Chavez v. Pea and Amari

Chavez v. Pea and Amari

Fact:In 1973, the Comissioner on Public Highways entered into a contract to reclaim areas of Manila Bay with the Construction and Development Corportion of the Philippines (CDCP).

PEA (Public Estates Authority) was created by President Marcos under P.D. 1084, tasked with developing and leasing reclaimed lands. These lands were transferred to the care of PEA under P.D. 1085 as part of the Manila Cavite Road and Reclamation Project (MCRRP). CDCP and PEA entered into an agreement that all future projects under the MCRRP would be funded and owned by PEA.

By 1988, President Aquino issued Special Patent No. 3517 transferring lands to PEA. It was followed by the transfer of three Titles (7309, 7311 and 7312) by the Register of Deeds of Paranaque to PEA covering the three reclaimed islands known as the FREEDOM ISLANDS.

Subsquently, PEA entered into a joint venture agreement (JVA) with AMARI, a Thai-Philippine corporation to develop the Freedom Islands. Along with another 250 hectares, PEA and AMARI entered the JVA which would later transfer said lands to AMARI. This caused a stir especially when Sen. Maceda assailed the agreement, claiming that such lands were part of public domain (famously known as the “mother of all scams”).

Peitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ of preliminary injunction and a TRO against the sale of reclaimed lands by PEA to AMARI and from implementing the JVA. Following these events, under President Estrada’s admin, PEA and AMARI entered into an Amended JVA and Mr. Chaves claim that the contract is null and void.

Issue:w/n: the transfer to AMARI lands reclaimed or to be reclaimed as part of the stipulations in the (Amended) JVA between AMARI and PEA violate Sec. 3 Art. XII of the 1987 Constitution

w/n: the court is the proper forum for raising the issue of whether the amended joint venture agreement is grossly disadvantageous to the government.

Held:On the issue of Amended JVA as violating the constitution:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain.

PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Chavez vs. NHA

Francisco I. Chavez vs. National Housing AuthorityG.R. No 164527. August 15, 2007.

Velasco, Jr., J.

Doctrine: There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.

Facts: Petitioner Francisco Chavez in his capacity as taxpayer seeks to declare null and void the Joint Venture Agreement (JVA) between the NHA and R-II Builder’s Inc (RBI) for being unconstitutional and invalid, and to enjoin respondents — particularly respondent NHA– from implementing and/or enforcing the said project and other agreements related thereto. On March 1, 1988, then President Corazon C. Aquino issued Memorandum Order No. 161 (MO 161) approving and directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste Management Plan. Specifically, respondent NHA was ordered to “conduct feasibility studies and develop low-cost housing projects at the dumpsite and absorb scavengers in NHA resettlement/low-cost housing projects.”

Pursuant to MO 161-A, NHA prepared the feasibility studies which resulted in the formulation of the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 or the Smokey Mountain Development and Reclamation Project (SMDRP). SMDRP aimed to convert the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across R-10, adjacent to the Smokey Mountain as the enabling component of the project. Once finalized, the Plan was submitted to President Aquino for her approval.

On January 17, 1992, President Aquino proclaimed MO 415, approving and directing the implementation of the SMDRP through a private sector joint venture. Said MO stipulated that the land area covered by the Smokey Mountain dumpsite is conveyed to the NHA as well as the area to be reclaimed across R-10. In the same MO 415, President Aquino created an Executive Committee (EXECOM) to oversee the implementation of the Plan and an inter-agency technical committee (TECHCOM) was created composed of the technical representatives of the EXECOM. Based on the evaluation of the pre-qualification documents, the EXECOM declared the New San Jose Builders, Inc. and RBI as top two contractors. Thereafter, TECHCOM submitted its recommendation to the EXECOM to approve the RBI proposal which garnered the highest score.

On October 7, 1992, President Ramos authorized NHA to enter into a JVA with RBI. Afterwards, President Ramos issued Proclamation No. 465 increasing the proposed area for reclamation across R-10 from 40 hectares to 79 hectares. On September 1, 1994, pursuant to Proclamation No. 39, the DENR issued Special Patent No. 3591 conveying in favor of NHA an

area of 211,975 square meters covering the Smokey Mountain Dumpsite. The land reclamation was completed in August 1996. Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special Patent No. 3598 conveying in favor of NHA an additional 390,000 square meter area. After some time, the JVA was terminated. RBI demanded the payment of just compensation for all accomplishments and costs incurred in developing the SMDRP plus a reasonable rate of return. In a Memorandum of Agreement (MOA) executed by NHA and RBI, both parties agreed to terminate the JVA and other subsequent agreements, which stipulated, among others, that unpaid balance may be paid in cash, bonds or through the conveyance of properties or any combination thereof.

Issues:1. Whether RBI can acquire reclaimed foreshore and submerged land areas because they are allegedly inalienable lands of the public domain2. Whether RBI can acquire reclaimed lands when there was no declaration that said lands are no longer needed for public use.3. Whether RBI, being a private corporation, is barred from the Constitution to acquire lands of the public domain.

Held:1. Yes. The reclaimed lands across R-10 were classified alienable and disposable lands of public domain of the State. First, there were three presidential proclamations classifying the reclaimed lands across R-10 as alienable or disposable hence open to disposition or concession. These were MO 415 issued by President Aquino, Proclamation No. 39 and Proclamation No. 465 both issued by President Ramos. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR classified the reclaimed areas as alienable and disposable.

Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit declarations that the lands to be reclaimed are classified as alienable and disposable. We find however that such conclusion is derived and implicit from the authority given to the NHA to transfer the reclaimed lands to qualified beneficiaries. In line with the ruling in Chavez v. PEA, the court held that MO 415 and Proclamations Nos. 39 and 465 cumulatively and jointly taken together with Special Patent Nos. 3591, 3592, and 3598 more than satisfy the requirement in PEA that “[t]here must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.”

2. Yes. Even if it is conceded that there was no explicit declaration that the lands are no longer needed for public use or public service, there was however an implicit executive declaration that the reclaimed areas R-10 are not necessary anymore for public use or public service. President

Aquino through MO 415 conveyed the same to the NHA partly for housing project and related commercial/industrial development intended for disposition to and enjoyment of certain beneficiaries and not the public in general and partly as enabling component to finance the project. Also, President Ramos, in issuing Proclamation No. 39, declared, though indirectly, that the reclaimed lands of the Smokey Mountain project are no longer required for public use or service. In addition, President Ramos issued Proclamation No. 465 increasing the area to be reclaimed from forty (40) hectares to seventy-nine (79) hectares, elucidating that said lands are undoubtedly set aside for the beneficiaries of SMDRP and not the public. MO 415 and Proclamations Nos. 39 and 465 are declarations that proclaimed the non-use of the reclaimed areas for public use or service as the SMDRP cannot be successfully implemented without the withdrawal of said lands from public use or service.

3. Yes. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said proclamations were converted to alienable and disposable lands of public domain. When the titles to the reclaimed lands were transferred to the NHA, said alienable and disposable lands of public domain were automatically classified as lands of the private domain or patrimonial properties of the State because the NHA is an agency NOT tasked to dispose of alienable or disposable lands of public domain. The only way it can transfer the reclaimed land in conjunction with its projects and to attain its goals is when it is automatically converted to patrimonial properties of the State. Being patrimonial or private properties of the State, then it has the power to sell the same to any qualified person—under the Constitution, Filipino citizens as private corporations, 60% of which is owned by Filipino citizens like RBI.

Manila International Airport Authority vs CA

GR No. 155650, July 20, 2006, 495 SCRA 591

Facts:

Manila International Airport Authority (MIAA) is the operator of the Ninoy International Airport located at Paranaque City. The Officers of Paranaque City sent notices to MIAA due to real estate tax delinquency. MIAA then settled some of the amount. When MIAA failed to settle the entire amount, the officers of Paranaque city threatened to levy and

subject to auction the land and buildings of MIAA, which they did. MIAA sought for a Temporary Restraining Order from the CA but failed to do so within the 60 days reglementary period, so the petition was dismissed. MIAA then sought for the TRO with the Supreme Court a day before the public auction, MIAA was granted with the TRO but unfortunately the TRO was received by the Paranaque City officers 3 hours after the public auction.

MIAA claims that although the charter provides that the title of the land and building are with MIAA still the ownership is with the Republic of the Philippines. MIAA also contends that it is an instrumentality of the government and as such exempted from real estate tax. That the land and buildings of MIAA are of public dominion therefore cannot be subjected to levy and auction sale. On the other hand, the officers of Paranaque City claim that MIAA is a government owned and controlled corporation therefore not exempted to real estate tax.

Issues:

Whether or not MIAA is an instrumentality of the government and not a government owned and controlled corporation and as such exempted from tax.

Whether or not the land and buildings of MIAA are part of the public dominion and thus cannot be the subject of levy and auction sale.

Ruling:

Under the Local government code, government owned and controlled corporations are not exempted from real estate tax. MIAA is not a government owned and controlled corporation, for to become one MIAA should either be a stock or non stock corporation. MIAA is not a stock corporation for its capital is not divided into shares. It is not a non stock corporation since it has no members. MIAA is an instrumentality of the government vested with corporate powers and government functions.

Under the civil code, property may either be under public dominion or private ownership. Those under public dominion are owned by the State

and are utilized for public use, public service and for the development of national wealth. The ports included in the public dominion pertain either to seaports or airports. When properties under public dominion cease to be for public use and service, they form part of the patrimonial property of the State.

The court held that the land and buildings of MIAA are part of the public dominion. Since the airport is devoted for public use, for the domestic and international travel and transportation. Even if MIAA charge fees, this is for support of its operation and for regulation and does not change the character of the land and buildings of MIAA as part of the public dominion. As part of the public dominion the land and buildings of MIAA are outside the commerce of man. To subject them to levy and public auction is contrary to public policy. Unless the President issues a proclamation withdrawing the airport land and buildings from public use, these properties remain to be of public dominion and are inalienable. As long as the land and buildings are for public use the ownership is with the Republic of the Philippines.

Villanueva vs. Castañeda

G.R. No. L-61311 September 2l, 1987

 FACTS:

In the vicinity of the public market of San Fernando, Pampanga, there stands a strip of land occupied by vendor stalls forming a so-called talipapa.

These vendors conduct business in said area by virtue of a previous authorization (Resolution 218) granted to them by the municipal government.

A protest has been filed against Resolution 218 and the CFI decided that the land cannot be subject of private occupancy, it being public in nature, thus beyond the commerce of man.

However this decision has not been enforced and petitioners continued to occupy the land while paying daily fees to the municipal government.

A subsequent resolution (Resolution 29) which declared the subject area as a public plaza impliedly revoked Resolution No. 218.

Later, the Association of Concerned Citizens and Consumers of San Fernando filed a petition for the immediate implementation of Resolution No. 29, to restore the subject property “to its original and customary use as a public plaza.

Acting on said petition,respondent Vicente A. Macalino, as officer-in-charge of the office of the mayor of San Fernando, issued a resolution to demolish the stalls in the subject place.

Petitioners filed a petition for prohibition with the CFI of Pampanga which was denied.

Petitioner’s moved for reconsideration but was denied.

Hence, the petition for certiorari to the SC.

ISSUE:

1. Whether or not the resolution in 1961 conferred contractual rights to the stall owners making them lawful lessees of the land

2. Whether or not the said area are dedicated for public use

HELD:1. There was no dispute that the land occupied by the petitioners was previously used as a town plaza and being such it is considered as beyond the commerce of man and cannot be the subject of lease or any contractual undertaking. The petitioners had no right in the first place to occupy the disputed premises.

2. The proliferation of the stalls caused several repercussions to the area such as

> the makeshift and flammable materials has made the area susceptible of fire endangering public safety> said stalls have obstructed the way going to the real public market> the filthy conditions of the stalls has aggravated health and sanitation problems> the area has contributed to the obstruction of the flow of traffic

3. Assuming that there was a valid contract (and that the land is not for public use), the petitioners must yield to the police power exercised by the municipal government. It is a well settled rule that any valid contract may be cancelled if it causes danger to the public.

Dacanay v. Asistio (GR 93654, 6 May 1992)

Dacanay v. Asistio[G.R. No. 93654. May 6, 1992.]

En Banc, Grino-Aquino (J): 13 concur, 1 took no part

Facts:

On 5 January 1979, MMC Ordinance 79-02 was enacted by the Metropolitan Manila Commission, designating certain city and municipal streets, roads and open spaces as sites for flea markets. Pursuant thereto, the Caloocan City mayor opened up 7 flea markets in that city. One of those streets was the "Heroes del '96" where the Francisco Dacanay lives. Upon application of vendors Rodolfo Teope, Mila Pastrana, Carmen Barbosa, Merle Castillo, Bienvenido Menes, Nancy Bugarin, Jose Manuel, Crisaldo Paguirigan, Alejandro Castron, Ruben Araneta, Juanita and Rafael Malibaran, and others, the city mayor and city engineer, issued them licenses to conduct vending activities on said street. In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition of the market stalls on Heroes del '96, V. Gozon and Gonzales streets.

To stop Mayor Martinez' efforts to clear the city streets, Teope, Pastrana and other stallowners filed an action for prohibition against the City of Caloocan, the OIC City Mayor and the City Engineer and/or their deputies before the RTC Caloocan City (Branch 122, Civil Case C-12921), praying the court to issue a writ of preliminary injunction ordering these city officials to discontinue the demolition of their stalls during the pendency of the action. The court issued the writ prayed for. However, on 20 December 1987, it dismissed the petition and lifted the writ of preliminary injunction which it had earlier issued. However, shortly after the decision came out, the city administration in Caloocan City changed hands. City Mayor Macario Asistio, Jr. did not pursue the latter's policy of clearing and cleaning up the city streets. Invoking the trial court’s decision, Francisco Dacanay wrote a letter to Mayor Asistio calling his attention to the illegally-

constructed stalls on Heroes del ’96 street and asked for demolition on 7 March 1988, wrote a follow-up letter to the mayor and the city engineer on 7 April 1988, and without receiving any response, sought the intervention of President Aquino through a letter. These letter was referred to the city mayor for appropriate action.

