuance of a new one in his own
name.
The spouses then filed a case for the annulment of the
purported sale of the property in favor of MUNOZ. The
RTC ruled that the property was the wife’s exclusive
paraphernal property (since she inherited it from her
father) and as such, the sale is valid even without the
husband’s consent.
The CA reversed and ruled that while the property was
originally exclusive paraphernal property of the wife,
it became conjugalproperty when it was used as a
collateral for a housing loan that was paid
through conjugal funds. Hence, the sale is void.
ISSUE (1): Is the property paraphernal or conjugal?
RULING: PARAPHERNAL. As a general rule, all
property acquired during the marriage is presumed to
be conjugal unless the contrary is proved. In this case,
clear evidence that the wife inherited the lot from her
father has sufficiently rebutted this presumption
of conjugalownership. Consequently, the residential lot is
the wife’s exclusive paraphernal property (pursuant to
Article 92 and 109 of FC).
It was error for the CA to apply Article 158 of the CC and
the ruling on Calimlim-Canullas. True, respondents were
married during the effectivity of the CC and thus its
provisions should govern their property relations. With
the enactment of the FC however, the provisions of the
latter on conjugal partnership of gains superseded those
of the CC. Thus, it is the FC that governs the present case
and not the CC. And under Article 120 of the FC (which
supersedes Article 158 of the CC), when the cost of the
improvement and any resulting increase in the value are
more than the value of the property at the time of the
improvement, the entire property shall belong to
the conjugal partnership, subject to reimbursement;
otherwise, the property shall be retained in ownership by
the owner-spouse, likewise subject to reimbursement for
the cost of improvement.
In this case, the husband only paid a small portion of the
GSIS loan (60k). Thus, it is fairly reasonable to assume
that the value of the residential lot is considerably more
than the contribution paid by the husband. Thus, the
property remained the exclusive paraphernal property of
the wife at the time she contracted with MUNOZ; the
written consent of the husband was not necessary.
ISSUE (2): Was the transaction a sale or equitable
mortgage?
RULING: EQUITABLE MORTGAGE. Under Article
1602 of the CC, a contract is presumed an equitable
mortgage when: (a) price of sale with right to repurchase
is unusually inadequate; (b) vendor remains in possession
as lessee or otherwise; (c) upon or after the expiration of
the right to repurchase, another instrument extending the
period of redemption is executed; (d) purchase retains for
himself a part of the purchase price; (e) vendor binds
himself to pay the taxes on the thing sold; and, (f) in any
other case it may be fairly inferred that the real intention
of the parties is for the transaction to secure the payment
of a debt.
In this case, considering that (a) the spouses remained in
possession of the property (albeit as lessees thereof); (b)
MUNOZ retained a portion of the ‘purchase price’
(200k); (c) it was the spouses who paid real property taxes
on the property; and, (d) it was the wife who secure the
payment of the principal debt with the subject property —
the parties clearly intended an equitable mortgage and not
a contract of sale.
11) VSD REALTY & DEVELOPMENT
CORPORATION VS. UNIWIDE SALES, INC., ET
AL.
FACTS
Petitioner VSD Realty and Development Corporation
(VSD) filed a Complaint for annulment of title and
recovery of possession of property against respondents
Uniwide Sales, Inc. (Uniwide) and Dolores Baello
(Baello) with the RTC.
28

VSD alleged that it is the registered owner of a parcel of
land in Caloocan City, wherein VSD purchased the said
property from Felisa D. Bonifacio. VSD proved the
identity of the land it is claiming through the technical
description contained in its title, TCT No. T-285312; the
derivative title of Felisa D. Bonifacio, TCT No. 265777;
the technical description included in the official records
of the subject lot in the Register of Deeds of Caloocan
City; and the verification survey conducted by Geodetic
Engineer Evelyn Celzo of the DENR-NCR.
On the other hand, Baello countered that the subject
property was bequeathed to her through a will by her
adoptive mother as approved by the probate court.
Therafter, she entered into a Contract of Lease with
respondent Uniwide. As a consequence of the lease
agreement, Uniwide constructed in good faith a building
worth at least P200,000,000.00 on the said property.
The RTC ruled in favor of VSD. On appeal, the CA
reversed the RTC. Hence, this petition.
ISSUES:
I. Whether or not VSD is entitled to recovery of possession
of the subject property?
II. Whether or not Uniwide, as a lessee, is entitled to
recover the amount of improvements introduced to the
land?
HELD: The petition has merit.
CIVIL LAW: accion reivindicatoria; builder in good
faith
Article 434 of the Civil Code provides that to successfully
maintain an action to recover the ownership of a real
property, the person who claims a better right to it must
prove two (2) things: first, the identity of the land claimed,
and; second, his title thereto. In regard to the first
requisite, in an accion reinvindicatoria, the person who
claims that he has a better right to the property must first
fix the identity of the land he is claiming by describing the
location, area and boundaries thereof. Hutchison v.
Buscas held: "It bears stress that in an action to recover
real property, the settled rule is that the plaintiff must rely
on the strength of his title, not on the weakness of the
defendants title. This requirement is based on two (2)
reasons: first, it is possible that neither the plaintiff nor the
defendant is the true owner of the property in dispute, and
second, the burden of proof lies on the party who
substantially asserts the affirmative of an issue for he who
relies upon the existence of a fact should be called upon
to prove that fact."
In this case, petitioner proved his title over the property in
dispute as well as the identity of the said property; hence,
it is entitled to recover the possession of the property from
respondents.
SECOND ISSUE: Uniwide is not entitled to recover
from VSD the cost of its improvement on the land.
It is noted that when the contract of lease was executed,
Uniwide was unaware that the property leased by it was
owned by another person other than Dolores Baello.
Nevertheless, Uniwide cannot avail of the rights of a
builder in good faith under Article 448 of the Civil Code,
in relation to Article 546 of the same Code, which
provides for full reimbursement of useful improvements
and retention of the premises until reimbursement is
made, as the said provisions apply only to a possessor in
good faith who builds on land with the belief that he is the
owner thereof. It does not apply where ones only interest
is that of a lessee under a rental contract. Parilla v. Pilar
held: "Articles 448 of the Civil Code, in relation to Article
546 of the same Code, applies only to a possessor in good
faith, i.e., one who builds on land with the belief that he
is the owner thereof. It does not apply where ones only
interest is that of a lessee under a rental contract;
otherwise, it would always be in the power of the tenant
to improve his landlord out of his property."
Petition is GRANTED.
ART. 449
1) DEL ROSARIO VS. SPS. MANUEL
FACTS: On August
12, 1999, spouses Jose andConcordia Manuel, responden
ts, filed with theMunicipal Trial Court (MTC), San Mate
o, Rizal acomplaint1 for unlawful detainer against Alfre
doYasay del Rosario, petitioner, docketed as Civil Case
No. 1360. They alleged that they are the true and lawful
owners of a 251 square meter lot located at Sta.
29
Ana, San Mateo, Rizal. Because of their compassion,
they allowed petitioner, whose house was destroyed by a
strong typhoon, to occupy their lot. They agreed that he
could build thereon a temporary shelter of light
materials. But without
their consent, what he constructed was a house of concre
te materials. In 1992, respondents
asked petitioner to vacate the lot. This was followed by
repeated verbal demandsbut to no avail, prompting them
to bring the matter to the barangay. But the parties failed
to reach an amicable settlement. On June 25,
1999, thebarangay chairman issued a Certification to Fil
eAction.In his answer to the complaint, petitioner claime
d that sometime in 1968, respondents allowed him to
build his house on the lot, provided he would
guard the premises to prevent land grabbers and squatters
from occupying the area. In 1995, when respondents
visited this country, they agreed verbally
to sell the portion on which his house was constructed. A
year later, he made an offer to buy the 60 square meter
portion occupied by him and to spend for its survey. But
what respondents wanted to sell was the whole area
containing 251 square meters. He then informed them that
he would first consult his children
and they said they will wait. Instead, they filed the
instant complaint.
