2nd batch of cases-property.doc

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SECOND DIVISION

[G.R. No. 131074. March 27, 2000]

CENTRAL BANK OF THE PHLPPNE!, petitioner, vs. !PO"!E!

ALFON!O a#$ ANACLETA BCHARA, respondents.

% E C ! O N

%E LEON, &R., J.'

Before us is a petition for review on certiorari praying for the reversal of theDecision[1] an !esolution["] ate #e$ruary "%& 1''( an Octo$er 1(& 1''(& respectively&renere $y the #or)er Special #ourteenth Division [*] of the Court of +ppeals in C+,-.!. CV No. ////%. 0he appellate court reverse the ug)ent of the trial court anecree the contract of sale entere into $y the opposing parties as rescine. Supre)a2

0he facts are3

!esponents S4O5SES +6#ONSO an +N+C6E0+ BIC7+!+ were the for)erregistere owners of 6ots 8"1,C,1 an 8"1,C," situate in 6ega9pi City an covere $y0ransfer Certificates of 0itle Nos. 1%1*% [/] an 1%1*'.[:] 0he two properties have anaggregate area of %11 s;uare )eters. On <uly 1'& 1'%*& the responents sol the twoproperties to petitioner CEN0!+6 B+N= O# 07E 47I6I44INES for the su) of4/>:&:>>. >>& or at 4:>>.>> per s;uare )eter. [8] 0he ee of sale containe thefollowing pertinent stipulations3

222......222......222......222

". 0he VENDEE $y virtue of the sale of real property agree upon shallpay to the VENDO!S at the rate of #IVE 75ND!ED 4ESOS ?4:>>.>>@per s;uare )eter or at a total price of #O5! 75ND!ED #IVE07O5S+ND #IVE 75ND!ED 4ESOS ?4/>:&:>>.>>@& such pay)ent to$e effecte only after this Dee of Sale shall have $een uly registerean a clean title issue in the na)e of VENDEE. It is agree that all feesan e2penses& cost of ocu)entary an science sta)ps necessary for theregistration of the property with the !egistry of Dees an the transfer oftitle of the parcels of the lan herein sol to the VENDEE as well as the

transfer ta2 ue uner this transaction shall $e $orne $y the VENDO!SA

222......222......222......222

/. 0he VENDO!S here$y liewise unertae at their e2pense to fill theparcels of lan with an esco)$ro free fro) waste )aterials co)pacte tothe street level upon signing of the Dee of Sale to suit the groun for the

http://sc.judiciary.gov.ph/jurisprudence/2000/mar2000/131074.htm#_ftn1
















construction of the regional office of the Central Ban of the 4hilippinesthereat.

4etitioner cause the two properties to $e consoliate& with several other parcels oflan& into a single estate having a total area of 8&(>> s;uare )eters. 6ots 8"1,C,1 an

8"1,C,"& shape roughly lie a right triangle& represent twelve per cent of the total areaan& )ore i)portantly& provie access to Calle !i9al. [(] <uris

0he recor iscloses that espite responents failure to pay the capital gains ta2 another transfer fees& 0ransfer Certificate of 0itle No. ":"8( [%] was nonetheless issue inpetitioners na)e on Septe)$er 8& 1'%*. 0wo annotations were recore in the)e)oranu) of encu)$rances. 0he first was a notice of averse clai) in favor of theheirs of 6utgara +rcos !e)pillo file uner Entry No. :%1"( ate Dece)$er "(&1'%*. 0he secon was a notice of lis pendens in favor of one <ai)e !e)pillo& inconnection with Civil Case No. (":* pening $efore the Court of #irst Instance of +l$ayfile uner Entry No. :%**8 ate <anuary "/& 1'%/. Both were su$se;uently cancelle

pursuant to a ecision in Civil Case No. (":*& per Entry No. 8>"1/ ate Septe)$er1"& 1'%/.

Despite the issuance of the title& petitioner faile to pay responent. On its part&responents i not fill up the lot with esco)$ro espite several e)ans )ae $ypetitioner. 4etitioner was thus constraine to unertae the filling up of the sai lots& $ycontracting the services of B-V Construction. 0he filling up of the lots cost petitioner4/:&>>>.>>.['] 4etitioner eucte the sai a)ount fro) the purchase price paya$le toresponents.[1>]

4etitioner& however& still i not pay the responents. Conse;uently& on Septe)$er (&

1''"& responents co))ence Civil Case No. %8/:& an action for rescission or specificperfor)ance with a)ages& against petitioner $efore the !egional 0rial Court& #ifth<uicial !egion& Branch (& of 6ega9pi City. !esponents allege that petitioner faile topay the purchase price espite e)an. 0hey praye for the rescission of the contractof sale an the return of the properties& or in the alternative that petitioner $e co)pelleto pay the purchase price plus interest at the rate of 1" per annu) fro) <uly 1'&1'%*& until fully pai& an to pay the capital gains an ocu)entary sta)p ta2es with theBureau of Internal !evenue an registration fees with the !egister of Dees. Scuris

4etitioner tenere pay)ent to responents [11] $y Central Ban chec no. /%*>>% [1"] inthe a)ount of 4*8>&:>>.>>. !esponents refuse the tener& however& in view of their

co)plaint for rescission. +fter receipt of su))ons& petitioner file its answer

[1*]

averringthat it was ustifie in elaying pay)ent of the purchase price in view of responents$reach of several conitions in the contract. #irst& petitioner allege that responentsfaile to eliver to the for)er free an legal possession of the two properties& in view ofthe encu)$rances note in the title& in aition to the presence of s;uatters who werenot evicte $y responents. Secon& it clai)e that responents i not fill up the lotswith esco)$ro free fro) waste )aterials& as agree upon. 4etitioner counterclai)e fora)ages of 4%&>>>&>>>.>> representing pay)ents for rentals for the lease of pre)ises


















it use as a te)porary regional officeA 41>>&>>>.>> as e2e)plary a)agesA 4:>&>>>.>>as attorneys feesA an costs.

On <anuary ""& 1''*& petitioner file a )otion for consignation [1/] $efore the trial court.0he )otion was grante per an Orer ate <anuary "8& 1''*. [1:] +fter trial& the trial

court issue its Decision ate Octo$er "8& 1''*&[18]

the ispositive portion of whichstates3

7E!E#O!E& in view of the foregoing& ecision is here$y renere as follows3

1. 0he plaintiffs are orere to accept the eposite a)ount of4*8>&:>>.>> in #e$ruary 1''* at the Office of the !0C Cler of Court asfull pay)ent for the properties in ;uestion& consiering that the su) of4/:&>>>.>> e2pene $y efenant in unertaing the filling up of theproperties is creite to the original purchase price of 4/>:&:>>.>>A

". 0he efenant is orere to pay the plaintiffs legal interest at the rate ofsi2 ?8@ per cent per annu) on the original purchase price of 4/>:&>>>.>>fro) Septe)$er 8& 1'%* up to <uly 1*& 1''"& when the 4/:&>>>.>> wascreite to the original purchase price ?E2hi$it 1",c@A

*. 0he efenant is orere to pay the plaintiffs legal interest at the rate ofsi2 ?8@ per cent per annu) on the re)aining a)ount of 4*8>&:>>.>> fro)<uly 1/& 1''" up to #e$ruary 1''*& when sai a)ount was eposite atthe Office of the !0C Cler of CourtA

/. +n other for)s of a)ages sustaine $y either plaintiffs or efenant

are to $e $orne or shoulere $y the respective party.

ith costs against efenant. <urissc

Both parties appeale the ecision to the Court of +ppeals. Initially& petitioners appealwas is)isse for failure to file the ocet fees& per a !esolution ate +ugust ""&1''/.[1(] 0he is)issal was recalle su$se;uently upon petitioners filing of aFanifestation [1%] infor)ing the appellate court that it ha withrawn its appeal at the trialcourt level. Sai )anifestation was uly note. [1']

On #e$ruary "%& 1''(& the appellate court renere ug)ent [">] reversing the ecision

of the trial court. Instea& it orere the rescission of the contract of sale an thereconveyance of the properties to responents. 0he appellate court liewise orereresponents to rei)$urse petitioner the cost of filling up the lot with esco)$ro& anpetitioner to pay responents attorneys fees an costs. 0he )otion for reconsierationfile $y petitioner was enie in the assaile !esolution of Octo$er 1(& 1''(. ["1]

+ggrieve $y the ruling& petitioner elevate the )atter to us via the instant petition&contening that3




















07E CO5!0 O# +44E+6S #+I6ED 0O !56E 07+0 4!IV+0E!ES4ONDEN0S DID NO0 COF46G I07 07EI! OB6I-+0IONS 0OCB4 IN -OOD #+I07 075S 4!IV+0E !ES4ONDEN0S +!E NO0EN0I06ED +S + F+00E! O# !I-70 0O !ESCISSION.

07E CO5!0 O# +44E+6S #+I6ED 0O !56E 07+0 CB4 +S<5S0I#IED IN I077O6DIN- 4+GFEN0 O# 07E 45!C7+SE 4!ICEO# 07E S5B<EC0 6O0 SO6D 0O 07EF BG 4!IV+0E !ES4ONDEN0S.

07E CO5!0 O# +44E+6S #+I6ED 0O !56E 07+0 07E 0!I+6 CO5!0DID NO0 COFFI0 + !EVE!SIB6E E!!O! 7EN I0 O!DE!ED

S4ECI#IC 4E!#O!F+NCE INS0E+D O# !ESCISSION. [""]

0he right to rescin a contract involving reciprocal o$ligations is provie for in +rticle11'1 of the Civil Coe& which states3 Fisuris

0he power to rescin o$ligations is i)plie in reciprocal ones& in case oneof the o$ligors shoul not co)ply with what is incu)$ent upon hi).

0he inure party )ay choose $etween fulfill)ent an the rescission of theo$ligation& with the pay)ent of a)ages in either case. 7e )ay also seerescission& even after he has choosen fulfill)ent& if the latter shoul

$eco)e i)possi$le.

0he court shall ecree the rescission clai)e& unless there $e ust causeauthori9ing the fi2ing of a perio.

0his is unerstoo to $e without preuice to the rights of thir personswho have ac;uire the thing& in accorance with +rticles 1*%: an 1*%%an the Fortgage 6aw.

0he law speas of the right of the Hinure partyH to choose $etween rescission orfulfill)ent of the o$ligation& with the pay)ent of a)ages in either case. 7ere&

responents clai) to $e the inure party an conse;uently see the rescission of theee of sale& or in the alternative& its fulfill)ent $ut on ter)s ifferent fro) thosepreviously agree upon. !esponents aver that they are entitle to cancel the o$ligationaltogether in view of petitioners failure to pay the purchase price when the sa)e$eca)e ue. 4etitioner isputes responents stan& clai)ing that if anyone was atfault& it was the latter who is)ally faile to co)ply with their contractual o$ligations.7ence& it was entitle to withhol pay)ent of the purchase price.





+n instance where the law clearly allows the venee to withhol pay)ent of thepurchase price is +rticle 1:'> of the Civil Coe& which provies3

Shoul the venee $e istur$e in the possession or ownership of thething ac;uire& or shoul he have reasona$le grouns to fear such

istur$ance& $y a vinicatory action or a foreclosure of )ortgage& he )aysuspen the pay)ent of the price until the venor has cause theistur$ance or anger to cease& unless the latter gives security for thereturn of the price in a proper case& or it has $een stipulate that&notwithstaning any such contingency& the venee shall $e $oun to )aethe pay)ent. + )ere act of trespass shall not authori9e the suspension ofthe pay)ent of the price. <le2

0his is not& however& the only ustifie cause for retention or withholing the pay)ent ofthe agree price. + note authority on civil law states that the venee is nonethelessentitle if the venor fails to perfor) any essential o$ligation of the contract. Such right

is pre)ise not on the afore;uote article& $ut on general principles of reciprocalo$ligations. ["*]

0his view is consistent with our rulings in earlier cases ["/] that resolution is allowe onlyfor su$stantial $reaches an not for those which are slight or casual. Consier ourpronounce)ent inBorromeo v. Franco3[":]

0he contract in ;uestion contains various clauses an stipulations $ut theefenants refuse to fulfill their pro)ise to sell on the groun that thevenee ha not perfecte the title papers to the property in ;uestion withinthe si2 )onths agree upon in clause ?c @. 0hat stipulation was not an

essential part of the contract an a failure to co)ply therewith is noo$stacle to the fulfill)ent of the pro)ise to sell.

222......222......222......222

0he o$ligations which the purchaser& Borro)eo& i)pose upon hi)self& toperfect the papers to the property within a perio of si2 )onths& is notcorrelative with the o$ligation to sell the property. 0hese o$ligations o notarise fro) the sa)e cause. 0hey create no reciprocal rights $etween thecontracting parties& so that a failure to co)ply with the stipulationcontaine in clause (c) on the part of the plaintiff purchaser within the

perio of si2 )onths provie for in the sai contract& as he& the plaintiffhi)self a)its& oes not give the efenants the right to cancel theo$ligation which they i)pose upon the)selves to sell the two houses in;uestion in accorance with the provisions of article 11"/ of the CivilCoe& since no real uriical $ilaterality or reciprocity e2iste $etween thetwo o$ligations& $ecause the o$ligation to perfect the title papers to thehouses in ;uestion is not correlative with the o$ligation to fulfill thepro)ise to sell such property. One o$ligation is entirely inepenent of the









other. 0he latter o$ligation is not su$orinate to nor oes it epen uponthe fulfill)ent of the o$ligation to perfect the title ees of the property.

Certainly& non,pay)ent of the purchase price constitutes a very goo reason to rescina sale& for it violates the very essence of the contract of sale.

By the contract of sale one of the contracting parties o$ligates hi)self totransfer the ownership of an to eliver a eter)inate thing& an the otherto pay therefor a price certain in )oney or its e;uivalent. ["8] New)iso

e have conse;uently hel that the nonpay)ent of the purchase price is a resolutoryconition& for which the re)ey is either rescission or specific perfor)ance uner +rticle11'1.["(] 0his is true for reciprocal o$ligations& where the o$ligation of one is a resolutoryconition of the other.["%]

In reversing the trial court& the Court of +ppeals in the case at $ench hel that3

0he trial court co))itte a reversi$le error when it orere appellants toaccept the a)ount consigne $y appellee with the Cler of Court as fullpay)ent for the two lots sol $y appellants to appellee. +ppelleeseli$erate refusal to pay appellants the purchase price for the two lots fornine ?'@ long years can not ust $e regare as a casual& $ut su$stantialan funa)ental $reach of o$ligation which efeats the o$ect of theparties. Such su$stantial an funa)ental $reach of o$ligation co))itte$y appellee gave appellants& uner the law& the right to rescin thecontract or as for its specific perfor)ance& in either case with right toe)an perfor)ance [sic].