On 3 April 1989, Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-89-0146) in the Office of the Ombudsman. After conducting a preliminary investigation, the Ombudsman rendered a final evaluation and report on 28 August 1989, finding that the Mayor’s and the City Engineer's inaction is purely motivated by their perceived moral and social responsibility toward their constituents, but "the fact remains that there is an omission of an act which ought to be performed, in clear violation of Sections 3(e) and (f) of RA 3019." The Ombudsman recommended the filing of the corresponding information in court.

As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of the city officials, and in clear violation of the decision in Civil Case C-12921, Dacanay filed a petition for mandamus on 19 June 1990, praying that the city officials be ordered to enforce the final decision in Civil Case C-12921 which upheld the city mayor's authority to order the demolition of market stalls on V. Gozon, Gonzales and Heroes del '96 Streets and to enforce PD 772 and other pertinent laws.

The Supreme Court established that Dacanay and the general public have a legal right to the relief demanded and that the city officials have the corresponding duty, arising from public office, to clear the city streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47 SCRA 183; City of Manila vs. Garcia et al., 19 SCRA 413 citing Unson vs. Lacson, 100 Phil. 695), and thus ordered the City Mayor and City Engineer of Caloocan City or their successors in office to immediately enforce and implement the decision in Civil Case C-1292 declaring that Heroes del '96, V. Gozon, and Gonzales Streets are public streets for public use, and they are ordered to remove or demolish, or cause to be removed or demolished, the market stalls occupying said city streets with utmost dispatch within 30 days from notice of the decision; the decision being immediately executory.

1. Jurisprudence applicable to property of public dominionThe streets, being of public dominion must be outside of the commerce of man. Considering the nature of the subject premises, the following jurisprudence co/principles are applicable on the matter: (1) They cannot be alienated or leased or otherwise be the subject matter of contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602); (2) They cannot be acquired

by prescription against the state (Insular Government vs. Aldecoa, 19 Phil. 505). Even municipalities can not acquire them for use as communal lands against the state (City of Manila vs. Insular Government, 10 Phil. 327); (3) They are not subject to attachment and execution (Tan Toco vs. Municipal Council of Iloilo, 49 Phil. 52); (4) They cannot be burdened by any voluntary easement (2-II Colin & Captain 520; Tolentino, Civil Code of the Phil. Vol. II, 1983 Ed. pp. 29-30).

2. Context of the ordinance of the Metropolitan Manila Commission as to the establishment of flea markets on municipal streets, roads and open spacesOrdinance 2, s. 1979 of the Metropolitan Manila Commission is an ordinance “authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions, subject to the approval of the Metropolitan Manila Commission, and for other purposes.” Section 2 of said ordinance provides that “the streets, roads and open spaces to be used as sites for flea markets (tiangge) or vending areas; the design, measurement or specification of the structures, equipment and apparatuses to be used or put up: the allowable distances: the days and time allowed for the conduct of the businesses and/or activities herein authorized; the rates or fees or charges to be imposed, levied and collected; the kinds of merchandise, goods and commodities sold and services rendered: and other matters and activities related to the establishment, maintenance and management and operation of flea markets and vending areas, shall be determined and prescribed by the mayors of the cities and municipalities in the Metropolitan Manila where the same are located, subject to the approval of the Metropolitan Manila Commission and consistent with the guidelines hereby prescribed.” Section 6(m) of said ordinance provides that “in the establishment operation, maintenance and management of flea markets and vending areas, the following guidelines, among others, shall be observed: xxx (m) that the permittee shall remove the equipment, facilities and other appurtenances used by him in the conduct of his business after the close or termination of business hours.”

3. Related case, Municipality of Cavite; Return of rentIn the case of Municipality of Cavite vs. Rojas, it was held that properties for public use may not be leased to private individuals. Such a lease is null and void for the reason that a municipal council cannot withdraw part of the plaza from public use. If possession has already been given, the lessee must restore possession by vacating it and the municipality must thereupon restore to him any sums it may have collected as rent.

4. Relate case, City of Manila v. Garcia; Ordinance legalizing the occupancy of squatters of public land is null and voidIn the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, it was held that “tThe property being a public one, the Manila Mayors did not have the authority to give permits, written or oral, to the squatters, and that the permits granted are therefore considered null and void. As reiterated in the case of Baguio Citizens Action Inc. vs. The City Council. 121 SCRA 368, “an ordinance legalizing the occupancy by squatters of public land is null and void.”

5. Occupation of private individuals of public places devoted for public use a nuisanceThe occupation and use of private individuals of sidewalks and other public places devoted for public use constitute both public and private nuisances and nuisance per se, and this applies to even case involving the use or lease of public places under permits and licenses issued by competent authority, upon the theory that such holders could not take advantage of their unlawful permits and license and claim that the land in question is a part of a public street or a public place devoted to public use, hence, beyond the commerce of man. (Padilla. Civil Code Annotated, Vol. II, p. 59, 6th Ed., citing Umali vs. Aquino, IC. A. Rep. 339.).

6. Authority of the city mayor and the city engineer to order the demolition of illegal structures"The authority of the Municipality to demolish the shanties is mandated by PD 772, and Section 1 of Letter of Instruction 19 ordering certain public officials, one of whom is the Municipal Mayor to remove all illegal constructions including buildings on and along esteros and river banks, those along railroad tracks and those built without permits on public or private property (Zansibarian Residents Association vs. Mun. of Makati, 135 SCRA 235). The City Engineer is also among those required to comply with said Letter of Instruction. Further, Section 185, paragraph 4 of BP 337(Local Government Code) provides that the City Engineer shall (c) Prevent the encroachment of private buildings and fences on the streets and public places, (j) nspect and supervise the construction, repair, removal and safety of private buildings, (k) With the previous approval of the City Mayor in each case, order the removal of materials employed in the construction or repair of any building or structures made in violation of law or ordinance, and cause buildings and structures dangerous to the public to made secure or torn down, among others. Likewise, the Charter of the City of Caloocan, RA 5502, Article VII, Section 27, paragraph g, 1 and m, grants the City Engineer similar powers.

7. Public street cannot be made subject to a leaseA public street is property for public use hence outside the commerce of

man (Arts. 420, 424. Civil Code). Being outside the commerce of man, it may not be the subject of lease or other contract (Villanueva et al. vs. Castañeda and Macalino, 15 SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602; Espiritu vs. Municipal Council of Pozorrubio, 102 Phil. 869, and Muyot vs. De la Fuente, 48 O.G. 4860). The disputed areas from which the market stalls are sought to be evicted are public streets, as found by the trial court in Civil Case C-12921.

8. Lease or licenses null and void for being contrary to lawAs the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and void for being contrary to law. The right of the public to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace. safety, good order and general welfare, the respondent city officials are under legal obligation to protect. The Executive Order issued by the Acting Mayor authorizing the use of Heroes del '96 Street as a vending area for stallholders who were granted licenses by the city government contravenes the general law that reserves city streets and roads for public use. The Executive Order may not infringe upon the vested right of the public to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for vehicles and pedestrians.

CITY OF MANILA VS. IAC

FACTS:

Vivencio Sto. Domingo, Sr. deceased husband of plaintiff Irene Sto. Domingo and father of the litigating minors, died on June 4, 1971 and buried on June 6, 1971 in Lot. No. 159, Block No. 194 of the North Cemetery which lot was leased by the city to irene Sto. Domingo for the period from June 6, 1971 to June 6, 2021. Full payment of the rental therefor of P50.00 is evidenced by a receipt which appears to be regular on its face. The burial record for Block No. 149 of Manila North Cemetery in which subject Lot. 159 is situated does not reflect the term of duration of the lease thereover in favor of the St. Domingo.

On January 25, 1978, the subject Lot No. 159 of Block 194 in which the mortal remains of the late Vivencio Sto. Domingo were laid to rest was made ready for exhumation in accordance with Administrative Order No. 5, Series of 1975, dated March 6, 1975. On the basis of such certification, the authorities of the North Cemetery then headed by defendant Joseph Helmuth authorized the exhumation and removal from subject burial lot the remains of the late Vivencio Sto. Domingo., placed the bones and skull in a bag or sack and kept the same in the depository or bodega of the cemetery. Subsequently, the same lot in question was rented out to another lessee so when the Sto. Domingos went to said lot on All Souls Day they were shocked and dismayed that the resting place of their dear departed did not anymore bear the stone marker which they lovingly placed on the tomb. Irene Sto. Domingo was told about the lease of the lot to another lessee and that she can look for the bones of her deceased husband in the warehouse of the cemetery where the exhumed remains from the different burial lots of the North Cemetery are being kept until they are retrieved by interested parties. What she was advised to do was simply unacceptable; hence, the bereaved widow came to court for relief even before she could formally present her claims and demands to the city government and to the other defendants named in the present complaint.

The RTC rendered its Decision in favor of the complainants. The decision was appealed to the CA which rendered a decision modifying the decision appealed from.

Petitioners alleged in their petition that the North Cemetery is exclusively devoted for public use or purpose as stated in Sec. 316 of the Compilation of the Ordinances of the City of Manila. They conclude that since the City is a political subdivision in the performance of its governmental function, it is immune from tort liability which may be caused by its public officers and subordinate employees. Further Section 4, Article I of the Revised Charter of Manila exempts the city from liability for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provision of its charter or any other laws, or ordinance, or from negligence of said Mayor, Municipal Board or any other officers while enforcing or attempting to enforce said provisions. They allege that the Revised Charter of Manila being a special law cannot be defeated by the Human Relations provisions of the Civil Code being a general law.

Private respondents on the other hand maintain that the City of Manila entered into a contract of lease which involve the exercise of proprietary functions with private respondent Irene Sto. Domingo. The city and its officers therefore can be sued for any-violation of the contract of lease.

ISSUE: WON the operations and functions of a public cemetery are a governmental, or a corporate or proprietary function of the City of Manila.

HELD: Private respondents' are right.

Under Philippine laws, the City of Manila is a political body corporate and as such endowed with the faculties of municipal corporations to be exercised by and through its city government in conformity with law, and in its proper corporate name. It may sue and be sued, and contract and be contracted with. Its powers are twofold in character-public, governmental or political on the one hand, and corporate, private and proprietary on the other. Governmental powers are those exercised in administering the powers of the state and promoting the public welfare and they include the legislative, judicial, public and political. Municipal powers on the one hand are exercised for the special benefit and advantage of the community and include those which are ministerial, private and corporate. In McQuillin on Municipal Corporation, the rule is stated thus: "A municipal corporation proper has ... a public character as regards the state at large insofar as it is its agent in government, and private (so called) insofar as it is to promote local necessities and conveniences for its own community. In connection with the powers of a municipal corporation, it may acquire property in its public or governmental capacity, and private or proprietary capacity. The New Civil Code divides such properties into property for public use and patrimonial properties (Article 423), and further enumerates the properties for public use as provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provisions, cities or municipalities, all other property is patrimonial without prejudice to the provisions of special laws.

Thus in Torio v. Fontanilla, supra, the Court declared that with respect to proprietary functions the settled rule is that a municipal corporation can be held liable to third persons ex contractu or ex delicto.

The Court further stressed that Municipal corporations are subject to be sued upon contracts and in tort.... The rule of law is a general one, that the superior or employer must answer civilly for the negligence or want of skill of its agent or servant in the course or line of his employment, by which another who is free from contributory fault, is injured. Municipal corporations under the conditions herein stated, fall within tile operation of this rule of law, and are liable accordingly, to civil actions for damages when the requisite elements of liability co-exist. ...

The court added that while the following are corporate or proprietary in character, viz: municipal waterworks, slaughter houses, markets, stables, bathing establishments, wharves, ferries and fisheries. Maintenance of parks, golf courses, cemeteries and airports among others, are also recognized as municipal or city activities of a proprietary character. Under the foregoing considerations and in the absence of a special law, the North Cemetery is a patrimonial property of the City of Manila which was created by resolution of the Municipal Board of August 27, 1903 and January 7, 1904. The administration and government of the cemetery are under the City Health Officer, the order and police of the cemetery , the opening of graves, niches, or tombs, the exhuming of remains, and the purification of the same are under the charge and responsibility of the superintendent of the cemetery. The City of Manila furthermore prescribes the procedure and guidelines for the use and dispositions of burial lots and plots within the North Cemetery through Administrative Order No. 5, s. 1975. With the acts of dominion, there is, therefore no doubt that the North Cemetery is within the class of property which the City of Manila owns in its proprietary or private character. Furthermore, there is no dispute that the burial lot was leased in favor of the private respondents. Hence, obligations arising from contracts have the force of law between the contracting parties. Thus a lease contract executed by the lessor and lessee remains as the law between them. Therefore, a breach of contractual provision entitles the other party to damages even if no penalty for such breach is prescribed in the contract.

As regards the issue of the validity of the contract of lease of grave lot No. 159, Block No. 195 of the North Cemetery for 50 years beginning from June 6, 1971 to June 6, 2021 as clearly stated in the receipt duly signed by the deputy treasurer of the City of Manila and sealed by the city government, there is nothing in the record that justifies the reversal of the conclusion of both the trial court and the Intermediate Appellate Court to the effect that the receipt is in itself a contract of lease.

Under the doctrine of respondent superior, (Torio v. Fontanilla, supra), petitioner City of Manila is liable for the tortious act committed by its agents who failed to verify and check the duration of the contract of lease. The contention of the petitioner-city that the lease is covered by Administrative Order No. 5, series of 1975 dated March 6, 1975 of the City of Manila for five (5) years only beginning from June 6, 1971 is not meritorious for the said administrative order covers new leases. When subject lot was certified on January 25, 1978 as ready for exhumation, the lease contract for fifty (50) years was still in full force and effect.