ISSUE: WON petitioner is a builder in good faith.
HELD:
NO. Petitioner is not a builder in good faith. Considering
that he occupies the land by mere tolerance, he is aware
that his occupation of the same may be terminated by
respondents any time
2) SPS. RASDAS VS. ESTENO
The main issue in this Petition for Review under Rule 45
is whether the complaint below is barred by res judicata.
We find that res judicata indeed obtains in this case,
albeit of a mode different from that utilized by the trial
court and the Court of Appeals in dismissing the
complaint.
The antecedent facts, as culled from the
assailed Decision[1] of the Court of Appeals Tenth
Division, follow.
The dispute centers on a parcel of land with an area of 703
square meters, situated in Ilagan, Isabela. On 29 October
1992, respondent as plaintiff filed a Complaint For
Recovery Of Ownership And Possession With
Damages against petitioners as defendants. The
complaint was docketed as Civil Case No. 673 and tried
by the Regional Trial Court (RTC) of Ilagan, Isabela,
Branch 16. In the same complaint, respondent asserted
that he was the owner of the subject property, which was
then in the possession of petitioners.
On 6 November 1995, the RTC decided Civil Case No.
673 in favor of petitioners. Respondent appealed the RTC
decision before the Court of Appeals, and his appeal was
docketed as CA-G.R. No. 52338.
On 25 September 1997, the Court of Appeals reversed the
judgment of the RTC, and declared respondent as the
owner of the subject property. As a result, petitioners were
ordered to vacate the land. The dispositive portion of the
appellate courts decision reads:
WHEREFORE, the Decision of the
trial court dated November 6, 1995 is
REVERSED and SET ASIDE, and a new one
is rendered declaring the plaintiff as the
owner of the land in question; and ordering
the defendants-appellees to vacate the same
and jointly and severally to pay the plaintiff
reasonable compensation of P300.00 a month
for the use and enjoyment of the land from
June 1991 up to the time the land is vacated;
attorneys fees of P10,000.00 and litigation
expenses of P5,000.00. Costs against the
defendants-appellees. SO ORDERED.[2]
The decision became final and executory after a petition
for certiorari assailing its validity was dismissed by this
Court.[3] Thereafter, a Writ of Execution and Writ of
Demolition was issued against petitioners, who were
ordered to demolish their houses, structures, and
improvements on the property.
Petitioners as plaintiffs then filed a Complaint dated 6
July 1999 against respondent for just compensation and
preliminary injunction with temporary restraining order.
The case was docketed as Civil Case No. 1090, and heard
by the same RTC Branch 16 that ruled on the first
complaint. Notwithstanding the earlier pronouncement of
the Court of Appeals, petitioners asserted therein that they
30
were the lawful owners of the subject property[4], although
they ultimately conceded the efficacy of the appellate
courts final and executory decision. Still, they alleged that
they were entitled to just compensation relating to the
value of the houses they had built on the property, owing
to their purported status as builders in good faith. They
claimed that the Court of Appeals decision did not declare
them as builders in bad faith, and thus, they were entitled
to be reimbursed of the value of their houses before these
could be demolished.[5] They posited that without such
reimbursement, they could not be ejected from their
houses.
Respondent as defendant countered with a Motion to
Dismiss, arguing that petitioners complaint was barred
by res judicata, owing to the final and executory judgment
of the Court of Appeals. The Motion to Dismiss was
initially denied by the RTC in an Order dated 4 August
1999[6], and pre-trial ensued. However, before trial proper
could begin, respondent filed a motion for preliminary
hearing on the affirmative defense of lack of jurisdiction
and res judicata.
This motion was resolved in an Order dated 16
February 2000, wherein the RTC declared itself
constrained to apply the principle of res judicata, thus
reversing its earlier order. In doing so, the RTC concluded
that the earlier decision of the Court of Appeals had
already effectively settled that petitioners were in fact
builders in bad faith. Citing Mendiola v. Court of
Appeals,[7] the RTC held that the causes of action between
the final judgment and the instant complaint of petitioners
were identical, as it would entail the same evidence that
would support and establish the former and present causes
of action. Accordingly, the RTC ordered the dismissal of
petitioners complaint. The counsel for petitioners was
likewise issued a warning for having violated the
prohibition on forum-shopping on account of the filing of
the complaint barred by res judicata.
The finding of res judicata was affirmed by the
Court of Appeals in its assailed Decision. It is this finding
that is now subject to review by this Court. Petitioners
argue that since respondents Motion to Dismiss on the
ground of res judicata had already been denied, the
consequent preliminary hearing on the special defenses
which precluded the dismissal of the complaint was null
and void.[8] Petitioners also claim that there was no
identity of causes of action in Civil Case No. 673, which
concerned the ownership of the land, and in Civil Case No.
1090, which pertained to just compensation under Article
448 of the Civil Code. Even assuming that res
judicata obtains, petitioners claim that the said rule may
be disregarded if its application would result in grave
injustice.
We observe at the onset that it does appear that the
RTCs act of staging preliminary hearing on the affirmative
defense of lack of jurisdiction and res judicata is not in
regular order. Under Section 6, Rule 16 of the 1997 Rules
of Civil Procedure, the allowance for a preliminary
hearing, while left in the discretion of the court, is
authorized only if no motion to dismiss has been filed but
any of the grounds for a motion to dismiss had been
pleaded as an affirmative defense in the answer. In this
case, respondents had filed a motion to dismiss on the
ground of res judicata, but the same was denied. They thus
filed an answer alleging res judicata as a special
affirmative defense, but later presented a Motion for
Preliminary Hearing which was granted, leading to the
dismissal of the case.
The general rule must be reiterated that the
preliminary hearing contemplated under Section 6, Rule
16 applies only if no motion to dismiss has been filed. This
is expressly provided under the rule, which relevantly
states [i]f no motion to dismiss has been filed, any of the
grounds for dismissal provided for in [Rule 16] may be
pleaded as an affirmative defense in the answer and, in the
discretion of the court, a preliminary hearing may be had
thereon as if a motion to dismiss had been filed. An
exception was carved out in California and Hawaiian
Sugar Company v. Pioneer Insurance,[9] wherein the
Court noted that while Section 6 disallowed a preliminary
hearing of affirmative defenses once a motion to dismiss
has been filed, such hearing could nonetheless be had if
the trial court had not categorically resolved the motion to
dismiss.[10] Such circumstance does not obtain in this case,
since the trial court had already categorically denied the
motion to dismiss prior to the filing of the answer and the
motion for preliminary hearing.
We observe in this case that the judge who had
earlier denied the motion to dismiss, Hon. Teodulo E.
Mirasol, was different from the judge who later authorized
the preliminary hearing,[11] Hon. Isaac R. de Alban, a
circumstance that bears some light on why the RTC
31
eventually changed its mind on the motion to dismiss.