In the case at $ench& appellants were ustifie in electing rescissioninstea of specific perfor)ance. 0he eli$erate failure of appellee to paythe purchase price for nine ?'@ long years after the registration of the Deeof +$solute Sale& an the su$se;uent issuance of a clean title to appelleeconstitutes a serious an unustifie $reach of o$ligation. In the case ofSiy vs. Court of +ppeals& 1*% SC!+ :*8& the Supre)e Court hel3 +cct)is

It is noteworthy to )ention that in their answer to thepetitioners co)plaint& the responents praye for theannul)ent of $oth the Dee of Conitional Sale ?E2h. +J@

an the Dee of Sale with +ssu)ption of Fortgage ?E2h.-J@ which are the very $ases of the supple)entalagree)ents ?E2hs. 1 & " an :@ e2ecute $etween thepetitioner an the responent. 0he technical argu)ent thatthe responents never praye for the rescission of thecontracts an that the trial court an the appellate courtshoul never have rescine the sa)e has no )erit.#urther)ore& $y failing to pay the a)ount of 41"&>>>.>> an










the $alance of 4/&*(8.>> as stipulate in the contract withinthe forty,five ?/:@ ays perio& the petitioner clearlyco))itte a $reach of contract which sufficiently an ustlyentitle the responents to as for the rescission of thecontracts. In the case of Nagarmull v. Binalbagan Isabel

Sugar Co., Inc . ?** SC!+ :"@& we rule that H2 2 2 0he$reach of contract co))itte $y appellee gave appellant&uner the law an even uner general principles of fairness&the right to rescin the contract or to as for its specificperfor)ance& in either case with right to e)an a)ages 22 2H. It is evient& in the case at $ar& that the responentschose to rescin the contracts after the petitioner repeatelyfaile to pay not only the $alance $ut the initial a)ount asownpay)ent in consieration of which the contracts oragree)ents were e2ecute. +s a )atter of fact& thepetitioner later ase the SSS to cancel his loan application.

7e there$y a$anone his own clai) for specificperfor)ance. 0herefore& the appellate court correctlyaffir)e the rescission of the a$ove,)entione contracts. Italso correctly affir)e the pay)ent of attorneys fees. hilethe petitioner )ay not have acte in $a faith in filing hisco)plaint& still the pay)ent of attorneys fees is warrante inthis case $ecause of the environ)ental circu)stances whichco)pelle the responents to litigate for the protection oftheir interests [citations o)itte].

hile appellants are entitle to their clai) for attorneys fees& they are not

entitle to an awar of a)ages $ecause they were not a$le tosu$stantiate their clai) for a)ages to have suffere ue to the failure ofappellee to pay the purchase price of the two lots after the registration ofthe Dee of a$solute Sale with the !egister of Dees of 6egaspi City& anthe issuance of a clean title to appellee covering the two lots. 2222

222......222......222......222

In orer that a)ages )ay $e recovere& the $est evience o$taina$le $ythe inure party )ust $e presente. +ctual or co)pensatory a)agescannot $e presu)e& $ut )ust $e prove with reasona$le egree ofcertainty. + court cnnot [sic] rely on speculation& conecture or guessworas to the fact an a)ount of a)ages& $ut )ust epen upon co)petentproof that they have $een suffere an on evience of the actual a)ount.If the proof is fli)sy an unsu$stantial& no a)ages will $e aware[citation o)itte].["']

e isagree with the appellate court. Fisact





By law& H[t]he venee is $oun to accept the elivery an to pay the price of the thingsol at the ti)e an place stipulate in the contract.H [*>] In the case at $ench& petitionerso$ligation to pay arose as soon as the ee of sale was registere an a clean title wasissue. 7owever& petitioner ustifies non,pay)ent on responents $reach of severalstipulations in the contract. e have e2a)ine these allege violations vis-a-vis the

pertinent provisions of the ee of sale& eeping in )in that only a su$stantial $reachof the ter)s an conitions thereof will warrant rescission. hether a $reach issu$stantial is largely eter)ine $y the attenant circu)stances. [*1]

4etitioner contens that it was entitle to retain the purchase price ue to responentsfailure to pay the capital gains an ocu)entary sta)p ta2es an other transfer fees.e have rea an e2a)ine the contract of sale an we have foun nothing therein toshow that pay)ent of the sai ta2es an fees to $e conitions preceent to petitionersuty to pay. 0he stipulation is a stanar clause in )ost contracts of sale an is nothing)ore than a specification of the party who shall $ear such fees an ta2es.

4etitioner liewise insists that its elay in paying the purchase price was ustifie since as;uatters occupie the pre)ises& contravening the stipulation that the responentvenors shall convey the properties free fro) liens an encu)$rances. +gain& wecannot support petitioners view. 0he s;uatters illegal occupation cannot $e ee)e alien or encu)$rance. By the e2press ter)s of +rticle 1:'> of the Civil Coe& a )ere actof trespass will not authori9e the suspension of pay)ent of the price. Be that as it )ay&the usurpation $eca)e )oot an acae)ic when the s;uatters left of their own volitionin 1'%% following a stor).[*"]

So far& what e)erges as clear is that petitioners o$ligation to pay was not su$ect to theforegoing Hconitions&H only that its e)ana$ility is suspene until the opportune ti)e.

0hat arrive upon the registration of the ee of sale an the issuance of a clean title infavor of the petitioner. !elative thereto& the notice of averse clai)an lis pendens $eca)e )oot issues[**] $ecause they were cancelle less than a yearafter their inscription. Sa

e now consier petitioners final argu)ent& to wit& that it was not o$lige to pay untilresponents co)pact the lots to street level with esco)$ro free fro) waste )aterial.0aing into account the facts of the case& we fin that particular argu)ent of petitionerto $e well,taen. 0he use to which the parcels of lan was to $e evote was no secret$etween the parties. 0he consoliate estate& which incorporate the lots sol $yresponents to petitioner& was intene as the site of petitioners regional office to servethe Bicol region. 0he proect ha its peculiar re;uire)ents& not the least of which wasthat since a su$stantial eifice was to $e $uilt on the property& the site ha to $e )aesuita$le for the purpose. 0hus& petitioner specifie that the lots $e fille up in the)anner specifie in paragraph / of the contract. 0he i)portance thereof coul not have$een lost on responents.

Eviently then& responents were guilty of non,perfor)ance of sai stipulation. 0heee of sale e2pressly stipulate that the venors were to unertae& at their e2pense&












the filling up of the lots with esco)$ro free fro) waste )aterial co)pacte to the streetlevel. 0his was to $e acco)plishe upon the signing of the contract an insofar aspetitioner was concerne& responents o$ligation was e)ana$le at once. Other thanhis testi)ony& +lfonso Bichara offere no proof tening to show that he ha co)plie inthe )anner agree upon. +lthough he i state that he saw no nee to co)ply with the

stipulation $ecause the parcels of lan were alreay level with the street&[*/]

it was still notshown that the sa)e were in a conition suita$le for the construction of petitionersregional office. e fin it har to $elieve that the ee of sale woul have specifie thenature& ;uantity an ;uality of the filling )aterial were it not to prepare the lots for theconstruction. here the ter)s of a contract are clear& they shoul $e fulfille accoringto the literal tenor of their stipulation. [*:] If inee it were true that the lots were alreay atstreet level& petitioner woul not have incurre the aitional cost of 4/:&>>>.>> forhaving the) fille up $y the B-V Corporation.

On the other han& responents argue that& as proof of petitioners $a faith& the lattercoul have unertaen the filling up of the lots as early as 1'%'& [*8] when it woul have

cost only a$out 4'&>>>.>>.[*(]

0he trial court concurre with this view.[*%]

But we isagree.4etitioner was uner no uty to have one& at the least cost to the latter& what wasclearly responents o$ligation fro) the very $eginning. If petitioner was force to havethe su$ect parcels of lan fille up $y another party& an su$se;uently $ill responents&the for)er was entitle to o so $y right. [*']!esponents are not in a position to ;uestionthe resulting e2pense. 7a they perfor)e their o$ligation uner the contract of sale atthe proper ti)e& the e2pense woul surely have $een even less than the 4'&>>>.>>esti)ate in 1'%'. Sppesc

In this conte2t& the appellate court erre in ecreeing the rescission& otherwise calleresolution& of the the su$ect ee of sale. !esponents shoul not $e allowe to

rescin the contract where they the)selves i not perfor) their essential o$ligationthereuner. It shoul $e e)phasi9e that a contract of sale involves reciprocity $etweenthe parties. Since responents were in $a faith& they )ay not see the rescission of theagree)ent they the)selves $reache.[/>] Conse;uently& the ecision renere $y thetrial court shoul $e reinstate as $eing ust an proper uner the pre)ises.

(HEREFORE& ug)ent is here$y renere !EVE!SIN- an SE00IN- +SIDE theDecision ate #e$ruary "%& 1''( of the Court of +ppeals. 0he Decision ate Octo$er"8& 1''* renere $y the !egional 0rial Court of 6ega9pi City in Civil Case No. %8/: ishere$y !EINS0+0ED. No pronounce)ent as to costs.

!O OR%ERE%. %E LEON, &R&

Bellosillo, (Chairman), Mendoa, !uisumbing, an Buena, ""., concur.


















DIGEST: Philippine Suburban Dev Corp vs

Auditor GeneralBy nutshellgirl ¶ Posted in Digest: Sales, Lawschool ¶ Tagged digest, law school, sales ¶ Leave a

commentPhilippine Suburban Dev Corp vs Auditor GeneralG.R. No. L-19545Sube!t" SalesDo!trine" Constructive or legal delivery#a!ts"On June , !"#$, at a meeting with the Ca%inet, the President o& the Phili''ines, acting onthe re'orts o& the Committee created to survey suita%le lots &or relocating s(uatters in)anila and su%ur%s, a''roved in 'rinci'le the ac(uisition %y the Peo'le*s +omesite and+ousing Cor'oration o& the unoccu'ied 'ortion o& the Sa'ang Palay state in Sta- )aria,Bulacan and o& another area either in Las Pi.as or Para.a(ue, /i0al, or Bacoor, Cavite &orthose who desire to settle south o& )anila- On June !$, !"#$, the Board o& Directors o& theP++C 'assed /esolution 1o- 2$$ 34nne5 6C78 authori0ing the 'urchase o& the unoccu'ied'ortion o& the Sa'ang Palay state at P$-9 'er s(uare meter 6su%;ect to the &ollowingconditions 'recedent:<- That the President o& the Phili''ines shall &irst 'rovide the P++C with the necessary &undsto e&&ect the 'urchase and develo'ment o& this 'ro'erty &rom the 'ro'osed P9- million%ond issue to %e a%sor%ed %y the =S>S-9- That the contract o& sale shall &irst %e a''roved %y the 4uditor =eneral 'ursuant to5ecutive Order dated ?e%ruary <, !""-

On July !<, !"#$, the President authori0ed the &loating o& %onds under /e'u%lic 4ct 1os-!$$$ and !<@@ in the amount o& P2,$$,$$$-$$ to %e a%sor%ed %y the =S>S, in order to&inance the ac(uisition %y the P++C o& the entire Sa'ang Palay state at a 'rice not toe5ceed P$-9 'er s(- meter-

On Decem%er @",!"#$, Petitioner Phili''ine Su%ur%an Develo'ment Cor'oration, as ownero& the unoccu'ied 'ortion o& the Sa'ang Palay state and the Peo'le*s +omesite and+ousing Cor'oration, entered into a contract em%odied in a 'u%lic instrument entitled 6Deedo& 4%solute Sale7 where%y the &ormer conveyed unto the latter the two 'arcels o& landa%ovementioned- This was not registered in the O&&ice o& the /egister o& Deeds until )arch!9, !"#!, due to the &act, 'etitioner claims, that the P++C could not at once advance themoney needed &or registration e5'enses-

>n the meantime, the 4uditor =eneral, to whom a co'y o& the contract had %een su%mitted&or a''roval in con&ormity with 5ecutive Order 1o- @"$, e5'ressed o%;ections thereto andre(uested a reAe5amination o& the contract, in view o& the &act that &rom !"9 to Decem%er@$, !"#$, the entire hacienda was assessed at P!<!,"$-$$, and reassessed %eginning

Decem%er @!, !"#$ in the greatly increased amount o& P9,",!!$-$$-

>t a''ears that as early as the &irst wee o& June, !"#$, 'rior to the signing o& the deed %ythe 'arties, the P++C ac(uired 'ossession o& the 'ro'erty, with the consent o& 'etitioner, toena%le the said P++C to 'roceed immediately with the construction o& roads in the newsettlement and to resettle the s(uatters and &lood victims in )anila who were renderedhomeless %y the &loods or e;ected &rom the lots which they were then occu'ying-On 4'ril !@, !"#!, the Provincial Treasurer o& Bulacan re(uested the P++C to withhold theamount o& P<$,$""-2" &rom the 'urchase 'rice to %e 'aid %y it to the Phili''ine Su%ur%an

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Develo'ment Cor'oration- Said amount re'resented the realty ta5 due on the 'ro'ertyinvolved &or the calendar year !"#!- Petitioner, through the P++C, 'aid under 'rotest thea%ovementioned amount to the Provincial Treasurer o& Bulacan and therea&ter, or on June!<, !"#!, %y letter, re(uested then Secretary o& ?inance Dominador 4ytona to order are&und o& the amount so 'aid- 'on recommendation o& the Provincial Treasurer o& Bulacan,said re(uest was denied %y the Secretary o& ?inance in a letterAdecision dated 4ugust @@,

!"#!-Petitioner claimed that it ceased to %e the owner o& the land in (uestion u'on thee5ecution o& the Deed o& 4%solute Sale on Decem%er @", !"#$- >t is now claimed in thisa''eal that the 4uditor =eneral erred in disallowing the re&und o& the real estate ta5 in theamount o& P<$,9#$-"$ %ecause aside &rom the 'resum'tive delivery o& the 'ro'erty %y thee5ecution o& the deed o& sale on Decem%er @", !"#$, the 'ossession o& the 'ro'erty wasactually delivered to the vendee 'rior to the sale, and, there&ore, %y the transmission o&ownershi' to the vendee, 'etitioner has ceased to %e the owner o& the 'ro'erty involved,and, conse(uently, under no o%ligation to 'ay the real 'ro'erty ta5 &or the year !"#!-/es'ondent, however, argues that the 'resum'tive delivery o& the 'ro'erty under 4rticle!9" o& the Civil Code does not a''ly %ecause o& the re(uirement in the contract that thesale shall &irst %e a''roved %y the 4uditor =eneral, 'ursuant to the 5ecutive Order-