The decision of the IAC is hereby AFFIRMED.

W.H. TIPTON, Chief of the Bureau of Lands and Administrator of the Estate of the San Lazaro Hospital,Plaintiff-Appellant, vs. ROMAN MARTINEZ Y ANDUEZA,Defendant-Appellee.

On the 30th day of October, 1899, Vicente Aguirre y Flores, as administrator of the San Lazaro Hospital, leased to the defendant in this case a tract of land belonging to the hospital. It was stipulated in the contract that the lease should run for a period of ten years from the 1st day of January, 1899. Aguirre, the administrator, was duly authorized to execute such contracts, but his power was general in terms and contained no provision specially authorizing him to make leases with respect to the hospital property for a period of ten years or any other specific term.chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff, as the present administrator of the hospital property, claims that the contract made by his predecessor, Aguirre, was null and void for want of power on his part to make such contract, basing his contention upon the provisions of article 1548 of the Civil Code. That article reads as follows:

The husband with respect to the property of his wife, the father and guardian with regard to that of his children or minor, and the administrator of property without a special power giving him such authority, can not execute a lease for a period exceeding six years.

This provision plainly shows that Aguirre could not, as administrator, have validly executed a lease of the land in question for a period of ten years in the absence of special authority to that effect. This, in our opinion, vitiated the contract. This defect, however, did not affect the contract in its entirety, but only in so far as it exceeded the six-year limit fixed by law as the maximum period for which an administrator can execute a lease without special power. The contract in question was perfectly valid in so far as it did not exceed that limit, it having been executed by the administrator, Aguirre, within the scope of the legal authority he had under his general power to lease. That general power carried with it, under the article above quoted, the authority to lease the property for a period not exceeding six years. There was no excess of authority and consequently no cause for nullification arising therefrom, as to the first six years of the lease. As to the last four, the contract was, however, void, the

administrator having acted beyond the scope of his powers.chanroblesvirtualawlibrary chanrobles virtual law library

The trial court construed article 1548 of the Civil Code as applying only to administrators of estates of deceased persons. This construction is manifestly erroneous. The provisions of that article are general and apply as well to administrators of property of living as of deceased persons.chanroblesvirtualawlibrary chanrobles virtual law library

It is contended, on the other hand, by the defendant, that article 1548 is not applicable to public lands such as the property in question, nor to public officials as was Vicente Aguirre, the administrator of the San Lazaro Hospital.chanroblesvirtualawlibrary chanrobles virtual law library

As to the first contention, it is not stated in defendant's brief in what sense the words "public lands" are used. It seems, however, that the defendant refers to lands of the public domain. He testified at the trial that the lands of the San Lazaro Hospital belonged to the Government of the United States. If such were the case his interpretation of these words would be erroneous. That property belongs to the public domain which is destined to public use or which belongs exclusively to the State without being devoted to common use or which is destined to some public service or to the development of the national resources and of mines until transferred to private persons. (Art. 339 of the Civil Code.) The land in question does not pertain to any of these classes. The best proof of it is that the defendant himself had been using it for his own personal and exclusive benefit. So that, assuming without deciding that the land in question belonged to the Government of the United States, it would be nevertheless private property under the provisions of articles 340 and 345 of the Civil Code, and as such unless provided for by special legislation, is subject to the provisions of those articles. The defendant has not called our attention to any special law providing a method different from that contained in the Civil Code for the leasing of the lands belonging to the San Lazaro Hospital, and we do not know of the existence of any such law.

As to public officials, the only reason given by defendant in support of his contention that article 1548 does not apply to them is that it would be impossible for the Government to make a lease for a period exceeding six years, because it has no legal capacity and must necessarily transact all its business through the medium of officials. This contention can not be sustained. It is a manifest error to say that the Government has no legal capacity or that is has no power to grant special authority to one of its officials for the leasing of Government property for a period exceeding six years, if deemed advisable. This is so apparent that it certainly requires no argument.

It is claimed, however, that Government officials do not act by virtue of any special power but under the law creating their respective offices, and that for this reason they are not affected by the provisions of article 1548, which refer to administrators whose acts may be governed by the limitations of a power of attorney. We think that this is a mere question of words. Power, according to text writers, means the authority granted by one person to another to do in his behalf the same thing which he would do himself in the premises. This is the sense in which the word power is used in that article and it refers to the private individual who administers property belonging to another as well as to the public official who administers patrimonial property or the private property belonging to the State. Such property, whether owned by the State or by a private citizen, is covered by the provisions of the Civil Code. In either case the administrator, in so far as he has the management of the property of another, is a mere agent whose acts must be governed by the limitations of the power which his principal may have conferred upon him. In neither case can he exceed these limitations, but must discharge his trust in accordance with his instructions. A public official is not, as such, exempt from the operation of this rule. He can not assume that he has the power to lease to others the patrimonial property belonging to the State for such time as he may see fit, say, for eighty or ninety years. He can not do so unless expressly authorized. Whether the administrator derives his powers from a legislative enactment, as in the case of a public official, or from the terms of a public instrument where private parties only are concerned, is immaterial. It is a mere question of form which does not affect the provision of the code above cited. What the law requires in order that the administrator may lease the property for a period exceeding six years is special power giving him such authority. The grant must be contained in a public document. (Art. 1280 of the Civil Code.) A public document may be either a public instrument or a legislative enactment, for legislative acts are also public documents under our code.chanroblesvirtualawlibrary chanrobles virtual law library

Furthermore it is very doubtful whether Aguirre was in fact a public official as the administrator of the San Lazaro estate. This question, however, was not raised in the court below, no evidence bearing on the subject having been introduced. We have merely assumed that he was such for the sake of argument.chanroblesvirtualawlibrary chanrobles virtual law library

It is further contended by the defendant that the complaint does not state a cause of action. This is not true. A mere perusal of the complaint will show the contrary. We hold that the facts therein set forth constitute a

sufficient cause of action.chanroblesvirtualawlibrary chanrobles virtual law library

It is also contended that there is no allegation with respect to the interest of the plaintiff in this action. Without passing upon the correctness of this allegation which refers to the legal capacity of the plaintiff, it may be said that as no question was raised as to this point in the court below it can not be urged on appeal.chanroblesvirtualawlibrary chanrobles virtual law library

The court below expressly found that the Government had collected rent for four years and held that it had thereby ratified the contract. This question was not discussed in the court below and, legally speaking, the court should not and could not have made any such finding. We hold that this was error on the part of the trial court.

The judgment of the court below is hereby modified so as to declare that the lease in question was valid only for six years from the 1st day of January, 1899, to the 31st of December, 1904, and void as to the last four years of the contract term - that is to say, the effects of its nullity should date from the 1st day of January, 1905. The defendant shall return the land in the form and manner provided for in the lease together with the proceeds derived from its possession since the last-mentioned date. The plaintiff will return to the defendant the rent received during the same period, provided the rent has in fact been paid to him, with legal interest thereon at the rate of 6 per cent per annum. No costs will be allowed to either party in either instance. After the expiration of twenty days let judgment be entered in accordance herewith and let the case be remanded to the court below for action in conformity herewith. So ordered.

Separate Opinionsc

JOHNSON, J., dissenting:chanrobles virtual law library

I can not conform with the doctrine contained in this decision.chanroblesvirtualawlibrary chanrobles virtual law library

Article 1548 of the Civil Code does not permit an administrator to make a contract such as was made in this case for a period exceeding six years. When the defendant here made a contract for more than six years it was void, and, being void, can not be valid in part. However, inasmuch as more

than six years have elapsed since the making of such contract and by virtue of this decision he may now be dispossessed, and for the purpose of arriving at a conclusion, I hereby conform with that part of the decision which in its effects gives the Government the right to dispossess the defendant of the lands in question.

Jacinto v. Director of Lands [G.R. No. 26374. December 31, 1926.] En Banc, Ostrand (J): 7 concur

Facts:

During the period from 1911 to 1913, sales certificates were issued by the Bureau of Lands to Frank W. Carpenter for more than 100 lots of the Tala and Piedad Friar Lands states located in Novaliches, Caloocan, Rizal including the lots 670, 690, 691, 695, 696, 697 698, 699, 700, 701, 950, 951, 952, 953, 954 955, 956, 957, and 1050. The total area of the land covered by the sales certificates being over 1,490 hectares and the purchase price amounting to about P56,600, of which amount Carpenter up to the year 1923, had paid in installments the sum of P16,272. Under a judgment rendered against Carpenter in the CFI of Manila (Civil Case 24607), execution was levied upon all of his right, title and interest in the lots purchased together with the improvements thereon, and on 16 November 1923, the sheriff of Rizal sold the property to Nicanor Jacinto. The sheriff’s sale was registered in the Bureau of Lands, assignments of the Bureau of Lands’ sales certificates were duly recorded, and certificates of assignment were issued and delivered to Nicanor Jacinto in September 1924.

On 31 March 1925, the Metropolitan Water District instituted proceedings in the CFI Rizal for the condemnation of certain parcels of land situated in the municipality of Caloocan for the construction of an earth dam and a first-class highway 3 kilometers long, in connection with the so-called Angat Water Works Project, and on the same date the CFI Rizal issued an order authorizing the Metropolitan Water District to take possession of said parcels of land upon deposit with the provincial treasurer of the sum of P3,000 as the provisional value, fixed by the court, of the parcels so to be condemned. By virtue of this order, the Metropolitan Water District entered into occupation of the land and began the construction of permanent improvements thereon. Copies of the complaint as well as of the order of 31 March 1925, were filed with the register of deeds of the Province of Rizal on 11 February 1926, to be recorded as

notices of lis pendens. The lots enumerated above were included in the land sought to be expropriated and Nicanor Jacinto was made a party defendant in the proceedings. He admitted the existence of the right of condemnation and the necessity for the expropriation, but demanded the sum of P64,839.33 as indemnity for the expropriation. As the actual purchase price to be paid by the purchaser from the Government only amounts to P13,725, including interest, the Metropolitan Water District considered Jacinto’s demand excessive and declined to pay the claim.

In the month of July 1926, the applicant tendered payment to the Director of Lands of the sum of P4,650 to cover the remaining balance of the sales price of the lots in question and demanded a corresponding deed of conveyance for said lots. The Director of Lands, upon the advice of the Attorney-General, rejected the tender and refused to execute and deliver the instrument of conveyance demanded from him. Applicant filed a petition for a writ of mandamus to compel the Director of Lands to execute a deed of conveyance in favor of the applicant for the lots enumerated belonging to the Tala Friar Lands Estate in Novaliches.

The Supreme Court ordered the Director of Lands to receive the balance of the purchase money for any or all of the lots in question if and when payment thereof is tendered by Jacinto, and denied the petition as to the execution of deeds of conveyance; without costs.

1. Proprietary rights, except that of occupation, not affected by condemnation proceedings

The proprietary rights, except the right of occupation, are not affected by the condemnation proceedings until the title has passed to the plaintiff and that does not occur until the award of compensation or damages has been satisfied.

2. Petition for a writ of mandamus not proper remedy to compel a conveyance

Mandamus is not the proper remedy to enforce purely contract rights, such as that in the present case sought to be enforced. (18 R. C. L., 121; Quiogue vs. Romualdez, 46 Phil., 337.)

3. Land is patrimonial property of the Government; Duty to execute deeds of conveyance devolved upon the Governor-General

The writ cannot issue in the present case unless it appears that the Director of Lands “unlawfully neglects the performance of an act which the law specially enjoins as a duty resulting from an office, trust, or station.” (Section 222, Code of Civil Procedure.) The land in question is private or patrimonial property of the Philippine Government and we can find no law specially enjoining upon the Director of Lands the duty to execute deeds of conveyance to purchasers of such lands; on the contrary, that duty, under section 567 of the Administrative Code, appears to devolve upon the Governor-General.

4. Director of Land has duty to receive purchase money payable under Act 1120

By section 14 of Act No. 1120 the Director of Lands is charged with the duty of receiving the purchase money payable under that Act and may therefore be compelled by mandamus to receive, as a purely ministerial act, such purchase money when tendered.

ALONSO vs. CEBU COUNTRY CLUB, INC.,

G.R. No. 130876

December 5, 2003

FACTS: The Supreme Court rendered a decision declaring that neither Tomas N. Alonso nor his son Francisco M. Alonso or the latter’s heirs are the lawful owners of the lot in dispute. Neither has the respondent Cebu Country Club, Inc. been able to establish a clear title over the contested estate. The reconstitution of a title is simply the re-issuance of a lost

duplicate certificate of title in its original form and condition. It does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered thereby.

It declared that the subject lot legally belongs to the Government of the Philippines. Wherefore, the petition for review was denied.

Petitioners and respondent filed separate motions for reconsideration, each assailing a different aspect of the decision.

ISSUE: Petitioners, in their MR vigorously argue that:

the majority decision unduly deprives petitioners of their property without due process of law and “in a manner shocking to good conscience”;

in invalidating the sale to the late Tomas Alonso, the ponencia unfairly deviated from established doctrine, using as basis factual findings either unsupported by the evidence or contradicted by the appellate court’s findings of fact;

the core issues of fraud and want of jurisdiction afflicting the reconstitution of respondent Cebu Country Club’s title were not squarely and frontally met, to the prejudice and damage of the petitioners; and

the dissenting opinion deserves a second hard look as it presents a more balanced, sober, factually accurate, and juridically precise approach to the critical issues of this case, including prescription and laches.

Respondents, in their MR staunchly assails the decision insofar as it declared that that the subject land legally belongs to the Government of the Republic of the Philippines. Moreover:

The Torrens Certificate of Title of respondent, covering subject lot cannot be collaterally attacked and nullified in this case at bar.

HELD: IN VIEW THEREOF, we DENY with finality the separate motions for reconsideration of the petitioners and respondent.

