1.

Macasaet v Macasaet

On December 10, 1997, the parents filed with the Municipal Trial Court in Cities (MTCC) of Lipa City an ejectment suit against the children.7 Respondents alleged that they were the owners of two (2) parcels of land covered by Transfer Certificate of Title situated at Banay-banay, Lipa City; that by way of a verbal lease agreement, Ismael and Teresita occupied these lots in March 1992 and used them as their residence and the situs of their construction business; and that despite repeated demands, petitioners failed to pay the agreed rental of P500 per week. Petitioners Ismael and Teresita5 Macasaet and Respondents Vicente and Rosario Macasaet are first-degree relatives. Ismael is the son of respondents, and Teresita is his wife. Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents had invited them to construct their residence and business on the subject lots in order that they could all live near one other, employ Marivic (the sister of Ismael), and help in resolving the problems of the family.9 They added that it was the policy of respondents to allot the land they owned as an advance grant of inheritance in favor of their children. The MTCC11 ruled in favor of respondents and ordered petitioners to vacate the premises. It opined that Ismael and Teresita had occupied the lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente and Rosario.12 As their stay was by mere tolerance, petitioners were necessarily bound by an implied promise to vacate the lots upon demand. On appeal, the regional trial court15 (RTC) upheld the findings of the MTCC. However, the RTC allowed respondents to appropriate the building and other improvements introduced by petitioners, after payment of the indemnity provided for by Article 448 in relation to Articles 546 and 548 of the Civil Code. The CA sustained the finding of the two lower courts that Ismael and Teresita had been occupying the subject lots only by the tolerance of Vicente and Rosario.19 Thus, possession of the subject lots by petitioners became illegal upon their receipt of respondents letter to vacate it.20 The CA mo dified the RTC Decision by declaring that Article 448 of the Civil Code was inapplicable. The CA opined that under Article 1678 of the same Code, Ismael and Teresita had the right to be reimbursed for one half of the value of the improvements made. Issue: Whether or not Article 1678 of the Civil Code should apply to the case on the matters of improvements, or is it Article 447 of the Civil Code in relation to the Article 453 and 454 thereof that should apply, if ever to apply the Civil Code? Held: As applied to the present case, accession refers to the right of the owner to everything that is incorporated or attached to the property.60 Accession industrial -- building, planting and sowing on an immovable -- is governed by Articles 445 to 456 of the Civil Code. In view of the unique factual setting of the instant case, the contention of petitioners regarding the inapplicability of Article 1678 deserves

attention. The CA applied the provisions on lease, because it found their possession by mere tolerance comparable with that of a lessee, per the pronouncement in Calubayan v. Pascual. As explained earlier, Ismael and Teresitas possession of the two lots was not by mere tolerance, a circumstance that negates the applicability of Calubayan. On the other hand, when a person builds in good faith on the land of another, the applicable provision is Article 448. This Court has ruled that this provision covers only cases in which the builders, sowers or planters believe themselves to be owners of the land or, at least, to have a claim of title thereto.65 It does not apply when the interest is merely that of a holder, such as a mere tenant, agent or usufructuary.66 From these pronouncements, good faith is identified by the belief that the land is owned; or that -by some title -- one has the right to build, plant, or sow thereon. Based on the aforecited special cases, Article 448 applies to the present factual milieu. The established facts of this case show that respondents fully consented to the improvements introduced by petitioners. In fact, because the children occupied the lots upon their invitation, the parents certainly knew and approved of the construction of the improvements introduced thereon.73 Thus, petitioners may be deemed to have been in good faith when they built the structures on those lots. Consequently, respondents have the right to appropriate -- as their own -- the building and other improvements on the subject lots, but only after (1) refunding the expenses of petitioners or (2) paying the increase in value acquired by the properties by reason thereof. They have the option to oblige petitioners to pay the price of the land, unless its value is considerably more than that of the structures -- in which case, petitioners shall pay reasonable rent. 2. De Guia v CA