Still, this fact does not sanction the staging of a
preliminary hearing on affirmative defenses after the
denial of the motion to dismiss. If a judge disagrees with
his/her predecessors previous ruling denying a motion to
dismiss, the proper recourse is not to conduct a
preliminary hearing on affirmative defenses, but to utilize
the contested ground as part of the basis of the decision on
the merits
On the part of the movant whose motion to
dismiss had already been filed and denied, the proper
remedy is to file a motion for reconsideration of the denial
of the motion. If such motion for reconsideration is denied,
the ground for the dismissal of the complaint may still be
litigated at the trial on the merits.
Clearly, the denial of a motion to dismiss does not
preclude any future reliance on the grounds relied
thereupon. However, nothing in the rules expressly
authorizes a preliminary hearing of affirmative defenses
once a motion to dismiss has been filed and denied. Thus,
the strict application of Section 6, Rule 16 in this case
should cause us to rule that the RTC erred in conducting
the preliminary hearing.
However, there is an exceptional justification for
us to overlook this procedural error and nonetheless affirm
the dismissal of the complaint. The complaint in question
is so evidently barred by res judicata, it would violate the
primordial objective of procedural law to secure a just,
speedy and inexpensive disposition of every action and
proceeding[12] should the Court allow this prohibited
complaint from festering in our judicial system. Indeed,
the rule sanctioning the liberal construction of procedural
rules is tailor-made for a situation such as this, when a by-
the-numbers application of the rule would lead to
absurdity, such as the continued litigation of an obviously
barred complaint.
Why is the subject complaint barred by res
judicata? It is uncontroverted that in the decision by the
Court of Appeals in Civil Case No. 673, it was observed:
When the occupancy of the lot by
Luis Aggabao which was transmitted to his
son Vivencio Aggabao, and later transmitted
to the latters children . . . expired in April
1965, the late Vivencio Aggabao verbally
begged and pleaded to plaintiff-appellant that
he be allowed to stay on the premises of the
land in question as his children, herein
appellees, were still studying and it would be
very hard fro them to transfer residence at
that time. The plaintiff, out of Christian
fellowship and compassion, allowed the
appellees to stay temporarily on the land in
question.
....
In this case, the possession of the
land by the appellees derived from their
father Luis Aggabao from March 31,
1955 to March 31, 1965 was by virtue of a
stipulation in the deed of sale (exh. G), while
their possession derived from their father,
Vivencio Aggabao, from March 31, 1965 to
1982 (the latter died in 1982) was only by
tolerance because of the pleading of Vivencio
Aggabao to the plaintiff-appellant that he be
allowed to stay because of the children going
to school. . . . [13]
Evidently, the Court of Appeals had previously ruled in
the first case that as early as 1965, the father of the
petitioners (and their predecessor-in-interest) had already
known that he did not own the property, and that his stay
therein was merely out of tolerance. Such conclusion in
fact bolstered the eventual conclusion that respondents
were the owners of the land and that petitioners should
vacate the same.
This fact should be seen in conjunction with the findings
of the RTC and the Court of Appeals in this case that the
structures for which petitioners sought to be compensated
were constructed in 1989 and 1990, or long after they had
known they were not the owners of the subject property.
These premises remaining as they are, it is clear that
petitioners are not entitled to the just compensation they
seek through the present complaint. Under Article 448 of
the Civil Code, the builder in bad faith on the land of
another loses what is built without right to
indemnity.[14]Petitioners were in bad faith when they built
the structures as they had known that the subject property
did not belong to them. Are these conclusions though
sufficient to justify dismissal on the ground of res
judicata?
32
 The doctrine of res judicata has two
[15]
aspects. The first, known as "bar by prior judgment," or
estoppel by verdict, is the effect of a judgment as a bar to
the prosecution of a second action upon the same claim,
demand or cause of action. The second, known as
"conclusiveness of judgment" or otherwise known as the
rule of auter action pendant, ordains that issues actually
and directly resolved in a former suit cannot again be
raised in any future case between the same parties
involving a different cause of action.[16] It has the effect of
preclusion of issues only.[17]
It appears that both the RTC and the Court of
Appeals deemed that the first aspect of res judicata, bar by
prior judgment, applied in this case.[18] We hold that it is
the second kind of res judicata, conclusiveness of
judgment, that barred the instant complaint. As previously
explained by this Court:
[C]onclusiveness of judgment states
that a fact or question which was in issue in a
former suit and there was judicially passed
upon and determined by a court of competent
jurisdiction, is conclusively settled by the
judgment therein as far as the parties to that
action and persons in privity with them are
concerned and cannot be again litigated in
any future action between such parties or
their privies, in the same court or any other
court of concurrent jurisdiction on either the
same or different cause of action, while the
judgment remains unreversed by proper
authority. It has been held that in order that a
judgment in one action can be conclusive as
to a particular matter in another action
between the same parties or their privies, it is
essential that the issue be identical. If a
particular point or question is in issue in the
second action, and the judgment will depend
on the determination of that particular point
or question, a former judgment between the
same parties or
their privies will be final and conclusive in
the second if that same point or question was
in issue and adjudicated in the first suit.
Identity of cause of action is not required but
merely identity of issues.[19]
Stated differently, any right, fact, or matter in issue
directly adjudicated or necessarily involved in the
determination of an action before a competent court in
which judgment is rendered on the merits is conclusively
settled by the judgment therein and cannot again be
litigated between the parties and their privies whether or
not the claim, demand, purpose, or subject matter of the
two actions is the same.[20]
Indeed, in cases wherein the doctrine of
conclusiveness of judgment is applicable, there is, as in the
two cases subject of this petition, identity of parties but not
of causes of action. The judgment is conclusive in the
second case, only as to those matters actually and directly
controverted and determined, and not as to matters merely
involved therein.]Herein, the fact that petitioners were in
possession in bad faith as early as 1965 was already
determined in the first case. In order that they could
successfully litigate their second cause of action,
petitioners will have to convince that they were in
possession in good faith at the time they built their
structures, an argument that deviates the previous
determination made in the final judgment that resolved the
first case.
The reasons for establishing the principle of
conclusiveness of judgment are founded on sound public
policy, and to grant this petition would have the effect of
unsettling this well-settled doctrine. It is allowable to
reason back from a judgment to the basis on which it
stands, upon the obvious principle that where a conclusion
is indisputable, and could have been drawn only from
certain premises, the premises are equally indisputable
with the conclusion.[22] When a fact has been once
determined in the course of a judicial proceeding, and a
final judgment has been rendered in accordance therewith,
it cannot be again litigated between the same parties
without virtually impeaching the correctness of the former
decision, which, from motives of public policy, the law
does not permit to be done.[23]
Contrary to the holdings of both courts below, in
the case of Mendiola v. Court of Appeals[24] which they
relied upon, this Court observed that the causes of action
in the two cases involved were so glaringly similar that it
had to affirm the dismissal of the second case by virtue of
the bar of former judgment rule.
33
 One final note. Petitioners, in their Reply before
this Court, raise the argument that assuming that they were
builders in bad faith, respondents should likewise be
considered as being in bad faith, as the structures were
built with their knowledge and without their opposition.
That being the case, Article 453 of the Civil Code would
apply to the effect both parties could thus be deemed as
being in good faith. Accordingly, petitioners would still be
entitled to compensation on the structures they built.
We are disinclined to accord merit to this
argument. For one, it was raised for the first time in
the Reply before this Court. It was not even raised in
the Complaint filed with the RTC, hence it could not be
said that petitioners cause of action is grounded on Article
453. Issues not previously ventilated cannot be raised for
the first time on appeal[25], much less when first proposed
in the reply to the comment on the petition for review.