Tomas Alonso had caused the reconstitution of his title on a Lot which is adjacent to the disputed property, and yet petitioners failed to show that Tomas Alonso exerted the same effort to reconstitute his alleged title to the subject property. As successors-in-interest, petitioners merely stepped into the shoes of Tomas Alonso. They cannot claim a right greater than that of their predecessor.

Moreover, it cannot be over-accentuated that Tomas Alonso, petitioners’ predecessor-in-interest, never asserted any claim of ownership over the disputed property during his lifetime. When he was alive, Tomas Alonso did not exert any effort to have the title of the disputed property reconstituted in his name or seek recovery thereof from the respondent which was in possession since 1931

1. Section 18 of Act No. 1120 or the Friar Lands Act unequivocally provides:

“No lease or sale made by the Chief of the Bureau of Public Lands (now the Director of Lands) under the provisions of this Act shall be valid until approved by the Secretary of the Interior (now, the Secretary of Natural Resources).

Thus, petitioners’ claim of ownership must fail in the absence of positive evidence showing the approval of the Secretary of Interior. Approval of the Secretary of the Interior cannot simply be presumed or inferred from certain acts since the law is explicit in its mandate. This is the settled rule.

2. It must be emphasized that in civil cases, the burden of proof to be established by preponderance of evidence is on the plaintiff who is asserting the affirmative of an issue. Inasmuch as petitioners pray for the “Declaration of Nullity and Non-Existence of Deed/Title, Cancellation of Certificates of Title and Recovery of Property” against the respondent, they had the burden to establish their claims of ownership of the subject property which they failed to do in this case.

3. While we held that the issue of the validity of respondent’s title is factual which cannot be reviewed on appeal, nevertheless, we have answered each ground raised by petitioner in assailing respondent’s title. Needless to stress, mere allegations of fraud are not enough. Fraud is never presumed but must be proved by clear and convincing evidence, mere preponderance of evidence not even being adequate.

It must be borne in mind that the disputed property is part of the “Friar Lands” over which the Government holds title and are not public lands but private or patrimonial property of the Government and can be alienated only upon proper compliance with the requirements of Act No. 1120 or the Friar Lands Act.

Sections 11, 12 and 18 of Act No. 1120 provide:

SECTION 11. Should any person who is the actual and bona fide settler upon and occupant of any portion of said lands . . . desire to purchase the land so occupied by him, he shall be entitled to do so at the actual cost thereof to the Government, and shall be allowed ten years from the date of

purchase within which to pay for the same in equal annual installments, if he so desires, all deferred payments to bear interest at the rate of four per centum per annum on all deferred payments.

SECTION 12. … When the cost thereof shall have been thus ascertained the Chief of the Bureau of Public Lands shall give the said settler and occupant a certificate which shall set forth in detail that the Government has agreed to sell to such settler and occupant the amount of land so held by him, at the prize so fixed, payable as provided in this Act . . . and that upon the payment of the final installment together with all accrued interest the Government will convey to such settler and occupant the said land so held by him by proper instrument of conveyance, which shall be issued and become effective in the manner provided in section one hundred and twenty-two of the Land Registration Act. …

SECTION 18. No lease or sale made by the Chief of the Bureau of Public Lands under the provisions of this Act shall be valid until approved by the Secretary of the Interior.

It was thus primordial for the respondent to prove its acquisition of its title by clear and convincing evidence in view of the nature of the land. In fact, it is essential for both respondent and petitioners to establish that it had become private property. Both parties failed to do so.

On the part of respondent, it failed to shed light on how its predecessor in interest, United Services Country Club, Inc., acquired its title. Surprisingly, there is not even one evidence to show when and how its predecessor in interest, United Services Country Club, Inc., acquired the property from anybody.

Respondent relies solely on its reconstituted title which, by itself, does not determine or resolve the ownership of the land covered by the lost or destroyed title. The reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its original form and condition. It does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered thereby.

a. Furthermore, the declaration in the Court’s judgment that the subject property belongs to the Government is not an offshoot of a collateral attack on respondent’s title. The validity of the reconstitution of title to the land in question was directly in dispute, and the proceedings before the trial court was in the nature of a direct attack on the legality of respondent’s title.

Neither may the rewards of prescription be successfully invoked by respondent, as it is an iron-clad dictum that prescription can never lie against the Government. Since respondent failed to present the paper trail of the property’s conversion to private property, the lengthy possession and occupation of the disputed land by respondent cannot be counted in its favor, as the subject property being a friar land, remained part of the patrimonial property of the Government. Possession of patrimonial property of the Government, whether spanning decades or centuries, can not ipso facto ripen into ownership

Cebu Oxygen & Acetylene v. Bercilles [G.R. No. L-40474. August 29, 1975.] Second Division, Concepcion Jr. (J): 4 concur

Facts: The parcel of land sought to be registered was originally a portion of M. Borces Street, Mabolo, Cebu City. On 23 September 1968, the City Council of Cebu, through Resolution 2193 (3 October 1968), declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an abandoned road, the same not being included in the City Development Plan. Subsequently, on 19 December 1968, the City Council of Cebu passed Resolution 2755, authorizing the Acting City Mayor to sell the land through a public bidding. Pursuant thereto, the lot was awarded to the herein petitioner being the highest bidder and on 3 March 1969, the City of Cebu, through the Acting City Mayor, executed a deed of absolute sale to the petitioner for a total consideration of P10,800.00.

By virtue of the aforesaid deed of absolute sale, the petitioner filed an application with the CFI Cebu to have its title to the land registered (LRC N-948; LRC Record N-44531). On 26 June 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground that the property sought to be registered being a public road intended for public use is considered part of the public domain and therefore outside the commerce of man. After hearing the parties, on 11 October 1914 the trial court issued an order dismissing the petitioner’s application for registration of title. Hence, the instant petition for review.

The Supreme Court set aside the order of the lower court, and the ordered said court to proceed with the hearing of the petitioner’s application for registration of title.

1. City is empowered to close city road or street and withdraw the same from public use

Section 31 of the Revised Charter of Cebu City (Legislative Powers) provides that “any provision of law and executive order to the contrary notwithstanding, the City Council shall have the following legislative powers xxx to close any city road, street or alley, boulevard, avenue, park or square. Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed.” It is undoubtedly clear that the City of Cebu is empowered to close a city road or street.

2. Discretion of the city council cannot ordinarily be interfered with by the court

The city council is the authority competent to determine whether or not a certain property is still necessary for public use. The power to vacate a street or alley is discretionary, and the discretion will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will he presumed. So the fact that some private interests may be served incidentally will not invalidate the vacation ordinance (Favis v. City of Baguio).

3. Street withdrawn from public use becomes patrimonial property; Subsequent sale valid

When a portion of the city street was withdrawn from public use, such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract. As expressly provided by Article 422 of the Civil Code, “property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.” Further, the Revised Charter of the City of Cebu, in very clear and unequivocal terms, states that “property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the

City may be lawfully used or conveyed.” Thus, the withdrawal of the property in question from public use and its subsequent sale to the petitioner is valid.

Javier vs. Veridiano

Felicidad Javier vs. Regino Veridiano and Reino RoseteG.R. No. L-48050. October 10, 1994

Bellosillo, J.

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.

Bustos vs. CA

Bustos vs. Court of AppealsG.R. Nos. 120784-85. January 24, 2001

Pardo, J.:

Doctrine: One of the essential attributes of ownership is possession. It follows that as owners of the subject property, petitioners are entitled to possession of the same. “An owner who cannot exercise the seven (7) “juses” or attributes of ownership–the right to possess, to use and enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruits–is a crippled owner.”

Facts: Paulino Fajardo died intestate in April 2, 1957. He had four children, Manuela, Trinidad, Beatriz and Marcial. Subsequently, they instituted an extra-judicial partition of the estate of the deceased. On the same day, Manuela sold her share to Moses G. Mendoza, husband of Beatriz, by way of Deed of Absolute Sale.

At the time of the sale, there was no cadastral survey in Masantol, Pampanga. Later, the cadastre was conducted, and the property involved in the partition case were specified as Lots 280, 283, 284, 1000-A and 1000-B. The share of Manuela, which was sold to Moses, includes Lot 284 of the Masantol Cadastre and Lot 284 was subdivided into Lots 284-A and 284-B.

Trinidad was in physical possession of the land. She refused to surrender the land to her brother-in-law Moses G. Mendoza, despite several demands. Mendoza then filed a complaint.

During the hearing, Trinidad died, and her heirs parted with her estate, including the lot claiming by Mendoza. Lot 284-B was then sold to Spouses Viray, herein private respondents.

The trial court ruled in favor of Mendoza. He then sold the subject land to Spouses Bustos, herein petitioners, who were actually lessees of the husband of Trinidad on the land in question. Since Spouses Bustos were in actual possession of the land, Spouses Viray filed an action for unlawful detainer against the Spouses Bustos.

Issue: Whether petitioners could be ejected from what is now their own land.

Held: No. Petitioners cannot be ejected from the subject land. The stay of execution is warranted by the fact that petitioners are now legal owners of the land in question and are occupants thereof. To execute the judgment by ejecting petitioners from the land that they owned would certainly result in grave injustice. The issue of possession was rendered moot when the court adjudicated ownership to the Spouses Bustos by virtue of a valid deed of sale. Placing petitioners in possession of the land in question is the necessary and logical consequence of the decision declaring them as the rightful owners of the property.

Heirs of Soriano vs. CA

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

Medialdea, J.:

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) children pro-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 3/4 pro-indiviso of Lot No. 8459. The Director of Lands and Roman Soriano filed separate oppositions to the application. The latter’s 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-owner pro-indiviso of 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 applicant’s 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 Soriano’s 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.

Garcia vs. CA

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

Puno, J.

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.

Rodil Enterprises vs. CA

Rodil Enterprises vs. Court of AppealsG.R. No. 129609, November 29, 2001.

Bellosillo, J.

Doctrine: The owner has a right to enjoy and dispose of a thing, without other limitations than those established by law. Every owner has the freedom of disposition over his property. This is an attribute of ownership.In an action for unlawful detainer, the plaintiff need not have been in prior physical possession.

Facts: Petitioner Rodil Enterprises is the lessee of the Ides O’Racca building (ORACCA) since 1959. It was a former alien property over which the Republic acquired ownership by virtue of RA 477. Rodil entered into a sublease contract with respondents Bondoc, Bondoc-Esto, Divisoria Footware and Chua Huay Soon, members of Oracca Building Tenants Association, Inc. (ASSOCIAION). On January 8, 1987, Rodil offered to purchase the property. On July 22, 1998, the Association also offered to lease the same building through DGSREPM. Pending action on the purchase offer of Rodil, the Republic granted Rodil’s request for the renewal of the lease contract on Sept. 23, 1987 for 5 more years. The renewal contract however was disapproved by the DGSREPM secretary.

On October 1987, Rodil filed an action to enjoin the Association from collecting rentals from the occupants of Oracca. This was granted by the trial court and upheld by CA. On May 18, 1992 Rodil signed a renewal contract for 10 more years of lease , which was approved by the DENR Secretary. The Association filed a case to set aside the renewal contract, but the same was denied by the trial court.

Rodil then filed an action for unlawful detainer against herein respondents. The MTC upheld Rodil’s right to eject, which was then upheld by the RTC. While the consolidated appeals were pending, the CA 2nd Division declared the renewal contract between Rodil and the Republic as null and void. Rodil moved for reconsideration but the same was denied which prompted it to file an action for certiorari. The CA 4th division likewise se aside the

MTC and the RTC’s decision and dismissed the action of Rodil for unlawful detainer.

Issues:Whether the renewal contract between Rodil and the Republic is valid.Whether Rodil may validly eject herein respondents even though the former is not in actual possession of the property.

Held:Yes. The Owner has a right to enjoy and dispose of a thing, without other limitations than those established by law. Every owner has the freedom of disposition over his property. This is an attribute of ownership. The Republic being the owner of the disputed property enjoys the prerogative to enter into a lease contract with Rodil in the exercise of its jus disponendi.

Yes. In an action for unlawful detainer, the plaintiff need not have been in prior physical possession. Respondents have admitted that they have not entered into any lease contract with the Republic and that their continued occupation of the subject property was merely by virtue of acquiescence. Since the occupation of respondents was merely tolerated by the Republic, the right of possession of the latter remained uninterrupted. It could therefore alienate the same to anyone it choose. Unfortunately for respondents, the Republic chose to alienate the subject premises to Rodil by virtue of a contract of lease entered into on May 18, 1992. Resultantly, the petitioner had the right to file the action for unlawful detainer against respondents as one from whom possession of property has been unlawfully withheld.

Isaguirre vs. De Lara

Cornelio M. Isaguirre vs. Felicitas De LaraG.R. No. 138053, May 31, 2000

Gonzaga-Reyes, J.

Doctrine: As a general rule, the mortgagor retains possession of the mortgaged property since a mortgage is merely a lien and title to the property does not pass to the mortgagee. However, even though a mortgagee does not have possession of the property, there is no impairment of his security since the mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted. If the debtor is unable to pay his debt, the mortgage creditor may institute an action to foreclose the mortgage, whether judicially or extra judicially, whereby the mortgaged property will then be sold at a

public auction and the proceeds there from given to the creditor to the extent necessary to discharge the mortgage loan.

Facts: Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales Application over a parcel of land identified as portion of Lot 502, Guianga Cadastre, filed with the Bureau of Lands with an area of 2,342 square meters. Upon his death, his wife – respondent Felicitas de Lara, as claimant, succeeded Alejandro de Lara. The Undersecretary of Agriculture and Natural Resources amended the sales application to cover only 1,600 square meters. By virtue of a decision rendered by the Secretary of Agriculture and Natural Resources, a subdivision survey was made and the area was further reduced to 1,000 square meters. On this lot stands a two-story residential-commercial apartment declared for taxation purposes in the name of respondent’s sons – Apolonio and Rodolfo, both surnamed de Lara.

