CASES IN PROPERTY BATCH 3 (DIGEST)

1) Felicidad Javier vs. Regino Veridiano and Reino Rosete G.R. No. L-48050. October 10, 1994 (237 SCRA 565)

Doctrine: A judgment in forcible entry or detainer case disposes of no other issue than possession and declares only who has the right of possession, but by no means constitutes a bar to an action for determination of who has the right or title of ownership.

Facts:

On January 1963, Javier filed a Miscellaneous Sales Application for Lot No. 1641, Ts 308 of Olongapo Townsite Subdivision in Olongapo City. On December 1970, Javier filed Civil Case no. 926 (CC 926) for forcible entry against Ben Babol for entering a portion of the southwestern part of Lot 1641, Ts 308. The case was dismissed since the court considered the portion outside Lot 1461. The case became final and executory on April 1973. Subsequently, Javier was granted Miscellaneous Sales Patent and an Original Certificate of Title was issued in her favor. Meanwhile, Babol who was the defendant in CC 926 had sold the portion he was occupying to Rosete. 4 years after the finality of CC 926, Javier instituted a Civil Case No. 2203-0 (CC 2203-0) for quieting of title and recovery of possession. Rosete moved to dismiss on the ground of res judicata. The CFI of Zambales dismissed the case.

Issue:

Whether res judicata is applicable in the case.

Held:

No. The following are the requisites of res judicata: a) there is final judgment or order; b) the court have jurisdiction over the subject matter; c) former judgment is a judgment on merits; and d) identity of parties, of subject matter, and of causes of action. The first three are present. There is identity of parties in the case. What is required is not absolute but substantial identity of parties. In the case, Rosete is a successor in interest of Babol by title. Nevertheless, there is no identity of cause of action. CC 926 is a complaint of forcible entry or accion interdictal where the issue is physical or material possession of real property. In this case, Javier merely claimed a better right or prior possession over the land without asserting title. CC 2203-0 is an action to recover a parcel of land or accion reivindicatori. In this case, Javier expressly alleged ownership (by virtue of the Original Certificate of Title issued) and specifically prayed that she be declared the rightful owner and be given possession of the disputed portion. A judgement in forcible entry or detainer case disposes of no other issue than possession and declares only who has the right of possession, but by no means constitutes a bar to an action for determination of who has the right or title of ownership.

2) Abejaron vs. Nabasa G.R. No. 84831, June 20, 2001 (359 SCRA 47)

Doctrine: For an action for reconveyance based on fraud to prosper, it is essential for the party seeking reconveyance to prove by clear and convincing evidence his title to the property and the fact of fraud.

Facts:

Petitioner Abejaron avers that he is the actual and lawful possessor and claimant of a 118-square meter portion of a 175-square meter residential lot in Silway, General Santos City. In 1945, petitioner Abejaron and his family started occupying the 118-square meter land. At that time, the land had not yet been surveyed. They fenced the area and built thereon a family home with nipa roofing and a small store. In 1949, petitioner improved their abode to become a two-storey house made of round wood and nipa roofing. Abejaron also introduced several improvements on the land including a store, 5 coconut trees on the property of controversy, and avocado and banana trees. All this time that the Abejarons introduced these improvements on the land in controversy, respondent Nabasa did not oppose or complain about the improvements. Knowing that the disputed land was public in character, petitioner declared only his house, and not the disputed land, for taxation purposes.

Petitioner stated that beginning 1955, respondent Nabasa resided on the remaining 57-square meter portion of Lot 1, Block 5, Psu-154953. Nabasa built his house about four (4) meters away from petitioner Abejaron’s house.

Before 1974, employees of the Bureau of Lands surveyed the area in controversy. Abejaron merely watched them do the survey and did not thereafter apply for title of the land on the belief that he could not secure title over it as it was government property. Without his (Abejaron) knowledge and consent, however, Nabasa “clandestinely, willfully, fraudulently, and unlawfully applied for and caused the titling in his name” of the entire Lot 1, Block 5, Psu-154953, including petitioner Abejaron’s 118-square meter portion. Petitioner imputes bad faith and fraud on the part of Nabasa because in applying for and causing the titling in his name of Lot 1, Block 5, Psu-154953, Nabasa represented himself to be the actual and lawful possessor of the entire Lot 1, Block 5, including petitioner Abejaron’s 118-square meter portion despite knowledge of Abejaron’s actual occupation and possession of said portion.

On September 24, 1974, Nabasa was issued Original Certificate of Title No. P-4140 pursuant to Free Patent No. (XI-4) 2877 covering Lot 1, Block 5, Psu-154953 including therein the lot occupied by the petitioner.

On March 12, 1982 an action for reconveyance with damages against respondent Nabasa before Branch 22, Regional Trial Court of General Santos City.

Issue:

Whether the allegation of fraud has been proven for the action for reconveyance to prosper.

Held:

No. An action for reconveyance of a property is the sole remedy of a landowner whose property has been wrongfully or erroneously registered in another’s name after one year from the date of the decree so long as the property has not passed to an innocent purchaser for value. The action does not seek to reopen the registration proceeding and set aside the decree of registration but only purports to show that the person who secured the registration of the property in controversy is not the real owner thereof. Fraud is a ground for reconveyance. For an action for reconveyance based on fraud to prosper, it is essential for the party seeking reconveyance to prove by clear and convincing evidence his title to the property and the fact of fraud. Such was not performed by the petitioner.