$SS%&: EO1 there was already a valid trans&er o& ownershi' %etween the 'arties-'&LD"Considering the a&orementioned a''roval and authori0ation %y the President o& thePhili''ines o& the s'eci&ic transaction in (uestion, the 'rior a''roval %y the 4uditor =eneralenvisioned %y 4dministrative Order would there&ore, not %e necessary-nder the civil law, delivery 3tradition8 as a mode o& transmission o& ownershi' may%e actual3real tradition8 or constructive 3constructive tradition8- @ Ehen the sale o& real 'ro'erty ismade in a 'u%lic instrument, the e5ecution thereo& is e(uivalent to the delivery o& the thingo%;ect o& the contract, i& &rom the deed the contrary does not a''ear or cannot clearly %ein&erred- <>n other words, there is sym%olic delivery o& the 'ro'erty su%;ect o& the sale %y thee5ecution o& the 'u%lic instrument, unless &rom the e5'ress terms o& the instrument, or %yclear in&erence there&rom, this was not the intention o& the 'arties- Such would %e the case,

&or instance, when a certain date is &i5ed &or the 'urchaser to tae 'ossession o& the'ro'erty su%;ect o& the conveyance, or where, in case o& sale %y installments, it is sti'ulatedthat until the last installment is made, the title to the 'ro'erty should remain with thevendor, or when the vendor reserves the right to use and en;oy the 'ro'erties until thegathering o& the 'ending cro's, or where the vendor has no control over the thing sold atthe moment o& the sale, and, there&ore, its material delivery could not have %een made->n the case at %ar, there is no (uestion that the vendor had actually 'laced the vendee in'ossession and control over the thing sold, even %e&ore the date o& the sale- The conditionthat 'etitioner should &irst register the deed o& sale and secure a new title in the name o& thevendee %e&ore the latter shall 'ay the %alance o& the 'urchase 'rice, did not 'reclude thetransmission o& ownershi'- >n the a%sence o& an e5'ress sti'ulation to the contrary, the'ayment o& the 'urchase 'rice o& the good is not a condition, 'recedent to the trans&er o&title to the %uyer, %ut title 'asses %y the delivery o& the goods-

('&R&#)R&* the a''ealed decision is here%y reversed, and the real 'ro'erty ta5 'aidunder 'rotest to the Provincial Treasurer o& Bulacan %y 'etitioner Phili''ine Su%ur%anDevelo'ment Cor'oration, in the amount o& P<$,9#$,"$, is here%y ordered re&unded-Eithout any 'ronouncement as to costs-



!epu$lic of the 4hilippines!"PREME CO"RT

Fanila

EN B+NC

G.R. No. L)1*434 F+r-ar 2/, 1*2

CON!ORCA ALANO, ET AL., plaintiffs,appellants&vs.CARMEN GNACO, ET AL., efenants,appellees.

"ose M. Casal #or plainti##s-appellants.Fausto C. Ignacio #or de#endants-appellees.

LABRA%OR, J.:

+ppeal fro) a ug)ent of the Court of #irst Instance of !i9al& 7on. +nres !eyes& presiing& is)issing theco)plaint in the a$ove entitle case& for failure of the plaintiffs to auce evience to prove the allegations of theco)plaint.

0he facts necessary to an unerstaning of the issues involve an the relationship $etween the parties thereto )ay$e $riefly state as follows3 Fanuel Ignacio ?ecease@ ha three chilren $y 6oren9a Santos& na)ely& Victoriana&4ero an +ntonio. Victoriana left three chilren ?$y her first hus$an@& na)ely& -enoveva& #rancisca an <uana.-enoveva left four chilrenA #rancisca& with her hus$an 0o)as +lao& left four chilren& na)ely& Consorcia& !u$en&Eligio an 4ri)itivo. <uana& who was )arrie to Cipriano Sta. 0eresa& left si2 chilren& na)ely& 4ilar& 6i$raa& 6uisa&#iela& +leanra an Faria.

0he elest chil of Fanuel Ignacio is na)e 4ero Ignacio an he left the following chilren& na)ely& Estanislao&Benigna& Faria& E)ilia an 6eocaio ?ecease@. #or his part& 6eocaio Ignacio left as his chilren Car)en& 4aula&4etra& #austo& -ertrues an -liseria. $%&ph'$.t

It is the clai) of the plaintiffs in their co)plaint that upon the eath of the original preecessor Fanuel Ignacio& hisheirs& na)ely& 4ero Ignacio an #rancisca& <uana an -enoveva 4agsisihan& chilren of Victoriana Ignacio&inherite the five parcels of lan escri$e in the co)plaintA that upon the eath of Fanuel Ignacio& 4ero Ignaciopossession the property as a)inistrator until his eath in 1'/8A that since the eath of 4ero Ignacio& his sonEstanislao Ignacio has $een in possession of the lans. 0he prayer is that the a$ove )entione properties $epartitione an efenants pay plaintiffs attorneys fees.

0he efenants in their answer eny& ?1@ the allegation that the property escri$e in the co)plaint ha $eeninherite ointly an that the real fact is that the sai properties are the e2clusive properties of 4ero Ignacio who&



since ti)e i))e)orial& ha possesse the) continuously& aversely an pu$licly in the concept of owner until hiseathA ?"@ that 4ero Ignacio ha never $een a)inistrator of any property left $y Fanuel Ignacio $ecause it wasVictoriana Ignacio an +ntonio Ignacio who too possession of the estate left $y the ecease Fanuel IgnacioA ?*@Estanislao Ignacio succeee in the a)inistration of the properties left $y 4ero Ignacio an that the fact is thatEstanislao Ignacio ha actually possesse the) as owner continuously& pu$licly an aversely since he ac;uire thesa)e fro) his father 4ero IgnacioA ?/@ that no e)an has ever $een )ae upon efenants& either ver$ally or inwriting& $efore the filing of the co)plaint for partition& regaring their clai) on the lans. +s special efense it is

clai)e that $oth 4ero Ignacio an Estanislao Ignacio ha $een in the uninterrupte possession of the propertysu$ect of the co)plaint continuously& aversely an pu$licly. + counter clai) was also presente $ut it nee not $e)entione here as the sa)e was is)isse an the lower court i not grant the prayer containe therein& an theefenants are not appeale fro) the ecision.

0he plaintiffs presente only testi)onial evience to support the allegations of their co)plaint. 0he efenants on theother han presente various ocu)ents showing that the properties su$ect of the action have $een eclare in thena)e of the efenants as early as the year 1'1* originally in the na)e of 4ero Ignacio. 0wo properties escri$ein the co)plaint ha $een previously )ortgage to one Koilo 4agalinawan in 1'*: $y 4ero Ignacio& this fact toshow e2ercise of ownership thereto.

+fter trial the court renere the ug)ent of is)issal in the following ter)s L

as can $e seen clearly& the evience of the plaintiff consiste )erely of sur)ise to the effect that Fanuel

Ignacio owne the properties in ;uestion an that uring his lifeti)e he ivie the) a)ong his threechilren& Victoriana& +ntonio an 4ero. 0hey $ase this conclusion )erely on their clai) that when theyreache the age of reason& they were alreay occupying the properties in ;uestion. But no convincingevience however& irect or inirect was ever presente to show that Fanuel Ignacio in fact really owne theproperties in ;uestion an was seen or hear& ver$ally or in writing to have ivie the sa)e a)ong histhree chilren. #urther)ore& no soun reason was given $y the plaintiffs to e2plain why 4ero an his heirsif it is true that they o not own the properties e2clusively& were allowe to eep the sa)e fro) the eath ofsai Fanuel Ignacio up to the present ti)e.

4laintiff -enoveva clai)e that she ha $een asing 4ero to return the property to her as early as 1'1" $uthowever& 4ero consistently refuse an )ae several pro)ises to o so. 0he failure of the plaintiff to taeany legal steps to enforce their allege right espite the fact that they new that 4ero Ignacio an his heirshas consistently refuse to return the property& an has since 1'1* up the present ti)e $een eclaring thesa)e in their na)e& only shows that plaintiffs were not sure of their so,calle right an o not $elieve that

the property $elonge to Fanuel Ignacio an as such therefore they are entitle to a share. Otherwise& theywoul not have waite for )ore than four generations to file the present co)plaint after those who wereco)petent an were in a position to testify as to whether Fanuel Ignacio really left so)e properties& arealreay ea. ?pp. "8,"(& !.O.+.@ .

+gainst the a$ove ecision the plaintiffs have prosecute this appeal. In this Court the appeal was given course inview of the evience su$)itte that the value of the property su$ect of the litigation has increase to such an e2tentthat the total value of all reache the urisictional a)ount of this Court.

0he $rief of the plaintiffs,appellants ;uestions the correctness of the finings of the trial courtA so& it has $eennecessary for 5s to review the testi)onial evience $y a stuy of the transcript an the ocu)entary evience& anthe result of our stuy is to the effect that the finings of facts of the lower court are ustifie. 0wo witnesses& na)ely&-enoveva 4agsisihan e +lano an Cipriano Sta. 0eresa& the hus$an of one of the chilren of Victoriana Ignacio&testifie for the plaintiff. -enoveva testifie that when she reache the age of reason her )other Victoriana Ignacio

was alreay )arrie to her secon hus$anA that her $rothers& the elest age 1> an the ne2t age %& witness $eingthe youngestA that the secon hus$an of her )other was the one who wore on the lan su$ect of the actionA thatupon the eath of her )other she live in the house of 4ero Ignacio& an 4ero Ignacio fro) that ti)e on $eganworing the lan that her fa)ily ha $een woring onA that she an her sisters left the house of 4ero Ignacio havingco)e to Fanila to wor in a to$acco factoryA that they ase fro) 4ero Ignacio that their property $e given to the)an that this too place aroun 1'1"A that upon the e)an 4ero Ignacio was angry an so they let the )atter goAthat an uncle of theirs $y the na)e of +ntonio Ignacio ha intercee in their $ehalf for the return of the property as aresult of which a ;uarrel too place $etween +ntonio an 4ero Ignacio although the fact of this ;uarrel was only tolto her.



Our attention is calle to the fact that this witness i not e2pressly eclare that the properties that her fathersupposely wore an were su$se;uently taen over $y 4ero Ignacio& were the properties inherite fro) their)other& who in turn inherite the sa)e fro) Fanuel Ignacio. +ll that she sai is that her stepfather wore the lanfor a few years until the eath of her )other an that this lan was wore $y 4ero Ignacio upon the eath of her)other. In what capacity the lan was wore $y her father or her stepfather is not eclare. 0he )ere fact ofworing over a lan was $eing wore& e2pressing the concept in which the lan was $eing wore& is no proof thatthe lan is owne $y her )other. Besies& at the ti)e that the lan was supposely $eing wore& she was only

a$out seven years ol& an she coul not $e in a position to state categorically what the nature or character of thepossession was& as the possession )ay have $een as )ere tenant. No other witness for the plaintiffs testifie thatthe cultivation of the lan was in the concept of owner. Conse;uently the testi)ony is of no value whatsoever tosupport the clai) of ownership.

e also notice that when the lan was taen over $y 4ero Ignacio to wor& the latter actually too possession ofthe property as if it were his own& as witness the following portion of the testi)ony of -enoveva 4agsisihan L

M. +fter 4ero too over that property an far)e the property& what happene .

+. 0here having it for the)selves alone $ecause we were living together. ?Sinasarili niya )angyari sa)a,sa)a a)i sa $ahay nila.@ ?tsn. ">& Farch *1& 1':%@ .

But assu)ing that the a$ove evience su$)itte $y the plaintiffs is prima #acie proof of their case& the sa)e isco)pletely overco)e $y the conclusive evience of possession as owner su$)itte $y the efenants. 0heefenants su$)itte ta2 eclarations of the properties which ate as far $ac as 1'1* as well as the evience ofpay)ent of the lan ta2es thereon fro) that ti)e up to the present ?E2hi$its 1 to 11& inclusive@. 0he ee of)ortgage& E2hi$it 1"& su$)itte $y the efenants also show that 4ero Ignacio e2ercise ownership over two of thelots escri$e in paragraphs / an : of the co)plaint& having )ortgage the sa)eA these lans are also assesse inthe na)e of the efenants.

0he testi)onial evience of the efenants consiste in the testi)ony of Si)plicio Farcelo& '> years ol& whoescri$e the properties $elonging to 4ero Ignacio eviently )entione in the co)plaint consisting of / parcels oflan. 7e further eclare that one of the parcels of lan was ac;uire $y 4ero Ignacio fro) his ?witness@ father inpay)ent of a e$t he owe 4ero Ignacio. 0his lan was the rice fiel. 0his witness also enie that propertiessupposely inherite $y Victoriana Ignacio fro) her father Fanuel Ignacio were ever wore or far)e $y IreneoSantos& a witness for the plaintiffs. +nother witness Estanislao Ignacio& one of the efenants& testifie that the lansof his father were the bu*id & the ricelan& the solar an the loo$anA that the bu*id was ac;uire $y his father $y

purchase fro) 6uis Farcelo& thus corro$orating a previous witness. 7e ientifie the ta2 eclarations& E2hi$its 1 to *&an eclare that the other ta2 eclarations have $een lost in the warA he also ientifie the pay)ent of the ta2es.

itness -enoveva 4agsisihan was calle for the secon ti)e as re$uttal witness an testifie to the fact of theirliving in Fanila an woring in the to$acco factory of the 0a$acalera. But on cross,e2a)ination she a)itte that thehouse in which they were living when her father was still alive was the house in awa locate in the HsolarH of 4eroIgnacioA that uring the ti)e she an her sisters were woring in Fanila they rarely went $ac to Bagu)$ayan&0aguig& the place where the properties are locate an where their uncle 4ero Ignacio an his chilren live.

+nother witness for the plaintiffs on re$uttal is Ireneo Santos who eclare also to the suppose woring of the lanssu$ect of the co)plaint $y the fa)ily of plaintiffsA $ut however& his testi)ony can not $e given )uch weight $ecausehe says that he ha $een living with the chilren of Victoriana or -enoveva in Fanila.

0he a$ove facts inicate clearly that plaintiffs have faile to prove the following allegations3 that the properties soughtto $e partitione were inherite $y their )other fro) the allege owner Fanuel IgnacioA that their )other an their

father possesse the properties as owners uring their lifeti)e. 0he plaintiffs also faile to prove that the possession$y the efenants of the properties was in trust. On the other han& efenants have prove conclusively that theyhave $een in possession of the lans as owner as early as 1'1"& so that the possession laste for /: years up to thefiling of the action in 1':(.

0his averse an e2clusively possession an ownership of the property $y the efenants for /: years is atteste tonot only $y the witnesses for the efenants $ut also $y eclaration of properties& pay)ent of ta2es& ee of)ortgage e2ecute $y their preecessors in interest as owners of the property& etc.



IN VIE O# 07E #O!E-OIN-& e fin that the evience fully support the fining of facts )ae $y the trial court&an& ug)ent is here$y renere a$solving the efenants of the co)plaint& with costs against plaintiffs.