Respondent obtained several loans from the Philippine National Bank. When she encountered financial difficulties, respondent approached petitioner Cornelio M. Isaguirre, who was married to her niece, for assistance. A document denominated as “Deed of Sale and Special Cession of Rights and Interests” was executed by respondent and petitioner, whereby the former sold a 250 square meter portion of Lot No. 502, together with the two-story commercial and residential structure standing thereon, in favor of petitioner, for and in consideration of the sum of P5,000.

Apolonio and Rodolfo de Lara filed a complaint against petitioner for recovery of ownership and possession of the two-story building. However, the case was dismissed for lack of jurisdiction. Petitioner filed a sales application over the subject property on the basis of the deed of sale. His application was approved, resulting in the issuance of Original Certificate of Title, in the name of petitioner. Meanwhile, the sales application of respondent over the entire 1,000 square meters of subject property (including the 250 square meter portion claimed by petitioner) was also given due course, resulting in the issuance of Original Certificate of Title, in the name of respondent.

Due to the overlapping of titles, petitioner filed an action for quieting of title and damages with the RTC of Davao City against respondent. After trial on the merits, the trial court rendered judgment, in favor of petitioner, declaring him to be the lawful owner of the disputed property. However, the Court of Appeals reversed the trial court’s decision, holding that the transaction entered into by the parties, as evidenced by their contract, was an equitable mortgage, not a sale. The appellate court’s decision was based on the inadequacy of the consideration agreed upon by the parties,

on its finding that the payment of a large portion of the “purchase price” was made after the execution of the deed of sale in several installments of minimal amounts; and finally, on the fact that petitioner did not take steps to confirm his rights or to obtain title over the property for several years after the execution of the deed of sale. As a consequence of its decision, the appellate court also declared Original Certificate issued in favor of petitioner to be null and void. This Court affirmed the decision of the Court of Appeals, we denied petitioner’s motion for reconsideration.

Respondent filed a motion for execution with the trial court, praying for the immediate delivery of possession of the subject property, which motion was granted. Respondent moved for a writ of possession. Petitioner opposed the motion, asserting that he had the right of retention over the property until payment of the loan and the value of the improvements he had introduced on the property. The trial court granted respondent’s motion for writ of possession. The trial court denied petitioner’s motion for reconsideration. Consequently, a writ of possession, together with the Sheriff’s Notice to Vacate, was served upon petitioner.

Issue: Whether or not the mortgagee in an equitable mortgage has the right to retain possession of the property pending actual payment to him of the amount of indebtedness by the mortgagor.

Held: A mortgage is a contract entered into in order to secure the fulfillment of a principal obligation. Recording the document, in which it appears with the proper Registry of Property, although, even if it is not recorded, the mortgage is nevertheless binding between the parties, constitutes it. Thus, the only right granted by law in favor of the mortgagee is to demand the execution and the recording of the document in which the mortgage is formalized. As a general rule, the mortgagor retains possession of the mortgaged property since a mortgage is merely a lien and title to the property does not pass to the mortgagee. However, even though a mortgagee does not have possession of the property, there is no impairment of his security since the mortgage directly and immediately subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted. If the debtor is unable to pay his debt, the mortgage creditor may institute an action to foreclose the mortgage, whether judicially or extrajudicially, whereby the mortgaged property will then be sold at a public auction and the proceeds there from given to the creditor to the extent necessary to discharge the mortgage loan. Apparently, petitioner’s contention that “to require him to deliver possession of the Property to respondent prior to the full payment of the latter’s mortgage loan would be equivalent to the cancellation of the mortgage is without basis. Regardless of its possessor, the mortgaged property may still be sold, with the

prescribed formalities, in the event of the debtor’s default in the payment of his loan obligation.

A simple mortgage does not give the mortgagee a right to the possession of the property unless the mortgage should contain some special provision to that effect. Regrettably for petitioner, he has not presented any evidence, other than his own gratuitous statements, to prove that the real intention of the parties was to allow him to enjoy possession of the mortgaged property until full payment of the loan.

The trial court correctly issued the writ of possession in favor of respondent. Such writ was but a necessary consequence of affirming the validity of the original certificate of title in the name of respondent Felicitas de Lara, while at the same time nullifying the original certificate of title in the name of petitioner Cornelio Isaguirre. Possession is an essential attribute of ownership; thus, it would be redundant for respondent to go back to court simply to establish her right to possess subject property.

Madrid v. Mapoy

FACTS:

Spouses Mapoy are the owners of two parcels of land in Sampaloc Manila with combined area of 270 square meters both with certificate of title under their name. On April 4, 1988, the respondents-plaintiffs sought to recover possession of the properties through an accion publiciana filed against Gregorio Miranda and two other defendants, one of which is Francisco Madrid.

Mapoy alleged that they acquired the properties from Spouses Castelo under a Deed of Absolute Sale dated June 20, 1978.  Mirandas countered that Gregorio Miranda owned the properties by virtue of an oral sale made in his favor by the original owner, Vivencio Antonio.

Madrid, for his part, claimed that he occupied the property in 1974, and constructed a house on this portion in 1989 with the permission of Bernardo (son of Miranda)

RTC ruled in favor of respondents-plaintiff. An appeal was made but dismissed by the CA holding that the certificate of title in the name of the respondents-plaintiffs serves as evidence of an indefeasible and incontrovertible title to the properties. Also, the reliance on their alleged continuous occupation is misplaced since petitioner-defendant Madrid’s occupation could not have been in the concept of an owner, as he recognized Gregorio Miranda as the owner.

ISSUES:

Who must have the possession of the property?

HELD:

The objective of the plaintiffs in accion publiciana is to recover possession only, not ownership. However, where the parties raise the issue of ownership, the courts may pass upon the issue to determine who between or among the parties has the right to possess the property. The adjudication is not conclusive on the issue of ownership.Under this legal situation, resolution of these conflicting claims will depend on the weight of the parties' respective evidence.

As a rule, the Court is not duty-bound to again analyze and weigh the evidence introduced and considered in the trial. The trial court findings, when affirmed by the CA, are final and conclusive and are not open for our review on appeal.

ps Padilla v. Sps. Velasco

FACTS:

Respondents are the heirs of Dr. Artemio A. Velasco died single and without any issue on 1949. During his lifetime, Artemio acquired a lot with a total area 7,791 square meters situated at  Pagsanjan, Laguna which he bought from spouses Brigido Sacluti and Melitona Obial, evidenced by a deed of sale executed in 1944.

In October 1987, petitioners entered the property as trustees by virtue of a deed of sale executed by the Rural Bank of Pagsanjan in favor of spouses Solomon.On October 14, 1991, respondents filed a complaint for accion publiciana against petitioners before the RTC. 

Petitioners contends that the Solomon bought the property from the Rural Bank of Pagsanjan as evidenced by a deed of sale dated September 4, 1987 and they are authorized by the same spouses to enter the land and introduce improvements therein. They futher claim that the bank acquired it from public auction after the mortgage executed by the alleged owner Valeriano Velasco was foreclosed due to failure in paying his debt. RTC rendered a decision in favor of respondents which the CA affirmed.

ISSUES:

I. Whether or not the spouses Solomon acquired the subject property from its lawful owner in good faith and for value.

II. Who, as between the parties, have a better right of possession of the subject property.

III. Whether the complaint for accion publiciana has already prescribed

HELD:

The instant case is for accion publiciana, or for recovery of the right to possess. The objective of which is to recover possession only, not ownership.

RTC ruled, which were affirmed by the CA, that respondents were able to establish lawful possession of the subject property when the petitioners occupied the property.  Evidences presented proved that the respondents are legally entitled to the possession of the subject property. It is a long-

standing policy of the Supreme Court that the findings of facts of the RTC which were adopted and affirmed by the CA are generally deemed conclusive and binding. This Court is not a trier of facts and will not disturb the factual findings of the lower courts unless there are substantial reasons for doing so.

The case filed by respondents for accion publiciana has not prescribed. The action was filed with the RTC on October 14, 1991. Petitioners dispossessed respondents of the property in October 1987. At the time of the filing of the complaint, only four (4) years had elapsed from the time of dispossession. An accion publiciana prescribes after the lapse of 10 years.

SPOUSES ELEGIO CAÑEZO AND DOLIA CAÑEZO, Petitioners, v. SPOUSES APOLINARIO AND CONSORCIA L. BAUTISTA, Respondents

CARPIO, J.:FACTS:

Spouses Elegio and Dolia Cañezo (appellees) are the registered owners of a parcel of land with an area of 186 square meters, covered by TCT No. 32911. Whereas, Spouses Apolinario and Consorcia Bautista (appellants) are the registered owners of a parcel of land, containing an area of 181 square meters, covered by TCT No. 31727. Both parcels of land are located at Coronado Heights, Barangka Ibaba, Mandaluyong City and registered with the Registry of Deeds of Mandaluyong City. Appellants’ lot is adjacent to that of appellees.

Sometime in 1995, appellees started the construction of a building on their lot. During the construction, appellees discovered that their lot was encroached upon by the structures built by appellants without appellees’ knowledge and consent. 

Three surveys were conducted which confirmed the fact of encroachment. However, despite oral and written demands, appellants failed and refused to remove the structures encroaching appellees’ lot.

Spouses Cañezo filed their complaint for the issuance of a writ of demolition with damages on 13 April 2000. In an Order dated 15 August 2000, the trial court declared the spouses Bautista in default for failure to answer within the reglementary period. The trial court promulgated its Decision in favor of the spouses Cañezo. The trial court found that the

spouses Bautista built structures encroaching on the land owned by the spouses Cañezo. The spouses Bautista also refused to remove the structures and respect the boundaries as established by the various surveyors. A referral to the Barangay Lupon failed to settle the controversy amicably. The trial court thus ruled that the spouses Bautista are builders in bad faith, such that spouses Cañezo are entitled to an issuance of a writ of demolition with damages.

On appeal, the appellate court rendered its Decision which reversed the Trial Court’s Decision. The appellate court ruled that since the last demand was made on 27 March 2000, or more than a year before the filing of the complaint, the spouses Cañezo should have filed a suit for recovery of possession and not for the issuance of a writ of demolition. A writ of demolition can be granted only as an effect of a final judgment or order, hence the spouses Cañezo’s complaint should be dismissed. The spouses Cañezo failed to specify the assessed value of the encroached portion of their property. Because of this failure, the complaint lacked sufficient basis to constitute a cause of action. Finally, the appellate court ruled that should there be a finding of encroachment in the action for recovery of possession and that the encroachment was built in good faith, the market value of the encroached portion should be proved to determine the appropriate indemnity.

ISSUE: Whether or not petitioners should have filed recovery of possession and not writ of demolition

PROPERTY LAW: Accion Reinvindicatoria

HELD:

The present case, while inaccurately captioned as an action for a “Writ of Demolition with Damages” is in reality an action to recover a parcel of land or an accion reivindicatoria under Article 434 of the Civil Code. Accion reivindicatoria seeks the recovery of ownership and includes the jus utendi and the jus fruendi brought in the proper regional trial court. Accion reivindicatoria is an action whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its full possession.

The spouses Cañezo were able to establish their ownership of the encroached property. Aside from testimonial evidence, the spouses Cañezo were also able to present documentary and object evidence which consisted of photographs, transfer certificates of title, and a relocation survey plan.

The relocation survey plan also corroborated Elegio Cañezo’s testimony on the reason for the spouses Bautista’s attitude regarding the encroached property. The relocation survey plan showed that the spouses Bautista’s property encroached upon that of the spouses Cañezo by 0.97 centimeters, while the spouses Bautista’s property was encroached upon by 1.01 centimeters by another landowner. 

The testimony and the relocation survey plan both show that the spouses Bautista were aware of the encroachment upon their lot by the owner of Lot 15 and thus they made a corresponding encroachment upon the lot of the spouses Cañezo. This awareness of the two encroachments made the spouses Bautista builders in bad faith. The spouses Cañezo are entitled to the issuance of a writ of demolition in their favor and against the spouses Bautista, in accordance with Article 450 of the Civil Code.

German Management & Services vs. Court of AppealsG.R. No. 76216 and 76217. September 14, 1989.

Fernan, J.

Doctrine: A prior possessor has security to remain in property until lawfully ejected by person having better right by accion publiciana or accion reivindicatoria. A party may validly claim ownership based on the muniments of title it may present, such evidence does not responsively address the issue of prior actual possession raised in a forcible entry case. It must be stated that regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror. When possession has already been lost, the owner must resort to judicial process for the recovery of property.

Facts: Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of Pennsylvania, Philadelphia, USA are the owners of a parcel of land situated in Sitio Inarawan, San Isidro, Antipolo, Rizal, with an area of 232,942 sq. m. (TCT 50023 of the Register of Deeds Rizal issued 11 September 1980 cancelling TCT 56762/ T-560). The land was originally registered on 5 August 1948 in the Office of the Register of Deeds Rizal as OCT 19, pursuant to a Homestead Patent granted by the President of the Philippines on 27 July 1948, under Act 141. On 26 February 1982, the spouses Jose executed a special power of attorney authorizing German Management Services to develop their property into a residential subdivision. Consequently, on 9 February 1983 the German Management

obtained Development Permit 00424 from the Human Settlements Regulatory Commission for said development. Finding that part of the property was occupied by Gernale and Villeza and 20 other persons, German Management advised the occupants to vacate the premises but the latter refused. Nevertheless, German Management proceeded with the development of the subject property which included the portions occupied and cultivated by Gernale,et.al.

