G.R. No. L-16218 November 29, 1962ANTONIA BICERRA, DOMINGO BICERRA, BERNARDO BICERRA, CAYETANO BICERRA, LINDA BICERRA, PIO BICERRA and EUFRICINA BICERRA, plaintiffs-appellants,vs.TOMASA TENEZA and BENJAMIN BARBOSA,defendants-appellees.

This case is before us on appeal from the order of the Court of First Instance of Abra dismissing the complaint filed by appellants, upon motion of defendants-appellate on the ground that the action was within the exclude (original) jurisdiction of the Justice of the Peace Court of Lagangilang, of the same province.The complaint alleges in substance that appellants were the owners of the house, worth P200.00, built on and owned by them and situated in the said municipality Lagangilang; that sometime in January 1957 appealed forcibly demolished the house, claiming to be the owners thereof; that the materials of the house, after it was dismantled, were placed in the custody of the barrio lieutenant of the place; and that as a result of appellate's refusal to restore the house or to deliver the material appellants the latter have suffered actual damages the amount of P200.00, plus moral and consequential damages in the amount of P600.00. The relief prayed for is that "the plaintiffs be declared the owners of the house in question and/or the materials that resulted in (sic) its dismantling; (and) that the defendants be orders pay the sum of P200.00, plus P600.00 as damages, the costs."The issue posed by the parties in this appeal is whether the action involves title to real property, as appellants contend, and therefore is cognizable by the Court of First Instance (Sec. 44, par. [b], R.A. 296, as amended), whether it pertains to the jurisdiction of the Justice of the Peace Court, as stated in the order appealed from, since there is no real property litigated, the house having ceased to exist, and the amount of the demand does exceed P2,000.00 (Sec. 88,id.)1The dismissal of the complaint was proper. A house is classified as immovable property by reason of its adherence to the soil on which it is built (Art. 415, par. 1, Civil Code). This classification holds true regardless of the fact that the house may be situated on land belonging to a different owner. But once the house is demolished, as in this case, it ceases to exist as such and hence its character as an immovable likewise ceases. It should be noted that the complaint here is for recovery of damages. This is the only positive relief prayed for by appellants. To be sure, they also asked that they be declared owners of the dismantled house and/or of the materials. However, such declaration in no wise constitutes the relief itself which if granted by final judgment could be enforceable by execution, but is only incidental to the real cause of action to recover damages.

PRUDENTIAL BANK V. PANIS153 SCRA 390

FACTS:Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real estate mortgage over a residential building. The mortgage included also the right to occupy the lot and the information about the sales patent applied for by the spouses for the lot to which the building stood. After securing the first loan, the spouses secured another from the same bank. To secure payment, another real estate mortgage was executed over the same properties. The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which was later on mortgaged to the bank. The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold in public auction despite opposition from the spouses. The respondent court held that the REM was null and void.

HELD:A real estate mortgage can be constituted on the building erected on the land belonging to another.The inclusion of building distinct and separate from the land in the Civil Code can only mean that the building itself is an immovable property.While it is true that a mortgage of land necessarily includes in the absence of stipulation of the improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from the land on which it is built. Such a mortgage would still be considered as a REM for the building wouldstill be considered as immovable property even if dealt with separately and apart from the land.The original mortgage on the building and right to occupancy of the land was executed before the issuance of the sales patent and before the government was divested of title to the land. Under the foregoing, it is evident that the mortgage executed by private respondent on his ownbuilding was a valid mortgage.As to the second mortgage, it was done after the sales patent was issued and thus prohibits pertinent provisions of the Public Land Act.

Makati Leasing and Finance Corp., vs Wearever Textile Mills,Inc.,

FACTSWearever Textile Mills, Inc. executed a chattel mortgage contract in favor of Makati Leasing and Finance Corporation covering certain raw materials and machinery. Upon default, Makati Leasing fi led a petition for judicial foreclosure of the properties mortgaged. Acting on Makati Leasings application for replevin, the lower court issued a writ of seizure. Pursuant thereto, the sheriff enforcing the seizure order seized the machinery subject matter of the mortgage. In a petition for certiorari and prohibition, the Court of Appeals ordered the return of the machinery on the ground that the same can-not be the subject of replevin because it is a real property pursuant to Article415 of the new Civil Code, the same being attached to the ground by means of bolts and the only way to remove it from Wearever textiles plant would be to drill out or destroy the concrete fl oor. When the motion for reconsideration of Makati Leasing was denied by the Court of Appeals, Makati Leasing elevated the matter to the Supreme Court.

ISSUEWhether the machinery in suit is real or personal property from the point of view of the parties.

HELDThere is no logical justification to exclude the rule out the present case from the application of the pronouncement inTumalad v Vicencio, 41 SCRA 143.If a house of strong materials, like what was involved in theTumaladcase,may be considered as personal property for purposes of executing a chattel mortgage thereonas long as theparties to the contract so agreeandno innocent third party will be prejudicedthereby, there is absolutelyno reason why a machinery, which ismovable in its natureand becomesimmobilized only by destination or purpose,may not be likewise treated as such. This is really becauseone who has so agreed is estopped from the denying the existence of the chattel mortgage.In rejecting petitioners assertion on the applicability of theTumaladdoctrine, the CA lays stress on the fact that the house involved therein was built on a land that did not belong to the owner of such house. Butthe law makes no distinction with respect to the ownership of the land on which the house is builtand We should not lay down distinctions not contemplated by law.It must be pointed out thatthe characterization by the private respondent is indicative of the intentionandimpresses upon the property the character determined by the parties. As stated inStandard Oil Co. of New York v. Jaramillo, 44 Phil. 630,it isundeniable that the parties to a contract may, by agreement,treat as personal property that which by nature would be a real propertyas long as no interest of third parties would be prejudiced thereby.The status of the subject matter as movable or immovable property was not raised as an issue before the lower court and the CA, except in a supplemental memorandum in support of the petition filed in the appellate court. There is no record showing that the mortgage has been annulled, or that steps were taken to nullify the same. On the other hand, respondent has benefited from the said contract.Equity dictates that one should not benefit at the expense of another.As such, private respondent could no longer be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom.Therefore, the questioned machinery should be considered as personal property