Even assuming the issue is properly litigable, the Court
can find no basis to declare that respondents were in bad
faith as a matter of fact. Certainly, nothing in the first
decision of the Court of Appeals conclusively establishes
that claim, its factual determination being limited to the
finding that petitioners alonewere had been in possession
of the property in bad faith. We are not wont to ascribe
points of fact in the said decision which were not expressly
established or affirmed.
WHEREFORE, the petition is DENIED. Costs against
petitioners.SO ORDERED.
3) LUMUNGO VS. USMAN
FACTS:
Dominga Usman sold and transfers her rights in and to the
3 lots in question to Jose Angeles. The latter made the
purchase with the knowledge that the property was
already in dispute by Atty. Usman, husband of Dominga,
and by the plaintiffs. Angeles, upon taking possession of
the land, planted the same with coconuts, which, together
with those already planted by Dominga
Usman,numberedabout3,000, most of which are now
fruit-bearing. In short, Angeles wasa purchaser and a
builder in bad faith.
ISSUE: Whether or not Angeles is entitled to
reimbursement for the coconuts tree he planted on the
property in litigation.
HELD: No. It should be noted that said trees are
improvements, not "necessary expenses of preservation,
"which a builder, planter or sower in bad faith may
recover under Arts. 452 and546, first paragraph, of the
Civil Code. The facts and findings of both the trial court
and the Court of Appeals leave no room for doubt that
Jose Angeles was a purchaser and a builder in bad faith.
The provision applicable to this case is, accordingly,
Article449 of the Civil Code, which provides that, "he
who builds, plants or sows in bad faith the land of another,
loses what is built, planted or sown without right to
indemnity."
ART. 453
1) MUNICIPALITY OF OAS VS. ROA
FACTS:
The Municipality brought the action for the recovery of
a tract of land in the pueblo of Oas, claiming that it was a
part of the public square of said town, while Roa alleged
that he was the owner of the property. The defendant
admitted in writing that he knew that the land is owned by
the Municipality and that Jose Castillo, whom he bought
the property did
not own the land. When Roa constructed a substantial
building on the property in question
after he “acquired” the property from Castillo, the
Municipality did not oppose the construction.
ISSUE: Whether or not the municipality owns the land.
HELD: Yes.
The defendant was not a purchaser in good faith. The
plaintiff, having permitted the erection by the defendant
of a building on the land without objection, acted in bad
faith. The rights of the parties must, therefore, be
determined as if they both had acted in good faith.
To the case are applicable
thoseprovisions of the Civil Code which relate to thecon
struction by one person of a building upon land belonging
to another. Article 364 (now Art.453) of the Civil Code is
as follows: "When there has been bad faith, not only on
the part of the person who built, sowed, or planted on
another's land, but also on the part of the owner of the
latter, the rights of both shall be the same as if they had
34
acted in good faith.” The Supreme declared that the
Municipality is the owner of the land and that it has the
option of buying the
building thereon, which is the property of the defendant,
or of selling to him the land on which it stands.
2) HEIRS OF EMILIANO NAVARRO VS. IAC, ET
AL.
FACTS:
Sinforoso Pascual sits in the midst of a land registration
case. The story begins on 1946 upon his desire to register
land on the northern section of his existing property. His
current registered property is bounded on the east by
Talisay River, on the West by Bulacan River and on the
North by the Manila bay. Both rivers flow towards the
Manila Bay. Because of constantly flowing water, extra
land of about 17hectares (that’s about the size of Disney
Park!) formed in the northern most section of the
property. It is this property he sought to register.
The RTC denied the registration claiming this to be
foreshore land and part of public domain (remember,
accretion formedby the sea is public dominion). His
Motion for Reconsideration likewise burned. In 1960, he
attempted registry again, claiming that the Talisay and
Bulacan rivers deposited more silt resulting on accretion.
He claimed this land as riprarian owner. The Director of
Lands, Director of Forestry and the Fiscal opposed.
Then a new party surfaced. Mr Emiliano Navarro jumped
into the fray opposing the same application, stating the he
leased part of the property sought to be registered. He
sought to protect his fishpond that rested on the same
property. Sinforoso was not amused and filed ejectment
against Mr. Navarro, claiming that Navarro used stealth
force and strategy to occupy a portion of his land. Pascual
lost the case against Navarro so he appealed. During the
appeal, his original land registration case was
consolidated and tried jointly. (alas Pascual died) The
heirs of Pascual took over the case.
On 1975, the court decided that the property was
foreshore land and therefore part of public domain. The
RTC dismissed the complaint of Pascual for ejectment
against Navarro and also denied his land registration
request. Pascual’s heirs appealed and the RTC was
reversed by the IAC. The Apellate court granted petition
for registration! The reason? The accretion was caused by
the two rivers, not manila bay. Hence it wasn’t foreshore
land. (BUT the confusion lies in the fact that the accretion
formed adjacent to Manila Bay… which is sea!)
Aggrieved, the Director of Forestry moved for
reconsideration (Government insists it is foreshore and
hence, public domain). The Apellate court denied all
motions of the Director and the Government.
The matter went to the SC.
ISSUE:
Whether or not the accretion taking place on property
adjacent to the sea can be registered under the Torrens
system.
HELD:
It cannot be registered. This is land of Public domain.
Pascual claimed ownership under Article 457 of the Civil
Code saying that the disputed 14-hectare land is an
accretion caused by the joint action of the Talisay and
Bulacan Rivers Art 457: Accretion as a mode of acquiring
property and requires the concurrence of the following
requisites: (1) that the accumulation of soil or sediment be
gradual and imperceptible; (2) that it be the result of the
action of the waters of the river; and (3) that the land
where the accretion takes place is adjacent to the bank of
the river.
Unfortunately, Pasucal and Heirs claim of ownership
based on Art 457 is misplaced. If there’s any land to be
claimed, it should be land ADJACENT to the rivers
Talisay and Bulacan. The law is clear on this. Accretion
of land along the river bank may be registered. This is not
the case of accretion of land on the property adjacent to
Manila Bay.
Furthermore, Manila Bay is a sea. Accretion on a sea bank
is foreshore land and the applicable law is not Art 457 but
Art 4 of the Spanish Law of Waters of 1866. This law,
while old, holds that accretion along sea shore cannot be
registered as it remains public domain unless abandoned
by government for public use and declared as private
property capable of alienation.
Article 4 of the Spanish Law of Waters of August 3, 1866
provides as follows:
Lands added to the shores by accretions and alluvial
deposits caused by the action of the sea, form part of the
public domain. When they are no longer washed by the
waters of the sea and are not necessary for purposes of
35
public utility, or for the establishment of special
industries, or for the coast-guard service, the Government
shall declare them to be the property of the owners of the
estates adjacent thereto and as increment thereof.
The IAC decision granting registration was reversed and
set aside. Registration cannot be allowed.
3) OFFICE OF THE CITY MAYOR OF
PARANAQUE CITY, ET AL. VS. MARIO EBIO,
ET AL.
FACTS:
Respondents claim to be absolute owners of a 406 sqm.
parcel of land inParañaque City covered by Tax in the
name of respondent Mario D. Ebio.Said land was
an accretion of Cut-cut creek.Respondents assert that the
original occupant and possessor land wastheir great
grandfather, Jose Vitalez, which was given to his son,
PedroValdez, in 1930. From then on, Pedro continuously
and exclusively occupiedand possessed the said lot. In
1966, after executing an affidavit declaring possession
and occupancy. He also paid taxes for the land.