Bautista +ngelo, Concepcion, ees, ".B.., Barrera, /aredes, 0ion and 0e eon, ""., concur.Bengon, C.". and /adilla, "., too* no part.


Fanila

SECOND DIVISION

G.R. No. 10071 &-#+ 2*, 12

TERE!TA LLAL", petitioner&

vs.

THE HONORABLE CO"RT OF APPEAL! a#$ MARTN !ANCEGO, &R., responents.

PARA!, J.:

4etition for review of the ecision of the Court of +ppeals which affir)e the ecision of the !0C of 0rece Fartires City orering thepetitioner to vacate the pre)ises an to pay attorneys fees.

0he facts of the case are $riefly as follows3

On Octo$er 8& 1'%8& the petitioner 0eresita Villalu9 file a forci$le entry case ?Civil Case No. "':@ against private responent FartinSanciego& <r.& the owner of !io +9ul Beach !esort& alleging that a resurvey of her aacent property showe that *&*"> s;uare )etersthereof on the northwestern portion was occupie $y the !io +9ul Beach !esort. +fter trial& the F0C ecie the case in petitioners favor. +writ of e2ecution was issue pening appeal an Deputy Sheriff <oa;uin Espeneli elivere the physical possession of the conteste area tothe petitioner.

So)eti)e in Farch& 1'%'& however& $y )eans of force& inti)iation& strategy an stealth& the petitioner too possession of another 181&('1s;uare )eter area of the !io +9ul Beach !esort& together with "%( shaes& " units of co)fort roo)s& a :&>>> gallon water tan& ":8 coconuttrees an 8% talisay trees plante $y the private responent. 0hus& private responent also file a forci$le entry case against the petitioner

?Civil Case No. *1>@. 0he F0C is)isse sai co)plaint. On appeal& however& the !0C renere a ecision eecting the petitioner fro) thepre)ises. 0he ispositive portion of the ecision reas& thus3

4!EFISES CONSIDE!ED& ?1@ the ecision of the Funicipal 0rial Court appeale fro) is !EVE!SED an SE0 +SIDEA ?"@ the efenant is orere3 ?a@ to vacate the pre)ises of the re)aining unconteste area of 18&('1 s;uare)eters )ore or less of 4hase I of !io +9ul Beach !esort situate at Sitio 4oste)a& Barangay Sahu,5lan& Funicipalityof 0an9a& province of Cavite together with any an all persons clai)ing any right uner herA ?$@ to pay the plaintiff thesu) of 4/&>>>&>>>.>> $y way of rei)$urse)ent for the i)prove)ents of the plaintiff& estroye $y the efenant in theprocess of forci$le entryA ?c@ to pay the plaintiff the a)ount of 0O 07O5S+ND 4ESOS ?4"&>>>.>>@& a ay fro)



Farch 1'%' until efenant vacates the pre)ises an the possession thereof is fully restore to the plaintiffA ?@ to paythe su) of 4*&>>>.>> for attorneys feesA an ?e@ to pay the costs.

SO O!DE!ED. ?p. %& ollo@

0he petitioner appeale to the Court of +ppeals which affir)e the ecision of the !0C $ut elete the a)ages aware in the a)ounts of4/&>>>&>>>.>> an 4"&>>>.>> a ay fro) Farch& 1'%'& fining no $asis therefor.

In this petition& the petit ioner sees the reversal of that portion of the ecision of the Court of +ppeals orering her to vacate the pre)isesan to pay attorneys fees& alleging that the sa)e is not supporte $y su$stantial evience an is contrary to law an applica$le urispruence.

In a previous case ecie $y the Court of +ppeals ?#rancisca 0rias& et al& vs. Fartin Sanciego& et al.& C+,-.!. CV No. 1*%>1@& sai Courtrule that other areas of the !io +9ul Beach !esort encroache on title properties of the 0riases. On that $asis& the petitioner contens thatprivate responent has no right to operate the $each resort on the 18&('1 s;uare )eter,area su$ect of the case $elow as the sa)e is notforeshore lan ?as clai)e $y private responent@ $ut private lan of the 0riases.

e fin no )erit in the petition.

hether or not private responent has the right to operate a $each resort is not a relevant issue in the instant case for the purpose of an

action of forci$le entry an etainer is that regarless of the actual conition of the title of the property& the party in peacea$le ;uietpossession shall not $e turne out $y strong han& violence or terror. In afforing this re)ey of restitution& the o$ect of the statutes is toprevent $reaches of the peace an cri)inal isorer which woul ensue fro) the withrawal of the re)ey . . . 0hus& persons $elieving

the)selves entitle to the possession of the property shoul not tae the law into their own hans to gain possession& rather shoul seefro) the proper authorities& legal re)eies esta$lishe therefor. ?Drilon vs. -aurana& et al.& 1/' SC!+ */"& Batioco vs. Muintero& et al.& :'4hil. *1"A 4itargue vs. Sorilla& '" 4hil. :@.

!ecors isclose that the property su$ect of the case $elow is foreshore lan& hence& part of the pu$lic o)ain. 0he Court of +ppeals& in itsecision ate <anuary *>& 1''1& state thus3

It is not ispute that the property in litigation is a foreshore $eachlan an part of the Fanila Bay an hence classifieas pu$lic lan. 0he sai property was uly investigate $y the District 6an Officer& <ose C. +postol& who issue thefollowing certification3

0hat there has $een no incursion into nor encroach)ent upon the allege private property of theecease #a$ian <a)ias& herein petitioners preecessor,in,interest ?6ot No. 1 :*"& S.C.Fala$on Estate@ that coul $e irecte against applicant Sanciego for what is actually $ullo9e

an propose to $e evelope into a $each resort is not the sai property of <a)ias $ut itsaacent foreshore,$eachlan. . . . ?p. /"& ollo@

4reponerance of evience also showe that private responent has $een in open& continuous& peaceful& e2clusive an averse possessionof the su$ect lan since 1'%>A that he has introuce i)prove)ents thereinA that he applie for a per)it to occupy su$ect property ?$elieveto $e foreshore lan@ to operate the sa)e as a $each resortA an that he is a bona #ide holer of !evoca$le 4er)it +pplication No. ?IV,"@(/issue $y the Bureau of 6ans. ?Decision& p. (@

0he petitioner& on the other han& oes not appear to have any interest on the su$ect property& having $een aware the physicalpossession of the *&*"> s;uare )eter area of that portion of the !io +9ul Beach !esort clai)e $y her as her own in another forci$le entrycase. Foreover& in her partial )otion for reconsieration of the assaile ecision of the Court of +ppeals ?p. :/ ollo@ an in her petition forreview of the sa)e $efore this Court& ?p. 1/& ollo@&the petitioner asserte that sai 18&('1 s;uare )eter area of the !io +9ul Beach !esort$elongs to the 0riases.

In view of the foregoing private responent& who is in actual occupation an peaceful possession of sai property su$ect of the case $elow&incluing the i)prove)ents thereon& has a $etter an superior right to the possession thereof an is entitle to protection uner the law. +shel $y the Supre)e Court in /itargue vs. Soulla, supra3

+ bona #ide applicant of pu$lic lan& who is in occupation an in peaceful possession thereof an who has introucei)prove)ents can file an action for forci$le entry against one who eprives hi) of the possession thereof& thoughplaintiffs application is still uner investigation an has not yet $een grante. ?p. /*& ollo@

#inally& it is a carinal rule that save for certain e2ceptions& finings of facts of the appellate tri$unal are $ining on 5s. Not one of saie2ceptions can apply to this case. ?Cathay Insurance Co. vs. C+& 1:1 SC!+ (11@

7E!E#O!E& the petition is here$y DENIED an the assaile ecision of the Court of +ppeals is here$y +##I!FED.

SO O!DE!ED.



Narvasa, C."., /adilla and egalado, ""., concur.

Nocon, is on leave.


Fanila

07I!D DIVISION

G.R. No. *10/ March 17, 1

C565a#, N.A. 8For9+r: F5r;6 Na65o#a: C56 Ba#<, petitioner&vs.Th+ Ho#ora:+ Co-r6 o= A>>+a:; a#$ %o-?:a; F. A#a9a, responents.

P"R!MA, J.:

+t $ar is a special civil action for certiorari with prayer for a te)porary restraining orer faulting the Court of +ppeals 1 with grave a$use of iscretion for nullifying the lower courts orer of sei9ure of )ortgage propertiessu$ect of a case for su) of )oney an replevin.

0he facts leaing to the institution of the case are as follows3

In consiering for a loan o$taine fro) Citi$an& N.+. ?for)erly #irst National City Ban@& the efenant ?privateresponent herein@ Douglas +na)a e2ecute a pro)issory note& ate Nove)$er 1>& 1'("& 2 to pay the plaintiff $anthe su) of 4/1%&>>>.>> in si2ty ?8>@ e;ual successive )onthly install)ents of 4%&("".":& starting on the 1>th ay ofDece)$er 1'(" an on the 1>th of every )onth thereafter. 0he sai 4ro)issory Note stipulate further that3

?a@ the loan is su$ect to interest at the rate of twelve percent ?1"@ per annumA

?$@ the pro)issory note an the entire a)ount therein state shall $eco)ei))eiately ue an paya$le without notice or e)an upon L

?aa@ efault in the pay)ent of any install)ent of principal orinterest at the ti)e when the sa)e is ueA

?$$@ the occurrence of any change in the conition an affairsof the efenant& which in the opinion of the plaintiff shallincrease its creit risA



?c@ the efenant agrees to pay all costs& e2penses& hanling an insurancecharges incurre in the granting of the loanA

?@ in case the services of a lawyer is )ae necessary for collection&efenant shall $e lia$le for attorneys fees of at least ten percent ?1>@of the total a)ount ue. 3

0o secure pay)ent of the loan& private responent +na)a also constitute a Chattel Fortgage of even ate in favorof petitioner& on various )achineries an e;uip)ent locate at No. 1*>" Epifanio elos Santos +venue& Mue9on City&uner the following ter)s an conitions3

?a@ 0he )achineries an e;uip)ent su$ect of the )ortgage& stan as securityfor efenants account.

?$@ +ll replace)ent& su$stitutions& aitions& increases an accretions to theproperties )ortgage shall also $e su$ect to the )ortgage.

?c@ 0he efenant appoints the plaintiff as his attorney,in,fact with authority toenter the pre)ises of the efenant an tae actual possession of the )ortgagechattels without any court orer& to sell sai property to any party.

?@ +ll e2penses in carrying into effect the stipulations therein shall $e for theaccount of the efenant an shall for) part of the a)ount of the o$ligationsecure $y the )ortgage.

?e@ In case the plaintiff institutes proceeings for the foreclosure of the )ortgage&the plaintiff shall $e entitle to the appoint)ent of a receiver without a $on.

?f@ In case of efault& the efenant shall $e lia$le for attorneys fees ancost of collection in the su) e;ual to twenty,five ?":@ of the totala)ount of the ine$teness outstaning an unpai. 4

On Nove)$er ":& 1'(/& for failure an refusal of the private responent to pay the )onthly install)ent ue uner the

sai pro)issory note since <anuary 1'(/& espite repeate e)ans& petitioner file a verifie co)plaint againstprivate responent +na)a for the collection of his unpai $alance of 4/>:&%">.:" on the sai pro)issory note& forthe elivery an possession of the chattels covere $y the Chattel Fortgage preparatory to the foreclosure thereof asprovie uner Section 1/ of the Chattel Fortgage 6aw& ocete as Civil Case No. ':''1 $efore the then Court of#irst Instance of Fanila.

On #e$ruary ">& 1'(:& the efenant +na)a su$)itte his +nswer with Counterclai)& enying the )aterialaver)ents of the co)plaint& an averring inter alia ?1@ that the re)ey of replevin was i)proper an the writ ofsei9ure shoul $e vacateA ?"@ that he signe the pro)issory note for 4/1%&>>>.>> without receiving fro) plaintiffCiti$an any a)ount& an was even re;uire to pay the first install)ent on the suppose loan in Dece)$er 1'(/A ?*@that the unerstaning $etween hi) an the Citi$an was for the latter to release to hi) the entire loan applie forprior to an uring the e2ecution of his pro)issory note& $ut Citi$an i not o so an& instea& elaye the releaseof any a)ount on the loan even after the e2ecution of the pro)issory note there$y isrupting his ti)eta$le of plansan causing hi) a)agesA ?/@ that the a)ount release $y Citi$an to hi) up to the present was not the a)ount

state in the pro)issory note& an his allege efault in paying the install)ent on the loan was ue to the elay inreleasing the full a)ount of the loan as agree uponA ?:@ that the )acheniries an e;uip)ent escri$e in the chattel)ortgage e2ecute $y hi) are really worth )ore than 41&>>>&>>>.>> $ut he )erely accee to the valuation thereof$y Citi$an in sai ocu)ent $ecause of the latters representation that the sa)e was necessary to spee up thegranting of the loan applie for $y hi)A ?8@ that the properties covere $y sai chattel )ortgage are real propertiesinstalle in a )ore or less per)anent nature at his ?efenants@ pre)ises in Mue9on City& as a)itte $y Citi$an insai )ortgage ocu)entA ?(@ that the )ortgage contract itself stipulate that the )anner an proceure for affectingthe sale or ree)ption of the )ortgage properties& if )ae e2trauicial& shall $e governe $y +ct No. 1:>% an otherpertinent laws which all pertain to real propertiesA an ?%@ that $ecause of the filing of this co)plaint without valigrouns therefor& he suffere a)ages an incurre attorneys feesA the efenant& now private responent& averre.



On Dece)$er "& 1'(/& the trial court upon proof of efault of the private responent in the pay)ent of the sai loan&issue an Orer of !eplevin over the )acheneries an e;uip)ent covere $y the Chattel Fortgage.

7owever& espite the issuance of the sai orer of sei9ure of su$ect chattels& actual elivery of possession thereof topetitioner i not tae place $ecause negotiations for an a)ica$le settle)ent $etween the parties were encourage$y the trial court.

On Farch "/& 1'(:& a pre,trial conference was hel an the lower court issue an orer for oint )anage)ent $y thepetitioner an the private responent of the latters $usiness for ten ?1>@ ays& after which the for)er woul appointereceiver for the sai $usiness.

On +pril 1& 1'(:& the petitioner too over private responents $usiness as receiver. hen further proposals to settlethe case a)ica$ly faile& the lower court proceee to try the case on the )erits.