Evangelista vs. Alto Surety & Insurance Co.,Inc.Santos Evangelista vs. Alto Surety & Insurance Co., Inc.G.R. No. L-11139. April 23, 1958

Doctrine:Parties to a deed of chattel mortgage may agree to consider a house as personal property for purposes of said contract. However, this view is good only insofar as the contracting parties are concerned.FACTS: Santos Evangelista instituted Civil Case No. 8235 of the CFI Manila for a sum of money. He also obtained a writ of attachment, which was levied upon a house, built by Rivera on a land situated in Manila and leased to him by filing copy of said writ and the corresponding notice of attachment with the Office of the Register of Deeds of Manila on June 8, 1949. Judgment was rendered in favor of Evangelista. On October 8, 1951, he bought the house at a public auction held in compliance with the writ of execution issued in said case. The corresponding definite deed of sale was issued to him upon expiration of the period of redemption. When Evangelista sought to take possession of the house, Rivera refused to surrender it, upon the ground that he had leased the property from the Alto Surety & Insurance Co., Inc. and that the latter is now the true owner of said property. It appears that on May 10, 1952, a definite deed of sale of the same house had been issued to Alto Surety, as the highest bidder at an auction sale held, on September 29, 1950, in compliance with a writ of execution issued in Civil Case 6268 of the same court in which judgment, for the sum of money, had been rendered in favor of Alto Surety. As such, Evangelista instituted an action against Alto Surety and Ricardo Rivera, for the purpose of establishing his title over said house, and securing possession thereof, apart from recovering damages. After due trial, the CFI Manila rendered judgment for Evangelista. The Court of Appeals reversed the decision and absolved Alto Surety from the complaint, upon the ground that, although the writ of attachment in favor of Evangelista had been filed with the Register of Deeds of Manila prior to the sale in favor of Alto Surety, Evangelista did not acquire thereby a preferential lien, the attachment having been levied as if the house in question were immovable property, although, in the opinion of the Court of Appeals, it is ostensibly a personal property. Thus, the Court of Appeals held, the order of attachment . . . should have been served in the manner provided in subsection (e) of section 7 of Rule 59, of the Rules of Court. Evangelista filed an appeal by Certiorari with the Supreme Court.Issue:Whether a house, constructed by the lessee of the land on which it is built, should be dealt with, for purposes of attachment, as immovable property, or a personal property.Held:Said house is not personal property, much less a debt or credit or other personal property not capable of manual delivery, but immovable property. As held in Laddera v. Hodges, a true building is immovable or real property, whether it is erected by the owner of the land or by a usufructuary or lessee. It is true that the parties to a deed of chattel mortgage may agree to consider a house as personal property for purposes of said contract. However, this view is good only insofar as the contracting parties are concerned. It is based partly upon the principle of estoppel. Neither is this principle nor said view applicable to strangers to said contract. Much less is it in point where there has been no contract whatsoever, with respect to the status of the house involved as in the case at bar. The rules on execution do not allow, and should not be interpreted as to allow, the special consideration that parties to a contract may have desired to impart to real estate as personal property, when they are not ordinarily so. Sales on execution affect the public and third persons. The regulation governing sales on execution are for public officials to follow. The form of proceedings prescribed for each kind of property is suited to its character, not to the character which the parties have given to it or desire to give it. The regulations were never intended to suit the consideration that parties, may have privately given to the property levied upon. Enforcement of regulations would be difficult were the convenience or agreement of private parties to determine or govern the nature of the proceedings.

Davao Sawmill Co. vsCastilloDavao Sawmill Co. vs Castillo61 PHIL 709GR No. L-40411August 7, 1935

A tenant placed machines for use in a sawmill on the landlord's land.FACTSDavao Sawmill Co., operated a sawmill. The land upon which the business was conducted was leased from another person. On the land, Davao Sawmill erected a building which housed the machinery it used. Some of the machines were mounted and placed on foundations of cement. In the contract of lease, Davo Sawmill agreed to turn over free of charge all improvements and buildings erected by it on the premises with the exception of machineries, which shall remain with the Davao Sawmill. In an action brought by the Davao Light and Power Co., judgment was rendered against Davao Sawmill. A writ of execution was issued and the machineries placed on the sawmill were levied upon as personalty by the sheriff. Davao Light and Power Co., proceeded to purchase the machinery and other properties auctioned by the sheriff.

ISSUEAre the machineries real or personal property?

HELDArt.415of the New Civil Code provides that Real Property consists of:(1) Lands, buildings, roads and constructions of all kinds adhered to the soil;xxx(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an industry ot works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;Appellant should have registered its protest before or at the time of the sale of the property. While not conclusive, the appellant's characterization of the property as chattels is indicative of intention and impresses upon the property the character determined by the parties.Machinery is naturally movable. However, machinery may beimmobilized by destination or purposeunder the following conditions:General Rule: The machinery only becomes immobilized if placed in a plant by the owner of the property or plant.Immobilization cannot be made by atenant, ausufructuary, or any person having only atemporary right.Exception: Thetenant,usufructuary, ortemporary possessoracted as agent of the owner of the premises; or he intended to permanently give away the property in favor of the owner.As a rule, therefore, the machinery should be considered as Personal Property, since it was not placed on the land by the owner of the said land.