Facts: On 12 May 1986, ABEJO4 instituted an action for recovery of possession with damages against DE GUIA. In his complaint, ABEJO alleged that he is the owner of the undivided portion of a property used as a fishpond ("FISHPOND") situated in Meycauayan, Bulacan. He alleged ownership over approximately 39,611 square meters out of the FISHPONDs total area of 79,220 square meters. ABEJO further averred that DE GUIA continues to possess and use the FISHPOND without any contract and without paying rent to ABEJOs damage and prejudice. ABEJO also complained that DE GUIA refuses to surrender ownership and possession of the FISHPOND despite repeated demands to do so after DE GUIAs sublease contract over the FISHPOND had expired. ABEJO asked the trial court to order DE GUIA to vacate an approximate area of 39,611 square meters as well as pay damages. In his Answer, DE GUIA alleged that the complaint does not state a cause of action and has prescribed. He claimed that the FISHPOND was originally owned by Maxima Termulo who died intestate with Primitiva Lejano as her only heir. According to him, ABEJO is not the owner of the entire FISHPOND but the heirs of Primitiva Lejano who authorized

him to possess the entire FISHPOND. He assailed ABEJOs ownership of the undivided portion of the FISHPOND as void and claimed ownership over an undivided half portion of the FISHPOND for himself. DE GUIA sought payment of damages and reimbursement for the improvements he introduced as a builder in good faith. The trial court rendered its decision rendered in favor of the plaintiff and against the defendant. Aggrieved, DE GUIA went to the Court of Appeals insisting the trial court erred in ordering him to vacate and surrender possession of the undivided portion of the FISHPOND and to pay actual damages and attorneys fees. The Court of Appeals found DE GUIAs appeal without merit and affirmed the trial courts decision. The trial court ruled that ABEJO has the right to demand that DE GUIA vacate and surrender an area equivalent to ABEJOs undivided share in the FISHPOND. The trial court explained that DE GUIAs sublease contract expired in 1979 and ABEJO acquired his fathers share in 1983. However, the trial court pointed out that ABEJO failed to present evidence of the judicial or extra-judicial partition of the FISHPOND. The identification of the specific area pertaining to ABEJO and his co-owner is vital in an action to recover possession of real property. The Court of Appeals affirmed the trial courts decision. The Court of Appeals debunked DE GUIAs claim that partition and not recovery of possession was the proper remedy under the circumstances Isuue: whether an action for recovery of possession and turnover of the undivided portion of a common property is proper before partition? Held: Under Article 484 of the Civil Code, "there is coownership whenever the ownership of an undivided thing or right belongs to different persons." A co-owner of an undivided parcel of land is an "owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract."15 On the other hand, there is no co-ownership when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described. Article 487 of the Civil Code provides, "[a]ny one of the co-owners may bring an action in ejectment." This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). Any co-owner may file an action under Article 487 not only against a third person, but also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property.18 In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership. The plaintiff cannot seek exclusion of the defendant from the property because as coowner he has a right of possession. The plaintiff cannot

recover any material or determinate part of the property. It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion. Following the inherent and peculiar features of co-ownership, while ABEJO and DE GUIA have equal shares in the FISHPOND quantitatively speaking, they have the same right in a qualitative sense as coowners. Simply stated, ABEJO and DE GUIA are owners of the whole and over the whole, they exercise the right of dominion. However, they are at the same time individual owners of a portion, which is truly abstract because until there is partition, such portion remains indeterminate or unidentified.21 As co-owners, ABEJO and DE GUIA may jointly exercise the right of dominion over the entire FISHPOND until they partition the FISHPOND by identifying or segregating their respective portions. Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extrajudicial partition is the proper recourse. An action to demand partition is imprescriptible and not subject to laches.22 Each co-owner may demand at any time the partition of the common property unless a co-owner has repudiated the coownership under certain conditions.23 Neither ABEJO nor DE GUIA has repudiated the co-ownership under the conditions set by law. To recapitulate, we rule that a co-owner may file an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property. Thus, judicial or extrajudicial partition is necessary to effect physical division of the FISHPOND between ABEJO and DE GUIA. An action for partition is also the proper forum for accounting the profits received by DE GUIA from the FISHPOND. However, as a necessary consequence of such recognition, ABEJO shall exercise an equal right to possess, use and enjoy the entire FISHPOND. The right of enjoyment by each co-owner is limited by a similar right of the other co-owners. A co-owner cannot devote common property to his exclusive use to the prejudice of the co-ownership.24 Hence, if the subject is a residential house, all the co-owners may live there with their respective families to the extent possible. However, if one coowner alone occupies the entire house without opposition from the other co-owners, and there is no lease agreement, the other co-owners cannot demand the payment of rent. Conversely, if there is an agreement to lease the house, the coowners can demand rent from the co-owner who dwells in the house. The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they fail to exercise any of these options, they must bear the consequences. It would be

unjust to require the co-owner to pay rent after the co-owners by their silence have allowed him to use the property. 3. Bogo-Medellin v CA

Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez, Angelina Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-Melendres (hereafter the heirs), purchased from Feliciana Santillan a parcel of unregistered land with an area of one hectare, 34 ares and 16 centares, located in Barrio Dayhagon, Medellin, Cebu. [3] He took possession of the property and declared it for tax purposes in his name. Prior to the sale, however, the entire length of the land from north to south was already traversed in the middle by railroad tracks owned by petitioner BogoMedellin Milling Co., Inc. (hereafter Bomedco). When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents inherited the land. However, unknown to them, Bomedco was able to have the disputed middle lot which was occupied by the railroad tracks placed in its name in the Cadastral Survey of Medellin, Cebu respondent heirs filed a Complaint for Payment of Compensation and/or Recovery of Possession of Real Property and Damages with Application for Restraining Order/Preliminary Injunction against Bomedco before the Regional Trial Court of Cebu. [7] Respondent heirs alleged that, before she sold the land to Valdez, Sr. in 1935, Santillan granted Bomedco, in 1929, a railroad right of way for a period of 30 years. When Valdez, Sr. acquired the land, he respected the grant. The right of way expired sometime in 1959 but respondent heirs allowed Bomedco to continue using the land because one of them was then an employee of the company. On the other hand, Bomedcos principal defense was that it was the owner and possessor of Cadastral Lot No. 954, having allegedly bought the same from Feliciana Santillan It also contended that plaintiffs claim was already barred by prescription and laches because of Bomedcos open and continuous possession of the property for more than 50 years. In its decision dated November 27, 1991, the trial court [19] rejected Bomedco's defense of ownership on the basis of a prior sale, citing that its evidence a xerox copy of the Deed of Sale dated March 18, 1929 was inadmissible and had no probative value. Nonetheless, the trial court held that Bomedco had been in possession of Cadastral Lot No. 954 in good faith for more than 10 years, thus, it had already acquired ownership of the property through acquisitive prescription under Article 620 of the Civil Code. Respondent heirs elevated the case to the Court of Appeals which found that Bomedco did not acquire ownership over the lot. It consequently reversed the trial court. Bomedco only acquired an easement of right of way by unopposed and continuous use of the land, but not ownership, under Article 620 of the Civil Code. The appellate court further ruled that Bomedcos claim of a prior sale to it by Feliciana Santillan was untrue. Its

possession being in bad faith, the applicable prescriptive period in order to acquire ownership over the land was 30 years under Article 1137 of the Civil Code. Petitioners c laim of ownership through extraordinary acquisitive prescription under Article 1137 of the Civil Code cannot be sustained. There is no dispute that the controversial strip of land has been in the continuous possession of petitioner since 1929. But possession, to constitute the foundation of a prescriptive right, must be possession under a claim of title, that is, it must be adverse. [21] Unless coupled with the element of hostility towards the true owner, possession, however long, will not confer title by prescription. [22] Instead of indicating ownership of the lot, these receipts showed that all petitioner had was possession by virtue of the right of way granted to it. Were it not so and petitioner really owned the land, petitioner would not have consistently used the phrases central railroad right of way and sugar central railroad right of way in its tax declarations until 1963. Certainly an owner would have found no need for these phrases. A person cannot have an easement on his own land, since all the uses of an easement are fully comprehended in his general right of ownership. While it is true that, together with a persons actual and adverse possession of the land, tax declarations constitute strong evidence of ownership of the land occupied by him, [25] this legal precept does not apply in cases where the property is declared to be a mere easement of right of way. An easement or servitude is a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benefit of another thing or person. It exists only when the servient and dominant estates belong to two different owners. It gives the holder of the easement an incorporeal interest on the land but grants no title thereto. Therefore, an acknowledgment of the easement is an admission that the property belongs to another. Having held the property by virtue of an easement, petitioner cannot now assert that its occupancy since 1929 was in the concept of an owner. Neither can it declare that the 30-year period of extraordinary acquisitive prescription started from that year. In the absence of an express grant by the owner, or conduct by petitioner sugar mill from which an adverse claim can be implied, its possession of the lot can only be presumed to have continued in the same character as when it was acquired (that is, it possessed the land only by virtue of the original grant of the easement of right of way), [28] or was by mere license or tolerance of the owners (respondent heirs). [29] It is a fundamental principle of law in this jurisdiction that acts of possessory character executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of the period of prescription. The only time petitioner assumed a legal position adverse to respondents was when it filed a claim over the property in 1965 during the cadastral survey of Medellin. Since then (1965) and until the filing of the complaint for the recovery of the subject land before the RTC