Gernale, et.al. filed an action for forcible entry against German Management before the MTC Antipolo, Rizal, alleging that they are mountainside farmers of Sitio Inarawan who have occupied and tilled their farmholdings some 12 to 15 years prior to the promulgation of PD27, and that they were deprived of their property without due process of law when German Management forcibly removed and destroyed the barbed wire fence enclosing their farmholdings without notice and bulldozing the rice, corn, fruit bearing trees and other crops that they planted by means of force, violence and intimidation. On 7 January 1985, the MTC dismissed Gernale et.al.’s complaint for forcible entry. On appeal, the RTC Antipolo, Rizal, Branch LXXI sustained the dismissal by the MTC. Gernale then filed a petition for review with the Court of Appeals. On 24 July 1986, said court gave due course to their petition and reversed the decisions of the MTC and the RTC. The Appellate Court held that since Gernale, et.al. were in actual possession of the property at the time they were forcibly ejected by German Management, they have a right to commence an action for forcible entry regardless of the legality or illegality of possession. German Management moved to reconsider but the same was denied by the Appellate Court in its resolution dated 26 September 1986. Hence the present recourse.

Issues:Whether the “mountainside farmers” are allowed by law to commence an action for forcible entry.Whether German Management & Services may validly invoke the doctrine of self-help.

Held:1. Yes. Notwithstanding the claim that German Management was duly authorized by the owners to develop the subject property, the actual possessors can commence a forcible entry case against the former because ownership is not in issue. Forcible entry is merely a quieting process and never determines the actual title to an estate. Title is not involved. Gernale et.al were already in peaceable possession of the property at the time German Management entered the property, manifested by the fact that they even planted rice, corn and fruit bearing

trees 12 to 15 years prior to German Management’s act of destroying their crops.

Moreover, a prior possessor has security to remain in property until lawfully ejected by person having better right by accion publiciana or accion reivindicatoria. A party may validly claim ownership based on the muniments of title it may present, such evidence does not responsively address the issue of prior actual possession raised in a forcible entry case. It must be stated that regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror. Thus, a party who can prove prior possession can recover such possession even against the owner himself. Whatever may be the character of his prior possession, if he has in his favor priority in time, he has the security that entitles him to remain on the property until he is lawfully ejected by a person having a better right by accion publiciana or accion reivindicatoria.

2. No. The justification given by petitioner that the drastic action of bulldozing and destroying the crops of the prior possessor on the basis of the doctrine of self help (enunciated in Article 429 NCC) is unavailing, because such doctrine can only be exercised at the time of actual or threatened dispossession, which is absent in the present case. When possession has already been lost, the owner must resort to judicial process for the recovery of property. This is clear from Article 536 NCC that , “in no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or right to deprive another of the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver the thing.”

Felix Caisip vs. People of the Philippines G.R. No. L-28716, November 18, 1970

Concepcion, C.J.

Facts: The complainant Gloria Cabalag is the wife of Marcelino Guevarra who cultivated a parcel of land known as Lot 105-A of Hacienda Palico situated in sitio Bote-bote, barrio Tampisao, Nasugbu, Batangas. The said parcel of land used to be tenanted by the deceased father of the complainant. Hacienda Palico is owned by Roxas y Cia. and administered by Antonio Chuidian. The overseer of the said hacienda is Felix Caisip, one of the accused herein.

On May 17, 1958 Roxas y Cia filed a forcible entry case against Guevarra. The court decided in favour of Roxas y Cia and issued a writ of execution. The return of the writ showed that possession of Lot 105-A was turned over

to the owner thru Caisip and that Guevarra and Cabalag were given 20 days from June 6, 1959 to vacate the premises. It also appears in the record that due to the tenacious attitude of Cabalag, Caisip sought the help of policemen Federico Villadelrey and Ignacio Rojales.

On June 17, 1959, Cabalag was seen weeding the portion of Lot 105-A which was a ricefield. Caisip approached her and bade her to leave but Cabalag refused to do so claiming that she and her husband has a right over the property. She having stuck to this attitude, even when he threatened to call the police, Caisip went to his co-defendants, Sgt. Rojales and Cpl. Villadelrey, both of the local police, who were some distance away, and brought them with him. Rojales told Gloria, who was then in a squatting position, to stop weeding. As Gloria insisted on her right to stay in said lot, Rojales grabbed her right hand and, twisting the same, wrested therefrom the trowel she was holding. Thereupon, Villadelrey held her left hand and, together with Rojales, forcibly dragged her. The appellants maintain that the Court of Appeals erred in not finding that their acts are justified under Article 429 of the Civil Code.

Issue: Whether Article 429 of the Civil Code applies in the present case.

Held: Article 429 is inapplicable, Cabalag was given 20 days from June 6, 1959 within which to vacate the premises. Cabalag did not, on June 17, 1959 — or within said period — invade or usurp said lot. She had merely remained in possession thereof, even though the hacienda owner may have become its co-possessor. Appellants did not “repel or prevent in actual or threatened . . . physical invasion or usurpation.” They expelled Gloria from a property of which she and her husband were in possession.

It is urged, that, by weeding and refusing to leave Lot 105-A, Gloria had committed a crime in the presence of the policemen, despite the aforementioned 20-day period, which, appellants claim, the sheriff had no authority to grant. This contention is manifestly untenable, because: (1) said period was granted in the presence of the hacienda owner’s representative, appellant Caisip, who, by not objecting thereto, had impliedly consented to or ratified the act performed by the sheriff; 2) Gloria and her husband were thereby allowed to remain, and had, in fact, remained, in possession of the premises, perhaps together with the owner of the hacienda or his representative, Caisip; (3) the act of removing weeds from the ricefield was beneficial to its owner and to whomsoever the crops belonged, and, even if they had not authorized it, does not constitute a criminal offense; and (4) although Gloria and her husband had been sentenced to vacate the land, the judgment against them did not necessarily imply that they, as the parties who had tilled it and planted thereon, had no rights, of any kind whatsoever, in or to the standing crops,

inasmuch as “necessary expenses shall be refunded to every possessor,” and the cost of cultivation, production and upkeep has been held to partake of the nature of necessary expenses.

It is, accordingly, clear that appellants herein had, by means of violence, and without legal authority therefor, prevented the complainant from “doing something not prohibited by law,” (weeding and being in Lot 105-A), and compelled her “to do something against” her will (stopping the weeding and leaving said lot), “whether it be right or wrong,” thereby taking the law into their hands, in violation of Art. 286 of the Revised Penal Code.

People of the Philippines vs. PletchaG.R. No.19029. June 27, 1977.

Bison, J.

Doctrine: The use of such necessary force to protect proprietary or possessory rights constitutes a justifying circumstance under our penal laws.

Facts: Tito Pletcha is a farmer who owns a land which he has been cultivating for 19years. A private corporation sought to take over the aforementioned land by fencing 4 hectares of his property. Such fencing was without authority or court order. Because of this, Pletcha foughjt-off any the take over and resisted the company. This forced the company to file a case for grave coercion against Pletcha in the Municipal Court of Murcia, Negros Occidental.

Pletcha invokes the protective mantle of Article 429 of the Civil Code which gives him the right to use reasonable force to exclude any person threatening his exclusive ownership over the land.

The People asks for affirmance on the ground that the appellant should not have taken the law into his own hands but rather have the courts decide the case.

Issue: Whether or not Pletcha can properly invoked Article 429.

Held: Yes. The principle of self-help authorizes the lawful possessor to use force not only to prevent a threatened unlawful invasion or usurpation thereof; it is sort of self-defense. It is lawful to repel force by force. He who merely uses force to defend his possession does not possess by force. The use of such necessary force to protect proprietary or possessory rights constitutes a justifying circumstance under our penal laws.

The appellant need not rush to court to seek redress before reasonably resisting the invasion of property. The situation required immediate action and Article 429 gave him the self-executory mechanics of self-defense and self-reliance.

Andamo vs. IAC

Andamo vs. Intermediate Appellate CourtG.R. No. 74761 November 6, 1990

Fernan, C.J.

Doctrine: It must be stressed that the use of one’s property is not without limitations. Article 431 of the Civil Code provides that “the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person.” SIC UTERE TUO UT ALIENUM NON LAEDAS.

Facts: Petitioner spouses Andamo owned a parcel of land situated in Biga Silang, Cavite which is adjacent to that of private respondent corporation, Missionaries of Our lady of La Salette, Inc. Within the land of the latter, waterpaths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioner’s land, caused a young man to drown, damagaed petitioner’s crops and plants, washed away costly fences, endangered the livesofthepetitioners and their laborers and some other destructions.This prompted petitioner spouses to file a criminal action for destruction by means of inundation under Article 324 of the RPC and a civil action for damages.

Issue: Whether  petitioner spouses Andamo can claim damages for destruction caused by respondent’s waterpaths and contrivances on the basis of Articles 2176 and 2177 of the Civil Code on quasi-delicts.

Held: Yes. A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff. 11

Clearly, from petitioner’s complaint, the waterpaths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of building these waterpaths and the damage sustained by

petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery of damages.

It must be stressed that the use of one’s property is not without limitations. Article 431 of the Civil Code provides that “the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person.” SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others. Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury or damage suffered.

Republic vs. CA

Republic of the Philippines, Benguet & Atok vs. Court of Appeals & De La RosaG.R. No. L-43938, April 15, 1988

Cruz, J.:

Doctrine: The owner of a piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. The rights over the land are indivisible and the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural.

Facts: These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964.The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9.

In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation.

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side cuts, and its payment of taxes on the land.

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon.

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973.

The trial court denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered.

The applicants appealed to the respondent court, which reversed the trial court and recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims. Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership.

Issue: Whether respondent court’s decision, i.e. “the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claim,” is correct.

Held: No. Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which

they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes. It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain. By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention of a patent over it. As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok. The Court of Appeals justified this by saying there is “no conflict of interest” between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application.

The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected. As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to “agricultural, industrial, commercial, residential or (for) any purpose other than mining.” Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership

of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings.

Spouses Custodio vs. CA

Spouses Cristino and Brigida Custodio and Spouses Lito and Maria Cristina Santos vs. Court of Appeals, Heirs of Pacifico C. MabasaG.R. No. 116100, February 9, 1996

Regalado, J.:

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 respondent’s property, there are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distan(t) from Mabasa’s 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 Mabasa’s 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.

Aneco Realty v. Landex

FACTS:

Fernandez Hermanos Development, Inc. (FHDI)  sold 22 lots to petitioner Aneco and 17 lots to Landex.  Landex constructed a concrete wall on one of its lots. To restrain construction of the wall, Aneco filed a complaint for

injunction with the RTC in Quezon City. Petitioner later filed supplemental complaints seeking to demolish the newly-built wall and to hold Landex liable damages.

Landex filed its Answer alleging, among others, that Aneco was not deprived access to its lots due to the construction of the concrete wall. Landex claimed that Aneco has its own entrance toits property along Miller Street, Resthaven Street, and San Francisco del Monte Street. The Resthaven access, however, was rendered inaccessible when Aneco constructed a building on said street.

ISSUE:

Whether or not Aneco may enjoin Landex from constructing a concrete wall on its own

property.

HELD: 

No. Under Article 430 of the Civil Code, every owner the right to enclose or fence his land or tenement. The right to fence flows from the right of ownership subject only to the limitations and restrictions provided by law.

Abejaron vs. Nabasa

Abejaron vs. NabasaG.R. No. 84831, June 20, 2001

Puno, J.

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.

NPC vs. Ibrahim

Sunday, June 22, 2014

Facts:

Ibrahim owns a parcel of land located in Lanao del Norte.

In 1978, NAPOCOR took possession of the sub-terrain area of the land and constructed underground tunnels on the said property. 

The tunnels were apparently being used by NAPOCOR in siphoning the water of Lake Lanao and in the operation of NAPOCOR’s Agus projects.

In 1991, Maruhom (one of the co-heirs of Ibrahim) requested Marawi City Water District for a permit to construct or install a motorized deep well on the parcel of land but it was rejected on the grounds that the construction would cause danger to lives and property by reason of the presence of the underground tunnels.

Maruhom demanded NAPOCOR to pay damages and to vacate the sub-terrain portion of the land.

Issue: WON Ibrahim is the rightful owner of the sub-terrain area of the land.

If yes, are they entitled to the payment of just compensation.

Held: YES. The sub-terrain portion of the property belongs to Ibrahim.

The Supreme Court cited Article 437 of the Civil Code which provides that: The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to special laws and ordinances. xxx

Hence, the ownership of land extends to the surface as well as to the subsoil under it. Therefore, Ibrahim owns the property as well as the sub-terrain area of the land where the underground tunnels were constructed.

On the issue of just compensation, the Supreme Court also said that Ibrahim should be paid a just compensation.

Ibrahim could have dug upon their property and built motorized deep wells but was prevented from doing so by the authorities because of the construction of the tunnels underneath the surface of the land.

Ibrahim still had a legal interest in the sub-terrain portion insofar as they could have excavated the same for the construction of the deep wells.  It has been shown that the underground tunnels have deprived the plaintiffs of the lawful use of the land and considerably reduced its value. 

It was held that: If the government takes property without expropriation and devotes the property to public use, after many years, the property owner may demand payment of just compensation in the event restoration of possession is neither convenient nor feasible. This is in accordance with the principle that persons shall not be deprived of their property except by competent authority and for public use and always upon payment of just compensation.

Bachrach Motor vs. Ledesma

The Bachrach Motor Co., Inc., vs. Mariano Lacson Ledesma, Talisay-Silay Milling Co., Inc., and the Philippine National BankG.R. No. 42462, August 31, 1937

Imperial, J.

Doctrine: Bonus is not civil fruits as contemplated in Art. 442. It is not one of those meant by the law when it says “other similar income” since the phrase refers merely to things analogous to rents, leases and annuities. Assuming that it is income, still, it is not income obtained or derived from

the land itself, but income obtained as compensation for the risk assumed by the owner.