Board of Assessment Appeals, Q.C. vs Meralco10 SCRA 68GR No. L-15334January 31, 1964

FACTSOn November 15, 1955, the QC City Assessor declared the MERALCO's steel towers subject to real property tax. After the denial of MERALCO's petition to cancel these declarations, an appeal was taken to the QC Board of Assessment Appeals, which required respondent to pay P11,651.86 as real property tax on the said steel towers for the years 1952 to 1956.MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax Appeals (CTA) which rendered a decision ordering the cancellation of the said tax declarations and the refunding to MERALCO by the QC City Treasurer of P11,651.86.

ISSUEAre the steel towers or poles of the MERALCO considered real or personal properties?

HELDPole long, comparatively slender, usually cylindrical piece of wood, timber, object of metal or the like; an upright standard to the top of which something is affixed or by which something is supported.MERALCO's steel supports consists of a framework of 4 steel bars/strips which are bound by steel cross-arms atop of which are cross-arms supporting 5 high-voltage transmission wires, and their sole function is to support/carry such wires. The exemption granted to poles as quoted fromPart II, Par.9of respondent's franchise is determined by the use to which such poles are dedicated.It is evident that the word poles, as used inAct No. 484and incorporated in the petitioner's franchise, should not be given a restrictive and narrow interpretation, as to defeat the very object for which the franchise was granted. The poles should be taken and understood as part of MERALCO's electric power system for the conveyance of electric current to its consumers.Art. 415of the NCC classifies the following as immovable property:(1) Lands, buildings, roads and constructions of all kinds adhered to the soil;xxx(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object;xxx(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an industry ot works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;Following these classifications,MERALCO's steel towers should be considered personal property. It should be noted that the steel towers:(a) are neither buildings or constructions adhered to the soil;(b) are not attached to an immovable in a fixed manner they can be separated without breaking the material or deterioration of the object;are not machineries, receptacles or instruments, and even if they are, they are not intended for an industry to be carried on in the premises.

SERGS PRODUCTS AND GOQUIOLAY V. PCI LEASING AND FINANCE

FACTS:PCI filed a case for collection of a sum of money as well as a writ of replevin for the seizure of machineries, subject of a chattel mortgage executed by petitioner in favor of PCI.Machineries of petitioner were seized and petitioner filed a motion for special protective order. It asserts that the machineries were real property and could not be subject of a chattel mortgage.HELD:The machineries in question have become immobilized by destination because they are essential and principal elements in the industry, and thus have become immovable in nature.Nonetheless, they are still proper subjects for a chattel mortgage.Contracting parties may validly stipulate that a real property be considered as personal. After agreement, they are consequently estopped from claiming otherwise.

Roxas v. CA

MELANIA A. ROXAS, petitioner, vs.THE HON. COURT OF APPEALSand ANTONIO M. CAYETANO, respondents.

Petitioner Melania Roxas ("Melania") is married to Antonio Roxas ("Antonio"), although they are already estranged and living separately.

Melania discovered that Antonio leased to Respondent Antonio Cayetano ("Mr. Cayetano") their conjugal lot in Novaliches without her knowledge and consent.

Thus, Melanie filed a case before the RTC praying for the annulment of the contract of lease between Antonio and Mr. Cayetano.

Mr. Cayetano moved to dismiss the complaint on the sole ground that the complaint states no cause of action.

The RTC Judge resolved said Motion by dismissing Melania's complaint.

ISSUE: W/N a husband, may legally enter into a long-term contract of lease involving conjugal real property without the consent of the wife.

Ruling: No.(Case remanded to the RTC by the SC)

Even if the husband is administrator of the conjugal partnership, administration does not include acts of ownership. For while the husband can administer the conjugal assets unhampered, he cannot alienate or encumber the conjugal realty.

As stated in Black's Law Dictionary, the word "alienation" means "the transfer of the property and possession of lands, tenements, or other things from one person to another ... The act by which the title to real estate is voluntarily assigned by one person to another and accepted by the latter, in the form prescribed by law." While encumbrance "has been defined to be every right to, or interest in, the land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by the conveyance; any (act) that impairs the use or transfer of property or real estate..."

The pivotal issue in this case is whether or not a lease is an encumbrance and/or alienation.

Under Art. 1643 of the New Civil Code "In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite...." Thus, lease is a grant of use and possession: it is not only a grant of possession.

In the contract of lease, the lessor transfers his right of use in favor of the lessee. The lessor's right of use is impaired, therein. He may even be ejected by the lessee if the lessor uses the leased realty.

Therefore, lease is a burden on the land, it is an encumbrance on the land. The concept of encumbrance includes lease, thus "an encumbrance is sometimes construed broadly to include not only liens such as mortgages and taxes, but also attachment, LEASES, inchoate dower rights, water rights, easements, and other RESTRICTIONS on USE."

Moreover, lease is not only an encumbrance but also a qualified alienation, with the lessee becoming, for all legal intents and purposes, and subject to its terms, the owner of the thing affected by the lease.

Thus, in case the wife's consent is not secured by the husband as required by law, the wife has the remedy of filing an action for the annulment of the contract.