Meanwhile, in 1961, respondent Mario Ebio married
Pedro’s daughter, Zenaida. In April 1964 and in October
1971, Mario Ebio secured building permits from the
Parañaque municipal office for the construction of their
house within the land. On April 21, 1987, Pedro
transferred his rightsover the land in favor of Ebio.
On March 30, 1999, the Office of the Sangguniang
Barangay
of Vitalez passed Resolution No. 08, series of 1990
seeking assistance from theCity Government of
Parañaque for the construction of an access road
alongCut-cut Creek located in the said barangay. The
proposed road will runfrom Urma Drive to the main road
of Vitalez Compound traversing the lotoccupied by the
respondents. Respondents immediately opposed and
the project was suspended.
In January 2003, however, respondents were surprised
when severalofficials from the barangay and the city
planning office proceeded to cuteight (8) coconut trees
planted on the said lot.On March 28, 2005, the
City Administrator sent a letter to therespondents
ordering them to vacate the area within the next thirty
(30) days,or be physically evicted from the said property.
Respondents sent a reply,
asserting their claim over the subject property and
expressing intent for a further dialogue. The request
remained unheeded.
Threatened of being evicted, respondents went to the RTC
of Parañaque City on April 21, 2005 and applied for
a writ of preliminary injunction against petitioners.
ISSUE: Whether or not the State may build on the land in
question.
HELD: No.
It is an uncontested fact that the subject land was formed
from the alluvial deposits that have gradually settled
along the banks of Cut-cut creek. This being the case, the
law that governs ownership over the accreted portion
is Article 84 of the Spanish Law of Waters
of 1866, which remains in effect, in relation to Article
457 of the Civil Code.
ART. 84. Accretions deposited gradually upon lands
contiguous to creeks, streams, rivers, and lakes, by
accessions or sediments from the waters thereof, belong
to the owners of such lands. Art. 457. To the owners of
lands adjoining the banks of rivers belong the accretion
which they gradually receive from the effects of the
current of the waters.
It is therefore explicit from the foregoing provisions that
alluvial deposits along the banks of a creek do not form
part of the public domain as the alluvial property
automatically belongs to the owner of the estate to which
it may have been added. The only restriction provided for
by law is that the owner of the adjoining property must
register the same under the Torrens system; otherwise, the
alluvial property may be subject to acquisition through
prescription by third persons.
In contrast, properties of public dominion cannot be
acquired by prescription. No matter how long
the possession of the properties has been, there can be no
prescription against the State regarding property of public
domain. Even a city or municipality cannot acquire them
by prescription as against the State.
Hence, while it is true that a creek is a property of public
dominion, the land which is formed by the gradual and
imperceptible accumulation of sediments along its banks
does not form part of the public domain by
clear provision of law.
36
4) REPUBLIC VS. ARCADIO IVAN A. SANTOS III,
ET AL.
Facts:
Alleging continuous and adverse possession of more than
ten years, respondent Arcadio Ivan A. Santos III (Arcadio
Ivan) applied on March 7, 1997 for the registration of Lot
4998-B (the property) in the Regional Trial Court (RTC)
in Parafiaque City. The property, which had an area of
1,045 square meters, more or less, was located in
Barangay San Dionisio, Parañaque City, and was bounded
in the Northeast by Lot 4079 belonging to respondent
Arcadio C. Santos, Jr. (Arcadio, Jr.), in the Southeast by
the Parañaque River, in the Southwest by an abandoned
road, and in the Northwest by Lot 4998-A also owned by
Arcadio Ivan.
On May 21, 1998, Arcadio Ivan amended his application
for land registration to include Arcadio, Jr. as his co-
applicant because of the latter’s co-ownership of the
property. He alleged that the property had been formed
through accretion and had been in their joint open,
notorious, public, continuous and adverse possession for
more than 30 years.
The City of Parañaque (the City) opposed the application
for land registration, stating that it needed the property for
its flood control program; that the property was within the
legal easement of 20 meters from the river bank; and that
assuming that the property was not covered by the legal
easement, title to the property could not be registered in
favor of the applicants for the reason that the property was
an orchard that had dried up and had not resulted from
accretion.3
On May 10, 2000,4 the RTC granted the application for
land registration:
WHEREFORE, the Court hereby declares the applicants,
ARCADIO IVAN A. SANTOS, III and ARCADIO C.
SANTOS, JR., both Filipinos and of legal age, as the
TRUE and ABSOLUTE OWNERS of the land being
applied for which is situated in the Barangay of San
Dionisio, City of Parañaque with an area of one thousand
forty five (1045) square meters more or less and covered
by Subdivision Plan Csd-00-000343, being a portion of
Lot 4998, Cad. 299, Case 4, Parañaque Cadastre, LRC
Rec. No. and orders the registration of Lot 4998-B
With this, the Republic, through the Office of the Solicitor
General (OSG), appealed.
The CA grossly erred in applying Article 457 of the Civil
Code to respondents’ benefit.
Article 457 of the Civil Code provides that "(t)o the
owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of
the currents of the waters."
In ruling for respondents, the RTC pronounced that on the
basis of the evidence presented by the applicants, the
Court finds that Arcadio Ivan A. Santos III and Arcadio
C. Santos, Jr., are the owners of the land subject of this
application which was previously a part of the Parañaque
River which became an orchard after it dried up and
further considering that Lot 4 which adjoins the same
property is owned by applicant, Arcadio C. Santos, Jr.,
after it was obtained by him through inheritance from his
mother, Concepcion Cruz, now deceased.
The CA upheld the RTC’s pronouncement, and stated that
it could not be denied that "to the owners of the lands
adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of
the waters" (Article 457 New Civil Code) as in this case,
Arcadio Ivan Santos III and Arcadio Santos, Jr., are the
owners of the land which was previously part of the
Parañaque River which became an orchard after it dried
up and considering that Lot 4 which adjoins the same
property is owned by the applicant which was obtained by
the latter from his mother
The Republic submits, however, that the application by
both lower courts of Article 457 of the Civil Code was
erroneous in the face of the fact that respondents’
evidence did not establish accretion, but instead the
drying up of the Parañaque River.
Issue: Whether or not respondents could claim the
property by virtue of acquisitive prescription (section
14(1) of PD 1529)
Held:
NO. (By law, accretion - the gradual and imperceptible
deposit made through the effects of the current of the
water- belongs to the owner of the land adjacent to the
banks of rivers where it forms. The drying up of the river
is not accretion. Hence, the dried-up river bed belongs to
the State as property of public dominion, not to the
riparian owner, unless a law vests the ownership in some
other person.)
37
Respondents as the applicants for land registration carried
the burden of proof to establish the merits of their
application by a preponderance of evidence, by which is
meant such evidence that is of greater weight, or more
convincing than that offered in opposition to it.11 They
would be held entitled to claim the property as their own
and apply for its registration under the Torrens system
only if they established that, indeed, the property was an
accretion to their land.
However, respondents did not discharge their burden of
proof. They did not show that the gradual and
imperceptible deposition of soil through the effects of the
current of the river had formed Lot 4998-B. Instead, their
evidence revealed that the property was the dried-up river
bed of the Parañaque River, leading both the RTC and the
CA to themselves hold that Lot 4998-B was "the land
which was previously part of the Parañaque River xxx
(and) became an orchard after it dried up."
Still, respondents argue that considering that Lot 4998-B
did not yet exist when the original title of Lot 4 was issued
in their mother’s name in 1920, and that Lot 4998-B came
about only thereafter as the land formed between Lot 4
and the Parañaque River, the unavoidable conclusion
should then be that soil and sediments had meanwhile
been deposited near Lot 4 by the current of the Parañaque
River, resulting in the formation of Lot 4998-B.