Abejaron’s 30-year period of possession and occupation required by the Public Land Act, as amended by R.A. 1942 ran from 1945 to 1975, prior to the effectivity of P.D. No. 1073 in 1977, the requirement of said P.D. that occupation and possession should have started on June 12, 1945 or earlier, does not apply to him. Petitioner claims that he started occupying the disputed land in 1945. At that time, he built a nipa house, a small store, and a fence made of wood to delineate his area. This nipa house was improved in 1949 into a two-storey house. The small store was also made bigger in 1950. The wooden fence was also changed to a fence made of hollow blocks. The two-storey house, bigger store, and hollow-block fence all stand to this day. In 1951, petitioner planted coconut trees near his house. While the petitioner has shown continued existence of these improvements on the disputed land, they were introduced later than January 24, 1947. He has failed to establish the portion of the disputed land that his original nipa house, small store and wooden fence actually occupied as of January 24, 1947. In the absence of this proof, we cannot determine the land he actually possessed and occupied for thirty years which he may acquire under Sec. 48(b) of the Public Land Act. Worthy of notice is the fact that the disputed land was surveyed, subdivided into and identified by lots only in the 1970’s. Therefore, prior to the survey, it would be difficult to determine the metes and bounds of the land petitioner claims to have occupied since 1947 in the absence of specific and incontrovertible proof.

Also, as admitted by the petitioner, he has never declared the disputed land for taxation purposes. While tax receipts and tax declarations are not incontrovertible evidence of ownership, they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property or supported by other effective proof. Even the tax declarations and receipts covering his house do not bolster his case as the earliest of these was dated 1950.

Petitioner’s evidence does not constitute the “well-nigh incontrovertible” evidence necessary to acquire title through possession and occupation of the disputed land at least since January 24, 1947 as required by Sec. 48(b) of the Public Land Act, as amended by R.A. 1942. The basic presumption is that lands of whatever classification belong to the State and evidence of a land grant must be “well-nigh incontrovertible.” As petitioner Abejaron has not adduced any evidence of title to the land in controversy, whether by judicial confirmation of title, or homestead, sale, or free patent, he cannot maintain an action for reconveyance.

3) Garcia vs. Court of Appeals G.R. No. 133140, August 10, 1999 (312 SCRA 180)

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. Garcia’s 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 Magpayo’s 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 PBCom’s 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. Magpayo’s 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 Garcia’s 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 vendor’s 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 Garcia’s possession is in a concept of an owner.

Held:

No. Garcia’s 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 PBCom’s 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, petitioner’s subsequent claim of ownership as successor to his mother’s 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 petitioner’s 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.

4) Bachrach Motors v. Talisay-Silay Milling [G.R. No. 35223. September 17, 1931.]

Facts:

On 22 December 1923, the Talisay-Silay Milling Co., Inc., was indebted to the PNB. To secure the payment of its debt, it succeeded in inducing its planters, among whom was Mariano Lacson Ledesma, to mortgage their land to the bank. And in order to compensate those planters for the risk they were running with their property under that mortgage, the aforesaid central, by a resolution passed on the same date, and amended on 23 March 1928, undertook to credit the owners of the plantation thus mortgaged every year with a sum equal to 2% of the debt secured according to the yearly balance, the payment of the bonus being made at once, or in part from time to time, as soon as the central became free of its obligations to the bank, and of those contracted by virtue of the contract of supervision, and had funds which might be so used, or as soon as it obtained from said bank authority to make such payment.

<It seems Mariano Lacson Ledesma is indebted from Bachrach Motor; the circumstance of which is not found in the case facts.>

Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc., for the delivery of the amount of P13,850 or promissory notes or other instruments of credit for that sum payable on 30 June 1930, as bonus in favor of Mariano Lacson Ledesma. The complaint further prays that the sugar central be ordered to render an accounting of the amounts it owes Mariano Lacson Ledesma by way of bonus, dividends, or otherwise, and to pay Bachrach Motors a sum sufficient to satisfy the judgment mentioned in the complaint, and that the sale made by said Mariano Lacson Ledesma be declared null and void. The PNB filed a third party claim alleging a preferential right to receive any amount which Mariano Lacson Ledesma might be entitled from Talisay-Silay Milling as bonus. Talisay-Silay answered the complaint that Mariano Lacson Ledesma’s credit (P7,500) belonged to Cesar Ledesma because he had purchase it. Cesar Ledesma claimed to be an owner by purchase in good faith. At the trial all the parties agreed to recognize and respect the sale made in favor of Cesar Ledesma of the P7,500 part of the credit in question, for which reason the trial court dismissed the complaint and cross-complaint against Cesar Ledesma authorizing the central to deliver to him the sum of P7,500. And upon conclusion of the hearing, the court held that the Bachrach Motor Co., Inc., had a preferred right to receive the amount of P11,076.02 which was Mariano Lacson Ledesma’s bonus, and it ordered the central to deliver said sum to Bachrach Motors. PNB appealed.

The Supreme Court affirmed the judgment appealed from, as it found no merit in the appeal;, without express finding as to costs.

1. Civil Fruits under Article 355 of the Civil Code

Article 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings; second, the proceeds from leases of lands; and, third, the income from perpetual or life annuities, or other similar sources of revenue. According to the context of the law, the phrase “u otras analogas” refers only to rents or income, for the adjectives “otras” and “analogas” agree with the noun “rentas,” as do also the other adjectives “perpetuas” and “vitalicias.” The “civil fruits” the Civil Code understands one of three and only three things, to wit: the rent of a building, the rent of land, and certain kinds of income.

2. Bonus not a civil fruit; not an income of the land

The amount of the bonus, according to the resolution of the central granting it, is not based upon the value, importance or any other circumstance of the mortgaged property, but upon the total value of the debt thereby secured, according to the annual balance, which is something quite distinct from and independent of the property referred to. As the bonus is not obtained from the land, it is not civil fruits of that land. It is neither rent of buildings, proceeds from lease of lands, or income under Article 355 of the Civil Code.