Ladera v.

Hodges
G.R. No. 8027-R, September 23, 1952, Vol. 48, No. 12, Official Gazette 5374
Reyes, J.B.L., J.

FACTS: Paz G. Ladera entered into a contract with C.N. Hodges. Hodges promised to
sell a lot to Ladera, subject to certain terms and conditions. The agreement called for a
down payment of P 800.00 and monthly installments of P 5.00 each with interest of 1%
per month, until P 2,085 is paid in full. In case of failure of the purchaser to make any
monthly payment within 60 days after it fell due, the contract may be considered as
rescinded or annulled.

Ladera built a house on the lot. Later on, she defaulted in the payment of the agreed
monthly installment. Hodges filed an action for the ejectment of Ladera.

The court issued an alias writ of execution and pursuant thereto, the city sheriff levied
upon all rights, interests, and participation over the house of Ladera. At the auction
sale, Ladera’s house was sold to Avelino A. Magno. Manuel P. Villa, later on, purchased
the house from Magno.

Ladera filed an action against Hodges and the judgment sale purchasers. Judgment was
rendered in favor of Ladera, setting aside the sale for non-compliance with Rule 39,
Rules of Court regarding judicial sales of real property. On appeal, Hodges contends
that the house, being built on a lot owned by another, should be regarded as movable
or personal property.

ISSUE: Whether or not Ladera’s house is an immovable property.

HELD: YES. The old Civil Code numerates among the things declared by it as
immovable property the following: lands, buildings, roads and constructions of all kind
adhered to the soil. The law does not make any distinction whether or not the owner of
the lot is the one who built. Also, since the principles of accession regard buildings and
constructions as mere accessories to the land on which it is built, it is logical that said
accessories should partake the nature of the principal thing.

Mindanao Bus Company v. The City Assessor and Treasurer

G.R. No. L-17870, September 29, 1962, 6 SCRA 197
Labrador, J.

FACTS: Petitioner is a public utility company engaged in the transport of passengers

and cargo by motor vehicles in Mindanao with main offices in Cagayan de Oro (CDO).
Petitioner likewise owned a land where it maintains a garage, a repair shop and
blacksmith or carpentry shops. The machineries are placed thereon in wooden and
cement platforms. The City Assessor of CDO then assessed a P4,400 realty tax on said
machineries and repair equipment. Petitioner appealed to the Board of Tax Appeals but
it sustained the City Assessor's decision, while the Court of Tax Appeals (CTA) sustained
the same.
Note: This is merely a case digest to aid in remembering the important points of a case.
It is still advisable for any student of law to read the full text of assigned cases.

ISSUE: Whether the equipments in question are immovable or movable properties.

HELD: The Supreme Court decided otherwise and held that said machineries and
equipments are not subject to the assessment of real estate tax.

1
Movable equipments to be immobilized in contemplation  of law must first be essential
and principal elements of an industry or works without which such  industry  or  works 
would  be  unable  to  function  or  carry  on  the industrial purpose for which  it was
established.  We may  here distinguish
those movables, which are essential and principal elements of an industry, from  those 
which  may  not  be  so  considered  immobilized  by  destination because they are
merely incidental, not essential and principal.  
In the case at bar, the tools and equipments in question are by their nature not
essential and principal elements of petitioner’s business of transporting passengers and
cargoes by motor trucks.  They are merely incidentals. 

Makati Leasing and Finance Corporation v. Wearever Textile Mills, Inc.

G.R. No. L-58469, May 16, 1983, 122 SCRA 29
De Castro, J.

FACTS: To obtain financial accommodations from the Makati Leasing and Finance
Corporation, the Wearever Textile discounted and assigned several receivables with
them under a “receivable purchase agreement.” To secure the collection of receivables
assigned, Wearever Textile executed a chattel mortgage over certain raw materials
inventory, as well as machinery described as an aero dryer stentering range. Upon
default of Wearever Textile, the Makati Leasing petitioned for extrajudicial foreclosure
of the properties mortgaged to it. When the sheriff failed to enter Wearever Textile’s
premises to seize the machinery, Makati Leasing applied for a replevin. Wearever
Textile contended that it cannot be a subject of replevin or a chattel mortgage because
it is a real property as it is attached to the ground by means of bolts and that the only
way to remove it is to destroy the concrete floor.

ISSUE: Whether or not the machinery is real or personal property.

HELD: The machinery is a personal property. The Supreme Court explained that if a
house of strong materials may be considered as personal property for purposes of
executing a chattel mortgage, there is absolutely no reason why a machinery, which is
movable in its nature and becomes immobilized only by destination or purpose, may not
be likewise treated as such.

Santos Evangelista v. Alto Surety and Insurance Co., Inc.

G.R. No. L-11139, April 23, 1958, 103 Phil. 401
Concepcion, J.

FACTS: On June 4, 1949, Santos Evangelista instituted a civil case for a sum of money.
On the same date, he obtained a writ of attachment, which was levied upon a house,
built by Rivera on a land situated in Manila and leased to him. In due course, judgment
was rendered in favor of Evangelista, who bought the house at public auction held in
compliance with the writ of execution issued in said case. When Evangelista sought to
take possession of the house, Rivera refused to surrender it, upon the ground that he
had leased the property from the Alto Surety & Insurance Co., Inc. and that the latter is
now the true owner of said property. It appears that on May 10, 1952, a definite deed
of sale of the same house had been issued to Alto Surety, as the highest bidder at an
auction sale held. Hence, Evangelista instituted an action against Alto Surety and

2
Ricardo Rivera, for the purpose of establishing his title over said house, and securing
possession thereof, apart from recovering damages. After due trial, the CFI Manila
rendered judgment for Evangelista, sentencing Rivera and Alto Surety to deliver the
house in question to Evangelista and to pay him, jointly and severally, P40.00 a month
from October, 1952, until said delivery, plus costs.

ISSUE: Whether or not a house constructed by the lessee of the land on which it is
built, should be dealt with, for purposes of attachment, as immovable property or as
personal property.

HELD: The house is not personal property, much less a debt, credit or other personal
property not capable of manual delivery, but immovable property. As explicitly held, in
Ladera vs. Hodges (48 OG 5374), "a true building (not merely superimposed on the
soil) is immovable or real property, whether it is erected by the owner of the land or by
a usufructuary or lessee. The opinion that the house of Rivera should have been
attached in accordance with subsection (c) of said section 7, as "personal property
capable of manual delivery, by taking and safely keeping in his custody", for it declared
that "Evangelista could not have validly purchased Ricardo Rivera's house from the
sheriff as the latter was not in possession thereof at the time he sold it at a public
auction” is untenable.

Tsai v. Court of Appeals

G.R. No. 120098, October 2, 2001, 366 SCRA 324
Quisumbing, J.

FACTS: On November 26, 1975, respondent Ever Textile Mills, Inc. (EVERTEX)
obtained a three million peso (P3,000,000.00) loan from petitioner Philippine Bank of
Communications (PBCom). As security for the loan, EVERTEX executed in favor of
PBCom, a deed of Real and Chattel Mortgage over the lot where its factory stands, and
the chattels located therein. On April 23, 1979, PBCom granted a second loan to
EVERTEX. The loan was secured by a chattel mortgage over personal properties
enumerated in a list attached thereto. After April 23, 1979, the date of the execution of
the second mortgage mentioned above, EVERTEX purchased various machines and
equipments.

Upon EVERTEX's failure to meet its obligation to PBCom, the latter commenced
extrajudicial foreclosure proceedings against EVERTEX. On December 15, 1982, the first
public auction was held where petitioner PBCom emerged as the highest bidder and a
Certificate of Sale was issued in its favor on the same date. On March 7, 1984, PBCom
consolidated its ownership over the lot and all the properties in it. In November 1986, it
leased the entire factory premises to petitioner Ruby L. Tsai. On May 3, 1988, PBCom
sold the factory, lock, stock, and barrel to Tsai, including the contested machineries.

On March 16, 1989, EVERTEX filed a complaint for annulment of sale, reconveyance,
and damages with the Regional Trial Court against PBCom. EVERTEX claimed that no
rights having been transmitted to PBCom over the assets of insolvent EVERTEX,
therefore Tsai acquired no rights over such assets sold to her, and should reconvey the
assets.

ISSUE: Whether or not the inclusion of the questioned properties in the foreclosed
properties is proper.

3
HELD: Yes. While it is true that the questioned properties appear to be immobile, a
perusal of the contract of Real and Chattel Mortgage executed by the parties gives a
contrary indication. In the case at bar, the true intention of PBCOM and the owner,
EVERTEX, is to treat machinery and equipment as chattels. Assuming that the
properties in question are immovable by nature, nothing detracts the parties from
treating it as chattels to secure an obligation under the principle of estoppel. It has
been held that an immovable may be considered a personal property if there is a
stipulation as when it is used as security in the payment of an obligation where a
chattel mortgage is executed over it, as in the case at bar.

#2

Serg’s Products, Inc. v. PCI Leasing and Finance, Inc.

G.R. No. 137705, August 22, 2000, 338 SCRA 499
Panganiban, J.

FACTS: Respondent PCI Leasing and Finance Inc. filed with the RTC of Quezon City a
complaint for sum of money, with an application for a writ of replevin. A writ of replevin
was issued, directing the sheriff to seize and deliver the machineries and equipment to
PCI Leasing after five days and upon payment of the necessary expenses. The sheriff
proceeded to petitioner's factory and seized one machinery. Petitioner filed a motion for
special protective order invoking the power of the court to control the conduct of its
officers and amend and control its processes, praying for a directive for the sheriff to
defer enforcement of the writ of replevin. The motion was opposed by PCI on the
ground that the properties were personal and therefore still subject to seizure and writ
of replevin. In their reply, petitioners asserted that the properties were immovable as
defined in Article 415 of the Civil Code, the parties' agreement to the contrary
notwithstanding. Petitioners went to the Court of Appeals via an original action for
certiorari. The Court of Appeals ruled that the subject machines were personal property
as provided by the agreement of the parties.

ISSUE: Whether or not the subject machines were personal, not real, property, which
may be a proper subject of a writ of replevin.

HELD: The contracting parties may validly stipulate that a real property be considered
as personal. After agreeing to such stipulation, they are consequently estopped from
claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein. In the present
case, the lease agreement clearly provides that the machines in question are to be
considered as personal properties. Clearly then, petitioners were estopped from denying
the characterization of the subject machines as personal property. Under the
circumstances, they are proper subject of the writ of seizure. Accordingly, the petition
was denied and the assailed decision of the Court of Appeals was affirmed.

Burgos v. Chief of Staff, AFP

G.R. No. 64261, December 26, 1984, 133 SCRA 800
Escolin, J.

FACTS: On December 7, 1982, two search warrants where issued and the premises at
19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building, Quezon
Avenue, Quezon City, business addresses of the "Metropolitan Mail" and "We Forum"
newspapers were searched. Office and printing machines, equipment, paraphernalia,

4
motor vehicles and other articles used in the printing, publication and distribution of the
said newspapers, as well as numerous papers, documents, books and other written
literature alleged to be in the possession and control of Jose Burgos, Jr. publisher-editor
of the "We Forum" newspaper, were seized.

ISSUE: Whether or not real properties were seized under the disputed warrants.

HELD: No. Under Article 415 (5) of the Civil Code, "machinery, receptacles, instruments
or implements intended by the owner of the tenement for an industry or works which
may be carried on in a building or on a piece of land and which tend directly to meet
the needs of the said industry or works" are considered immovable property. In Davao
Sawmill Co. v. Castillo , it was said that machinery which is movable by nature becomes
immobilized when placed by the owner of the tenement, property or plant, but not so
when placed by a tenant, usufructuary, or any other person having only a temporary
right, unless such person acted as the agent of the owner. In the present case,
petitioners do not claim to be the owners of the land and/or building on which the
machineries were placed. The machineries, while in fact bolted to the ground, remain
movable property susceptible to seizure under a search warrant.

#3

Lopez v. Orosa, Jr., and Plaza Theatre, Inc.

G.R. No. L-10817-18, February 28, 1958, 103 Phil. 98
Felix, J.

FACTS: Lopez was engaged in business under the name Lopez-Castelo Sawmill. Orosa
approached Lopez and invited the latter to make an investment in the theatre business
he was forming, the Plaza Theatre. Lopez expressed his unwillingness to invest.
Nonetheless, Lopez agreed to supply the lumber for the construction of the theatre.
Lopez further agreed that that the payment therefore would be on demand and not
cash on delivery basis. Lopex delivered the lumber which was used for the construction
of the Plaza Theatre. However, of the total cost of materials amounting to P62, 255.85,
Lopez was paid only P 20, 848.50, thus leaving a balance of P 41, 771.35.

Due to Lopez’ demands, Orosa issued a deed of assignment over his shares of stock of
the Plaza Theatre, Inc. As there was still an unpaid balance, Lopez filed a case against
Orosa and Plaza Theatre. He asked that Orosa and Plaza theatre be held liable solidarily
for the unpaid balance, and in case defendants failed to pay, the land and building
should be sold in public auction with the proceeds to be applied to the balance, or that
the shares of stock be sold in public auction.

ISSUE: Whether or not the lien for the value of the materials used in the construction
of the building attaches to said structure alone and does not extend to the land on
which the building is adhered to.

HELD: No. While it is true that generally, real estate connotes the land and the building
constructed thereon, it is obvious that the inclusion of the building, separate and
distinct from the land, in the enumeration of what may constitute real properties could
only mean one thing—that a building is by itself an immovable property. In view of the
absence of any specific provision to the contrary, a building is an immovable property
irrespective of whether or not said structure and the land on which it is adhered to
belong to the same owner. The lien so created attaches merely to the immovable
property for the construction or repair of which the obligation was incurred. Therefore,

5
the lien in favor of appellant for the unpaid value of the lumber used in the construction
of the building attaches only to said structure and to no other property of the obligors.

#5

Yap v. Tañada
G.R. No. L-32917, July 18, 1988, 163 SCRA 464
Narvasa, J.

FACTS: Goulds Pumps International (Phil.), Inc. filed a complaint against Yap and his
wife seeking recovery of P1,459.30 representing the balance of the price and
installation cost of a water pump in the latter's premises. Goulds presented evidence ex
parte and judgment by default was rendered by Judge Tañada requiring Yap to pay to
Goulds the unpaid balance of the pump purchased by him and interest of 12% per
annum.

Thereafter, the water pump in question was levied by the sheriff and by notice dated
November 4, 1969, scheduled the execution sale thereof. But in view of the pendency
of Yap's motion for reconsideration, suspension of the sale was directed. It appears
however that a copy of the order suspending the sale was not transmitted to the sheriff
Hence, the Deputy Provincial Sheriff went ahead with the scheduled auction sale and
sold the property levied on to Goulds as the highest bidder. 

Yap argues that "the sale was made without the notice required by Sec. 18, Rule 39, of
the New Rules of Court," i.e., notice by publication in case of execution sale of real
property, the pump and its accessories being immovable because attached to the
ground with character of permanency (Art. 415, Civil Code).

ISSUE: Whether or not the water pump in question is an immovable property.

HELD: No. Yap's argument is untenable. The Civil Code considers as immovable
property, among others, anything "attached to an immovable in a fixed manner, in such
a way that it cannot be separated therefrom without breaking the material or
deterioration of the object." The pump does not fit this description. It could be, and was
in fact separated from Yap's premises without being broken or suffering deterioration.
Obviously, the separation or removal of the pump involved nothing more complicated
than the loosening of bolts or dismantling of other fasteners.

Machinery and Engineering Supplies, Inc. v. Court of Appeals

G.R. No. L-7057, October 29, 1954, 96 Phil. 70
Concepcion, J.

FACTS: Petitioner Machinery and Engineering Supplies filed a complaint for replevin for
the recovery of the machinery and equipment sold and delivered to Ipo Limestone Co.
An order was issued to seize and take immediate possession of the properties specified
in the order. Upon carrying out the court’s order, Roco, the company’s President, along
with a crew of technical men and labourers, proceeded to the factory. The manager of
Ipo Limestone Co. and Torres protested against the seizure of the properties on the
ground that they are not personal properties. However, since the sheriff contended that
his duty is purely ministerial, they all went to the factory and dismantled the equipment
despite the fact that the equipment could not be dismantled without causing damage or

6
injuries to the wooden frames attached to them. Consequently, they had to cut some of
the supports of the equipment which rendered its use impracticable.

ISSUE: Whether or not the machinery and equipment in question could be the subject
of replevin.

HELD: No. Replevin is applicable only to personal property. The machinery and
equipment in question appeared to be attached to the land, particularly to the concrete
foundation of said premises, in a fixed manner, in such a way that the former could not
be separated from the latter without breaking the material or deterioration of the
object. Hence, in order to remove the said outfit, it became necessary not only to
unbolt the same, but also to cut some of its wooden supports. Moreover, said
machinery and equipment were intended by the owner of the tenement for an industry
carried on said immovable. For these reasons, they were already immovable pursuant
to paragraphs 3 and 5 of Article 415 of the Civil Code.

#7

FELS Energy, Inc. v. The Province of Batangas

G.R. No. 168557, February 16, 2007
Callejo, Sr., J.

FACTS: On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc.
over diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The
contract staes that NPC shall be responsible for the payment of all taxes other levies
imposed government to which POLAR may be or become subject to in respect of the
Power Barges. Subsequently, Polar Energy, Inc. assigned its rights under the agreement
to FELS Energy Inc.

On August 7, 1995, FELS received an assessment of real property taxes on the power
barges from Provincial Assessor of Batangas City. The assessed tax amounted to
P56,184,088.40 per annum. FELS referred the matter to NPC, reminding it of its
obligation under the agreement to pay all real estate taxes. NPC sought reconsideration
of the Provincial Assessor’s decision to assess real property taxes on the power barges,
alleging that barges are non-taxable items. In its answer, the Provincial Assessor
averred that the barges were real property for purposes of taxation under Section
199(c) of Republic Act (R.A.) No. 7160.

ISSUE: Whether power barges, which are floating and movable, are personal
properties and therefore, not subject to real property tax.

HELD: NO. The power barges are real property and are thus subject to real property
tax. Tax assessments by tax examiners are presumed correct and made in good faith,
with the taxpayer having the burden of proving otherwise. Besides, factual findings of
administrative bodies, which have acquired expertise in their field, are generally binding
and conclusive upon the Court.

7
8
Laurel v. Garcia
G.R. No. 92013, July 25, 1990, 187 SCRA 797
Gutierrez, J.

FACTS: In view of the Reparations Agreement between the Philippines and Japan, four
properties located in Japan were given to the Philippines. One of these properties is the
Roppongi property. The said property was formerly the location of the Chancery of the
Philippine Embassy until it was transferred to Nampeidai on July 22, 1976. The Roppongi
property has remained abandoned from the time of the transfer due to lack of funds to develop
the said property. Consequently, Administrative orders were issued by the President
authorizing the study of the condition of the properties of the Philippines in Japan.
Subsequently, Executive Order 296 was issued by President Aquino allowing non-Filipinos to
buy or lease some of the properties of the Philippines located in Japan, including Roppongi.

Petitioners now contend that the Roppongi property cannot be alienated as it is classified as
public dominion and not of private ownership because it is a property intended for public
service under paragraph 2, article 420 of the Civil Code. On the other hand, respondents aver
that it has already become part of the patrimonial property of the State which can be alienated
because it has not been used for public service for over 13 years. They further contend that EO
296 converted the subject property to patrimonial property.

ISSUE: Whether or not the Roppongi property still forms part of the public dominion hence
cannot be disposed nor alienated.

HELD: Yes. The respondents failed to convincingly show that the property has already become
patrimonial. The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property. Under Art. 422 of
the Civil Code, there must be a definite and a formal declaration on the part of the government
to withdraw it from being public. Abandonment must be a certain and a positive act based on
correct legal premises. The mere transfer of the embassy to Nampeidai is not a relinquishment
of the property’s original purpose.

The Administrative orders authorizing the study of the conditions of government properties in
Japan were merely directives for investigation but did not in any way signify a clear intention to
dispose of the properties. Likewise, EO 296 did not declare that the properties lost their public
character; it merely made them available to foreigners in case of sale, lease or other
disposition. Thus, since there is no law authorizing its conveyance, the Roppongi property still
remains part of the inalienable properties of the State.

#12

Rabuco v. Villegas
G.R. No. L-24916, February 28, 1974, 55 SCRA 658
Teehankee, J.

FACTS: The issue in this case involves the constitutionality of Republic Act No. 3120 whereby
the Congress converted the lots in question together with another lot in San Andres, Malate that
are reserved as communal property into disposable or alienable lands of the State. Such lands are
to be placed under the administration and disposal of the Land Tenure Administration for
subdivision into small lots not exceeding 120 square meters per lot for sale on instalment basis to

9
the tenants or bona fide occupants thereof and expressly prohibited ejectment and demolition of
petitioners' homes under Section 2 of the Act. Respondent contends that the Act is invalid and
unconstitutional for it constitutes deprivation of property without due process of law and without
just compensation.

ISSUE: Whether or not Republic Act No. 3120 is constitutional.

HELD: Yes. The lots in question are manifestly owned by the city in its public and
governmental capacity and are therefore public property over which Congress had absolute
control as distinguished from patrimonial property owned by it in its private or proprietary
capacity of which it could not be deprived without due process and without just compensation. It
is established doctrine that the act of classifying State property calls for the exercise of wide
discretionary legislative power, which will not be interfered with by the courts. The Acts in
question were intended to implement the social justice policy of the Constitution and the
government program of land for the landless and that they were not intended to expropriate the
property involved but merely to confirm its character as communal land of the State and to make
it available for disposition by the National Government. The subdivision of the land and
conveyance of the resulting subdivision lots to the occupants by Congressional authorization
does not operate as an exercise of the power of eminent domain without just compensation in
violation of Section 1, subsection (2), Article III of the Constitution, but simply as a
manifestation of its right and power to deal with state property.

#13

Macasiano v. Diokno
G.R. No. 97764, August 10, 1992, 212 SCRA 464
Medialdea, J.

FACTS: The Municipality of Paranque passed an ordinance that authorized the closure of J.
Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran,
Paranaque Metro Manila and the establishment of a flea market thereon. Thereafter, the
municipal council of Paranaque issued a resolution authorizing Paranaque Mayor Walfrido N.
Ferrer to enter into a contract with any service cooperative for the establishment, operation,
maintenance and management of flea markets and/or vending areas. By virtue of this,
respondent municipality and respondent Palanyag, a service cooperative, entered into an
agreement whereby the latter shall operate, maintain and manage the flea market in the
aforementioned streets with the obligation to remit dues to the treasury of the municipal
government of Paranaque. Consequently, market stalls were put up by Palanyag on the said
streets.

Petitioner Macasiano, PNP Superintendent of the Metropolitan Traffic Command, then ordered
the destruction and confiscation of the stalls along the abovementioned streets. Hence,
respondents filed with the trial court a joint petition for prohibition and mandamus with
damages and prayer for preliminary injunction, to which the petitioner filed his opposition to
the issuance of the writ of preliminary injunction. The trial court upheld the validity of the
ordinance in question.

ISSUE: Whether or not an ordinance or resolution which authorizes the lease and use of public
streets or thoroughfares as sites for flea markets is valid.

HELD: No. The aforementioned streets are local roads used for public service and are therefore
considered public properties of respondent municipality. Article 424 of the Civil Code provides
that properties of public dominion devoted for public use and made available to the public in
general are outside the commerce of man and cannot be disposed of or leased by the local
government unit to private persons. Properties of the local government which are devoted to

10
public service are deemed public and are under the absolute control of Congress. Hence, LGUs
have no authority whatsoever to control or regulate the use of public properties unless specific
authority is vested upon them by Congress.

#11

Republic of the Philippines v. Court of Appeals

G.R. No. 100709, November 14, 1997, 281 SCRA 639
Panganiban, J.

FACTS: Morato filed for a patent on a parcel of land located in Calauag, Quezon, which was
approved, provided that the land shall not be encumbered or alienated within a period of five
years from the date of the issuance of the patent. Later on, the land was established to be a
portion of Calauag Bay, which was five to six feet deep during high tides and three feet deep on
low tides. The water level rose because of the ebb and flow of tides from the bay and the
storms that frequently passed through the area. Furthermore, it was observed by the Director
of Lands from his investigation, that the land of Morato was leased to Advincula for P100 per
month and it was also mortgaged to Co for P10,000. The Director of Lands filed a suit with the
contention that Morato violated the 5-year prohibitory period and thus the patent should be
cancelled and the land should revert back to the State.

ISSUE: Whether or not there is a violation of the prohibition of the patent, and thus, the subject
land should revert back to the ownership of the State.

HELD: Yes. The lease was an encumbrance included in the prohibitions of the patent because it
impairs the use of the land by Morato herself. As for the mortgage, it is a legal limit on the title
and if there will be foreclosure because Morato was not able to pay her debts, the property will
be auctioned. It is also a limitation on Morato's right to enjoy and possess the land for herself.
Encumbrance, as defined, is an impairment on the use or transfer of property, or a claim or lien
on the property where there is a burden on the title. Thus, Morato clearly violated the terms of
the patent on these points. Moreover, the property became a foreshore land because it turned
into a portion of land which was covered most of the time with water, whether it was low or
high tide. Foreshore is defined as land between high and low waters which is dry depending on
the reflux or ebb of the tides. In accordance with this land reclassification, the land can no
longer be subject to a pending patent application and must be returned to the State.

Province of Zamboanga del Norte v. City of Zamboanga

G.R. No. L-24440, March 28, 1968, 22 SCRA 1334
Bengzon, J.P., J.

FACTS: On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga
into two (2): Zamboanga del Norte and Zamboanga del Sur. Republic Act 3039 was approved
providing that “all buildings, properties and assets belonging to the former province of
Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in
favor of the said City of Zamboanga.”

Plaintiff-appellee Zamboanga del Norte filed a complaint in the Court of First Instance of
Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance
and the Commissioner of Internal Revenue. It was prayed that Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of property without due process and just
compensation. Included in the properties were the capital site and capitol building, certain
school sites, hospital and leprosarium sites, and high school playground.

11
ISSUE: Whether or not the properties mentioned are properties for public use or patrimonial.

HELD: The subject properties are properties for public use. The validity of the law ultimately
depends on the nature of the lots and buildings in question. The principle itself is simple: If the
property is owned by the municipality (meaning municipal corporation) in its public and
governmental capacity, the property is public and Congress has absolute control over it. But if
the property is owned in its private or proprietary capacity, then it is patrimonial and Congress
has no absolute control. The municipality cannot be deprived of it without due process and
payment of just compensation.

Applying the norm obtaining under the principles constituting the law of Municipal
Corporations, all those of the 50 properties in question which are devoted to public service are
deemed public; the rest remain patrimonial. Under this norm, to be considered public, it is
enough that the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc. 

Regarding the several buildings existing on the lots above-mentioned, the records do not
disclose whether they were constructed at the expense of the former Province of Zamboanga.
Considering however the fact that said buildings must have been erected even before 1936
when Commonwealth Act 39 was enacted and the further fact that provinces then had no
power to authorize construction of buildings such as those in the case at bar at their own
expense, it can be assumed that said buildings were erected by the National Government, using
national funds. Hence, Congress could very well dispose of said buildings in the same manner
that it did with the lots in question.

Chavez v. Public Estates Authority

G.R. No. 133250, July 9, 2002
Carpio, J.

FACTS: In 1973, the Government through the Commissioner of Public Highways and the
Construction and Development Corporation of the Philippines (CDCP) signed a contract to
reclaim certain foreshore and offshore areas of Manila Bay. PD 1084 was issued, creating Public
Estates Authority (PEA), and PD 1085, transferring the reclaimed lands under the MCCRRP to
PEA.

In 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation
to develop the Freedom Islands, and the JVA was approved by President Ramos. However, PEA
and AMARI entered into the JVA through negotiation without public bidding. A Legal Task Force
was created to look into the issue. The said task force upheld the legality of the JVA.

In 1998, Frank I. Chavez, as a taxpayer, filed a petition to compel PEA to disclose all facts on its
negotiations with AMARI, invoking the constitutional right of the people to information on
matters of public concern. He assails the sale to AMARI of lands of the public domain as a
blatant violation of the constitutional prohibiting in the sale of alienable lands of the public
domain to private corporations.

Despite the ongoing court petitions, PEA and AMARI signed an Amended Joint Venture
Agreement (Amended JVA) in 1999, and such was approved by President Estrada. The
Amended JVA seeks to convey to AMARI the ownership of 77.34 hectares of the Freedom
Islands.

12
ISSUE: Whether AMARI has the capacity to acquire the lands held by PEA.

HELD: No. Under the 1987 Constitution, private corporations such as AMARI cannot acquire
alienable land of the public domain. Reclaimed lands comprising the Freedom Islands, which
are 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. Thus, the Amended
Joint Venture Agreement between AMARI and PEA was null and void.

#10

Chavez v. National Housing Authority

G.R. No. 164527, August 15, 2007
Velasco, Jr., J.

FACTS: President Corazon Aquino issued Memorandum Order No. 161 approving and directing
the implementation of the Comprehensive and Integrated Metropolitan Manila Waste
Management Plan. Respondent National Housing Authority 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”, particularly in the Smokey Mountain. It produced the
“Smokey Mountain Development Plan and Reclamation of the Area Across R-10” or the Smoke
Mountain Development and Reclamation Project. The Project aimed to covert Smokey
mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area.
President Aquino approved the said Project through MO 415. After President Aquino’s term,
President Fidel Ramos, through Proclamation No. 39, authorized the NHA to enter into a Joint
Venture Agreement with R-II Builders, Inc. (RBI) for the implementation of the project.
Afterwards, President Ramos issued Proclamation No. 465 increasing the proposed area for
reclamation across R-10 from 40 hectares to 79 hectares. The petitioner Francisco Chavez
contended that the respondent NHA or respondent RBI has no authority to reclaim foreshore
and submerged land.

ISSUE: Whether or not respondent NHA has the authority to reclaim foreshore and submerged
land.

HELD: Yes. The National Housing Authority (NHA) is a government agency not tasked to dispose
of public lands under its charter – it is an “end-user agency” authorized by law to administer
and dispose of reclaimed lands. The moment titles over reclaimed lands based on the special
patents are transferred to the National Housing Authority (NHA) by the Register of Deeds, they
are automatically converted to patrimonial properties of the State which can be sold to Filipino
citizens and private corporations, 60% of which are owned by Filipinos. The combined and
collective effect of Proclamations Nos. 39 and 465 with Special Patents Nos. 3592 and 3598 is
tantamount to and can be considered to be an official declaration that the reclaimed lots are
alienable or disposable lands of the public domain. 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 are not necessary
anymore for public use or public service when President Aquino through MO 415 conveyed the
same to the National Housing Authority (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.

#9

13
Manila International Airport Authority v. Court of Appeals
G.R. No. 155650, July 20, 2006
Carpio, J.

FACTS: MIAA received Final Notices of Real Estate Tax Delinquency from the City of Parañaque
for the taxable years 1992 to 2001. MIAA’s real estate tax delinquency was estimated at P624
million. Thus, the City of Parañaque, through its City Treasurer, issued notices of levy and
warrants of levy on the Airport Lands and Buildings. The Mayor of the City of Parañaque
threatened to sell at public auction the Airport Lands and Buildings should MIAA fail to pay the
real estate tax delinquency. City of Parañaque contends that Section 193 of the Local
Government Code expressly withdrew the tax exemption privileges of “government-owned
and-controlled corporations” upon the effectivity of the Local Government Code. However,
MIAA avers that airport lands and buildings are owned by the State, and thus, exempt from tax.

ISSUE: Whether or not airport lands and buildings of MIAA are exempt from real estate tax.

HELD: Yes. MIAA is a government instrumentality vested with corporate powers to perform
efficiently its governmental functions. MIAA is like any other government instrumentality, the
only difference is that MIAA is vested with corporate powers. Unless the government
instrumentality is organized as a stock or non-stock corporation, it remains a government
instrumentality exercising not only governmental but also corporate powers. Thus, MIAA
exercises the governmental powers of eminent domain, police authority and the levying of fees
and charges. The airport lands and buildings of MIAA are property of public dominion and
therefore owned by the State or the Republic of the Philippines. Hence, the subject properties
are not subject to tax.

Javier v. Veridiano II
G.R. No. L-48050, October 10, 1994, 237 SCRA 565
Bellosillo, J.

FACTS: Javier filed a Miscellaneous Sales Application for lot 1641. She later instituted a
complaint for forcible entry against Babol, alleging that she was forcibly dispossessed of a
portion of said land. The case for forcibly entry was however dismissed as it was found by the
court that the occupied portion was outside Lot 1641. The same was dismissed on appeal.
Javier was eventually granted a Miscellaneous Sales Patent and issued an OCT for lot 1641.
Babol, however had sold the property he was occupying, including a portion of 200 square
meters to Rosete. Javier demanded the surrender of the same area from Rosete who
repeatedly refused to comply. After 4 years, Javier instituted a complaint for quieting of title
and recovery of possession with damages against Babol and Rosete. Rosete moved to dismiss
the complaint on the ground of res judicata. The CFI sustained the argument of Rosete and
granted his motion to dismiss. Javier contends that res judicata cannot apply in the instant case
since there is no identity of parties and causes of action between her complaint for forcible
14
entry, which had long become final and executory, and her subsequent petition for quieting of
title. Javier maintains that there is no identity of causes of action since the first case was for
forcible entry, which is merely concerned with the possession of the property, whereas the
subsequent case was for quieting of title, which looks into the ownership of the disputed land.

ISSUE: Whether or not there are really different causes of action between the forcible entry
case and the later quieting of title case.

HELD: Yes. For res judicata to bar the institution of a subsequent action the following requisites
must concur: (1) There must be a final judgment or order; (2) The court rendering the judgment
must have jurisdiction over the subject matter; (3) The former judgment is a judgment on the
merits; and, (4) There is between the first and second actions identity of (4a) parties, (4b) of
subject matter and (4c) of causes of action.
Javier's argument that there is no identity of parties between the two actions is without merit.
We have repeatedly ruled that for res judicata to apply, what is required is not absolute but
only substantial identity of parties. But, there is merit in Javier's argument that there is no
identity of causes of action.

"The only issue in an action for forcible entry is the physical or material possession of real
property, that is, possession de facto and not possession de jure. The philosophy underlying this
remedy is that irrespective of the actual condition of the title to the property, the party in
peaceable quiet possession shall not be turned out by strong hand, violence or terror." A
judgment rendered in a case for recovery of possession is conclusive only on the question of
possession and not on the ownership. It does not in any way bind the title or affects the
ownership of the land or building.

On the other hand, Civil Case No. 2203-0 is in reality an action to recover a parcel of land or an
accion reivindicatoria under Art. 434 of the Civil Code, and should be distinguished from Civil
Case No. 926, which is an accion interdictal. Accion interdictal, which is the summary action for
forcible entry (detentacion) where the defendant's possession of the property is illegal ab initio,
or the summary action for unlawful detainer (desahuico) where the defendant's possession was
originally lawful but ceased to be so by the expiration of his right to possess, both of which
must be brought within one year from the date of actual entry on the land, in case of forcible
entry, and from the date of last demand, in case of unlawful detainer, in the proper municipal
trial court or metropolitan trial court; accion publiciana which is a plenary action for recovery of
the right to possess and which should be brought in the proper regional trial court when the
dispossession has lasted for more than one year; and, accion reivindicatoria or accion de
reivindicacion which seeks the recovery of ownership and includes the jus utendi and the jus
fruendi brought in the proper regional trial court.

Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff alleges

ownership over a parcel of land and seeks recovery of its full possession. It is different from
accion interdictal or accion publiciana where plaintiff merely alleges proof of a better right to
possess without claim of title.

In Civil Case No. 926 Javier merely claimed a better right or prior possession over the disputed
area without asserting title thereto. It should be distinguished from Civil Case No. 2203-0 where
she expressly alleged ownership.

JAVIER V. VERIDIANO II- Action for Determination

of Ownership

15
A final judgment on forcible entry or unlawful detainer is NOT a bar against to an action
for determination of ownership. A judgment rendered in a case for recovery of
possession is conclusive only as to possession, not ownership. It is not a bar against an
action for determination of ownership.

FACTS:

Petitioner bought a land on a subdivision by filing a Miscellaneous Sales Application.

Pending the approval of the sale, Ben Babol entered a portion adjacent to the land
being bought by Petitioner. Petitioner claims that the occupied land by Babol is part of
his land so he filed a forcible entry case. However, the trial court found Petitioner wrong
and so sustained the possession of Babol. Later on, Babol would sell this portion to
private Respondent. In the meantime, the application was approved and a TCT was
delivered to Petitioner. This motivated the Petitioner to demand the land again, this time
from Respondent, and this time on the basis of ownership. He filed a complaint for
quieting of title and recovery of possession. Respondent countered that the first case on
forcible entry constituted res judicata against the second complaint.

ISSUE:

W/N the first case on forcible entry was res judicata against the second case on quieting
of title

RULING:

No! Once again, for res judicata to arise, four requisites must concur: Final judgment,
Court with competent jurisdiction, judgment based on merits, identity of parties and
cause of action.
The Court said that in the two cases, there were identity of parties because
Respondent, having acquired the contested land by sale and tradition, is a successor in
interest.

However, there was no identity of the causes of action. In forcible entry, the only issue
is prior possession and not ownership. In accion reivindicatoria, the issue is the
ownership. The Court held that the second case was actually an accion reivindicatoria
as Petitioner set up title for herself, prayed that Respondent to be ejected and that she
be declared the owner. Thus a final judgment on forcible entry or detainer is NOT a bar
against to an action for determination of ownership.

Bustos v. Court of Appeals

G.R. No. 120784-85, January 24, 2001, 350 SCRA 155
Pardo, J.

16
FACTS: Paulino Fajardo died intestate on April 2, 1957. He had four (4) children, namely:
Manuela, Trinidad, Beatriz and Marcial, all surnamed Fajardo. On September 30, 1964, the heirs
executed an extra-judicial partition of the estate of Paulino Fajardo. On the same date, Manuela
sold her share to Moses G. Mendoza, husband of Beatriz by 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 was 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.

On September 3, 1971, Moses filed with the Court of First Instance, Pampanga a complaint for
partition claiming the one fourth (1/4) share of Manuela which was sold to him. During the
pendency of the case for partition, Trinidad Fajardo died. On December 15, 1984, the heirs
executed an extra-judicial partition of the estate of Trinidad Fajardo. On February 16, 1987,
Lucio Fajardo Ignacio, son of Trinidad sold Lot 284-B to spouses Venancio Viray and Cecilia
Nunga-Viray.