Heirs of Soriano vs.CAHeirs of Roman Soriano vs. Hon. Court of AppealsG.R. No. 93401 June 26, 1991

Doctrine:There is ownership when a thing pertaining to one person is consistent with the rights of others. Ownership confers certain rights to the owner, among which are the right to enjoy the thing owned and the right to exclude other persons from possession thereof. On the other hand, possession is defined as the holding of a thing or enjoyment of a right.

Facts:The object of the dispute in this case is a parcel of land originally owned by Adriano Soriano who died intestate in 1947. On June 30, 1967, his heirs leased the property to spouses David de Vera and Consuelo Villasista for a period of fifteen (15) years beginning July 1, 1967. Paragraph 5 of the contract of lease, provided that Roman Soriano, one of the children of the late Adriano, will be the caretaker of the property during the period of the lease.During the effectivity of the lease contract, the heirs of Adriano Soriano entered into an extrajudicial settlement of his estate. The property subject of this case was adjudicated to seven (7) of his rune (9) childrenpro-indiviso.On January 11, 1968, the property was divided into two (2) lots, Lot No. 60052 and Lot No. 8459. The former lot was assigned to Lourdes, Candido and the heirs of Dionisia while the latter lot was assigned to Francisco, Librada, Elcocadio and Roman. The new owners of Lot No. 60052 sold the portions assigned to them to spouses Braulio and Aquilina Abalos. Likewise, the new owners of Lot 8459, except Roman, sold their shares to the Abalos spouses.On March 14, 1968, the de Vera spouses ousted Roman as caretaker and appointed Isidro Versoza and Vidal Versoza as his substitutes. Thereafter, Roman filed a case for reinstatement and reliquidation against the de Vera spouses. On September 30, 1969, the Agrarian Court rendered a decision authorizing the ejectment of Roman. On appeal, the decision was reversed by the Court of Appeals. However, before it was executed, the parties entered into a post-decisional agreement wherein the de Vera spouses allowed Roman Soriano to sub-lease the property until the termination of the original lease on June 30 1982. This agreement was approved by the CAR court in an order dated December 22, 1972.On August 16, 1976, the Abalos spouses filed with the then Court of First Instance of Pangasinan at Lingayen an application for registration of title. The application claimed ownership of the entire lot No. 60052 and 3/4pro-indivisoof Lot No. 8459. The Director of Lands and Roman Soriano filed separate oppositions to the application. The latters opposition alleged that the two (2) lots subject of the application have not yet been subdivided and remained as one parcel; that he is the co-ownerpro-indivisoof the combined area of the two (2) lots and not just to one-fourth (1/4) of Lot No. 8459 as alleged in the application; and that the applicants source of ownership is voidable.The Republic subsequently conceded that the land applied for was private and disposable. The RTC, acting as a Land Registration Court, granted the application for Registration.Meanwhile, on April 13, 1983, after the expiration of the original lease and the sub-lease in favor of Roman Soriano, the Abalos spouses filed a case for unlawful detainer against Roman Soriano. This case, however, was dismissed on motion of the complainants, Abalos spouses.For their part, Elcocadio, Librada, Roman, Francisco, Lourdes, Candido and the heirs of Dionisia, filed a complaint to annul the deeds of sale they executed in favor of the Abalos spouses or should the deeds be not annulled, to allow Roman, Elcocadio and Librada to redeem those shares sold by Candido, Lourdes, Francisca and the heirs of Dionisia and to uphold Roman Sorianos possession of the fishpond portion of the property as a tenant-caretaker. After the dismissal of the case for unlawful detainer, the Abalos spouses a motion for execution of the post-decisional order embodying the agreement of Roman Soriano and the de Vera spouses allowing the former to sublease the property.Issue:Whether or not a motion for execution of a post decisional agreement approved by the court in 1972 may still be filed eleven (11) years after.

Held:No. It should be noted that the meat of the post decisional agreement sought to be executed was the creation of a sub- lessor and sub-lessee relationship between the de Veras and Roman Soriano. While it appears from the above resolution of the trial court that there was a basis for private respondents demand for reasonable compensation for the use of the premises and for joint possession as a co-owner, the filing of a motion for execution of the post decisional agreement between the de Vera spouses and the petitioners predecessor, Roman Soriano, was not the proper remedy. The pleading filed with the trial court was captioned Motion for Execution. However, it was very clear that, under the circumstances they were in, the relief demanded by the private respondents can properly be asked for in an unlawful detainer case or in other proper proceedings. A case for unlawful detainer was already brought by the private respondents against the petitioner but the former sought its dismissal for reasons not known. Be that as it may, there is still a pending civil action between the parties (Civil Case No. 15958) where possession is one of the issues to be resolved.The agrarian court erred in not dismissing outright the motion for execution filed by private respondents. Said court, acting on the motion for execution had no jurisdiction to entertain propositions outside of the scope of the agreement sought to be executed. Further, the agreement sought to be enforced was approved by the court on December 22, 1972, eleven (11) years and eight (8) months from the time the motion for execution was filed on August 22, 1984. It is settled that under Section 6, Rule 39 of the Rules of Court, execution of a judgment (or a final order) may be made by motion within five (5) years from the date it becomes final and executory. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced only by an ordinary action. Actions upon a judgment or a final order of the court must be brought within ten (10) years from the time the right of action accrues [(Article 1144 (3)] or within ten years counted from the time the judgment became final. Furthermore, it is indubitable that the agreement sought to be executed had already been executed by the parties. The obligations of spouses De Vera, the original lessees, and of Roman Soriano, under sub-lease agreement had already been complied with. Possession and rentals under the contracts were already delivered. In fact, at the time the motion for execution was filed the sub-lease contract had already expired. Hence, there was nothing more to execute. Petition granted. Motion for execution denied.

