G.R. No.

L-48050 October 10, 1994

FELICIDAD JAVIER, petitioner,
vs.
HON. REGINO T. VERIDIANO II, Presiding Judge, Branch I, Court of First Instance of Zambales and REINO
ROSETE, respondents.
Cesar E. Palma for petitioner.
Saturnino V. Bactad for private respondent.
BELLOSILLO, J.:

Petitioner Felicidad Javier questions before us the order of a regional trial court citing the final decision
of the city court previously dismissing her complaint for forcible entry, and on the basis thereof,
dismissed her petition to quiet title on the ground of res judicata. We summon the time-honored
remedies accion interdictal, accion publiciana and accion reivindicatoria or accion de reivindicacion to
resolve the issues presented in the petition.
It appears that on 25 January 1963, petitioner filed a Miscellaneous Sales Application for Lot No. 1641,
Ts-308 of the Olongapo Townsite Subdivision, Lower Kalaklan, Olongapo City, with the District Land
Officer, Bureau of Lands, Olongapo City. Sometime in December 1970, alleging that she was forcibly
dispossessed of a portion of the land by a certain Ben Babol, she instituted a complaint for forcible entry
before the City Court of Olongapo City, docketed as Civil Case No. 926, stating in pars. 2 and 3 therein
that
. . . plaintiff is the true, lawful and in actual, prior physical possession of a certain parcel of land situated
at Lower Kalaklan, City of Olongapo, said lot being designated as Lot No. 1641, Ts-308 of the Olongapo
Townsite Subdivision since 1961 and up to the present time, until the day and incidents hereinafter
narrated. . . . Sometime on December 12, 1970, the defendant, without express consent of plaintiff and
without lawful authority, through scheme, strategy and stealth, forcibly entered a portion on the
southwestern part of Lot No. 1641, Ts-308, with the assistance of hired helpers, started construction of
riprap along the Kalaklan River perimeter of said portion of land; said entry was further augmented by
removing plaintiff's chain link, fence with galvanized iron posts embedded in concrete, likewise
destroying plants introduced by plaintiff by removing existing BL (Bureau of Lands) monuments thereon,
and by these actions, defendant started exercising illegal possession of said portion of land which
contains an area of 200 square meters, more or less. 1
On 7 November 1972 the City Court of Olongapo City, Br. 4, 2 dismissed Civil Case No. 926 on the ground
that "it appears to the Court that the Bureau of Lands has considered the area in question to be outside
Lot 1641 of the plaintiff. . . ."3 The Decision of the City Court of Olongapo City became final and
executory on 30 April 1973 when the then Court of First Instance of Zambales and Olongapo City, Br.
3, 4 dismissed the appeal and affirmed the findings and conclusions of the City Court holding that
appellant (herein petitioner) failed to give sufficient evidence to prove that the area in question was
within the boundaries of Lot No. 1641. 5
Subsequently, on 17 December 1973, petitioner was granted Miscellaneous Sales Patent No. 5548 and
issued Original Certificate of Title No. P-3259 covering Lot No. 1641. Meanwhile, Ben Babol who was the
defendant and appellee in the complaint for forcible entry had sold the property he was occupying,
including the portion of about 200 square meters in question, to a certain Reino Rosete. Thus petitioner
demanded the surrender of the same area in dispute from Reino Rosete who repeatedly refused to
comply with the demand.
On 29 June 1977, or after about four (4) years from the finality of the dismissal of Civil Case No. 926,
petitioner instituted a complaint for quieting of title and recovery of possession with damages against
Ben Babol and Reino Rosete before the then Court of First Instance of Zambales and Olongapo City,
docketed as Civil Case No. 2203-0, alleging in pars. 2 and 3 therein that
. . . plaintiff is the absolute owner in fee simple of a parcel of land identified as Lot No. 1641, Ts-308,
Olongapo Townsite Subdivision . . . covered by Original Certificate of Title No. P-3259, issued by the
Register of Deeds for the province of Zambales. . . . Sometime in December,
1970, and until present, defendants, relying on an application filed on December 23, 1969, with the
Bureau of Lands, however have squatted, illegally occupied and unlawfully possessed the southwestern
portion of plaintiff's above-described property of about 200 square meters, then by defendant BEN
BABOL and now by defendant REINO ROSETE, the former having sold the entirety of his property to the
latter, including the portion in question. . . . 6
Instead of filing a responsive pleading, therein defendant Reino Rosete (private respondent herein)
moved to dismiss the complaint on the ground of res judicata. Defendant Ben Babol did not file any
pleading.
In its Order dated 27 January 1978, 7 the then Court of First Instance of Zambales, Br. 1, 8 sustained the
argument of Rosete and granted his motion to dismiss. Thereafter, petitioner's motion for
reconsideration was denied. 9 Hence, this petition for review on certiorari.
Petitioner 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 entry, which had long become final and
executory, and her subsequent petition for quieting of title. She argues that private respondent Reino
Rosete, who invokes the defense or res judicata, was never impleaded in the forcible entry case, which
is an action in personam; neither was he a purchaser pendente lite who, perhaps, could have validly
invoked the defense of res judicata. With regard to the cause of action, she 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.
Private respondent however submits that there is identity of parties in the two cases since he is a
successor in interest by title of the defendant in the first case after the commencement of the first
action. On the issue of identity of causes of action, he simply states that neither of the two cases, i.e.,
the complaint for forcible entry and the subsequent petition for quieting of title, alleges a cause of
action. Thus, private respondent continues, both cases have to be dismissed.
Time and again it has been said that 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 parties, of subject matter
and of causes of action. 10 The presence of the first three requirements and the identity of subject
matter in the fourth requirement are not disputed. Hence, the only issues remaining are whether as
between Civil Case No. 926 and Civil Case No. 2203-0 there is identity of parties and of causes of action
which would bar the institution of Civil Case No. 2203-0.
Petitioner'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. 11 It is fundamental that the application of res judicata may not be evaded by simply
including additional parties in a subsequent litigation. In fact we have said that there is still identity of
parties although in the second action there is one party who was not joined in the first action, if it
appears that such party is not
a necessary party either in the first or second action, 12 or is a mere nominal party. 13 Thus, Sec. 49,
par. (b), Rule 39, Rules of Court, provides that ". . . the judgment or order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive
between the parties and their successors in interest by title subsequent to the commencement of the
action or special proceeding, litigating for the same thing and under the same title and in the same
capacity."
In the case at bench, it is evident that private respondent Reino Rosete is a successor in interest of Ben
Babol by title subsequent to the commencement and termination of the first action. Hence, there is
actual, if not substantial, identity of the parties between the two actions. But, there is merit in
petitioner's argument that there is no identity of causes of action between Civil Case
No. 926 and Civil Case No. 2203-0.
Civil Case No. 926 is a complaint for forcible entry, where what is at issue is prior possession, regardless
of who has lawful title over the disputed property. 14 Thus, "[t]he 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." 15 And, 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 affect
the ownership of the land or building. 16
On the other hand, Civil Case No. 2203-0 while inaccurately captioned as an action for "Quieting of Title
and Recovery of Possession with Damages" is in reality an action to recover a parcel of land or an accion
reivindicatoria under Art. 434 17 of the Civil Code, and should be distinguished from Civil Case No. 926,
which is an accion interdictal. From the averments of the complaint in Civil Case No. 2203-0, plaintiff
therein (petitioner herein) clearly sets up title to herself and prays that respondent Rosete be ejected
from the disputed land and that she be declared the owner and given possession thereof. Certainly, the
allegations partake of the nature of an accion reivindicatoria. 18
The doctrine in Emilia v. Bado, 19, decided more than twenty-five years ago, is still good law and has
preserved the age-old remedies available under existing laws and jurisprudence to recover possession of
real property, namely 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; 20 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 thejus
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. 21 It is different from accion
interdictal or accion publicianawhere plaintiff merely alleges proof of a better right to possess without
claim of title. 22
In Civil Case No. 926 petitioner 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, specifically praying that she be declared the rightful owner and given possession of
the disputed portion. Hence, in Civil Case No. 926 petitioner merely alleged that she was "the true,
lawful (possessor) and in actual, prior physical possession" of the subject parcel of land, whereas in Civil
Case
No. 2203-0 she asserted that she was "the absolute owner in fee simple" of the parcel of land "covered
by Original Transfer Certificate of Title No. P-3259." The complaint in Civil Case No. 2203-0 definitely
raises the question of ownership and clearly gives defendants therein notice of plaintiff's claim of
exclusive and absolute ownership, including the right to possess which is an elemental attribute of such
ownership. Thus, this Court has ruled that a judgment in forcible entry or detainer case disposes of no
other issue than possession and declares only who has the right of possession, but by no means
constitutes a bar to an action for determination of who has the right or title of ownership. 23
And, applying the ruling of the Court En Banc in Quimpo v. De la Victoria, 24 even if we treat Civil Case
No. 2203-0 as a petition to quiet title, as its caption suggests, still it has a cause of action different from
that for ejectment. Consequently, there being no identity of causes of action between Civil Case No. 926
and Civil Case No. 2203-0, the prior complaint for ejectment cannot bar the subsequent action for
recovery, or petition to quiet title.
WHEREFORE, the petition is GRANTED. The Order dated 27 January 1978 of the then Court of First
Instance of Zambales, Br. I, with station in Olongapo City, dismissing Civil Case No. 2203-0, and its
subsequent Order denying reconsideration of the dismissal are REVERSED and SET ASIDE.
The Clerk of Court is directed to remand the records immediately to the court of a quo and the latter to
proceed with the trial of Civil Case No. 2203-0 with deliberate dispatch. This decision is immediately
executory.
SO ORDERED.

SPOUSES WARLITO BUSTOS and HERMINIA REYES-BUSTOS, petitioners, vs. COURT OF APPEALS,
SPOUSES VENANCIO VIRAY and CECILIA NUNGA-VIRAY, respondents.