On February 8, 1989, the Regional Trial Court, Pampanga, Macabebe, Branch 55 rendered a
decision in favor of Moses G. Mendoza.In the meantime, on November 6, 1989, spouses
Venancio Viray and Cecilia Nunga-Viray, buyers of Lucio Ignacio's share of the property, filed
with the Municipal Circuit Trial Court, Macabebe-Masantol, Pampanga an action for unlawful
detainer against spouses Bustos, the buyers of Moses G. Mendoza, who were in actual
possession as lessees of the husband of Trinidad, Francisco Ignacio, of the subject land. The
municipal circuit trial court decided the case in favor of spouses Viray. Subsequently, the trial
court issued writs of execution and demolition, but stayed when spouses Bustos filed with the
regional Trial Court, Pampanga, Macabebe, Branch 55, a petition for certiorari, prohibition and
injunction. On December 18, 1992, the regional trial court rendered a decision dismissing the
case. On September 9, 1994, petitioners filed a motion for reconsideration; however, on June
21, 1995, the Court of Appeals denied the motion.

ISSUE: Whether or not petitioners could be ejected from what is now their own land.

HELD: In this case, the issue of possession is intertwined with the issue of ownership. In the
unlawful detainer case, the Court of Appeals affirmed the decision of the trial court as to
possession on the ground that the decision has become final and executory. This means that
the petitioners may be evicted. In the accion reinvindicatoria, the Court of Appeals affirmed the
ownership of petitioners over the subject land. Hence, the court declared petitioners as the
lawful owners of the land. In the present case, 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. Besides, 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 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.

Heirs of Roman Soriano v. Court of Appeals

17
G.R. No. 128177, August 15, 2001, 363 SCRA 87
Ynares – Santiago, J.

FACTS: The land in dispute in this case is originally owned by Adriano Soriano who died
sometime in 1947. Adriano Soriano has 7 heirs whom leased the subject parcel of land to David
de Vera and Consuelo Villasista for a term of 15 years starting July 1, 1967. The lease contract
states that Roman Soriano will serve as the caretaker of the said property during the period of
lease. During the effectivity of the lease contract, the heirs of Adriano Soriano entered into
extrajudicial settlement of his estate. As a result of the settlement, the property was divided
into two property, Lot No. 60052 which was assigned to Lourdes and Candido, heirs of Adriano
and the heirs of Dionisia another heir of Adriano. The other property, Lot No. 8459 was
assigned to Francisco, Librada, Elcociado and Roman all heirs of Adriano. The owners of Lot No.
60052 sold the lot to spouses Braulio and Aquiliana Abalos, and the owners of Lot No. 8459,
except Roman also sold their shares to spouses Briones.

On March 14, 1968, the de Vera spouses ousted Roman as caretaker and appointed Isidro
Versoza and Vidal Versoza as his substitute. Roman filed a case for reinstatement and
reliquidation against the de Vera spouses in CAR Case No. 1724-P-68. 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. The deicion became final and executor.
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 applied for the registration of the disputed parcel of
land. Roman Soriano and the Director of Lands acted as oppositors. On June 27, 1983, the Land
Registration Court granted the application for registration. On April 13, 1983, after the
expiration of the original lease and sub-lease in favor of Roman Soriano, the Abalos spouses
filed a case for unlawful detainer against Roman Soriano, later, this case was dismissed on
motion of the Abalos spouses. On July 14, 1983, Elcociado, 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, Elcociado
and Librada to redeem their shares in the disputed land 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 filed on August 22,
1984, 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. On October 25,
1984, Roman filed a motion to suspend hearing on the rental demanded by the Abalos spouses
until after the other issues raised in his opposition to the motion for execution are resolved.
The motion to suspend hearing on the issue of the rentals was denied and the trial court
authorized the substitution of the de Vera spouses by the Abalos spouses. Roman Soriano's
motion for reconsideration was denied on March 16, 1985. Roman filed petition for certiorari
and prohibition in the Court of Appeals but the latter denied the petition, pending the denial of
this petition, Roman Soriano died. Not satisfied with the decision of the Court of Appeals, the
heirs of Roman Soriano brought this case in the Supreme Court.

ISSUE: Whether or not a winning party (ABALOS) in a land registration case can effectively eject
the possessor (SORIANO) thereof, whose security of tenure rights is still pending determination
before the DARAB.

HELD: No. The Court held that a judgment in a land registration case cannot effectively used to
oust the possessor of the land, whose security of tenure rights are still pending determination
18
before the DARAB. There is no dispute that Abalos spouses' title over the land under litigation
has been confirmed with finality. However, the declaration pertains only to ownership and does
not automatically include possession, especially soin the instant case where there is a third
party occupying the said parcel of land, allegedly in the concept of an agricultural tenant.
Agricultural lessees are entitled to security of tenure and they have the right to work on their
respective landholdings once the leasehold relationship is established. Security of tenure is a
legal concession to agricultural lessees which they value as life itself ad deprivation of their
landholdings is tantamount to deprivation of their only means of livelihood. The exercise of the
right of ownership, then, yields to the exercise of the rights of an agricultural tenant. The
Supreme Court decided to refrain from ruling whether petitioners may be dispossessed of the
subject property while petitioner's status as tenant has not yet been declared by the DARAB.

Garcia v. Court of Appeals

G.R. No. 133140, August 10, 1999, 312 SCRA 180
Puno, J.

FACTS: Petitioner Atty. Pedro Garcia, with the consent of his wife Remedios Garcia, sold a
parcel of land situated at Bel Air II Village, Makati to his daughter Maria Luisa Magpayo and her
husband Luisito Magpayo. The Magpayos mortgaged the land to the Philippine Bank of
Communications (PBCom) to secure a loan. The Magpayos failed to pay their loan upon its
maturity, hence, the mortgage was extrajudicially foreclosed and at the public auction sale in
which PBCom bought the land. 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.

PBCom subsequently filed a petition for the issuance of a writ of possession over the land with
the Regional Trial Court (RTC) of Makati. The RTC granted the petition. Upon service of the writ
of possession, Maria Luisa Magpayo’s brother, Jose Ma. T. Garcia, who was in possession of the
land, refused to honor it. Jose Garcia thereupon filed against PBCom, the Magpayos, and the
RTC Sheriff the instant suit for recovery of realty and damages wherein he contended, inter alia,
that at the time of the alleged sale to the Magpayo spouses, he was in possession of the
property; that, when his mother Remedios Tablan Garcia died, sometime in October, 1980, he
became, by operation of law, a co-owner of the property; and that, Atty. Pedro V. Garcia, at the
time of the execution of the instrument in favor of the Magpayo spouses was not in possession
of the subject property.

ISSUE: Whether or not Jose Magpayo was a co-owner of the parcel of the land in dispute.

HELD: No. 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 Jose Garcia occupied
the property not in the concept of an owner for his stay was merely tolerated by his parents. An
owner’s act of allowing another to occupy his house, rent-free does not create a permanent
19
and indefeasible right of possession in the latter’s favor. 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. All said, the Magpayo spouses were
already the owners when they mortgaged the property to PBCom.

Rodil Enterprises, Inc. v. Court of Appeals

G.R. No. 129609, November 29, 2001, 371 SCRA 79
Bellosillo, J.

FACTS: Rodil Enterprises Inc. (RODIL) is the lessee of the Ides O'Racca Building (O'RACCA) since
1959 which is a property owned by the Republic of the Philippines. In 1980, Rodil entered into a
sublease contract with respondents Carmen Bondoc, Teresita Bondoc-Esto, Divisoria Footwear
and Chua Huay Soon, members of the Ides O’Racca Building Tenants Association, Inc. On 12
September 1982 BP 233 was enacted. It authorized the sale of "former alien properties"
classified as commercial and industrial, and the O'RACCA building was classified as commercial
property. RODIL and Ides O’Racca Building Tenants Association, Inc., offered to purchase the
subject property. Pending action on the offer of RODIL to purchase the property, Director
Factora of the Building Services and Real Property Management Office granted RODIL's request
for another renewal of the lease contract on 23 September 1987 for another five (5) years from
1 September 1987. The renewal contract was forwarded to then Secretary Jose de Jesus of
Department of General Services and Real Estate Property Management (DGSREPM) for
approval. Upon recommendation of DGSREPM Rufino Banas, De Jesus disapproved the renewal
contract in favour of Rodil and recalled all papers signed by him regarding the subject. Secretary
De Jesus likewise directed RODIL to pay its realty tax delinquency and ordered the issuance of a
temporary occupancy permit to the ASSOCIATION.

On 6 October 1987 RODIL filed an action for specific performance, damages and injunction with
prayer for temporary restraining order before the Regional Trial Court of Manila against the
REPUBLIC, De Jesus, Banas, Factora and the ASSOCIATION. De Jesus, Banas and Factora were
later substituted by Secretary Fulgencio Factoran of the Department of Environment and
Natural Resources (DENR) in the action for specific performance. On 31 May 1988 Factora
issued Order No. 1 designating the Land Management Bureau represented by Director Abelardo
Palad, Jr. as custodian of all "former alien properties" owned by the REPUBLIC. Pending the
action for specific performance, RODIL signed a renewal contract with Director Palad which was
approved by Secretary Factora. The renewal contract would extend the lease for ten (10) years
from 1 September 1987. A supplement to the renewal contract was subsequently entered into
on 25 May 1992 where rentals on the previous lease contract were increased. As a result, the
action was dismissed in favour of Rodil. Rodil then filed an action for unlawful detainer against
Divisoria Footwear, Bondoc, Bondoc-Esto and Chua Huay Soon. Upon appeal, the Court of
Appeals declared the contracts null and void and dismissed the actions for unlawful detainer.

ISSUE: Whether or not Rodil has the right to occupy the building by virtue of its lease contract
with the Republic.

HELD: Yes. The owner has the 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. It
is an attribute of ownership, and this rule has no exception. 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. Hence, as lessor, the REPUBLIC has the right to eject usurpers of
the leased property where the factual elements required for relief in an action for unlawful
detainer are present.

20
Private respondents claim that the agreements of 23 September 1987, 18 May 1992 and 25
May 1992 did not give rise to valid contracts.This is true only of the Contract of Lease entered
into on 23 September 1987 which the REPUBLIC did not approve. RODIL neither alleged nor
proved that such approval was made known to it. The so-called approval of the lease contract
was merely stated in an internal memorandum of Secretary De Jesus addressed to Director
Factora. This is evident from the fact that Secretary De Jesus, in his letter, asked Factora to duly
execute a lease contract and forward it to his office for approval. The consequences of this fact
are clear. The Civil Code provides that no contract shall arise unless acceptance of the contract
is communicated to the offeror. Until that moment, there is no real meeting of the minds, no
concurrence of offer and acceptance, hence, no contract.

However, the same is not true of the contracts of 18 May 1992 and 25 May 1992. As argued by
RODIL, these contracts are not proscribed by law; neither is there a law prohibiting the
execution of a contract with provisions that are retroactive. Where there is nothing in a
contract that is contrary to law, morals, good customs, public policy or public order, the validity
of the contract must be sustained.

The Court of Appeals invalidated the contracts because they were supposedly executed in
violation of a temporary restraining order issued by the Regional Trial Court. The appellate
court however failed to note that the order restrains the REPUBLIC from awarding the lease
contract only as regards respondent ASSOCIATION but not petitioner RODIL. While a temporary
restraining order was indeed issued against RODIL, it was issued only on 25 May 1992 or after
the assailed contracts were entered into. As correctly stated by petitioner, one cannot enjoin an
act already fait accompli.
Private respondents argue that the "renewal contract" cannot "renew" a void contract.
However, they could cite no legal basis for this assertion. It would seem that respondents
consider the renewal contract to be a novation of the earlier lease contract of 23 September
1987. However, novation is never presumed. Also, the title of a contract does not determine its
nature. On the contrary, it is the specific provisions of the contract which dictate its nature.
Furthermore, where a contract is susceptible of two (2) interpretations, one that would make it
valid and another that would make it invalid, the latter interpretation is to be adopted. The
assailed agreement of 18 May 1992, "Renewal of Contract of Lease," merely states that the
term of the contract would be for ten (10) years starting 1 September 1987. This is hardly
conclusive of the existence of an intention by the parties to novate the contract of 23
September 1987. Nor can it be argued that there is an implied novation for the requisite
incompatibility between the original contract and the subsequent one is not present. Based on
this factual milieu, the presumption of validity of contract cannot be said to have been
overturned.

Respondent ASSOCIATION claims that the Decision of the Office of the President declaring null
and void the lease contracts of 18 May 1992 and 25 May 1992 should be counted in its favor.
We do not agree. The contention does not hold water. It is well-settled that a court's judgment
in a case shall not adversely affect persons who were not parties thereto.

Isaguirre v. De Lara
G.R. No. 138053, May 31, 2000, 332 SCRA 803
Gonzaga – Reyes, J.

FACTS: Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales
Application over a parcel of land with an area of 2,342 square meters. Upon his death,
Alejandro de Lara was succeeded by his wife-respondent Felicitas de Lara as claimant. On this
lot stands a two-story residential-commercial apartment declared for taxation purposes in the
21
name of respondent’s sons, Apolonio and Rodolfo de Lara. When Felicitas encountered
financial difficulties, she approached petitioner Cornelio M. Isaguirre. On February 10, 1960, a
document denominated as “Deed of Sale and Special Cession of Rights and Interests” was
executed by Felicitas and Isaguirre, whereby the former sold a 250 square meter portion of the
subject lot, together with the two-story commercial and residential structure standing thereon.
Sometime in May 1969, Apolonio and Rodolfo de Lara filed a complaint against petitioner for
recovery of ownership and possession of the two-story building. However, petitioner filed a
sales application over the subject property and was issued an OCT. Due to overlapping of title,
petitioner filed an action for quieting of title. Judgment was rendered in favor of the
respondents. When respondent filed a motion for execution, petitioner opposed, and alleged
that he had a right of retention over the property until payment of the value of the
improvements he had introduced on the property.

ISSUE: Whether or not petitioner can be considered a builder in good faith with respect to the
improvements he made on the property.

HELD: No. The petitioner is a possessor in bad faith. Based on the factual findings from this
case, it is evident that petitioner knew from the very beginning that there was really no sale
and that he held respondent’s property as mere security for the payment of the loan obligation.
Therefore, petitioner may claim reimbursement only for necessary expenses; however, he is
not entitled to reimbursement for any useful expenses which he may have incurred.

German Management & Services, Inc. v. Court of Appeals

G.R. No. 76216 and 76217, September 14, 1989, 177 SCRA 495
Fernan, J.

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,
22
Antipolo, Rizal, with an area of 232,942 sq. M. 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. 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, 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 PD 27,
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 The MTC dismissed Gernale
et.al.'s complaint for forcible entry. On appeal, the RTC sustained the dismissal by the MTC.
Gernale then filed a petition for review with the Court of Appeals. 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. Hence, here is the present recourse.

ISSUE: Whether the doctrine of self-help may be availed of when respondents refused to vacate
the premises.

HELD: No. The justification 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 the 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
New Civil Code which provides 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."

Caisip v. People of the Philippines

G.R. No. L-28716, November 18, 1970, 36 SCRA 17
Concepcion, C. J.

FACTS: Spouses Marcelino Guevarra and Gloria Cabalag cultivated a parcel of land known as
Lot 105-A of Hacienda Palico situated in Nasugbu, Batangas, the same land used to be tenanted
by Cabalag’s father when he was still alive. Hacienda Palico is owned by Roxas y Cia,
administered by Antonio Chuidian, and supervised by the overseer, Felix Caisip. Prior to the
incident involved, Guevarra sought recognition as a lawful tenant of Royas y Cia from the Court
of Agrarian Relations but his action was dismissed. Thereafter, Roxas y Cia filed an action
against Guevarra for forcible entry with prayer that Guevarra be ejected from the premises of
Lot 105-A. The Justice of the Peace of Court of Nasugbu decided in favor of Roxas y Cia and on
June 6, 1959, a trouble between Cabalag and Caisip occurred regarding the cutting of
sugarcane.
23
A day later, Cabalag entered again the premises of Lot 105-A and refused to be driven out by
Caisip. Due to Cabalag’s tenacious attitude, Caisip sought the help of the Chief of Police of
Nasugbu. The Deputy Sheriff, however, informed Caisip that his request to eject Cabalag cannot
be acted upon without a proper court order. Nevertheless, the Chief of Police assigned
Sergeant Ignacio Rojales and Corporal Frederico Villadelrey to Haciendo Palico. On June 17,
1959, Cabalag was seen weeding a portion of Lot 105-A which was a ricefield. Caisip
approached her and bade her to leave, but she refused to do so. So, Caisip went to Sgt. Rojales
and Cpl. Villadelrey and brought them to Cabalag. Rojales told Cabalag to stop weeding but she
insisted on her right to stay in the said lot. While in squatting position, Cabalag was grabbed by
Rojales who twisted her right arm and wrested the trowel she was holding. Villadelrey held her
left hand and together Rojales forcibly dragged her towards a banana plantation while Caisip
stood nearby, with a drawn gun. Cabalag shouted, “Ina ko po! Ina ko po!” and was heard by
some neighbors. Zoilo Rivera, head of the tenant organization to which Cabalag was affiliated,
went with them on their way to the municipal building. Upon arrival, Cabalag was turned over
by Rojales and Villadelrey to the policemen on duty, who interrogated her. But upon
representations made by Rivera, she was released and allowed to go home. Cabagan then filed
a complaint charging Caisip, Rojales and Villadelrey of the crime of “grave coercion.”

The Court of First Instance of Batangas found them guilty as charged. On appeal, The Court of
Appeals affirmed the trial court’s decision.

ISSUE: Whether or not the force employed by Caisip and others, in the exercise of his right
granted by Article 429, is reasonably necessary to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of his property.

HELD: No. Caisip was not even entitled to the right granted by Article 429. This is totally
inapplicable to the case, for, having been given 20 days from June 6th within which to vacate
the lot, Cabalag did not, on June 17th and within said period, invades or usurps the said lot. She
had merely remained in possession thereof, even though the hacienda owner may have
become its co-possessor by reason of the prior order of the Justice of Peace Court of Nasugbu.
Caisip and others did not repel or prevent an actual or threatened physical invasion or
usurpation. They expelled Cabalag from a property which she and her husband were in
possession, despite the fact that the Sheriff had explicitly authorized Guevarra and Cabalag to
stay in said property up to June 26th, and had expressed the view that he could not oust them
without a judicial order. It is clear, therefore, that Caisip, Rojales and Villadelrey, by means of
violence, and without legal authority, had 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 Article 286 of the Revised Penal Code.

People of the Philippines v. Pletcha

G.R. No. 19029-CR, June 27, 1977, 22 CA Rep. 807
Sison, J.

FACTS: Tito Pletcha, Jr., farmer, invoking ‘self-help’ in defense of the land he inherited from his
father 19 years ago against the workers of Radeco Corporation, who without court order, were
constructing a fence in a hacienda allegedly leased by the corporation from a certain Lopinco.

Claiming actual possession and ownership and believing that the land sought to be fenced was
an integral part of the land he inherited, Pletcha asked the group to desist from fenicing
pending a resurvey he proposed, but he was totally ignored, thus he fought off and prevented
24
the workers. As a result of such resistance he was prosecuted and convicted of grave coercion
by the Municipal Trial Court. Pletcha appealed the decision of the MTC with the Court of
Appeals.

ISSUE: Whether the appellant’s action is a legitimate exercise of a private citizen’s ‘self-help.

HELD: Yes. In the instant case,the usurper’s possession has not yet become complete and the
complainants were in the act of building a fence. Such an act constitutes force in contemplation
of the law. This act of trespass justified the appellant to drive them away, even by means of
bolo because they refused to listen to his appeal which is reasonable. The appellant need not
rush to the court to seek redress before reasonably resisting the invasion of his property. The
situation required immediate action and Art. 429 gave him the self executory mechanics of self-
defense and self-reliance. The provision in Art 429 of the New Civil Code confirms the right of
the appellant, an owner and lawful possessor, to use reasonable force to repel an invasion or
usurpation, actual, threatened or physical of his property. The principle of self-defense and the
protective measures related thereto, covers not only his life, but also his liberty and property.

“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 a 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 propriety or possessory rights constitutes a
justifying circumstance under the Penal Code.”

25
Andamo v. Intermediate Appellate Court
G.R. No. 74761, November 6, 1990, 191 SCRA 195
Fernan, C.J.

FACTS: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land
situated in Biga (Biluso) Silang, Cavite which is adjacent to that of private respondent,
Missionaries of Our Lady of La Salette, Inc., a religious corporation. Within the land of
respondent corporation, waterpaths and contrivances, including an artificial lake, were
constructed, which allegedly inundated and eroded petitioners' land, caused a young man to
drown, damaged petitioners' crops and plants, washed away costly fences, endangered the
lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and
other improvements to destruction.
Petitioners instituted a criminal action against the officers and directors of respondent
corporation, for destruction by means of inundation under Article 324 of the Revised Penal
Code. Subsequently, petitioners filed a civil action against respondent corporation for damages.
The trial court dismissed the civil case for lack of jurisdiction, as the criminal case which was
instituted ahead of the civil case was still unresolved. The appellate court affirmed the order of
the trial court. The motion for reconsideration was also denied.

ISSUE: Whether a corporation, which has built through its agents, waterpaths, water
conductors and contrivances within its land, thereby causing inundation and damage to an
adjacent land, can be held civilly liable for damages.

HELD: Yes. Petitioners' complaint sufficiently alleges that petitioners have sustained and will
continue to sustain damage due to the waterpaths and contrivances built by respondent
corporation. 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.

Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act
or omission constituting fault or negligence. However, responsibility for fault or negligence
under the said article is entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. The plaintiff cannot recover damages twice for the same act
or omission of the defendant. The decision is reversed and set aside.

Republic of the Philippines v. Court of Appeals

G.R. No. L-43938, April 15, 1988, 160 SCRA 228
Cruz, J.

FACTS: An application for registration of a parcel of land was filed on February 11, 1965, by Jose
de la Rosa on his own behalf and on behalf of his three children. The land, situated in Tuding,
26
Itogon, Benguet Province, was divided into 9 lots. 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. 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. Alberto said he received Lots 6-9 in 1961 from his
mother, Bella Alberto. She was corroborated by Felix Marcos, who recalled the earlier
possession of the land by Alberto's father. 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. 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.
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 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 appealed to the Supreme Court,
invoking their superior right of ownership. The Republic filed its own petition for review and
reiterated its argument that neither the private respondents nor the two mining companies had
any valid claim to the land because it was not alienable and registerable.

ISSUE: Whether or not Benguet and Atok have a better right over the property in question.

HELD: Yes. 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. 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.
It is true, as the Court of Appeals observed, that such private property was subject to the
"vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the
private respondents aver, by acquisitive prescription. 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. Under the aforesaid ruling, the land is classified as mineral
underneath and agricultural on the surface, subject to separate claims of title. However, 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.

27
This is an application of the Regalian doctrine. 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.

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. The
decision is set aside and that of the trial court is reinstated.

Custodio v. Court of Appeals

G.R. No. 116100, February 9, 1996, 253 SCRA 483
Regalado, J.

FACTS: Pacifico Mabasa owns a parcel of land with a two-door apartment. Said property may be
described to be surrounded by other immovables owned by petitioner Spouses Custodio,
Spouses Santos and Rosalina Morato. From the main street P. Burgos, there are two possible
passageways to Mabasa’s property. One of the tenants of the apartment vacated because an
adobe fence was constructed thereby making the first passageway narrower in width. Ma.
Cristina Santos testified that she constructed said fence for security reasons. Morato also
constructed her fence and even extended it in such a way that the entire passageway was
enclosed. It was then that the remaining tenants of the apartment left. Thereafter, Mabasa filed
a case for the grant of an easement of right of way against petitioners. The RTC granted the
easement of right of way sought by private respondent. On appeal, the CA affirmed the
decision of the RTC and furthermore, ordering petitioners to pay private respondent a sum of
money for damages.

ISSUE: Whether the award of damages to private respondent is proper.

HELD: No, the act of petitioners in constructing a fence within their lot is a valid exercise of
their right as owners. Article 430 of the Civil Code provides that “every 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. The proper exercise of a lawful
right cannot constitute a legal wrong for which an action will lie, although the act may result in
damage to another. The courts can give no redress for hardship to an individual resulting from
action reasonably calculated to achieve a lawful end by lawful means.

28
Abejaron v. Nabasa
G.R. No. 84831, June 20, 2001, 359 SCRA 47
Puno, J.

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.
Petitioner Abejaron and his family occupied 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. Petitioner later improved their abode to become a two-storey house.
This house, which stands to this day, occupies a portion of Lot 1, Block 5 and a portion of the
adjoining Lot 2 of the same Psu. Lot 2 belongs to petitioners' daughter, Conchita. The small
store was eventually destroyed and in its stead, petitioner Abejaron another store. He later
planted five coconut trees on the property. Knowing that the disputed land was public in
character, petitioner declared only his house, and not the disputed land, for taxation purposes.
The last two declarations state that petitioners' house stands on Lots 1 and 2, Block 5.
Petitioner stated that respondent Nabasa resided on the remaining 57-square meter portion of
Lot 1. Nabasa built his house about 4 meters away from petitioner Abejaron's house.
Employees of the Bureau of Lands surveyed the area. Abejaron did not apply for title of the land
on the belief that he could not secure title over it as it was government property. Without his
knowledge and consent, Nabasa applied for and caused the titling in his name the entire Lot 1,
including petitioner Abejaron's 118-square meter portion. Nabasa was issued an Original
Certificate of Title pursuant to a Free Patent covering Lot 1. As the title included petitioner
Abejaron’s portion of the lot, he filed a protest with the Bureau of Lands against Nabasa's title
and application. The protest was dismissed for failure of the petitioner to attend the hearings.
Petitioner Abejaron then filed an action for reconveyance with damages against respondent
Nabasa before the RTC. The RTC The Regional Trial Court ruled in favor of petitioner in its
reconveyance case declaring the possession and occupancy of Abejaron over 118 square
meters of lot in good faith and thereby declaring the inclusion of said portion in the OCT issued
in the name of Nabasa erroneous. On appeal, the CA reversed the decision of the RTC stating
that the only basis for reconveyance is actual fraud which in this case was failed to be
substantiated by Abejaron. Without proof of irregularity neither in the issuance of title nor in
the proceedings incident thereto nor a claim that fraud intervened in the issuance of the title,
the title would become indefeasible. The petitioner hence resorts to the Supreme Court.

ISSUE: Whether or not petitioner has acquired title over the disputed land.

HELD: 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
29
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.

Reconveyance is a remedy granted only to the owner of the property alleged to be erroneously
titled in another's name. In the case at bench, petitioner does not claim to be the owner of the
disputed portion. Admittedly, what he has is only a "preferential right" to acquire ownership
thereof by virtue of his actual possession since January 1947. Title to alienable public lands can
be established through open, continuous, and exclusive possession for at least 30 years. Not
being the owner, petitioner cannot maintain the present suit. Persons who have not obtained
title to public lands could not question the titles legally issued by the State.

Bachrach Motor Co., Inc. v. Talisay – Silay Milling Co.

G.R. No. 35223, September 17, 1931, 56 Phil. 117
Romualdez, J.

FACTS: On December 22, 1923, the Talisay-Silay Milling Co., Inc., was indebted to the Philippine
30
National Bank. To secure the payment of its debt, it succeeded in inducing its planters, among
whom, was Mariano Lacson Ledesma, to mortgage their land to the creditor bank. And in order
to compensate those planters for the risk they were running with their property under the
mortgage, the aforesaid central, by a resolution passed on that same date, i.e., December 22,
1923, undertook to credit the owners of the plantation thus mortgaged every year with a sum
equal to two per centum of the debt secured according to yearly balance, the payment of the
bonus being made at once, or in part from time to time, as soon as the central became free of
its obligations to the aforesaid bank, and of those contracted by virtue of the contract of
supervision, and had funds which might be so used, or as soon as it obtained from said bank
authority to make such payment.

Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc., for the
delivery of the amount P13,850 or promissory notes or other instruments or credit for that sum
payable on June 30, 1930, as bonus in favor of Mariano Lacson Ledesma.

The Philippine National Bank filed a third party claim alleging a preferential right to receive any
amount which Mariano Lacson Ledesma might be entitled to from the Talisay-Silay Milling Co.
as bonus, because that would be civil fruits of the land mortgaged to said bank by said debtor
for the benefit of the central referred to, and by virtue of a deed of assignment, and praying
that said central be ordered to delivered directly to the intervening bank said sum on account
of the latter's credit against the aforesaid Mariano Lacson Ledesma.

ISSUE: Whether or not the bonus in question is civil fruits

HELD: No. The said bonus bears no immediate, but only a remote accidental relation to the land
mentioned, having been granted as compensation for the risk of having subjected one's land to
a lien in favor of the bank, for the benefit of the entity granting said bonus. If this bonus be
income or civil fruits of anything, it is income arising from said risk, or, if one chooses, from
Mariano Lacson Ledesma's generosity in facing the danger for the protection of the central, but
certainly it is not civil fruits or income from the mortgaged property. Hence, the amount of the
bonus, according to the resolution of the central granting it, is not based upon the value,
importance or any other circumstance of the mortgaged property, but upon the total value of
the debt thereby secured, according to the annual balance, which is something quite distinct
from and independent of the property referred to.

Equatorial Realty Development, Inc. v. Mayfair Theater, Inc.

G.R. No. 136221, May 12, 2000, 370 SCRA 56
Pardo, J.

FACTS: Carmelo and Bauermann, Inc. use to own a parcel of land, together with two 2-storey
buildings constructed thereon. Carmelo entered into a Contract of Lease with Mayfair Theater
Inc. for a period of 20 years. The lease covered a portion a portion of the second floor and
mezzanine of a 2-storey building which respondent used as a movie house known as Maxim
Theater. Two years later, Mayfair entered into a second Contract of Lease with of Carmelo for
the lease of another portion of the latter’s property – namely, part of the second floor of the 2-
storey building and two store spaces on the ground floor and the mezzanine, on which Mayfair
put up another movie house known as Miramar Theater. The contract was likewise for a period
of 20 years. Both leases contained a provision granting Mayfair a right of first refusal to
purchase the subject properties. However, the subject properties were sold by Carmelo to
Equatorial Realty Development, Inc. without offering it first to Mayfair. Mayfair filed a
Complaint before the RTC of Manila for the annulment of the Deed of Absolute Sale between
Carmelo and Equatorial. The RTC rendered its decision in favour of Carmelo and Equatorial. The
31
Court of Appeals completely reversed and set aside the judgment of the lower court. The
Supreme Court denied the petition for review and rescinded the contract of sale between
Carmelo and Equatorial and ordered Carmelo to allow Mayfair to buy the lots. However,
Carmelo could no longer be located. Thus, following the order of execution of the trial court,
Mayfair deposited with the clerk of court a quo its payment to Carmelo. The lower court issued
a Deed of Reconveyance in favour of Carmelo and a Deed of Sale in favor of Mayfair. Later,
Equatorial filed with the trial court an action for the collection of the sum of money against
Mayfair, claiming payment of rentals or reasonable compensation for the defendant’s use of
subject premises after its lease contract had expired.

ISSUE: Whether or not Equatorial should be entitled to back rentals.

HELD: No. Rescission creates the obligation to return the things which were the object of the
contract, together with their fruits, and the price with its interest. It is clear the Equatorial
never took actual control and possession of the property sold, in view of Mayfair’s timely
objection to the sale and continued actual possession of the property. Furthermore, the fact
that Mayfair paid rentals to Equatorial during the litigation should not be interpreted to mean
actual delivery or ispo facto recognition of Equatorial’s title. They were made merely to avoid
imminent eviction and should not be construed as recognition of Equatorial as new owner.

32
Ignacio v. Hilario
G.R. No. L-175, August 30, 1946, 76 Phil. 605
Moran, C. J.

FACTS: This case concerns the ownership of a parcel of land, partly rice-land and partly
residential. The lower court rendered judgment holding plaintiffs as the legal owners of the
whole property but conceding to defendants 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.

Subsequently, the plaintiffs prayed for an order of execution alleging that since they chose
neither to pay defendants for the buildings nor to sell to them the residential lot, said
defendants should be ordered to remove the structure at their own expense and to restore
plaintiffs in the possession of said lot. Defendants objected to this motion which, after hearing,
was granted by Judge Natividad. Hence, this petition by defendants praying for (a) a restraint
and annulment of the order of execution issued by Judge Natividad; (b) an order to compel
plaintiffs 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.

ISSUE: Whether the respondent Court erred in its judgment.

HELD: Yes. The Civil Code provides:

ART. 361. 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.

ART. 453. 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.

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. 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. But he cannot, as respondents here did,
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 another motion only when, after
having chosen to sell his land, the other party fails to pay for the same.

The Court holds, therefore, that the order of Judge Natividad compelling defendants-petitioners
to remove their buildings from the land belonging to plaintiffs-respondents only because the
latter chose neither to pay for such buildings not 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.

Ignao v. Intermediate Appellate Court

33
G.R. No. 72876, January 18, 1991, 193 SCRA 17
Fernan, C. J.

FACTS: Petitioner Florencio Ignao and his uncles Juan Ignao and Isidro Ignao were co-owners of
a 534sqm land located in Cavite. Pursuant to an action for partition filed by petitioner, the CFI
of Cavite directed the partition of the said land. A total of 133.5 sqm was allotted to the
petitioner’s uncles while the remaining 266.5 was allotted to the petitioner. However, when
Juan and Isidro built their houses they encroached upon a portion of land belonging to
Florencio. A geodetic engineer surveyed the land and it was found out that Juan and Isidro
occupied a total of 101sqm of Florencio’s lot.

The trial court which based its decision on Article 448 of the Civil Code, ruled that Florencio
should have the choice to either appropriate to himself that part of the house standing on his
lot or to require Juan and Isidro to pay the price of the land. But since the first option seems to
be impractical, it ordered to sell to Juan and Isidro those portions occupied by them because it
is the “workable solution”. Upon appeal petitioner contends that Article 448 cannot be applied
because they are co-owners of he subject property. However, the appellate court affirmed in
toto the decision of the trial court.

ISSUE: Whether or not Article 448 of the Civil Code is applicable in the case at bar.

HELD: Yes. It is true that Article 448 cannot be applied where a co-owner builds upon a land
owned in common. However, in the case at bar, the co-ownership has already been terminated
by virtue of the partition, thus, Article 448 now applies since the builder is not anymore
considered as an owner of the land where the house was built.

As to the workable solution applied by the lower court, the same cannot be upheld because
Article 448 clearly states that the right of choice belongs to the land owner and not upon the
builder and the courts. Thus, whether it might seem impractical, the landowner may choose to
appropriate the improvements.

Filipinas Colleges, Inc. v. Garcia Timbang, et. al.,

G.R. No. L-12812, September 29, 1989, 164 SCRA 287
Barrera, J.

FACTS: After appropriate proceedings, the Court of Appeals held, among other things, that
Filipinas Colleges, Inc. are declared to have acquired the rights of the spouses Timbang in the
questioned lots, they are ordered to pay the spouses Timbang in the amount of P15,807.90 plus
such other amount which said spouses might have paid or had to pay. On the other hand, Maria
Gervacio Blas was also declared to be a builder in good faith of the school building constructed
in the lot in question and was entitled to be paid the amount of P19,000.00 for the same. Also,
in case that Filipinas Colleges, Inc. failed to deposit the value of the land, which after liquidation
was fixed at P32,859.34, within the 90-day period set by the Court, Filipinas Colleges would lose
all its rights to the land and the spouses Timbang would then become the owners thereof. If
that is the case, the Timbangs are ordered to make known to the court their option under
Article 448 of the Civil Code whether they would appropriate the building in question, in which
even they would have to pay Filipinas Colleges, Inc. the sum of P19,000.00, or would compel
the latter to acquire the land and pay the price thereof. Filipinas Colleges, Inc. failed to pay the
sum of P32,859.34 so the spouses Timbang made known to the court their decision that they
had chosen not to appropriate the building but to compel Filipinas Colleges, Inc., for the
payment of the sum of P32,859,34 which was granted by the Court. As a consequence of which,
a writ of execution was issued. Meanwhile, Blas filed a motion for execution of her judgment

34
representing the unpaid portion of the price of the house sold to Filipinas which was granted.
Levy was made on the house in virtue of the writs of execution. Then, the Sheriff of Manila sold
the building in public auction in favor of the spouses Timbang, as the highest bidders. Several
motion were the subsequently filed before the lower court wherein the court held that: a) the
Sheriff's certificate of sale covering a school building sold at public auction was null and void
unless within 15 days from notice of said order spouses Timbang shall pay to Blas the sum of
P5,750.00 that the spouses Timbang had bid for the building at the Sheriff's sale; b) that
Filipinas is owner of 245.00/32,859.34 undivided interest in Lot No. 2-a on which the building
sold in the auction sale is situated; and c) that the undivided interest of the Filipinas in the lot
should be sold to satisfy the unpaid portion of the judgment in favor of Blas and against
Filipinas in the amount of P8,200.00 minus the sum of P5,750.00. The spouses Timbang
contends that because 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 lost his
right of retention provided in Article 546 and that by operation of Article 445, the spouses
Timbang as owners of the land automatically became the owners ipso facto of the school
building.

ISSUE: Whether or not the spouses Timbang automatically become the owners of the building
upon failure of Filipinas to pay the value of the land.

HELD: No. Based on Article 448 and 546 of the New Civil Code, the owner of the land has the
right to choose between appropriating the building by reimbursing the builder of the value
thereof or compelling the builder in good faith to pay for his land. Even this second right cannot
be exercised if the value of the land is considerably more than that of the building. In addition to
the right of the builder to be paid the value of his improvement, Article 546 gives him the
corollary right of retention of the property until he is indemnified by the owner of the land.
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. The case of Bataclan vs Bernardo cannot be applied in this case
in the sense that 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. Also, in the
present 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. Blas is actually a
lien on the school building are concerned. The order of the lower court directing the Timbang
spouses, as successful bidders, to pay in cash the amount of their bid in the sum of P5,750.00 is
therefore correct.

Manotok Realty v. Tecson

G.R. No. L-47475 August 19, 1988, 164 SCRA 287
Gutierrez Jr., J.

FACTS: Petitioner Manotok Realty filed a complaint against Nilo Madlangawa for recovery of
possession with damages with the Court of First Instance of Manila. Said court rendered
judgment declaring Madlangawa as a builder-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, petitioner appealed to the Court of Appeals and
upon affirming the trial court’s decision, it elevated the case to the Supreme Court. On July 13,

35
1977, the Supreme Court issued a resolution denying Manotok’s petition for lack of merit.
Petitioner then 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. However, Judge Tecson denied
the motion for approval. Hence, this petition is filed.

ISSUE: Whether or not respondent Judge Tecson can deny petitioner’s (landowner) motion to
avail of its option.