Spouses Custodio vs.CASpouses Cristino and Brigida Custodio and Spouses Lito and Maria Cristina Santos vs. Court of Appeals, Heirs of Pacifico C. Mabasa

Doctrine: Every owner has an absolute right over his property and his act of fencing and enclosing the same was an act which he may lawfully perform in the employment and exercise of said right. Whatever injury or damage that may have been sustained by others by reason of the rightful use of the said land by the owner is damnum absque injuria.

Facts:The respondent (Pacifico Mabasa) owns a parcel of land with a two-door apartment erected thereon situated at Interior P. Burgos St., Palingon, Tipas, Tagig, Metro Manila. Said property may be described to be surrounded by other immovables pertaining to respondents herein.As an access to P. Burgos Street from respondents property, there are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distan(t) from Mabasas residence to P. Burgos Street. Such path is passing in between the previously mentioned row of houses of the petitioners The second passageway is about 3 meters in width and length from Mabasas residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length, has to be traversed.When said property was purchased by Mabasa, there were tenants occupying the remises and who were acknowledged by Mabasa as tenants. However, sometime in February, 1982, one of said tenants vacated the apartment and when Mabasa went to see the premises, he saw that there had been built an adobe fence in the first passageway making it narrower in width. Said adobe fence was first constructed by Petitioners Santoses along their property which is also along the first passageway. Petitioner Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed. And it was then that the remaining tenants of said apartment vacated the area.Petitioner Ma. Cristina Santos testified that she constructed said fence because of some other inconveniences of having (at) the front of her house a pathway such as when some of the tenants were drunk and would bang their doors and windows.Trial court rendered a decision ordering the Petitioners Custodios and Santoses to give Respondent Mabasa permanent access ingress and egress, to the public street and Mabasa to pay the Custodios and Santoses the sum of Eight Thousand Pesos (P8,000) as indemnity for the permanent use of the passageway.Respondent Mabasa went to the CA raising the sole issue of whether or not the lower court erred in not awarding damages in their favor. The CA rendered its decision affirming the judgment of the trial court with modification only insofar as the. grant of damages to Mabasa The motion for reconsideration filed by the petitioners was denied.Issues:Whether the grant of right of way to herein private respondent Mabasa is proper.Whether the award of damages is in order.

Held:No. Herein petitioners are already barred from raising the same. Petitioners did not appeal from the decision of the court a quo granting private respondents the right of way, hence they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the trial court as to petitioners, the issue of propriety of the grant of right of way has already been laid to rest.No. A reading of the decision of the CA will show that the award of damages was based solely on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when the tenants vacated the leased premises by reason of the closure of the passageway.However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages.There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. (damnum absque injuria). In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it (damnum et injuria.)In the case at bar, although there was damage, there was no legal injury. The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good customs or public policy. The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those established by law. It is within the right of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code provides that (e)very owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon.At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way existing in favor of private respondents, either by law or by contract. The fact that private respondents had no existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation.Hence, prior to said decision, petitioners had an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the employment and exercise of said right. To repeat, whatever injury or damage may have been sustained by private respondents by reason of the rightful use of the said land by petitioners is damnum absque injuria.

Garcia vs. CAGarcia vs. Court of AppealsG.R. No. 133140, August 10, 1999

Doctrine:Possession and ownership are distinct legal concepts. Ownership exists when a thing pertaining to one person is completely subjected to his will in a manner not prohibited by law and consistent with the rights of others. Ownership confers certain rights to the owner, one of which is the right to dispose of the thing by way of sale.Literally, to possess means to actually and physically occupy a thing with or without right. Possession may be had in one of two ways: possession in the concept of an owner and possession of a holder. A possessor in the concept of an owner may be the owner himself or one who claims to be so. On the other hand, one who possesses as a mere holder acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong.