D E C I S I O N
PARDO, J.:
The case before the Court is an appeal via certiorari seeking to set aside the decision of the Court of
Appeals[1] modifying that of the Regional Trial Court, Pampanga, Macabebe, Branch 55[2] and the
resolution denying reconsideration.[3]
Paulino Fajardo died intestate on April 2, 1957.[4] 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[5] of the estate of Paulino
Fajardo. On the same date, Manuela sold her share to Moses[6] G. Mendoza, husband of Beatriz by
deed of absolute sale.[7] The description of the property reads as follows:
A parcel of an irrigated riceland located in the barrio of San Isidro, Masantol, Pampanga. Bounded on
the North, by Paulino Fajardo; on the East, by Paulino Fajardo; on the South, by Eleuterio Bautista; and
on the West, by Paulino Guintu. Containing an area of 5,253 sq. mts., more or less. Declared under Tax
Declaration No. 3029 in the sum of P710.00.
At the time of the sale, there was no cadastral survey in Masantol, Pampanga. Later, the cadastre was
conducted, and the property involved in the partition case were specified as Lots 280, 283, 284, 1000-A
and 1000-B. The share of Manuela, which was sold to Moses, includes Lot 284 of the Masantol Cadastre
and Lot 284 was subdivided into Lots 284-A and 284-B.
Trinidad was in physical possession of the land. She refused to surrender the land to her brother-in-law
Moses G. Mendoza, despite several demands.
On September 3, 1971, Moses filed with the Court of First Instance, Pampanga a complaint for partition
claiming the one fourth () share of Manuela which was sold to him.[8]
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, the dispositive portion of which provides:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against
the defendants, and hereby orders
1. The division and partition of the parcel of land identified and described earlier with the aid and
assistance of a qualified surveyor, segregating therefrom an area equivalent to portion to be taken
from the vacant right eastern portion which is toward the national road the same to be determined by
one (or the said surveyor) standing on the subject land facing the municipal road, at the expense of the
plaintiffs;
2. The said portion segregated shall be a fixed portion, described by metes and bounds, and shall be
adjudicated and assigned to the plaintiffs;
3. In case of disagreement as to where the said right eastern portion should be taken, a commission is
hereby constituted, and the OIC-Clerk of Court is hereby appointed chairman, and the OIC-Branch Clerk
of Court of Branches 54 and 55 of this Court are hereby appointed members, to carry out the orders
contained in the foregoing first two paragraphs;
4. The defendants to pay the plaintiffs the sum of P500.00 as attorneys fees, and to pay the costs of
the proceedings.
SO ORDERED.[9]
On September 13, 1991, Moses sold the subject land to spouses Warlito Bustos and Herminia Reyes-
Bustos.
In the meantime, on November 6, 1989, spouses Venancio Viray and Cecilia Nunga-Viray, buyers of Lucio
Ignacios share of the property, filed with the Municipal Circuit Trial Court, Macabebe-Masantol,
Pampanga an action for unlawful detainer[10] 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 were stayed when spouses Bustos filed with the Regional
Trial Court, Pampanga, Macabebe, Branch 55,[11] a petition for certiorari, prohibition and injunction.
On December 18, 1992, the regional trial court rendered a decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, this case, is as it is hereby, dismissed. The preliminary injunction is
ordered dissolved and the petitioners and Meridian Assurance Corporation are hereby ordered jointly
and severally, to pay the private respondents the sum of P20,000.00 by way of litigation expenses and
attorneys fees, and to pay the cost of the proceedings.[12]
In time, the spouses Bustos appealed the decision to the Court of Appeals.[13]
On February 27, 1989, Lucio Fajardo Ignacio also appealed the decision to the Court of Appeals.[14]
Upon motion for consolidation of the petitioners, on August 9, 1993, the Court of Appeals resolved to
consolidate CA-G. R. SP No. 30369 and CA-G. R. CV No. 37606.[15]
On August 26, 1994, the Court of Appeals promulgated its decision in the two cases, the dispositive
portion of which provides:
WHEREFORE, in view of all the foregoing, consolidated judgment is hereby rendered for both CA-G. R.
SP No. 37607 and CA-G. R. SP NO. 30369 as follows:
1. The appeal docketed as CA-G. R. CV No. 37607 is dismissed; Moses Mendoza is declared as owner of
the undivided share previously owned by Manuela Fajardo; and the decision of the Regional Trial
Court dated February 8, 1989 in Civil Case No. 83-0005-M is affirmed but MODIFIED as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against
the defendants, and hereby orders
1. A relocation survey to be conducted (at the expense of the plaintiffs) to retrace the land subject of
the deed of sale dated September 30, 1964 between Manuela Fajardo and Moses Mendoza;
2. The division and partition of said relocated land by segregating therefrom an area equivalent to
portion to be taken from the vacant right eastern portion which is toward the national road, the same to
be determined by one standing on the subject land facing the municipal road, at the expense of the
plaintiff-appellees;
3. The said portion segregated shall be a fixed portion, described by metes and bounds, and shall be
adjudicated and assigned to the plaintiffs-appellees;
4. In case of disagreement as to where the said right eastern portion should be taken, a Commission is
hereby constituted, with the OIC/present Clerk of Court as Chairman, and the OIC/present Branch Clerks
of Court of Branches 54 and 55 of the Court (RTC) as members, to carry out and implement the Orders
contained in the second and third paragraphs hereof;
5. The defendants are ordered to pay the plaintiffs the sum of P500.00 as attorneys fees, and to pay
the costs of the proceedings.
2. The dismissal of Civil Case No. 92-0421-M is AFFIRMED but the reasons for its dismissal shall be
effective only as to the issue of possession. CA-G. R. SP No. 30369 is DISMISSED.
3. No pronouncement as to costs.
SO ORDERED.[16]
On September 9, 1994, petitioners filed a motion for reconsideration;[17] however, on June 21, 1995,
the Court of Appeals denied the motion.[18]
Hence, this petition.[19]
The issue raised is whether petitioners could be ejected from what is now their own land.
The petition is meritorious.
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.
Admittedly, the decision in the ejectment case is final and executory. However, the ministerial duty of
the court to order execution of a final and executory judgment admits of exceptions. In Lipana vs.
Development Bank of Rizal,[20] the Supreme Court reiterated the rule once a decision becomes final
and executory, it is the ministerial duty of the court to order its execution, admits of certain exceptions
as in cases of special and exceptional nature where it becomes imperative in the higher interest of
justice to direct the suspension of its execution (Vecine v. Geronimo, 59 O. G. 579); whenever it is
necessary to accomplish the aims of justice (Pascual v. Tan, 85 Phil. 164); or when certain facts and
circumstances transpired after the judgment became final which could render the execution of the
judgment unjust (Cabrias v. Adil, 135 SCRA 354).
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 of the property.[21] One of the essential attributes of
ownership is possession. It follows that as owners of the subject property, petitioners are entitled to
possession of the same. An owner who cannot exercise the seven (7) juses or attributes of
ownership--the right to possess, to use and enjoy, to abuse or consume, to accessories, to dispose or
alienate, to recover or vindicate and to the fruits--is a crippled owner.[22]
WHEREFORE, we GRANT the petition. We SET ASIDE the decision of the Court of Appeals in CA G. R. SP
No. 30609 for being moot and academic. We AFFIRM the decision of the Court of Appeals in CA G. R. CV
No. 37606.
No costs.
SO ORDERED.
HEIRS OF ROMAN SORIANO, petitioners, vs. THE HONORABLE COURT OF APPEALS, SPOUSES BRAULIO
ABALOS and AQUILINA ABALOS,respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
May a winning party in a land registration case effectively eject the possessor thereof, whose security of
tenure rights are still pending determination before the DARAB?
The instant petition for certiorari seeks to set aside the Decision[1] dated September 20, 1996 of the
Court of Appeals in CA-G.R. SP No. 34930 as well as its Resolution[2] dated January 15, 1997, denying
petitioners Motion for Reconsideration.
We quote the undisputed facts as narrated by the Court of Appeals, to wit
The property subject of this case is a parcel of land containing an area of 24,550 square meters, more or
less, located in Lingayen, Pangasinan, and particularly described as follows:
A parcel of land (Nipa with an area of 8,410 square meters; fishpond with an area of 14,000 square
meters; and residential land with an area of 1,740 square meters, more or less. Bounded on the N, by
river and Filemon Anselmo; on the South by Alejandro Soriano and Filemon Anselmo; and on the West
by Fortunata Soriano.
Originally owned by Adriano Soriano until his death in 1947, the above-described property passed on to
his heirs who leased the same to spouses David de Vera and Consuelo Villasista for a period of fifteen
(15) years beginning July 1, 1967 with Roman Soriano, one of the children of Adriano Soriano, acting as
caretaker of the property during the period of the lease. After executing an extra judicial settlement
among themselves, the heirs of Adriano Soriano subsequently subdivided the property into two (2) lots,
Lot No. 60052 and Lot No. 8459. Lot No. 60052 was assigned to Lourdes, Candido and the heirs of
Dionisia while Lot No. 8459 was assigned to Francisca, Librada, Elocadio and Roman. In 1971, Lot No.
60052 was sold by Lourdes, Candido and the heirs of Dionisia to petitioner spouses Braulio and Aquilina
Abalos (hereinafter referred to as petitioners), while, Elocadio, Francisca and Librada sold their three-
fourths shares in Lot No. 8459 also to petitioners.
On March 14, 1968, the de Vera spouses ousted Roman Soriano as caretaker and appointed Isidro
Verzosa and Vidal Verzosa as his substitutes. Thereafter, Roman Soriano filed CAR Case No. 1724-P-
68 for reinstatement and reliquidation against the de Vera spouses. The agrarian court authorized the
ejectment of Roman Soriano but on appeal, the decision was reversed by the Court of Appeals, which
decision became final and executory. However, prior to the execution of the said decision, 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 lease in 1982. In an Order dated December 22, 1972, the
post-decisional agreement was approved by the agrarian court.
On August 16, 1976, petitioners filed with the Regional Trial Court of Lingayen, Pangasinan, Branch 38,
an application for registration of title over Lot No. 60052 and three-fourths (3/4) pro-indiviso of Lot No.