HELD: No. There is, therefore, no basis for the respondent judge to deny the petitioner’s
motion to avail of its option to appropriate the improvements made on its property. Neither
can the judge deny the issuance of a writ of execution because the private respondent 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 belongs to the owner
of the land. Under Article 448 of the Civil Code, the right to appropriate the works or
improvements or to oblige the one who built or planted to pay the proper price of the land
belongs to the owner of the land. The only right given to the builder in good faith is the right of
reimbursement of necessary expenses for the preservation of the land; the builder cannot
compel the landowner to sell such land to the former.

Bernardo v. Bataclan
G.R. No. L-44606, November 28, 1938, 66 Phil. 598
Laurel, J.

FACTS: Bernardo bought a parcel of land from Samonte which was located in Cavite. In order
that he may take possession and occupy the said land, he filed a case in the CFI for such purpose
and the court rendered a favorable decision for Bernardo. However, when he was supposedly set
in occupying the said land, he found Bataclan. He was within the premises because he was
authorized by the previous owners to clear the land and make the necessary improvements he
deems fit, further claiming that such authorization was granted to him ever since 1922. Since
Bataclan was not a party in the first case, Bernardo filed against him a separate case. Bernardo
was declared owner but the defendant was held to be a possessor in good faith for whom the
work done and improvements made by him should be reimbursed. An appeal to the decision of
the court was filed by both Bernardo and Bataclan. The decision was modified by lowering the
price of the land from P300 to P200 per hectare. Bernardo was given 30 days to exercise his
option, whether to sell the land to Bataclan or to buy the improvements from him. Bernardo
chose the option which would require Bataclan to pay him the value of the land at the rate of
P200 per hectare. However, Bataclan informed the court that he will not be able to pay for the
price of the land. The court then gave Bataclan 30 days to pay the price of the property and after
the lapse of the period, the land shall be sold in a public auction. After 30 days, the land was sold
to Teodoro at a public auction, after failure of Bataclan to pay within the period the purchase
price.

ISSUE: Whether or not Bataclan has the right of retention over the parcel of land in question.

HELD: No. Bataclan no longer has lost the right of retention. The option of the owner was
already exercised where he decided that he will just allow the defendant to purchase the land
such that Bataclan was to comply with the option if he wants to retain the land. From the
moment that he told the courts of his inability to pay for the price of the land, he already lost his
right to retain the land.

36
Heirs of Ramon Durano, Sr. v. Uy
G.R. No. 136456 October 24, 2000, 344 SCRA 238
Gonzaga – Reyes, J.

FACTS: Respondents stated that sometime in August 1970 and months thereafter they received
mimeographed notices dated August 2, 1970 and signed by the late Ramon Durano, Sr.,
informing them that the lands which they are tilling and residing in, formerly owned by the
Cebu Portland Cement Company (hereafter, “Cepoc”), had been purchased by Durano & Co.,
Inc. The notices also declared that the lands were needed by Durano & Co. for planting to sugar
and for roads or residences, and directed respondents to immediately turn over the said lands
to the representatives of the company. Simultaneously, tall bamboo poles with pennants at the
tops thereof were planted in some areas of the lands and metal sheets bearing the initials
“RMD” were nailed to posts.

As early as the first week of August 1970, and even before many of the respondents received
notices to vacate, men who identified themselves as employees of Durano & Co. proceeded to
bulldoze the lands occupied by various respondents, destroying in their wake the plantings and
improvements made by the respondents therein. On September 15, 1970, Durano & Co. sold
the disputed property to petitioner Ramon Durano III, who procured the registration of these
lands in his name under TCT No. T-103 and TCT No. T-104.

Respondents contended that the display of force and the known power and prestige of
petitioners and their family restrained them from directly resisting this wanton depredation
upon their property. Respondents urged the Department of Justice to conduct the preliminary
investigation. The RTC found that the case preponderated in favor of respondents, who all
possessed their respective portions of the property covered by TCT Nos. T-103 and T-104
thinking that they were the absolute owners thereof. A number of these respondents alleged
that they inherited these properties from their parents, who in turn inherited them from their
own parents. Some others came into the properties by purchase from the former occupants
thereof. They and their predecessors were responsible for the plantings and improvements on
the property. They were the ones who sought for the properties to be tax-declared in their
respective names, and they continually paid the taxes thereto. Respondents maintained that
they were unaware of anyone claiming adverse possession or ownership of these lands until
the bulldozing operations in 1970.

Dissatisfied, petitioners appealed the RTC decision to the Court of Appeals, which, in turn,
affirmed the said decision and ordered the return of the property to all the respondents-
claimants.

ISSUE: Whether or not the Court of Appeals erred in its decision ordering the petitioners to
return the properties to the respondents.

HELD: No. The evidence shows that respondents successfully complied with all the
requirements for acquisitive prescription to set in. The properties were conveyed to
respondents by purchase or inheritance, and in each case the respondents were in actual,
continuous, open and adverse possession of the properties. They exercised rights of ownership
over the lands, including the regular payment of taxes and introduction of plantings and
improvements. They were unaware of anyone claiming to be the owner of these lands other
than themselves until the notices of demolition in 1970 --- and at the time each of them had
already completed the ten-year prescriptive period either by their own possession or by
obtaining from the possession of their predecessors-in-interest.

Furthermore, a purchaser of a parcel of land cannot close his eyes to facts which should put a
reasonable man upon his guard, such as when the property subject of the purchase is in the
37
possession of persons other than the seller. A buyer who could not have failed to know or
discover that the land sold to him was in the adverse possession of another is a buyer in bad
faith. In the case, respondents were in open possession and occupancy of the properties when
Durano & Co. supposedly purchased the same from Cepoc. Petitioners made no attempt to
investigate the nature of respondents’ possession before they ordered demolition in August
1970.

In the same manner, the purchase of the property by petitioner Ramon Durano III from Durano
& Co. could not be said to have been in good faith. It is not disputed that Durano III acquired
the property with full knowledge of respondents’ occupancy thereon. There even appears to be
undue haste in the conveyance of the property to Durano III, as the bulldozing operations by
Durano & Co. were still underway when the deed of sale to Durano III was executed on
September 15, 1970. There is not even an indication that Durano & Co. attempted to transfer
registration of the property in its name before it conveyed the same to Durano III.

Since petitioners knew fully well the defect in their titles, they were correctly held by the Court
of Appeals to be builders in bad faith.

The Civil Code provides:

Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built,
planted or sown without right of indemnity.

Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith
may demand the demolition of the work, or that the planting or sowing be removed, in order to
replace things in their former condition at the expense of the person who built, planted or
sowed; or he may compel the builder or planter to pay the price of the land, and the sower the
proper rent.

Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from
the builder, planter or sower.

Based on these provisions, the owner of the land has three alternative rights: (1) to appropriate
what has been built without any obligation to pay indemnity therefor, or (2) to demand that the
builder remove what he had built, or (3) to compel the builder to pay the value of the land. In
any case, the landowner is entitled to damages under Article 451.

The Court sustains the return of the properties to respondents and the payment of indemnity
as being in accord with the reliefs under the Civil Code.

Ballatan v. Court of Appeals

G.R. No. 125683, March 2, 1999, 304 SCRA 34
Puno, J.

FACTS: Ballatan, Martinez and Ling are the owners of adjacent lots in Malabon, Metro Manila.
Lot No. 24, 414 square meters in area, is registered in the name of petitioners Eden Ballatan
and spouses Betty Martinez and Chong Chy Ling. Lots Nos. 25 and 26 are registered in the name
of respondent Gonzalo Go, Sr. On Lot No. 25, respondent Winston Go, son of Gonzalo Go, Sr.,
constructed his house. Adjacent to Lot No. 26 is Lot No. 27, registered in the name of
respondent Li Ching Yao. In 1985, petitioner Ballatan constructed her house on Lot No. 24.
During the construction, she noticed that the concrete fence and side pathway of the adjoining
house of respondent Winston Go encroached on the entire length of the eastern side of her
38
property. Her building contractor informed her that the area of her lot was actually less than
that described in the title. Forthwith, Ballatan informed respondent Go of this discrepancy and
his encroachment on her property. Go, however, claimed that his house, including its fence and
pathway, were built within the parameters of his father's lot; and that this lot was surveyed by
Engineer Jose Quedding, the authorized surveyor of the Araneta Institute of Agriculture (AIA),
the owner-developer of the subdivision project. So Ballatan called the attention of the IAI and
after another survey of the land, Engineer Quedding found that the lot area of petitioner
Ballatan was less by few meters and that of respondent Li Ching Yao, which was three lots
away, increased by two meters. Engineer Quedding declared that he made a verification survey
of Lots Nos. 25 and 26 of respondents Go in 1983 and allegedly found the boundaries to have
been in their proper position. He, however, could not explain the reduction in Ballatan's area
since he was not present at the time respondents Go constructed their boundary walls.

On 10 June 1985, petitioner Ballatan made a written demand on respondents Go to remove and
dismantle their improvements on Lot No. 24 but Go refused. So Ballatan instituted against Go a
civil case for recovery of possession the RTC of Malabon decided in favor of Ballatan, ordering
the Go's to vacate the subject portion of Lot No. 24, demolish their improvements and pay
petitioner Ballatan actual damages, attorney's fees and the costs of the suit. Go appealed.

ISSUE: Whether or not Ballatan have a right of remotion.

HELD: All the parties have acted in good faith so Article 448 must apply. Petitioners are ordered
to exercise within thirty (30) days from finality of the decision their option to either buy the
portion of respondents Go's improvement on their Lot No. 24, or sell to said respondents the
portion of their land on which the improvement stands. If petitioners elect to sell the land or
buy the improvement, the purchase price must be at the prevailing market price at the time of
payment. If buying the improvement will render respondents Go's house useless, then
petitioners should sell the encroached portion of their land to respondents Go. If petitioners
choose to sell the land but respondents Go are unwilling or unable to buy, then the latter must
vacate the subject portion and pay reasonable rent from the time petitioners made their choice
up to the time they actually vacate the premises. But if the value of the land is considerably
more than the value of the improvement, then respondents Go may elect to lease the land, in
which case the parties shall agree upon the terms, the lease. Should they fail to agree on said
terms, the court of origin is directed to fix the terms of the lease.

39
Spouses Del Ocampo v. Abesia
G.R. No. L-49219, April 15, 1998, 160 SCRA 379
Gancayco, J.

FACTS: Plaintiffs – spouses Concepcion Fernandez and Estanislao Del Campo and defendant
Bernarda Fernandez Abesia are co-owners of parcel of land with an area of 45 square meters
and divided in the proportion of 2/3 and 1/3 share each, respectively. A commissioner, who is
appointed by the court, conducted a survey and recommended that the property be divided
into two lots: Lot 1161 – A with an area of 30 square meters for the plaintiffs and Lot 1161 – B
with an area of 15 square meters for the defendants. However, it was shown in the sketch plan
that the house of the defendant occupied the portion with an area of 5 square meters of Lot
1161 – A of plaintiffs. The parties asked the court to finally settle and adjudicate who among
the parties should take possession of the 5 square meters of land.

ISSUES:
1.) Whether or not Article 448 of the Civil Code, the rights of a builder in good faith, should be
applied to the plaintiff-spouses Del Campo.
2.) Whether or not the house of the defendant Abesia should be removed and demolished at
their expense.

HELD: 1.) Yes. 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, as in this case, the co-ownership is terminated by the partition and it appears
that the house of defendants overlaps or occupies a portion of 5 square meters of the land
pertaining to plaintiffs which the defendants obviously built in good faith, then the provisions of
Article 448 of the new Civil Code should apply. Manresa and Navarro Amandi agree that the
said provision of the Civil Code may apply even when there was co-ownership if good faith has
been established.

2.) It depends. Applying Article 448 of the Civil Code, the plaintiffs have the right to appropriate
said portion of the house of defendants upon payment of indemnity to defendants as provided
for in Article 546 of the Civil Code. Otherwise, the plaintiffs may oblige the defendants to pay
the price of the land occupied by their house. However, if the price asked for is considerably
much more than the value of the portion of the house of defendants built thereon, then the
latter cannot be obliged to buy the land. The defendant shall then pay the reasonable rent to
the plaintiffs upon such terms and conditions that they may agree. In case of disagreement, the
trial court shall fix the terms thereof. Of course, defendants may demolish or remove the said
portion of their house, at their own expense, if they so decide.

Pacific Farms Inc. v. Esguerra

G.R. No. L-21783, November 29, 1969, 30 SCRA 684
Castro, J.

FACTS: On October 1, 1956 to March 2, 1957 the Company sold and delivered lumber and
construction materials to the Insular Farms Inc. which the latter used in the construction of the
si buildings at its compound in Bolinao, Pangasinan, of the total procurement price of
P15,000.00, the sum of P4,710.18 has not been paid. Consequently, the Company instituted a
civil case to recover the unpaid balance and the court sustained their claim. The defendant
sheriff levied th six buildings. The Pacific Farms, Inc. filed a suit against the Company and the
sheriff asserting ownership over the levied buildings which it had acquired from the Insular
40
Farms by virtue of absolute sale executed on March 21, 1958. Pacific prays that the judicial sale
of the six buildings be declared null and void. The trial court rendered judgment annulling the
levy and the certificate of sale. However, it denied the plaintiff's claim for actual and exemplary
damages on the ground that it was not "prepared to find there was gross negligence or bad
faith on the part of any defendants".

ISSUE: Whether or not the application by analogy of the rules of accession would suffice for a
just adjudication.

HELD: Article 447 of the Civil Code contemplates a principal and an accessory; the land being
considered the principal, and the plantings, constructions or works, the accessory. The owner of
the land who in good faith - whether personally or through another - makes constructions or
works thereon, using materials belonging to somebody else, becomes the owner of the said
materials with the obligation however of paying for their value. On the other hand, the owner
of the materials is entitled to remove them, provided no substantial injury is caused to the
landowner. Otherwise, he has the right to reimbursement for the value of his materials,

Applying article 447 by analogy, the Court consider the buildings as the principal and the
lumber and construction materials that went into their construction as the accessory. Thus the
appellee, if it does own the six buildings, must bear the obligation to pay for the values of the
said materials; the appellant — which apparently has no desire to remove the materials, and,
even if it were minded to do so, cannot remove them without necessarily damaging the
buildings — has the corresponding right to recover the value of the unpaid lumber and
construction materials.

Pecson v. Court of Appeals

G.R. No. 115814, May 26, 1995, 244 SCRA 407
Davide, Jr. J.

FACTS: Pedro Pecson owned a commercial lot situated in Kamias street, Quezon City, on which
he built a a four-door, two-storey apartment building. But because of failure to pay realty taxes
amounting to P12,000.00, the commercial lot owned was sold at a public auction. It was
purchased by Nepomuceno, which later sold the same to the Nuguid spouses for P103,000 on
October 12, 1983. Pecson then challenged the sale, alleging that the apartment building,
contrary to the claim of the Nuguid spouses, was not included in the sale. The lower court
judged in favor of Pecson, declaring that the apartment building was indeed not included in the
subject sale. The Court of Appeals affirmed the same. The Spouses Nuguid then filed a motion
for delivery of possession of the lot and the apartment building. The lower court ruled in favor
of the private respondents, but subject to the reimbursement to Pecson of the cost of
constructing the apartment building minus the rents due to the spouses (calculated at P21,000
from June 23, 1993 to September 23, 1993). With the said decision at hand, the spouses then
made a move to eject Pecson and as well as the tenants residing therein. However, the spouses
have yet to pay Pecson for the construction costs.

ISSUE: Whether the Nuguid Spouses can eject Pecson even if reimbursement hasn’t been given
for the construction costs.

HELD: No. The Court ruled that since the spouses still haven’t reimbursed Pecson for the cost of
construction of the building, the latter has the right to retain the property, and along with it,
the fruits of which during such possession.

41
The court ruled that though Article 448 do not apply in the case at bar. By its clear language,
Article 448 refers to a land whose ownership is claimed by two or more parties, one of whom
has built some works, or sown or planted something. The building, sowing or planting may have
been made in good faith or in bad faith. As in this case, since the owner himself was the one
who constructed the improvement, good faith and bad faith becomes irrelevant. However, by
analogy, the indemnity may be applied, considering that the primary intent of Article 448 is to
avoid a state of forced co-ownership and that the parties agree that Articles 448 and 546 of the
Civil Code are applicable and indemnity for the improvements may be paid, although they differ
as to the basis of the indemnity. Since the spouses have opted to appropriate the apartment
building, Pecson is thus entitled to the possession and enjoyment of the apartment building,
until he is paid the proper indemnity, as well as of the portion of the lot where the building has
been constructed. This is so because the right to retain the improvements while the
corresponding indemnity is not paid implies the tenancy or possession in fact of the land on
which it is built, planted or sown. The petitioner not having been so paid, he was entitled to
retain ownership of the building and, necessarily, the income therefrom.

42
Technogas Philippines Manufacturing Corporation v. Court of Appeals
G.R. No. 108894, February, 10, 1997, 268 SCRA 5
Panganiban, J.

FACTS: Technogas purchased a parcel of land from Pariz Industries, Inc. In the same year,
Eduardo Uy purchased the land adjacent to it. The following year, Uy bought another lot
adjoining the lot of Technogas. Portions of the buildings and wall bought by Technogas
together with the land from Pariz Industries are occupying a portion of Uy’s adjoining land. The
knowledge of some encroachment was only made known to both parties after their parties of
their respective parcels of land.

ISSUES:
1.) Whether or not petitioner Technogas Philippines is a possessor in bad faith.
2.) Whether or not petitioner Technogas Philippines has stepped into the shoes of the seller.

HELD: 1.) No. Unless one is versed in the science of surveying, no one can determine the
precise extent or location of his property by merely examining his paper title. There is no
question in that when Technogas purchased the land from Pariz Industries, the buildings and
other structures were already in existence. Furthermore, it is not clear as to who actually built
these structures but it can be assumed that the predecessor-in-interest of Technogas, Pariz
Industries, did so. An article 527 of the New Civil Code presumes good faith. Since no proof
exists to show that the builder built the encroaching structures in bad faith, the structures
should be presumed to have been built in good faith. Good faith consists in the belief of the
builder that the land he is building on is his, and his ignorance of any defect or flaw in his title.
Furthermore, possession acquired in good faith does not lose this character except in case and
from the moment facts exist which show that the possessor is not aware that he possesses the
thing improperly or wrongfully. The good faith ceases from the moment the defects in the title
are made known to the possessor, by extraneous evidence or by suit for recovery of the
property of the true owner.

2.) Yes. Has been shown, contrary as to the good faith of Technogas has not been overthrown.
Similarly, upon delivery of the property to Pariz Industries, as seller, to Technogas, as buyer, the
latter acquired ownership of the property. Consequently, Technogas is deemed to have stepped
into the shoes of the seller with regard to all the rights of ownership of the property over the
immovable sold, including the right to compel Uy to exercise either of the two options under
Article 448 of the New Civil Code. Thus, the landowner’s exercise of his option can only take
place after the builder shall have to know the intrusion – in short, when both parties shall have
become aware of it. Only then will the occasion for exercising the option arise, for it is only
then that both parties will have been aware that a problem exists with regard to their property
rights.

Pleasantville Development Corporation v. Court of Appeals

G.R. No. 79688, February 1, 1996,
Panganiban, J.

FACTS: On March 26, 1974, Wilson Kee on installment Lot 8 from C.T. Torres Enterprises Inc.
the exclusive real estate agent of petitioner. Under the Contract to Sell on installment. Kee can
exercise possession over the parcel of land even before the completion of installment
payments. On January 20, 1975, Kee paid CTTEI relocation fee of Php 50.00 and another on
January 27, 1975 for the preparation of lot plan. These amounts were paid by Kee before he
took possession of Lot 8. After the preparation of the lot plan and a copy was presented to Kee,
43
Zenaida Octaviano, employee of CTTEI accompanied Donnabelle Kee the wife of Wilson Kee to
inspect Lot 8. Unfortuantely, Octaviano pointed Lot 9. Thereafter, Kee constructed his residence
on the said Lot 9 together a store, repair shop and other improvements.

Edith Robillo purchased from Pleasantville Development Corporation Lot 9. Sometime in 1975,
she sold the said parcel of land, Lot 9, to Eldred Jardinico which at that time is vacant. Upon
paying completely to Robillo, Jardinico secured from the Register of Deeds of Bacolod City on
December 19, 1978 Transfer Certificate of Title No. 106367 in his name. It was only that time
that he discovered that Wilson Kee take possession of that lot and that the same have
introduced improvements to the same lot. Jardinico confronted Kee and tried to reach for an
amicable settlement, but failed.

On January 30, 1981, Jardinico, through his lawyer, demanded that Kee vacate Lot 9 and
remove all the improvements introduced by the latter. Kee refused which made Jardinico filed
with the Municipal Trial Court in Cities, Branch 3, Bacolod City a complaint for ejectment with
damages against Kee. Kee, in turn filed a third-party complaint against Pleasantville
Development Corporation and CTTEI.

The MTCC held that the erroneous delivery was attributable to CTTEI and the Kee has no rights
to Lot 9 because of the rescission made by CTTEI of their contract due to Kee’s failure to pay the
installment. MTCC also held that Kee must pay reasonable rental for the use of Lot 9 and
furthermore he cannot claim reimbursement for the improvements introduced by him. On
appeal, the Regional Trial Court held that Pleasantville and CTTEI were not negligent and that
Kee was in bad faith.

Kee appealed directly to the Supreme Court which referred the matter to the Court of Appeals.
The Appellate Court overturned the ruling of the RTC and held the Kee was a builder in good
faith and the erroneous delivery was attributable to the negligence of CTTEI. Hence the instant
petition filed by Pleasantville.

ISSUES:
1.) Whether or not, Wilson Kee is a builder in good faith.
2.) Whether or not petitioner is liable for the acts of its agent CTTEI.

HELD: 1.) Petitioner fails to persuade the Court to abandon the findings and conclusions of the
Court of Appeals that Kee was a builder in good faith. Good faith consists in the belief of the
builder that the land he is building on is his and his ignorance of any defect or flaw in his title.
And as good faith is presumed, petitioner has the burden of proving bad faith on the part of
Kee. At the time he built improvements on Lot 8, Kee believed that said lot was what he bought
from petitioner. He was not aware that the lot delivered to him was not Lot 8. Thus, Kee is in
good faith. Petitioner failed to prove otherwise.

To demonstrate Kee's bad faith, petitioner points to Kee's violation of paragraphs 22 and 26 of
the Contract of Sale on Installment. It has no merit. Such violations have no bearing whatsoever
on whether Kee was a builder in good faith, that is, on his state of mind at the time he built the
improvements on Lot 9. These alleged violations may give rise to petitioner's cause of action
against Kee under the said contract (contractual breach), but may not be the basis to negate
the presumption that Kee was a builder in good faith.

2.) Yes. The rule is that the principal is responsible for the acts of the agent done within the
scope of his authority, and should bear the damage caused to third persons. On the other hand,
the agent who exceeds his authority is personally liable for the damage. But CTTEI was acting
within its authority as the sole real estate representative of petitioner when it made the
delivery to Kee, only that in so acting, it was negligent. It is this negligence that is the basis of
44
petitioner's liability, as principal of CTTEI, per Articles 1909 and 1910 of the Civil Code. For such
negligence, the petitioner should be held liable for damages. The rights of Kee and Jardinico
vis-a-vis each other, as builder in good faith and owner in good faith, respectively, are regulated
by law (i.e., Arts. 448, 546 and 548 of the Civil Code). It was error for the Court of Appeals to
make a "slight modification" in the application of such law [by holding petitioner and CTTEI
solidarily liable], on the ground of "equity".

Germiniano v. Court of Appeals

G.R. No. 120303, July 24, 1996, 259 SCRA 344
Davide, Jr., J.

FACTS: This is a petition for review on certiorari which has its origins in Civil Case No. 9214 of
Branch 3 of the Municipal Trial Court in Cities (MTCC) in Dagupan City for unlawful detainer and
damages. During the pre-trial conference, the parties agreed to confine the issues to: (1)
whether there was an implied renewal of the lease which expired in November 1985; (2)
whether the lessees were builders in good faith and entitled to reimbursement of the value of
the house and improvements; and (3) the value of the house.

On the first issue, the court held that since the petitioners' mother was no longer the owner of
the lot in question at the time the lease contract was executed in 1978, in view of its acquisition
by Maria Lee as early as 1972, there was no lease to speak of, much less, a renewal thereof.
And even if the lease legally existed, its implied renewal was not for the period stipulated in the
original contract, but only on a month-to-month basis pursuant to Article 1687 of the Civil
Code. The refusal of the petitioners' mother to accept the rentals starting January 1986 was
then a clear indication of her desire to terminate the monthly lease. As regard the petitioners'
alleged failed promise to sell to the private respondents the lot occupied by the house, the
court held that such should be litigated in a proper case before the proper forum, not an
ejectment case where the only issue was physical possession of the property.

The court resolved the second issue in the negative, holding that Articles 448 and 546 of the
Civil Code, which allow possessors in good faith to recover the value of improvements and
retain the premises until reimbursed, did not apply to lessees like the private respondents,
because the latter knew that their occupation of the premises would continue only during the
life of the lease. Besides, the rights of the private respondents were specifically governed by
Article 1678, which allow reimbursement of up to one-half of the value of the useful
improvements, or removal of the improvements should the lessor refuse to reimburse.

On the third issue, the court deemed as conclusive the private respondents' allegation that the
value of the house and improvements was P180,000.00, there being no controverting evidence
presented.

On appeal by the private respondents, the RTC of Dagupan City reversed the trial court's
decision.

ISSUE: Whether or not Article 448 or Article 1678 of the Civil Code should apply in the instant
case.

HELD: In this case, both parties admit that the land in question was originally owned by the
petitioners' mother. The land was allegedly acquired later by one Maria Lee by virtue of an
extrajudicial foreclosure of mortgage. Lee, however, never sought a writ of possession in order
that she gain possession of the property in question. The petitioners' mother therefore
remained in possession of the lot. It has been said that while the right to let property is an
45
incident of title and possession, a person may be lessor and occupy the position of a landlord to
the tenant although he is not the owner of the premises let. There is no need to apply by
analogy the provisions of Article 448 on indemnity as was done in Pecson vs. Court of Appeals,
because the situation sought to be avoided and which would justify the application of that
provision, is not present in this case. Suffice it to say, "a state of forced co-ownership" would
not be created between the petitioners and the private respondents. For, as correctly pointed
out by the petitioners, the right of the private respondents as lessees is governed by Article
1678 of the Civil Code which allows reimbursement to the extent of one-half of the value of the
useful improvements.

It must be stressed, however, that the right to indemnity under Article 1678 of the Civil Code
arises only if the lessor opts to appropriate the improvements. Since the petitioners refused to
exercise that option the private respondents cannot compel them to reimburse the one-half
value of the house and improvements. Neither can they retain the premises until
reimbursement is made. The private respondents' sole right then is to remove the
improvements without causing any more impairment upon the property leased than is
necessary.

46
Agustin v. Intermediate Appellate Court
G.R. No. 66075-76, July 5, 1990, 187 SCRA 218
Grino – Aquino, J.

FACTS: The Cagayan River separates the towns of Solana on the west and Tuguegarao on the
east in the province of Cagayan. In 1919 the lands of the east of the river were covered by the
Tuguegarao Cadastre. In 1925, OCT 5472 was issued for land east of the Cagayan River owned
by Eulogio Agustin. As the years went by, the Cagayan River moved gradually eastward,
depositing silt on the west bank. The shifting of the river and siltation continued until 1968. In
1950, all lands west of the river were included in the Solana Cadastre. Among these occupying
lands covered by Solana Cadastre were Pablo Binayug and Maria Melad. Through the years, the
Cagayan River eroded lands of the Tuguegarao Cadastre on its eastern bank among which was
Agustin’s Lot 8457, depositing the alluvium as accretion on the land possessed by Binayug on
the western bank. However, 1968, after a big flood, the Cagayan River changed its course,
returned to its 1919 bed and in the process, cut across the lands of Maria Melad, Timoteo
Melad, and the spouses Pablo Binayug and Geronima Ubina whose lands were transferred on
the eastern, or Tuguegarao, side of the river. To cultivate those lots they had to cross the river.
In April 1969, while the Melads, Binayug, Urbina and their tenants were planting corn on their
lots located on the easter side of Cagayan River, Agustin, the heirs of Baldomero Langcay, Juan
Langcay, and Arturo Balisi, accompanied by the mayor and some policemen of Tuguegarao,
claimed the same lands as their own and drove away the Melads, Binayug and Urbina from the
premises.

ISSUE: Whether or not ownership of accretion is lost upon sudden and abrupt change of the
river.

HELD: No. The ownership of the accretion to the lands was not lost upon sudden and abrupt
change of the course of the river (Cagayan River in 1968 or 1969 when it reverted to its old
1919 bed), and separated or transferred said accretions to the other side (eastern bank) of the
river. Articles 459 and 463 of the New Civil Code apply to this situation. Article 459 provides
that “whenever the current of a river, creek or torrent segregates from an estate on its bank a
known portion of land and transfer it to another estate, the owner of the land to which the
segregated portion belonged retains the ownership of it, provided that he removes the same
within two years.” Article 463 provides that,” whenever the current of a river divides itself into
branches, leaving a piece of land or part thereof isolated, the owner of the land retains his
ownership. He also retains it if a portion of land is separated from the estate by the current.”

Cureg v. Intermediate Appellate Court

G.R. No. 73465, September 7, 1989, 177 SCRA 313
Medialdea, J.

FACTS: On November 5, 1982, private respondents Domingo Apostol et al. filed a complaint for
quieting of title against petitioners Leonida Cureg et al. The complaint alleged that private
respondents, except Apostol, are the legal and/or the forced heirs of the late Domingo Gerardo,
and his predecessors-in-interest have been in actual, open, peaceful and continuous
possession, under a bona fide claim of ownership of a parcel of land (referred to as their
“motherland”). Subsequently, the heirs verbally sold the “motherland” to Apostol. The
47
“motherland” showed signs of accretion caused by the movement of the Cagayan River. When
private respondents were about to cultivate their “motherland” together with its accretion,
they were prevented by the petitioners. Petitioners alleged that the “motherland” claimed by
the private respondents is non-existent, that the “subject land” is an accretion to their
registered land, and that petitioners have been in possession and cultivation of the “accretion”
for many years now.

ISSUE: Whether or not the petitioners have the better right of accretion.

HELD: Yes. The petitioners are entitled to the accretion. The “subject land” is an alluvial deposit
left by the northward movement of the Cagayan River and pursuant to Article 457 of the New
Civil Code: “To the owners of land adjoining the banks of river belong the accretion which they
gradually receive from the effects of the current of the waters.” However, the increase in the
area of the petitioner’s land, being an accretion left by the change of course or the northward
movement of the Cagayan River does not automatically become registered land just because
the lot which receives such accretion is covered by a Torrens title. As such, it must also be
placed under the operation of the Torrens system.

Viajar v. Court of Appeals

G.R. No. 77294, December 12, 1988, 168 SCRA 405
Medialdea, J.

FACTS: The spouses Ricardo and Leonor Ladrido were the owners of Lot 7511. Spouses Rosendo
and Ana Te were also the registered owners of a parcel of land described in their title as Lot
7340 of the Cadastral Survey of Pototan. On 6 September 1973, Rosendo Te, with the
conformity of his wife, sold this lot to Angelica F. Viajar and Celso F. Viajar for P5,000. A Torrens
title was later issued in the latter’s names. Later, Angelica Viajar had Lot 7340 relocated and
found out that the property was in the possession of Ricardo Y. Ladrido. Consequently, she
demanded its return but Ladrido refused. The piece of real property which used to be Lot 7340
of the Cadastral Survey of Pototan was located in barangay Guibuanogan, Pototan, Iloilo; that
at the time of the cadastral survey in 1926, Lot 7511 and Lot 7340 were separated by the
Suague River; that Lot 7340 has been in the possession of Ladrido; that the area of 14,036
sq.ms., which was formerly the river bed of the Suague River per cadastral survey of 1926, has
also been in the possession of Ladrido; and that the Viajars have never been in actual physical
possession of Lot 7340. On 15 February 1974, Angelica and Celso Viajar instituted a civil action
for recovery of possession and damages against Ricardo Y. Ladrido. The trial court rendered its
decision in favor of Ladrido, dismissing the complaint of Angelica and Celso Viajar with costs
against them, declaring the Ladridos are entitled to the possession thereof. Not satisfied with
the decision, the Viajars appealed to the Court of Appeals. The Court of Appeals affirmed the
decision of the court. The Viajars filed a petition for review on certiorari.

ISSUE: Whether the respondents are entitled to the land on the ground of accretion.

HELD: Article 457 of the New Civil Code provides that “to the owners of lands adjoining the
banks of rivers belong the accretion which they gradually receive from the effects of the current
of the waters." The presumption is that the change in the course of the river was gradual and
caused by accretion and erosion. In the present case, the lower court correctly found that the
evidence introduced by the Viajars to show that the change in the course of the Suague River
was sudden or that it occurred through avulsion is not clear and convincing. The Ladridos have
sufficiently established that for many years after 1926 a gradual accretion on the eastern side of
Lot 7511 took place by action of the current of the Suague River so that in 1979 an alluvial
deposit of 29,912 sq.ms. more or less, had been added to Lot 7511. The established facts
48
indicate that the eastern boundary of Lot 7511 was the Suague River based on the cadastral
plan. For a period of more than 40 years (before 1940 to 1980) the Suague River overflowed its
banks yearly and the property of the defendant gradually received deposits of soil from the
effects of the current of the river. The consequent increase in the area of Lot 7511 due to
alluvion or accretion was possessed by the defendants whose tenants plowed and planted the
same with corn and tobacco. The quondam river bed had been filled by accretion through the
years. The land is already plain and there is no indication on the ground of any abandoned river
bed. Under the law, accretion which the banks or rivers may gradually receive from the effects
of the current of the waters becomes the property of the owners of the lands adjoining the
banks. Therefore, the accretion to Lot 7511 which consists of Lots A and B belong to the
Ladridos.

Vda. De Nazareno v. Court of Appeals

G.R. No. 98045, June 26, 1996, 257 SCRA 589
Romeo, J.

FACTS: The subject of this controversy is a parcel of land formed as a result of sawdust dumped
into the dried-up Balacanas Creek and along the banks of the Cagayan river. Private
respondents Salasalan and Rabaya leased the subject lots on which their houses stood from
Antonio Nazareno, petitioners’ predessor-in-interest. Private respondents allegedly stopped
paying rentals. As a result, Nazareno and petitioners filed a case for ejectment with the MTC of
Cagayan de Oro City. The MTC rendered a decision against private respondents which was
affirmed by the RTC. After several petitions for annulmentof judgment by private respondents
which were all dismissed, the decision of the lower court was finally enforced with the private
respondents being ejected from portions of the subject lots they occupied. Before Nazareno
died, he caused the approval by the Bureau of lands of the survey plan with a view to perfecting
his title over the accretion area being claimed by him. The said petition was protested by
private respondents. After conducting a survey of the subject land, land investigator Avelino
labis recommended that the survey plan be cancelled and that private respondents be directed
to file appropriate public land application covering their respective portions. Nazareno filed a
motion for reconsideration with the Undersecretary of the Department of Natural Resources
and OIC of the Bureau of lands Ignacio who denied the Motion. Respondent Director of lands
Abelardo Palad ordered Nazareno to vacate the portions adjudicated to private respondents
and remove whatever improvements they have introduced; he also ordered that private
respondents be placed in possession thereof. A petitioner filed a case for annulment of the
previous decisions with the RTC but was dismissed. The CA affirmed the RTC decision
contending that the approved of the survey plan belongs exclusively to the Director of lands
and the same shall be conclusive when approved by the Secretary of Agriculture and Natural
Resources.

ISSUE: Whether or not petitioners can claim ownership of the subject land by virtue of Art 457
of the Civil Code.

HELD: No, accretion as a mode of acquiring property under Art 457 of the NCC requires the
concurrence of the requisites mentioned in the Article. These are called rules on alluvion, which
if present in a case, give to the owners of lands adjoining the banks of rivers or streams any
accretion gradually received from the effects of the current of waters. The word “current”
indicates the participation of the body of water in the flow of waters due to high and low tide.
Petitioners, however, admit that the accretion was formed by the dumping of boulders, soil and
other filling materials on portions of the Balacanas creek and the Cagayan River. The Bureau of
lands classified the subject land as an accretion area which was formed by deposits of sawdust.
Petitioner’s submission not having met the first and second requirements of the rules of
49
alluvion, they cannot claim the rights of a riparian owner. The subject being public land is under
the jurisdiction of the Bureau of lands, respondent Palad is authorized to exercise executive
control over any form of concession, disposition and management of the lands of public
dominion.

Heirs of Navarro v. Intermediate Appellate Court

G.R. No. 68166, February 12, 1997, 268 SCRA 589
Hermosisima, J:

FACTS: On October 3, 1946, Sinforoso Pascual, filed an application for foreshore lease covering
a tract of foreshore land in Sibocon, Balanga, Bataan, having an area of approximately
seventeen (17) hectares. Subsequently, petitioners' predecessor-in-interest, Emiliano Navarro,
filed a fishpond application with the Bureau of Fisheries covering twenty five (25) hectares of
foreshore land also in Sibocon, Balanga, Bataan. Initially, such application was denied by the
Director of Fisheries on the ground that the property formed part of the public domain.

Sometime in the early part of 1960, Sinforoso Pascual flied an application to register and
confirm his title to a parcel of land, situated in Sibocon, Balanga, Bataan, described in Plan Psu-
175181 and said to have an area of 146,611 square meters. Pascual claimed that this land is an
accretion to his property, situated in Barrio Puerto Rivas, Balanga, Bataan, and covered by
Original Certificate of Title No. 6830. It is bounded on the eastern side by the Talisay River, on
the western side by the Bulacan River, and on the northern side by the Manila Bay. The Talisay
River as well as the Bulacan River flow downstream and meet at the Manila Bay thereby
depositing sand and silt on Pascual's property resulting in an accretion thereon. Sinforoso
Pascual claimed the accretion as the riparian owner.

On March 25, 1960, the Director of Lands, represented by the Assistant Solicitor General, filed
an opposition thereto stating that neither Pascual nor his predecessors-in-interest possessed
sufficient title to the subject property, the same being a portion of the public domain and,
therefore, it belongs to the Republic of the Philippines.

ISSUE: Whether or not the land sought to be registered is accretion or foreshore land, or,
whether or not said land was formed by the action of the two rivers of Talisay and Bulacan or
by the action of the Manila Bay.