On <anuary "'& 1'((& petitioner presente a Fotion for the Issuance of an +lias rit of Sei9ure& orering the sheriffto sei9e the properties involve an ispose of the) in accorance with the !evise !ules of Court. 0he lower courtthen gave private responent five ?:@ ays to oppose the sai )otion an on #e$ruary ""& 1'((& he sent in hisopposition thereto on the grouns3 ?1@ that Citi$ans 4/>>&>>> replevin $on to answer for a)ages was grosslyinae;uate $ecause the )aret value of the properties involve is 41&(1>&>>> an their replace)ent cost is4"&*/"&*>>.>> per the appraisal report of the +ppraisal an !esearch Corp.A ?"@ that he was never in efault to ustifythe sei9ureA ?*@ that the Civil Case No. 1%>(1 of the Court of #irst Instance& entitle 1ernandes vs. +nama& et al .&which& accoring to Citi$an& supposely increase its creit ris in the allege o$ligation& ha alreay $eenis)isse as against hi) an the case ter)inate with the is)issal of the co)plaint against the re)ainingefenant& #irst National City Ban& $y the Court in its orers of <anuary 1"& 1'(( an #e$ruary (& 1'((A ?/@ that his?efenants@ suppose o$ligations with Citi$an were fully secure an his )ortgage properties are )ore thansufficient to secure pay)ent thereofA an ?:@ that the writ of sei9ure if issue woul stop his $usiness operations ancontracts an e2pose hi) to lawsuits fro) custo)ers& an also islocate his e)ployees an their fa)ilies entirelyepenent thereon for their livelihoo.

On #e$ruary "%& 1'((& acting on the sai Fotion an private responents opposition& the trial court issue an Orergranting the Fotion for +lias rit of Sei9ure& ruling thus3

7E!E#O!E& the )otion for alias writ of sei9ure is here$y grante. +t any rate& thisOrer gives another opportunity for efenant an the intervenor who clai)s to $e a part

owner to file a counter$on uner Sec. 8> of !ules of Court.

4rivate responent )ove for reconsieration of the aforesai orer $ut the sa)e was enie $y the !esolution ofFarch 1%& 1'((& to wit3

In view of the foregoing& the )otion for reconsieration is here$y enie.

+t any rate& as alreay state& the efenant has still a re)ey availa$le which is to file a$on e2ecute to the plaintiff in ou$le the value of the properties as state in theplaintiffs affiavit. 0he Court at this instance therefore has no authority to stop orsuspene the writ of sei9ure alreay orere. *

+ccoringly& $y virtue of the +lias writ of Sei9ure& petitioner too possession of the )ortgage chattels of private

responent. +s a conse;uence& the sheriff sei9e su$ect properties& is)antle an re)ove the) fro) thepre)ises where they were installe& elivere the) to petitioners possession on Farch 1(& 1% an 1'& 1'(( anavertise the) for sale at pu$lic auction scheule on Farch ""& 1'((.

On Farch "1& 1'((& private responent file with the Court of +ppeals a 4etition for Certiorari an 4rohi$ition 7withInunction to set asie an annul the ;uestione resolution of the trial court on the groun that they were issue Hine2cess of urisiction an with grave a$use of iscretionH $ecause of the Hlac of evience an clear cut right topossession of #irst National City Ban ?herein petitioner@H top the )achineries su$ect of the Chattel Fortgage.



On <uly *>& 1'%"& fining that the trial court acte with grave a$use of iscretion a)ounting to e2cess of lac of urisiction in issuing the assaile resolutions& the Court of +ppeals grante petition& holing that the provision of the!ules of Court on !eplevin an !eceivership have not $een co)plie with& in that ?1@ there was no +ffiavit of Feritacco)panying the Co)plaint for !eplevinA ?"@ the $on poste $y Citi$an was insufficientA an ?*@ there was non,co)pliance with the re;uire)ent of a receivers $on an oath of office. 0he ecretal portion of the assaile ecisionof the Court of +ppeals& reas3

7E!E#O!E& the petition is grante. 0he ;uestione resolutions issues $y the responent ugein Civil Case No. ':''1& ate #e$ruary "%& 1'(( an Farch 1%& 1'((& together with the writs anprocesses e)anating or eriving therefro)& are here$y eclare null an voi ab initio.

0he responent e2-o##icio sheriff of Mue9on City an the responent #irst National City Ban arehere$y orere to return all the )achineries an e;uip)ent with their accessories sei9e&is)antle an haule& to their original an respective places an position in the shop flooring ofthe petitioners pre)ises where these articles were& $efore they were is)ounte& sei9e anhaule at their own e2pense. 0he sai responents are further orere to cause the repair of theconcrete founations estroye $y the) incluing the repair of the electrical wiring an facilitiesaffecte uring the sei9ure& is)anting an hauling.

0he writ of preli)inary inunction heretofore in effect is here$y )ae per)anent. Costs against theprivate responents.

SO O!DE!ED /

0herefro)& Citi$an ca)e to this Court via its present petition for certiorari & ascri$ing grave a$use of iscretion to theCourt of +ppeals an assigning as errors& that3

I

07E !ES4ONDEN0 CO5!0 E!!ED IN 4!+C0IC+66G +ND IN E##EC0 !ENDE!IN-<5D-FEN0 ON 07E FE!I0S +-+INS0 07E 7E!EIN 4E0I0IONE! BG O!DE!IN- 07E!E05!N O# 07E F+C7INE!IES +ND EM5I4FEN0 +ND I0S +CCESSO!IES 0O 07EI!O!I-IN+6 +ND !ES4EC0IVE 46+CES +ND 4OSI0IONS.

II

07E !ES4ONDEN0 CO5!0 E!!ED IN #INDIN- 07+0 07E COF46+IN0 O# 07E4E0I0IONE! DID NO0 COF46G I07 07E 4!OVISIONS O# SEC. "& !56E 8> O# 07E !56ESO# CO5!0.

III

07+0 07E !ES4ONDEN0 CO5!0 E!!ED IN #INDIN- 07+0 07E BOND 4OS0ED BG 07E4E0I0IONE! IS M5ES0ION+B6E +NDO! INS5##ICIEN0.

IV

07E !ES4ONDEN0 CO5!0 E!!ED IN #INDIN- 07+0 07E 4E0I0IONE! DID NO0 COF46GI07 07E 4!OVISIONS O# SEC. :& !56E :' BG #+I6IN- 0O 4OS0 + !ECEIVE!S BOND.

V

07E !ES4ONDEN0 E!!ED IN #INDIN- 07+0 07E 7ON. <O!-E !. COM5I+ +C0ED I07-!+VE +B5SE O# DISC!E0ION +FO5N0IN- 0O EPCESS O! 6+C= O# <5!ISDIC0ION INDE+6IN- I07 07E SI05+0ION.



I

+nent the first assigne error& petitioner contens that the Court of +ppeals& $y nullifying the writ of sei9ureissue $elow& in effect& renere ug)ent on the )erits an auge private responent +na)a as theperson lawfully entitle to the possession of the properties su$ect of the replevin suit. It is theori9e that thesa)e cannot $e one& as the case $efore the court $elow was yet at trial stage an lower court still ha toeter)ine whether or not private responent was in fact in efault in the pay)ent of his o$ligation to

petitioner Citi$an& which efault woul warrant the sei9ure of su$ect )achineries an e;uip)ent.

0he contention is untena$le. + ug)ent is on the )erits when it eter)ines the rights an lia$ilities of theparties on the $asis of the isclose facts& irrespective of for)al technical or ilatory o$ections& an it is notnecessary that there shoul have $een a trial. 0he assaile ecision of the Court of +ppeals i not )aeany auication on the rights an lia$ilities $etween Citi$an an Douglas +na)a. 0here was no fining yetof the fact of efault. 0he ecision only rule on the propriety of the issuance of the writ of sei9ure $y the trialcourt. +s wore $y the responent court itself& Hthe )ain issues to $e resolve are whether there was lacor e2cess of urisiction& or grave a$use of iscretion& in the issuance of the orers in ;uestion& an there isno appeal nor any plain& speey& an ae;uate re)ey in the orinary course of law.H 10

In resolving the issue pose $y the petition& the Court of +ppeals li)ite its isposition to a eter)ination ofwhether or not the assaile orer of sei9ure was issue in accorance with law& that is& whether theprovisions of the !ules of Court on elivery of personal property or replevin as a provisional re)ey were

followe. 0he Court of +ppeals relie on !ule 8> of the !ules of Court& which prescri$e the proceure forthe recovery of possession of personal property& which !ule& provies3

Sec. ". +ffiavit an Bon. L 5pon applying or such orer the plaintiff )ust show $y his ownaffiavit or that of so)e other person who personally nows the facts3

?a@ 0hat the plaintiff is the owner of the property clai)e particularly escri$ing it&or is entitle to the possession thereofA

?$@ 0hat the property is wrongfully etaine $y the efenant& alleging the causeof etention thereof accoring to his $est of nowlege& infor)ation an $eliefA

?c@ 0hat it has nor $een taen for a ta2 assess)ent or fine pursuant to law& or

sei9e uner an e2ecution& or an attach)ent against the property of the plaintiff&or is so sei9e& that is e2e)pt fro) such sei9ureA an

?@ 0he actual value of the property.

0he plaintiff )ust also give a $on& e2ecute to the efenant in ou$le of the value of the propertyas state in the affiavit afore)entione& for the property to the efenant of such su) as he )ayrecover fro) the plaintiff in the action.

0he Court of +ppeals i not pass upon the issue of who& as $etween Douglas +na)a an Citi$an& is entitle to thepossession of su$ect )achineries& as asserte $y the latter. hen it orere the restoration of the sai )achineriesto Douglas +na)a ?now the private responent@& it )erely efenant to the possession of his properties& since therewas a fining that the issuance of the writ was not in accorance with the specific rules of the !ules of Court.

II

In its secon assign)ent of errors& petitioner theori9es that the Court of +ppeals erre in fining that it inot co)ply with Section "& !ule 8> of the !ules of Court re;uiring the replevin plaintiff to attach an affiavitof )erit to the co)pliant.

4etitioner )aintains that although there was no affiavit of )erit acco)panying its co)plaint& there was nonethelesssu$stantial co)pliance with the sai rule as all that is re;uire to $e allege in the affiavit of )erit was set forth in itsverifie co)plaint. 4etitioner argues further that assu)ing arguendo that there was non,co)pliance with the affiavitof )erit re;uire)ent& such efense can no longer $e availe of $y private responent +na)a as it was not allege in



his +nswer an was only $elately interpose in his !eply to the 4etitioners Co))ent on the 4etitionerfor Certiorari $efore the Court of +ppeals.

4etitioner is correct insofar as it contens that su$stantial co)pliance with the affiavit re;uire)ent )ay $eper)issi$le. 0here is su$stantial co)pliance with the rule re;uiring that an affiavit of )erit to support the co)plaintfor replevin if the co)plaint itself contains a state)ents of every fact re;uire to $e state in the affiavit of )erit anthe co)plaint is verifie lie an affiavit. On the )atter of replevin& <ustice Vicente #ranciscos Co))ent on the

!ules of Court& states3

+lthough the $etter practice is to eep the affiavit an pleaing separate& if plaintiffs pleaingcontains a state)ent of every fact which the statute re;uires to $e shown in the affiavits& an thepleaing is verifie $y affiavit covering every state)ent therein& this will $e sufficient without aseparate affiavitA $ut in no event can the pleaing supply the a$sence of the affiavit unless allthat the affiavit is re;uire to contain is e)$oie in the pleaing& an the pleaing is verifie inthe for) re;uire in the case of a separate affiavit. ?(( C<S 8: cite in #rancisco& !ules of Courtof the 4hilippines& Vol. IV,+& p. *%*@

+n si)ilarly& in the case of an attach)ent which liewise re;uires an affiavit of )erit& the Court hel that thea$sence of an affiavit of )erit is not fatal where the petition itself& which is uner oath& recites the circu)stances orfacts constitutive of the grouns for the petition. 11

0he facts that )ust $e set forth in the affiavit of )erit are ?1@ that plaintiff owns the property particularly escri$ingthe sa)e& or that he is entitle to its possessionA ?"@ wrongful etention $y efenants of sai propertyA ?*@ that theproperty is not taen $y virtue of a ta2 assess)ent or fine pursuant to law or sei9e uner e2ecution or attach)ent or&if it is so sei9e& that it is e2e)pt fro) sei9ureA an the& ?/@ the actual value of the property. 12

But& as correctly taen note of $y the Court of +ppeals& petitioners co)plaint oes not allege all the facts that shoul$e set forth in an affiavit of )erit. +lthough the co)plaint alleges that petitioner is entitle to the possession ofsu$ect properties $y virtue of the chattel )ortgage e2ecute $y the private responent& upon the latters efault on itso$ligation& an the efenants allege Hwrongful etentionH of the sa)e& the sai co)plaint oes not state thatsu$ect properties were not taen $y virtue of a ta2 assess)ent or fine i)pose pursuant to law or sei9e unere2ecution or attach)ent or& if they were so sei9e& that they are e2e)pt fro) such sei9ure.

0hen too& petitioner state the value of su$ect properties at a Hpro$a$le value of 4">>&>>>.>>& )ore or lessH.4ertinent rules re;uire that the affiavit of )erit shoul state the actual value of the property su$ect of a replevin suit

an not ust its pro$a$le value. +ctual value ?or actual )aret value@ )eans Hthe price which an article woulco))an in the orinary course of $usiness& that is to say& when offere for sale $y one willing to sell& $ut not unerco)pulsion to sell an purchase $y another who is willing to $uy& $ut uner no o$ligation to purchase itH.13 4etitionerallege that the )achineries an e;uip)ent involve are value at 4">>&>>>.>> while responent enies the sa)e&clai)ing that per the appraisal report& the )aret value of the sai properties is 41&(1>&>>>.>> an their replace)entcost is 4"&*/"&*>>.>>. 4etitioners assertion is $elie $y the fact that upon taing possession of the aforesaiproperties& it insure the sa)e for 481>&:'*.(/ an 4/:>&>>>.>>& separately. It $ears stressing that the actual valueof the properties su$ect of a replevin is re;uire to $e in the affiavit $ecause such actual value will $e the $asis ofthe replevin $on re;uire to $e poste $y the plaintiff. 0herefore& when the petitioner faile to eclare the actualvalue of the )achineries an e;uip)ent su$ect of the replevin suit& there was non,co)pliance with Section "& !ule8> of the !evise !ules of Court.

It shoul $e note& however& that the private responent interpose the efense of lac of affiavit of )erit only in his!eply to the Co))ent of Citi$an on the 4etition for Certiorari which responent file with the Court of +ppeals.

Section "& !ule ' of the !evise !ules of Court& provies3

Sec. ". Defenses an o$ections not pleae ee)e waive L Defenses an o$ections notpleae either in a )otion to is)iss or in the answer are ee)e waiveA e2cept the failure tostate a cause of action which )ay $e allege in later pleaing& . . . .