8459, docketed as LRC Case No. N-3405. Said application for registration was granted by the trial court,
acting as a land registration court, per Decision dated June 27, 1983. On appeal, the Court of Appeals
affirmed the decision of the land registration court. The petition for review filed with the Supreme
Court by Roman Soriano docketed as G.R. 70842, was denied for lack of merit and entry of judgment
was entered on December 16, 1985.
Meanwhile, it appears that on July 15, 1983, a day after the promulgation of the land registration courts
decision, Roman Soriano, together with Elocadio and Librada Soriano, filed before the Regional Trial
Court of Lingayen, Branch 37, and against petitioners, an action for annulment of document and/or
redemption, ownership and damages, docketed as Civil Case No. 159568 (sic; should be
15958). Petitioners filed a motion to dismiss on the ground of res judicata, pendency of another action,
laches, misjoinder of parties and lack of jurisdiction, which was denied by the trial court.
Thereafter, on August 22, 1984, or eleven (11) years after the approval of the post-decisional agreement
between Roman Soriano and the spouses de Vera in CAR Case No. 1724-P-68 for reinstatement and
reliquidation, petitioners filed with the agrarian court a motion for execution of said post-decisional
agreement which allowed Roman Soriano to sub-lease the property. The motion prayed that petitioners
be placed in possession of the subject property, jointly with Roman Soriano, and to levy so much of
Romans property to answer for the use and occupation by Soriano of 6/7 share of the property. On
October 25, 1984, Roman Soriano filed a motion to suspend hearing on the rental demanded by
petitioners, which, however, was denied by the agrarian court. The agrarian court likewise authorized
the substitution of the de Vera spouses by petitioners. Sorianos motion for reconsideration was also
denied, prompting Soriano to file a petition for certiorari with the Court of Appeals.
In the meantime, Roman Soriano died on December 11, 1985. Thus, the complaint in Civil Case No.
159568 (sic) for annulment of document and/or redemption, ownership and damages, was amended to
substitute Sorianos heirs, herein private respondents, as party-plaintiffs. The complaint was again
amended to include Juanito Ulanday as party-defendant for having allegedly purchased part of the
disputed property from petitioners. On motion of petitioners, the re-amended complaint was dismissed
by the trial court on the ground that the re-amended complaint altered the cause of action. Upon
reconsideration, the dismissal was set aside and petitioners were ordered to file their Answer, in view of
which petitioners filed a petition for certiorari and prohibition with the Court of Appeals, docketed
as C.A. GR SP No. 22149.
On April 25, 1990, the Court of Appeals denied the petition filed by Roman Soriano (substituted by
private respondents) impugning the denial of their motion to suspend hearing on the rental demanded
by petitioners, and authorizing the substitution of the de Vera spouses by petitioners, on the ground
that no grave abuse of discretion was committed by the agrarian court. Thus, private respondents filed
a petition for review on certiorari with the Supreme Court, docketed as G.R. 93401.
Meanwhile, on December 7, 1990, the Court of Appeals in C.A. GR SP No. 22149, also denied the
petition for certiorari and prohibition filed by petitioners, ruling that the land registration court
committed no error when it refused to adhere to the rule of res judicata. Petitioners then filed with the
Supreme Court a petition for review on certiorari, docketed as G.R. 99843.
On June 26, 1991, the Supreme Court promulgated its decision in G.R. 93401, and granted the petition
filed by private respondents. Thus, the decision of the Court of Appeals denying the petition of private
respondents was set aside, and the motion for execution filed by petitioners in CAR Case No. 1724-P-
48 was denied.
On June 22, 1993, the Supreme Court, in G.R. 99843, reversed and set aside the denial of the Court of
Appeals in C.A. GR SP No. 22149, and consequently, Civil Case No. 15958 for annulment of document
and/or redemption, ownership and damages, was ordered dismissed.
On October 18, 1993, private respondents filed with the Department of Agrarian Adjudication
Board (sic), a complaint against petitioners for Security of Tenure with prayer for Status Quo Order and
Preliminary Injunction docketed as DARAB Case No. 528-P-93.
Meanwhile, it appears that the decision of the land registration court in LRC Case No. N-3405 was
partially executed with the creation of a Committee on Partition per Order dated March 25, 1987. On
July 27, 1988, the land registration court approved the partition of Lot No. 8459, with Lot No. 8459-A
assigned to private respondent, and Lot No. 8459-B assigned to petitioners. For Lot No. 60052, O.C.T.
No. 22670 was issued in the name of petitioners; for Lot No. 8459-B, O.C.T. No. 22687 was issued, also
in the name of petitioner; and for Lot No. 8459-A, O.C.T. No. 22686 was issued in the name of Roman
Soriano. Dissatisfied with said partition, private respondents appealed to the Court of Appeals,
docketed as CA G.R. SP No. 119497. The appellate court affirmed the partition but reversed the order of
the land registration court directing the issuance of a writ of possession on the ground of pendency
of Civil Case No. 15958.
On November 15, 1993, the trial court in compliance with the decision of the Supreme Court in G.R. No.
99843, dismissed Civil Case No. 15958, in view of which, petitioner, on November 25, 1993, in LRC Case
No. N-3405, moved for the issuance of an alias writ of execution and/or writ of possession to place them
in possession of Lot No. 60052 and Lot No. 8459-B. Per Resolution dated January 21, 1994, said motion
was held in abeyance by the land registration court until and after DARAB Case No. 528-P-93 for security
of tenure with prayer for status quo, has been resolved.
Their motion for reconsideration having been denied on April 5, 1984, petitioners interposed an appeal
to the Supreme Court, docketed as G.R. 115073. In a Resolution dated July 27, 1994 issued by the
Supreme Court, petitioners appeal, which was treated as a petition for certiorari, was referred to this
Court [of Appeals] for determination and disposition.[3]
The Court of Appeals annulled and set aside the Resolution of the land registration court and ordered
instead the issuance of the corresponding writ of possession in favor of private respondents. With the
denial of their Motion for Reconsideration, petitioners are now before us raising the following grounds:
1. THE DECISION AND RESOLUTION OF THE RESPONDENT COURT OF APPEALS ARE CONTRARY TO THE
PROVISIONS OF THE AGRARIAN REFORM LAWS AND JURISPRUDENCE ON THE SECURITY OF TENURE OF
TENANT-CARETAKER.
2. THE DECISION AND RESOLUTION OF THE RESPONDENT COURT OF APPEALS ARE VIOLATIVE OF THE
PROVISION ON RIGHT TO DUE PROCESS.
3. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO
THE PETITION CONSIDERING THAT PRIVATE RESPONDENTS HAD EARLIER PERFECTED AN APPEAL OF THE
RESOLUTION SUBJECT OF THEIR PETITION.[4]
Possession and ownership are distinct legal concepts. There is ownership 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, among which are the right to enjoy the
thing owned and the right to exclude other persons from possession thereof. On the other hand,
possession is defined as the holding of a thing or 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.[5] A person may be declared
owner but he may not be entitled to possession. The possession may be in the hands of another either
as a lessee or a tenant. A person may have improvements thereon of which he may not be deprived
without due hearing. He may have other valid defenses to resist surrender of possession. A judgment
for ownership, therefore, does not necessarily include possession as a necessary incident.[6]
There is no dispute that private respondents (petitioners below) title over the land under litigation has
been confirmed with finality. As explained above, however, such declaration pertains only to ownership
and does not automatically include possession, especially so in the instant case where there is a third
party occupying the said parcel of land, allegedly in the concept of an agricultural tenant.
While the issue of ownership of the subject land has been laid to rest in the final judgment of the land
registration court, the right of possession thereof is, as yet, controverted. This is precisely what is put in
issue in the security of tenure case filed by petitioners (private respondents below) before the DARAB.
It is important to note that although private respondents have been declared titled owners of the
subject land, the exercise of their rights of ownership are subject to limitations that may be imposed by
law.[7] The Tenancy Act provides one such limitation. 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 and deprivation of their landholdings is tantamount to deprivation of their only means of
livelihood.[8] The exercise of the right of ownership, then, yields to the exercise of the rights of an
agricultural tenant.
However, petitioners status as tenant has not yet been declared by the DARAB. In keeping with judicial
order, we refrain from ruling on whether petitioners may be dispossessed of the subject property. As
ratiocinated in Nona v. Plan[9]
It is to the credit of respondent Judge that he has shown awareness of the recent Presidential Decrees
which are impressed with an even more solicitous concern for the rights of the tenants. If, therefore, as
he pointed out in his order granting the writ of possession, there is a pending case between the parties
before the Court of Agrarian Relations, ordinary prudence, let alone the letter of the law, ought to have
cautioned him against granting the plea of private respondents that they be placed in possession of the
land in controversy. x x x. At the time the challenged orders were issued, without any showing of how
the tenancy controversy in the Court of Agrarian Relations was disposed of, respondent Judge could not
by himself and with due observance of the restraints that cabin and confine his jurisdiction pass upon
the question of tenancy. (Emphasis ours)
In its challenged Decision, the Court of Appeals relied heavily on the principle of finality of judgments. It
applied the legal doctrine that once a judgment has become final, the issuance of a writ of execution
becomes ministerial. The appellate court held that petitioners situation does not fall under any of the
exceptions to this rule since his occupation of the subject land did not transpire after the land
registration courts adjudication became final.
In so ruling, however, the Court of Appeals loses sight of the fact that petitioners claim of possession as
a tenant of the litigated property, if proven, entitles him to protection against dispossession.
Private respondents argue that petitioners tenancy claim is barred by res judicata, having been ruled
upon in G.R. Nos. 99843 and 93401. However, not being an issue in the case before us, this question
should properly be resolved in DARAB Case No. 528-P-93. To restate, the only issue before us is
whether or not a winning party in a land registration case can effectively eject the possessor thereof,
whose security of tenure rights are still pending determination before the DARAB.
A judgment in a land registration case cannot be effectively used to oust the possessor of the land,
whose security of tenure rights are still pending determination before the DARAB. Stated differently,
the prevailing party in a land registration case cannot be placed in possession of the area while it is
being occupied by one claiming to be an agricultural tenant, pending a declaration that the latters
occupancy was unlawful.