Facts: The Talisay- Silay Milling Co., Inc., in order to secure its indebtedness to the Philippine National Bank, induced its planters, among whom was Mariano Ledesma to mortgage their land to the creditor bank. As compensation and bonus to those planters for the risk they were running with their property under the mortgage, the aforesaid central, by a resolution passed on December 22, 1923, granted to herein respondent, Mariano Lacson Ledesma, the sum of P19,911.11, Philippine currency, which sum, however, would not be payable until the month of January, 1930.

Thereafter, or on December 20, 1929, Bachrach Motor Co., Inc., brought an action in the Court of First Instance of Iloilo against the Talisay-Silay Milling Co., Inc., to recover from it the sum of P13,850 against the bonus or dividend which, by virtue of the resolution of December 22, 1923, said Central Talisay-Silay Milling Co., Inc., had declared in favor of the defendant Mariano Lacson Ledesma as one of the owners of the hacienda which had been mortgaged to the Philippine National Bank to secure the obligation of the Talisay-Silay Milling Co., Inc., in favor of said bank.

The Philippine National Bank, on the other hand, on February 13, 1930, filed a complaint in intervention alleging that in had a preferred right to said bonus granted by the central to the defendant Mariano Lacson Ledesma as one of the owners of the haciendas which had been mortgaged to said bank to answer for the obligations of the Central Talisay-Silay Milling Co., Inc., basing such allegation on the fact that, as said properties were mortgaged to it by the debtor Mariano Lacson Ledesma, by virtue of the deed to secure the obligations of the Talisay-Silay Milling Co., Inc., and said bonus being a civil fruit of the mortgaged lands, said bank was entitled to it on the ground that the mortgage of August 9, 1923, had become due.

Issue: Whether the bonus in question is a civil fruit and hence should pertain to PNB on account of the mortgage of Ledesma’s land

Held: No. The bonus is not a civil fruit. The Supreme Court held that the bonus had no immediate relation to the lands in question but merely a remote and accidental one and, therefore, it was not a civil fruit of the real properties mortgaged to the Philippine National Bank to secure the obligation of the Talisay-Silay Milling Co., Inc., being a mere personal right of Mariano Lacson Ledesma. It is not one of those meant by Art. 442 of the Civil Code when it says “other similar income” since the phrase merely refers to things analogous to rents, leases, and annuities. Assuming that it

is income, still it is not income obtained or derived from the land itself, but obtained as compensation for the risk assumed by the owner. It should, moreover, be remembered that the bonus was not based upon the value or importance of the land but upon the total value of the debt secured. Hence, the PNB does not have a preferred right with regard to the bonus as against herein petitioner.

Equatorial Realty vs. Mayfair Theater

Equatorial Realty Development, Inc. vs. Mayfair Theater, Inc.G.R. No. 133879, November 21, 2001

Panganiban, J.

Doctrine: Rent is a civil fruit that belongs to the owner of the property producing it by right of accession.

Facts: Carmelo & Bauermann, Inc. (“Camelo” ) used to own a parcel of land with two 2-storey buildings constructed thereon, located at Claro M. Recto Avenue, Manila, which it leased to Mayfair Theater Inc. (“Mayfair”) for a period of 20 years. The Contract of Lease contained a provision granting Mayfair a right of first refusal to purchase the subject properties. However, on July 30, 1978 — within the 20-year-lease term — the subject properties were sold by Carmelo to Equatorial Realty Development, Inc. (“Equatorial”) for the total sum of P11,300,000, without first offering to Mayfair. Mayfair filed a Complaint before the RTC of Manila for (a) the annulment of the Deed of Absolute Sale between Carmelo and Equatorial, (b) specific performance, and (c) damages. The lower court rendered a Decision in favor of Carmelo and Equatorial but the CA reversed such decision rescinding the sale and ordered to allow Mayfair Theater, Inc. to buy the aforesaid lots for P11,300,000.00. Mayfair bought the property. However, Equatorial filed an action for the collection of a sum of money against Mayfair, claiming payment of rentals or reasonable compensation for Mayfair’s use of the subject premises after its lease contracts had expired. Equatorial alleged that representing itself as the owner of the subject premises by reason of the Contract of Sale; it claimed rentals arising from Mayfair’s occupation thereof. The trial court dismissed the Complaint holding that the rescission of the Deed of Absolute Sale did not confer on Equatorial any vested or residual proprietary rights.

Issue: Whether Equatorial is entitled to back rentals.

Held: No. In the case, there was no right of ownership transferred from Carmelo to Equatorial in view of a patent failure to deliver the property to

the buyer. By a contract of sale, “one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and the other to pay therefor a price certain in money or its equivalent.” Ownership of the thing sold is a real right,[ which the buyer acquires only upon delivery of the thing to him “in any of the ways specified in articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee.” This right is transferred, not by contract alone, but by tradition or delivery. And there is said to be delivery if and when the thing sold “is placed in the control and possession of the vendee.” From the peculiar facts of this case, it is clear that petitioner never took actual control and possession of the property sold, in view of respondent’s timely objection to the sale and the continued actual possession of the property. While the execution of a public instrument of sale is recognized by law as equivalent to the delivery of the thing sold, such constructive or symbolic delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual possession of the land sold. In the case, Mayfair’s opposition to the transfer of the property by way of sale to Equatorial was a legally sufficient impediment that effectively prevented the passing of the property into the latter’s hands. Rent is a civil fruit that belongs to the owner of the property producing it by right of accession. Consequently and ordinarily, the rentals that fell due from the time of the perfection of the sale to petitioner until its rescission by final judgment should belong to the owner of the property during that period. Not having been the owner, Equatorial cannot be entitled to the civil fruits of ownership like rentals of the thing sold.

Ignacio v. Hilario [G.R. No. L-175. April 30, 1946.] En Banc, Moran (J): 10 concur

Facts: Elias Hilario and his wife Dionisia Dres filed a complaint Damian, Francisco and Luis Ignacio concerning the ownership of a parcel of land, partly rice-land and partly residential. After the trial of the case, the lower court (Judge Alfonso Felix), rendered judgment holding Hilario and Dres as the legal owners of the whole property but conceding to the Ignacios the ownership of the houses and granaries built by them on the residential portion with the rights of a possessor in good faith, in accordance with article 361 of the Civil Code; without pronouncement is made as to damages and costs.

Subsequently, in a motion filed in the same CFI (Judge Hon. Felipe Natividad), Hilario and Dres prayed for an order of execution alleging that since they chose

neither to pay the Ignacios for the buildings nor to sell to them the residential lot, the Ignacios should be ordered to remove the structure at their own expense and to restore Hilario and Dres in the possession of said lot. After hearing, the motion was granted by Judge Natividad. Hence, the petition for certiorari was filed by the Ignacios praying for (a) a restraint and annulment of the order of execution issued by Judge Natividad; (b) an order to compel Hilario and Dres to pay them the sum of P2,000 for the buildings, or sell to them the residential lot for P45; or (c) a rehearing of the case for a determination of the rights of the parties upon failure of extra-judicial settlement.

The Supreme Court set aside the writ of execution issued by Judge Natividad and ordered the lower court to hold a hearing in the principal case wherein it must determine the prices of the buildings and of the residential lot where they are erected, as well as the period of time within which Hilario and Dres may exercise their option either to pay for the buildings or to sell their land, and, in the last instance, the period of time within which the Ignacios may pay for the land, all these periods to be counted from the date the judgment becomes executory or unappealable. After such hearing, the court shall render a final judgment according to the evidence presented by the parties; with costs against Hilarion and Dres.

1. Right of retention of builder in good faith

The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under article 453. Article 453 provides that “Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until such expenses are made good to him. Useful expenses shall be refunded to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or paying the increase in value which the thing may have acquired in consequence thereof.”

2. Option of the landowner to pay for the building or sell his land to the owner of the building; Right of remotion only available if he chose the latter and the owner of the building cannot pay

The owner of the land, upon the other hand, has the option, under article 361, either to pay for the building or to sell his land to the owner of the building. Article 361 provides that “The owner of land on which anything has been built,

sown or planted in good faith, shall have the right to appropriate as his own the work, sowing or planting, after the payment of the indemnity stated in articles 453 and 454, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.” He cannot however refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having chosen to sell his land, the other party fails to pay for the same.

3. Order amends judgment substantially and thus null and void

The order of Judge Natividad compelling the Ignacios to remove their buildings from the land belonging to Hilario and Dres only because the latter chose neither to pay for such buildings nor to sell the land, is null and void, for it amends substantially the judgment sought to be executed and is, furthermore, offensive to articles 361 and 453 of the Civil Code.

4. Original decision did not become final as it failed to determine the value of the buildings and of the lot; and the time to which the option may be exercised

In the decision of Judge Felix, the rights of both parties were well defined under articles 361 and 453 of the Civil Code, but it failed to determine the value of the buildings and of the lot where they are erected as well as the periods of time within which the option may be exercised and payment should be made, these particulars having been left for determination apparently after the judgment has become final. The procedure is erroneous, for after the judgment has become final, no additions can be made thereto and nothing can be done therewith except its execution. And execution cannot be had, the sheriff being ignorant as to how, for how much, and within what time may the option be exercised, and certainty no authority is vested in him to settle these matters which involve exercise of judicial discretion. Thus, the judgment rendered by Judge Felix has never become final, it having left matters to be settled for its completion in a subsequent proceeding, matters which remained unsettled up to the time the petition is filed in the present case.

[51]

Ignao v. IAC [G.R. No. 72876. January 18, 1991.] Third Division, Fernan (J): 3 concur

Facts: A lot situated in Barrio Tabon, Municipality of Kawit, Cavite, with an area of 534 sq. m. was originally owned by Baltazar Ignao who married twice. In his first marriage, he had 4 children, namely Justo (the father of Florencio), Leon, Juan and Isidro. In his second marriage, Baltazar had also 4 children but the latter waived their rights over the controverted land in favor of Justo. Thus, Justo owned 4/8 of the land which was waived by his half-brothers and sisters plus his 1/8 share or a total of 5/8. Thereafter, Justo acquired the 1/8 share of Leon for P500.00 which he later sold to his son Florencio for the same amount. When Justo died, Florencio inherited the 5/8 share of his father Justo plus his 1/8 share of the land which he bought or a total of 6/8 (representing 400.5 sq. m.) Juan and Isidro, on the other hand, had 1/8 share (66.75 sq. m.) each of the land or a total of 133.5 sq. m. Thus, Florencio and his uncles Juan and Isidro were co-owners of a parcel of land. Pursuant to an action for partition filed by Florencio Ignao (Civil Case N-1681), the then CFI Cavite in a decision dated 6 February 1975 directed the partition of the aforesaid land, alloting 133.5 sq. m. or 2/8 thereof to Juan and Isidro, and giving the remaining portion with a total area of 266.5 sq. m. to petitioner Florencio. However, no actual partition was ever effected.

On 17 July 1978, Florencio instituted a complaint for recovery of possession of real property against Juan and Isidro before the CFI Cavite (Civil Case 2662). In his complaint, Florencio alleged that the area occupied by the 2 houses built by Juan and Isidro exceeded the 133.5 sq. m. previously alloted to them by the trial court in Civil Case N-1681. An ocular inspection was conducted by the lower court; which found that the houses of Juan and Isidro actually encroached upon a portion of the land belonging to Florencio. Upon agreement of the parties, the trial court ordered a licensed geodetic engineer to conduct a survey to determine the exact area occupied by the houses of Juan and Isidro. The survey subsequently disclosed that the house of Juan occupied 42 sq. m. while that of Isidro occupied 59 sq. m. of Florencio’s land or a total of 101 sq. m. In its decision, the trial court (thru Judge Luis L. Victor) ruled that although Juan and Isidro occupied a portion of Florencio’s property, they should be considered builders in good faith. The trial court observed that based on the facts of the case, it would be useless and unsuitable for Florencio to exercise the first option (of appropriating part of the house standing on his lot) since this would render the entire houses of Juan and Isidro worthless. The trial court then applied the ruling in the similar case of Grana vs. Court of Appeals, where the Supreme Court had advanced a more “workable solution”. Thus, it ordered Florencio to sell to Juan

and Isidro those portions of his land respectively occupied by the latter at P40.00 per sq. m., and to execute the necessary deed of conveyance to the Juan and Isidro; without pronouncement as to costs. Florencio appealed to the IAC. On 27 August 1985, the Appellate Court (Second Civil Cases Division), promulgated a decision, affirming the decision of the trial court. Hence the petition for review by certiorari.

The Supreme Court modified the decision appealed from. The Court directed Florencio to exercise his option to either appropriate as his own the portions of the houses of Juan and Isidro Ignao occupying his land upon payment of indemnity in accordance with Articles 546 and 548 of the Civil Code, or sell to private respondents the 101 sq. m. occupied by them at such price as may be agreed upon; within 30 days from entry of judgment. Should the value of the land exceed the value of the portions of the houses that Juan and Isidro have erected thereon, the latter may choose not to buy the land but they must pay reasonable rent for the use of the portion of Florencio’s land as may be agreed upon by the parties. In case of disagreement, the rate of rental and other terms of the lease shall be determined by the trial court. Otherwise, Juan and Isidro may remove or demolish at their own expense the said portions of their houses encroaching upon Florencio’s land; Without costs.

1. Co-owners hold property in common dominion, with each an owner of share (abstract and undetermined until partition is effected

Prior to partition, all the co-owners hold the property in common dominion but at the same time each is an owner of a share which is abstract and undetermined until partition is effected. As cited in Eusebio vs. Intermediate Appellate Court, “an undivided estate is co-ownership by the heirs.” As co-owners, the parties may have unequal shares in the common property, quantitatively speaking. But in a qualitative sense, each co-owner has the same right as any one of the other co-owners. Every co-owner is therefore the owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract, because until division is effected such portion is not concretely determined.

2. Article 448

Article 448 provides that “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.”

3. Article 448 does not apply to a co-owner; except co-ownership is terminated

In the case of Spouses del Campo vs. Abesia, it was held that Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows on the land owned in common for then he did not build, plant or sow upon land that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person under the circumstances, and the situation is governed by the rules of co-ownership. However, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner which was however made in good faith, then the provisions of Article 448 should apply to determine the respective rights of the parties.