0his !ule has $een revise an a)ene& as follows3

Sec. 1. Defenses an o$ection not pleae. L Defenses an o$ections not pleae in a )otion tois)iss or in the answer are ee)e waive. 7owever& when it appears fro) the pleaings or the



evience on recor that the court has no urisiction over the su$ect )atter& that there is anotheraction pening $etween the sa)e parties for the sa)e cause& or that the action is $arre $y a prior

ug)ent or $y statute of li)itations& the court shall is)iss the clai).

0hus& although responents efense of lac of affiavit of )erit is )eritorious& proceurally& such a efense is nolonger availa$le for failure to plea the sa)e in the +nswer as re;uire $y the o)ni$us )otion rule.

III

4etitioner also faults the Court of +ppeals for fining that the $on poste $y the petitioner is ;uestiona$le anorinsufficient. It is averre that& in co)pliance with Section "& !ule 8> re;uiring the replevin plaintiff to post a $on inou$le the value of the properties involve& it file a $on in the a)ount 4/>>&>>>.>> which is twice the a)ount of4">>&>>>.>> eclare in its co)plaint.

0he Court reiterates its finings on the secon assign)ent of errors& particularly on the issue of the actual of su$ectproperties as against their pro$a$le value. 4rivate responent& at the onset& has put into issues the value of the saiproperties. In the Special Defenses containe in his +nswer& private responent averre3

0hat while efenant a)its that he e2ecute a Chattel Fortgage in favor of plaintiff& he vigorouslyenies that the )achineries covere therein are worth 4">>&>>>.>>. 0he fact is that plaintiff new

fully well that sai chattels are worth no less than 41&>>>&>>>.>>& sai efenant having accee tosai valuation upon plaintiffs representation that it woul $e necessary to spee up the granting ofthe loan.

+s here was a isagree)ent on the valuation of the properties in the first place& proper eter)ination of the value ofthe $on to $e poste $y the plaintiff cannot $e sufficiently arrive at. 0hough the rules specifically re;uire that theneee $on $e ou$le the value of the properties& since plaintiff )erely eno)inate a pro$a$le value of4">>&>>>.>> an faile to aver the properties actual value& which is clai)e to $e )uch greater than that eclare $yplaintiff& the a)ount of 4/>>&>>>.>> woul inee $e insufficient as foun $y the Court of +ppeals. 0he !ules ofCourt re;uires the plaintiff to Hgive a $on& e2ecute to the efenant in ou$le the value of the property as state inthe affiavit. . . .H 7ence& the $on shoul $e ou$le the actual value of the properties involve. In this case& what was postewas )erely an a)ount which was ou$le the pro$a$le value as eclare $y the plaintiff an& therefore& inae;uateshoul there $e a fining that the actual value is actually far greater than 4">>&>>>.>>. Since the valuation )ae $ythe petitioner has $een ispute $y the responent& the lower court shoul have eter)ine first the actual value of

the properties. It was thus as error for the sai court to approve the $on& which was $ase )erely on the pro$a$levalue of the properties.

It shoul $e note that a replevin $on is intene to ine)nify the efenant against any loss that he )ay suffer $yreason of its $eing co)pelle to surrener the possession of the ispute property pening trial of theaction. 14 0he sa)e )ay also $e answera$le for a)ages if any when ug)ent is renere in favor of the efenantor the party against who) a writ of replevin was issue an such ug)ent inclues the return of the property tohi). 1 0hus& the re;uire)ent that the $on $e ou$le the actual value of the properties litigate upon. Such is thecase $ecause the $on will answer for the actual loss to the plaintiff& which correspons to the value of the propertiessought to $e recovere an for a)ages& if any.

4etitioner also )aintains that& assu)ing for the sae of argu)ent that its replevin $on was grossly inae;uate orinsufficient& the recourse of the responent shoul $e to post a counter$oun or a reelivery $on as provie unerSection : of !ule 8>.

Sec. : an 8& !ule 8> of the !ules of Court& rea3

Sec. :. !eturn of property. L If the efenant o$ects to the sufficient of the plaintiffs $on& or ofthe surety or sureties thereon& he cannot re;uire the return of the property as in this sectionprovieA $ut if he oes not so o$ect& he )ay& at any ti)e $efore the elivery of the property to theplaintiff& if such elivery $e auge& an for the pay)ent of such su) to hi) as )ay $e recovereagainst the efenant& an $y serving a copy of such $on on the plaintiff or his attorney.



Sec. 8. Disposition of property $y officer. L If within five ?:@ ays after the taing of the property $ythe officer& the efenant oes not o$ect to the sufficiecy of the $on& or of the surety or suretiesthereon& or re;uire the return of the property as provie in the last preceing sectionA or if theefenant so o$ects& an the plaintiffs first or new $on is approveA or if the efenant sore;uire& an his $on is o$ect to an foun insufficient an he oes not forthwith file an approve$on& the property shall $e elivere to the plaintiff& the officer )ust return it to the efenant.

0he Court hel in a prior case 1* that the re)eies provie uner Section :& !ule 8>& are alternative re)eies. H. . . Ifa efenant in a replevin action wishes to have the property taen $y the sheriff restore to hi)& he shoul& within fiveays fro) such taing& ?1@ post a counter,$on in ou$le the value of sai property& an ?"@ serve plaintiff with a copythereof& $oth re;uire)ents as well as co)pliance therewith within the five,ay perio )entione L $eing)anatory.H 17 0his course of action is availa$le to the efenant for as long as he oes not o$ect to the sufficiency ofthe plaintiffs $on.

Confor)a$ly& a efenant in a replevin suit )ay e)an the return of possession of the property replevine $y filinga reelivery $on e2ecute to the plaintiff in ou$le the value of the property as state in the plaintiffs affiavit withinthe perio specifie in Section : an 8.

+lternatively& Hthe efenant )ay o$ect to the sufficiency of the plaintiffs $on& or of the surety or sureties thereonAH$ut if he oes so& Hhe cannot re;uire the return of the propertyH $y posting a counter,$on pursuant to Section : an8. 1/

In the case uner consieration& the private responent i not opt to cause reelivery of the properties tohi) $y filing a counter,$on precisely $ecause he o$ecte to the sufficiency of the $on poste $y plaintiff.0herefore& he nee not file a counter,$on or reelivery $on. hen such o$ection was not given uecourse in the court $elow L when& instea of re;uiring the plaintiff to post a new $on& the court approvethe $on in the a)ount of 4/>>&>>>.>>& clai)e $y responent to $e insufficient& an orere the sei9ure ofthe properties L recourse to a petition for certiorari $efore the Court of +ppeals assailing such orer isproper uner the circu)stances.

IV

+s its fourth assign)ent of errors& petitioner contens that the Court of +ppeals )ae an error of ug)ent in finingthat the petitioner i not co)ply with the provisions of Section :& !ule :' $y failing to post a receivers $on.4etitioner contens that although it is in agree)ent with the Court of +ppeals that a receivers $on is separate an

istinct fro) a replevin $on& uner the circu)stances it was not re;uire to file a receivers $on $ecause it i notassu)e receivership over the properties. It is further argue that assu)ing that it i assu)e receivership& theChattel Fortgage e2pressly provies& that3

In case the FO!0-+-EE institutes proceeings& uicially or otherwise& for theforeclosure of this Chattel Fortgage& or to enforce any of its rights hereuner& theFO!0-+-EE shall $e entitle as a )atter of right to the appoint)ent of a receiver&without $on& of the )ortgage properties an of such properties& real or personal& clai)san rights of the FO!0-+-O! as shall $e necessary or proper to ena$le the saireceiver to property control an ispose of the )ortgage properties. 1

0he orer of the trial court ate Farch "/& 1'(: provie& a)ong others& that the properties shall $e uner oint)anage)ent for a perio of ten ays& after which perio Hthe $an& $y virtue of the stipulations uner the chattel

)ortgage& $eco)es the !eceiver to perfor) all the o$ligations as such !eceiverH an Hin the event that the $anecies not to tae over the receivership& the oint )anage)ent continues.H 20

#ro) the evience on recor& it is palpa$ly clear that petitioner Citi$an i& in fact& assu)e receivership. +letter 21 ate +pril 1& 1'(: sent $y petitioner to the private responent& reas3

+pril 1& 1

+na)a Engineering Service -roup



11/ !. 6ag)ay Street

San <uan& !i9al

+ttention3 Mr. 0ouglas +nama

-entle)en3

4ursuant to the Court orer& we have ecie to tae over your )achine shop as !eceiver.

e are here$y appointing Fr. +rte)io 0. -on9ales as our representative.

Verytrulyyours&

#I!S0N+0ION

+6 CI0GB+N=

By3

4.!.!E+6&

<!.

+ssistant

Fanager

4etitioner cannot therefore eny that nine ays after the trial court issue the orer of receivership& it infor)e heprivate responent that it woul& as it i& assu)e receivership.

0he Court of +ppeals foun that the re;uire)ents of Section :& !ule :' on receivership were not co)plie with $ythe petitioner& particularly the filing or posting of a $on an the taing of an oath.

It shoul $e note that uner the ol !ules of Court which was in effect at the ti)e this case was still at trial stage& a$on for the appoint)ent of a receiver was not generally re;uire of the applicant& e2cept when the applicationwas e2 parte. 22 0herefore& petitioner was not a$solutely re;uire to file a $on. Besies& as stipulate in the chattel)ortgage contract $etween the parties& petitioner& as the )ortgagee& is entitle to the appoint)ent of a receiverwithout a $on.

7owever& the Court of +ppeals was right in fining a efect in such assu)ption of receiver in that the re;uire)ent oftaing an oath has not $een co)plie with Section :& !ule :'& states3

Sec. :. Oath an $on of receiver. L Before entering upon his uties& the receiver )ust $e swornto perfor) the) faithfully& an )ust file a $on& e2ecute to such person an in such su) as thecourt or uge )ay irect& to the effect that he will faithfully ischarge the uties of receiver in theaction an o$ey the orers of the court therein.

Conse;uently& the trail court erre in allowing the petitioner to assu)e receivership over the )achine shop of privateresponent without re;uiring the appointe receiver to tae an oath.

V



In light of the foregoing& the answer to the fifth assign)ent of errors is in the negative. #or erroneously issuingthealias writ of sei9ure without in;uiring into the sufficiency of the replevin $on an for allowing petitioner to assu)ereceivership without the re;uisite oath& the Court of +ppeals aptly hel that the trial court acte with grave a$use ofiscretion in ealing with situation.

5ner the !evise !ules of Court& the property sei9e uner a writ of replevin is not to $e elivere i))eiately tothe plaintiff. 23 0his is $ecause a possessor has every right to respecte in its possession an )ay not $e eprive of

it without ue process. 24

+s enunciate $y this Court in the case of Filinvest Credit Corporation vs. Court o# +ppeals& 2

0he reason why the law oes not allow the creitor to possess hi)self of the )ortgage propertywith violence an against the will of the e$tor is to $e foun in the fact that the creitors right ofpossession is conitione upon the fact of efault& an the e2istence of this fact )ay naturally $ethe su$ect of controversy. 0he e$tor& for instance& )ay clai) in goo faith& an rightly or wrongly&that the e$t is pai& or that for so)e other reason the allege efault is none2istent. 7ispossession in this situation is as fully entitle to protection as that of any other person& an in thelanguage of +rticle //8 of the Civil Coe& he )ust $e respecte therein. 0o allow the creitor tosei9e the property against the will of the e$tor woul )ae the for)er to a certain e2tent $oth

uge an e2ecutioner in his own cause L a thing which is ina)issi$le in the a$sence ofune;uivocal agree)ent in the contract itself or e2press provision to the effect in the statute.

7E!E#O!E& for lac of )erit& the petition is here$y DISFISSED. No pronounce)ent as to costs.

SO O!DE!ED.

omero, 3itug, /anganiban and 4onaga-ees, ""., concur




Fanila

SECOND DIVISION

G.R. No. L)2/23 No@+9+r 2, 1/2PHLPPNE NATONAL BANK, petitioner&vs.Ho#. M%PANTAO A%L, 5# h5; ca>ac56 a; Pr+;5$5#? &-$?+ o= 6h+ CF :o5:o, Bra#ch , a#$ 6h+ HER! OF THELATE TEO%ORO MELLA Co9>o;+$ o= ANGELNA LOBATON %A. %E MELLA, +6c., RO!EMARECHANG, RAM"N%O TEO%ORO MELLA, &R., MARLN MELLA, &O!E TEO%ORO MELLA, +6a:.,responents.

"uan . 0ia, amon F. +viado and Isidro F. eal, "r., #or petitioner.

5ugenio 6. 6riginal #or respondents.

%E CA!TRO, J:

0his is a special civil action for certiorari which sees to annul the several inunctive orers issue $y responent uge& an praying that& instea& the writ of possession issue in favor of petitioner& as purchaser in the foreclosuresale& ate +pril ">& 1'('& $e i))eiately enforce.

It appears that on +ugust "& 1'(/& responent +ngelina 6o$aton Felli9a& for herself an as uicial a)inistratri2 ofthe estate of 0eooro 5y Felli9a& o$taine a loan fro) petitioner in the a)ount of 4%>&>>>.>> which was secure $ya )ortgage over two parcels of lan covere $y 0C0 Nos. %"88 an 0,%"8(& #or failure of sai responent to pay theloan on )aturity& the )ortgage was foreclose e2trauicially on #e$ruary 18& 1'(8 at which foreclosure sale&petitioner purchase the properties for 4'(&'"*.(*. 0he properties were not reee)e within the perio& hence the

title over the sa)e were consoliate in the na)e of petitioner& an conse;uently 0C0 .Nos. 0,:>/"" an 0,:>/"*were issue in its na)e on <une "8& 1'(%.

On +pril 1'& 1'('& petitioner file an e2,parte petition for issuance of a writ of possession $efore the Court of #irstInstance of Iloilo& Branch II& which was grante $y an orer ate +pril ">& 1'('. 5pon issuance of the writ& theDeputy Sheriff serve the sa)e upon private responents& $ut the latter re;ueste for a grace perio of seven ?(@ays to vacate the pre)ises in ;uestion to which the Sheriff agree. On Fay %& 1'('& the Sheriff returne to thepre)ises in ;uestion an fining that private responents are still staying in the pre)ises an ha not co)plie withthe writ of possession& i))eiately orere their eect)ent. +t aroun one ocloc in the afternoon& $efore theeect)ent was co)plete& the Sheriff receive an orer ate Fay %& 1'('& issue motu proprio $y responent uge&suspening the i)ple)entation of the writ of possession for Hhu)anitarian reasonsH for a perio of fifteen ?1:@ ays.Before the e2piration of the fifteen ?1:@ ay perio& private responents file a co)plaint ate Fay 1/& 1'(' for theannul)ent of the e2trauicial foreclosure& writ of possession an consoliation of ownership on groun that theproperties were foreclose without personal notice to any of the private responents. 0he co)plaint was ocete asCivil Case No. 1"%'/ an was assigne to the Court of #irst Instance of Iloilo& Branch V. 5pon )otion of privateresponents Hto consoliate the trial of the two cases&H the 4resiing <uge of sai Branch& in an orer ate Fay "/&1'('& transferre the case of Branch II& presie $y responent uge.