WHEREFORE, the instant petition for certiorari is hereby GRANTED. The Decision of respondent Court of
Appeals in CA-G.R. SP No. 34930 dated September 20, 1996, as well as its Resolution dated January 15,
1997 are SET ASIDE. The Resolution of the Regional Trial Court of Lingayen, Pangasinan in LRC Case No.
N-3405 dated January 21, 1994 is ordered REINSTATED.
SO ORDERED.

G.R. No. L-20264 January 30, 1971
CONSUELO S. DE GARCIA and ANASTACIO GARCIA, petitioners,
vs.
HON. COURT OF APPEALS, ANGELINA D. GUEVARA and JUAN B. GUEVARA, respondents.
Deogracias T. Reyes and Jose M. Luison for petitioners.
Tolentino and Garcia and D.R. Cruz for private respondents.

FERNANDO, J.:
This petition for certiorari to review a decision of respondent Court of Appeals was given due course
because it was therein vigorously asserted that legal questions of gravity and of moment, there being
allegations of an unwarranted departure from and a patent misreading of applicable and controlling
decisions, called for determination by this Tribunal. The brief for petitioners-spouses, however, failed to
substantiate such imputed failings of respondent Court. The performance did not live up to the promise.
On the basis of the facts as duly found by respondent Court, which we are not at liberty to disregard,
and the governing legal provisions, there is no basis for reversal. We affirm.
The nature of the case presented before the lower court by private respondent Angelina D. Guevara,
assisted by her spouse, Juan B. Guevara, as plaintiffs, was noted in the decision of respondent Court of
Appeals thus: "Plaintiff seeks recovery of `one (1) lady's diamond ring 18 cts. white gold mounting, with
one (1) 2.05 cts. diamond-solitaire, and four (4) brills 0.10 cts. total weight' which she bought on
October 27, 1947 from R. Rebullida, Inc."1 Then came a summary of now respondent Guevara of her
evidence: "Plaintiff's evidence tends to show that around October 11, 1953 plaintiff while talking to
Consuelo S. de Garcia, owner of La Bulakea restaurant recognized her ring in the finger of Mrs. Garcia
and inquired where she bought it, which the defendant answered from her comadre. Plaintiff explained
that that ring was stolen from her house in February, 1952. Defendant handed the ring to plaintiff and it
fitted her finger. Two or three days later, at the request of plaintiff, plaintiff, her husband Lt. Col. Juan
Guevara, Lt. Cementina of Pasay PD, defendant and her attorney proceeded to the store of Mr.
Rebullida to whom they showed the ring in question. Mr. Rebullida a 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. Hence, this case. Later on when the sheriff tried to serve
the writ of seizure (replevin), defendant refused to deliver the ring which had been examined by Mr.
Rebullida, claiming it was lost."2
How the defendant, Consuelo S. de Garcia, the present petitioner before us, along with her husband
Anastacio Garcia, sought to meet plaintiff's claim was narrated thus: "On the other hand, defendant
denied having made any admission before plaintiff or Mr. Rebullida or the sheriff. Her evidence tends to
show that the ring (Exhibit 1) was purchased by her from Mrs. Miranda who got it from Miss Angelita
Hinahon who in turn got it from the owner, Aling Petring, who was boarding in her house; that the ring
she bought could be similar to, but not the same ring plaintiff purchased from Mr. Rebullida which was
stolen; that according to a pawn-shop owner the big diamond on Exhibit 1 was before the trial never
dismantled. When dismantled, defendant's diamond was found to weigh 2.57 cts."3
Plaintiff lost in the lower court. She elevated the matter to respondent Court of Appeals with the
judgment of the lower court being reversed. It is this decision now under review.
These are the facts as found by respondent Court of Appeals: "That the ring brought by the parties for
examination by Rafael Rebullida on December 14, 1953 was the same ring purchased by plaintiff from R.
Rebullida, Inc. on October 27, 1947 and stolen in February, 1952 has been abundantly established by
plaintiff's evidence. Before plaintiff lost the ring, she had been wearing it for six years and became
familiar with it. Thus, when she saw the missing ring in the finger of defendant, she readily and definitely
identified it. Her identification was confirmed by Mr. Rafael Rebullida, whose candid testimony is
entitled to great weight, with his 30 years experience behind him in the jewelry business and being a
disinterested witness since both parties are his customers. Indeed, defendant made no comment when
in her presence Rebullida after examining the ring and stock card told plaintiff that that was her ring, nor
did she answer plaintiff's letter of demand, ... asserting ownership. Further confirmation may be found
in the extra-judicial admissions, contained in defendant's original and first amended answers ..."4
These further facts likewise appeal therein: "The foregoing proof is not counter-balanced by the denial
on the part of defendant or the presentation of the ring, Exhibit I, which has a diamond-solitaire 2.57
cts., or much heavier than the lost diamond weighing 2.05 cts. only. It is noteworthy that defendant
gave a rather dubious source of her ring. Aling Petring from whom the ring supposedly came turned out
to be a mysterious and ephemeral figure. Miss Hinahon did not even know her true and full name, nor
her forwarding address. She appeared from nowhere, boarded three months in the house of Miss
Hinahon long enough to sell her diamond ring, disappearing from the scene a week thereafter. Indeed,
the case was terminated without any hearing on the third-party and fourth-party complaints, which
would have shown up the falsity of defendant's theory. Moreover, Mrs. Baldomera Miranda, third-party
defendant, who tried to corroborate defendant on the latter's alleged attempt to exchange the ring
defendant bought through her, is [belied] by her judicial admission in her Answer that appellee
`suggested that she would make alterations to the mounting and structural design of the ring to hide the
true identity and appearance of the original one' (Cunanan vs. Amparo, 45 O.G. 3796). Finally, defendant
is refuted by her own extra-judicial admissions ... although made by defendant's counsel. For an
attorney who acts as counsel of record and is permitted to act such, has the authority to manage the
cause, and this includes the authority to make admission for the purpose of the litigation... Her
proffered explanation that her counsel misunderstood her is puerile because the liability to error as to
the identity of the vendor and the exchange of the ring with another ring of the same value, was rather
remote."5
It is in the light of the above facts as well as the finding that the discrepancy as to the weight between
the diamond-solitaire in Exhibit I and the lost diamond was due to defendant having "substituted a
diamond-solitaire of plaintiff with a heavier stone" that the decision was rendered, respondent Court
reversing the lower court and ordering defendant, now petitioner Consuelo S. de Garcia, to return
plaintiff's ring or fact value of P1,000.00 and costs, as well as to pay plaintiff P1,000.00 as attorney's fee
and P1,000.00 as exemplary damages. Hence this appeal.
To repeat, there is no occasion to reverse respondent Court. It correctly applied the law to the facts as
found.
1. The controlling provision is Article 559 of the Civil Code. It reads thus: "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 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. As authoritative
interpreted in Cruz v. Pahati, 6 the right of the owner cannot be defeated even by proof that there was
good faith by the acquisition by the possessor. There is a reiteration of this principle in Aznar v.
Yapdiangco.7Thus: "Suffice it to say in this regard that the right of the owner to recover personal
property acquired in good faith by another, is based on his being dispossessed without his consent. 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."8
2. 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. That is a factual determination to
which we must pay heed. Instead of proving any alleged departure from legal norms by respondent
Court, petitioner would stress Article 541 of the Civil Code, which provides: 'A possessor in the concept
of owner has in his favor the legal presumption that he possesses with a just title and he cannot be
obliged to show or prove it." She would accord to it a greater legal significance than that to which under
the controlling doctrines it is entitled.lwph1.t The brief for respondents did clearly point out why
petitioner's assertion is lacking in support not only from the cases but even from commentators. Thus:
"Actually, even under the first clause, possession in good faith does not really amount to title, for the
reason that Art. 1132 of the Code provides for a period of acquisitive prescription for movables through
`uninterrupted possession for four years in good faith' (Art. 1955 of the old Spanish Code, which
provided a period of three years), so that many Spanish writers, including Manresa, Sanchez Roman,
Scaevola, De Buen, and Ramos, assert that under Art. 464 of the Spanish Code (Art. 559 of the New Civil
Code), the title of the possessor is not that of ownership, but is merely a presumptive title sufficient to
serve as a basis of acquisitive prescription (II Tolentino, Civil Code of the Phil. p. 258: IV Manresa,
Derecho Civil Espaol, 6th Ed., p. 380). And it is for the very reason that the title established by the first
clause of Art. 559 is only a presumptive title sufficient to serve as a basis for acquisitive prescription,
that the clause immediately following provides that `one who has lost any movable or has been
unlawfully deprived thereof, may recover it from the person in possession of the same.' As stated by the
Honorable Justice Jose B. L. Reyes of this Court in Sotto vs. Enage (C.A.), 43 Off. Gaz. 5075, Dec. 1947:
`Article 559 in fact assumes that possessor is as yet not the owner; for it is obvious that where the
possessor has come to acquire indefeasible title by, let us say, adverse possession for the necessary
period, no proof of loss or illegal deprivation could avail the former owner of the chattel. He would no
longer be entitled to recover it under any condition.' "9
The second assigned error is centered on the alleged failure to prove the identity of the diamond ring.
Clearly the question raised is one of the fact. What the Court of Appeals found is conclusive. Again,
petitioner could not demonstrate that in reaching such a conclusion the Court of Appeals acted in an
arbitrary manner. As made mention of in the brief for respondents two disinterested witnesses, Mr.
Rafael Rebullida as well as Lt. Col. Reynaldo Cementina of the Pasay City Police Department, both of
whom could not be accused of being biased in favor of respondent Angelina D. Guevara, did testify as to
the identity of the ring.