HELD: Accretion as a mode of acquiring property under said Article 457, requires the
concurrence of the following requisites: (1) that the accumulation of soil or sediment be
gradual and imperceptible; (2) that it be the result of the action of the waters of the river; and
(3) that the land where the accretion takes place is adjacent to the bank of the river. If the
accretion were to be attributed to the action of either or both of the Talisay and Bulacan Rivers,
the alluvium should have been deposited on either or both of the eastern and western
boundaries of petitioners' own tract of land, not on the northern portion thereof which is
adjacent to the Manila Bay. Clearly lacking, thus, is the third requisite of accretion, which is,
that the alluvium is deposited on the portion of claimant's land which is adjacent to the river
bank.

The disputed land, thus, is an accretion not on a river bank but on a sea bank, or on what used
to be the foreshore of Manila Bay which adjoined petitioners' own tract of land on the northern
side. Applicant Pascual has not presented proofs to convince the Court that the land he has
applied for registration is the result of the settling down on his registered land of soil, earth or
other deposits so as to be rightfully be considered as an accretion [caused by the action of the
two rivers]. Article 457 finds no applicability where the accretion must have been caused by
50
action of the bay.

The conclusion formed by the trial court on the basis of the aforegoing observation is that the
disputed land is part of the foreshore of Manila Bay and therefore, part of the public domain.
Thus, the disputed property is an accretion on a sea bank, Manila Bay being an inlet or an arm
of the sea; as such, the disputed property is, under Article 4 of the Spanish Law of Waters of
1866, part of the public domain.

Del Banco v. Intermediate Appellate Court

G.R. No. 72694, December 1, 1987, 156 SCRA 55
51
Paras, J.

FACTS: In a document executed in the Municipality of San Rafael, Bulacan, on February 11,
1859, three brothers, Benedicto Pansacola, Jose Pansacola and Manuel Pansacola (known as Fr.
Manuel Pena) entered into an agreement which provided, among others: (1) That they will
purchase from the Spanish Government the lands comprising the Island of Cagbalite which is
located within the boundaries of the Municipality of Mauban, Province of Tayabas (now
Quezon) and has an approximate area of 1,600 hectares; (2) That the lands shall be considered
after the purchase as their common property; (3) That the co-ownership includes Domingo Arce
and Baldomera Angulo, minors at that time represented by their father, Manuel Pansacola (Fr.
Manuel Pena) who will contribute for them in the proposed purchase of the Cagbalite Island;
(4) That whatever benefits may be derived from the Island shall be shared equally by the co-
owners in the following proportion: Benedicto Pansacola-1/4 share; Jose Pansacola-1/4 share;
and, Domingo Arce and Baldomera Angulo-2/4 shares which shall be placed under the care of
their father, Manuel Pansacola (Fr. Manuel Pena). On August 14, 1866, co-owners entered into
the actual possession and enjoyment of the Island purchased by them from the Spanish
Government. On April 11, 1868 they agreed to modify the terms and conditions of the
agreement entered into by them on February 11, 1859.

About one hundred years later, on November 18, 1968, private respondents brought a special
action for partition in the Court of First Instance of Quezon, under the provisions of Rule 69 of
the Rules of Court, including as parties the heirs and successors-in-interest of the co-owners of
the Cagbalite Island in the second contract of co-ownership dated April 11, 1968. In their
answer some of the defendants, petitioners herein, interposed such defenses as prescription,
res judicata, exclusive ownership, estoppel and laches.

After trial on the merits, the trial court rendered a decision dated November 6, 1981 dismissing
the complaint. The motion for reconsideration filed by the plaintiffs, private respondents
herein, was denied by the trial court in an order dated February 25, 1982. On appeal,
respondent Court reversed and set aside the decision of the lower court .It also denied the
motion for reconsideration and the supplement to motion for reconsideration filed by private
respondents, in its resolution dated October 15, 1983.

ISSUES:
1.) Whether or not Cagbalite Island is still undivided property owned in common by the heirs
and successors-in-interest of the brothers, Benedicto, Jose and Manuel Pansacola.
2.) Whether or not a prescription may run in favor of a co-owner against his co- owners or co-
heirs.

HELD: 1.) On the first issue, there is nothing in all four agreements that suggests that actual or
physical partition of the Island had really been made by either the original owners or their heirs
or successors-in-interest. The agreement entered into in 1859 simply provides for the sharing of
whatever benefits can be derived from the island. The agreement, in fact, states that the Island
to be purchased shall be considered as their common property. In the second agreement
entered in 1868 the co-owners agreed not only on the sharing proportion of the benefits
derived from the Island but also on the distribution of the Island each of the brothers was
allocated a 1/4 portion of the Island with the children of the deceased brother, Eustaquio
Pansacola allocated a 1/4 portion and the children of Manuel Pansacola (Fr. Manuel Pena) also
allocated a 1/4 portion of the Island. With the distribution agreed upon each of the co-owner is
a co-owner of the whole, and in this sense, over the whole he exercises the right of dominion,
but he is at the same time the sole owner of a portion, in the instant case, a 1/4 portion (for
each group of co-owners) of the Island which is truly abstract, because until physical division is
effected such portion is merely an Ideal share, not concretely determined (3 Manresa, Codigo
Civil, 3rd Ed., page 486, cited in Lopez vs. Cuaycong, 74 Phil. 601; De la Cruz vs. Cruz, 32 SCRA
52
307 [1970]; Felices vs. Colegado, 35 SCRA 173 [1970],; Dultra vs. CFl 70 SCRA 465 [1976];
Gatchalian vs. Arlegui, 75 SCRA 234 [1977].)

In the agreement of January 20, 1907, the heirs that were represented agreed on how the
Island was to be partitioned. The agreement of April 18, 1908 which supplements that of
January 20, 1907 reveals that as of the signing of the 1908 agreement no actual partition of the
Island had as yet been done. The second and fourth paragraphs of the agreement speaks of a
survey yet to be conducted by a certain Amadeo and a plan and description yet to be made.
Virgilio Pansacola, a son of the surveyor named Amadeo who is referred to in the contract
dated April 18, 1908 as the surveyor to whom the task of surveying Cagbalite Island pursuant to
said agreement was entrusted, however, testified that said contracts were never implemented
because nobody defrayed the expenses for surveying the same.

It is not enough that the co-owners agree to subdivide the property. They must have a
subdivision plan drawn in accordance with which they take actual and exclusive possession of
their respective portions in the plan and titles issued to each of them accordingly (Caro vs.
Court of Appeals, 113 SCRA 10 [1982]). The mechanics of actual partition should follow the
procedure laid down in Rule 69 of the Rules of Court. Maganon vs. Montejo, 146 SCRA 282
[1986]).

Neither can such actual possession and enjoyment of some portions of the Island by some of
the petitioners herein be considered a repudiation of the co-ownership. It is undisputed that
the Cagbalite Island was purchased by the original co-owners as a common property and it has
not been proven that the Island had been partitioned among them or among their heirs. While
there is co-ownership, a co-owner's possession of his share is co-possession which is linked to
the possession of the other co-owners (Gatchalian vs. Arlegui, 75 SCRA 234 [1977]).

2.) On the second issue, no prescription shall run in favor of a co-owner against his co-owners
or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Valdez vs. Olonga,
51 SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Co-owners cannot acquire by
prescription the share of the other co-owners, absent a clear repudiation of the co-ownership
clearly communicated to the other co-owners. An action for partition does not prescribe. Article
403 of the Old Civil Code, now Article 497, provides that the assignees of the co-owners may
take part in the partition of the common property, and Article 400 of the Old Code, now Article
494 provides that each co-owner may demand at any time the partition of the common
property, a provision which implies that the action to demand partition is imprescriptible or
cannot be barred by laches (Budlong vs. Pondoc, 79 SCRA 24 [1977]). An action for partition
does not lie except when the co-ownership is properly repudiated by the co- owner.

53
Pardell v. Bartolome
G.R. No. L-4656, November 18, 1912, 23 Phil. 450
Torres, J.

FACTS: Plaintiff Vicenta Ortiz and defendant Matilde Ortiz are the duly recognized natural
daughters of the spouses Miguel and Calixta who died in Vigan, Ilocos Sur. Prior to the death of
their mother, she executed a will whereby Matilde and Vicenta became the heirs of all her
property. Subsequently, defendants, without judicial authorization or extrajudicial agreement
took over the administration and enjoyment of the properties as well as collection of the rents,
fruits and products thereof. Moreover, Matilde and her husband occupied the upper storey of
the house and the room of the lower floor as an office. With this, Vicenta demanded that she
be given rental payments by Matilde in occupying the house since she is a co-owner of the
property not occupying the same and as such is entitled to its enjoyment and/or fruits.

ISSUE: Whether or not Vicenta can collect rentals from Matilde who occupies and enjoy the
property alone as a co-owner.

HELD: No. The law grants each co-owner the right to use the property for the purpose intended
provided that the interest of the co-ownership must not be injured or prejudiced and the other
co-owners must not be prevented from using it according to their rights.

Matilde occupied the property owned in common in accordance with the purpose for which it is
intended. Records show no proof that she neither occasioned any detriment to the interest of
the community property nor prevented her sister from utilizing the said property in accordance
to her right as a co-owner thereof. Matilde was excercising her right as a co-owner without
being prejudicial to Vicenta who could have also occupied her property had she wanted to.

Each co-owner of a property has the right pro-indiviso over the whole property and may use
and enjoy the same with no other limitation than that he shall not injure the interests of his co-
owners, for the reason that until a division is made, the respective part of each holder of a right
as a co-owner cannot be determined and every co-owner exercises joint ownership over the
pro-indiviso property in addition to his use and enjoyment of the same.

54
Caro v. Court of Appeals
G.R. No. L-46001, March 25, 1982, 113 SCRA 10
Guerrero, J.

FACTS: Alfredo Benito, Mario Benito and Benjamin Benito were the original co-owners of two
parcels of land somewhere in Sorsogon. Sometime in 1957, Mario died. His wife, Basilia Lahorra
and his father, Saturnino Benito, were subsequently appointed as joint administrators of
Mario’s estate by the CFI of Sorsogon.

On August 26, 1959, Benjamin executed a deed of absolute sale of his one-third undivided
portion over said parcels of land in favor of herein petitioner, Luz Caro for the sum of 10,000.

Subsequently, with the consent of Saturnino Benito and Alfredo Benito as shown in their
affidavits, a subdivision title was issued to petitioner Luz Caro over the lot.

Sometime in May 1966, when private respondent Basilia Lahorra learned from a pleading sent
to her that petitioner Luz Caro acquired from Benjamin Benito the aforesaid one-third of the
undivided share of the subject lands. She sent to petitioner thru counsel, a written offer to
redeem the said one-third share. However, this offer was ignored by the petitioner. Hence,
private respondent Basilia Lahorra filed a case for legal redemption and sought to prove that as
joint administrator of the estate of Mario Benito, she had not been notified of the sale as
required by articles 1620 and 1623 of the Civil Code.

During the hearing of the case, petitioner presented the following secondary evidence to prove
the service of notice of the intended sale to possible redemptioners: (1) affidavit of Benjamin
Benito attesting to the fact that the possible redemptioners were formally notified in writing of
his intention to sell his undivided share; (2) deposition of Saturnino’s widow that she received
and showed the notice to husband but the latter was not interested to buy the property.

The trial court ruled in favor of the petitioner. However, the decision was reversed by the CA.
Hence, the case was brought to the SC.

ISSUE: Whether or not co-ownership on the lots in question still exist thereby allowing private
respondent Basilia Lahorra to exercise the right of legal redemption.

HELD: The court held that as early as 1960, co-ownership of the parcels of land covered by TCT
Nos. T-609 and T-610 was terminated when Alfredo Benito, Luz Caro and the intestate estate of
Mario Benito, represented by administrators Saturnino Benito, as trustee and representative of
the heirs of Mario Benito, agreed to subdivide the property. It added that an “agreement of
partition, though oral, is valid and consequently binding upon the parties.”

A partition for subdivision was then filed for the purpose. This was accompanied by the
affidavits of Alfredo Benito and Saturnino Benito to the effect that they agree to the
segregation of the land owned in common by the three amigos. A subdivision plan was made
and by common agreement Lot 1-C, with an area of 163 hectares, was ceded to petitioner, to
wit, TCT no. T-4978.

55
In addition, notwithstanding the ruling in the Caram case wherein the sale of the property took
place after the partition agreement, the court therein saw no difference with respect to a
conveyance which took place before the partition agreement.

Regarding the contention of private respondent that she was not notified of the sale, the court
ruled that since the right of legal redemption does not exist nor apply in this case because
admittedly a subdivision title has already been issued in the name of the petitioner on Lot 1-C
sold to her, it becomes moot and academic. It becomes unnecessary to decide whether private
respondent complied with the requirements for the exercise of legal redemption under Article
1623 of the New Civil Code.

Bailon – Casilao v. Court of Appeals

G.R. No. 78178, April 15, 1988, 160 SCRA 738
Cortes, J.

FACTS: The Roman Catholic Archbishop [sic] of Manila was the owner of a parcel of land (Lot
No. 1272, Balanga Cadastre) situated in the Barrio of Puerto Rivas, Municipality of Balanga,
Bataan, having an area of 3,368 sq. m., more or less covered by OCT No. 14379 of de Registry of
Deeds for the province of Bataan. With respect to its rights over its properties in Bataan
(inclusive of Lot No. 1272), the said church was succeeded by the Roman Catholic Bishop of San
Fernando, Pampanga which was, likewise, succeeded by Catholic Bishop of Balanga —
registered as a corporation on 15 December 1975.Prior thereto, or on 23 August 1936, by virtue
of the authority given him by the Roman Catholic Archbishop of Manila to donate a portion of
Lot No. 1272, the then parish priest and administrator of all the properties of the said church in
the Municipality of Balanga Bataan, Rev. Fr. Mariano Sarili, executed an Escritura De Donacion
donating an area of 12.40 meters by 21.40 meters or 265.36 sq. m (the subject property) of Lot
No. 1272 to Ana de los Reyes and her heirs, as a reward for her long and satisfactory service to
the church. Her acceptance of the donation, as well as her possession of the subject property, is
indicated in the deed of donation, which deed, for unknown reasons, was refused registration
by the Register of Deeds. Six (6) years later, or in 1939, Ana de los Reyes died without issue.
Nevertheless, before her death, she had given the subject property to her nephew who had
been living with her, the herein defendant-appellant [private respondent]. The latter
immediately took possession of the property in the concept of owner, built his house thereon
and, through the years, declared the land for taxation purposes as well as paid the taxes due
thereon. His possession of the subject property was never disturbed by anybody until plaintiff-
appellee [petitioner] filed the instant complaint against him on 5 November 1985, or more than
49 years after the deed of donation was executed.

ISSUE: Whether or not petitioner is barred to recover the property by the doctrine of laches.

HELD: Yes. Laches means the failure or neglect for an unreasonable and unexplained length of
time, to do that which, by exercising due diligence, could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable time, warranting the presumption
that the party entitled to assert it either has abandoned or declined to assert it. It has also been
defined as such neglect or omission to assert a right taken in conjunction with the lapse of time
and other circumstances causing prejudice to an adverse party, as will operate as a bar in
equity. The following are the essential elements of laches: (1) Conduct on the part of the
defendant, or of one under whom he claims, giving rise to the situation complained of; (2)
Delay in asserting complainant's right after he had knowledge of the defendant's conduct and
after he has an opportunity to sue; (3) Lack of knowledge or notice on the part of the defendant
that the complainant would assert the right on which he bases his suit; and (4) Injury or

56
prejudice to the defendant in the event relief is accorded to the complainant.  32 Under the
present circumstances, all of the aforegoing elements are attendant in this case.

Finally, we agree with the respondent Court of Appeals that, while petitioner is admittedly still
the registered owner of the donated property, and jurisprudence is settled as to the
imprescriptibility and indefeasibility of a Torrens Title, there is equally an abundance of cases in
the annals of our jurisprudence where we categorically ruled that a registered landowner may
lose his right to recover the possession of his registered property by reason of laches.  

Roque v. Intermediate Appellate Court

G.R. No. L-75886, August 30, 1988, 165 SCRA 118
Feliciano, J.

FACTS: Petitioner Concepcion Roque, on 6 December 1977, filed a Complaint for "Partition with
Specific Performance" (docketed as Civil Case No. 5236-M) with Branch 2 of the then Court of
First Instance of Malolos against respondents Emesto Roque and the heirs of Victor Roque. In
her complaint, petitioner (plaintiff below) claimed legal ownership of an undivided three-
fourths (3/4) portion of Lot No. 1549, by virtue of the 27 November 1961 "Bilihan Lubos at
Patuluyan" executed in her favor by Emesto Roque and Victor Roque.

In support of this claim, petitioner also presented an undated and unnotarized "Kasulatang
Pagkilala sa Bilihan Patuluyan ng Bahagui at Pagmamana sa Labas ng Hukuman at Paghahati-
hati at Abuyan ng Bahagui" said to have been signed by the respondents in acknowledgment of
the existence and validity of the Bilihan in favor of petitioner. Finally, petitioner alleged that, as
a co-owner of Lot No. 1549, she had a right to seek partition of the property, that she could not
be compelled to remain in the co-ownership of the same. Respondents Ernesto Roque and the
legal heirs of Victor Roque, however, refused to acknowledge petitioner's claim of ownership of
any portion of Lot No. 1549 and rejected the plan to divide the land.

ISSUE: Whether or not petitioner can be compelled to remain in the co-ownership.

HELD: No. Article 494 of the Civil Code provides that "no co-owner shall be obliged to remain in
the co-ownership" and that "each co-owner may demand at any time the partition of the thing
owned in common, insofar as his share is concerned." The facts on record clearly show that
petitioner Concepcion Roque had been in actual, open and continuous possession of a three-
fourths (3/4) portion of Lot No. 1549 ever since execution of the "Bilihan Lubos at Patuluyan" in
November of 1961. The Court notes that it was only in their Answer with Compulsory
Counterclaim filed with the trial court in December of 1977 — more than sixteen (16) years
later — that respondents first questioned the genuineness and authenticity of the "Bilihan
Lubos at Patuluyan." Not once during those sixteen (16) years did respondents contest
petitioner's occupation of a three-fourths (3/4) portion of Lot No. 1549.

Furthermore, if indeed it is true that respondents, as they claim, are the absolute owners of the
whole of Lot No. 1549, it is most unusual that respondents would have allowed or tolerated
such prolonged occupation by petitioner of a major portion (3/4) of the land while they, upon
the other hand, contented themselves with occupation of only a fourth thereof. This latter
circumstance, coupled with the passage of a very substantial length of time during which
petitioner all the while remained undisturbed and uninterrupted in her occupation and
possession, places respondents here in laches: respondents may no longer dispute the
existence of the co-ownership between petitioner and themselves nor the validity of
petitioner's claim of a threefourths (3/4) interest in Lot No. 1549, as they are deemed, by their
unreasonably long inaction, to have acquiesced in the co-ownership.
57
Delima v. Court of Appeals
G. R. No. L-46296, September 24, 1991, 201 SCRA 641
Medialdea J.

FACTS: Lino Delima acquired a lot from the friar lands. Later, he died, leaving as his only heirs
three brothers and sisters namely: Eulalio Delima, Juanita Delima, Galileo Delima and Vicente
Delima. Galileo was the caretaker of the property. He was able to execute an affidavit adjusting
to himself the parcel of land and was able to secure the issuance of a Transfer Certificate of Title
in his name. This prompted the heirs of his siblings to file a action for reconveyance.

ISSUE: Whether or not the property is subject to prescription.

HELD: Yes. From the moment one of the co-owners claims that he is the absolute and exclusive
owner of the properties and denies the others any share therein, the question involved is no
longer one of partition but of ownership. In such case, the imprescriptibility of the action for
partition can no longer be invoked or applied when one of the co-owners has adversely possessed
the property as exclusive owner for a period sufficient to vest ownership by prescription. It is
settled that possession by the co-owner or co-heir is that of a trutee. In order that such possession
is considered adverse to the cestui que trust amounting to a repudiation of the co-ownership, the
following elements must concur: 1) that the trustee has performed unequivocal acts amounting to
an ouster of cestui que trust; 2) that such positive acts of repudiation had been made known to
the cestui que trust; and 3) that the evidence thereon should be clear and conclusive.

When the co-owner of the property executed a deed of partition and on the strength thereof,
obtained a cancellation of the title in the name of their predecessor and the issuance of a new title
in his name as the owner, the statute of limitations started to run for the purposes of the action
instituted by the latter seeking a declaration of the existence of the co-ownership and their rights
thereafter. The issuance of a new title constituted a clear act of repudiation of the trust and co-
ownership.

Aguilar v. Court of Appeals

G.R. No. 76351, October 29, 1993, 227 SCRA 472
Bellosillo, J.

FACTS: Petitioner Virgilio and respondent Senen are brothers, and were among the seven (7)
children of the late Maximiano Aguilar. In 1969, the two brothers purchased a house and lot in
Parañaque where their father could spend and enjoy his remaining years in a peaceful
neighborhood. Initially, the brothers agreed that Virgilio's share in the co-ownership was two-
thirds while that of Senen was one-third. By virtue of a written memorandum, Virgilio and
Senen agreed that henceforth their interests in the house and lot should be equal, with Senen
assuming the remaining mortgage obligation of the original owners with the SSS in exchange
for his possession and enjoyment of the house together with their father. Since Virgilio was
then disqualified from obtaining a loan from SSS, the brothers agreed that the deed of sale
would be executed and the title registered in the meantime in the name of Senen. It was
further agreed that Senen would take care of their father and his needs since Virgilio and his
family were staying in Cebu.

After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that the
latter vacate the house and that the property be sold and proceeds thereof divided among
them. Because of the refusal of respondent to give in to petitioner's demands, the latter filed an

58
action to compel the sale of the house and lot so that the they could divide the proceeds
between them. In his complaint, petitioner prayed that the proceeds of the sale, be divided on
the basis of two-thirds (2/3) in his favor and one-third (1/3) to respondent. Petitioner also
prayed for monthly rentals for the use of the house by respondent after their father died. In his
answer with counterclaim, respondent alleged that he had no objection to the sale as long as
the best selling price could be obtained; that if the sale would be effected, the proceeds thereof
should be divided equally; and, that being a co-owner, he was entitled to the use and
enjoyment of the property. Rendering judgment by default against defendant, for failure to
appear at pre- trial, the trial court found him and plaintiff to be co-owners of the house and lot,
in equal shares on the basis of their written agreement. However, it ruled that plaintiff has been
deprived of his participation in the property by defendant's continued enjoyment of the house
and lot, free of rent, despite demands for rentals and continued maneuvers of defendants, to
delay partition. The trial court also upheld the right of plaintiff as co-owner to demand
partition. Since plaintiff could not agree to the amount offered by defendant for the former's
share, the trial court held that this property should be sold to a third person and the proceeds
divided equally between the parties. The CA set aside the order of the trial court.

ISSUE: Whether or not petitioner may demand partition of the property.

HELD: Yes. We uphold the trial court in ruling in favor of petitioner, except as to the effectivity
of the payment of monthly rentals by respondent as co-owner which we here declare to
commence only after the trial court ordered respondent to vacate in accordance with its order.
Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-
ownership, and that each co-owner may demand at any time partition of the thing owned in
common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that
whenever the thing is essentially, indivisible and the co-owners cannot agree that it be, allotted
to one of them who shall indemnify the others, it shall be sold and its proceeds accordingly
distributed. This is resorted to (1) when the right to partition the property is invoked by any of
the co-owners but because of the nature of the property it cannot be subdivided or its
subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not in
agreement as to who among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners. However, being a co-owner respondent has the right to use
the house and lot without paying any compensation to petitioner, as he may use the property
owned in common long as it is in accordance with the purpose for which it is intended and in a
manner not injurious to the interest of the other co-owners. 9 Each co-owner of property held
pro indiviso exercises his rights over the whole property and may use and enjoy the same with
no other limitation than that he shall not injure the interests of his co-owners, the reason being
that until a division is made, the respective share of each cannot be determined and every co-
owner exercises, together with his co-participants joint ownership over the pro indiviso
property, in addition to his use and enjoyment of the same.

Since petitioner has decided to enforce his right in court to end the co-ownership of the house
and lot and respondent has not refuted the allegation that he has been preventing the sale of
the property by his continued occupancy of the premises, justice and equity demand that
respondent and his family vacate the property so that the sale can be effected immediately. In
fairness to petitioner, respondent should pay a rental of P1,200.00 per month, with legal
interest; from the time the trial court ordered him to vacate, for the use and enjoyment of the
other half of the property appertaining to petitioner. When petitioner filed an action to compel
the sale of the property and the trial court granted the petition and ordered the ejectment of
respondent, the co-ownership was deemed terminated and the right to enjoy the possession
jointly also ceased. Thereafter, the continued stay of respondent and his family in the house
prejudiced the interest of petitioner as the property should have been sold and the proceeds
divided equally between them. To this extent and from then on, respondent should be held
liable for monthly rentals until he and his family vacate.
59
Tomas Claudio Memorial College v. Court of Appeals
G.R. No. 124262, October 12, 1999, 316 SCRA 502
Quisimbing, J.

FACTS: Juan De Castro died intestate in 1993 leaving a parcel of land located in Morong, Rizal to
his heirs. Mariano De Castro one of the heirs sold the said lot to petitioner Tomas Claudio
Memorial College by representing that he is the sole owner of the property. The other heirs
filed an action for partition before the Regional Trial Court of Rizal alleging that the sale made
by Mariano affected only his undivided share of the lot but not the shares of the other co-
owners. Petitioner filed a motion to dismiss the partition for the reason that it has already been
barred by prescription.

The Regional Trial Court of Rizal dismissed the petitioner’s motion. The Court of Appeals
affirmed the decision.

ISSUES:
1.) Whether or not the sale affected only the undivided share of Mariano
2.) Whether or not the action to file for partition has already prescribed.

HELD: 1.) Yes. The Court has consistently ruled that even if a co-owner sells the whole property
as his, the sale will affect only his own share but not those of the other co-owners who did not
consent to the sale. The sale of the whole property by a co-owner does not make the sale null
and void but it only transfers the rights to the undivided share of the co-owner who made the
sale. The proper action in a case like this is not nullification nor recovery but a division or
partition of the entire property.

2.) No. As to the issue on prescription, the Civil Code provides that no prescription shall lie in
favor of a co-owner or co-heirs as long as he expressly or impliedly recognizes the co-
ownership.

Robles v. Court of Appeals

GR. No. 123509, March 14, 2000, 328 SCRA 97
Panganiban, J.

FACTS: Leon Robles originally owned the land which was inherited by his son Silvino Robles.
The latter then took possession of the land and declared it in his name for taxation purposes.
Upon his death, the same was inherited by his widow Maria dela Cruz and his children. The
plaintiffs entrusted the payment of the land taxes to their co-heir and half-brother, Hilario Tobles.
For unknown reasons, the tax declaration of the parcel of land in the name of Silvino Robles was
cancelled and transferred to one Exequiel Ballena, father of Andres Robles who is the wife of the
defendant Hilario Robles. He secured a loan from the Cardona Rural Bank, Inc. which was
foreclosed for failure to pay the mortgage debt wherein the defendant bank emerged as the
highest bidder during the auction sale. Defendant Rural Bank sold the same to the Spouses
Santos. A n action for quieting of title was filed by respondent Santos. The plaintiffs alleged that
they had been in possession of the land since 1942 and it was only in 1987 that they knew about
the foreclosure of the mortgage. The Court of Appeals ruled that because of the plaintiff’s
inaction for more than 20 years, prescription had already set in.

ISSUE: Whether or not the action has prescribed in favour of Hilario Robles.

60
HELD: Yes. Hilario effected no clear and evident repudiation of the co-ownership. It is a
fundamental principle that a co-owner cannot acquire by prescription the share of the other co-
owners, absent any clear repudiation of the co-ownership. In order that the title may prescribe in
favor of a co-owner, the following requisites must concur: (1) the co-owner has performed
unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) such positive
acts of repudiation have been made known to the other co-owner; and (3) the evidence thereof is
clear and convincing. In the present case, Hilario did not have possession of the subject property;
neither did he exclude the petitioners from the use and the enjoyment thereof, as they had
indisputably shared in its fruits. Likewise, his act of entering into a mortgage contract with the
bank cannot be construed to be a repudiation of the co-ownership. As absolute owner of his
undivided interest in the land, he had the right to alienate his share, as he in fact did. Neither
should his payment of land taxes in his name, as agreed upon by the co-owners, be construed as a
repudiation of the co-ownership. The assertion that the declaration of ownership was tantamount
to repudiation was belied by the continued occupation and possession of the disputed property by
the petitioners as owners.

Galvez vs. Court of Appeals

G.R. No. 157954, March 24, 2006
Chico – Nazario, J.

FACTS: Timotea F. Galvez died intestate and left a parcel of land in La Union. She left behind her
children Ulpiano and petitioner Paz Galvez. Ulpiano who died before Timotea was survived by
his son, private respondent, Porfirio Galvez. With regards to the property of Timotea, it is
supposed to pass to Paz and Porfirio. However, Porifirio was surprised to discover that Paz
executed an affidavit of adjudication stating that she is the true and lawful owner of the said
property. Moreover, without the knowledge and consent of Porfirio, Paz sold the property to
petitioner Carlos Tam for P10,000.00. Tam thereafter filed an application for registration for
said parcel of land. Subsequently, Tam sold the property to Tycoon Properties, Inc. Having
knowledge of such sale, Porfirio filed a complaint for Legal Redemption with Damages and
Cancellation of documents against petitioner which was affirmed by the lower court and the
Court of Appeals.

ISSUES:
1.) Whether or not the claim of Porfirio Galvez which is based on an implied trust has already
prescribed because the action was filed 24 years after Paz Galvez repudiated the said trust?
2.) Whether or not the claim of Porfirio Galvez which is based on an implied trust is already
banned by laches because he failed to assert his alleged right for almost 24 years?
3.) Whether or not Carlos Tam and Tycoon Properties are buyers in good faith and for value
and has the right to rely on the face of the title?

HELD: 1.) No. Article 494 of the Civil Code provides that "a prescription shall not run in favor of
a co-owner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly
recognizes the co-ownership." It is a fundamental principle that a co-owner cannot acquire by
prescription the share of the other co-owners, absent any clear repudiation of the co-
ownership. Prescription, as a mode of terminating a relation of co-ownership, must have been
preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to
certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is
clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive;
and (4) he has been in possession through open, continuous, exclusive, and notorious
possession of the property for the period required by law. In this case, we find that Paz Galvez
effected no clear and evident repudiation of the co-ownership. The execution of the affidavit of
self-adjudication does not constitute such sufficient act of repudiation as contemplated under

61
the law as to effectively exclude Porfirio Galvez from the property. This Court has repeatedly
expressed its disapproval over the obvious bad faith of a co-heir feigning sole ownership of the
property to the exclusion of the other heirs essentially stating that one who acts in bad faith
should not be permitted to profit from it to the detriment of others.

2.) No. On the matter of laches, it is hornbook doctrine that laches is a creation of equity and its
application is controlled by equitable considerations. Laches cannot be used to defeat justice or
perpetrate fraud and injustice. Neither should its application be used to prevent the rightful
owners of a property from recovering what has been fraudulently registered in the name of
another. The equitable remedy of laches is, therefore, unavailing in this case.

3.) No. As to petitioners Carlos Tam and Tycoon Properties, Inc.’s claim that they are buyers in
good faith, same fails to persuade. A purchaser in good faith and for value is one who buys the
property without notice that some other person has a right to or interest in such property and
pays its fair price before he has notice of the adverse claims and interest of another person in
the same property. So it is that the "honesty of intention" which constitutes good faith implies a
freedom from knowledge of circumstances which ought to put a person on inquiry. "Tam did
not exert efforts to determine the previous ownership of the property in question" and relied
only on the tax declarations in the name of Paz Galvez. It must be noted that Carlos Tam
received a copy of the summons and the complaint on 22 September 1994. This
notwithstanding, he sold the property to Tycoon Properties, Inc. on 27 September 1994.
Significantly, Carlos Tam is also an owner of Tycoon Properties, Inc. to the extent of 45%. A
notice of lis pendens dated 8 July 1997 filed with the Registry of Deeds of the Province of La
Union was inscribed on TCT No. T- 40390. Despite the inscription, Tycoon Properties, Inc.
mortgaged the land to Far East Bank and Trust Company for the sum of P11,172,600. All these
attendant circumstances negate petitioners’ claim of good faith.

Adille vs. Court of Appeals

G.R. No. L-45546, January 29, 1988
Sarmiento, J.

FACTS: Felisa Alzul, who owned a parcel of lot in Albay was married twice. The first was with
Bernabe Adille whom she had an only child, herein petitioner Rustico Adille. The second was with
Procopio Asejo whom she had three children, herein the private respondents. It was alleged that
Felisa sold the property in pacto de retro to certain 3 rd persons, for a period of repurchase being 3
years. However, she died without being able to redeem the lot. After her death but during the
period of redemption, petitioner Rustico repurchased, by himself alone the said lot. Afterwards,
he executed a deed of extra-judicial partition by himself. Efforts to compromise were made but
failed. Thus, his half-brothers and sisters, private respondents filed a present case of partition
with accounting on the position that he was only a trustee on an implied trust when he redeemed
the lot. Moreover, it turned out that one of the private respondents, Emeteria Asejo was
occupying a portion. The lower court was in favor of the petitioner; however, it was reversed by
the Court of Appeals.

ISSUES:
1.) Whether or not a co-owner can acquire an exclusive ownership over the property held in
common.
2.) Whether or not prescription has set in.

HELD: 1.) No. The right of repurchase may be exercised by a co-owner with aspect to his share
alone. While the records show that the petitioner redeemed the property in its entirety,
shouldering the expenses therefore, that did not make him the owner of all of it. In other
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words, it did not put to end the existing state of co-ownership. Necessary expenses may be
incurred by one co-owner, subject to his right to collect reimbursement from the remaining co-
owners. There is no doubt that redemption of property entails a necessary expense. Under
Article 488 of the Civil Code, it provides that each co-owner shall have a right to compel the
other co-owners to contribute to the expenses of preservation of the thing or right owned in
common and to the taxes. Any one of the latter may exempt himself from this obligation by
renouncing so much of his undivided interest as may be equivalent to his share of the expenses
and taxes. No such waiver shall be made if it is prejudicial to the co-ownership. The result is
that the property remains to be in a condition of co-ownership. While a vendee a retro, under
Article 1613 of the Code, “may not be compelled to consent to a partial redemption,” the
redemption by one co-heir or co-owner of the property in its totality does not vest him
ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a
retro to retain the property and consolidate title thereto in his name. But the provision does
not give to the redeeming co-owner the right to the entire property. It does not provide for a
mode of terminating a co-ownership. Neither does the fact that the petitioner had succeeded in
securing title over the parcel in his name terminate the existing co-ownership. While his half-
brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in
redemption expenses, he cannot claim exclusive right to the property owned in common.
Registration of property is not a means of acquiring ownership. It operates as a mere notice of
existing title, that is, if there is one.

2.) We hold in the negative. Prescription, as a mode of terminating a relation of co-ownership,

must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn
is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of
repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and
conclusive, and (4) he has been in possession through open, continuous, exclusive, and
notorious possession of the property for the period required by law. The instant case shows
that the petitioner had not complied with these requisites. We are not convinced that he had
repudiated the co-ownership; on the contrary, he had deliberately kept the private respondents
in the dark by feigning sole heirship over the estate under dispute. He cannot therefore be said
to have "made known" his efforts to deny the co-ownership. Moreover, one of the private
respondents, Emeteria Asejo, is occupying a portion of the land up to the present; yet, the
petitioner has not taken pains to eject her therefrom. As a matter of fact, he sought to recover
possession of that portion Emeteria is occupying only as a counterclaim, and only after the
private respondents had first sought judicial relief.

Adlawan vs. Adlawan

G.R. No. 161916, January 20, 2006
Ynares – Santiago, J.

FACTS: Petitioner Arnelito Adlawan, the acknowledged illegitimate child of Dominador Adlawan
filed an ejejctment suit against the siblings of his father, respondents Narcisa and Emeterio
Adlawan. Being the sole heir of Dominador, he executed an affidavit adjudicating the house and
lot owned by his father. However, he alleged that out of respect and generosity to respondents,
he granted their plea to occupy the subject property provided they would vacate the same
should his need for the property arise. Later, when he verbally requested respondents to vacate
the house and lot, they refused and filed instead an action for quieting of title. He then also
filed a complaint for ejectment. In answer, the respondents, 70 and 59 years of age respectively
denied that they begged petitioner to allow them to say on the property since they have been
staying there since birth. They claimed that the said lot was originally registered in the name of
their deceased parents, Ramon and Oligia Adlawan. Spouses Ramon and Oligia needed money
to finance the renovation of their house. Since they were not qualified to obtain a loan, they
63
transferred ownership of the lot to Dominador who was the only one in the family who had a
college education. Dominador and his wife, Graciana did not disturb respondents’ possession of
the property until they died. They also argued that even if petitioner is indeed Dominador’s
acknowledged illegitimate son, his right to succeed is doubtful because Dominador was
survived by his wife, Graciana.

ISSUE: Whether or not the petitioner can validly maintain the instant case of ejectment.

HELD: No. Petitioner averred that he is an acknowledged illegitimate son and the sole heir of
Dominador. However, the RTC lost sight of the fact that the theory of succession invoked by
petitioner would end up proving that he is not the sole owner of the subject lot. This so because
Dominador was survived not only by petitioner but also by his legal wife, Graciana, who died 10
years after the death of Dominador. By intestate succession, Graciana and petitioner became
co-owners of the subject lot and house. Petitioner then contended that even granting that he is
a co-owner, he can file the instant case pursuant to Article 487 of the Civil Code. This article
covers all kinds of actions for the recovery of possession. It includes forcible entry and unlawful
detainer (accion interdictal), recovery of possession (accion publiciana) and recovery of
ownership (accion de reinvindicacion). A co-owner may bring such action without the necessity
of joining all the other co-owners as co-plaintiffs because the suit is presumed to have been
filed to benefit his co-owners. It should be stressed, however, that where the suit is for the
benefit of the petitioner alone who claims to be the sole owner and entitled to the possession
of the litigated property, the action should be dismissed.

According to the renowned civilest, Professor Arturo M. Tolentino, he explained that “a co-
owner may bring such an action, without the necessity of joining all the other co-owners as co-
plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for
the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-
ownership, the action will not prosper. In this case, it is not disputed that petitioner brought the
suit for unlawful detainer in his name alone and for his own benefit to the exclusion of the heirs
of Graciana as he even executed an affidavit of self-adjudication over the disputed property. It
is clear therefore that petitioner cannot validly maintain the instant action considering that he
does not recognize the co-ownership that necessarily flows from his theory of succession to the
property of his father, Dominador.

Sumipat v. Banga
G.R. No. 155810, August 13, 2004
Tinga, J.