The argument is legally and factually groundless. For one,
respondents thereby ignore that the effects of the current
of the river are not the only cause of the formation of land
along a river bank. There are several other causes,
including the drying up of the river bed. The drying up of
the river bed was, in fact, the uniform conclusion of both
lower courts herein. In other words, respondents did not
establish at all that the increment of land had formed from
the gradual and imperceptible deposit of soil by the effects
of the current. Also, it seems to be highly improbable that
the large volume of soil that ultimately comprised the dry
land with an area of 1,045 square meters had been
deposited in a gradual and imperceptible manner by the
current of the river in the span of about 20 to 30 years –
the span of time intervening between 1920, when Lot 4
was registered in the name of their deceased parent (at
which time Lot 4998-B was not yet in existence) and the
early 1950s (which respondents’ witness Rufino
Allanigue alleged to be the time when he knew them to
have occupied Lot 4988-B). The only plausible
explanation for the substantial increment was that Lot
4988-B was the dried-up bed of the Parañaque River.
Confirming this explanation was Arcadio, Jr.’s own
testimony to the effect that the property was previously a
part of the Parañaque River that had dried up and become
an orchard.
The relevant legal provision is Section 14(1) of
Presidential Decree No. 1529 (Property Registration
Decree), which pertinently states:
Section 14. Who may apply. — The following persons
may file in the proper [Regional Trial Court] an
application for registration of title to land, whether
personally or through their duly authorized
representatives:
(1) Those who by themselves or through their
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain under
a bona fide claim of ownership since June 12, 1945, or
earlier.
The Court found that from the time the applicant became
the owners thereof, they took possession of the same
property continuously, openly, publicly and adversely for
more than thirty years because their predecessor in
interest are the adjoining owners of the subject parcel of
land along the river banks. Furthermore, the fact that the
applicant paid its realty taxes, had it surveyed per
subdivision plan Csd-00-000343 (Exh. "L") which was
duly approved by the Land Management Services and the
fact that Engr. Chito B. Cainglet, OIC – Chief, Surveys
Division Land Registration Authority, made a Report that
the subject property is not a portion of the Parañaque
River and that it does not fall nor overlap with Lot 5000,
thus, the Court opts to grant the application.
The RTC apparently reckoned respondents’ period of
supposed possession to be "more than thirty years" from
the fact that "their predecessors in interest are the
adjoining owners of the subject parcel of land." Yet, its
decision nowhere indicated what acts respondents had
performed showing their possession of the property
"continuously, openly, publicly and adversely" in that
length of time. The decision mentioned only that they had
paid realty taxes and had caused the survey of the property
to be made. That, to us, was not enough to justify the
foregoing findings, because, firstly, the payment of realty
taxes did not conclusively prove the payor’s ownership of
the land the taxes were paid for,25 the tax declarations and
payments being mere indicia of a claim of
38
ownership;26 and, secondly, the causing of surveys of the
property involved was not itself an of continuous, open,
public and adverse possession.
The principle that the riparian owner whose land receives
the gradual deposits of soil does not need to make an
express act of possession, and that no acts of possession
are necessary in that instance because it is the law itself
that pronounces the alluvium to belong to the riparian
owner from the time that the deposit created by the current
of the water becomes manifest27 has no applicability
herein. This is simply because Lot 4998-B was not formed
through accretion. Hence, the ownership of the land
adjacent to the river bank by respondents’ predecessor-in-
interest did not translate to possession of Lot 4998-B that
would ripen to acquisitive prescription in relation to Lot
4998-B.
To prove that the land subject of an application for
registration is alienable, an applicant must conclusively
establish the existence of a positive act of the
Government, such as a presidential proclamation,
executive order, administrative action, investigation
reports of the Bureau of Lands investigator, or a
legislative act or statute. Until then, the rules on
confirmation of imperfect title do not apply.
The burden of proof in overcoming the presumption of
State ownership of the lands of the public domain is on
the person applying for registration (or claiming
ownership), who must prove that the land subject of the
application is alienable or disposable. To overcome this
presumption, incontrovertible evidence must be
established that the land subject of the application (or
claim) is alienable or disposable. There must still be a
positive act declaring land of the public domain as
alienable and disposable. To prove that the land subject of
an application for registration is alienable, the applicant
must establish the existence of a positive act of the
government such as a presidential proclamation or an
executive order; an administrative action; investigation
reports of Bureau of Lands investigators; and a legislative
act or a statute. The applicant may also secure a
certification from the government that the land claimed to
have been possessed for the required number of years is
alienable and disposable.
In the case at bar, no such proclamation, executive order,
administrative action, report, statute, or certification was
presented to the Court.
The State exclusively owned Lot 4998-B and may not be
divested of its right of ownership. Article 502 of the Civil
Code expressly declares that rivers and their natural beds
are public dominion of the State. It follows that the river
beds that dry up, like Lot 4998-B, continue to belong to
the State as its property of public dominion, unless there
is an express law that provides that the dried-up river beds
should belong to some other person.
WHEREFORE, the Court REVERSES and SETS ASIDE
the decision of the Court of Appeals promulgated on May
27, 2003; DISMISSES the application for registration of
Arcadio C. Santos, Jr. and Arcadio Ivan S. Santos III
respecting Lot 4998-B with a total area of 1,045 square
meters, more or less, situated in Barangay San Dionisio,
Parañaque City, Metro Manila; and DECLARES Lot
4998-B as exclusively belonging to the State for being
part of the dried--up bed of the Parat1aque River.
5) VDA. DE NAZARENO VS. CA
Facts:
-Maximino Nazareno, Sr. and Aurea Poblete
werehusband and wife. Aurea died on April 15,
1970,while Maximino, Sr. died on December 18, 1980.-
They had five children, namely, Natividad, Romeo, Jose,
Pacifico, and Maximino, Jr. Natividad and Maximino, Jr.
are petitioners in this case, while theestate of Maximino,
Sr., Romeo, and his wife Eliza Nazareno are the
respondents.
-After the death of Maximino, Sr., Romeo filed an
intestate case and was appointed administrator of his
father's estate.-
In the course of the intestate proceedings, Romeodiscove
red that his parents had executed several deeds of sale
conveying a number of real properties in favor of
his sister, Natividad.-One of the deeds involved six lots in
Quezon City which were allegedly sold by Maximino,
Sr., with theconsent of Aurea, to Natividad on January 29,
1970.By virtue of these deeds, TCTs were issued
toNatividad for lots 3-B, 3, 10, 11, 13 & 14-Unknown to
Romeo, Natividad sold Lot 3-B, w/c hadbeen occupied
by Romeo, his wife, & Maximino, Jr.,to Maximino, Jr.
-Romeo filed the present case for annulment of salew/
damages against Natividad & Maximino Jr. on the ground
that both sales were void for lack of consideration-Romeo
presented the Deed of Partition &Distribution executed
by Maximino Sr. & Aurea in1962 & duly signed by all
of their children, except Jose, who was then
39
abroad. However, this deed was not carried out. In 1969,
their parents instead offered to sell to them the lots-He
testified that, although the deeds of sale executed by his
parents in their favor stated that the sale was for a
consideration, they never really paid any amount for the
supposed sale. The transfer was made in this manner in
order to avoid the payment of inheritance taxes.
-Allegedly, it was only Natividad who bought the lots in
question because she was the only one financially able to
do so-The trial court rendered a decision declaring the
nullity of the Deed of Sale dated January 29, 1970,except
as to Lots 3, 3-B, 13 and 14 which had passed on to third
persons.