In the proceeing for the writ of possession& private responents file a )otion for reconsieration of the orergranting the writ of possession& while petitioner file a )otion to eclare private responents in conte)pt for refusal tovacate the pre)ises& which )otions were orere $y responent uge hel in a$eyance pening the resolution ofthe preuicial ;uestion raise $y private responents in Civil Case No. 1"%'/.



On <une 1& 1'('& responent uge& acting on private responents prayer for inunction& issue an orer restrainingpetitioner fro) istur$ing the status 7uo& an on <uly :& 1'('& responent uge issue an orer granting the writ ofpreli)inary inunction.

Su$se;uently& petitioner file the following3 1@ Fotion to !e;uire 4laintiff to Deposit Inco)e#ruits of the Dispute4roperty ate <uly 8& 1'('A "@ Fotion for !econsieration of the orer of <uly :& 1'(' ate <uly 1(& 1'('A an *@Fotion to Dis)iss& the Co)plaint ate +ugust "& 1'('. 0he first two )otions were enie $y& responent uge on

+ugust 1*& 1'('& an the last )otion& on Nove)$er ""& 1'('.

+s coul reaily $e seen& the )ain ;uestion is whether or not responent uge grave a$use his iscretion&a)ounting to lac of urisiction. in issuing the orers ate Fay %& 1'('& <une 1& 1'('& <uly :& 1'(' an +ugust 1*&1'(' all of which& in effect& enoine the enforce)ent of the writ of possession. 0he petitioner sustains the affir)ative&contening that since pursuant to 0e los +ngeles vs. Court o# +ppeals, et al . 1 citing 0e 4racia vs. San "ose, '/ 4hil.8(:& it is )inisterial upon the court to issue a writ of possession in favor of the purchaser in a foreclosure sale of a)ortgage property& it follows that the e2ecution of the writ of possession cannot $e suspene& )uch less&restraine $y responent uge. It also contens that& as purchaser& it $eco)es the owner of the property entitleto 8us possidendi as provie in +rticle /"% of the Civil Coe.

It is& however& clai)e $y private responents that responent uge& contrary to petitioners su$)ission& acte withinhis authority& alleging that pursuant to Section : of !ule 1*: of the !ules of Court& the court has inherent power toHa)en an control ?the courts@ processes an orer so as to )ae the) confor)a$le to law an ustice.H 0hey

further clai)e that the case cite $y petitioner is not applica$le $ecause in the instant case the writ has alreay$een issue. 4etition shoul $e grante.

Section / of 4.D. No. *%: Hre;uiring govern)ental financial institutions to foreclosure )anatorily all loans witharrearages& incluing interest an charges a)ounting to at least "> of the total outstaning o$ligations&H provies3

Section /. +s a result of foreclosure or any other legal proceeings wherein the properties of thee$tor which are foreclose& attache& or levie upon in satisfaction of a ug)ent are sol to agovern)ent financial institution& the sai properties shall $e place in the possession an control ofthe financial institution concerne& with the assistance of the +r)e #orces of the 4hilippineswhenever necessary. 0he 4etition for rit of 4ossession shall $e acte upon $y the court withinfifteen ?1:@ ays fro) the ate of filing.

4ursuant to the a$ove provision& it is )anatory for the court to place the govern)ent financial institution& which

petitioner is& in the possession an control of the property. +s state& the sai ecree was enacte Hin orer to effectthe early collection of elin;uent loans fro) govern)ent financial institutions an ena$le the) to continue effectivelyfinancing the evelop)ent nees of the countryH without $eing ha)pere $y actions $rought to the courts $y$orrowers.

+lso& Section 8 of +ct No. *1*:& as a)ene $y +ct /11%& the law that regulates the )ethos affecting e2trauicialforeclosure of )ortgage provies that in cases in which an e2trauicial sale is )ae& Hree)ption shall $e governe$y the provisions of sections four hunre an si2ty,four to four hunre an si2ty,si2& inclusive& of the Coe of Civil4roceure insofar as these are not inconsistent with the provisions of this +ct.H ?Sections /8/,/88 of the Coe of Civil4roceure were supersee $y Sections ":,"( an Section *1 of !ule *' of the !ules of Court which in turn werereplace $y Sections "' to *1 an Section *: of !ule *' of the !evise !ules of Court. 2Section *: which is one ofthe specific provisions applica$le to the case at $ar provies that Hif no ree)ption $e )ae within twelve ?1"@)onths after the sale& the purchaser& or his assignee& is entitle to a conveyance an possession of property. ... . 0hepossession of the property shall $e given to the purchaser or last ree)ptioner $y the officer unless a thir party is

actually holing the property aversely to the ug)ent e$tor.H

0he rule& therefore& is that after the ree)ption perio has e2pire& the purchaser of the property has the right to $eplace in possession thereof. +ccoringly& it is the inescapa$le uty of the Sheriff to enforce the writ of possession&especially& as in this case& a new title has alreay $een issue in the na)e of the purchaser& In fact& uner Section (of the sai +ct *1*:& upon which the e los +ngeles an e -racia cases were $ase& even $efore the ree)ptionperio& it is )inisterial upon the court to issue a writ of possession in favor of a purchaser& provie that a proper)otion has $een file& a $on approve& an no thir person is involve.



0he right of the purchaser to $e place in the possession of the property is $olstere $y Section % of the aforecite +ct which provies that if the uge fins the co)plaint assailing the legality of the foreclosure sale ustifie& it shallnot transfer the possession of the property& even on appeal& $ut will only procee against the $on poste $y thepurchaser. Section % reas3

0he e$tor )ay& in the proceeings in which possession was re;uesteA $ut not later than thirtyays after the purchaser was given possession& petition that the sale $e set asie an the writ of

possession cancelle& specifying the a)ages suffere $y hi)& $ecause the )ortgage was notviolate or the sale was not )ae in accorance with the provisions thereof& an the court shalltae cogni9ance of this petition in accorance with the su))ary proceure provie for in sectionone hunre an twelve of +ct Nu)$ere #our 7unre an Ninety,Si2& an if it fins theco)plaint of the e$tor ustifie& it shall ispose in his favor of all or part of the $on furnishe $ythe person who o$taine possession. Either of the parties )ay appeal fro) the orer of the ugein accorance with sections fourteen of act nu)$ere #our 7unre an Ninety,Si2.

In the case at $ar& the writ of possession was issue $ut its enforce)ent was suspene $y the grace perio given $ythe Sheriff who has no authority to o so& an later $y the orer of the uge on a very u$ious groun asHhu)anitarian reason.H If the applica$le laws clearly allow the purchaser to have possession of the propertyforeclose an )anate the court to give effect to such right& it woul $e a gross error for the uge to suspen thei)ple)entation of the writ of possession& which& as shown& shoul issue as a )atter of course. e are of the opinionthat once the writ of possession has $een issue& the Court has no alternative $ut to enforce the writ without elay&

especially as in this case& no )otion for the suspension of the enforce)ent was file.

0he right of the petitioner to the possession of the property is clearly unassaila$le. It is foune on its right ofownership. +s the purchaser of the properties in the foreclosure sale& an to which the respective titles thereto havealreay $een issue& petitioners right o,&&er the property has $eco)e a$solute& vesting upon hi) the right ofpossession over an enoy)ent of the property which the Court )ust ai in effecting its elivery. +fter such elivery&the purchaser $eco)es the a$solute owner of the property. +s e sai & in 9an Soo 1uat vs. 6ng&ico& 3the ee ofconveyance entitle the purchaser to have an to hol the purchase property& this )eans& that the purchaser isentitle to go i))eiately upon the real property& an that it is the Sheriffs inescapa$le uty to place hi) in suchpossession.

!esponents cannot clai) that the writ of possession was suspene uner the authority set forth in !ule 11*: ofthe !ules of Court. 0o invoe the power grante therein& the court )ust act within the law an with ustice. hen thereason given $y the uge in issuing the orer of suspension was not specifie in the orer& $ut state only in general

ter)& as Hhu)anitarian reasons&H the Court i not act within the $ouns of the law. 0he orer was& further)ore&issue )otu proprio an without the petitioner $eing affore the right to present its sie. e cannot give Ourapproval to the actuation of responent uge& for an orer suspening the i)ple)entation of an earlier orer is liean inunction which )ust $e issue always with circu)spection& an upon proper )otion of the party concerne.

+s it is& the suspension orer has a far,reaching effect. It ena$le private responents to withhol the possessionfro) petitioner an file the co)plaint where an inunction was sought. 7a not responent uge issue such orer&petitioner coul have alreay taen possession of the property& there$y ac;uiring an a$solute ownership over theproperty& an inunction coul no longer have $een issue. + prohi$itory inunction cannot $e issue when the act

sought to $e enoine has alreay $een co))itte. 4 Neither can a )anatory inunction issue& for it is a well,settlerule that inunction will not lie to tae the property out of control of the party in possession.

0he orers of the uge enoining the enforce)ent of the writ of possession are vulnera$le to attac. #irstly& the rightof private responents to inunctive orer is& at least& ou$tful& an it is a settle rule that to $e entitle to the

inunction& the applicants right or title )ust $e clear an un;uestione.

In the instant case& the groun relie upon $y private responents is not inu$ita$le& while the foreclosure proceeinghas in its favor the presu)ption of regularity. +n secondl & 4.D. No. *%:& as aforestate& )aes it )anatory for thecourt to place a govern)ent financial institution in possession of the property. 0o enoin 40B fro) taing possessionof the property woul $e to rener nugatory the provisions of sai ecree& particularly Section " thereof3

Section ". No restraining orer& te)porary or per)anent in. unction shall $e issue $y the courtagainst any govern)ent financial institution in any action taen $y such institution in co)pliancewith the )anatory foreclosure provie in Section 1 hereof& whether such restraining orer&



te)porary or per)anent inunction is sought $y the $orrower?s@ or any thir party or parties& e2ceptafter ue hearing in which it is esta$lishe $y the $orrower an a)itte $y the govern)entfinancial institution concerne that twenty percent ?">@ of the outstaning arrearages has $eenpai after the firing of foreclosure proceeings.

In case a restraining orer or inunction is issue the $orrower shall nevertheless $e legallyo$ligate to li;uiate the re)aining $alance of the arrearages& paying ten percent ?1>@ of the

arrearages outstaning as of the ti)e of foreclosure& plus interest an other charges& on everysucceeing thirtieth ?*>th@ ay after the issuance of such restraining orer or inunction until theentire arrearages have $een li;uiate. 0hese shall $e in aition to the pay)ent of a)orti9ationscurrently )aturing. 0he restraining orer or inunction shall auto)atically $e issolve shoul the$orrower fail to )ae any of the a$ove,)entione pay)ents on ue ates& an no restraining oreror inunction shall $e issue thereafter. 0his shall $e without preuice to the e2ercise $y thegovern)ent financial institutions of such rights anor re)eies availa$le to the) uner theirrespective charters an their respective contracts with their e$tors& nor shoul this provision $econstrue as restricting the govern)ent financial institutions concerne fro) approving& solely at itsown iscretion& any restructuring& recapitali9ation& or any other arrange)ent that woul place theentire account on a current $asis& provie& however& that at least twenty percent ?">@ of thearrearages outstaning at the ti)e of the foreclosure is pai.

+ll restraining orers an inunctions e2isting as of the ate of this Decree on foreclosure

proceeings file $y sai govern)ent financial institutions shall $e consiere lifte unless finallyresolve $y the court within si2ty ?8>@ ays fro) ate hereof.

7E!E#O!E& ug)ent is here$y renere annulling an setting asie all the inunctive orers issue $yresponent uge ate Fay %& 1'('& <une 1& 1'('& <uly :& 1'(' an +ugust 1*& 1'('A an orering responent

uge to place petitioner in possession of the purchase property without elay. ithout cost.

SO O!DE!ED.

Ma*asiar, Concepcion, "r., 4uerrero and 5scolin, ""., concur.

+bad Santos, "., too* no part.



epu$lic of the 4hilippines!"PREME CO"RT

Fanila

#I!S0 DIVISION

G.R. No. L)3422/ F+r-ar 21, 1/0

!OTERO ARMAMENTO, plaintiff,appellant&vs.CPRANO G"ERRERO, efenant,appellee.

MELENCO)HERRERA, J.: p

+ case certifie $y the Court of +ppeals pursuant to section *1 of the <uiciary +ct& as a)ene& on the groun that itraises purely ;uestions of law.

4laintiff $rought this action against efenant in the Court of #irst Instance of Cota$ato ?-eneral Santos City@ on<anuary "(& 1'8(& seeing the reconveyance of a parcel of lan& or for the eclaration of an i)plie trust thereon& anfor a)ages. 0he ispute property is 6ot No. '(/& 46S,"/(,D& situate in =linan 8& 4olo)olo& South Cota$ato& withan area of appro2i)ately 11 hectares. 0he property is covere $y Original Certificate of 0itle No. V,181*: issue $ythe !egister of Dees of Cota$ato pursuant to #ree 4atent No V,1'1"' grante $y the Director of 6ans on <uly ">&1'81 in favor of efenant& $ut which plaintiff clai)s was ac;uire $y efenant through frau an )isrepresentation.

Defenant raise the following affir)ative efenses in his +nswer3 that plaintiff has no cause of actionA that the trialCourt has no urisiction over the su$ect )atterA that the action has prescri$eA an that it has not $een $rought inthe na)e of the real party in interest.

0he trial Court& in an Orer ate #e$ruary 1/& 1'8%& sustaine efenants affir)ative efenses an is)isse theCo)plaint holing that plaintiff has no cause of action against efenantA that if the action is to $e $ase on frau& theaction has prescri$eA an that if the action is for cancellation of title& plaintiff has no personality to $ring the action&the proper party to institute the sa)e $eing the !epu$lic of the 4hilippines.

#ro) this Orer& plaintiff appeale to the Court of +ppeals assigning the following errors3

I

07E 0!I+6 CO5!0 E!!ED IN NO0 EPE!CISIN- I0S EM5I0G <5!ISDIC0ION +SEN5NCI+0ED BG <5!IS4!5DENCE ON 07E F+00E!A

II

07E 0!I+6& CO5!0 E!!ED IN I-NO!IN- 07E 46+IN0I##, +44E66+N0S C6+IF O#4OSSESSION +ND O# ONE!S7I4 OVE! 07E 6+ND IN M5ES0IONA

III

07E 0!I+6 CO5!0 E!!ED IN 7O6DIN- 07+0 46+IN0I##,+44E66+N0 7+S NO C+5SE O# +C0IONA



IV

07E 0!I+6 CO5!0 E!!ED IN 7O6DIN- 07+0 46+IN0I##, +44E66+N0S +C0ION #O!!ECONVEG+NCE ND DEC6+!+0ION O# +N IF46IED 0!5S0& +ND D+F+-ES 7+S4!ESC!IBED.