FACTS: The spouses Placida Tabo-tabo and Lauro Sumipat acquired three parcels of land. The
couple was childless. Lauro Sumipat, however, sired five illegitimate children. They are the
petitioners herein. Lauro executed a document denominated “Deed of Absolute Transfer
and/or Quit-Claim over Real Properties” in favor of the petitioners. On the document, it appears
that the signature of his wife, Placida which indicates that she gave her marital consent.
Moreover, it was alleged that Lauro executed it when he was already very sick and bedridden
that upon petitioner Lydia’s request, their neighbor Benjamin Rivera lifted the body of Lauro
whereupon Lydia guided his hand in affixing his signature on the document. Lydia left but later
returned on the same day and requested Lauro’s unlettered wife, Placida to sign on the said
document. After Lauro’s death, his wife, Placida and petitioners jointly administered the
properties, 50% of the produce went to his wife. As wife’s share in the produce of the
properties dwindled, she filed a complaint for declaration of partition disclaiming any partition
in the execution of the subject document.

64
ISSUE: Whether or not a co-ownership was formed from the said deed.

HELD: No. A perusal of the deed reveals that it is actually a gratuitous disposition of property —
a donation — although Lauro Sumipat imposed upon the petitioners the condition that he and
his wife, Placida, shall be entitled to one-half (1/2) of all the fruits or produce of the parcels of
land for their subsistence and support. Where the deed of donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a separate instrument, is
either not given to the donor or else not noted in the deed of donation and in the separate
acceptance, the donation is null and void. In this case, the donees’ acceptance of the donation
is not manifested either in the deed itself or in a separate document. Hence, the deed as an
instrument of donation is patently void. The Court declared that the deeds of sale questioned
therein are not merely voidable but null and void ab initio as the supposed seller declared
under oath that she signed the deeds without knowing what they were. The significant
circumstance meant, the Court added, that her consent was not merely marred by vices of
consent so as to make the contracts voidable, but that she had not given her consent at all.

Rizal Cement Co., Inc. v. Villareal

G.R. No. L-30272, February 28, 1985, 135 SCRA 15
Cuevas, J.

FACTS: Respondents are applicants for the registration of two agricultural lands located in Rizal.
They presented testimonial and documentary evidence appearing that the property applied for,
designated as Lot Nos. 1 and 2 of Plan Psu-147662, have a total area of 26,015 sq. m.; that
these lots originally belong to one Maria Certeza; that upon her death, the property was
involved in a litigation between her grandchildren and Gonzalo Certeza, and that the lots were
given by the latter to Justice de Joya as the latter’s attorney’s fees; that the lots were then sold
by de Joya to Filomeno Sta. Ana, who in turn sold the same to spouses Victoriano Cervo and
Ignacia Guillermo in 1939; that sometime in November 1955, the said spouses sold the lots to
herein applicants as shown by a duly notarized deed of sale. The spouses Cervo declared the
property for taxation purposes in the name of the wife, Ignacia Guillermo, and paid for the
realty taxes thereon; that prior to the sale, the spouses Cervo had the two lots surveyed first in
1950 and then in 1955. On the other hand, oppositor (Rizal Cement Company) claims to be the
owner of the subject lots, having bought the same from Maria Certeza, and to have been in
continuous and adverse possession of the property since 1911. To substantiate this claim,
petitioner submitted documentary evidence, one of which is a tax declaration of the said lots.
The Court of First Instance denied the application for registration of respondents and ordered
the issuance of a decree of registration in the name of Rizal Cement Co., after finality of said
decision. On appeal, the Court of Appeals reversed and set aside the decision of the CFI. The CA
denied petitioner’s motion for reconsideration. Hence, this petition was filed.

ISSUE: Whether or not respondents had been in actual possession of the land in question.

HELD: Yes. The CA gave credence to the testimony of the witnesses for respondents. As a
general rule, it is provided in the Civil Code that possession is acquired by the material
occupation of a thing or the exercise of a right or by the fact that it is subject to the action of
our will, or by the proper acts or legal formalities established for acquiring such right.
Petitioner’s evidence, consisting of tax receipts, tax declaration and survey plan are not
65
conclusive and indisputable basis of one’s ownership of the property in question. Assessment
alone is of little value as proof of title. Mere tax declaration does not vest ownership of the
property upon defendant.

Wong v. Carpio
G.R. No. 50264, October 21, 1991, 203 SCRA 118
Bidin, J.

FACTS: William Giger sold a parcel of land through a pacto de recto sale to Manuel Mercado.
Mercado only began to harvest the coconut fruits but he never placed anyone over the land to
watch it. Neither did he reside in the land nor was there any hut constructed thereon to show
possession. Thereafter, Ignacio Wong inspected the land to see if whether there was anyone
claiming the land. After finding there was none, he bought the land from Giger. He placed
workers on the land, constructed a farmhouse, and fenced the boundaries. He couldn't register
the sale due to some technicalities.

ISSUE: Whether or not the possession of the disputed land belongs to Ignacio Wong.

HELD: It should be stressed that "possession is acquired by the material occupation of a thing or
the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper
acts and legal formalities for acquiring such right." And that the execution of a sale thru a public
instrument shall be equivalent to the delivery of the thing, unless there is stipulation to the
contrary. If, however, notwithstanding the execution of the instrument, the purchaser cannot
have the enjoyment and material tenancy of the thing and make use of it herself, because such
tenancy and enjoyment are opposed by another, then delivery has not been effected. Applying
the above pronouncements on the instant case, it is clear that possession passed from vendor
William Giger to private respondent Manuel Mercado by virtue of the first sale a retro, and
accordingly, the later sale a retro in favor of petitioner failed to pass the possession of the
property because there is an impediment — the possession exercised by private respondent.
Possession as a fact cannot be recognized at the same time in two different personalities except
in the cases of co-possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessions, the one longer in possession,
if the dates of possession are the same, the one who presents a title; and if these conditions are
equal, the thing shall be placed in judicial deposit pending determination of its possession or
ownership through proper proceedings.

Somodio v. Court of Appeals

G.R. No. 82680, August 15, 1994, 235 SCRA 307
Quiason, J.

FACTS: Wilfredo Mabugat and Nicanor Somodio bought a residential lot situated at Rajah
Muda, Bula, General Santos. Petitioner and Mabugat partitioned the property into two portions,
with petitioner taking the western part. Immediately after the partition, petitioner took possession
of his portion and planted thereon ipil-ipil trees, coconut trees and other fruit-bearing trees. In
1976, petitioner began construction of a structure with a dimension of 22-by-18 feet on his lot.
His employment, however, took him to Kidapawan, North Cotabato, and he left the unfinished
structure to the case of his uncle. He would visit the property every three months or on weekened
when he had time. Sometime in October 1977, petitioner allowed respondent Felomino Ayco, to
transfer his hut to petitioner's lot. About six years later, petitioner demanded that Ayco vacate the
premises but such demand proved futile. Hence, on August 23, 1983, petitioner filed an action

66
for unlawful detainer with damages against respondent Ayco. Meanwhile, on June 26, 1983,
respondent Ebenecer Purisima entered the land and constructed a house thereon. Four days later,
petitioner filed against respondent Purisima a complaint for forcible entry before the same court
docketed as Civil Case No. 2013-I. Said case was later consolidated with Civil Case No. 2032-II.

ISSUE: Whether or not Somodio has actual possession of the property.

HELD: Yes. Article 531 of the Civil Code of the Philippines provides that possession is
acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is
subject to the action of our will, or by the proper acts and legal formalities established for
acquiring such right. Petitioner took possession of the property sometime in 1974 when he
planted the property to coconut trees, ipil- ipil trees and fruit trees. In 1976, he started the
construction of a building on the property. It is immaterial that the building was unfinished and
that he left for Kidapawan for employment reasons and visited the property only intermittently.
Possession in the eyes of the law does not mean that a man has to have his feet on every square
meter of ground before it can be said that he is in possession (Ramos v. Director of Lands, 39
Phil. 175 [1918]). It is sufficient that petitioner was able to subject the property to the action of
his will.

Maglucot – Aw v. Maglucot
G.R. No. 132518, March 28, 2000, 329 SCRA 78
Kapunan, J.

FACTS: Sometime in 1946 there was a prior oral agreement to tentatively partition Lot No.
1639. By virtue of this agreement, the original co-owners occupied specific portions of Lot No.
1639. It was only in 1952 when the petition to subdivide Lot No. 1639 was filed because two of
the co-owners, namely Hermogenes Olis and heirs of Pascual Olis, refused to have said lot
subdivided and have separate certificates of title. Significantly, after the 1952 proceedings, the
parties in this case by themselves and/or through their predecessors-in-interest occupied
specific portions of Lot No. 1639 in accordance with the sketch plan. Sometime in 1963,
Guillermo Maglucot rented a portion of the subject lot. Subsequently, Leopoldo and Severo,
both surnamed Maglucot, rented portions of subject lot in 1964 and 1969, respectively, and
each paying rentals therefor. Said respondents built houses on their corresponding leased lots.
They paid the rental amount of P100.00 per annum to Mrs. Ruperta Salma, who represented
the heirs of Roberto Maglucot, petitioners’ predecessor-in-interest. In December 1992,
however, said respondents stopped paying rentals claiming ownership over the subject lot
alleging they had a right over the land because such was not partitioned and they were co-
owners. Manglucot-Aw thus filed a complaint for recovery of possession and damages against
Manglucot.

ISSUE: Whether or not Manglucot-Aw may recover possession by virtue of a valid partition.

HELD: Yes. An order for partition is final and not interlocutory and, hence, appealable because it
decides the rights of the parties upon the issue submitted. In this case, both the order of
partition and the unconfirmed sketch plan are, thus, interlocutory. Nevertheless, where parties
do not object to the interlocutory decree, but show by their conduct that they have assented
thereto, they cannot thereafter question the decree, especially, where, by reason of their
conduct, considerable expense has been incurred in the execution of the commission.
Respondents in this case have occupied their respective lots in accordance with the
sketch/subdivision plan. They cannot after acquiescing to the order for more than forty (40)
years be allowed to question the binding effect thereof. Under the present rule, the
proceedings of the commissioners without being confirmed by the court are not binding upon
the parties. However, this rule does not apply in case where the parties themselves actualized

67
the supposedly unconfirmed sketch/subdivision plan. The purpose of court approval is to give
effect to the sketch/subdivision plan. In this case, the parties themselves or through their
predecessors-in-interest implemented the sketch plan made pursuant to a court order for
partition by actually occupying specific portions of Lot No. 1639 in 1952 and continue to do so
until the present until this case was filed, clearly, the purpose of the court approval has been
met. This statement is not to be taken to mean that confirmation of the commissioners may be
dispensed with but only that the parties herein are estopped from raising this question by their
own acts of ratification of the supposedly non-binding sketch/subdivision plan.

Cequeña v. Bolante
G.R. No. 137944, April 6, 2000, 330 SCRA 216
Panganiban, J.

FACTS: The petitioners Fernanda Mendoza Cequeña and Eduarda Apiado sought for the
ownership and possession of the land occupied by the respondent Honorata Bolante. Prior to
1954, the land in Binangonan, Rizal was declared for taxation purposes in the name of Sinforoso
Mendoza, the father of respondent. Sinforoso died in 1930. On the basis of an affidavit, the tax
declaration in the name of Sinforoso Mendoza of the contested lot was cancelled and
subsequently declared in the name of Margarito Mendoza, the father of the petitioners.
Margarito and Sinforoso are brothers. During the cadastral survey, respondent Honorata is the
present occupant of the land together with Miguel Mendoza, another brother of the
petitioners. The trial court rendered the petitioners as the lawful owner and possessors of the
land. However, the Court of Appeals reversed the decision because the genuineness and the
due execution of the affidavit. It was said to be insufficient to overcome the denial of
respondent and her mother. Moreover, the probative value of petitioners’ tax receipts and
declarations paled in comparison with respondent’s proof of ownership of the disputed parcel.
The actual, physical, exclusive and continuous possession by respondent since 1985 gave her a
better title under Article 538 of the Civil Code. The petitioners contended otherwise that she
came into possession through force and violence, contrary to Article 536 of the Civil Code.

ISSUES:
1.) Whether or not the respondent has the actual, physical, exclusive and continuous
possession of the land.
2.) Whether or not tax declarations and receipts are conclusive evidence of ownership or
possession.

HELD: 1.) Yes. Possession by the petitioner before 1985 was not exclusive, as the respondent
also acquired it before 1985. The records show that the petitioners’ father and brother, as well
as the respondent and her mother were simultaneously in adverse possession of the land.
Based on Article 538 of the Civil Code, the respondent is the preferred possessor because,
benefitting from her father’s tax declaration of the subject lot since 1926, she has been in
possession thereof for a longer period. On the other hand, petitioners’ father acquired joint
possession only in 1952.

2.) No. Tax declarations and receipts are not conclusive evidence of ownership. At most, they
constitute mere prima facie proof of ownership or possession of the property for which taxes
have been paid. In the absence of actual public and adverse possession, the declaration of the
land for tax purposes does not prove ownership. The petitioners’ claim of ownership of the
whole parcel has no legal basis.

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Aragon v. Insular Government
G.R. No. L-6019, March 25, 1911, 19 Phil. 223
Carson, J.

FACTS: The Government of the Philippine Islands, through its proper representatives, objected
to the application for registration pursuant to the Land Registration Act of a small lot of parcel
of land being instituted by herein petitioner, Juan Aragon on the ground that said land forms
part of the public domain applying the provisions of subsection 1 of Article 339 of the old Civil
Code, now Article 420, paragraph 1 of the New Civil Code which provides that the following
things are property of public dominion: (1) Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the State, banks, shores, roadstead, and
others of similar character. It appears, however, that possessory title over the land in question
was duly registered in favor of petitioner, and that the applicant and their predecessors in
interest have been in possession of the parcel of land in question, under an undisputed claim of
ownership. That there are strong reasons to believe that the land in question was originally well
above the ebb and flow of the tide and only in later years have the waters risen to such a height
along the shores of the Bay of Manila at this point as to cover the land in question completely
at high tide, though, it cannot be ascertained definitely whether it is due to changes in the
current and flow of the waters in the bay, or to the gradual sinking of the land along the coast.

ISSUE: Whether or not petitioner is entitled ownership over the land in question.

HELD: The Court affirmed the decree entered by the lower court in favor of petitioner applying
the provisions of Article 446 of the old Civil Code, Article 539 of the New Civil Code which
provides that every possessor has a right to be protected in his possession; and should he be
disturbed therein, he shall be protected in or restored to said possession by the means
established by the laws and the Rules of Court. Corollary, a possessor may lose his possession
under the circumstances provided under Article 555 of the New Civil Code, to wit: (1) By the
abandonment of the thing; (2) By an assignment made to another either by onerous or
gratuitous title; (3) By the destruction or total loss of the thing, or because it goes out of
commerce; and (4) By the possession of another, subject to the provisions of Article 537, if the
69
new possession has lasted longer than one year. But the real right of possession is not lost till
after the lapse of ten years. The Court held that since the foregoing enumerations with respect
to the loss of possession was not conclusively established by the representatives of the
government, and the fact that the owners of the land in question have never intended to
abandon the same, then it is just and proper to register said land in their name.

Catholic Vicar Apostolic of the Mountain Province v. Court of Appeals

G.R. No. 80294, March 23, 1990, 183 SCRA 639
Gancayco, J.

FACTS: CA-G.R. No. 38830-R was a land registration case where petitioner and private
respondents were asking for confirmation of their alleged imperfect titles to the lots in question
under Section 49 (b) of the Public Land Act. In the said decision, the appellate court found that
the petitioner was not entitled to confirmation of its imperfect title to Lots 2 and 3. In separate
motions for reconsideration filed by private respondents Heirs of Octaviano and Heirs of Juan
Valdez relating to the same decision, they also asked that said two lots be registered in their
names. On August 12, 1977, the Court of Appeals denied both motions. Effectively, therefore, in
the said decision the appellate court ruled that neither the petitioner nor the private
respondents are entitled to the confirmation of imperfect title over said two lots. Pursuant to
the said decision in CA-G.R. No. 38830-R, the two lots in question remained part of the public
lands. This is the only logical conclusion when the appellate court found that neither the
petitioner nor private respondents are entitled to confirmation of imperfect title over said lots.
The present actions that were instituted in the Regional Trial Court by private respondents are
actions for recovery of possession (accion publiciana) and not for recovery of ownership (accion
reivindicatoria).

ISSUE: Whether or not petitioner is entitled to the possession of the subject lots.

HELD: Yes. Under Article 555 (4) of the Civil Code, it is provided that a possessor may lose his
possession “by the possession of another, subject to the provisions of Article 537, if the new
possession has lasted longer than one year. But the real right of possession is not lost till after
the lapse of ten years.” In the case at bar, it is clear that the petitioner was in possession of the
said property as borrower in commodatum from private respondents since 1906. However, in
1951 petitioner repudiated the trust when it declared the property for tax purposes under its
name. Thus, when petitioner filed its application for registration of the said property in 1962, it
had been in adverse possession of the same for at least 11 years. Hence, the action for recover
of possession of said property filed by private respondents against petitioner must fail. The
Court, therefore, finds that the trial court and the Court of Appeals erred in declaring the
private respondents to be entitled to the possession thereof. Much less can they pretend to be
owners thereof. Said lots are part of the public domain.

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EDCA Publishing & Distributing Corp. v. Santos,
G.R. No. 80298, April 26, 1990, 134 SCRA 614
Cruz, J.

FACTS: Jose Cruz ordered by telephone 406 books from EDCA Publishing and Distributing Corp.
(EDCA), payable on delivery. EDCA prepared the corresponding invoice and delivered the books
as ordered, for which Cruz issued a check. Subsequently, Cruz sold 120 of the books to Leonor
Santos who paid him after verifying the seller's ownership from the invoice he showed her.
Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before
clearing of his first check, made inquiries with the De la Salle College where he had claimed to
be a dean and was informed that there was no such person in its employ. Further, Cruz had no
account with the Philippine Amanah Bank, against which he had drawn the check. EDCA went
to the police, which arrested Cruz whose real name was Tomas de la Peña. EDCA sought the
assistance of the police, and forced their way into the store of the Santos and threatened her
with prosecution for buying stolen property. They seized the 120 books. Santos sued for
recovery of the books after demand for their return was rejected by EDCA.

ISSUES:
1.) Whether or not EDCA was unlawfully deprived of the books because the check issued by the
impostor in payment therefor was dishonored.
2.) Whether or not EDCA had the right to cease the books that were sold to Santos.

HELD: 1.) No. EDCA was not unlawfully deprived of the books. Article 559 of the Civil Code
provides that the possession of movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same. If the possessor of a movable lost or of
which the owner has been unlawfully deprived has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid therefor. A contract of sale is
perfected once agreement is reached between the parties on the subject matter and the
consideration. Ownership in the thing sold shall not pass to the buyer until full payment of the
purchase only if there is a stipulation to that effect. Otherwise, the rule is that such ownership
shall pass from the vendor to the vendee upon the actual or constructive delivery of the thing
sold even if the purchase price has not yet been paid. Non-payment only creates a right to
demand payment or to rescind the contract, or to criminal prosecution in the case of bouncing
checks. But absent the stipulation above noted, delivery of the thing sold will effectively
transfer ownership to the buyer who can in turn transfer it to another.

2.) No. Actual delivery of the books having been made, Cruz acquired ownership over the books
which he could then validly transfer to the private respondents. The fact that he had not yet
paid for them to EDCA was a matter between him and EDCA and did not impair the title to the
books acquired by the Santos spouses. Therefore, EDCA was not unlawfully deprived of the
books and Santos had rights over the books.

De Garcia v. Hon. Court of Appeals

G.R. No. L-20264, January 30, 1971, 37 SCRA 129
Fernando, J.

FACTS: On October 11, 1953, Angelina Guevarra, while talking to Consuelo de Garcia,
recognized her ring in the finger of the latter which she lost sometime in February 1952.
Guevarra asked where de Garcia bought the ring to which de Garcia answered that she bought
71
it from her comadre. Guevarra explained to de Garcia that that ring was the very same ring
stolen from her. De Garcia handed the ring to Guevarra and the ring fitted her finger. Two or
three days later, at the request of Guevarra, she, her husband Lt. Col. Juan Guevara, Lt.
Cementina of Pasay PD, de Garcia and her attorney proceeded to the store of Mr. Rebullida to
whom they showed the ring in question. Mr. Rebullida examined the ring with the aid of high
power lens and after consulting the stock card thereon, concluded that it was the very ring that
plaintiff bought from him in 1947. The ring was returned to defendant who despite a written
request therefor failed to deliver the ring to plaintiff. In trial, de Garcia said that she bought the
ring from Mrs. Miranda who got it from Mrs. Angelita Hinahon who in turn got it from, Aling
Petring who was boarding in her house.

ISSUE: Whether or not de Garcia’s possession of the ring in good faith confers her title to the
said ring.

HELD: No. The controlling provision is Article 559 of the Civil Code which provides that
possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one
who has lost any movable or has been unlawfully deprived thereof may recover it from the
person in possession of the same. If the possessor of a movable lost of which the owner has
been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain
its return without reimbursing the price paid therefor. Respondent Angelina D. Guevara, having
been unlawfully deprived of the diamond ring in question, was entitled to recover it from
petitioner Consuelo S. de Garcia who was found in possession of the same. The only exception
the law allows is when there is acquisition in good faith of the possessor at a public sale, in
which case the owner cannot obtain its return without reimbursing the price. The common law
principle that where one of two innocent persons must suffer by a fraud perpetrated by the
another, the law imposes the loss upon the party who, by his misplaced confidence, has
enabled the fraud to be committed, cannot be applied in a case which is covered by an express
provision of the new Civil Code, specifically Article 559. Between a common law principle and
statutory provision, the latter must prevail in this jurisdiction. It is thus immediately apparent
that there is no merit to the contention raised in the first assigned error that her possession in
good faith, equivalent to title, sufficed to defeat respondent Guevara's claim. As the above
cases demonstrate, even on that assumption the owner can recover the same once she can
show illegal deprivation. Respondent Court of Appeals was so convinced from the evidence
submitted that the owner of the ring in litigation is such respondent.

Dizon v. Suntay
G.R. No. L-30817, September 29, 1972, 47 SCRA 160
Fernando, J.

FACTS: Lourdes Suntay is the owner of a 3 carat diamond ring. She entered into a transaction
with Clarita Sison, wherein said ring was delivered to the latter for sale on commission. Upon
receiving the ring, the receipt was delivered to Suntay. After a lapse of a considerable amount
of time, the ring was not yet returned and so Suntay demanded for its return from Sison but the
latter could not comply as she had already pledged it with Dizon’s pawnshop for P 2,600.00.
After insistent demands, Sison delivered the pawnshop ticket to Suntay. Suntay through her
counsel, wrote to Dizon asking for the delivery of the ring pledged but, the latter refused. She
filed an action for recovery with P 500 as attorney’s fees and costs. She asked for the remedy of
replevin upon filing the requisite bond pending final determination of the action. The CFI of
Manila issued the writ and Suntay was able to regain possession during the pendency of the
action. The lower court rendered a decision in favor of Suntay. On appeal, Dizon sought the
reversal of the lower court’s decision and invoking estoppel. CA affirmed the lower court’s
decision. SC affirmed CA decision.
72
ISSUE: Whether or not the owner of the ring may recover its possession from the pawnshop
owner.

HELD: Yes. Owner of a diamond ring may recover the possession of the same from a pawnshop
where another person had pledged it without authority to do so. Art. 559 of the civil code
applies and the defense that the pawnshop acquired possession of the without notice of any
defect in the title of the pledgor is unavailing. Neither the promptings of equity nor the
mandates of moral right and natural justice come to his rescue. Dizon is engaged in a business
where presumably ordinary prudence would manifest itself to ascertain whether or not an
individual who is offering a jewelry by way of a pledge is entitled to do so. If no such care be
taken he should be the last to complain if thereafter the right of the true owner of such jewelry
should be recognized.

Ledesma v. Court of Appeals

G.R. No. 86051, September 1, 1992, 213 SCRA 195
Davide, J.

FACTS: Two motor vehicles—Honda Gemini and Holden Premiere Model—were purchased
from Citiwide Motors by a person who identified himself as Jojo Consunji. He bought the
vehicles purportedly for his father. Upon delivery to him of the vehicles, he paid a manager’s
check drawn against PCIB. The check though was dishonored by the bank on the ground that
the check’s value has been materially altered. This was reported to the police authorities and it
was found out that the person misrepresenting himself was actually Suarez who had a long line
of criminal cases against him for his modus operandi. The Holden car was recovered after being
abandoned somewhere in Quezon City. The Honda on the other hand, was discovered to be
sold to Ledesma. Ledesma averred he purchased the vehicle in good faith from one Neyra, as
evidenced by his certificate of registration. Citiwide Motors was able to recover.

ISSUE: Whether or not CITIWIDE MOTORS has been unlawfully deprived.

HELD: No. There was a perfected unconditional contract of sale between Citiwide Motors and
Suarez. The subsequent dishonor of the check merely amounted to failure of consideration
which doesn't render a contract of sale void, but merely allows the prejudiced party to sue for
specific performance or rescission of the sale. This being the case, Citiwide motors wasn't
unlawfully deprived of the property. It is thus not entitled to the return of the vehicle from
Ledesma who bought the property in good faith and for consideration.

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Azarcon and Abobo v. Eusebio
G.R. No. L-11977, April 29, 1959, 105 SCRA 569
Labrador, J.

FACTS: Victor Eusebio had a dispute over a parcel of land with Leonardo Azarcon, Manuel
Azarcon and Esteban Abobo. Eusebio filed a lease application for a parcel of land, a portion
thereof was occupied by Azarcon et al. under a homestead application. Before the dispute
could be settled, Eusebio filed a complaint in the CFI of Nueva Ecija, alleging that he had
acquired a big parcel of land by lease from the Bureau of Lands, and that while he was in
possession thereof, Azarcon et al. occupied a portion. The trial court ruled in favor of Eusebio,
and a writ of execution ordering Azarcon et al. to restore possession of the land to Eusebio was
issued on October 3, 1955. However, in spite of the receipt of the notice of writ of execution,
Azarcon et al. nevertheless entered the land to gather palay which was then pending harvest.

ISSUE: Whether or not Azarcon and Abobo are entitled to the pending fruits of the land.

HELD: Yes. While the court order of October 3, 1955 ordered them to move out of the
premises, it did not prohibit them from gathering the crop then existing thereon. Under the
law, a person, who is in possession and who is being ordered to leave a parcel of land while
products thereon are in pending harvests, has the right to a part of the net harvest, as expressly
provided by Article 545 of the Civil Code. Hence, as the order of execution did not expressly
prohibit Azarcon et al. from gathering the pending fruits, which fruits were the result of their
possession and cultivation of the land, it cannot be said that they committed an act which is
clear violation of the court’s order.

Cordero v. Cabral
G.R. No. L-36789, July 25, 1983, 123 SCRA 532
Abad Santos, J.

FACTS: Mr. Gregorio Z. Ocampo of Meycauayan, Bulacan, husband of the plaintiff Felipa
Cordero and father of the other plaintiffs surnamed Ocampo, died on May 17, 1958. The said
deceased left several properties, which were inherited by the plaintiffs including the land in
question which parcel of land was originally registered in accordance with the Land Registration
Act on December 14, 1933, and was registered and/or transferred in the name of Mr. Gregorio
Z. Ocampo on July 31, 1934. After the death of the said Mr. Gregorio Z. Ocampo, the plaintiffs
herein took possession of the said parcel of land which is a riceland, but they found out that the
southern portion of the same with an area 4,303 square meters, more or less, upon verification,

74
was possessed by the defendants herein, Victoria P. Cabral, Alejandro Berboso and Dalmacio
Montaos. Victoria P. Cabral claimed to be the owner of said portion while her co-defendants co-
possessed the same as her tenants. The plaintiffs demanded of the defendants to surrender to
the former possession of the portion of land and/or vacate it but they refused and failed to do
so, and the defendant Victoria P. Cabral continued claiming to be the owner of the same while
her co-defendants continued recognizing her as the owner thereof instead of the plaintiffs.
Plaintiffs alleged that because of the defendants' occupancy of the aforementioned plaintiffs'
portion of land with the area of 4,303 square meters, more or less, to the exclusion of the
latter, the said plaintiffs failed to realize a yearly harvest of at least ten (10) cavanes of palay at
the rate of P10.00 per cavan, from the harvest-time of 1958 up to the present.

ISSUE: Whether or not the defendants must reimburse the fruits receive.

HELD: Yes. The disputed land is included in T.C.T. No. 14513 issued to Gregorio Z. Ocampo, the
predecessor of the plaintiffs. The original registration which includes the disputed land was not
vitiated by error or fraud. The defendants, by their own admission, are in possession of the
disputed land. There is no evidence that they were possessors in bad faith. However, their good
faith ceased when they were served with summons to answer the complaint. As possessors in
bad faith from the service of the summons they "shall reimburse the fruits received and those
which the legitimate possessor could have received.

Mendoza and Enriquez v. De Guzman

G.R. No. L-28721, October 5, 1928, 52 Phil. 164
Malcolm, J.

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FACTS: In the cadastral proceedings of the municipality of Sariaya, Tayabas, a piece of land
identified as lot No. 687 was adjudicated in favor of Martin Mendoza and Natalio Enriquez in
equal parts pro indiviso subject to the right of retention on the part of Manuel de Guzman until
he shall have been indemnified for the improvements existing on the land. Mendoza has
possessed it since 1916. By virtue of this judgment, De Guzman presented a motion requesting
the issuance of a writ of possession for lot No. 687 in his favor which was granted on June 25,
1924. Since then De Guzman has had dominion over the land. Being unable to come to an
agreement as to the amount which should be allowed for the improvements made on the land,
Martin Mendoza and Natalio Enriquez began an action requesting the court to (a) fix the value
of the necessary and useful expenses incurred by Manuel de Guzman in introducing the
improvements; (b) require the defendant to render an accounting of the fruits received by him
and order that the value of the fruits be applied to the payment of the necessary and useful
expenses; and (c) decree the restitution of the possession to the plaintiffs. Max. B. Solis, one of
the persons who were ejected from the land, asked leave to intervene, alleging, among other
things, that De Guzman had transferred all his rights in the improvements and in the lot to him
with the exception of two hundred coconut trees. This petition was granted. At the trial which
followed and at the instance of the parties, two commissioners were appinted with instructions
to inspect the land and to count the number of coconut trees planted thereon, determining the
number of fruit-bearing trees and those that are not fruit-bearing as well as the condition of the
same. After trial, Judge of First Instance Gloria rendered judgment declaring (a) that the
defendant Manuel de Guzman and the intervenor Bernardo Solis have the right to collect from
the plaintiffs Martin Mendoza and Natalio Enriquez the sum of P2,046 as compensation for the
necessary and useful expenditures in the proportion of 20 per cent for Manuel de Guzman and
80 per cent for Bernardo Solis; and (b) that Manuel de Guzman and Bernardo Solis are obliged
to pay to the plaintiffs the sum of P666.93 per annum from June 25, 1924, one-fifth of this
amount to be paid by Manuel de Guzman and the other four-fifths by Bernardo Solis. As on the
date when this judgment was rendered, that is on September 23, 1927, the amount that the
plaintiffs were required to pay to the defendant and intervenor exceeded the amount that the
latter were to pay the former, the defendant and intervenor were ordered to deliver the land
and its improvement as soon as the plaintiffs have paid the difference, without special
pronouncement as to costs.

ISSUE: Whether or not the trial court correctly declared the amount to be paid as
"indemnizacion" in the form of necessary and useful expenditures incurred by the defendant.

HELD: Yes. Article 361 of the Civil Code in the original Spanish text uses the word
"indemnizacion." However one may speculate as to the true meaning of the term
"indemnizacion" whether correctly translated as "compensation" or "indemnity," the amount
of the "indemnizacion" is the amount of the expenditures mentioned in articles 453 and 454 of
the Civil Code, which in the present case is the amount of the necessary and useful
expenditures incurred by the defendant. Necessary expenses have been variously described by
the Spanish commentators as those made for the preservation of the thing; as those without
which the thing would deteriorate or be lost; as those that augment the income of the things
upon which they are expanded. Among the necessary expenditures are those incurred for
cultivation, production, upkeep, etc. Here the plaintiffs have chosen to take the improvements
introduced on the land and are disposed to pay the amount of the necessary and useful
expenses incurred by the defendant. Inasmuch as the retentionist, who is not exactly a
posessor in good faith with in the meaning of the law, seeks to be reimbursed for the necessary
and useful expenditures, it is only just that he should account to the owners of the estate for
any rents, fruits, or crops he has gathered from it.

Robles and Martin v. Lizarraga Hermanos

76
G.R. No. L-16736, December 22, 1921, 42 Phil. 584
Romualdez, J.

FACTS: Anastasia de la Rama died on the 17th of October, 1916, leaving six children, to wit,
Magdalena, Jose, Evarista, Zacarias, Felix, and Purificacion, surnamed Robles, and some
properties, among which is house No. 4 on Iznart Street in the city of Iloilo. The children and
heirs of Anastasia de la Rama entered into partnership with Lizarraga Hermanos in liquidation
and settlement of their accounts, by virtue of which the competent court awarded to said
partnership the properties left by the deceased, including the aforesaid house No. 4 on Iznart
Street. Evarista Robles, one of the heirs, since before the death of her mother Anastasia de la
Rama, has been with her husband occupying the aforesaid house No. 4 on Iznart Street, at the
beginning, by permission of her mother, later on by the consent of her coheirs, and lastly by
agreement with the partnership, Lizarraga Hermanos, to whom it had been awarded, having
made some improvements on the house, the value of which is fixed at four thousand five
hundred pesos (P4,500), and paying to said partnership forty pesos (P40) monthly as rent of the
upper story. On March 18, 1918, Lizarraga Hermanos notified Evarista Robles (Exhibit J) that
beginning April next the rent of the upper story of the house would be raised to sixty pesos
(P60) a month, and that, if she did not agree to the new rate of rent, she might vacate the
house. Evarista Robles refused to pay such a new rate of rent and to vacate the house, and
Lizarraga Hermanos brought suit against her for ejectment. Evarista Robles sued Lizarraga
Hermanos afterwards to recover the value of the improvements.

ISSUES:
1.) Whether or not Evarista Robles is the owner of the aforesaid improvements and has the right
to demand payment of their value.
2.) Whether or not she has any right to retain the building until the said value is paid to her.

HELD: 1.) Yes. Robles is the owner of the improvements. The expenditures incurred in these
improvements were not necessary inasmuch as without them the house would have continued to
stand just as before, but were useful, inasmuch as with them the house better serves the purpose
for which it was intended, being used as a residence, and the improvements consisting of the
addition of a dining room, kitchen, closet, and bathroom in the lower and upper stories of the
house, and a stable, suitable as a coach house and dwelling, it is beyond doubt that such
improvements are useful to the building. Since the improvements are useful and Robles’
possession is in good faith, applying Article 453, it is beyond question that Evarista Robles is the
owner of such improvements, and entitled to reimbursement therefor.

2.) Yes. It is a fact that the value of the improvements in question has not as yet been paid by
Lizarraga Hermanos. Wherefore, if Evarista Robles and her husband are entitled to retain the
building until the value of such improvements is paid them, Lizarraga Hermanos have not yet
any right to oust them from the building, nor, therefore, to be indemnified for any damages
caused by the refusal of the plaintiffs found on their legitimate rights. Hence, due to the non-
reimbursement of the aforesaid useful expenditures, the possessor in good faith has the right of
retention until she has been fully reimbursed with the same.

Metropolitan Waterworks and Sewerage System v. Court of Appeals

G.R. No. L-54526, August 25, 1986, 143 SCRA 623
Martinez, J.

FACTS: Sometime in 1965, petitioner MWSS (then known as NAWASA) leased around one
hundred twenty eight (128) hectares of its land (hereafter, subject property) to respondent
CHGCCI (formerly the International Sports Development Corporation) for twenty five (25) years
and renewable for another fifteen (15) years or until the year 2005, with the stipulation

77
allowing the latter to exercise a right of first refusal should the subject property be made open
for sale. The terms and conditions of respondent CHGCCI's purchase thereof shall nonetheless
be subject to presidential approval. Pursuant to Letter of instruction (LOI) No. 440 issued on July
29,1976 by then President Ferdinand E. Marcos directing petitioner MWSS to negotiate the
cancellation of the MWSS-CHGCCI lease agreement for the disposition of the subject property,
Oscar Ilustre, then General Manager of petitioner MWSS, sometime in November of 1980
informed respondent CHGCCI, through its president herein respondent Pablo Roman, Jr., of its
preferential right to buy the subject property which was up for sale. Valuation thereof was to
be made by an appraisal company of petitioner MWSS' choice, the Asian Appraisal Co., Inc.
which, on January 30, 1981, pegged a fair market value of P40.00 per square meter or a total of
P53,800,000.00 for the subject property. Upon being informed that petitioner MWSS and
respondent CHGCCI had already agreed in principle on the purchase of the subject property,
President Marcos expressed his approval of the sale as shown in his marginal note on the letter
sent by respondents Jose Roxas and Pablo Roman, Jr. dated December 20, 1982.The Board of
Trustees of petitioner MWSS thereafter passed Resolution 36-83, approving the sale of the
subject property in favor of respondent SILHOUETTE, as assignee of respondent CHGCCI. The
MWSS-SILHOUETTE sales agreement eventually pushed through. Per the Agreement dated May
11, 1983 covering said purchase, the total price for the subject property is P50,925,200, P25
Million of which was to be paid upon President Marcos' approval of the contract and the
balance to be paid within one (1) year from the transfer of the title to respondent SILHOUETTE
as vendee with interest at 12% per annum. The balance was also secured by an irrevocable
letter of credit. A Supplemental Agreement was forged between petitioner MWSS and
respondent SILHOUETTE on August 11, 1983 to accurately identify the subject property.
Subsequently, respondent SILHOUETTE, under a deed of sale dated July 26, 1984, sold to
respondent AYALA about sixty-seven (67) hectares of the subject property at P110.00 per
square meter. Of the total price of around P74 Million, P25 Million was to be paid by
respondent AYALA directly to petitioner MWSS for respondent SILHOUETTE's account and P2
Million directly to respondent SILHOUETTE. P11,600,000 was to be paid upon the issuance of
title in favor of respondent AYALA, and the remaining balance to be payable within one (1) year
with 12% per annum interest. Respondent AYALA developed the land it purchased into a prime
residential area now known as the Ayala Heights Subdivision. Almost a decade later, petitioner
MWSS on March 26, 1993 filed an action against all herein named respondents before the
Regional Trial Court of Quezon City seeking for the declaration of nullity of the MWSS-
SILHOUETTE sales agreement and all subsequent conveyances involving the subject property,
and for the recovery thereof with damages.