The third assigned error of petitioners would find fault with respondent Court relying "on the weakness
of the title or evidence" of petitioner Consuelo S. de Garcia. It is true, in the decision under review,
mention was made of petitioner Consuelo S. de Garcia making no comment when in her presence
Rebullida, after examining the ring the stock card, told respondent Angelina L. Guevara that that was her
ring, nor did petitioner answer a letter of the latter asserting ownership. It was likewise stated in such
decision that there were extra-judicial admissions in the original and first amended answers of
petitioner. In the appraisal of her testimony, respondent Court likewise spoke of her giving a rather
dubious source of her ring, the person from whom she allegedly bought it turning out "to be a
mysterious and ephemeral figure." As a matter of fact, as set forth a few pages back, respondent Court
did enumerate the flaws in the version given by petitioner. From the weakness of the testimony offered
which, as thus made clear, petitioner, did not even seek to refute, she would raise the legal question
that respondent Court relied on the "weakness of [her] title or evidence" rather than on the proof
justifying respondent Angelina D. Guevara's claim of ownership. Petitioner here would ignore the finding
of fact of respondent Court that such ownership on her part "has been abundantly established" by her
evidence. Again here, in essence, the question raised is one of fact, and there is no justification for us to
reverse respondent Court.
The legal question raised in the fourth assignment of error is that the matter of the substitution of the
diamond on the ring was a question raised for the first time on appeal as it was never put in issue by the
pleadings nor the subject of reception of evidence by both parties and not touched upon in the decision
of the lower court. Why no such question could be raised in the pleadings of respondent Angelina D.
Guevara was clarified by the fact that the substitution came after it was brought for examination to Mr.
Rebullida. After the knowledge of such substitution was gained, however, the issue was raised at the
trial according to the said respondent resulting in that portion of the decision where the lower court
reached a negative conclusion. As a result, in the motion for reconsideration, one of the points raised as
to such decision being contrary to the evidence is the finding that there was no substitution. It is not
necessary to state that respondent Court, exercising its appellate power reversed the lower court. What
was held by it is controlling. What is clear is that there is no factual basis for the legal arguments on
which the fourth assigned error is predicated.
What is said takes care of the fifth assigned error that respondent Court was mistaken in its finding that
there was such a substitution. Again petitioner would have us pass on a question of credibility which is
left to respondent Court of Appeals. The sixth assigned error would complain against the reversal of the
lower court judgment as well as petitioner Consuelo S. de Garcia being made to pay respondent
Angelina D. Guevara exemplary damages, attorney's fees and costs. The reversal is called for in the light
of the appraisal of the evidence of record as meticulously weighed by respondent Court. As to the
attorney's fees and exemplary damages, this is what respondent Court said in the decision under review:
"Likewise, plaintiff is entitled to recover reasonable attorney's fees in the sum of P1,000, it being just
and equitable under the circumstances, and another P1,000 as exemplary damages for the public good
to discourage litigants from resorting to fraudulent devices to frustrate the ends of justice, as defendant
herein tried to substitute the ring, Exhibit 1, for plaintiff's ring." 10 Considering the circumstances, the
cursory discussion of the sixth assigned error on the matter by petitioner fails to demonstrate that
respondent Court's actuation is blemished by legal defects.

RODIL ENTERPRISES, INC., petitioner, vs. COURT OF APPEALS, CARMEN BONDOC, TERESITA BONDOC-
ESTO, DIVISORIA FOOTWEAR and CHUA HUAY SOON, respondents.
[G.R. No. 135537. November 29, 2001]
RODIL ENTERPRISES, INC., petitioner, vs. IDES O'RACCA BUILDING TENANTS ASSOCIATION,
INC., respondent.
D E C I S I O N
BELLOSILLO, J.:
These twin petitions filed under Rule 45 seek to set aside the Decisions of the Court of Appeals in CA-
G.R. Nos. 39919, 36381 and 37243.
Petitioner Rodil Enterprises Inc. (RODIL) is the lessee of the Ides O'Racca Building (O'RACCA) since
1959.[1] It was a "former alien property" over which the Republic of the Philippines acquired ownership
by virtue of RA 477, as amended.[2]
Sometime in 1980 RODIL entered into a sublease contract with respondents Carmen Bondoc, Teresita
Bondoc-Esto, Divisoria Footwear and Chua Huay Soon,[3] members of the Ides O'Racca Building Tenants
Association Inc. (ASSOCIATION).
On 4 September 1972 the lease contract between RODIL and the REPUBLIC was renewed for another
fifteen (15) years.[4] At that time the O'RACCA was under the administration of the Building Services
and Real Property Management Office (BSRPMO) then headed by Director Jesus R. Factora.[5]
On 12 September 1982 BP 233[6] 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.[7]
On 8 January 1987 RODIL offered to purchase the subject property conformably with BP 233 and the
REPUBLIC responded that its offer to purchase would be acted upon once the Committee on Appraisal
shall have determined the market value of the property.[8]
On 22 July 1997 the ASSOCIATION also offerred to lease the same building through the Department of
General Services and Real Estate Property Management (DGSREPM).[9]
Pending action on the offer of RODIL to purchase the property, Director Factora of the BSRPMO granted
RODILs request for another renewal of the lease contract on 23 September 1987 for another five (5)
years from 1 September 1987.[10] The renewal contract was forwarded to then Secretary Jose de Jesus
of DGSREPM for approval.
On 25 September 1987 Undersecretary of DGSREPM Rufino B. Banas recommended to Secrectary De
Jesus the suspension of the approval of the renewal contract because the offer of the ASSOCIATION was
more beneficial to the REPUBLIC.
Resultantly, on 30 September 1987 Secretary De Jesus issued another memorandum to Director Factora
disapproving the renewal contract in favor of RODIL, at the same time recalling 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.[11]
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.[12] RODIL prayed that a restraining order be issued
enjoining the ASSOCIATION or any person acting under it from collecting rentals from the occupants or
sub-lessees of O'RACCA. On 26 October 1987 the trial court granted the writ of preliminary
injunction.[13] On appeal, the Court of Appeals upheld the issuance of the writ of preliminary injunction
and ordered the deposit of the monthly rentals with the lower court pendente lite.
On 20 November 1987 the REPUBLIC, De Jesus, Banas and Factora filed their Answer with Counterclaim
for damages. On 21 December 1987 the ASSOCIATION also filed its Answer with Counterclaim for
damages.
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
Factoran 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.
On 18 May 1992 RODIL signed a renewal contract with Director Palad which was approved by Secretary
Factoran.[14] 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.[15]
On 14 August 1972 the action for specific performance was dismissed by the trial court upon joint
motion to dismiss by RODIL and the Solicitor General. The order of dismissal however was appealed by
the ASSOCIATION to the Court of Appeals.[16]
On 25 September 1992 the spouses Saturnino Alvarez and Epifania Alvarez, sublessees of RODIL, filed
with the Office of the President a letter-appeal assailing the authority of Factoran to enter into the
renewal contract of 18 May 1992 with RODIL, and claiming the right to purchase the subject
property.[17]
While the appeal of the ASSOCIATION from the order of dismissal and the letter-appeal of the spouses
Alvarez were pending, the ASSOCIATION instituted Civil Case No. 92-63833 with the Regional Trial Court
of Manila[18] praying for the setting aside of the renewal contract of 18 May 1992 as well as the
supplementary contract of 25 May 1992, and further praying for the issuance of a writ of preliminary
injunction. On 3 May 1993 the trial court denied the prayer for preliminary injunction.
On 30 July 1993 RODIL filed an action for unlawful detainer against Divisoria Footwear,[19] and on 4
August 1993, a similar action against Chua Huay Soon.[20]
On 10 September 1993 the trial court dismissed the action for declaration of nullity of the lease contract
filed by the ASSOCIATION on the ground of litis pendentia.[21] The Order stated that the action for
declaration of nullity and the action for specific performance filed by RODIL were practically between
the same parties and for the same causes of action.[22] This Order was appealed by the ASSOCIATION to
the Court of Appeals.[23]
On 19 January 1994 RODIL filed an action for unlawful detainer against respondent Teresita Bondoc-
Esto,[24] and on 1 February 1994 filed another action against respondent Carmen Bondoc,[25] both with
the Metropolitan Trial Court of Manila.
On 8 February 1994 the Office of the President through Executive Secretary Teofisto Guingona Jr. denied
the letter-appeal of the spouses Alvarez, but nullified the renewal contract of 18 May 1992 and the
supplementary contract of 25 May 1992.[26]
Meanwhile, the Metropolitan Trial Court of Manila upheld RODIL's right to eject respondents Bondoc,
Bondoc-Esto, Divisoria Footwear and Chua Huay Soon,[27] as promulgated in separate decisions the
dispositive portions of which read -
IN CIVIL CASE NO. 143301 -
WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiff [RODIL
ENTERPRISES, INC.] and against the defendant [CARMEN BONDOC], to wit: 1. Ordering the defendant
and all those claiming title under her to vacate the subleased portion of the ORacca Building, corner
Folgueras and M. de los Santos Streets, Binondo, Manila; 2. Ordering the defendant to pay plaintiff the
back rentals from October 1987 to August 1992 at the rate of P2,665.00 per month and from September
1992 at the rate of P2,665.00 per month plus a yearly increase of 20% per month up to the time that she
vacates the premises; 3. Ordering the defendant to pay the amount of P10,000.00 as attorneys fees
and to pay the cost of suit.
IN CIVIL CASE NO. 143216 -
WHEREFORE, judgment is hereby rendered in favor of the plaintiff [RODIL ENTERPRISES, INC.] as against
the defendant [TERESITA BONDOC ESTO] ordering the defendant and all persons claiming rights under
her to vacate the premises at ORacca Building located at corner Folgueras and M. de los Santos Streets,
Binondo, Manila, and turn over the possession thereof to plaintiff; ordering the defendant to pay
plaintiff the amount of P29,700.00 as rental in arrears for the period from September 1992 plus legal
rate of interest less whatever amount deposited with the Court; ordering defendant to pay the sum of
P3,000.00 as reasonable compensation for the use and occupancy of the premises from January 1994
until defendant shall have finally vacated the premises minus whatever amount deposited with the
Court as rental; ordering defendant to pay reasonable attorneys fees in the amount of P2,000.00 and
the costs of suit.