of Cebu in 1989, only 24 years had lapsed. Since the required 30-year extraordinary prescriptive period had not yet been complied with in 1989, petitioner never acquired ownership of the subject land. Neither can petitioner find refuge in the principle of laches. It is not just the lapse of time or delay that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or declined to assert it. Further, there is no absolute rule on what constitutes laches. It is a rule of equity and applied not to penalize neglect or sleeping on ones rights but rather to avoid recognizing a right when to do so would result in a clearly unfair situation. The question of laches is addressed to the sound discretion of the court and each case must be decided according to its particular circumstances. [37] It is the better rule that courts, under the principle of equity, should not be guided or bound strictly by the statute of limitations or the doctrine of laches if wrong or injustice will result. Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years. Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, an easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage; [38] and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way. The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not in any way convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent or nonapparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent. [40] In this case, the presence of railroad tracks for the passage of petitioners trains denotes the existence of an apparent but

discontinuous easement of right of way. And under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, may be acquired only by title. The conferment of a legal easement of right of way under Article 629 is subject to proof of the following: (1) it is surrounded by other immovables and has no adequate outlet to a public highway; (2) (3) payment of proper indemnity; the isolation is not the result of its own acts; and

4) the right of way claimed is at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, the distance from the dominant estate to the highway is the shortest. 4. Shoppers Paradise v Roque

Shoppers Paradise Realty & Development Corporation, represented by its president, Veredigno Atienza, entered into a twenty-five year lease with Dr. Felipe C. Roque, now deceased, over a parcel of land, with an area of two thousand and thirty six (2,036) square meters, situated at Plaza Novaliches, Quezon City. The death of Dr. Roque on 10 February 1994 constrained petitioner to deal with respondent Efren P. Roque, one of the surviving children of the late Dr. Roque, but the negotiations broke down due to some disagreements. In a letter, dated 3 November 1994, respondent advised petitioner "to desist from any attempt to enforce the aforementioned contract of lease and memorandum of agreement". Efren P. Roque alleged that he had long been the absolute owner of the subject property by virtue of a deed of donation inter vivos executed in his favor by his parents, Dr. Felipe Roque and Elisa Roque, on 26 December 1978, and that the late Dr. Felipe Roque had no authority to enter into the assailed agreements with petitioner. Respondent, while he resided in the United States of America, delegated to his father the mere administration of the property. Respondent came to know of the assailed contracts with petitioner only after retiring to the Philippines upon the death of his father. The trial court dismissed the complaint of respondent. Court of Appeals reversed the decision of the trial court and held to be invalid the Contract of Lease and Memorandum of Agreement. While it shared the view expressed by the trial court that a deed of donation would have to be registered in order to bind third persons, the appellate court, however, concluded that petitioner was not a lessee in good faith having had prior knowledge of the donation in favor of respondent, and that such actual knowledge had the effect of registration insofar as petitioner was concerned. Issue: WON Efren Roque should adhere into the contract even if it was made without his knowledge?

Held: No. The existence, albeit unregistered, of the donation in favor of respondent is undisputed. The trial court and the appellate court have not erred in holding that the nonregistration of a deed of donation does not affect its validity. As being itself a mode of acquiring ownership, donation results in an effective transfer of title over the property from the donor to the donee.3 In donations of immovable property, the law requires for its validity that it should be contained in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.4 The Civil Code provides, however, that "titles of ownership, or other rights over immovable property, which are not duly inscribed or annotated in the Registry of Property (now Registry of Land Titles and Deeds) shall not prejudice third persons." A person dealing with registered land may thus safely rely on the correctness of the certificate of title issued therefore, and he is not required to go beyond the certificate to determine the condition of the property7 but, where such party has knowledge of a prior existing interest which is unregistered at the time he acquired a right thereto, his knowledge of that prior unregistered interest would have the effect of registration as regards to him. The appellate court was not without substantial basis when it found petitioner to have had knowledge of the donation at the time it entered into the two agreements with Dr. Roque. During their negotiation, petitioner, through its representatives, was apprised of the fact that the subject property actually belonged to respondent. 5. Naawan v CA