In a !esolution ate <uly "/& 1'(1& an as previously state the Court of +ppeals certifie the case to this Court$ecause the appeal involves only legal issues.

0he Co)plaint alleges that plaintiff is the possessor,actual occupant of& an the ho)estea applicant& over 6ot No.'(/& having continuously possesse an cultivate the sa)e since 1':: an having file his 7o)estea +pplicationNo. *(,*1& therefore on <uly (& 1'('A that the aforesai application was approve $G the Bureau of 6ans on <uly (&1':' the ?correct ate is <anuary 8& 1'8/@A that when he was following up his ho)estea +pplication& he wasshoce to iscover that efenant& through frau an )isrepresentation& succeee in o$taining #ree 4atent No. V,1'1"' an OC0 No. V,181*: $y falsely stating in his #ree 4atent +pplication that he ha continuously possesse thelot in ;uestion since <uly /& 1'/: or prior thereto& when& in truth an in fact& efenant was never in possessionthereof. 7e then praye that the Court orer efenant to reconvey the ispute lot to hi)& or if reconveyance isi)proper that the lot $e eclare in trust for the $enefit of the !epu$lic of the 4hilippines& an for hi)& who is clearlyentitle thereto.

Defenant& in his +nswer& enie that he was not in possession& alleging that he ha $een in occupation of sai lotan ha even authori9e Facario Caangay to a)inister the sa)e while he was te)porarily away for )issionarywor in Cagayan e Oro that he ha file his application on +ugust 1& 1':% prior to plaintiffs application file on <uly(& 1':'& an that title was issue in his favor on <uly ">& 1'81. Defenant also attache to his +nswer a Certificationate +pril 1& 1'8(& issue $y the +cting District 6an Officer& District 6an Office VIII,/ -eneral Santos& Cota$ato& tothe effect that the parties conflicting clai)s are uner investigation in D.6.O. Conflict No. 1: ?N@. 1

It will thus $e seen that the ispute lan was the su$ect of two 4atent +pplications. Defenant file his #ree 4atent +pplication on +ugust 1& 1':%. 4laintiff file his 7o)estea 4atent +pplication appro2i)ately one year later or on<uly (& 1':'. Defenant was issue #ree 4atent No. V,1'1"' on <uly ">& 1'81 an Original Certificate of 0itle No. V,181*: on #e$ruary "*& 1'8". 4laintiffs 7o)estea +pplication was approve on <anuary 8& 1'8/. 0he present suitwas institute on <anuary "(& 1'8(.

It is to $e note that the trial Court is)isse the case after a hearing on the affir)ative efenses. No trial on the)erits was hel. 0hat is)issal was $ase on the following grouns3 that plaintiff has no personality to file the action

for reconveyance& the proper party $eing the !epu$lic of the 4hilippinesA that plaintiff has no cause of action in thea$sence of privity of contract $etween the partiesA that efenants title& issue in 1'8"& has $eco)e inefeasi$le&conse;uently& the Court is powerless to cancel the sa)eA an that even if the suit were $ase on frau& the actionhas prescri$e.

It is true that the $asic rule is that after the lapse of one year& a ecree of registration is no longer open to review or

attac& although its issuance is attene with frau. 2 0his oes not )ean& however& that the aggrieve party is

without re)ey at law. If the property has not as yet passe to an innocent purchaser for value& an action forreconveyance is still availa$le. 3

0he sole re)ey of the lan owner whose property has $een wrongfully or erroneouslyregistere in anothers na)e is& after one year fro) the ate of the ecree& not to setasie the ecree& ... $ut& respecting the ecree as incontroverti$le an no longer open to

review& to $ring an orinary action in the orinary court of ustice for reconveyance or& ifthe property has passe into the hans of an innocent purchaser for value& for a)ages. 4

0his is e2actly what plaintiff has one. 7e has institute this action for reconveyance alleging that efenant hasucceee in o$taining title through frau an )isrepresentation $y falsely stating in his free patent application thathe ha continuously possesse the lan since <uly /& 1'/: when& in truth an in fact& efenant ha never $een inpossession. 4laintiff has $een una$le to prove his charges of frau an )isrepresentation $ecause of the is)issalOrer of the trial Court without $enefit of a full,ress hearing.



hile plaintiff is not the HownerH of the lan he is clai)ing so that& strictly speaing& he has no personality to file thisaction& he pleas for e;uity an invoes the octrine of i)plie trust enunciate in +rticle 1/:8 of the Civil Coe asfollows3

+rt. 1/:8. If property is ac;uire through )istae or frau& the person o$taining it is& $y force oflaw& consiere a trustee of an i)plie trust for the $enefit of the person fro) who) the propertyco)es.

0he particular circu)stances o$taining herein i)pel us to e2ercise our e;uity urisiction to the en that su$stantial ustice )ay $e ispene to the party litigants. 0o affir) the trial Courts Orer of is)issal woul leave the presentcontroversy unresolve an pening investigation at the a)inistrative level. +sie fro) the length of ti)e it woul prpro$a$ly tae for the case to reach the highest a)inistrative authority& any final auication renere $y the latter)ay eventually $e raise to the appellate Courts for uicial review. 0his circuitous an teious process can $eeli)inate for the sae of the speey a)inistration of ustice $y re)aning the case to the trial Court foreter)ination on the )erits of the issue of valiity of the issuance of #ree 4atent No. V,1'1"' an of the title whichfollowe as a )atter of course.

+ court of e;uity which has taen urisiction an cogni9ance of a cause for any purpose willorinarily retain urisiction for all purposes ?0e2as v. #loria& *>8 5S "'%A Garnell v. 7ills$orough4acing Co.& '" +6! 1/(:A Ersine v. 5pha) 1*" 4 " "1'& an other cases cite@& ecie allissues which are involve in the su$ect )atter of the ispute $etween the litigants ?!ussel v. Clar&

* 6 e "(1 an other cases cite@& an awar& relief which is co)plete an finally isposes of thelitigation =atchen v. 6any *%" 5S *"* an other cases cite so as to acco)plish full ustice$etween the parties litigants& ?7ep$urn v. Dunlop [5S] / 6 e 8:A 7enerson v. 7enerson& /8 SE" 1> an other cases cite@& prevent future litigation ?Sonnicsen v. Sonnicsen& 11* 4 " /':an other cases cite@& an )ae perfor)ance of the courts ecree perfectly safe to those who)ay $e co)pelle to o$ey it ?right v. Scotton 1"1 + 8'A Olsen v. National Fe)orial -arens& Inc.11: N " *1"@ ?cite in "( +) <ur " E;uity& sec. 1>%@.

6iewise to satisfy the e)ans of ustice& the octrine of i)plie trust )ay $e )ae to operate in plaintiffs favor&assu)ing that he can prove his allegation that efenant ha ac;uire legal title $y frau.

... a constructive trust is a trust raise $y construction of law& or arising $y operation oflaw. In a )ore restricte sense an as contra,istinguishe fro) a resulting trust& aconstructive trust is a trust not create $y any wors& either e2pressly or i)plielyevincing a irect intention to create a trust& $ut $y the construction of e;uity in orer tosatisfy the e)ans of ustice. It oes not arise $y agree)ent or intention $ut $yoperation $y law. ?%' C.<.S. ("8, ("(@. HIf a person o$tains legal title to property $y frauor conceal)ent& courts of e;uity will i)press upon the title a so,calle constructive trustin favor of the efraue party.H + constructive trust is not a trust in the technical sense?-ayonato vs. 0reasurer of the 4hil.& /' 4hil. "//A see +rt& 1/:8 of the Civil Coe.@ *

4laintiffs action for reconveyance )ay not $e sai to have prescri$e& for& $asing the present action on i)plie trust&

the prescriptive perio is ten years. 7 0itle was o$taine $y efen ant on #e$ruary "*& 1'8". 4laintiff co))ence

this suit for reconveyance on <anuary "(& 1'8(. +n if plaintiffs cause of action is $ase on frau& which shoulorinarily $e $rought within four years fro) the iscovery of the frau& ee)e to have taen place when thecertificate of title was issue& / it nee only $e recalle that the conflicting rights of the parties were alreay peninginvestigation $efore District 6an Office VIII,/ -eneral Santos& Cota$ato& even $efore plaintiff institute the present

suit for reconveyance.

7E!E#O!E& this case is here$y orere re)ane to the Court of #irst Instance of Cota$ato& Branch II& at -eneralSantos City& for hearing on the )erits an renition of the corresponing ug)ent.

SO O!DE!ED.

9eehan*ee (Chairman), Ma*asiar, Fernande, 4uerrero and 0e Castro, "". concur.



Republic of the Philippines

SUPREME COURT

Manila

EN ANC

G.R. No. L-12792 February 28, 1961

REPUBLC OF T!E P!LPPNES, plaintiff!appellant"

vs#

L" OR#EN #E PP. BENE#CTNOS #E FLPN"S, defendant!appellee#

Office of the Solicitor General for plaintiff-appellant.

Ledesma, Puno, Guytingco, Antonio and Associates for defendant-appellee.

#$ON, J .%

To ease and solve the dail$ traffic con%estion on &e%arda Street" the Govern'ent dre( plans to

e)tend A*carra%a street fro' its +unction (ith Mendiola street" up to the Sta# Mesa Rotonda"Sa'paloc" Manila# To carr$ out this plan it offered to bu$ a portion of appro)i'atel$ ,"---

s.uare 'eters of a bi%%er parcel belon%in% to &a /rden de PP# enedictinos de 0ilipinas" a

do'estic reli%ious corporation that o(ns the San eda Colle%e" a private educational institutionsituated on Mendiola street# Not havin% been able to reach an a%ree'ent on the 'atter (ith the

o(ner" the Govern'ent instituted the present e)propriation proceedin%s#

/n Ma$ 12" 3452 the trial court" upon application of the Govern'ent 6 hereinafter referred to

as appellant 6 issued an order fi)in% the provisional value of the propert$ in .uestion at

P12-"---#-- and authori*in% appellant to ta7e i''ediate possession thereof upon depositin%said a'ount# The deposit havin% been 'ade (ith the Cit$ Treasurer of Manila" the trial court

issued the correspondin% order directin% the Sheriff of Manila to place appellant in possession ofthe propert$ aforesaid#

/n 8une 9" 3452" as directed b$ the Rules of Court" the herein appellee" in lieu of an ans(er" filed

a 'otion to dis'iss the co'plaint based on the follo(in% %rounds:

I# That the propert$ sou%ht to be e)propriated is alread$ dedicated to public use and

therefore is not sub+ect to e)propriation#

II# That there is no necessit$ for the proposed e)propriation#

III# That the proposed A*carra%a E)tension could pass throu%h a different site (hich

(ould entail less e)pense to the Govern'ent and (hich (ould not necessitate the

e)propriation of a propert$ dedicated to education#

I# That the present action filed b$ the plaintiff a%ainst the defendant is discri'inator$#



# That the herein plaintiff does not count (ith sufficient funds to push throu%h its

pro+ect of constructin% the proposed A*carra%a E)tension and to allo( the plaintiff to

e)propriate defendant;s propert$ at this ti'e (ould be onl$ to needlessl$ deprive thelatter of the use of its propert$#<#

The %overn'ent filed a (ritten opposition to the 'otion to dis'iss =Record on Appeal" pp# >-!>2? (hile appellee filed a repl$ thereto =Id#" pp# >9!@9?# /n 8ul$ 14" 3452" (ithout receivin%

evidence upon the .uestions of fact arisin% fro' the co'plaint" the 'otion to dis'iss and theopposition thereto filed" the trial court issued the appealed order dis'issin% the case#

The appealed order sho(s that the trial court li'ited itself to decidin% the point of (hether or not

the e)propriation of the propert$ in .uestion is necessar$ =Rec# on Ap#" p# 5-? and" havin% arrivedat the conclusion that such e)propriation (as not of e)tre'e necessit$" dis'issed the

proceedin%s#

It is to be observed that para%raph I of the co'plaint e)pressl$ alle%es that appellant needs"

a'on% other properties" the portion of appellee;s propert$ in .uestion for the purpose ofconstructin% the A*carra%a street e)tension" and that para%raph II of the sa'e co'plaint

e)pressl$ alle%es that" in accordance (ith Section ,@=b? of the Revised Ad'inistrative Code" the

President of the Philippines had authori*ed the ac.uisition" thru conde'nation proceedin%s" of

the aforesaid parcel of land belon%in% to appellee" as evidenced b$ the third indorse'ent datedMa$ 35" 3452 of the E)ecutive Secretar$" /ffice of the President of the Philippines" a cop$ of

(hich (as attached to the co'plaint as Anne) <C< and 'ade an inte%ral part thereof# In denial of

these alle%ations appellee;s 'otion to dis'iss alle%ed that <there is no necessit$ for the proposede)propriation<# Thus" the .uestion of fact decisive of the (hole case arose#

It is the rule in this +urisdiction that private propert$ 'a$ be e)propriated for public use and upon

pa$'ent of +ust co'pensation that conde'nation of private propert$ is +ustified onl$ if it is forthe public %ood and there is a %enuine necessit$ therefor of a public character# Conse.uentl$" thecourts have the po(er to in.uire into the le%alit$ of the e)ercise of the ri%ht of e'inent do'ain

and to deter'ine (hether or not there is a %enuine necessit$ therefor =Cit$ of Manila vs# Chinese

Co''unit$" @- Phil# >@4 Manila Railroad Co'pan$ vs# Bacienda enito" Inc#" >2 /#G# 3452?#

pon the other hand" it does not need e)tended ar%u'ent to sho( that (hether or not the proposed openin% of the A*carra%a e)tension is a necessit$ in order to relieve the dail$

con%estion of traffic on &e%arda St#" is a .uestion of fact dependent not onl$ upon the facts of

(hich the trial court ver$ liberall$ too7 +udicial notice but also up on other factors that do notappear of record and 'ust" therefore" be established b$ 'eans of evidence# e are" therefore" of

the opinion that the parties should have been %iven an opportunit$ to present their respective

evidence upon these factors and others that 'i%ht be of direct or indirect help in deter'inin% thevital .uestion of fact involved" na'el$" the need to open the e)tension of A*carra%a street to ease

and solve the traffic con%estion on &e%arda street#

BERE0/RE" the appealed order of dis'issal is set aside and the present case is re'anded to

the trial court for further proceedin%s in accordance (ith this decision# ithout costs#



Bengzon, Actg. C.., Padilla, Bautista Angelo, La!rador, "eyes, .B.L., Barrera and Paredes

., concur#

Concepcion, ., too7 no part#

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2nd batch of cases-property.doc