-On appeal to the Court of Appeals, the decision of the
trial court was modified in the sense that titles to Lot 3 (in
the name of Romeo Nazareno) and Lot 3-B(in the name
of Maximino Nazareno, Jr.), as well as to Lots 10 and 11
were cancelled and ordered restored to the estate of
Maximino Nazareno, Sr.Hence, the present petition.
Issue:
1)Whether the restoration of the titles to thelots in
question to the estate of Maximino Sr. was proper
2)Whether it was the intention of Maximino, Sr. to give
the subject lots to Natividad
Held:
1)Yes. The Nazareno spouses transferredtheir properties
to their children by fictitioussales in order to avoid the
payment of inheritance taxes. Facts
& circumstancesindicate badges of a simulated sale w/c
makethe Jan 29, 1970 sale void & of no effect.Natividad
never acquired ownership over theproperty because the
Deed of Sale in her favor is also void for being w/o
consideration.
2)Yes. It cannot be denied that Maximino, Sr. intended to
give the six Quezon City lots to Natividad. As Romeo
testified, their parents executed the Deed of Sale in favor
of Natividad because the latter was the only "female and
the only unmarried member of the family." She was thus
entrusted with the real properties in behalf of her siblings.
As she herself admitted, she intended to convey Lots 10
and 11 to Jose in the event the latter returned from abroad.
There was thus an implied trust constituted in her favor.
Art.1449 of the Civil Code states:
There is also an implied trust when a donation ismade to
a person but it appears that althoughthe legal estate is
transmitted to the donee, henevertheless is either to have
no beneficial interest or only a part thereof.
There being an implied trust, the lots in question are
therefore subject to collation in accordance with Art. 1061
which states:
Every compulsory heir, who succeeds
with other compulsory heirs, must bring into the mass
of the estate any property or right which he may have
received from the decedent, during the lifetime of the
latter, by way of donation, or any other gratuitous title, in
order that it may be computed in the determination of the
legitime of each heir, and in the account of the partition.
As held by the trial court, the sale of Lots 13 and14 to
Ros-Alva Marketing, Corp. will have to be upheld for it
is an innocent purchaser for value which relied on the title
of Natividad.
ART. 458
1) GOVERNMENT OF THE PHILIPPINES VS.
COLEGIO DE SAN JOSE
Doctrine: Article 457 of the Civil Code in relation to
Article 48 of the Law of Waters: Accretions deposited
gradually upon lands contiguous to creeks, streams, rivers
and lakes by accessions or sediments from the waters
thereof belong to the owners of such lands.
Summary: Colegio de San Jose and Government argued
about the ownership of a strip of land bordering the
Laguna de Bay. The SC ruled that the land belonged to
Colegio because even though the waters of Laguna de
Bay, which is part of the public domain, would cover the
strip, Colegio cannot be deprived of its ownership.
Facts:
During the rainy months of September to November, the
waters of Laguna de Bay would cover a long strip of land
bordering the eastern part of two parcels of land and also
the eastern border of a pass owned by the municipality of
San Pedro Tunasan. The pass is usually flooded during
the year. Colegio de San Juan claims that it has been in
open and continuous possession and that the lands are part
of the Hacienda de San Pedro Tunasan which belongs to
them. Government contends that they belong to public
domain because they have always been known to be a part
of the shores of Laguna de Bay
Ratio/ Issues:
40
Whether the two parcels of land belong to Colegio or to
the public domain as part of the bed of Laguna de Bay
(OWNED BY COLEGIO) –please bear with the flow of
discussion – super technical! (1) The SC turned to the
Enciclopedia Juridica Espanola’s definition of a “lake”
and “lagoon” and concluded that Laguna de Bay was a
legally a lake. As such, the provisions of the Civil Code
on ownership of lakes and their beds and shores are
applicable. (2) According to Article 407, lakes and ponds
formed by nature on public lands and their channels are
of public ownership. Article 44 of the Law of Waters
likewise says that “natural ponds and lakes existing upon
public lands and fed by public waters belong to the public
domain.” (3) Laguna de Bay therefore belongs to the
public domain. BUT: What is the bed of Laguna de Bay?
(1) The SC turned to Article 74 of the Law of Waters as
regards the definition of “bed”: It is the ground covered
by the waters when at their highest ordinary depth.
(2) During the rainy season (September-November), the
water level uncommonly spills over to the highway and
completely covers the parcels of land as compared to its
normal level during the dry season (December-August)
which reaches only the northeastern border of the parcels
of land.
(3) It is therefore fair to conclude that the highest ordinary
depth is during the dry months. During this time, the
waters of Laguna de Bay only reaches the northeastern
boundary of the two parcels of land, so the they are
outside the bed and do not belong to public domain.
Government argued that the lots were previously
submerged and it was only when the waters of Laguna de
Bay receded that Colegio claimed ownership.
(1) According to Art 367 of the CC, “the owners of estates
bordering on ponds or lagoons do not acquire the land left
dry by the natural decrease of the waters.” (2) The
provision is however inapplicable because it pertains only
to “ponds or lagoons.” What is applicable is Article 77 of
the Law of Waters: Lands accidentally inundated by the
waters of lakes, or by creeks, rivers, and other streams,
shall continue to be the property of their respective
owners.
(3) The two parcels of land therefore continue to belong
to Colegio de San Jose. The fact that they are covered
during rainy season does not deprive it of its ownership.
(4) Article 84 of the Law of Waters: Accretions deposited
gradually upon lands contiguous to creeks, streams,
rivers, and lakes, by accessions or sediments from the
waters thereof, belong to the owners of such lands.
(5) Even if the parcels of land were formed by accretions
gradually deposited by the sediments from the waters of
Laguna de Bay, Colegio would still own the area.
Government contends that the parcels of land form part of
the shores of Laguna de Bay and are of public ownership:
(1) The definition of “shores” in Article 1 (2) of the Law
of waters, is included under Title I regarding ownership
and use of waters of the sea while lake waters are
governed by Title II so it is inapplicable.
Therefore, the provisions of the Law of Waters regulating
the ownership and use of the waters of the sea are not
applicable to the ownership and use of lakes. (2) It has
been determined that the bed limit of Laguna de bay is
only up to the northeastern boundary of the two parcels of
land.
Held: Judgment appealed from affirmed.
2) LUCITA CANTOJA VS. HARRY S. LIM
Petitioner in this case is the widow of the late
Roberto Cantoja, Sr.
On 16 November 1989, the late Roberto Cantoja
Sr. filed with the Office of the DENR, General Santos
City, an application for a Foreshore Lease Contract over
an area situated in Makar, General Santos City.
Harry S. Lim filed his protest questioning the grant of the
FLA to Cantoja. The protest was based on
petitioner’s allegation that Cantoja committed fraud and
misrepresentation in declaring in his application that the
subject foreshore area adjoined his (Cantoja’s)
property. To prove this allegation, petitioner presented
his Transfer Certificate which adjoins the foreshore area
subject of the lease.
Special Investigator Marohomsalic found that
Cantoja was in actual possession of the foreshore area
which was utilized as “dock-board of the Cantoja’s
Fishing Business.
Geodetic Engineer Bernardo L. Soria, submitted
his report stating, inter alia, that “there was no
overlapping of the lot and FLI.
41
 Meanwhile the DENR instituted a Civil Case for
annulment/cancellation of petitioner’s TCT No.