IN CIVIL CASE NO. 142258 -
WHEREFORE, judgment is hereby rendered in favor of plaintiff [RODIL ENTERPRISES, INC.], ordering
defendant [DIVISORIA FOOTWEAR], its representatives, agents, employees and/or assigns to vacate the
leased premises or portion of the Ides ORacca Building presently occupied by said defendant and to pay
plaintiff the following: a) Rentals in arrears from October 1987 to June 1993 in the amount of
P521,000.00; b) Rentals in the amount of P9,000.00 a month from July, 1993 until defendant will have
vacated the premises; c) Attorneys fees in the amount of P15,000.00; d) Costs of suit.
IN CIVIL CASE NO. 142282-CV -
IN VIEW THEREOF, judgment is hereby rendered ordering: 1. defendant CHUA HUAY SOON and all
persons claiming rights through him, to vacate the premises occupied by him at ORACCA Building,
located at the corner of Folgueras and M. delos Santos Street, Binondo, Manila, and turn over
possession thereof to plaintiff RODIL ENTERPRISES, INC.; 2. defendant to pay rentals in arrears from
October 1987 up to June 1993 at the rate of P6,175.00 a month, representing the rentals in arrears; 3.
defendant to pay P6,175.00 per month from July 1993 until he vacates the premises, as reasonable
compensation for the use of the premises; 4. defendant to pay the sum of P20,000.00 as attorneys fees;
5. defendant to pay interests on the amounts mentioned in Nos. 2 and 3 above at ten (10%) percent per
annum from the date of the filing of the complaint until said amounts are fully paid; and, 6. defendant
to pay the costs.
The Regional Trial Court affirmed the Metropolitan Trial Court[28] in all the four (4) decisions above
quoted. Thus, respondents Bondoc, Bondoc-Esto and Divisoria Footwear subsequently filed a Petition
for Review with the Court of Appeals,[29] followed by respondent Chua Huay Soon.[30]
While the consolidated appeals from the unlawful detainer cases were pending, the Second Division of
the Court of Appeals promulgated its decision on 12 April 1996 with regard to CA-G.R. No. 39919
declaring the renewal contract between RODIL and the REPUBLIC null and void.[31] RODIL moved for
reconsideration but its motion was denied.[32] Hence, this petition for review on certiorari under Rule
45.[33]
On 29 November 1996 the Special Fourth Division of the Court of Appeals promulgated its Decision in
CA-G.R. No. 36381 and CA-G.R. No. 37243 setting aside the decisions of the Regional Trial Court, which
sustained the Metropolitan Trial Court, and dismissing the action for unlawful detainer filed by RODIL
against its lessees.[34] RODIL moved for reconsideration but the motion was denied.[35] Hence, this
petition for review on certiorari.[36]
On respondents' motion, G.R. Nos. 129609 and 135537 were consolidated.
RODIL now contends that the Court of Appeals erred in annulling its renewal contract with the REPUBLIC
and in dismissing its actions for unlawful detainer against respondents Bondoc, Bondoc-Esto, Divisoria
Footwear and Chua. RODIL claims that the assailed contracts are neither void nor voidable as the facts
show they do not fall within the enumerations under Arts. 1305 and 1409, and an implied new lease still
exists by virtue of Art. 1670. As a result, the right to eject respondents properly belongs to it.[37]
With regard to CA-G.R. No. 39919, RODIL argues that the REPUBLIC, the only defendant who is a real
party in interest, signified its assent to having the action dismissed. Assuming arguendo that the
ASSOCIATION was a real party in interest, its counterclaim was nonetheless unmeritorious.[38]
On the other hand, respondents Bondoc, Bondoc-Esto, Divisoria Footwear and Chua contend that the
lease contract which the lease contract of 18 May 1992 was to renew, never came into
existence. Therefore, since there was no contract to "renew," the renewal contract had no leg to stand
on, hence, is also void.[39] Respondents then conclude that since there was no lease contract to speak
of, RODIL had no right to relief in its action for unlawful detainer. The ASSOCIATION, for its part, argues
that the counterclaim it filed against RODIL cannot be dismissed because the trial court has not passed
upon it.[40]
We rule for RODIL. The owner has the right to enjoy and dispose of a thing, without other limitations
than those established by law.[41] 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.
Private respondents claim that the agreements of 23 September 1987, 18 May 1992 and 25 May 1992
did not give rise to valid contracts.[42] 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.[43] 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.[44] 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.[45] Until that
moment, there is no real meeting of the minds, no concurrence of offer and acceptance, hence, no
contract.[46]
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.[47]
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.[48] 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.[49]
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.[50] 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.[51] 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.[52] 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.[53] 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.
Respondent ASSOCIATION finally argues that the 18 May 1992 and 25 May 1992 contracts can be
considered rescissible because they concern property under litigation and were entered into without
the knowledge and approval of the litigants or of competent judicial authority.[54] Civil Case No. 87-
42323 involved an action for specific performance and damages filed by RODIL against the REPUBLIC and
the ASSOCIATION. The right to file the action for rescission arises in favor of the plaintiff when the
defendant enters into a contract over the thing under litigation without the knowledge and approval of
the plaintiff or the court. The right of action therefore arose in favor of petitioner RODIL and not
respondent ASSOCIATION.
Having preliminarily dealt with the validity of the lease contracts, we now proceed to resolve the issue
raised by respondent ASSOCIATION with regard to its counterclaim.
The ASSOCIATION argues that its counterclaim should not have been dismissed. On this point, we
agree. The requisites for the application of Rule 17 of the Rules of Civil Procedure are clearly
present.[55] The counterclaim is necessarily connected with the transaction that is the subject matter of
the claim. In malicious prosecution, there must be proof that the prosecution was prompted by a
sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant
knowing that his charge was false and groundless.[56] A determination of whether the charge is
groundless would necessarily involve an analysis of whether the action instituted by RODIL is
meritorious. The counterclaim did not require the presence of third parties over which the court could
not acquire jurisdiction, and that the court had jurisdiction over the subject matter of the counterclaim
since the amount of damages claimed by the ASSOCIATION in its counterclaim amounted
to P3,500,000.00, clearly within the jurisdictional amount for the Regional Trial Court under BP 129.
However, in the interest of making a final adjudication on an issue which has been pending for fourteen
(14) years, we will rule on the issues raised by the ASSOCIATION in its counterclaim, and accordingly
deny the same, dispensing with any discussion regarding the merits of RODIL's cause of action which is
clearly neither "false" nor "groundless." Therefore, the elements of malicious prosecution are absent.
As regards the action for unlawful detainer, respondents Bondoc, Bondoc-Esto, Divisoria Footwear and
Chua argue that this should not prosper because RODIL is not in actual possession of the property and
because they are not its sublessees.[57] Their arguments do not convince.
In an action for unlawful detainer the plaintiff need not have been in prior physical
possession. Respondents have admitted that they have not entered into any lease contract with the
REPUBLIC and that their continued occupation of the subject property was merely by virtue of
acquiescence.[58] The records clearly show this to be the case. The REPUBLIC merely issued a
"temporary occupancy permit" which was not even in the name of the respondents Bondoc, Bondoc-
Esto, Divisoria Footwear or Chua but of respondent ASSOCIATION. Since the occupation of respondents
was merely tolerated by the REPUBLIC, the right of possession of the latter remained uninterrupted. It
could therefore alienate the same to anyone it chose. Unfortunately for respondents, the REPUBLIC
chose to alienate the subject premises to RODIL by virtue of a contract of lease entered into on 18 May
1992. Resultantly, petitioner had the right to file the action for unlawful detainer against respondents
as one from whom possession of property has been unlawfully withheld.
Respondents finally argue that petitioner failed to comply with the mandatory provisions of Rule 45 so
that its petition must be dismissed. They allege that petitioner failed to state in its petition that a
motion for reconsideration was filed, the date of filing, when the motion was denied, and the date when
the resolution denying the motion was received.
A cursory review of RODIL's petition belies respondents' assertion. All dates required under Rule 45,
Sec. 4, are properly indicated except when the motion for reconsideration was filed. Procedural rules
are required to be followed as a general rule, but they may be relaxed to relieve a litigant of an injustice
not commensurate with the degree of his noncompliance with the procedure required. Dismissal of
appeals purely on technical grounds is frowned upon and the rules of procedure ought not to be applied
in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and
thereby defeat their very aims. The rules have been drafted with the primary objective of enhancing fair
trials and expediting the proper dispensation of justice. As a corollary, if their application and operation
tend to subvert and defeat, instead of promote and enhance its objective, suspension of the rules is
justified.[59] Petitioner did not repeat its error in its later petition filed under G.R. No. 135537. The
oversight must be fashioned with leniency.
WHEREFORE, the consolidated petitions are GRANTED. The assailed Decisions of the Court of Appeals in
CA-G.R. Nos. 36381, 37243 and 39919 are REVERSED and SET ASIDE. Accordingly, the Decisions of the
Regional Trial Court, Br. 39, in Civil Cases Nos. 94-70776, 94-71122 and 94-71123 as well as the Decision
of the Regional Trial Court, Br. 23, in Civil Case No. 94-72209 affirming in toto the Decisions of the MeTC
- Br. 28 in Civil Case No. 143301, MeTC - Br. 15 in Civil Case No. 143216, MeTC - Br. 7 in Civil Case No.
142258, and MeTC - Br. 24 in Civil Case No. 142282-CV, as herein quoted, and the Orders dated 14
August 1992 and 6 November 1992 of the Regional Trial Court, Br. 8 in Civil Case No. 87-42323,
recognizing the validity and legality of the Renewal of the Lease Contract dated 18 May 1992 and the
Supplemental Contract dated 25 May 1992, are REINSTATED, AFFIRMED and ADOPTED. Costs against
private respondents in both cases.
SO ORDERED.
CORNELIO M. ISAGUIRRE, petitioner, vs. FELICITAS DE LARA, respondent.
D E C I S I O N
GONZAGA-REYES, J.:
In this petition for review on certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure,
petitioner Cornelio M. Isaguirre assails the October 5, 1998 decision[1] of the Court of Appeals[2]and its
Resolution promulgated on March 5, 1999.