ISSUE: Whether or not MWSS failed to provide appropriate security measures over its own
records; Circumstances led NBI to believe that the fraudulent encashment as an “inside job”.

HELD: Yes. The records likewise show that MWSS failed to provide appropriate security
measures over its own records thereby laying confidential records open to unauthorized
persons. MWSS's own Fact Finding Committee, in its report submitted to their General Manager
underscored this laxity of records control. It observed that the "office of Mr. Ongtengco
(Cashier VI of the Treasury Department at the NAWASA) is quite open to any person known to
him or his staff members and that the check writer is merely on top of his table. Relying on the
foregoing statement of Mr. Ongtengco, the NBI concluded in its Report dated 2 November 1970
that the fraudulent encashment of the 23 checks in question was an "inside job". Thus the NBI
believe that the fraudulent act was an inside job or one pulled with inside connivance at
NAWASA. The serial numbers of the checks in question conform with the numbers in current
use of NAWASA, aside from the fact that these fraudulent checks were found to be of the same
kind and design as that of NAWASA's own checks. While knowledge as to such facts may be
obtained through the possession of a NAWASA check of current issue, an outsider without
information from the inside can not possibly pinpoint which of NAWASA's various accounts has

78
sufficient balance to cover all these fraudulent checks. None of these checks, it should be
noted, was dishonored for insufficiency of funds.

Bachrach v. Seifert and Elianoff

G.R. No. L-2659, October 12, 1950, 87 Phil. 483
Ozaeta, J.

FACTS: The deceased E. M. Bachrach, who left no forced heir except his widow Mary McDonald
Bachrach, in his last will and testament made various legacies in cash and willed the remainder
of his estate. The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big
Wedge Mining Co., Inc., received from the latter 54,000 shares representing 50 per cent stock
dividend on the said 108,000 shares. On June 10, 1948, Mary McDonald Bachrach, as
usufructuary or life tenant of the estate, petitioned the lower court to authorize the Peoples
Bank and Trust Company, as administrator of the estate of E. M. Bachrach, to transfer to her
the said 54,000 shares of stock dividend by indorsing and delivering to her the corresponding
certificate of stock, claiming that said dividend, although paid out in the form of stock, is fruit or
income and therefore belonged to her as usufructuary or life tenant. Sophie Seifert and Elisa
Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock
dividend in question was not income but formed part of the capital and therefore belonged not
to the usufructuary but to the remainderman. While appellants admit that a cash dividend is an
income, they contend that a stock dividend is not, but merely represents an addition to the
invested capital.

ISSUE: Whether or not a dividend is an income and whether it should go to the usufructuary.

HELD: Yes. The usufructuary shall be entitled to receive all the natural, industrial, and civil fruits
of the property in usufruct. The 108,000 shares of stock are part of the property in usufruct.
The 54,000 shares of stock dividend are civil fruits of the original investment. They represent
profits, and the delivery of the certificate of stock covering said dividend is equivalent to the
payment of said profits. Said shares may be sold independently of the original shares, just as
the offspring of a domestic animal may be sold independently of its mother. If the dividend be
in fact a profit, although declared in stock, it should be held to be income. A dividend, whether
in the form of cash or stock, is income and, consequently, should go to the usufructuary, taking
into consideration that a stock dividend as well as a cash dividend can be declared only out of
profits of the corporation, for if it were declared out of the capital it would be a serious
violation of the law.

Under the Massachusetts rule, a stock dividend is considered part of the capital and belongs to
the remainderman; while under the Pennsylvania rule, all earnings of a corporation, when
declared as dividends in whatever form, made during the lifetime of the usufructuary, belong to
the latter. The Pennsylvania rule is more in accord with our statutory laws than the
Massachusetts rule.

Hemedes v. Court of Appeals,

G.R. No. 107132, October 8, 1999, 316 SCRA 347
Gonzaga – Reyes, J.

FACTS: Jose Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. Jose Hemedes
executed a document entitled "Donation Inter Vivos with Resolutory Conditions" whereby he
conveyed ownership over the subject land, together with all its improvements, in favor of his
third wife, Justa Kausapin, subject to the following resolutory conditions that upon her death or
marriage, the donee shall revert the said property to anyone of Jose Hemedes children. On
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September 27, 1960 a "Deed of Conveyance of Unregistered Real Property by Reversion" was
made conveying to Maxima Hemedes. She had it titled and mortgage it to R & B Insurance with
an annotation of “Usufruct” in favor of her stepmother, Justa Kausapin.  Unable to pay the
mortgage, R & B Insurance extra-judicially foreclosed the property. However, Justa Kausapin
executed another agreement or Kasunduan on May 27, 1971 to his stepson, Enrique D.
Hemedes.  He obtained tax declarations and pay realty taxes from thereon.  The Ministry of
Agrarian Reform Office conducted a cadastral survey and indicated Enrique Hemedes as the
owner. Enrique Hemedes sold the property to Dominium Realty Const. Corp. (Dominium), a
sister company of Asia Brewery. Asia Brewery started to introduce some improvements already
when R & B insurance informed them that they are the owners of the property where these
improvements are being built.

ISSUE: Whether or not the kasunduan executed by Justa Kausapin in favor of Enrique D.
Hemedes was valid.

HELD: No. The court dismissed the petition and affirmed the decision of the CA.  It held that
Maxima failed to comply with the requirements of Art. 1332 of the civil code and also failed to
repudiate Justa Kausapin’s allegation that she did not execute such a deed and she never
allowed to use the land as security for the loan. It was found that the deed of conveyance to
Maxima was spurious and it follows that the original title she had for the property was also null
and void so as the mortgage to R & B Insurance.  On the other hand, Kausapin executed an
affidavit to affirm the authenticity of the the kasundudan in favor of his stepson, Enrique
Hemedes whom she is dependent from for her financial support. 

Fabie v. Gutierrez David

G.R. No. L-123, December 12, 1945, 75 Phil. 536
Ozaeta, J.

FACTS: The petitioner Josefa Fabie is the usufructuary of the income of certain houses located
at 372-376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth
clause of the will of the deceased Rosario Fabie y Grey. The owner of Santo Cristo property
abovementioned is the respondent Juan Grey, while those of the Ongpin property are other
person not concern herein. Previous to September 1944 litigation arose between Josefa Fabie
as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors,
involving the administration of the houses mentioned.

ISSUE: Whether or not the action instituted by the petitioner Josefa Fabie is a purely possessory
action and as such within the jurisdiction of said court, or an action founded on property right
and therefore beyond the jurisdiction of the municipal court.

HELD: Yes. It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of
the income of the property in question and that the respondent Juan Grey is the owner thereof.

80
It is likewise admitted that by virtue of a final judgment entered in Civil Case No. 1659 of the
Court of First Instance of Manila between the usufructuary and the owner, the former has the
right to collect all the rents of said property for herself with the obligation on her part to pay all
the real estate taxes, special assessments, and insurance premiums, and make all necessary
repairs thereon, and in case default on her part the owner shall have the right to do all those
things, in which event he shall be entitled to collect all subsequent rents of the property
concerned until the amount paid by him and the expenses of collection are fully satisfied, after
which the usufructuary shall again collect the rents. There is therefore no dispute as to the title
to or the respective interests of the parties in the property in question. The naked title to the
property is to admittedly in the respondent Juan Grey, but the right to all the rents thereof,
with the obligation to pay the taxes and insurance premiums and make the necessary repairs,
is, also admittedly, vested in the usufructuary, the petitioner Josefa Fabie, during her lifetime. 

Construing said judgment in the light of the ninth clause of the will of the deceased Rosario
Fabie y Grey, which was quoted in the decision and by which Josefa Fabie was made by the
usufructuary during her lifetime of the income of the property in question, we find that the said
usufructuary has the right to administer the property in question. All the acts of administration
— to collect the rents for herself, and to conserve the property by making all necessary repairs
and paying all the taxes, special assessments, and insurance premiums thereon — were by said
judgment vested in the usufructuary

Vda. De Aranas v. Aranas

G.R. No. L-56249, May 29, 1987, 150 SCRA 415
Paras, J.

FACTS: Fr. Teodoro Aranas, a priest of the Roman Catholic Church, died on January 19, 1953. He
had executed on June 6, 1946 his Last Will and Testament which was admitted to probate on
August 31, 1956. In said Last Will and Testament, Fr. Teodoro Aranas stipulated the special
administration of the remainder of his estate (after returning to his brothers Aniceto and
Carmelo or their heirs all properties acquired by him including 10 parcels of land inherited by
him from his parents) by Vicente Aranas, a faithful and serviceable nephew and designating him
also as recipient of 1/2 of the produce of said properties after deducting the expenses for the
administration and the other 1/2 of the produce to be given to the Catholic Church for the
eternal repose of the testator's soul. Said pertinent provision reads as follows: “It is my will that
the lands I had bought from other persons should be converged and placed under a special
administrator. The special administrator of these lands, for his office, should receive one half of
all the produce from which shall be deducted the expenses for the administration, and the other
half of the produce should be received by the Roman Catholic Church and should be spent for my
soul, Vicente B. Aranas (Tingting), because he is a faithful and serviceable nephew, should be
the first special administrator of said properties, without bond, until his death or until he should
not want to hold the said office anymore. Anyone of the sons of my brother Carmelo Aranas can
hold the said office of special administrator, and none other than they. Their father, my brother
Carmelo Aranas shall be the one to decide who among them shall hold the said office, but upon
the death of my said brother Carmelo Aranas, his said sons will have power to select the one
among them ourselves. The special administration is perpetual.”

ISSUE: Whether or not perpetual inalienability and administration of the estate of the late Fr.
Teodoro Aranas is null and void for being violative of Article 870 of the NCC.

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HELD: No. Vicente Aranas as a usufructuary has the right to enjoy the property of his uncle with
all the benefits which result from the normal enjoyment (or exploitation) of another's property,
with the obligation to return, at the designated time, either the same thing, or in special cases
its equivalent. This right of Vicente to enjoy the fruits of the properties is temporary and
therefore not perpetual as there is a limitation namely his death or his refusal. Likewise his
designation as administrator of these properties is limited by his refusal and/or death and
therefore it does not run counter to Art. 870 of the Civil Code relied upon by the petitioners. Be
it noted that Vicente Aranas is not prohibited to dispose of the fruits and other benefits arising
from the usufruct. Neither are the naked owners (the other heirs) of the properties, the
usufruct of which has been given to Vicente Aranas prohibited from disposing of said naked
ownership without prejudice of course to Vicente's continuing usufruct. To void the designation
of Vicente Aranas as usufructuary and/or administrator is to defeat the desire and the dying
wish of the testator to reward him for his faithful and unselfish services rendered during the
time when said testator was seriously ill or bed-ridden.

Locsin v. Valenzuela
G.R. No. L-51333, May 18, 1989, 173 SCRA 454
Feliciano, J.

FACTS: Petitioners were co-owners of a large tract of agricultural land known as “Hacienda Villa
Regalado”. A portion of this land known as Lot No. 2-C-A-3 was subject to lifetime usufructuary
rights of respondent Helen Schon. The bulk of this lot was cultivated by the lessees who
customarily delivered the rentals to respondent. In 1972, PD 27 was enacted, decreasing the
“Emancipation of Tenants”. The tract of land owned in common by the petitioners, including
the portion thereof subject to petitioner’s usufructuary rights, fell within the scope of the
“Operation Land Transfer”. Petitioners sought the opinion of the Department of Agrarian
Reform(DAR) as to who should be entitled to receive the rental payments which continued to
be made by the tenants to respondent. The DAR District Officer rendered the opinion that the
rental payments were properly considered as amortization payments for the land and as such
should pertain to the landowners and not the usufructuary.

ISSUE: Whether or not the usufructuary was extinguished by PD 27 and who, between the
naked owner and the usufructuary, should be entitled to the amounts paid by the tenants
beginning October 21, 1972.

HELD: Yes. The usufruct which had therefore existed as a jus in re aliena in favour of Helen
Schon was effectively extinguished by PD 27. To hold, as private respondent apparently urges
would obviously defeat the purpose of the land reform statute. PD 27 was enacted to
emancipate the tenants from “bondage of the soil” by giving to the tenant-farmers ownership
of the land which they were cultivating. Ownership over the lands subjected to the Operation
Land Transfer moved from the registered owner to the tenants. The Court holds that Lot No. 2-
C-A-3 having been declared part of the land reform area and subjected to the Operation Land
Transfer, the payments made on October 21, 1972 by the tenant-farmers constituted
amortization payments on the cost of the land that they were required to pay under PD 27.
These payments, therefore, legally pertain to the petitioners as part of the compensation for
the dominion over the land of which they were deprived of by operation of PD 27.

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Valisno v. Adriano
G.R. No. L-37409, May 23, 1988, 161 SCRA 398
Grino – Aquino, J.

FACTS: Plaintiff – appellant Nicolas Valisno alleges that he is the owner of a parcel of land in
Nueva Ecija which he bought from his sister, Honorata Adriano Francisco. Said land is planted
with watermelon, peanuts, corn, tobacco and other vegetables and adjoins the land of Felipe
Adriano, on the bank of the Pampanga River. At the time of the sale of the land to Valisno, the
land was irrigated by water from the Pampanga River through a canal about 70 meters long,
traversing Adriano’s land. Later, Adriano levelled a portion of the irrigation canal so that Valisno
was deprived of the irrigation water and prevented from cultivating his 57 – hectare land. Thus,
Valisno filed a complaint for deprivation of waters rights in the Bureau of Public Works and
Communications (Bureau – PWC). Bureau – PWC ruled in favour of Valisno. Instead of restoring
the irrigation canal, Adriano asked for a reinvestigation of the case which was granted. In the
meantime, Valisno rebuilt the irrigation canal at his own expense due to his urgent need to
irrigate his watermelon fields. Valisno then filed a complaint for damages. However, the
Secretary of Bureau – PWC reversed its decision and dismissed Valisno’s complaint. It held that
Eladio Adriano’s water rights which had been granted in1923 ceased to be enjoyed by him in
1936 or 1937, when his irrigation canal collapsed. His non-use of the water rights since then for
a period of more than five years extinguished the grant by operation of law. Hence, the water
rights did not form part of his hereditary estate which his heirs partitioned among themselves.
Likewise, Valisno, as vendee of the land which Honorata received from her father’s estate did
not acquire any water rights with the land purchased. The trial court held that Valisno had no
right to pass through the defendant's land to draw water from the Pampanga River. It pointed
out that under Section 4 of the Irrigation Law, controversies between persons claiming a right
to water from a stream are within the jurisdiction of the Secretary of Bureau-PWC and his
decision on the matter is final, unless an appeal is taken to the proper court within thirty days.
The court may not pass upon the validity of the decision of the Public Works Secretary
collaterally. Furthermore, there was nothing in Valisno’s evidence to show that the resolution
was not valid. It dismissed the complaint and counterclaim. Valisno’s motion for
reconsideration was denied, and he appealed to the Court of the Appeals who certified the case
to the Supreme Court.

ISSUE: Whether the provisions of the Irrigation Act (Act No. 2152) or those of the Civil Code
should apply to this case.

HELD: The provisions of the Civil Code shall apply. The existence of the irrigation canal on
Adriano’s land for the passage of water from the Pampanga River to Honorata's land prior to
and at the time of the sale of Honorata's land to Valisno was equivalent to a title for the vendee
of the land to continue using it as provided in Article 624 of the Civil Code: The existence of an
apparent sign of easement between two estates, established or maintained by the owner of
both shall be considered, should either of them be alienated, as a title in order that he easement
may continue actively and passively, unless at the time, theownership of the two estates is
divided, the contrary should be provided in the title of conveyance of either of them, or the sign
aforesaid should be removed before the execution of the deed. This provision shall also apply in
case of the division of a thing owned in common on by two or more persons (Civil Code).

This provision was lifted from Article 122 of the Spanish Law of Waters which provided:
Whenever a tract of irrigated land which previously received its waters from a single point is
83
divided through inheritance, sale or by virtue of some other title, between two or more owners,
the owners of the higher estates are under obligation to give free passage to the water as an
easement of conduit for the irrigation of the lower estates, and without right to any
compensation therefore unless otherwise stipulated in the deed of conveyance.

The deed of sale in favor of Valisno included the "conveyance and transfer of the water rights
and improvements" appurtenant to Honorata Adriano's property. By the terms of the Deed of
Absolute Sale, the vendor Honorata Adriano Francisco sold, ceded, conveyed and transferred to
Dr. Nicolas Valisno all "rights, title, interest and participations over the parcel of land above-
described, together with one Berkely Model 6 YRF Centrifugal Pump G" suction, 6" discharge
500-1500 GPM, with Serial No. 5415812 and one (1) set of suction pipe and discharge of pipe
with elbow, nipples, flanges and footvalves," and the water rights and such other
improvements appertaining to the property subject of this sale. According to Valisno, the water
right was the primary consideration for his purchase of Honorata's property, for without it the
property would be unproductive.

Water rights, such as the right to use a drainage ditch for irrigation purposes, which are
appurtenant to a parcel of land, pass with the conveyance of the land, although not specifically
mentioned in the conveyance. The purchaser's easement of necessity in a water ditch running
across the grantor's land cannot be defeated even if the water is supplied by a third person. The
fact that an easement by grant may also have qualified as an easement of necessity does
detract from its permanency as property right, which survives the determination of the
necessity. As an easement of waters in favor of Valisno has been established, he is entitled to
enjoy it free from obstruction, disturbance or wrongful interference (19 CJ 984), such as
Adriano’s act of levelling the irrigation canal to deprive him of the use of water from the
Pampanga River.

Ronquillo, et. al. v. Roco, et. al.

G.R. No. L-10619, February 28, 1958, 103 Phil. 84
Montemayor, J.

FACTS: Plaintiff Leogario Ronquillo have been in the continuous and uninterrupted use of a
road which traversed the land of the defendants, Rocos, in going to Igualdad Street and the
market place of Naga City for more than 20 years and that the Rocos have long recognized and
respected the private legal easement of a right of way of said plaintiffs.

On May 12, 1953, the defendants along with a number of men maliciously obstructed plaintiff’s
right of way by constructing a chapel in the middle of the said road and then later, by means of
force, intimidation, and threats, illegally and violently planted wooden posts, fenced with
barbed wire and closed hermitically the road passage way thereby preventing the plaintiff from
using it.

The plaintiff claims that he has already acquired the easement of right of way over the land thru
prescription by his continuous and uninterrupted use of the narrow strip of land as passage
way. However, plaintiff’s complaint was dismissed by the CFI.

ISSUE: Whether or not an easement of right of way can be acquired by prescription.

HELD: No. The Court held than an easement of right of way may not be acquired thru
prescription because though it may be apparent, it is nevertheless discontinuous or
intermittent, and therefore, under Article 622 of the New Civil Code, can be acquired only by a

84
virtue of a title. Furthermore, a right of way cannot be acquired by prescription because
prescription requires that the possession be continuous and uninterrupted.

Tañedo v. Bernad
G.R. No. L-66520 August 30, 1988, 165 SCRA 86
Padilla, J.

FACTS: Private respondent Antonio Cardenas owned Lot 7501-A and Lot 7501-B. On the said
two lots, a septic tank was constructed for the common use of the occupants of both lots.
Cardenas sold Lot 7501-A to herein petitioner Tañedo and the other Lot 7501-B was also
mortgaged to Tañedo as a security for the payment of loan with an agreement that Cardenas
would only sell Lot 7501-B to him. However, said Lot 7501-B was sold to herein respondent
Spouses Romeo and Pacita Sim. Upon learning of the said sale, Tañedo offered to redeem the
property from Sim but the latter refused. Instead, Sim blocked the sewage pipe connecting the
building of Eduardo Tañedo built on Lot 7501-A, to the septic tank in Lot 7501-B. He also asked
Tañedo to remove that portion of his building enroaching on Lot 7501-B. Tañedo was then
constrained to file an action for legal redemption and damages invoking Article 1622 of the Civil
Code. On the other hand, respondent Spouses claimed they are the absolute owners of Lot 7501-
B and that Eduardo Tañedo has no right to redeem the land under Art. 1622 of the Civil Code as
the land sought to be redeemed is much bigger than the land owned by Tañedo.

ISSUE: Whether or not the petitioner’s right to continue to use the septic tank, erected on Lot
7501-B, ceased upon the subdivision of the land and its subsequent sale to different owners who
do not have the same interest.

HELD: No. Applying Article 631 and 624 of the Civil Code, no statement abolishing or
extinguishing the easement of drainage was mentioned in the deed of sale of Lot 7501-A to
Eduardo Tañedo. Nor did Antonio Cardenas stop the use of the drain pipe and septic tank by the
occupants of Lot 7501-A before he sold said lot to Eduardo Tafiedo. Hence, the use of the septic
tank is continued by operation of law. Accordingly, the spouses Romeo and Pacita Sim the new
owners of the servient estate (Lot 7501- B), cannot impair, in any manner whatsoever, the use of
the servitude.

Costabella Corporation v. Court of Appeals

G.R. No. 80511 January 25, 1991, 193 SCRA 333
Sarmiento, J.

FACTS: Petitioner owns the real estate properties situated at Sitio Buyong, Maribago, Lapu-Lapu
City, on which it had constructed a resort and hotel. The private respondents, on the other
hand, are the owners of adjoining properties. Before the petitioner began the construction of
its beach hotel, the private respondents, in going to and from their respective properties and
the provincial road, passed through a passageway which traversed the petitioner's property. In
1981, the petitioner closed the aforementioned passageway when it began the construction of
its hotel, but nonetheless opened another route across its property through which the private
respondents, as in the past, were allowed to pass. Later, or sometime in August, 1982, when it
undertook the construction of the second phase of its beach hotel, the petitioner fenced its
property thus closing even the alternative passageway and preventing the private respondents
from traversing any part of it. Therefore, an action for injunction with damages was filed
against the petitioner by the private respondents before the then Court of First Instance of
Cebu.

85
The CFI rendered a decision on March 15, 1984 finding that the private respondents had
acquired a vested right over the passageway in controversy based on its long existence and its
continued use and enjoyment by the private respondents and also by the community at large.
On appeal, Appellate Court held as without basis the trial court's finding that the private
respondents had acquired a vested right over the passageway in question by virtue of
prescription. The appellate court pointed out that an easement of right of way is a
discontinuous one which, under Article 622 of the New Civil Code, may only be acquired by
virtue of a title and not by prescription. That notwithstanding, the appellate court went on to
rule that ". . . in the interest of justice and in the exercise by this Court of its equity jurisdiction,
there is no reason for Us in not treating the easement here sought by appellees Katipunan
Lumber Co., Inc. and Perfecta Guangco as one that is not dependent upon the claims of the
parties but a compulsory one that is legally demandable by the owner of the dominant estate
from the owner of the servient estate."
ISSUE: Whether or not the easement may be granted to private respondent over the land of
Costabella.

HELD: No. It is already well-established that an easement of right of way, as is involved here, is
discontinuous and as such can not be acquired by prescription. Insofar therefore as the
appellate court adhered to the foregoing precepts, it stood correct. Unfortunately, after making
the correct pronouncement, the respondent Appellate Court did not order the reversal of the
trial court's decision and the dismissal of the complaint after holding that no easement had
been validly constituted over the petitioner's property. Instead, the Appellate Court went on to
commit a reversible error by considering the passageway in issue as a compulsory easement
which the private respondents, as owners of the "dominant" estate, may demand from the
petitioner the latter being the owner of the "servient" estate.

Based on Articles 649 and 650 of the Civil Code, the owner of the dominant estate may validly
claim a compulsory right of way only after he has established the existence of four requisites, to
wit: (1) the (dominant) estate is surrounded by other immovables and is without adequate
outlet to a public highway; (2) after payment of the proper indemnity; (3) the isolation was not
due to the proprietor's own acts; and (4) the right of way claimed is at a point least prejudicial
to the servient estate. In the case at bar, there is absent any showing that the private
respondents had established the existence of the four requisites mandated by law.

Encarnacion v. Court of Appeals

G.R. No. 77628, March 11, 1991, 195 SCRA 74
Fernan, C.J.

FACTS: Petitioner owns the dominant estate bounded on north by the servient estate owned by
respondents and an estate owned by Magsino, all of which are located in Talisay, Batangas. The
servient estate is bound on the north by the national highway. To provide access to the
highway, a one meter road path was paved through in which half of its width was taken from
the estate of Magsino and the other half from the estate of the respondent. Petitioner started a
nursery plant type of business in which pushcarts were used to haul the plants from his estate
to and from his nursery and the highway, using the one meter road path. As his business grew,
he bought a jeepney to enable him to transport more plants and soil catering to the now bigger
demand. The problem however was that the jeepney cannot pass through the road path since
its width would not be accommodated by a one meter width. Petitioner made a request upon
the respondent to sell to him 1 ½ meters of their property so that the pathway may be widened
to enable his jeepney to pass through. The respondents refused. Petitioner went to court
praying that he would be granted the additional land to the right of way already constituted but
the trial court rendered a decision adverse to the petitioner because there was no such
86
necessity as it was shown that there was the presence of dried river bed only 80 meters away
from the property of the petitioner which he may use as an alternative route. The CA affirmed
said decision of the trial court.

ISSUE: Whether or not petitioner is entitled to be granted his prayer to buy the additional land
to increase the existing one meter road path.

HELD: Yes. Even with the presence of the dried river bed, upon thorough investigation, it was
found to be an inadequate right of way because a concrete bridge traverses it thereby the jeep
would have to jump over said bridge which has a height of 5 meters in order to reach the
highway. It was also found that during the rainy season, the same was impassable as it became
flooded. This right of way could not provide adequate access to the highway thereby when an
estate has no access to a public road, it may demand for a right of way. Furthermore, under
Article 651 of the Civil Code, it is the needs of the dominant property which ultimately
determine the width of the right of way. In this case, since the business of the petitioner grew
larger and pushcarts became tedious to transport his nursery plants, it became necessary for
him to do so with a jeepney. And in order to efficiently make such transportation of his plants,
the right of way had to be widened to accommodate the width of the jeepney of the petitioner.
The petitioner thus shall be granted the additional land to the existing right of way.

Case v. Heirs of Tuason

G.R. No. L-5044, December 1, 1909, 14 Phil. 521
Torres, J.

FACTS: The counsel for the heirs of Pablo Tuason and Leocadia Santibañez alleged that the
parties whom he represents are owners in common of the property adjoining that of the petitioner
Edwin Case on the southwest. The latter, extended his southwest boundary line to a portion of
the lot of the said heirs of Tuason and Santibañez. They alleged that the true dividing line
between the property of the petitioner and that of the said heirs is a belonging to the respondents,
and that about two years ago, when Case made alterations in the buildings erected on his land, he
improperly caused a portion of them to rest on the wall owned by the respondents.

ISSUE: Whether or not the wall is the property of the heirs of the late Tuason and Santibañez.

HELD: The wall in controversy belongs to the heirs of the late Tuason and Santibañez for the
reason, among others, that in the public document by which one of their original ancestors
acquired on the 19th of April, 1796, the property now possessed by them, it appears that property
was then already inclosed by a stone wall.

The wall supports only the property of the respondents and not that of the petitioner, can not be a
party wall, one-half of which along its entire length would belong to the adjoining building
owned by Mr. Case. There is not sufficient proof to sustain such claim, and besides, the building
erected thereon disproves the pretension of the petitioner.

Under article 572 of the Civil Code the easement of party walls is presumed, unless there is a
title or exterior sign, or proof to the contrary, among others, in dividing walls adjoining buildings
up to the common point of elevation.

The legal presumption as to party walls is limited to the three cases dealt with in the said article
of the code, and is that of juris tantum unless the contrary appear from the title of ownership of
the adjoining properties, that is to say, that the entire wall in controversy belongs to one of the
property owners, or where there is no exterior sign to destroy such presumption and support a
presumption against the party wall.

87
It can not be presumed that the aforesaid portion was a party wall, and that it was not exclusively
owned by the respondents, inasmuch as the latter have proven by means of a good title that has
not been impugned by the petitioner, that when one of their ancestors and principals acquired the
property the lot was already inclosed by the wall on which the building was erected; it must
therefore be understood that in the purchase of the property the wall by which the land was
inclosed was necessarily included.

Choco v. Santamaria
G.R. No. 6076, December 29, 1911, 21 Phil. 132
Mapa, J.

FACTS: The defendant in the building of his house, has made several openings and windows in
the walls of the house on both sides overlooking then property of the plaintiff; that at the time
the defendant was building his house, and the windows and the openings were being made, the
plaintiffs protested, and later on and in the year 1905 made written protest and demand on the
defendant, and the defendant received the written protest and referred it to his counsel, who,
from the evidence, appears to have suggested an amicable and adjustment of the matter, but
the adjustment was not made, and this action was brought. The Trial Court rendered judgment
in favor of the plaintiffs, Severina and Flora Choco, and against the defendant, Isidro
Santamaria, forever prohibiting the opening of the window stated, which must be closed, and
forever prohibiting the opening of the windows and openings marked, which must be closed or
made to conform to the requirements of law with regard to dimensions and an iron grate
embedded in the wall, with the costs of the action.

ISSUE: Whether or not the lower court erred by not ordering in his judgment the final and
perpetual closing of the large window opened in the balcony of the back part of the appellee's
house and that, though the appellant's lot can be seen through the window, it is not contiguous
to the latter's property.

HELD: To judge from the photographic views, it opens on the boundary line between the said
lot and that the appellee and is situated perpendicularly above a part of the wall that belongs
to the appellants. This opinion is corroborated by the testimony of the defendant's witness who
took the said photographs, in so far as he said that "a part of the window in question is in front
of the plaintiffs' property, since between it and the plaintiffs' property there does not intervene
the distance required by law — that of two meters in the first case, and 60 centimeters in the
second, therefore, its opening is a manifest violation of the provisions of article 582 of the Civil
Code which reads as follows: “Windows with direct views, or balconies or any similar openings
projecting over the estate of the neighbor, cannot be made if there is not a distance of, at least,
2 meters between the wall in which they are built and said estate. Neither can side nor oblique
views be opened over said property, unless there is a distance of 60 centimeters.” Because of
the lack of the distance required by law, the window in question must be closed, and
consequently the judgment appealed from should be modified in this sense, as regards this
window.

Solid Manila Corporation v. Bio Hong Trading Co., Inc.

G.R. No. 90596, April 8, 1991, 195 SCRA 748
Sarmiento, J.

FACTS: Petitioner Solid Manila Corporation is the owner of the land in Ermita, Manila. The same
lies in the vicinity of another parcel, registered in the name of the private respondent Bio Hong

88
Trading Co., Inc. The private respondent’s title came from a prior owner, and in their deed of
sale, the parties thereto reserved as easement of way. As a consequence, there is an
annotation which was entered wherein a construction of private alley has been undertaken.
However, the petitioner averred that they and their neighbors have been using the private alley
and maintained and contributed to its upkeep until sometime in 1983. Due to this, the private
respondent constructed steel gates that precluded unhampered used. The petitioner
commenced suit for injunction against the private respondent to have the gates removed and
to allow full access to the easement. The court a quo issued ex parte an order directing the
private respondent to open the gates. However, the Court of Appeals ordered the restoration
of the annotation. They ruled that an easement is a mere limitation on ownership and that it
does not impair the private respondent’s title, and that since the private respondent had
acquired title to the property, “merger” brought about an extinguishment of the easement. The
petitioner then averred that the very deed of sale executed between the private respondent
and the previous owner of the property “excluded” the alley in question, and that in any event,
the intent of the parties was to retain the “alley” as an easement, notwithstanding the sale.

ISSUE: Whether or not an easement had been extinguished by merger.

HELD: No. The Court held that no genuine merger took place as a consequence of the sale in
favor of the private respondent corporation. According to the Civil Code, a merger exists when
ownership of the dominant and servient estates is consolidated in the same person. Merger
then, as can be seen, requires full ownership of both estates. One thing ought to be noted here,
however. The servitude in question is a personal servitude, that is to say, one constituted not in
favor of a particular tenement but rather, for the benefit of the general public as stated in
Article 614 of the Civil Code. In personal servitude, there is therefore no “owner of a dominant
tenement” to speak of, and the easement pertains to persons without a dominant estate, in
this case, the public at large. Merger, as we said, presupposes the existence of a prior servient-
dominant owner relationship, and the termination of that relation leaves the easement of no
use. Unless the owner conveys the property in favor of the public, if that is possible, no genuine
merger can take place that would terminate a personal easement.

Floro v. Llenado
G.R. No. 75723, June 2, 1995, 244 SCRA 713
Romeo, J.

FACTS: Petitioner Simeon Floro is the owner of Floro Park Subdivision who has its own egress
and ingress to and from the Mac Arthur Highway by means of its Road Lot 4 and the PNR level
crossing. On the other hand, Respondent Orlando Llenado, is the registered owner of Llenado
Homes Subdivision, adjacent to Floro Park Subdivision. Prior to its purchase by Llenado, the
land was known as the Emmanuel Homes Subdivision, a duly licensed and registered housing
subdivision in the name of Soledad Ortega. Bounded on the South by the 5 to 6 meter-wide
Palanas Creek, which separates it from the Floro Park Subdivision, and on the west by ricelands
belonging to Marcial Ipapo. the Llenado Homes does not have any existing road or passage to
the Mac Arthur Highway. However, a proposed access road traversing the idle riceland of
Marcial Ipapo has been specifically provided in the subdivision plan of the Emmanuel Homes
Subdivision which was duly approved by the defunct Human Settlement Regulatory
Commission. Meanwhile, the Llenados sought, and were granted permission by the Floros to
use Road Lots 4 and 5 of the Floro Park Subdivision as passageway to and from MacArthur
Highway. However no contract of easement of right of way was ever perfected by both parties.
Later, Floro barricaded Road Lot 5 with a pile of rocks, wooden posts and adobe stones, thereby
preventing its use by the Llenados. Llenado instituted a complaint before the RTC of Malolos,
Bulacan against Floro for easement of right of way. The RTC granted the prayer for the issuance
89
of a writ of preliminary mandatory injunction and ordered Floro to open the road and pay
damages. Thereafter, the trial court rendered another judgment dismissing the case and lifting
the writ of preliminary mandatory injunction previously issued and ordered the plaintiff to pay
defendant damages and costs. On appeal by Llenado on the CA, the judgment of the RTC was
reversed ordering Floro to open roads 4 and 5 and remove all the objects that prevent passage
on road 5 and to pay the plaintiff damages with costs and payment of indemnity for the
easement of right of way.

ISSUE: Whether or not Llenado is entitled to a compulsory easement of right of way.

HELD: No. For the Llenados to be entitled to a compulsory servitude of right of way under the
Civil Code, the preconditions provided under Articles 649 and 650 thereof must be established.
These preconditions are: (1) that the dominant estate is surrounded by other immovables and
has no adequate outlet to a public highway (Art. 649, par. 1); (2) after payment of proper
indemnity (Art. 649, par. 1); (3) that the isolation was not due to acts of the proprietor of the
dominant estate (Art. 649, last par.); and, (4) that the right of way claimed is at the point least
prejudicial to the servient estate; and insofar as consistent with this rule, where the distance
from the dominant estate to a public highway may be the shortest (Art. 650).

The burden of proving the existence of the prerequisites to validly claim a compulsory right of
way lies on the owner of the dominant estate. On the past subdivision plans by Emmanuel
Homes which is bought by Llenado, there is an indication of an access road through IPAPO’s
property although it was not properly paved, a dirt road will suffice. Seeing this, Llenado has
failed to comply with the first requirement. If the servitude requested by Llenado is allowed,
other subdivision developers/owners would be encouraged to hastily prepare a subdivision
plan with fictitious provisions for access roads merely for registration purposes. Furthermore, if
such practice were tolerated, the very purpose for which Presidential Decree No. 957 was
enacted, that is, to protect subdivision buyers from unscrupulous subdivision
owners/developers who renege on their duties to develop their subdivisions in accordance with
the duly approved subdivision plans, would be defeated.

In order to justify the imposition of the servitude of right of way, there must be a real, not a
fictitious or artificial necessity for it. Mere convenience for the dominant estate is not what is
required by law as the basis for setting up a compulsory easement. Even in the face of a
necessity, if it can be satisfied without imposing the servitude, the same should not be
imposed.

The complaint for easement of right of way filed by Llenado in the lower court did not contain a
prayer for the fixing of the amount that he must pay Floro in the event that the easement of
right of way is constituted. Thus, the existence of the second requisite has likewise not been
established. Private respondent Llenado admitted that the Ipapo riceland was no longer being
cultivated. Indications are that it has already been abandoned as a ricefield. There was no
reason for private respondent's failure to develop the right of way except the inconvenience
and expenses it would cost him. Hence, the third requisite has not been met. Failing to establish
the existence of the prerequisites under Articles 649 and 650 of the Civil Code, private
respondent Llenado's bid for a compulsory easement of right of way over Road Lots 4 and 5 of
the Floro Park Subdivision must fail.

Quimen v. Court of Appeals

G.R. No. 112331 May 29, 1996, 257 SCRA 163
Bellosillo, J.

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FACTS: Petitioner Anastacia Quimen together with her brothers Sotero, Sulpicio, Antonio and
sister Rufina inherited a piece of property situated in Pandi, Bulacan. They agreed to subdivide
the property equally among themselves, as they did, with the shares of Anastacia, Sotero,
Sulpicio and Rufina abutting the municipal road. Located directly behind the lots of Anastacia
and Sotero is the share of their brother Antonio designated as Lot No. 1448-B-C which the latter
divided into two (2) equal parts, now Lots Nos. 1448-B-6-A and 1448-B-6-B. The latter Lot is
behind the property of Sotero, father of private respondent Yolanda Oliveros. Yolanda
purchased Lot No. 1448-B-6-A from her uncle Antonio through her aunt Anastacia who was
then acting as his administratrix. According to Yolanda, when petitioner offered her the
property for sale she was hesitant to buy as it had no access to a public road. But Anastacia
prevailed upon her to buy the lot with the assurance that she would give her a right of way on
her adjoining property. Thereafter, Yolanda constructed a house on the lot she bought using as
her passageway to the public highway a portion of Anastacia's property. But when Yolanda
finally offered to pay for the use of the pathway Anastacia refused to accept the payment. In
fact she was thereafter barred by Anastacia from passing through her property. Later, Yolanda
purchased the other lot of Antonio Quimen, Lot No. 1448-B-6-B, located directly behind the
property of her parents who provided her a pathway between their house from the lot of
Yolanda behind the sari sari store of Sotero, and Anastacia's perimeter fence. The store is made
of strong materials and occupies the entire frontage of the lot measuring four (4) meters wide
and nine meters (9) long. Although the pathway leads to the municipal road it is not adequate
for ingress and egress. The municipal road cannot be reached with facility because the store
itself obstructs the path so that one has to pass through the back entrance and the facade of
the store to reach the road. Finally, Yolanda filed an action with the proper court praying for a
right of way through Anastacia's property. The report was that the proposed right of way was at
the extreme right of Anastacia's property facing the public highway, starting from the back of
Sotero's sari-sari store and extending inward by one (1) meter to her property and turning left
for about five (5) meters to avoid the store. However, the trial court dismissed her complaint.
The Court of Appeals reversed the decision declaring that she was entitled to a right of way on
petitioner’s property and that the way proposed by Yoland would cause the least damage and
detriment to the servient estate.