4. Right to appropriate works or to oblige builder to pay the price of the land belongs to the landowner

As held in Quemuel vs. Olaes, it was categorically ruled that the right to appropriate the works or improvements or to oblige the builder to pay the price of the land belongs to the landowner. Both the trial court and the Appellate Court erred when they peremptorily adopted the “workable solution” in the case of Grana vs. Court of Appeals, and ordered the owner of the land, Florencio, to sell to Juan and Isidro, the part of the land they intruded upon, thereby depriving Florencio of his right to choose. Such ruling contravened the explicit provisions of Article 448 to the effect that “the owner of the land shall have the right to appropriate or to oblige the one who built to pay the price of the land.” The law is clear and unambiguous when it confers the right of choice upon the landowner and not upon the builder and the courts.

5. Determination of price to be paid premature

The question on the price to be paid on the land need not be discussed as this would be premature inasmuch as Florencio has yet to exercise his option as the owner of the land.

FILIPINAS COLLEGES INC. vs. MARIA GARCIA TIMBANG, ET AL.

[G.R. No. L-1281, September 29, 1959]

BARRERA, J.:

FACTS:

 This is an appeal taken from an order of the Court of First Instance of Manila dated May 10, 1957 (a) declaring the Sheriff’s certificate of sale covering a school building sold at public auction null and void unless within 15 days from notice of said order the successful bidders, defendants-appellants spouses Maria Garcia Timbang and Marcelino Timbang, shall pay to, appellee Maria Gervacio Blas directly or through the Sheriff of Manila the sum of P5,750.00 that the spouses Timbang had bid for the building at the Sheriff’s sale; (b) declaring the other appellee Filipinas Colleges, Inc. owner of 24,500/3,285,934 undivided interest in Lot No. 2-a covered by certificate of tile No 45970, on which the building sold in the auction sale is situated; and © ordering the sale in public auction of the said undivided interest of the Filipinas Colleges, Inc., in lot No. 2-a aforementioned to satisfy the unpaid portion of the judgment in favor of appellee Blas and against Filipinas Colleges, Inc. in the amount of P8,200.00 minus the sum of P5,750.00 mentioned in (a) above. The order appealed from is the result of three motions filed in the court a quo in the course of the execution of a final judgment of the Court of Appeals rendered in 2 cases appealed to it in which the spouses Timbang, the Filipinas Colleges, Inc., and Maria Gervacio Blas were the parties. The Timbang spouses presented their opposition to each and all of this motion. In assailing the order of the court a quo directing the appellants to pay appellee Blas the amount of their bid (P5,750.00) made atthe public auction, appellants‘ counsel has presented a novel, albeit ingenious, argument. They contend that since the builder in good faith has failed to pay the price of the land after the owners thereof exercised their option under Article 448 of the Civil Code, the builder has lost his right and the appellants as owners of the land automatically became the owners ipso facto.

ISSUE/S:

1.Whether or not the contention of the appellants is valid. If not, what are the remedies left to the owner of the land if the builder fails topay?

2.Whether or not the appellants, as owner of the land, may seek recovery of the value of their land by a writ of execution; levy the house of the builder and sell it in public auction.

HOLDING & RATIO DECIDENDI:

NO, THE APPELLANTS CONTENTION IS SUPERFLUOUS.

 There is nothing in the language of these two articles, 448 and 546, which would justify the conclusion of appellants that, upon the failure of the builder to pay the value of the land, when such is demanded by the land-owner, the latter becomes automatically the owner of the improvement under Article 445. Although it is true, it was declared therein that in the event of the failure of the builder to pay the land after the owner thereof has chosen this alternative, the builder’s right of retention provided in Article 546 is lost, nevertheless there was nothing said that as a consequence thereof, the builder loses entirely all rights over his own building. The remedy left to the parties in such eventuality where the builder fails to pay the value of the land, though the Code is silent on this Court, a builder in good faith not be required to pay rentals. He has right to retain the land on which he has built in good faith until he is reimbursed the expenses incurred by him.

Possibly he might be made to pay rental only when the owner of the land chooses not to appropriate the improvement and requires the builder in good faith to pay for the land but that the builder is unwilling or unable to pay the land, and then they decide to leave things as they are and assume the relation of lessor and lessee, and should they disagree as to the amount of rental then they can go to the court to fix that amount. This was ruled in the case of Miranda vs. Fadullon, et al., 97 Phil.,801. A further remedy is indicated in the case of Bernardo vs. Bataclan,supra, where this Court approved the sale of the land and the improvement in a public auction applying the proceeds thereof first to the payment of the value of the land and the excess, if any, to be delivered to the owner of the house in payment thereof.

The second contention was without merit.

In the instant case, the Court of Appeals has already adjudged that appellee Blas is entitled to the payment of the unpaid balance of the purchase price of the school building. With respect to the order of the court declaring appellee Filipinas Colleges, Inc. part owner of the land to the extent of the value of its personal properties sold at

public auction in favor of the Timbang, this Court likewise finds the same as justified, for such amount represents, in effect, apartial payment of the value of the land. Failure of the Timbang spouses to pay to the Sheriff or to Manila Gervacio Blas said sum of P5,750.00 within fifteen (15) days from notice of the final judgment, an order of execution shall issue in favor of Maria Gervasio Blas to be levied upon all properties of the Timbang spouses not exempt from execution for the satisfaction of the said amount.

Manotok Realty v. Tecson [G.R. No. L-47475. August 19, 1988.] Third Division, Gutierrez Jr. (J): 4 concur

Facts: Manotok Realty filed a complaint against Nilo Madlangawa for recovery of possession and damages with the then CFI Manila. Said court rendered judgment, declaring Madlangawa as a builder or possessor in good faith; ordering the company to recognize the right of Madlangawa to remain in Lot 345, Block 1, of the Clara Tambunting Subdivision until after he shall have been reimbursed by the company the sum of P7,500.00, without pronouncement as to costs. Not satisfied with the trial court’s decision, the company appealed to the Court of Appeals and upon affirmance by the latter of the decision below, the company elevated its case to the Supreme Court. On 13 July 1977, the Supreme Court issued a resolution dated 11 July 1977 denying the company’s petition for lack of merit.

On 5 August 1977, the company filed with the trial court (Judge Jose H. Tecson), a motion for the approval of the company’s exercise of option and for satisfaction of judgment, praying that the court issue an order: a) approving the exercise of the company’s option to appropriate the improvements introduced by Madlangawa on the property; b) thereafter, Madlangawa be ordered to deliver possession of the property in question to the company. On 7 October 1977, the judge held that in view of peculiar circumstances which supervened the institution of the case, e.g. the introduction of certain repairs of and other substantial improvements on the controverted property, the motion for approval was denied. After a denial of its motion for reconsideration,

the company filed the present petition for mandamus alleging that the judge committed grave abuse of discretion in denying his motion to exercise option and for execution of judgment on the grounds that under Articles 448 and 546 of the Civil Code, the exercise of option belongs to the owner of the property and

that upon finality of judgment, the prevailing party is entitled, as a matter of right, to its execution which is only a ministerial act on the part of the judge.

On 28 December 1980, PD 1669 was issued providing for the expropriation of the Tambunting Estate. However, this decree was challenged before the Supreme Court in GR 55166 (Elisa R. Manotok, et al. v. National Housing Authority, et al.). On 21 May 1987, the Court rendered a decision in the Elisa Manotok case ruling that PD 1669 is unconstitutional for being violative of the due process clause. Thus, the present petition has not been rendered moot and academic by the decision in Manotok v. NHA.

The Supreme Court granted the petition and ordered Judge Tecson to immediately issue a writ of execution ordering the Madlangawa to vacate the disputed premises and deliver possession of the same to the company, Manotok Realty.

1. When decision becomes final and executory, judge incumbent to issue necessary writ of execution

When the decision of the trial court became final and executory, it became incumbent upon the trial court judge to issue the necessary writ for the execution of the same. There is no basis for the judge to deny the petitioner’s motion to avail of its option to appropriate the improvements made on its property.

2. When decision becomes final, no addition can be made thereto

In Duenas v. Mandi (151 SCRA 530, 545), it was held that “after a judgment has become final, no additions can be made thereto, and nothing can be done therewith except its execution, otherwise there would be no end to legal processes. (Fabular v. Court of Appeals, 119 SCRA 329)” The judge cannot deny the issuance of a writ of execution because the Madlangawa was adjudged a builder in good faith or on the ground of “peculiar circumstances which supervened after the institution of this case, like, for instance, the introduction of certain major repairs of and other substantial improvements” because the option given by law either to retain the premises and pay for the improvements thereon or to sell the said premises to the builder in good faith belongs to the owner of the property.

3. Options available to the parties

In Queme v. Olaes (1 SCRA 1159, 1163), it was held that “under Article 448, the right to appropriate the works or improvements or ‘to oblige the one who built or planted to pay the price of the land’ belongs to the owner of the land. The only right given to the builder in good faith is the right to reimbursement for the improvements; the builder, cannot compel the owner of the land to sell such land to the former.”

4. Builder in good faith

In Paz Mercado, et al. v. Hon. Court of Appeals, et al., (GR L-44001, 10 June 1988), it was held that “to be deemed a builder in good faith, it is essential that a person assert title to the land on which he builds; i.e., that he be a possessor in concept of owner, (Art. 525, Civil Code; Lopez, Inc. v. Phil. Eastern Trading Co., Inc., 98 Phil. 348) and that he be unaware ‘that there exists in his title or mode of acquisition any flaw which invalidates it.’ (Art. 526, Civil Code; Granados v. Monton, 86 Phil. 42; Arriola v. Gomez de la Serna, 14 Phil. 627; See also Manotok Realty, Inc. v. C.A., 134 SCRA 329, citing Caram v. Laureta, 103 SCRA 7) It is such a builder in good faith who is given the right to retain the thing, even as against the real owner, until he has been reimbursed in full not only for the necessary expenses but also for useful expenses. (Art. 546, Civil Code; Policarpio v. CA., 129 SCRA 51; Sarmiento v. Agana, 129 SCRA 122; cf, Queto v. C.A. ,122 SCRA 206)”

5. Good faith cease after filing of the complaint

In Mindanao Academy, Inc. v. Yap (13 SCRA 190, 196), it was held that “although the bad faith of one party neutralizes that of the other and hence as between themselves their rights would be as if both of them had acted in good faith at the time of the transaction, this legal fiction of (Yap)’s good faith ceased when the complaint against him was filed, and consequently the court’s declaration of liability for the rents thereafter is correct and proper. A possessor in good faith is entitled to the fruits only so long as his possession is not legally interrupted, and such interruption takes place upon service of judicial summons (Arts. 544 and 1123, Civil Code).”

6. Repairs and improvements introduced after the filing of the complaint in bad faith

The repairs and improvements introduced by the builder after the complaint was filed cannot be considered to have been built in good faith, much less, justify the denial of the landowner’s exercise of option.

7. Improvements gutted by fire, builder’s right to retain extinguished

Since the improvements have been gutted by fire, and therefore, the basis for the builder’s right to retain the premises has already been extinguished without the fault of the landowner, there is no other recourse for the builder but to vacate the premises and deliver the same to the landowner.

BERNARDO v BATACLAN (1938; Laurel)

FACTS: Plaintiff Vicente Bernardo acquired a parcel of land from Pastor Samonte thru a contract of sale. Thereafter, Bernardo instituted a case against said vendor to secure possession of the land. Bernardo was able to obtain a favorable decision from the court. The plaintiff found the defendant herein, Catalino Bataclan, in the said premises. It appears that he has been authorized by former owners, as far back as 1922, to clear the land and make improvements thereon. Thus, plaintiff instituted a case against Bataclan in the Court of First Instance of Cavite. In this case, plaintiff was declared the owner of the land but the defendant was held to be a possessor in good faith, entitled to reimbursement in the total sum of P1,642, for work done and improvements made. Both parties appealed the decision.

The court thereafter made some modifications by allowing the defendant to recover compensation amounting to P2,212 and by reducing the price at which the plaintiff could require the defendant to purchase the land in question from P300 down to P200 per hectare. Plaintiff was likewise given 30 days from the date when the decision became final to exercise his option, either to sell the land to the defendant or to buy the improvements from him. On January 9, 1934, the plaintiff conveyed to the court his desire "to require the defendant to pay him the value of the land at the rate of P200 per hectare or a total price of P18,000 for the whole tract of land." The defendant indicated that he was unable to pay the land and, on January 24, 1934, an order was issued giving the plaintiff 30 days within which to pay the defendant the sum of P2,212.

Subsequently, on April 24, 1934, the court below, at the instance of the plaintiff and without objection on the part of the defendant, ordered the sale of the land in question at public auction. The land was sold on April 5, 1935 to Toribio Teodoro for P8,000.

ISSUE: WON DEFENDANT BATACLAN IS STILL ENTITLED TO RECOVER THE COURT MANDATED COMPENSATION ARISING FROM THE SALE OF THE PROPERTY TO TORIBIO

HELD: NO. Manresa, basing on Art 448 of the NCC, where the planter, builder or sower has acted in good faith, a conflict of rights arises between the owners and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. The law provided a just and equitable solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper rent. In this case, the plaintiff, as owner of the land, chose to require the defendant, as owner of the improvements to pay for the land.

The defendant avers that “he is a possessor in good faith and that the amount of P2,212 to which he is entitled has not yet been paid to him.” Defendant further claims that he has a right to retain the land in accordance with the provisions of article 453 of the Civil Code. While the said argument is legally tenable, the same must perforce be denied because defendant Bataclan has lost his right of retention as he failed to pay for the land. “The law, as we have already said, requires no more than that the owner of the land should choose between indemnifying the owner of the improvements or requiring the latter to pay for the land”.