The antecedent facts of the present case are as follows:
Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales Application over a parcel
of land identified as portion of Lot 502, Guianga Cadastre, filed with the Bureau of Lands on January 17,
1942 and 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 November 19, 1954, the Undersecretary of
Agriculture and Natural Resources amended the sales application to cover only 1,600 square meters.
Then, on November 3, 1961, by virtue of a decision rendered by the Secretary of Agriculture and Natural
Resources dated November 19, 1954, a subdivision survey was made and the area was further reduced
to 1,000 square meters. On this lot stands a two-story residential-commercial apartment declared for
taxation purposes under TD 43927 in the name of respondents sons - Apolonio and Rodolfo, both
surnamed de Lara.
Sometime in 1953, respondent obtained several loans from the Philippine National Bank. When she
encountered financial difficulties, respondent approached petitioner Cornelio M. Isaguirre, who was
married to her niece, for assistance. On February 10, 1960, a document denominated as "Deed of Sale
and Special Cession of Rights and Interests" was executed by respondent and petitioner, whereby the
former sold a 250 square meter portion of Lot No. 502, together with the two-story commercial and
residential structure standing thereon, in favor of petitioner, for and in consideration of the sum of
P5,000.
Sometime in May, 1968, Apolonio and Rodolfo de Lara filed a complaint against petitioner for recovery
of ownership and possession of the two-story building.[3] However, the case was dismissed for lack of
jurisdiction.
On August 21, 1969, petitioner filed a sales application over the subject property on the basis of the
deed of sale. His application was approved on January 17, 1984, resulting in the issuance of Original
Certificate of Title No. P-11566 on February 13, 1984, in the name of petitioner. Meanwhile, the sales
application of respondent over the entire 1,000 square meters of subject property (including the 250
square meter portion claimed by petitioner) was also given due course, resulting in the issuance of
Original Certificate of Title No. P-13038 on June 19, 1989, in the name of respondent.[4]
Due to the overlapping of titles, petitioner filed an action for quieting of title and damages with the
Regional Trial Court of Davao City against respondent on May 17, 1990. The case was docketed as Civil
Case No. 20124-90. After trial on the merits, the trial court rendered judgment on October 19, 1992, in
favor of petitioner, declaring him to be the lawful owner of the disputed property. However, the Court
of Appeals reversed the trial courts decision, holding that the transaction entered into by the parties, as
evidenced by their contract, was an equitable mortgage, not a sale.[5] The appellate courts decision
was based on the inadequacy of the consideration agreed upon by the parties, on its finding that the
payment of a large portion of the "purchase price" was made after the execution of the deed of sale in
several installments of minimal amounts; and finally, on the fact that petitioner did not take steps to
confirm his rights or to obtain title over the property for several years after the execution of the deed of
sale. As a consequence of its decision, the appellate court also declared Original Certificate of Title No.P-
11566 issued in favor of petitioner to be null and void. On July 8, 1996, in a case docketed as G. R. No.
120832, this Court affirmed the decision of the Court of Appeals and on September 11, 1996, we denied
petitioners motion for reconsideration.
On May 5, 1997, respondent filed a motion for execution with the trial court, praying for the immediate
delivery of possession of the subject property, which motion was granted on August 18, 1997. On
February 3, 1998, respondent moved for a writ of possession, invoking our ruling in G. R. No. 120832.
Petitioner opposed the motion, asserting that he had the right of retention over the property until
payment of the loan and the value of the improvements he had introduced on the property. On March
12, 1998, the trial court granted respondents motion for writ of possession. Petitioners motion for
reconsideration was denied by the trial court on May 21, 1998. Consequently, a writ of possession dated
June 16, 1998, together with the Sheriffs Notice to Vacate dated July 7, 1998, were served upon
petitioner.
Petitioner filed with the Court of Appeals a special civil action for certiorari and prohibition with prayer
for a temporary restraining order or preliminary injunction to annul and set aside the March 12, 1998
and May 21, 1998 orders of the trial court, including the writ of possession dated June 16, 1998 and the
sheriffs notice to vacate dated July 7, 1998.[6]
The appellate court summarized the issues involved in the case as follows: (1) whether or not the
mortgagee in an equitable mortgage has the right to retain possession of the property pending actual
payment to him of the amount of indebtedness by the mortgagor; and (b) whether or not petitioner can
be considered a builder in good faith with respect to the improvements he made on the property before
the transaction was declared to be an equitable mortgage.
The Court of Appeals held that petitioner was not entitled to retain possession of the subject property. It
said that -
the mortgagee merely has to annotate his claim at the back of the certificate of title in order to
protect his rights against third persons and thereby secure the debt. There is therefore no necessity for
him to actually possess the property. Neither should a mortgagee in an equitable mortgage fear that the
contract relied upon is not registered and hence, may not operate as a mortgage to justify its
foreclosure. In Feliza Zubiri v. Lucio Quijano, 74 Phil 47, it was ruled "that when a contract x x x is held as
an equitable mortgage, the same shall be given effect as if it had complied with the formal requisites of
mortgage. x x x by its very nature the lien thereby created ought not to be defeated by requiring
compliance with the formalities necessary to the validity of a voluntary real estate mortgage, as long as
the land remains in the hands of the petitioner (mortgagor) and the rights of innocent parties are not
affected."
Proceeding from the foregoing, petitioners imagined fears that his lien would be lost by surrendering
possession are unfounded.
In the same vein, there is nothing to stop the mortgagor de Lara from acquiring possession of the
property pending actual payment of the indebtedness to petitioner. This does not in anyway endanger
the petitioners right to security since, as pointed out by private respondents, the petitioner can always
have the equitable mortgage annotated in the Certificate of Title of private respondent and pursue the
legal remedies for the collection of the alleged debt secured by the mortgage. In this case, the remedy
would be to foreclose the mortgage upon failure to pay the debt within the required period.
It is unfortunate however, that the Court of Appeals, in declaring the transaction to be an equitable
mortgage failed to specify in its Decision the period of time within which the private respondent could
settle her account, since such period serves as the reckoning point by which foreclosure could ensue. As
it is, petitioner is now in a dilemma as to how he could enforce his rights as a mortgagee. ...
Hence, this Court, once and for all resolves the matter by requiring the trial court to determine the
amount of total indebtedness and the period within which payment shall be made.
Petitioners claims that he was a builder in good faith and entitled to reimbursement for the
improvements he introduced upon the property were rejected by the Court of Appeals. It held that
petitioner knew, or at least had an inkling, that there was a defect or flaw in his mode of acquisition.
Nevertheless, the appellate court declared petitioner to have the following rights:
He is entitled to reimbursement for the necessary expenses which he may have incurred over the
property, in accordance with Art. 526 and Art. 452 of the Civil Code. Moreover, considering that the
transaction was merely an equitable mortgage, then he is entitled to payment of the amount of
indebtedness plus interest, and in the event of non-payment to foreclose the mortgage. Meanwhile,
pending receipt of the total amount of debt, private respondent is entitled to possession over the
disputed property.
The case was finally disposed of by the appellate court in the following manner:
WHERFORE, the Petition is hereby DISMISSED, and this case is ordered remanded to the Regional Trial
Court of Davao City for further proceedings, as follows:
1) The trial court shall determine
a) The period within which the mortgagor must pay his total amount of indebtedness.
b) The total amount of indebtedness owing the petitioner-mortgagee plus interest computed from the
time when the judgment declaring the contract to be an equitable mortgage became final.
c) The necessary expenses incurred by petitioner over the property.[7]
On March 5, 1999, petitioners motion for reconsideration was denied by the appellate court.[8] Hence,
the present appeal wherein petitioner makes the following assignment of errors:
A.......THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT THE RTC ACTED WITHOUT OR
IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN ISSUING A WRIT OF POSSESSION IN FAVOR OF RESPONDENT.
A.1......The RTC patently exceeded the scope of its authority and acted with grave abuse of discretion in
ordering the immediate delivery of possession of the Property to respondent as said order exceeded the
parameters of the final and executory decision and constituted a variance thereof.
B.......THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER IS NOT ENTITLED TO
THE POSSESSION OF THE PROPERTY PRIOR TO THE PAYMENT OF RESPONDENTS MORTGAGE LOAN.
C.......THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONER WAS NOT A BUILDER IN
GOOD FAITH.
D.......THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONER IS ENTITLED TO
INTEREST COMPUTED ONLY FROM THE TIME WHEN THE JUDGMENT DECLARING THE CONTRACT TO BE
AN EQUITABLE MORTGAGE BECAME FINAL.[9]
Basically, petitioner claims that he is entitled to retain possession of the subject property until payment
of the loan and the value of the necessary and useful improvements he made upon such
property.[10] According to petitioner, neither the Court of Appeals decision in G.R. CV No. 42065 nor
this Courts decision in G.R. No. 120832 ordered immediate delivery of possession of the subject
property to respondent.