ISSUE: Whether or not passing through the property of Yolanda's parents is more accessible to
the public road than to make a detour to her property and cut down the avocado tree standing
thereon.

HELD: Yes. The conditions sine quo non for a valid grant of an easement of right of way are: (a)
the dominant estate is surrounded by other immovables without an adequate outlet to a public
highway; (b) the dominant estate is willing to pay the proper indemnity; (c) the isolation was
not due to the acts of the dominant estate; and, (d) the right of way being claimed is at a point
least prejudicial to the servient estate.

The criterion of least prejudice to the servient estate must prevail over the criterion of shortest
distance although this is a matter of judicial appreciation. While shortest distance may
ordinarily imply least prejudice, it is not always so as when there are permanent structures
obstructing the shortest distance; while on the other hand, the longest distance may be free of
obstructions and the easiest or most convenient to pass through. In other words, where the
easement may be established on any of several tenements surrounding the dominant estate,
the one where the way is shortest and will cause the least damage should be chosen. However,
as elsewhere stated, if these two (2) circumstances do not concur in a single tenement, the way
which will cause the least damage should be used, even if it will not be the shortest.

As between a right of way that would demolish a store of strong materials to provide egress to
a public highway, and another right of way which although longer will only require an avocado
tree to be cut down, the second alternative should be preferred.
91
De Jesus, et. al. v. Homart Corporation, et. al.
G.R. No. 44191 – R, August 28, 1974, 19 CA Rep. 831

FACTS: Jesus and Luz Miranda de Jesus are owners of the building located in Tondo, Manila.
They brought an action for damages against Homart Corporation and Howmill Manufacturing
Corporation, owners of the land adjoining the plaintiff on the same street where a sixty storey
concrete building was constructed. Plaintiffs allege that the defendants failed to observe the
necessary care and precautions to protect the construction of the plaintiffs by depriving it of
sufficient lateral or subjacent support, thereby causing it to sink in some parts; its walls,
ceilings, and floorings to crack in some places; and by the careless manner of handling the
cement used the roofing’s of the building of the plaintiff were damaged with the accumulated
debris piled thereon.

ISSUE: Whether or not proper precautions had been taken by the defendants in constructing
the building in question so as to prevent causing damage to the building of the plaintiff.

HELD: No. Article 684 of the New Civil Code provides “No property shall make such excavations
upon his land as to deprive any adjacent land or building sufficient lateral or subjacent
support”. A reading of Article 684 shows that the duty of an adjacent owner not to deprive any
adjacent land or building of sufficient lateral or subjacent support is an absolute one. It does
not depend on the degree of care and precaution made by the proprietor in making the
excavation or building on his land. Plaintiffs’ house which adjoins the seven storey concrete
building constructed by the defendants had sunk by about eight inches. The sinking of the left
side of the house of the plaintiffs was due to the weakening of subjacent support and to the
weight of the seven storey concrete building constructed by the defendant, as the excavation
made necessarily disturbed the subjacent soil of the plaintiff’s land. Defendants having failed to
provide the plaintiff’s land and house with sufficient lateral and subjacent support are liable for
damages.

La Vista Association, Inc. v. Court of Appeals

G.R. No. 95252, September 5, 1997, 278 SCRA 498
Bellosillo, J.

FACTS: The Tuasons owned a vast tract of land in Quezon City and Marikina, and when they
sold to Philippine Building Corporation a portion of their landholdings, it was expressly provided
in the Deed of Sale with Mortgage that the boundary line between the property sold and the
adjoining property of the Tuasons shall be a road fifteen (15) meters wide, one-half of which
shall be taken from the property sold to the Philippine Building Corporation and the other half
from the portion adjoining belonging to the Tuasons. Philippine Building Corporation then sold
and assigned with the consent of the Tuasons, the subject parcel of land to ATENEO which
assumed the mortgage and the obligation in the seven and one-half roadway.

On their part, the Tuasons developed a part of the estate adjoining the portion sold to
Philippine Building Corporation into a residential village known as LA VISTA Subdivision. Thus
the boundary between LA VISTA and the portion sold to ATENEO was the 15-meter wide
roadway known as the Mangyan Road. The Tuasons developed its 7.5-meter share of the 15-
meter wide boundary, while ATENEO deferred improvement on its share and erected instead
an adobe wall on the entire length of the boundary.
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ATENEO subsequently sold to Solid Homes Inc. the land which the latter developed into a
subdivision now known as LOYOLA Grand Villas. Solid Homes Inc. now claims to have an
easement of right-of-way along Mangyan Road through which they could have access to
Katipunan Avenue.

LA VISTA however instructed its security guards to prohibit agents and assignees of Solid
Homes, Inc., from traversing Mangyan Road, and even constructed concrete posts that
prevented the residents of LOYOLA from passing through.

Solid Homes, Inc., filed a case before the Regional Trial Court and prayed that LA VISTA been
joined from preventing and obstructing the use and passage of LOYOLA residents through
Mangyan Road. The lower court recognized the easement of right-of-way along Mangyan Road
in favor of Solid Homes, Inc., and ordered LA VISTA to pay damages. On appeal by LA VISTA, the
decision of the lower court was affirmed.

ISSUE: Whether or not there is an easement of right-of-way over Mangyan Road.

HELD: Yes. The predecessors-in-interest of both LA VISTA and Solid Homes, Inc., i.e., the
Tuasons and the Philippine Building Corporation, respectively, clearly established a contractual
easement of right-of-way over Mangyan Road. A voluntary easement is quite evidently
manifested in the stipulation in the Deed of Sale with mortgage executed by them. When the
easement was established by their contract, the parties unequivocally made provisions for its
observance by all whom in the future might succeed them in dominion. It is thus very apparent
that the parties and their respective predecessors-in-interest intended to establish an
easement of right-of-way over Mangyan Road for their mutual benefit, both as dominant and
servient estates.

With this, the free ingress and egress along Mangyan Road created by the voluntary agreement
between Ateneo and Solid Homes, Inc., is thus legally demandable (Articles 619 and 625, New
Civil Code) with the corresponding duty on the servient estate not to obstruct the same.

LA VISTA contends that there are other routes to LOYOLA from Mangyan Road, however, this
should not be taken into consideration since the opening of an adequate outlet to a highway
can extinguish only legal or compulsory easements, not voluntary easements like in the case at
bar. The fact that an easement by grant may have also qualified as an easement of necessity
does not detract from its permanency as a property right, which survives the termination of the
necessity.

Alcantara v. Reta, Jr.

G.R. No. 136996, December 14, 2001, 372 SCRA 364
Pardo, J.

FACTS: Alcantara and the other petitioners claim that they were tenants or lessees of the land
owned by Reta. The land has been converted into a commercial center and Reta is threatening
to eject them. They claim that since they are legitimate tenants or lessees of such land, they
have the right of first refusal to purchase the land in accordance with Section 3(g) of
Presidential Decree No. 1517, the Urban Land Reform Act. They also claimed that the amicable
settlement executed between Reta and Ricardo Roble, one of the petitioners, was void ab
initio for being violative of PD No. 1517. On the other hand, Reta claimed that the land is
question is not within the scope of PD No. 1517 since it was not proclaimed as an Urban Land
Reform Zone (ULRZ). Alcantara, among others, then filed complaint for the exercise of the right
93
of first refusal under PD No. 1517 in the Regional Trial Court. However, such complaint was
dismissed and such dismissal was affirmed by the Court of Appeals. Hence, this petition was
filed.

ISSUE: Whether the Alcantara and the other petitioners have the right of first refusal.

HELD: No. The land involved has not been proclaimed an Urban Land Reform Zone (ULRZ). In
fact, petitioners filed a petition with the National Housing Authority requesting that said land
be declared as an ULRZ. Clearly, the request to have the land proclaimed as an ULRZ would not
be necessary if the property was an ULRZ. PD No. 1517 pertains to areas proclaimed as ULRZ.
Consequently, petitioners cannot claim any right under the said law since the land involved is
not an ULRZ.

To be able to qualify and avail of the rights and privileges granted by the said decree, one must
be: (1) a legitimate tenant of the land for ten (10) years or more; (2) must have built his home
on the land by contract; and, (3) has resided continuously for the last ten (10) years. Those who
do not fall within the said category cannot be considered "legitimate tenants" and, therefore,
not entitled to the right of first refusal to purchase the property should the owner of the land
decide to sell the same at a reasonable price within a reasonable time.

Reta denies that he has lease agreements with Alcantara and Roble. Alcantara, on the other
hand, failed to present evidence of a lease agreement other than his testimony in court. Reta
allowed Roble to use sixty-two (62) coconut trees for P186 from where he gathered tuba. This
arrangement would show that it is a usufruct and not a lease. Roble was also allowed to
construct his house on the land because it would facilitate his gathering of tuba. This would be
in the nature of a personal easement under Article 614 of the Civil Code. Whether the amicable
settlement is valid or not, the conclusion would still be the same since the agreement was one
of usufruct and not of lease. Thus, Roble is not a legitimate tenant as defined by PD No. 1517.

With regard to the other petitioners, Reta admitted that he had verbal agreements with them.
This notwithstanding, they are still not the legitimate tenants who can exercise the right of first
refusal under PD No. 1517. From the moment Reta demanded that the petitioners vacate the
premises, the verbal lease agreements, which were on a monthly basis since rentals were paid
monthly, ceased to exist as there was termination of the lease.

In conclusion, none of the petitioners is qualified to exercise the right of first refusal under PD
No. 1517.

There was also no intention on the part of Reta to sell the property. Hence, even if the
petitioners had the right of first refusal, the situation which would allow the exercise of that
right, that is, the sale or intended sale of the land has not happened. PD No. 1517 applies
where the owner of the property intends to sell it to a third party.

Prosperity Credit Resources, Inc. v. Court of Appeals

G.R. No. 114170, January 15, 1999, 301 SCRA 52
Mendoza, J.

FACTS: Private respondent Metropolitan Fabrics, Inc. (MFI) and petitioner Prosperity Credit
Resources, Inc. (PCRI) executed a Memorandum of Undertaking (MOU) wherein PCRI acceded
to MFI’s request to redeem three of the seven lots foreclosed and won by the former in the
ensuing public auction. The MOA was conditioned upon the agreement that the petitioner shall
be given a right of way on the existing private road which forms part of the area to be
94
redeemed by private respondents. Later, PCRI filed an injunctive suit against MFI alleging, inter
alia, that the latter, in violation of the terms of the MOU, refused to allow PCRI to make
excavations on one side of the access road for the installation of water. The trial court granted
the petition for the issuance of the writ of preliminary mandatory injunction. On appeal, the CA
set aside the assailed order of the trial court; hence, this petition for review on certiorari. PCRI
contends that it is entitled to the issuance of the writ of preliminary mandatory injunction as
may be gleaned from the following provision in the MOU: The above cited lot, being an existing
private road, will remain open to ingress and egress for whatever kind of passage in favor of
PROSPERITY FINANCIAL RESOURCES, INC. or its successors=in-interest.

ISSUE: Whether or not the RTC committed grave abuse of discretion in issuing a writ of
preliminary mandatory injunction ordering private respondent to allow petitioner to undertake
excavations along the access road for the purpose of installing water pipes.

Held: Yes. There is no question as to the meaning of the terms “ingress” and “egress”. They give
petitioner the right to use the private road as means of entry into and exit from its property on
the northwestern side o f the compound. The question concerns the meaning of the phrase “for
whatever kind of passage”. The trial court read this phrase to mean that petitioner had the
right to make excavations on the side of the access road in order to install a network of pipes.
The word “passage” does not, however; “clearly and unmistakably” convey a meaning that
includes a right to install water pipes on the access road. The ordinary meaning of the word, as
defined in Webster’s Dictionary, is that act or action of passing: movement or transference
from one place or point to another.” this legal meaning is not different. It means, according to
Black’s Law Dictionary, the act of passing; transit; transition.

Villanueva v. Velasco
G.R. No. 130845, November 27, 2000, 346 SCRA 99
Quisumbing, J.

FACTS: Petitioner Bryan Villanueva is the registered owner of the parcel of land covered by
Transfer Certificate of Title No. 127862 of the Register of Deeds of Quezon City. He bought it
from Pacific Banking Corporation, the mortgagee of said property. When petitioner bought the
parcel of land there was a small house on its southeastern portion. It occupied one meter of the
two-meter wide easement of right of way the Gabriel spouses granted to the Espinolas,
predecessors-in-interest of private respondents, in a Contract of Easement of Right of Way.
Unknown to petitioner, even before he bought the land, the Gabriels had constructed the
aforementioned small house that encroached upon the two-meter easement. Petitioner was
also unaware that private respondents, Julio Sebastian and Shirley Lorilla, had filed on May 8,
1991 for easement. As successors-in-interest, Sebastian and Lorilla wanted to enforce the
contract of easement. On August 13, 1991, a writ of preliminary mandatory injunction was
issued, ordering the Gabriels to provide the right of way and to demolish the small house
encroaching on the easement. On January 5, 1995, Judge Tirso Velasco issued an Alias Writ of
Demolition. Meanwhile, petitioner filed a Third Party Claim with Prayer to Quash Alias Writ of
Demolition. He maintains that the writ of demolition could not apply to his property since he
was not a party to the civil case.

ISSUE: Whether or not the easement on the property binds petitioner.

HELD: Yes. Unlike other types of encumbrance of real property, a servitude like a right of way
can exist even if they are not expressly stated or annotated as an encumbrance in a Torrens title
because servitudes are inseparable from the estates to which they actively or passively belong.
Moreover, Villanueva was bound by the contract of easement, not only as a voluntary
95
easement but as a legal easement. A legal easement is mandated by law, and continues to exist
unless its removal is provided for in a title of conveyance or the sign of the easement is
removed before the execution of the conveyance conformably with Article 649 in accordance
with Article 617 of the Civil Code.

National Irrigation Administration v. Court of Appeals

G.R. No. 114348, September 20, 2000, 340 SCRA 661
Pardo, J.

FACTS: A free patent over 3 hectares of land in Cagayan was issued and registered in the name
of private respondent Dick Manglapus’ predecessor-in-interest, Vicente Manglapus. The land
was granted to the latter subject to the provisions of sections 113, 121, 122 and 124 of
Commonwealth Act No. 141 which provide that except in favor of the Government or any of its
branches, units, or institutions, the land hereby acquired shall be inalienable and shall not be
subject to encumbrance for a period of 5 years from the date of this patent and shall not be
liable for the satisfaction of any debt contracted prior to the expiration of that period.
Subsequently, private respondent Manglapus acquired the lot from Vicente Manglapus by
absolute sale and was later registered 11 years later from the issuance of patent. Meanwhile,
petitioner National Irrigation Administration entered into a contract with Villamar Development
Construction. Under the contract, petitioner NIA was to construct canals in Cagayan. NIA then
entered a portion of petitioner’s land and made diggings and fillings thereon. Private
respondent then filed a complaint for damages alleging that petitioner’s diggings and fillings
destroyed the agricultural use of his land and that no reasonable compensation was paid for its
taking.

ISSUE: Whether or not the petitioner NIA should pay Manglapus just compensation for the
taking of a portion of his property for use as easement of a right of way.

HELD: No. We find that NIA is under no obligation. We sustain the appeal. We agree with NIA
that the Transfer Certificate of Title and the Original Certificate of Title covering the subject
parcel of land contained a reservation granting the government a right of way over the land
covered therein.

Under the Original Certificate of Title, there was a reservation and condition that the land is
subject to “to all conditions and public easements and servitudes recognized and prescribed by
law, especially thouse mentioned in Sections 109, 110, 111, 112, 113 and 114, Commonwealth
Act No. 141, as amended.” This reservation, unlike the other provisos imposed on the grant,
was not limited by any time period and thus is a subsisting condition. Section 112,
Commonwealth Act No. 141, provides that lands granted by patent, “shall further be subject to
a right of way not exceeding twenty meters in width for public highways, railrods, irrigation,
ditches, aqueducts, telegraphs and telephone lines, and similar works as the Government or
any public or quasi-public service or enterprises, including mining or forest concessionaires may
reasonably require for carrying on their business, with damages for the improvements only.

Article 619 of the Civil Code provides that “Easements are established either by law or by the
will of the owners. The former are called legal and the latter voluntary easements.” In the
present case, we find and declare that a legal easement of a right-of-way exists in favor of the
government. The land was originally public land, and awarded to respondent Manglapus by free
patent. The ruling would be otherwise if the land were originally private property, in which
case, just compensation must be paid for the taking of a part thereof for public use as an
easement of a right of way.

96
Remman Enterprises, Inc. v. Court of Appeals
G.R. No. 125018, April 6, 2000, 330 SCRA 145
Bellosillo, J.

FACTS: Petitioner Remman Enterprises, Inc. and private respondent Crispin Lat are adjoining
landowners in Lipa City. The land of Lat is agricultural and planted mostly with fruit trees while
Remman’s land is devoted to its piggery business. The latter’s land is 1 ½ meters higher in
elevation than that of respondent Lat. Meanwhile, respondent noticed that petitioner’s waste
disposal lagoon was already overflowing and inundating ¼ of Lat’s plantation. He made several
representations with petitioner but they fell on deaf ears. Consequently, the trees growing on
the flooded portion where it was inundated with water containing pig manure, started to
wither and die. Private respondent then filed a complaint for damages alleging that the acidity
of the soil in his plantation increased because of the overflow of the water heavy with pig
manure from petitioner’s piggery farm. Petitioner denied the allegations and claimed that the
construction of additional lagoons was already adopted to contain the waste water coming
from its piggery to prevent any damage to the adjoining estate. Petitioner also argued that the
damages, if any, were due to a fortuitous event.

ISSUE: Whether or not the damages were due to a fortuitous event.

HELD: No. We cannot agree with petitioner. We defer instead to the findings opions expressed
by the lower courts: Even assuming that the heavy rains constituted an act of God; by reason of
their negligence, the fortuitous event became humanized, rendering appellants liable for the
ensuing damges. In National Power Corporation v. Court of Appeals, 233 SCRA 649 (1993), the
Supreme Court held: “Accordingly, petitioners cannot be heard to invoke the act of God or
force majeure to escape liability for the loss or damages sustained by private respondents since
they, the petitioners, were guilty of negligence. This event then was not occasioned exclusively
by an act of God or force majeure; a human factor – negligence or imprudence – had
intervened. The effect tehn of the force majeure in question may be deemed to have, even if
only partly, resulted from the participation of man. Thus, the whole occurrence was thereby
humanized, as it were, and removed from the rules applicable to acts of God.”

As regards the alleged natural easement imposed upon the property of appelle, resort to
pertinent provisions of applicable law is imperative. Under Article 637 of the Civil Code, it is
provided that “lower estates are obliged to receive the waters which naturally and without the
intervention of man descend from the higher estates, as well as the stones or earth which they
carry with them. The owner of the lower estate cannot construct works which will impede this
easement; neither can the owner of the higher estate make works which will increase the
burden.”

A similar provion is found under Article 50 of the Water Code of the Philippines (P.D. No. 1067),
which provides that “lower estates are obliged to receive the water which naturally and
without the intervention of man flow from the higher estates, as well as the stone or eath
which they carry with them. The owner of the lower estate cannot construct works which will
impede this natural flow, unless he provides an alternative method of drainage; neither can the
owner of the higher estate make works which will increase this natural flow.”

As worded, the two aforecited provisions impose a natural easement upon the lower estate to
receive the waters which naturally and without the intervention of man descend from higher
estates. However, where the waters which flow from a higher estate are those which are
artificially collected in man-made lagoons, any damage occasioned thereby entitles the owner
of the lower or servient estate to compensation.
97
Jesus is Lord Christian School Foundation, Inc. v. Municipality (now City) of Pasig, Metro
Manila
G.R. No. 152230, August 9, 2005, 466 SCRA 235
Callejo, Sr., J.

FACTS: Respondent Municipality of Pasig needed an access road from E.R. Santos Street, a
municipal road near the Pasig Public Market to Barangay Sto. Tomas Bukid, Pasig where 60 to
70 houses, mostly made of light materials, were located. The road has to be at least three
meters in width, as required by the Fire Code, so that fire trucks could pass through in case of
conflagration. Likewise, the residents in the area needed the road for water and electrical
outlets. The municipality then decided to acquire 51 square meters out of the 1,791 square
meter property of Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Ching Cuanco Kho,
which is abutting E.R. Santos Street.

Meanwhile, the Sangguniang Bayan of Pasig approved an Ordinance authorizing the municipal
mayor to initiate expropriation proceedings to acquire the said property and appropriate the
fund therefore. The ordinance stated that the property owners were notified of the
municipality’s intent to purchase the property for public use as an access road but they rejected
the offer. The municipality then filed a complaint against the Cuancos for the expropriation of
the property under Section 19 of the Republic Act No. 7160 or otherwise known as the Local
Government Code. The Cuancos then contended that they had sold the said property to
petitioner Jesus is the Lord Christian School Foundation, Inc. (JILCSFI) as evidenced by a deed of
sale. When apprised about the complaint, petitioner JILCSFI filed a motion for leave to
intervene as defendant-in-intervention which was granted.

The petitioner JILCSFI asserted that the respondent must comply with the requirements for the
establishment of an easement of right-of-way, more specifically, the road must be constructed
at the point lease prejudicial to the servient state, and that there must be no adequate outlet to
a public highway. The petitioner also claimed that the portion of the lot sought to be
expropriated is located at the middle protion of the petitioner’s entire parcel of land, thereby
splitting the lot into two halves, and making it impossible for the petitioner to put up its school
building and worship center.

ISSUE: Whether or not the petitioner JILCSFI’s contentions are tenable.

HELD: No. The subject property is expropriated for the purpose of constructing a road. The
respondent is not mandated to comply with the essential requisites for an easement of right-of-
way under the New Civil Code. Case law has it that in the absence of legislative restriction, the
grantee of the power of eminent domain may determine the location and route of the land to
be taken unless such determination is capricious and wantonly injurious. Expropriation is
justified so long as it is for the public good and there is genuine necessity of public character.
Governmentmay not capriciously choose what private property should be taken.

The respondent has demonstrated the necessity for constructing a road from E.R. Santos Street
to Sto. Tomas Bukid. The witnesses, who were residents of Sto. Tomas Bukid, testified that
although there were other ways through which one can enter the vicinity, no vehicle, however,
especially fire trucks, could enter the area except through the newly constructed Damayan
Street. This is more than sufficient to establish that there is a genuine necessity for the
construction of a road in the area. After all, absolute necessity is not required, only reasonable
and practical necessity will suffice. Nonetheless, the respondent failed to show the necessity for
constructing the road particularly in the petitioner’s property and not elsewhere. We note that
98
the wheras clause of the ordinance states that the 51-square meter lot is the shortest and most
suitable access road to connect Sto. Tomas Bukid to E.R. Santos Street. The respondent’s
complaint also alleged that the said portion of the petitioner’s lot has been surveyed as the best
possible ingress and egress. However, the respondent failed to adduce a preponderance of
evidence.

Acap v. Court of Appeals

G.R. No. 118114, December 7, 1995, 251 SCRA 30
Padilla, J.

FACTS: The title to Lot 1130 of the Cadastral Survey of Hinigaran, Negros Occidental was
evidenced by OCT R-12179. The lot has an area of 13,720 sq. m. The title was issued and is
registered in the name of spouses Santiago Vasquez and Lorenza Oruma. After both spouses
died, their only son Felixberto inherited the lot. In 1975, Felixberto executed a duly notarized
document entitled “Declaration of Heirship and Deed of Absolute Sale” in favor of Cosme Pido.
Since 1960, Teodoro Acap had been the tenant of a portion of the said land, covering an area of
9,500 sq. m. When ownership was transferred in 1975 by Felixberto to Cosme Pido, Acap
continued to be the registered tenant thereof and religiously paid his leasehold rentals to Pido
and thereafter, upon Pido’s death, to his widow Laurenciana. The controversy began when Pido
died interstate and on 27 November 1981, his surviving heirs executed a notarized document
denominated as “Declaration of Heirship and Waiver of Rights of Lot 1130 Hinigaran Cadastre,”
wherein they declared to have adjudicated upon themselves the parcel of land in equal share,
and that they waive, quitclaim all right, interests and participation over the parcel of land in
favor of Edy de los Reyes. The document was signed by all of Pido’s heirs. Edy de los Reyes did
not sign said document. It will be noted that at the time of Cosme Pido’s death, title to the
property continued to be registered in the name of the Vasquez spouses. Upon obtaining the
Declaration of Heirship with Waiver of Rights in his favor, de los Reyes filed the same with the
Registry of Deeds as part of a notice of an adverse claim against the original certificate of title.
Thereafter, delos Reyes sought for Acap to personally inform him that he had become the new
owner of the land and that the lease rentals thereon should be paid to him. Delos Reyes alleged
that he and Acap entered into an oral lease agreement wherein Acap agreed to pay 10 cavans
of palay per annum as lease rental. In 1982, Acap allegedly complied with said obligation. In
1983, however, Acap refused to pay any further lease rentals on the land, prompting delos
Reyes to seek the assistance of the then Ministry of Agrarian Reform (MAR) in Hinigaran,
Negros Occidental. The MAR invited Acap, who sent his wife, to a conference scheduled on 13
October 1983. The wife stated that the she and her husband did not recognize delos Reyes’s
claim of ownership over the land. On 28 April 1988, after the lapse of four (4) years, delos Reyes
filed a complaint for recovery of possession and damages against Acap, alleging that as his
leasehold tenant, Acap refused and failed to pay the agreed annual rental of 10 cavans of palay
despite repeated demands. On 20 August 1991.

ISSUE: Whether or not the subject declaration of heirship and waiver of rights is a recognized
mode of acquiring ownership by private respondent over the lot in question.

HELD: An asserted right or claim to ownership or a real right over a thing arising from a juridical
act, however justified, is not per se sufficient to give rise to ownership over the res. That right or
title must be completed by fulfilling certain conditions imposed by law. Hence, ownership and
real rights are acquired only pursuant to a legal mode or process. While title is the juridical
justification, mode is the actual process of acquisition or transfer of ownership over a thing in
question.

Under Article 712 of the Civil Code, the modes of acquiring ownership are generally classified
into two (2) classes, namely, the original mode (i.e., through occupation, acquisitive
prescription, law or intellectual creation) and the derivative mode (i.e., through succession
99
mortis causa or tradition as a result of certain contracts, such as sale, barter, donation,
assignment or mutuum).

In the case at bench, the trial court was obviously confused as to the nature and effect of the
Declaration of Heirship and Waiver of Rights, equating the same with a contract (deed) of sale.
They are not the same. In a Contract of Sale, one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing, and the other party to pay a price
certain in money or its equivalent. Upon the other hand, a declaration of heirship and waiver of
rights operates as a public instrument when filed with the Registry of Deeds whereby the
intestate heirs adjudicate and divide the estate left by the decedent among themselves as they
see fit. It is in effect an extrajudicial settlement between the heirs under Rule 74 of the Rules of
Court.

Hence, there is a marked difference between a sale of hereditary rights and a waiver of
hereditary rights. The first presumes the existence of a contract or deed of sale between the
parties. The second is, technically speaking, a mode of extinction of ownership where there is
an abdication or intentional relinquishment of a known right with knowledge of its existence
and intention to relinquish it, in favor of other persons who are co-heirs in the succession.
Private respondent, being then a stranger to the succession of Cosme Pido, cannot conclusively
claim ownership over the subject lot on the sole basis of the waiver document which neither
recites the elements of either a sale, or a donation, or any other derivative mode of acquiring
ownership.

De Luna v. Abrigo
G.R. No. L-57455, January 18, 1990, 181 SCRA 150
Medialdea, J.

FACTS: Prudencio de Luna donated a portion of a lot of the Cadastral Survey of Lucena to the
Luzonian University Foundation. The donation was embodied in a Deed of Donation Intervivos
and made subject to certain terms and conditions and provided for the automatic reversion to
the donor of the donated property in case of violation or non-compliance. The foundation failed
to comply with the conditions of the donation. De Luna "revived" the said donation in favor of
the foundation, in a document entitled "Revival of Donation Intervivos" subject to terms and
conditions which among others, required it to construct a chapel, a nursery and a kindergarten
school in the donated property within five (5) years from execution. The automatic reversion to
the donor of the donated area in case of violation of the conditions was also provided. The
foundation, through its president, accepted the donation. A "Deed of Segregation" was later
executed by De Luna and the foundation whereby the area donated was adjudicated to the
foundation. The heirs of de Luna later filed a complaint with the trial court alleging that the
terms and conditions of the donation were not complied with by the foundation. Thus, it
prayed for the cancellation of the donation and the reversion of the donated land to the heirs.
The foundation invoked, among others, the defense of prescription of action. The court
dismissed the complaint. It ruled that under Article 764 of the New Civil Code, actions to revoke
a donation on the ground of non-compliance with any of the conditions of the donation shall
prescribe in four years (4) counted from such non-compliance. In the instant case, the four-year
period for filing the complaint for revocation commenced on April 9, 1976 and expired on April
9, 1980. Since the complaint was brought on September 23, 1980 or more than five (5) months
beyond the prescriptive period, it was already barred by prescription.

ISSUE: Whether or not the complaint is one for judicial decree of revocation of the donation in
question as contemplated in Article 764 of the New Civil Code and which prescribes in four (4)
years and not an action to enforce a written contract which prescribes in ten (10) years.
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HELD: The donation subject of this case is one with an onerous cause. It was made subject to
the burden requiring the donee to construct a chapel, a nursery and a kindergarten school in
the donated property within five years from execution of the deed of donation. It is true that
under Article 764, actions for the revocation of a donation must be brought within for (4) years
from the non-compliance of the conditions of the donation. However, the said article does not
apply to onerous donations in view of the specific provision of Article 733 providing that
onerous donations are governed by the rules on contracts. Therefore, the rules on contracts
and the general rules on prescription and not the rules on donations are applicable in the case
at bar.

Furthermore, while the judicial action for the rescission of a contract is generally not necessary
where the contract provides that it may be automatically revoked and cancelled for violation of
any of its terms and conditions, however, where one of the parties contests or denies the
rescission, judicial intervention is necessary not for purposes of obtaining a judicial declaration
rescinding a contract already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to determine whether or not the
rescission was proper. Judicial action will be necessary as without it, the extrajudicial resolution
will remain contestable and subject to judicial invalidation, unless attack thereon should
become barred by acquiescence, estoppel or prescription.

In the instant case, trial court was therefore not correct in holding that the complaint is barred
by prescription under Article 764 because Article 764 does not apply to onerous donations. As
provided in the donation executed on April 9, 1971, compliance with the terms and conditions
of the contract of donation, shall be made within five (5) years from its execution. The
complaint which was filed on September 23, 1980 was then well within the ten (10) year
prescriptive period to enforce a written contract pursuant to Article 1144 par. 1, counted from
April 9, 1976.

Reyes v. Mosqueda
G.R. No. L-45262, July 23, 1990
Gutierrez, Jr., J.

FACTS: On May 15, 1969, Dr. Emilio Pascual executed a Deed of Donation of real property
located at 1109-1111 R. Papa St. Tondo, Manila in favor of Ofelia Parungao, a minor, with her
mother, Rosario Duncil, accepting the gift and donation for and in her behalf. However, Ursula
Pascual alleged that Dr. Pascual during his lifetime on November 2, 1966 executed a Donation
mortis causa in her favor covering the said property. Parungao, upon reaching the age of
majority was able to register the Deed of Donation with the Register of Deeds in Manila and
was issued a TCT.

On September 23, 1976, Ursula executed a deed of absolute sale over the Tondo property in
favor of Benjamin, Oscar, Jose, and Emmanuel Reyes. Benjamin filed a complaint for the
declaration of nullity of the TCT of Parungao and/or reconveyance of the deed of title. The CFI
of Manila declared the TCT in the name of Parungao null and void and ordered the Register of
Deeds to cancel the title. On appeal, the Court of Appeals ruled that the 1966 donation to
Ursula was inter vivos, which meant that the property was already transferred to Ursula at that
time.

ISSUE: Whether or not the donation to Ursula was Inter Vivos or Mortis Causa.

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HELD: It was a Donation Inter Vivos. The title given by the donor in the deed of donation is not a
determinative factor which makes the donation inter vivos or mortis causa. It is the body of the
document of donation and the statements contained therein and not the title that should be
considered in ascertaining the intent of the donor. In the case, the donor used the term
donation Mortis Causa but from the stipulations of the deed, it can be clearly inferred that he
was actually executing a donation Inter Vivos to Ursula.

The transfer of ownership over the properties donated to Ursula was immediate and
independent of the death of Dr. Pascual since it was a donation Inter Vivos. The provision as
regards the reservation of properties for the donor's subsistence in relation to the other
provisions of the deed of donation confirms the intention of the donor to give the naked
ownership of the properties to Ursula immediately after the execution of the deed of donation.
Hence, he could not have donated the property again in 1969 in favor of Parungao since the lot
was already transferred to Ursula at that time.

Liguez v. Court of Appeals

G.R. No. L-11240, December 18, 1957, 102 Phil. 577
Reyes, J.B.L., J.

FACTS: The case began upon complaint filed by petitioner-appellant against the widow and
heirs of the late Salvador P. Lopez to recover a parcel of land in barrio Davao. Plaintiff averred
to be its legal owner, pursuant to a deed of donation of said land, executed in her favor by the
late owner, Salvador P. Lopez, on 18 May 1943. The defense interposed was that the donation
was null and void for having an illicit causa or consideration, which was the plaintiff's entering
into marital relations with Salvador P. Lopez, a married man; and that the property had been
adjudicated to the appellees as heirs of Lopez by the court of First Instance, since 1949.

It was ascertained by the Court of Appeals that the donated land originally belonged to the
conjugal partnership of Salvador P. Lopez and his wife, Maria Ngo; that the latter had met and
berated Conchita for living maritally with her husband, sometime during June of 1943; that the
widow and children of Lopez were in possession of the land and made improvements thereon;
that the land was assessed in the tax rolls first in the name of Lopez and later in that of his
widow.; and that the deed of donation was never recorded.

Upon these facts, the Court of Appeals held that the deed of donation was inoperative, and null
and void (1) because the husband, Lopez, had no right to donate conjugal property to the
plaintiff appellant; and (2) because the donation was tainted with illegal cause or consideration,
of which donor and donee were participants.

ISSUE: Whether or not the donation is valid.

HELD: In the present case, it is scarcely disputable that Lopez would not have conveyed the
property in question had he known that appellant would refuse to cohabit with him. The
cohabitation was an implied condition to the donation, and being unlawful, necessarily tainted
the donation itself.

The rule that parties to an illegal contract, if equally guilty, will not be aided by the law but will
both be left where it finds them, has been interpreted by this Court as barring the party from
pleading the illegality of the bargain either as a cause of action or as a defense.  Memo auditor
propriam turpitudinem allegans.

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The appellant seeks recovery of the disputed land on the strength of a donation regular on its
face. To defeat its effect, the appellees must plead and prove that the same is illegal. But such
plea on the part of the Lopez heirs is not receivable, since Lopez, himself, if living, would be
barred from setting up that plea; and his heirs, as his privies and successors in interest, can
have no better rights than Lopez himself.

Appellees, as successors of the late donor, being thus precluded from pleading the defense of
immorality or illegal causa of the donation, the total or partial ineffectiveness of the same must
be decided by different legal principles. In this regard, the Court of Appeals correctly held that
Lopez could not donate the entirety of the property in litigation, to the prejudice of his wife
Maria Ngo, because said property was conjugal in character and the right of the husband to
donate community property is strictly limited by law

Pershing Tan Queto v. Court of Appeals

G.R. No. L-35648, March 27, 1987, 148 SCRA 54
Paras, J.

FACTS: Herein private respondent Restituta Tacalinar Guangco de Pombuena received the
questioned lot from her mother Basilides Tacalinar either as a purported donation or by way of
purchase with P50 as the alleged consideration thereof. The donation or sale was
consummated while Restituta was already married to her husband Juan Pombuena. Juan then
filed for himself and his supposed co-owner Resitituta an application for a Torrens Title over
the land which was later on granted pronouncing him (‘married to Resitiuta’) as the owner of
the land.

A contract of lease over the lot was entered into between petitioner, Pershing Tan Queto and
Restituta with the consent of her husband for a period of 10 years. The lease of contract having
expired, Restituta filed for unlawful detainer against Tan Queto. The unlawful detainer case was
won by the spouses in the Municipal Court but on appeal in the CFI the entire case was
dismissed because of a barter agreement whereby Tan Queto became the owner of the
disputed lot and the spouses became the owners of a parcel of land with the house thereon
previously owned before the barter by Tan Queto. After the barter agreement, Tan Queto
constructed on the disputed land a concrete building without any objection from Restituta.
Afterwards Restituta sued both Juan and Tan Queto for reconveyance of the title over the
registered but disputed lot, for annulment of the barter, and for recovery of the land with
damages.

The respondent court’s decision which later on was affirmed by the Supreme court led to the
reformation of the Contract of Sale of the disputed lot from Basilides to Restituta from a sale to
a conveyance of the share of Restituta in the future hereditary estate of her parents. Hence,
this petition for a motion for reconsideration.

ISSUE: Whether or not the conveyance of the share of Restituta in the future hereditary estate
of her parents was valid hence a paraphernal property.

HELD: No. The court ruled that the land is conjugal, not paraphernal. The oral donation of the
lot cannot be a valid donation intervivos because it was not executed in a public instrument
(Art. 749, Civil Code), nor as a valid donation mortis causa for the formalities of a will were not
complied with. The allegation that the transfer was a conveyance to RESTITUTA of her
hereditary share in the estate of her mother (or parents) cannot be sustained for the
contractual transmission of future inheritance is generally prohibited.

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The fact is ownership was acquired by both JUAN and RESTITUTA by tradition (delivery) as a
consequence of the contract of sale (See Art. 712, Civil Code) with P50.00 (then a considerable
amount) as the cause or consideration of the transaction. The lot is therefore conjugal, having
been acquired by the spouses thru onerous title (the money used being presumably conjugal
there being no proof that RESTITUTA had paraphernal funds of her own).