Facts:Atty. Pedro V. Garcia, in whose name TCT No. S-31269 covering a parcel of land identified as Lot 17 situated at Bel Air II Village, Makati, was registered, sold with the consent of his wife Remedios T. Garcia, the same to their daughter Ma. Luisa Magpayo and her husband Luisito Magpayo (the Magpayos). On March 5, 1981, the Magpayos mortgaged the land to the Philippine Bank of Communications (PBCom) to secure a loan. On March 9, 1981, Atty. Garcias Title was cancelled and in its stead Transfer Certificate of Title No. S-108412/545 was issued in the name of the Magpayos. The Deed of Real Estate Mortgage was registered at the Makati Register of Deeds and annotated on the Magpayos title. The redemption period of the foreclosed mortgage expired without the Magpayos redeeming the same, hence, title over the land was consolidated in favor of PBCom which cancelled the Magpayos title and Transfer Certificate of Title No. 138233 was issued in its name. The Magpayos failed to pay their loan upon its maturity, hence, the mortgage was extrajudicially foreclosed and at the public auction sale, PBCom which was the highest bidder bought the land. On October 4, 1985, the Magpayos filed at the RTC of Makati a complaint seeking the nullification of the extrajudicial foreclosure of mortgage, public auction sale, and PBComs title docketed as Civil Case No. 11891. This complaint was dismissed for failure to prosecute. On October 15, 1985, PBCom filed at the Regional Trial Court (RTC) of Makati a petition for the issuance of a writ of possession over the land which was granted. Upon service of the writ of possession, Mrs. Magpayos brother, Jose Ma. T. Garcia (Garcia), who was in possession of the land, refused to honor it and filed a motion for Intervention in the above-said PBCom petition, which motion was denied.Garcia thereupon filed against PBCom, the Magpayos, and the RTC Sheriff the instant suit for recovery of realty and damages wherein he alleged, inter alia, that he inherited the land as one of the heirs of his mother Remedios T. Garcia, and that PBCom acquired no right thereover. In its summary judgment, the lower court held that the mortgage executed by the Magpayo spouses in favor of PBCom was void. The Magpayo spouses could not have acquired the said property merely by the execution of the Deed of Sale because the property was in the possession of the plaintiff. The vendor, Pedro V. Garcia, was not in possession and hence could not deliver the property merely by the execution of the document.On appeal, CA held that Garcias assertion that ownership over the disputed property was not transmitted to his sister and her husband-Magpayo spouses at the time of the execution of the Deed of Sale as he was still in actual and adverse possession thereof does not lie. Since the execution of the deed of sale by Atty. Pedro V. Garcia in favor of the Magpayos took place earlier or on August 1, 1980, then contrary to his claim, Garcia was not in possession of the property at the time of the execution of said public instrument. Furthermore, it appearing that the vendor Atty. Garcia had control of the property which was registered in his name and that the deed of sale was likewise registered, then the sale was consummated and the Magpayos were free to exercise the attributes of ownership including the right to mortgage the land.When the land is registered in the vendors name, and the public instrument of sale is also registered, the sale may be considered consummated and the buyer may exercise the actions of an owner. That the Magpayos title, TCT No. S-108412, was issued four (4) days following the execution of the deed of real estate mortgage is of no moment, for registration under the Torrens system does not vest ownership but is intended merely to confirm and register the title which one may already have on the land.Issue:Whether Garcias possession is in a concept of an owner.

Held:No. Garcias possession which started only in 1986 could not ripen into ownership. He has no valid title thereto. His possession in fact was that of an intruder, one done in bad faith (to defeat PBComs Writ of Possession). His possession is certainly not in the concept of an owner. This is so because as early as 1981, title thereto was registered in the name of the Magpayo Spouses which title was subsequently cancelled when the property was purchased by PBCom in a public auction sale resulting in the issuance of title in favor of the latter in 1985.The Court stressed that possession and ownership are distinct legal concepts. Ownership exists when a thing pertaining to one person is completely subjected to his will in a manner not prohibited by law and consistent with the rights of others. Ownership confers certain rights to the owner, one of which is the right to dispose of the thing by way of sale. Atty. Pedro Garcia and his wife Remedios exercised their right to dispose of what they owned when they sold the subject property to the Magpayo spouses. On the other hand, possession is defined as the holding of a thing or the enjoyment of a right. Literally, to possess means to actually and physically occupy a thing with or without right. Possession may be had in one of two ways: possession in the concept of an owner and possession of a holder. A possessor in the concept of an owner may be the owner himself or one who claims to be so. On the other hand, one who possesses as a mere holder acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong.The records show that petitioner occupied the property not in the concept of an owner for his stay was merely tolerated by his parents. Consequently, it is of no moment that petitioner was in possession of the property at the time of the sale to the Magpayo spouses. It was not a hindrance to a valid transfer of ownership. On the other hand, petitioners subsequent claim of ownership as successor to his mothers share in the conjugal asset is belied by the fact that the property was not included in the inventory of the estate submitted by his father to the intestate court. This buttresses the ruling that indeed the property was no longer considered owned by petitioners parents.The Court upheld the Court of Appeals in holding that the mortgage to PBCom by the Magpayo spouses is valid notwithstanding that the transfer certificate of title over the property was issued to them after the mortgage contract was entered into. Registration does not confer ownership, it is merely evidence of such ownership over a particular property. The deed of sale operates as a formal or symbolic delivery of the property sold and authorizes the buyer to use the document as proof of ownership. All said, the Magpayo spouses were already the owners when they mortgaged the property to PBCom.

FEDERICO GEMINIANO, MARIA GEMINIANO, ERNESTO GEMINIANO, ASUNCION GEMINIANO, LARRY GEMINIANO, and MARLYN GEMINIANO,petitioners, vs.COURT OF APPEALS, DOMINADOR NICOLAS, and MARY A. NICOLAS,respondents.