Facts: On April 30, 1988, a certain Guillermo Comayas offered to sell to private respondent-spouses Alfredo and Annabelle Lumo, a house and lot measuring 340 square meters located at Pinikitan, Camaman-an, Cagayan de Oro City. Wanting to buy said house and lot, private respondents made inquiries at the Office of the Register of Deeds of Cagayan de Oro City where the property is located and the Bureau of Lands on the legal status of the vendor's title. They found out that the property was mortgaged for P8,000 to a certain Mrs. Galupo and that the owner's copy of the Certificate of Title to said property was in her possession. Private respondents directed Guillermo Comayas to redeem the property from Galupo at their expense, giving the amount of P10,000 to Comayas for that purpose. In the meantime, on May 17, 1988, even before the release of Galupo's adverse claim, private respondents and Guillermo Comayas, executed a deed of absolute sale. The subject property was allegedly sold for P125,000 but the deed of sale reflected the amount of only P30,000 which was the amount private respondents were ready to pay at the time of the execution of said deed, the balance payable by installment. After obtaining their TCT, private respondents requested the issuance of a new tax declaration certificate in their names. However, they were surprised to learn from the City Assessor's Office that the property was also declared for tax purposes in the name of

petitioner Naawan Community Rural Bank Inc. Apparently, on February 7, 1983, Guillermo Comayas obtained a P15,000 loan from petitioner Bank using the subject property as security. At the time said contract of mortgage was entered into, the subject property was then an unregistered parcel of residential land, tax-declared in the name of a certain Sergio A. Balibay while the residential one-storey house was taxdeclared in the name of Comayas. Balibay executed a special power of attorney authorizing Comayas to borrow money and use the subject lot as security. But the Deed of Real Estate Mortgage and the Special Power of Attorney were recorded in the registration book of the Province of Misamis Oriental, not in the registration book of Cagayan de Oro City. For failure of Comayas to pay, the real estate mortgage was foreclosed and the subject property sold at a public auction to the mortgagee Naawan Community Rural Bank as the highest bidder in the amount By virtue of said deed, petitioner Bank obtained a tax declaration for the subject house and lot. Thereafter, petitioner Bank instituted an action for ejectment against Comayas before the MTCC which decided in its favor. On appeal, the Regional Trial Court affirmed the decision of the MTCC in a decision dated April 13, 1988. However, when the writ was served, the property was no longer occupied by Comayas but herein private respondents, the spouses Lumo who had, as earlier mentioned, bought it from Comayas After trial, the Regional Trial Court rendered a decision declaring private respondents as purchasers for value and in good faith, and consequently declaring them as the absolute owners and possessors of the subject house and lot. Petitioner appealed to the Court of Appeals which in turn affirmed the trial court's decision. Unfortunately, the subject property was still untitled when it was already acquired by petitioner bank by virtue of a final deed of conveyance. On the other hand, when private respondents purchased the same property, it was covered by the Torrens System. Moreover, the issuance of a certificate of title had the effect of relieving the land of all claims except those noted thereon. Accordingly, private respondents, in dealing with the subject registered land, were not required by law to go beyond the register to determine the legal condition of the property. They were only charged with notice of such burdens on the property as were noted on the register or the certificate of title. To have required them to do more would have been to defeat the primary object of the Torrens System which is to make the Torrens Title indefeasible and valid against the whole world. Issue: WON Lumo spouses can be considered as buyers in good faith? Held: Yes. The rights created by the above-stated statute of course do not and cannot accrue under an inscription in bad faith. Mere registration of title in case of double sale is not enough; good faith must concur with the registration. It is a well-known rule in this jurisdiction that persons dealing with registered land have the legal right to rely on the face of the

Torrens Certificate of Title and to dispense with the need to inquire further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry. Before private respondents bought the subject property from Guillermo Comayas, inquiries were made with the Registry of Deeds and the Bureau of Lands regarding the status of the vendor's title. No liens or encumbrances were found to have been annotated on the certificate of title. Neither were private respondents aware of any adverse claim or lien on the property other than the adverse claim of a certain Geneva Galupo to whom Guillermo Comayas had mortgaged the subject property. But, as already mentioned, the claim of Galupo was eventually settled and the adverse claim previously annotated on the title cancelled. Thus, having made the necessary inquiries, private respondents did not have to go beyond the certificate of title. Otherwise, the efficacy and conclusiveness of the Torrens Certificate of Title would be rendered futile and nugatory. Considering therefore that private respondents exercised the diligence required by law in ascertaining the legal status of the Torrens title of Guillermo Comayas over the subject property and found no flaws therein, they should be considered as innocent purchasers for value and in good faith.