8423. The suit was anchored on the findings and
recommendations of Special Investigator Romulo J.
Marohomsalic that “the area in question is xxx partly
foreshore and partly river bed of the Makar and therefore
inalienable.”
The Court of Appeals reinstated the decision of the
DENR Secretary, which cancelled and rescinded the
Foreshore Lease Contract covering the foreshore area D
in favor of Cantoja.
The Court of Appeals held that Cantoja committed
misrepresentation amounting to fraud in his application
for lease when he declared in his application that his lot
adjoins that of the foreshore area sought to be
leased.
The Issue
The primary issue in this case is whether the Court of
Appeals erred in cancelling the Foreshore Lease Contract
granted to Cantoja covering the foreshore area under
survey plan Fli-XI-5B-000002-D.
The Ruling of the Court
It is undisputed that respondent is the registered
owner of the land adjacent to the foreshore area leased to
Cantoja. Respondent’s predecessor-in-interest, Jacinto
Acharon, was issued the land by virtue of a free patent
grant. Thus, prior to Cantoja’s foreshore lease application
and the grant of the foreshore lease contract, respondent
already owned the land adjacent to the foreshore land. The
sketch plan dated 12 December 1995 submitted by the
Geodetic Engineer clearly shows that respondent’s
property is in between the foreshore land and Cantoja’s
property. As stated by the DENR Secretary in his
Decision[7] dated 2 May 2000:
Being the owner of the land adjoining the
foreshore area, respondent is the riparian or littoral
owner[9] who has preferential right to lease the foreshore
area as provided under paragraph 32 of the Lands
Administrative Order No. 7-1, dated 30 April 1936, which
reads:
32. Preference of Riparian Owner. – The owner of the
property adjoining foreshore lands, marshy lands or lands
covered with water bordering upon shores or banks of
navigable lakes or rivers, shall be given preference to
apply for such lands adjoining his property as may not be
needed for the public service, subject to the laws and
regulations governing lands of this nature, provided that
he applies therefor within sixty (60) days from the date he
receives a communication from the Director of Lands
advising him of his preferential right.
In other words, article 4 recognizes the preferential right
of the littoral owner (riparian according to paragraph 32)
to the foreshore land formed by accretions or alluvial
deposits due to the action of the sea.
The reason for that preferential right is the same as the
justification for giving accretions to the riparian owner,
which is that accretion compensates the riparian owner for
the diminutions which his land suffers by reason of the
destructive force of the waters. So, in the case of littoral
lands, he who loses by the encroachments of the sea
should gain by its recession.
In this case, Cantoja committed fraud when he
misrepresented himself as the riparian or littoral owner in
his application for the foreshore lease. Under stipulation
no. 15 of the Foreshore Lease Agreement, any fraud or
misrepresentation committed by the applicant is a ground
for cancellation or rescission of the Foreshore Lease
Agreement.
ART. 461
4) AGNE VS. DIRECTOR OF LANDS
On April 13, 1971, private respondent spouses filed Civil
Case No. U-2286 in
the Courtof First Instance of Pangasinan for recovery of
possession and damages againstpetitioners. Their compla
int states that they are the registered owners under theafo
resaid Transfer Certificate of Title No. 32209 of the parcel
of land situated in BarrioBantog, Asingan, Pangasinan
which is now in the possession of petitioners. Petitioners
answered that the land which was formerly a part of the
river is owned bythem by reason of accretion and
accession due to the big flood that happened in 1920.They
contend that since 1920, they and their predecessors in
interest occupied andexercised dominion openly and
adversely over said portion of the abandoned river bed in
question abutting their respective riparian lands
continuously up to the present to the exclusion of all other
persons, particularly Herminigildo Agpoon and that they
have introduced improvements thereon by constructing
42
irrigation canals and planting trees and agricultural crops
thereon 6 and converted the land into a productive area.
During the pendency of the said case, the petitioners filed
a complaint (Case No. U-2649 ) against the Director of
Lands and Spouses Agpoon with the CFI of Pangasinan
for annulment of title, reconveyance of and/or action to
clear title to a parcel of land. They allege that the land in
question belong to them. They further contend that it was
only on April 13, 1971, when respondent spouses filed a
complaint against them, that they found out that the
said land was granted by the Government to Herminigild
o Agpoon under Free Patent No. 23263, pursuant to
which Original Certificate of Title No.2370 was issued in
the latter's name and that the said patent and subsequent
titlesissued pursuant thereto are null and void since the
said land, an abandoned river bed,is of private ownership
and, therefore, cannot be the subject of a public land grant.
On June 21, 1974, the trial court rendered a decision in
Civil Case U-2286 in favor of the Respondents. O n J u n e
24, 1974, Court of First Instance of
P a n g a s i n a n , a c t i n g o n t h e m o t i o n t o dismiss
filed by respondents Director of Lands and spouses
Agpoon, issued an order dismissing Civil Case No. U-
2649 for annulment of title by merely
citing the statement in the case
of Antonio, et al. vs. Barroga, et al. that an action to
annul a free patent many years after it had become final and
indefeasible states no cause of action.
ISSUE: Whether the action to annul a free patent many
years after it had become final and indefeasible states no cause
of action.
Ruling:
No The facts alleged in the complaint, which are deemed
hypothetically admitted upon the filing of the motion
to dismiss, constitute a sufficient cause of action
against private respondents. In the case at bar, it was
admitted in the stipulation of facts that the land was
formerly an abandoned river bed formed due to
natural causes in 1920. It was likewise admitted that
the riparian owners of the lands abutting said abandoned
river bed were the plaintiffs and/or their predecessors in
interest and that since then and upto the present, they
have been occupying and cultivating aliquot
portions of the saidland proportionate to the respective
lengths of their riparian lands and that they are thereal and
lawful owners of the said land as decreed by Article 370
of the old Civil Code,the law then in force that time. With
that being said, then, the land in question was andis of
private ownership and, therefore, beyond the jurisdiction
of the Director of Lands.
The free patent and subsequent title issued
pursuant thereto are null and void. The indefeasibility
and imprescriptibility of a Torrens title issued pursuant to a patent
may be invoked only when the land involved originally formed part
of the public domain. If it was a private land, the patent and certificate
of title issued upon the patent are a nullity. The rule on the
incontrovertibility of a certificate of title upon the
expiration of one year, after the entry of the decree,
pursuant to the provisions of the Land Registration Act,
does not apply where an action for the cancellation of a
patent and a certificate of title issued pursuant thereto is
instituted on the ground that they are null and void
because the Bureau of Lands had no jurisdiction to issue
them at all, the land in question having been withdrawn from
the public domain prior to the subsequent award of the patent and the
grant of a certificate of title to another person.
Such an action is different from a review of the decree
of title on the ground of fraud. Although a period of one year
has already expired from the time a certificate of title was
issued pursuant to a public grant, said title does not
become incontrovertible but is null and void if the property
covered thereby is originally of private ownership, and an
actiont o a n n u l t h e s a m e d o e s n o t p r e s c r i b e .
M o r e o v e r , s i n c e h e r e i n p e t i t i o n e r s a r e i n po
ssession of the land in dispute, an action to quiet title is imprescriptible.
Their action for reconveyance which, in effect, seeks to
quiet title to property in one's possession
isi m p r e s c r i p t i b l e . T h e i r u n d i s t u r b e d p o s s e s
sion for a number of years gave them acon
tinuing right to seek the aid of a court of
e q u i t y t o d e t e r m i n e t h e n a t u r e o f t h e adverse
claims of a third party and the effect on her title
43