This petition for review oncertiorarihas its origins in Civil Case No. 9214 of Branch 3 of the Municipal Trial Court in Cities (MTCC) in Dagupan City for unlawful detainer and damages.The petitioners ask the Court to set aside the decision of the Court of Appeals affirming the decision of Branch 40 of the Regional Trial Court (RTC) of Dagupan City, which, in turn, reversed the MTCC; ordered the petitioners to reimburse the private respondents the value of the house in question and other improvements; and allowed the latter to retain the premises until reimbursement was made.It appears that Lot No. 3765-B-1 containing an area of 314 square meters was originally owned by the petitioners' mother, Paulina Amado vda. de Geminiano.On a 12-square-meter portion of that lot stood the petitioners' unfinished bungalow, which the petitioners sold in November 1978 to the private respondents for the sum of P6,000.00, with an alleged promise to sell to the latter that portion of the lot occupied by the house.Subsequently, the petitioners' mother executed a contract of lease over a 126 square-meter portion of the lot, including that portion on which the house stood, in favor of the private respondents for P40.00 per month for a period of seven years commencing on 15 November 1978.[1]The private respondents then introduced additional improvements and registered the house in their names.After the expiration of the lease contract in November 1985, however, the petitioners' mother refused to accept the monthly rentals.It turned out that the lot in question was the subject of a suit, which resulted in its acquisition by one Maria Lee in 1972.In 1982, Lee sold the lot to Lily Salcedo, who in turn sold it in 1984 to the spouses Agustin and Ester Dionisio.On 14 February 1992, the Dionisio spouses executed a Deed of Quitclaim over the said property in favor of the petitioners.[2]As such, the lot was registered in the latter's names.[3]On 9 February 1993, the petitioners sent,viaregistered mail, a letter addressed to private respondent Mary Nicolas demanding that she vacate the premises and pay the rentals in arrears within twenty days from notice.[4]Upon failure of the private respondents to heed the demand, the petitioners filed with the MTCC of Dagupan City a complaint for unlawful detainer and damages.During the pre-trial conference, the parties agreed to confine the issues to:(1) whether there was an implied renewal of the lease which expired in November 1985; (2) whether the lessees were builders in good faith and entitled to reimbursement of the value of the house and improvements; and (3) the value of the house.The parties then submitted their respective position papers and the case was heard under the Rule on Summary Procedure.On the first issue, the court held that since the petitioners' mother was no longer the owner of the lot in question at the time the lease contract was executed in 1978, in view of its acquisition by Maria Lee as early as 1972, there was no lease to speak of, much less, a renewal thereof.And even if the lease legally existed, its implied renewal was not for the period stipulated in the original contract, but only on a month-to-month basis pursuant to Article 1687 of the Civil Code.The refusal of the petitioners' mother to accept the rentals starting January 1986 was then a clear indication of her desire to terminate the monthly lease.As regards the petitioners' alleged failed promise to sell to the private respondents the lot occupied by the house, the court held that such should be litigated in a proper case before the proper forum, not an ejectment case where the only issue was physical possession of the property.The court resolved the second issue in the negative, holding that Articles 448 and 546 of the Civil Code, which allow possessors in good faith to recover the value of improvements and retain the premises until reimbursed, did not apply to lessees like the private respondents, because the latter knew that their occupation of the premises would continue only during the life of the lease.Besides, the rights of the private respondents were specifically governed by Article 1678, which allows reimbursement of up to one-half of the value of the useful improvements, or removal of the improvements should the lessor refuse to reimburse.On the third issue, the court deemed as conclusive the private respondents' allegation that the value of the house and improvements was P180,000.00, there being no controverting evidence presented.The trial court thus ordered the private respondents to vacate the premises, pay the petitioners P40.00 a month as reasonable compensation for their stay thereon from the filing of the complaint on 14 April 1993 until they vacated, and to pay the sum of P1,000.00 as attorney's fees, plus costs.[5]On appeal by the private respondents, the RTC of Dagupan City reversed the trial court's decision and rendered a new judgment:(1) ordering the petitioners to reimburse the private respondents for the value of the house and improvements in the amount of P180,000.00 and to pay the latter P10,000.00 as attorney's fees and P2,000.00 as litigation expenses; and (2) allowing the private respondents to remain in possession of the premises until they were fully reimbursed for the value of the house.[6]It ruled that since the private respondents were assured by the petitioners that the lot they leased would eventually be sold to them, they could be considered builders in good faith, and as such, were entitled to reimbursement of the value of the house and improvements with the right of retention until reimbursement had been made.On appeal, this time by the petitioners, the Court of Appeals affirmed the decision of the RTC[7]and denied[8]the petitioners' motion for reconsideration.Hence, the present petition.The Court is confronted with the issue of which provision of law governs the case at bench:Article 448 or Article 1678 of the Civil Code?The said articles read as follows:Art. 448.The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees.In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity.The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.xxxxxxxxxArt. 1678.If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time.Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby.He shall not, however, cause any more impairment upon the property leased than is necessary.With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished.The crux of the said issue then is whether the private respondents are builders in good faith or mere lessees.The private respondents claim they are builders in good faith, hence, Article 448 of the Civil Code should apply.They rely on the lack of title of the petitioners' mother at the time of the execution of the contract of lease, as well as the alleged assurance made by the petitioners that the lot on which the house stood would be sold to them.It has been said that while the right to let property is an incident of title and possession, a person may be a lessor and occupy the position of a landlord to the tenant although he is not the owner of the premises let.[9]After all, ownership of the property is not being transferred,[10]only the temporary use and enjoyment thereof.[11]In this case, both parties admit that the land in question was originally owned by the petitioners' mother.The land was allegedly acquired later by one Maria Lee by virtue of an extrajudicial foreclosure of mortgage.Lee, however, never sought a writ of possession in order that she gain possession of the property in question.[12]The petitioners' mother therefore remained in possession of the lot.It is undisputed that the private respondents came into possession of a 126 square-meter portion of the said lot by virtue of a contract of lease executed by the petitioners' mother in their favor.The juridical relation between the petitioners' mother as lessor, and the private respondents as lessees, is therefore well-established, and carries with it a recognition of the lessor's title.[13]The private respondents, as lessees who had undisturbed possession for the entire term under the lease, are then estopped to deny their landlord's title, or to assert a better title not only in themselves, but also in some third person while they remain in possession of the leased premises and until they surrender possession to the landlord.[14]This estoppel applies even though the lessor had no title at the time the relation of lessor and lessee was created,[15]and may be asserted not only by the original lessor, but also by those who succeed to his title.[16]Being mere lessees, the private respondents knew that their occupation of the premises would continue only for the life of the lease.Plainly, they cannot be considered as possessors nor builders in good faith.[17]In a plethora of cases,[18]this Court has held that Article 448 of the Civil Code, in relation to Article 546 of the same Code, which allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith,i.e., one who builds on land with the belief that he is the owner thereof.It does not apply where one's only interest is that of a lessee under a rental contract; otherwise, it would always be in the power of the tenant to "improve" his landlord out of his property.Anent the alleged promise of the petitioners to sell the lot occupied by the private respondents' house, the same was not substantiated by convincing evidence.Neither the deed of sale over the house nor the contract of lease contained an option in favor of the respondent spouses to purchase the said lot.And even if the petitioners indeed promised to sell, it would not make the private respondents possessors or builders in good faith so as to be covered by the provisions of Article 448 of the Civil Code.The latter cannot raise the mere expectancy of ownership of the aforementioned lot because the alleged promise to sell was not fulfilled nor its existence even proven.The first thing that the private respondents should have done was to reduce the alleged promise into writing, because under Article 1403 of the Civil Code, an agreement for the sale of real property or an interest therein is unenforceable, unless some note or memorandum thereof be produced.Not having taken any steps in order that the alleged promise to sell may be enforced, the private respondents cannot bank on that promise and profess any claim nor color of title over the lot in question.There is no need to apply by analogy the provisions of Article 448 on indemnity as was done inPecson vs. Court of Appeals,[19]because the situation sought to be avoided and which would justify the application of that provision, is not present in this case.Suffice it to say, "a state of forced co-ownership" would not be created between the petitioners and the private respondents.For, as correctly pointed out by the petitioners, the rights of the private respondents as lessees are governed by Article 1678 of the Civil Code which allows reimbursement to the extent of one-half of the value of the useful improvements.It must be stressed, however, that the right to indemnity under Article 1678 of the Civil Code arises only if the lessor opts to appropriate the improvements.Since the petitioners refused to exercise that option,[20]the private respondents cannot compel them to reimburse the one-half value of the house and improvements.Neither can they retain the premises until reimbursement is made.The private respondents' sole right then is to remove the improvements without causing any more impairment upon the property leased than is necessary.[21]WHEREFORE, judgment is hereby rendered GRANTING the instant petition; REVERSING and SETTING ASIDE the decision of the Court of Appeals of 27 January 1995 in CA-G.R. SP No. 34337; and REINSTATING the decision of Branch 3 of the Municipal Trial Court in Cities of Dagupan City in Civil Case No. 9214 entitled "Federico Geminiano, et al. vs. Dominador Nicolas, et al."Costs against the private respondents.SO ORDERED.