Pajarillo vs. Intermediate Appellate Court

G.R. No. 72908, August 11, 1989, 176 SCRA 340
Cruz, J.

FACTS: Perfecta Balane de Cordero died intestate in 1945 and leaving a tract of 28 hectares of
land with buildings and improvements in the Quezon Province. On May 20, 1946, perfecta’s
siblings Juana and Felipe executed a public instrument entitled “ Extra-judicial settlement of the
estate of the decease Perfecta Balane de Cordero.” In it they disposed that in according to
Perfecta’s wishes and in consideration of love and affection, the said property be donated to
private respondent Salud Suterio de Matias, Perfecta’s niece, who will assume the
encumbrance/obligation to the Philippine National Bank in the amount of P 1,000. In the same
document, the done accepted the donation in a public instrument. The instrument was never
registered nor the title transferred to Salud’s name although she immediately took possession
of the land. Sometime in 1951, Salud transferred the possession of the land to her mother
Juana, who was then staying with her brother Claudio and his family. During the period they
were occupying the land, Claudio paid realty taxes thereon. On May 25, 1956, Juana executed a
deed of absolute sale conveying the land to Claudio. Two years later, Claudio had the land
registered in his name. Claudio died in 1961 and his mother in 1963. On June 30, 1965, the
private respondents Salud and Pedro Matias filed a complaint for the reconveyance of the
property on the ground that the deed of sale in favour of Claudio was fictitious and the
registration in his name was null and void. Salud claimed that no compensation was paid by
Claudio and that the transaction was deliberately concealed from her by her brother and the
defendants.

ISSUE: Whether or not the extra-judicial settlement was a donation.

HELD: Yes. Felipe and Juana had declared themselves the heirs of Perfecta and the owners of
the property in question. As such, they were free to give the land to whomever they pleased
and for whatever reason they saw fit. Hence, if they choose to respect Perfecta’s wishes and
carry out her intentions by donating the land to Salud, there was no legal impediment to their
doing so. There is no question that Felipe and Juana could have simply disregarded their sister’s
sentiments and decided not to donate the property to Salud. The fact that they did no do this
speaks well of their integrity and their loyalty to their deceased sister. The extra-judicial
settlement also reflects their own affection for Salud which constituted the valid consideration
for their own act of liberality.

Cruz v. Court of Appeals

G.R. No. L-58671, November 22, 1985, 140 SCRA 245
Plana, J.

FACTS: In 1973, Eduvigis Cruz, a childless widow, donated a 235.5 sq. m. residential lot in San
Isidro, Taytay, Rizal together with the two-door apartment erected thereon to her grandnieces
(private respondents Teresita, Lydia and Cecilia, all surnamed De Leon). The property was
accordingly transferred to the names of private respondents.
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In 1974, Cruz judicially adopted Cresencia Ocreto, a minor, after which she extrajudicailly tried
to revoke the donation, but the donee resisted, alleging that: (1) the property in question was
co-owned by Eduvigis Cruz and her brother, the late Maximo Cruz, grandfather of the donees,
hence the latter own 1/2 of the property by inheritance; and (2) Eduvigis owns another
property, an agricultural land of more than two hectares situated in Barrio Dolores, Taytay,
Rizal, hence the donation did not impair the presumptive legitime of the adoptive child.

Petitioner filed a complaint against the donees for revocation of donation, invoking Article 760,
par. 3 of the NCC. The trial court rendered a decision revoking the donation. On appal, The
Court of Appeals reversed the trial court and dismissed the complaint.

ISSUE: Whether or not the Court of Appeals correctly dismissed the complaint to annul the
subject donation.

HELD: Yes. In the case of the subsequent adoption of a minor by one who had previously
donated some or all of his properties to another, the donor may sue for the annulment or
reduction of the donation within 4 years from the date of adoption, if the donation impairs the
legitime of the adopted, taking into account the whole estate of the donor at the time of the
donation of the child (Articles 760, 761 and 763 of the NCC). Of course, the burden of proof is
on the plaintiff-donor, who must allege and establish the requirements prescribed by law, on
the basis of which annulment or reduction of the donation can be adjudged. Unfortunately, in
the case at bar, the complaint for annulment does not allege that the subject donation impairs
the legitime of the adopted child. Indeed, it contains no indication at all of the total assets of
the donor.

Nor is there proof of impairment of legitime. On the contrary, there is unrebutted evidence that
the donor has another piece of land worth P273,420 in 1977. The legal situation of petitioner-
donor is made worse by the factual finding of the Court of Appeals that the grandfather of the
donees was the owner pro indiviso of one-half of the donated land, the effect of which is to
reduce the value of the donation which can then more easily be taken from the portion of the
estate within the free disposal of petitioner.

Roman Catholic Archbishop of Manila v. Court of Appeals

G.R. No. 77425, June 19, 1991, 198 SCRA 300
Regalado, J.

FACTS: On August 23, 1930, the spouses Eusebio de Castro and Martina Rieta executed a deed
of donation in favor of herein petitioner Roman Catholic Archbishop of Manila covering a parcel
of land located at Cavite. The deed of donation provides that the donee shall not dispose or sell
the property within a period of 100 years from the execution of the deed of donation,
otherwise a violation of such condition would render ipso facto null and void the donation and
the property would revert to the estate of the donors.

However, on June 30, 1980 while within the prohibitive period to dispose, petitioner executed a
deed of absolute sale of the property subject of the donation in favor of the petitioner-spouses
Florencio and Soledad Ignao in consideration of the sum of P114,000.00. Hence, private
respondents filed a complaint for the nullification of the deed of donation. In their answer, the
petitioners filed a motion to dismiss based on the grounds that the action has been barred by
prescription because the complaint was filed four years after the sale, and that the complaint
states no cause of action.

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ISSUE: Whether or not the deed of donation in favor of the Roman Catholic Archbishop of
Manila may be revoked.

HELD: No. The complaint in the case at bar cannot be barred by prescription because the
applicable prescriptive period is not the 4-year period provided in Article 764 of the New Civil
Code, rather it is the 10-year period ordinary prescription shall apply because the deed of
donation provides for the automatic reversion of the property to the original owner in case of
violation of any condition. The Court in the previous case of De Luna v. Abrigo has already
settled such prescriptive period.

However, although the action cannot be dismissed on the ground of prescription, the same
should be dismissed for lack of cause of action.

The cause of action of the private respondents is based on the fact that the petitioner sold the
lot during the 50th year of the prohibitive period of 100 years. Such prohibitive period imposed
by the respondents was unreasonable because applying in analogy Articles 494 and 870 of the
New Civil Code, the donor cannot order a prohibitive period of disposition exceeding 20 years.
As such, the said condition regarding the prohibitive period being contrary to law shall be
considered as null and void pursuant to Art. 727 of the New Civil Code but the donation shall
remain valid and subsisting. Thus, respondents cannot anymore revoke the donation, and the
sale of the property by the petitioner to the Ignao spouses shall be valid and with legal effects.

Eduarte v. Court of Appeals

G.R. No. 105944, February 9, 1996, 253 SCRA 391
Francisco, J.

FACTS: Pedro Calapine was the registered owner of a parcel of land with an area of 12,199
square meters. He executed a deed entitled “Donation InterVivos” ceding one-half portion
thereof to his niece Helen S. Doria. Eventually, the whole parcel of land was ceded to Doria by
Calapine. Doria then donated a portion of 157 square meters to the Calauan Christian Reformed
Church. He also sold, transferred and conveyed unto the spouses Eduarte the parcel of land,
saving the 700 square meters on which Doria’s house was erected. However, Pedro Calapine
filed a complaint against Doria, the Calauan Christian Reformed Church, Inc. and the spouses
Eduarte claiming that his signature to the deed of donation was a forgery. He prays for the
revocation of the donation made in favour of Doria, to declare null and void the deeds of
donation and sale that she had executed in favor of the Calauan Christian Reformed Church,
Inc. and the spouses Eduarte.

ISSUE: Whether or not the petitioners are buyers in bad faith of the donated property.

HELD: No. The rule is well-settled that mere possession cannot defeat the title of a holder of a
registered torrens title to real property. When herein petitioners purchased the subject
property from Helen Doria, the same was already covered by TCT No. T-23205 under the latter's
name. And although Helen Doria's title was fraudulently secured, such fact cannot prejudice the
rights of herein petitioners absent any showing that they had any knowledge or participation in
such irregularity. Thus, they cannot be obliged to look beyond the certificate of title which
appeared to be valid on its fade and sans any annotation or notice of private respondents'
adverse claim. Contrary therefore to the conclusion of respondent Court, petitioners are
purchasers in good faith and for value as they bought the disputed property without notice that
some other person has a right or interest in such property, and paid a full price for the same at
the time of the purchase or before they had notice of the claim or interest of some other
person in the property. And having established beyond doubt that Helen Doria fraudulently
106
secured her title over the disputed property which she subsequently sold to petitioners, Helen
Doria should instead be adjudged liable to private respondents, and not to petitioners as
declared by the trial court and respondent Court of Appeals, for the resulting damages to the
true owner and original plaintiff, Pedro Calapine.
Petition granted.

Quilala v. Alcantara
G.R. No. 132681, December 3, 2001, 371 SCRA 311
Ynares – Santiago, J.

FACTS: On February 20, 1981, Catalina Quilala executed a "Donation of Real Property Inter
Vivos" in favor of Violeta Quilala over a parcel of land. The "Donation of Real Property Inter
Vivos" consists of two pages. The first page contains the deed of donation itself, and is signed
on the bottom portion by Catalina Quilala as donor, Violeta Quilala as donee, and two
instrumental witnesses. The second page contains the Acknowledgment, which states merely
that Catalina Quilala personally appeared before the notary public and acknowledged that the
donation was her free and voluntary act and deed. There appear on the left-hand margin of the
second page the signatures of Catalina Quilala and one of the witnesses, and on the right-hand
margin the signatures of Violeta Quilala and the other witness The deed of donation was
registered with the Register of Deeds and, in due course, TCT No. 17214 was cancelled and TCT
No. 143015 was issued in the name of Violeta Quilala.

On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22, 1984.
Petitioner Ricky Quilala alleges that he is the surviving son of Violeta Quilala. Meanwhile,
respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan Reyes, claiming to be
Catalina's only surviving relatives within the fourth civil degree of consanguinity, executed a
deed of extrajudicial settlement of estate, dividing and adjudicating unto themselves the above-
described property.

On September 13, 1984, respondents instituted against petitioner and Guillermo T. San Pedro,
the Registrar of Deeds of Manila, an action for the declaration of nullity of the donation inter
vivos. The trial court found that the deed of donation, although signed by both Catalina and
Violeta, was acknowledged before a notary public only by the donor, Catalina. Consequently,
there was no acceptance by Violeta of the donation in a public instrument, thus rendering the
donation null and void. On appeal, the Court of Appeals rendered a decision affirming with
modification the decision of the trial court by dismissing the complaint for lack of cause of
action without prejudice to the filing of probate proceedings of Catalina's alleged last will and
testament.

ISSUE: Whether or not the deed of donation is void for lack of acceptance on the part of the
donee Violeta Quilala.

HELD: No. As stated above, the second page of the deed of donation, on which the
Acknowledgment appears, was signed by the donor and one witness on the left-hand margin,
and by the donee and the other witness on the right hand margin. Surely, the requirement that
the contracting parties and their witnesses should sign on the left-hand margin of the
instrument is not absolute. The intendment of the law merely is to ensure that each and every
page of the instrument is authenticated by the parties. The requirement is designed to avoid
the falsification of the contract after the same has already been duly executed by the parties.
Hence, a contracting party affixes his signature on each page of the instrument to certify that
he is agreeing to everything that is written thereon at the time of signing.

107
Simply put, the specification of the location of the signature is merely directory. The fact that
one of the parties signs on the wrong side of the page does not invalidate the document. The
purpose of authenticating the page is served, and the requirement in the above-quoted
provision is deemed substantially complied with.

In the same vein, the lack of an acknowledgment by the donee before the notary public does
not also render the donation null and void. The instrument should be treated in its entirety. It
cannot be considered a private document in part and a public document in another part. The
fact that it was acknowledged before a notary public converts the deed of donation in its
entirety a public instrument. The fact that the donee was not mentioned by the notary public in
the acknowledgment is of no moment. To be sure, it is the conveyance that should be
acknowledged as a free and voluntary act. In any event, the donee signed on the second page,
which contains the Acknowledgment only. Her acceptance, which is explicitly set forth on the
first page of the notarized deed of donation, was made in a public instrument.

Hemedes v. Court of Appeals

G.R. No. 107132, October 8, 1999, 316 SCRA 347
Gonzaga – Reyes, J.

FACTS: Jose Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. Jose Hemedes
executed a document entitled "Donation Inter Vivos With Resolutory Conditions"  whereby he
conveyed ownership over the subject land, together with all its improvements, in favor of his
third wife, Justa Kausapin, subject to the following resolutory conditions that upon her death or
marriage, the DONEE shall revert the said property to anyone of Jose Hemedes children.

On September 27, 1960 a "Deed of Conveyance of Unregistered Real Property by Reversion"

conveying to Maxima Hemedes. She had it titled and mortgage it to R & B Insurance with an
annotation of USUFRUCT favor of her stepmother,Justa Kausapin.  Unable to pay the mortgage,
R & B Insurance extra-judicially foreclosed the property. However, Justa Kausapin executed
another agreement or Kasunduan on May 27, 1971 to his stepson, Enrique D. Hemedes.  He
obtained tax declarations and pay realty taxes from thereon.  The Ministry of Agrarian Reform
Office conducted a cadastral survey and indicated Enrique Hemedes as the owner.

Enrique Hemedes sold the property to Dominium Realty Const. Corp.(Dominium), a sister
company of Asia Brewery.  Asia Brewery started to introduce some improvements already
when R & B insurance informed them that they are the owners of the property where these
improvements are being built.

ISSUE: Whether or not the kasunduan executed by Justa Kausapin in favor of Enrique D.
Hemedes valid.

HELD: The court dismissed the petition and affirmed the decision of the CA.  It held that
Maxima failed to comply with the requirements of Art. 1332 of the civil code and also failed to
repudiate Justa Kausapin’s allegation that she did not execute such a deed and she never
allowed to use the land as security for the loan. It was found that the deed of conveyance to
Maxima was spurious and it follows that the original title she had for the property was also null
and void so as the mortgage to R & B Insurance.  On the other hand, Kausapin executed an
affidavit to affirm the authenticity of the kasundudan in favor of his stepson, Enrique Hemedes
whom she is dependent from for her financial support. 

Siguan v. Lim
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G.R. No. 134685, November 19, 1999, 318 SCRA 725
Davide, Jr., C.J.

FACTS: On 2 July 1991, a Deed of Donation conveying parcels of land and purportedly executed
by LIM on 10 August 1989 in favor of her children, Linde, Ingrid and Neil was registered with the
Office of the Register of Deeds of Cebu City. On 23 June 1993, petitioner filed an accion
pauliana against LIM and her children to rescind the questioned Deed of Donation and to
declare as null and void the new transfer certificates of title issued for the lots covered by the
questioned Deed. Petitioner claimed therein that sometime in July 1991, LIM, through a Deed
of Donation, fraudulently transferred all her real property to her children in bad faith and in
fraud of creditors, including her; that LIM conspired and confederated with her children in
antedating the questioned Deed of Donation, to petitioner's and other creditors' prejudice; and
that LIM, at the time of the fraudulent conveyance, left no sufficient properties to pay her
obligations. The RTC ruled in favor of Siguan and rescinded the Contract, but was reversed by
the CA.

ISSUE: Whether or not the Deed of Donation executed by respondent may be rescinded for
being in fraud of her alleged creditor.

HELD: We resolve these issues in the negative. Art. 1381 of the Civil Code enumerates the
contracts which are rescissible, and among them are "those contracts undertaken in fraud of
creditors when the latter cannot in any other manner collect the claims due them."

The action to rescind contracts in fraud of creditors is known as accion pauliana. For this action
to prosper, the following requisites must be present: (1) the plaintiff asking for rescission has a
credit prior to the alienation, although demandable later; (2) the debtor has made a
subsequent contract conveying a patrimonial benefit to a third person; (3) the creditor has no
other legal remedy to satisfy his claim; (4) the act being impugned is fraudulent; (5) the third
person who received the property conveyed, if it is by onerous title, has been an accomplice in
the fraud. The general rule is that rescission requires the existence of creditors at the time of
the alleged fraudulent alienation, and this must be proved as one of the bases of the judicial
pronouncement setting aside the contract. Without any prior existing debt, there can neither
be injury nor fraud. While it is necessary that the credit of the plaintiff in the accion pauliana
must exist prior to the fraudulent alienation, the date of the judgment enforcing it is
immaterial. Even if the judgment be subsequent to the alienation, it is merely declaratory, with
retroactive effect to the date when the credit was constituted. In the instant case, the alleged
debt of LIM in favor of petitioner was incurred in August 1990, while the deed of donation was
purportedly executed on 10 August 1989. Even assuming arguendo that petitioner became a
creditor of LIM prior to the celebration of the contract of donation, still her action for rescission
would not fare well because the third requisite was not met. Under Article 1381 of the Civil
Code, contracts entered into in fraud of creditors may be rescinded only when the creditors
cannot in any manner collect the claims due them. It is, therefore, "essential that the party
asking for rescission prove that he has exhausted all other legal means to obtain satisfaction of
his claim. 20 Petitioner neither alleged nor proved that she did so. On this score, her action for
the rescission of the questioned deed is not maintainable even if the fraud charged actually did
exist."

Noceda vs. Court of Appeals

G.R. No. 119730, September 2, 1999, 313 SCRA 504
Gonzaga – Reyes, J.

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FACTS: Celestino Arbizo died in 1956 leaving behind a parcel of land having an area of 66,530
square meters. His heirs plaintiff Aurora Directo, defendant Rodolfo Noceda, and Maria Arbizo
extrajudicially settled the partition of the land with Directo getting 11,426 square meters, Noceda
got 13,294 square meters, and Arbizo got 41,810 square meters. Plaintiff Directo donated 625
square meters of her share to defendant Noceda, who is her nephew being the son of her
deceased sister However another extrajudicial settlement-partition was executed. Three fifths of
the said land went to Maria Arbizo while plaintiff Directo and defendant Noceda got only one-
fifth each.

Sometime in 1981, Noceda constructed his house on the land donated to him by Directo. Directo
fenced the portion allotted to her in the extrajudicial settlement, excluding the donated portion,
and constructed thereon three huts. But in 1985, Noceda removed the fence earlier constructed
by Directo, occupied the three huts (3) and fenced the entire land of plaintiff Directo without her
consent. Directo demanded from Noceda to vacate her land, but the latter refused. Hence,
Directo filed a complaint for the recovery of possession and ownership and rescission/annulment
of donation, against defendant Noceda

ISSUE: Whether or not the acts of Noceda constitute ingratitude to warrant revocation of the
donation.

HELD: Yes. It was established that petitioner Noceda occupied not only the portion donated to
him by private respondent Aurora Arbizo-Directo but he also fenced the whole area of Lot C
which belongs to private respondent Directo, thus petitioner's act of occupying the portion
pertaining to private respondent Directo without the latter's knowledge and consent is an act of
usurpation which is an offense against the property of the donor and considered as an act of
ingratitude of a donee against the donor. The law does not require conviction of the donee; it is
enough that the offense be proved in the action for revocation.

The action to revoke by reason of ingratitude prescribes within one (1) year to be counted from
the time (a) the donor had knowledge of the fact; (b) provided that it was possible for him to
bring the action. It is incumbent upon petitioner to show proof of the concurrence of these two
conditions in order that the one (1) year period for bringing the action be considered to have
already prescribed. No competent proof was adduced by petitioner to prove his allegation.

Heirs of Cesario Velasquez v. Court of Appeals

G.R. No. 126996, February 15, 2000, 325 SCRA 552
Gonzaga – Reyes, J.

FACTS: Spouses Leoncia de Guzman and Cornelio Aquino died intestate sometime in 1945 and
1947, respectively and were childless, leaving 6 parcels of land situated in Pangasinan. Leoncia
De Guzman was survived by her sisters Anatalia de Guzman and Tranquilina de Guzman.

Sometime in 1989, the Meneses(heirs of Anatalia de Guzman) filed a complaint for annulment,
partition and damages against the heirs of Cesario Velasquez(son of Tranquilina de Guzman) for
the latters' refusal to partition the properties of the Spouses Aquino.

The complaint alleged that before Leoncia’s death, she told that the documents of donation
and partition which she and her husband earlier executed were not signed by them as it was
not their intention to give away all the properties to Cesario Velasquez because Anatalia de
Guzman who is one of her sisters had several children to support; and that Cesario Velasquez
and his mother allegedly promised to divide the properties equally and to give the plaintiffs
one-half thereof. Plaintiffs further claim that after the death of Leoncia, defendants forcibly
took possession of all the properties and despite plaintiffs' repeated demands for partition,
defendants refused.

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Plaintiffs prayed for the nullity of the documents covering the properties in question since they
do not bear the genuine signatures of the Aquino spouses, to order the partition of the
properties between plaintiffs and defendants in equal shares and to order the defendants to
render an accounting of the produce of the land from the time defendants forcibly took
possession until partition shall have been effected.

Defendants filed their answer with counterclaim alleging that during the lifetime of spouses
Aquino, they had already disposed of their properties in favor of petitioners' predecessors-in-
interest, Cesario Velasquez and Camila de Guzman, and petitioners Anastacia and Jose
Velasquez in the following manner:
(1) The third and sixth parcels were conveyed to defendants' late parents Cesario
Velasquez and Camila de Guzman, by virtue of a Escritura de Donation Propter Nuptias
dated February 15, 1919;
(2) The second parcel was conveyed to defendants' late parents Cesario Velasquez and
Camila de Guzman by virtue of a deed of conveyance dated July 14, 1939;
(3) The first parcel was likewise conveyed to defendants Jose Velasquez and Anastacia
Velasquez by virtue of a deed of conveyance (Donation Intervivos) dated April 10, 1939;
(4) As to the fourth and fifth parcels, the same were owned and possessed by third
parties.

The trial court ruled in favor of the plaintiffs, giving credibility to Santiago Meneses’ testimony;
declaring the Donation Intervivos, the Deed of Sale, the Deed of Donation, the Deed of Sale to
third parties over the 4th and 5th parcels as null and void insofar as 1/2 of the 6 parcels are
concerned legitimately belong to the plaintiffs; and ordering the defendants to pay damages.
Defendants appealed the decision to respondent CA which affirmed the same. A motion for
reconsideration was filed by the petitioners but the same was denied.

ISSUE: Whether or not the petitioners have acquired absolute and exclusive ownership of the
properties in question.

HELD: Yes. Private respondent Santiago Meneses failed to prove the nullity of the Deeds of
Conveyance executed by the Aquino spouses in favor of petitioners and their predecessors-in-
interest Cesario Velasquez and Camila de Guzman since he failed to adduce any evidence to
support his claim other than his bare allegations of its nullity. On the other hand, petitioners
were able to show by documentary evidence that the Aquino spouses during their lifetime
disposed of the four parcels of land subject of the complaint, to wit: (a) Escritura de donation
propter nuptias, (b) Deed of donation inter vivos, (c) Escritura de Compreventa with a P500
consideration: (d) Deed of Conveyance with a consideration of P600 and confirming in the same
Deed the Escritura de donation propter nuptias and Escritura de compraventa
abovementioned. It was reversible error for the court to overlook the probative value of these
notarized documents.

A donation as a mode of acquiring ownership results in an effective transfer of title over the
property from the donor to the donee and the donation is perfected from the moment the
donor knows of the acceptance by the donee. Once a donation is accepted, the donee becomes
the absolute owner of the property donated.

The donation of the first parcel made by the Aquino spouses to petitioners Jose and Anastacia
Velasquez who were then 19 and 10 years old respectively was accepted through their father
Cesario Velasquez, and the acceptance was incorporated in the body of the same deed of
donation and made part of it, and was signed by the donor and the acceptor. Legally speaking
there was delivery and acceptance of the deed, and the donation existed perfectly and

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irrevocably. The donation inter vivos may be revoked only for the reasons provided in Articles
760, 764 and 765 of the Civil Code.

The donation propter nuptias in favor of Cesario Velasquez and Camila de Guzman over the
third and sixth parcels including a portion of the second parcel became the properties of the
spouses Velasquez since 1919. The deed of donation propter nuptias can be revoked by the
non-performance of the marriage and the other causes mentioned in Article 86 of the Family
Code. The alleged reason for the repudiation of the deed, i.e., that the Aquino spouses did not
intend to give away all their properties since Anatalia had several children to support is not one
of the grounds for revocation of donation either inter vivos or propter nuptias, although the
donation might be inofficious.

The Escritura compraventa over another portion of the second parcel and the Deed of
conveyance dated July 14, 1939 in favor of Cesario and Camila Velasquez over the remaining
portion of the second parcel is also valid. In fact in the deed of sale, the Aquino spouses ratified
and confirmed the rights and interests of Cesario Velasquez and Camila de Guzman including
the previous deeds of conveyance over the second parcel in the complaint and such deed of
sale became the basis for the issuance of TCT in the names of Cesario Velasquez and Camila de
Guzman. The best proof of the ownership of the land is the certificate of title and it requires
more than a bare allegation to defeat the face value of TCT which enjoys a legal presumption of
regularity of issuance. Notably, during the lifetime of Cesario Velasquez, he entered into
contracts of mortgage and lease over the property as annotated at the back of the certificate of
title which clearly established that he exercised full ownership and control over the property.

Petitioners were able to establish that these four parcels of land were validly conveyed to them
by the Aquino spouses, hence, they no longer formed part of the conjugal properties of the
spouses at the time of their deaths. As regards the fourth and fifth parcels, petitioners alleged
that these were also conveyed to third persons and they do not claim any right thereto.

In view of the foregoing, the action of partition cannot be maintained. The properties sought to
be partitioned by private respondents have already been delivered to petitioners and therefore
no longer part of the hereditary estate which could be partitioned. No co-ownership exists
between private respondents and petitioners.

Gonzales v. Court of Appeals

G.R. No. 110335, June 18, 2001, 358 SCRA 598
Melo, J.

FACTS: Deceased spouses Ignacio and Marina Gonzales were registered owners of two parcels
of agricultural land. Petitioners are the successors-in-interest or the children and grandchildren
of the deceased spouses. On the other hand, private respondents are the farmers and tenants
of said spouses who have been cultivating the parcels of land even before World War II either
personally or through their predecessors-in-interest. Marina Gonzales died intestate and
appointed as administratix was petitioner Lilia Gonzales. Prior to the partition of said estate,
Ignacio Gonzales executed a Deed of Donation in favor of his grandchildren but was not
registered. When Presidential Decree No. 27 took effect, the landholdings of the said spouses
were placed under Operation Land Transfer. Private respondents were then issued the
corresponding Certificates of Land Transfer. The administratix of the spouses’ estate, Lilia
Gonzales filed an application for retention requesting that their property be excluded from the
Operation Land Transfer. Initially, it was denied but was approved due to the deed of donation.

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ISSUE: Whether or not the property subject of the deed of donation which was not registered
when P.D. No. 27 took effect, should be excluded from the Operation Land Transfer.

HELD: No. Article 749 of the Civil Code provides inter alia that “in order that the donation of an
immovable may be valid, it must be made in a public document, specifying therein the property
donated and the value of the charges which the done must satisfy.” Corollarily, Article 709 of
the same Code explicitly states that “the titles of ownership, or other rights over immovable
property, which are not duly inscribed or annotated in the Registry of Property shall not
prejudice third persons.” From the foregoing provisions, it may be inferred that as between the
parties to a donation of immovable property, all that is required is for said donation to be
contained in a public document. Registration is not necessary for it to be contained in a public
document. It is not necessary for it to be considered valid and effective. However, in order to
bind third persons, the donation must be registered in the Registry of Property. In the case at
bar, the donation executed by Ignacio Gonzales in favor of his grand children, although in
writing and duly notarized, has not been registered in accordance with law. For this reason, it
shall not be binding upon private respondents who did not participate in said deed nor had no
actual knowledge thereof.

Imperial v. Court of Appeals

G.R. No. 112483, October 8, 1999, 316 SCRA 393
Gonzaga – Reyes, J.

FACTS: Leoncio Imperial was the owner of a parcel of land with an area of 32,837 sq. m. and
located in Albay. On July 7, 1951, Leoncio sold the lot for Php 1.00 to his acknowledged natural
son, petitioner in this case. Petitioner and Victor Imperial, adopted son of Leoncio, agreed that
despite the designation of the contract as Deed of Absolute Sale, the transaction is in fact a
Donation. Two years after, Leoncio filed a complaint for the Annulment of Donation. It was
however resolved through a compromise agreement under the following terms and conditions:
(1) Leoncio recognized and agreed the legality and validity of the rights of petitioner; and (2)
petitioner agreed to sell a designated 1,000 sq.m. portion of the donated land.

Leoncio died leaving only two heirs: petitioner and Victor Imperial. On March 8, 1962, Victor
was substituted in the complaint for annulment. He moved for the execution of judgment and it
was granted. After 15 years, Victor died and was survived only by his natural father, Ricardo
Villalon. Ricardo Villalon is a lessee of the portion of the subject property. Villalon died leaving
his heirs, Cesar and Teresa Villalon, respondents in this case. In 1986, respondents filed a
complaint for the annulment of the donation. Allegedly, it impairs the legitime of Victor
Imperial.

ISSUES:
1.) Whether or not the respondents have the right to question the inofficious donation and
seek its reduction.
2.) Whether or not the 30-year prescriptive period is applicable in the reduction of the
inofficious donation.

HELD: 1.) Yes. At the time of the substitution, the judgment approving the compromise
agreement has already been rendered. Victor merely participated in the execution of the
compromise judgment. He was not a party to the compromise agreement. When Victor
substituted Leoncio, he was not deemed to have renounced his legitime. He was therefore not
precluded or estopped from subsequently seeking the reduction. Nor are Victor’s heirs, upon
his death, precluded from doing so. This is in accordance with Articles 772 and 1053 of the new
Civil Code, to wit:
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Article 772. Only those who at the time of the donor’s death have a right to the legitime and
their heirs and successors in interest may ask for the reduction of the inofficious donation xxx.

and

Article 1053. If the heir should die without having accepted or repudiated the inheritance, his
rights shall be transmitted to his heirs.

2.) No. Under Article 1144 of the New Civil Code, actions upon an obligation created by law
must be brought within ten years from the right of action accrues. Thus, the 10-year
prescriptive period applies to the obligation to reduce inofficious donations required under
Article 771 of the New Civil Code to the extent that they impair the legitime of compulsory
heirs.

The cause of action to enforce a legitime accrues upon the death of the donor-decedent.
Clearly so, since only then that the net estate may be ascertained and on which basis, the
legitimes may be determined. It took 24 years since the death of Leoncio to initiate this case.
Thus, the action has long prescribed. Not only has prescription set in, they are also guilty of
estoppel and laches. Fifteen years after the death of Leoncio, Victor died. Ricardo Villalon,
Victor’s sole heir, died four years later. While Victor was alive, he gave no indication of any
interest to contest the donation of his deceased father.

Republic of the Philippines v. Silim

G.R. No. 140487, April 2, 2001, 356 SCRA 1
Kapunan, J.

FACTS: Respondent Spouses Silim and Mangubat donated a 5,600 square meter parcel of land
in favor of the Bureau of Public Schools of the Municipality of Malangas, Zamboanga del Sur. In
the Deed of Donation, the respondents imposed the condition that the said property should be
“used exclusively and forever for school purposes only.” This donation was accepted by the
District Supervisor of the Bureau, through an Affidavit of Acceptance and/or Confirmation of
Donation.

A school building was thereafter constructed on the donated land. However, another school
building that was also supposed to be allocated for the donated parcel of land could not be
released since the government required that it be built upon a 1 hectare parcel of land. By
reason of this, the District Supervisor and the vice-mayor’s wife entered into a Deed of
Exchange whereby the donated lot was exchanged with a bigger lot owned by the latter.
Consequently, the school buildings were constructed on this new school site and the school
building previously erected on the donated land was dismantled and transferred to the new
location. One day, respondents were surprised when he saw the vice-mayor constructing a
house on the donated land.

ISSUES:
1.) Whether or not there was a valid donation despite non-notation of the acceptance in the
Deed of Donation, as required in Article 749.
2.) Whether or not the condition on the donation was violated.

HELD: 1.) Yes. The purpose of the formal requirement for acceptance of a donation is to ensure
that such is duly communicated to the donor. In the case at bar, a school building was
immediately constructed after the donation was executed. Respondents had knowledge of the
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existence of the school building put up on the donated lot. The actual knowledge by
respondents of the construction and existence of the school building fulfilled the legal
requirement that the acceptance of the donation by the donee be communicated to the donor.

2.) No. There was no violation even after the donated lot was exchanged for another one. The
purpose of the donation remains the same, which is for the establishment of a school. The
exclusivity of the purpose was not altered or affected. In fact, the exchange of the lot for a
much bigger one was in furtherance and enhancement of the purpose of the donation. The
acquisition of the bigger lot paved the way for the release of funds for the construction of
Bagong Lipunan school building which could not be accommodated by the limited area of the
donated lot.

Gestopa v. Court of Appeals

G.R. No. 111904, October 5, 2000, 342 SCRA 105
Quisumbing, J.

FACTS: Spouses Danlag were the owners of six parcels of unregistered lands. They executed
three deeds of donation mortis causa, two of which were in favor of Mercedes Danlag-Pilapil.
All deeds contained the reservation of the rights of the donors to amend, cancel or revoke the
donation during their lifetime, and to sell, mortgage, or encumber the properties donated
during the donors' lifetime, if deemed necessary. The spouses then executed another deed of
donation inter vivos in favor of Mercedes which contained the condition that the donors,
Danlag spouses, shall continue to enjoy the fruits of the land during their lifetime and that the
donee enjoy the fruits of the land during their lifetime and that the donee cannot sell or
dispose of the land during the lifetime of the donors without their prior consent and approval.
Consequently, Mercedes caused the transfer of the parcels of land's tax declaration to her
name and paid the taxes on them.

Spouses Danlag sold two parcels of lots to Spouses Agripino and Isabel Gestopa and executed a
deed of revocation recovering the six parcels of land subject to the deed of donation inter vivos.
Mercedes Pilapil filed with the Regional Trial Court against the Spouses Danlag and Gestopa, for
quieting of title over the parcels of land and alleged that the land was donated to her by Diego
Danlag and that she accepted the donation openly and publicly exercised rights of ownership
over the donated properties, and transferred the tax declarations to her name. She also alleged
that the donation inter vivos was coupled with conditions and, according to Mercedes, since its
perfection, she had complied with all of them; that she had not been guilty of any act of
ingratitude; and that Diego Danlag had no legal basis to revoke the donation and then in selling
the two parcels of land to the Gestopa spouses.

In their opposition, the spouses Gestopa and the Danlag averred that the deed of donation was
null and void because it was obtained by Mercedes through machinations and undue influence.
Even assuming it was validly executed, the intention was for the donation to take effect upon
the death of the donor and that the donation was void for it left the donor, Diego Danlag,
without any property at all.

ISSUE: Whether the donation is a donation inter vivos or a donation mortis causa.

HELD: The Court Rules that it was a donation inter vivos. The Court affirmed the Court of
Appeals' decision that the reservation by the donor of lifetime usufruct indicated that he
transferred to Mercedes the ownership over the donated properties; that the right to sell
belonged to the donee, and the donor's right referred to that of merely giving consent; that the
donor changed his intention by donating inter vivos properties already donated mortis causa;
115
that the transfer to Mercedes' name of the tax declarations pertaining to the donated
properties implied that the donation was inter vivos; and that Mercedes did not purchase two
of the six parcels of land donated to her.

In ascertaining the intention of the donor, all of the deed's provisions must be read together.
The granting clause shows that Diego donated the properties out of love and affection for the
donee. This is a mark of a donation inter vivos. Second, the reservation of lifetime usufruct
indicates that the donor intended to transfer the naked ownership over the properties. Third,
the donor reserved sufficient properties for his maintenance in accordance with his standing in
society, indicating that the donor intended to part with the six parcels of land. Lastly, the donee
accepted the donation.

An acceptance clause is a mark that the donation is inter vivos. Acceptance is a requirement for
donations inter vivos. Donations mortis causa, being in the form of a will, are not required to be
accepted by the donees during the donors' lifetime. The right to dispose of the properties
belonged to the donee. The donor's right to give consent was merely intended to protect his
usufructuary interests. The limitation on the right to sell during the donors' lifetime implied that
ownership had passed to the donees and donation was already effective during the donors'
lifetime. Hence, the moment that it was accepted by Mercedes Danlag-Pilapil, ownership of the
properties was transferred.

Sumipat v. Banga
G.R. No. 155810, August 13, 2004
Tinga, J.

FACTS: The spouses Placida Tabo-tabo and Lauro Sumipat acquired three parcels of land. The
couple was childless. Lauro Sumipat, however, sired five illegitimate children. They are the
petitioners herein. Lauro executed a document denominated “Deed of Absolute Transfer
and/or Quit-Claim over Real Properties” in favor of the petitioners. On the document, it appears
that the signature of his wife, Placida which indicates that she gave her marital consent.
Moreover, it was alleged that Lauro executed it when he was already very sick and bedridden
that upon petitioner Lydia’s request, their neighbor Benjamin Rivera lifted the body of Lauro
whereupon Lydia guided his hand in affixing his signature on the document. Lydia left but later
returned on the same day and requested Lauro’s unlettered wife, Placida to sign on the said
document. After Lauro’s death, his wife, Placida and petitioners jointly administered the
properties, 50% of the produce went to his wife. As wife’s share in the produce of the
properties dwindled, she filed a complaint for declaration of partition disclaiming any partition
in the execution of the subject document.

ISSUE: Whether or not the questioned deed by its terms or under the surrounding
circumstances has validly transferred title to the disputed properties to the petitioners.

HELD: No. A perusal of the deed reveals that it is actually a gratuitous disposition of property —
a donation — although Lauro Sumipat imposed upon the petitioners the condition that he and
his wife, Placida, shall be entitled to one-half (1/2) of all the fruits or produce of the parcels of
land for their subsistence and support. Where the deed of donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a separate instrument, is
either not given to the donor or else not noted in the deed of donation and in the separate
acceptance, the donation is null and void. In this case, the donees’ acceptance of the donation
is not manifested either in the deed itself or in a separate document. Hence, the deed as an
instrument of donation is patently void. The Court declared that the deeds of sale questioned
therein are not merely voidable but null and void ab initio as the supposed seller declared
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under oath that she signed the deeds without knowing what they were. The significant
circumstance meant, the Court added, that her consent was not merely marred by vices of
consent so as to make the contracts voidable, but that she had not given her consent at all.

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