Kilario v. CAG.R. No. 134329. January 19, 2000

RespondentSilverioPada filed an ejectment case against sps. Kilario. The latteroccupies a portion of the intestate estate of Jacinto Pada, Grandfather ofSilverio. TheKilarios have been living therein since 1960 by sheer tolerance. When Jacinto Padadies, his heirs entered intoextrajudicialpartition of his estate in 1951. As a resultthereof, lot 5581 was allocated to Ananias andMarcianowho became co-owners of saidlot.Ananias died and his daughter succeeded in his right as co-owner. Eventually,Juanita sold her right in the co-ownership to Engr. Paderes. Mariaon the other hand,heir ofMarciano, sold her share to her cousin respondentSilverioPada. The latterdemanded sps. Kilario to vacate but the sps. refused.On June 1995, a complaint forejectment was filed against sps. Kilario. On July1995 a deed of donation in their favorwas executed by heirs of Amador Pada.ISSUE:Whether or not the partition was validTheextrajudicialpartition of the estate of Jacinto Pada among his heirs made in1951 is valid, albeit executed in an unregistered private document. No law requirespartition among heirs to be in writing andbe registeredin order to be valid. The object ofregistrationis to serve asconstructivenotice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities is not undermined when no creditors are involved. Without creditors to take into consideration, it is competent for the heirs of an estate to enter into an agreement for distribution thereof in a manner and upon a plan different from those provided by the rules from which, in the first place, nothing can be inferred that a writing or other formality is essential for the partition to be valid. The partition of inherited property need not be embodied in apublicdocument so as to be effective as regards the heirs that participated therein. Theextrajudicialpartition which the heirs of Jacinto Pada executed voluntarily and spontaneously in 1951 has produced a legal status. When they discussed and agreed on the division of the estate of Jacinto Pada, it is presumed that they did so in furtherance of their mutual interests. As such, their division is conclusive, unless and until it is shown that there were debts existing against the estate which had not been paid. No showing, however, has been made of any unpaid charges against the estate of Jacinto Pada. Thus, there is no reason why the heirs should not be bound by their voluntary acts.The belated act ofConcordia, Esperanza andAngelito, who are the heirs ofAmador Pada, of donating the subject property to petitioners after forty four (44) yearsof never havingdisputedthe validity of the 1951extrajudicialpartition that allocated the subject property toMarcianoand Ananias, produced no legal effect. The donation made by his heirs to petitioners of the subject property, thus, is void for they were not the owners thereof. At any rate it is too late in the day for the heirs of Amador Pada torepudiate the legal effects of the 1951extrajudicialpartition as prescription and lacheshave equally set in.Petitioners are estopped from impugning theextrajudicialpartitionexecuted by the heirs of Jacinto Pada after explicitly admitting in their Answer that theyhad been occupying the subject property since 1960 without ever paying any rental asthey only relied on the liberality and tolerance of the Pada family. Theiradmissionsareevidence of a high order and bind them insofar as the character of their possession ofthe subject property is concerned.