The dispositive portion of the March 31, 1995 decision of the Court of Appeals in G.R. CV No. 42065,
which was affirmed by this Court, provides that
IN VIEW OF ALL THE FOREGOING, the judgment appealed from is REVERSED and SET ASIDE and a new
one entered: (1) dismissing the complaint; (2) declaring the "Document of Sale and Special Cession of
Rights and Interests" (Exhibit B) dated February 10, 1960, to be an equitable mortgage not a sale; (3)
upholding the validity of OCT No. P-13038 in the name of Felicitas de Lara; and (3) declaring null and
void OCT No. P-11566 in the name of plaintiff Cornelio Isaguirre. All other counterclaims for damages
are likewise dismissed. Costs against the appellee.[11]
Petitioner argues that the abovementioned decision merely settled the following matters: (1) that the
transaction between petitioner and respondent was not a sale but an equitable mortgage; (2) that OCT
No. P-13038 in the name of respondent is valid; and (3) that OCT No. P-11566 in the name of petitioner
is null and void. Since the aforementioned decision did not direct the immediate ouster of petitioner
from the subject property and the delivery thereof to respondent, the issuance of the writ of possession
by the trial court on June 16, 1998 constituted an unwarranted modification or addition to the final and
executory decision of this Court in G.R. No. 120832.[12]
We do not agree with petitioners contentions. On the contrary, the March 31, 1995 decision of the
appellate court, which was affirmed by this Court on July 8, 1996, served as more than adequate basis
for the issuance of the writ of possession in favor of respondent since these decisions affirmed
respondents title over the subject property. As the sole owner, respondent has the right to enjoy her
property, without any other limitations than those established by law.[13] Corollary to such right,
respondent also has the right to exclude from the possession of her property any other person to whom
she has not transmitted such property.[14]
It is true that, in some instances, the actual possessor has some valid rights over the property
enforceable even against the owner thereof, such as in the case of a tenant or lessee.[15] Petitioner
anchors his own claim to possession upon his declared status as a mortgagee. In his Memorandum, he
argues that
4.8 It was respondent who asserted that her transfer of the Property to petitioner was by way of an
equitable mortgage and not by sale. After her assertion was sustained by the Courts, respondent cannot
now ignore or disregard the legal effects of such judicial declaration regarding the nature of the
transaction.
xxx......xxx......xxx
4.13 Having delivered possession of the Property to petitioner as part of the constitution of the
equitable mortgage thereon, respondent is not entitled to the return of the Property unless and until
the mortgage loan is discharged by full payment thereof. Petitioners right as mortgagee to retain
possession of the Property so long as the mortgage loan remains unpaid is further supported by the rule
that a mortgage may not be extinguished even though then mortgagor-debtor may have made partial
payments on the mortgage loan:
"Art. 2089. A pledge or mortgage is indivisible, even though the debt may be divided among the
successors in interest of the debtor or the creditor.
"Therefore, the debtors heir who has paid a part of the debt cannot ask for the proportionate
extinguishment of the pledge or mortgage as long as the debt is not completely satisfied.
"Neither can the creditors heir who has received his share of the debt return the pledge or cancel the
mortgage, to the prejudice of the other heirs who have not been paid."
(Emphasis supplied.)
xxx......xxx......xxx
4.14 ......To require petitioner to deliver possession of the Property to respondent prior to the full
payment of the latters mortgage loan would be equivalent to the cancellation of the mortgage. Such
effective cancellation would render petitioners rights ineffectual and nugatory and would constitute
unwarranted judicial interference.
xxx......xxx......xxx
4.16 The fact of the present case show that respondent delivered possession of the Property to
petitioner upon the execution of the Deed of Absolute Sale and Special Cession of Rights and Interest
dated 10 February 1960. Hence, transfer of possession of the Property to petitioner was an essential
part of whatever agreement the parties entered into, which, in this case, the Supreme Court affirmed to
be an equitable mortgage.
xxx......xxx......xxx
4.19 Petitioner does not have the mistaken notion that the mortgagee must be in actual possession of
the mortgaged property in order to secure the debt. However, in this particular case, the delivery of
possession of the Property was an integral part of the contract between petitioner and respondent.
After all, it was supposed to be a contract of sale. If delivery was not part of the agreement entered into
by the parties in 1960, why did respondent surrender possession thereof to petitioner in the first place?
4.20 Now that the Courts have ruled that the transaction was not a sale but a mortgage, petitioners
entitlement to the possession of the Property should be deemed as one of the provisions of the
mortgage, considering that at the time the contract was entered into, possession of the Property was
likewise delivered to petitioner. Thus, until respondent has fully paid her mortgage loan, petitioner
should be allowed to retain possession of the subject property.[16]
Petitioners position lacks sufficient legal and factual moorings.
A mortgage is a contract entered into in order to secure the fulfillment of a principal obligation.[17] It is
constituted by recording the document in which it appears with the proper Registry of Property,
although, even if it is not recorded, the mortgage is nevertheless binding between the parties.[18] Thus,
the only right granted by law in favor of the mortgagee is to demand the execution and the recording of
the document in which the mortgage is formalized.[19] As a general rule, the mortgagor retains
possession of the mortgaged property since a mortgage is merely a lien and title to the property does
not pass to the mortgagee.[20] However, even though a mortgagee does not have possession of the
property, there is no impairment of his security since the mortgage directly and immediately subjects
the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the
obligation for whose security it was constituted.[21] If the debtor is unable to pay his debt, the
mortgage creditor may institute an action to foreclose the mortgage, whether judicially or
extrajudicially, whereby the mortgaged property will then be sold at a public auction and the proceeds
therefrom given to the creditor to the extent necessary to discharge the mortgage loan. Apparently,
petitioners contention that "*t+o require *him+ to deliver possession of the Property to respondent
prior to the full payment of the latters mortgage loan would be equivalent to the cancellation of the
mortgage" is without basis. Regardless of its possessor, the mortgaged property may still be sold, with
the prescribed formalities, in the event of the debtors default in the payment of his loan obligation.
Moreover, this Court cannot find any justification in the records to uphold petitioners contention that
respondent delivered possession of the subject property upon the execution of the "Deed of Sale and
Special Cession of Rights and Interests" on February 10, 1960 and that the transfer of possession to
petitioner must therefore be considered an essential part of the agreement between the parties. This
self-serving assertion of petitioner was directly contradicted by respondent in her
pleadings.[22] Furthermore, nowhere in the Court of Appeals decisions promulgated on March 31, 1995
(G.R. CV No. 42065) and on October 5, 1998 (G.R. SP No. 48310), or in our own decision promulgated on
July 8, 1996 (G.R. No. 120832) was it ever established that the mortgaged properties were delivered by
respondent to petitioner.
In Alvano v. Batoon,[23] this Court held that "[a] simple mortgage does not give the mortgagee a right to
the possession of the property unless the mortgage should contain some special provision to that
effect." Regrettably for petitioner, he has not presented any evidence, other than his own gratuitous
statements, to prove that the real intention of the parties was to allow him to enjoy possession of the
mortgaged property until full payment of the loan.
Therefore, we hold that the trial court correctly issued the writ of possession in favor of respondent.
Such writ was but a necessary consequence of this Courts ruling in G.R. No. 120832 affirming the
validity of the original certificate of title (OCT No. P-13038) in the name of respondent Felicitas de Lara,
while at the same time nullifying the original certificate of title (OCT No. P-11566) in the name of
petitioner Cornelio Isaguirre. Possession is an essential attribute of ownership; thus, it would be
redundant for respondent to go back to court simply to establish her right to possess subject property.
Contrary to petitioners claims, the issuance of the writ of possession by the trial court did not constitute
an unwarranted modification of our decision in G.R. No. 120832, but rather, was a necessary
complement thereto.[24] It bears stressing that a judgment is not confined to what appears upon the
face of the decision, but also those necessarily included therein or necessary thereto.[25]
With regard to the improvements made on the mortgaged property, we confirm the Court of Appeals
characterization of petitioner as a possessor in bad faith. Based on the factual findings of the appellate
court, it is evident that petitioner knew from the very beginning that there was really no sale and that he
held respondents 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[26] which he may have incurred.[27]
Finally, as correctly pointed out by the Court of Appeals, this case should be remanded to the Regional
Trial Court of Davao City for a determination of the total amount of the loan, the necessary expenses
incurred by petitioner, and the period within which respondent must pay such amount.[28] However, no
interest is due on the loan since there has been no express stipulation in writing.[29]
WHEREFORE, the assailed Decision of the Court of Appeals dated October 5, 1998 and its Resolution
dated March 5, 1999 are hereby AFFIRMED. Respondent is entitled to delivery of possession of the
subject property. This case is hereby REMANDED to the trial court for determination of the amount of
the loan, the necessary expenses incurred by petitioner and the period within which the respondent
must pay the same.
SO ORDERED.
SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and MARIA CRISTINA
SANTOS, petitioners, vs. COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL TRIAL
COURT OF PASIG, METRO MANILA, BRANCH 181, respondents.
D E C I S I O N
REGALADO, J.:
This petition for review on certiorari assails the decision of respondent Court of Appeals in CA-G.R. CV
No. 29115, promulgated on November 10, 1993, which affirmed with modification the decision of the
trial court, as well as its resolution dated July 8, 1994 denying petitioners motion for reconsideration.[1]
On August 26, 1982, Civil Case No. 47466 for the grant of an easement of right of way was filed by
Pacifico Mabasa against Cristino Custodio, Brigida R. Custodio, Rosalina R. Morato, Lito Santos and Maria
Cristina C. Santos before the Regional Trial Court of Pasig and assigned to Branch 22 thereof.[2]
The generative facts of the case, as synthesized by the trial court and adopted by the Court of Appeals,
are as follows:
Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa died during the pendency
of this case and was substituted by Ofelia Mabasa, his surviving spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at Interior P.
Burgos St., Palingon, Tipas, Taguig, Metro Manila. The plaintiff was able to acquire said property
through a contract of sale with spouses Mamerto Rayos and Teodora Quintero as vendors last
September 1981. Said property may be described to be surrounded by other immovables pertaining to
defendants herein. Taking P. Burgos Streetas the point of reference, on the left side, going to plaintiffs
property, the row of houses will be as follows: That of defendants Cristino and Brigido Custodio, then
that of Lito and Maria Cristina Santos and then that of Ofelia Mabasa. On the right side (is) that of
defendant Rosalina Morato and then a Septic Tank (Exhibit D). As an access to P. Burgos Street from
plaintiffs property, there are two possible passageways. The first passageway is approximately one
meter wide and is about 20 meters distan(t) from Mabasas residence to P. Burgos Street. Such path is
passing in between the previously mentioned row of houses. The second passageway is about 3 meters
in width and length from plaintiff Mabasas residence to P. Burgos Street; it is about 26 meters. In
passing thru said passageway, a less than a meter wide path through the septic tank and with5-6 meters
in length has to be traversed.
When said property was purchased by Mabasa, there were tenants occupying the premises and who
were acknowledged by plaintiff Mabasa as tenants. However, sometime in February, 1982. one of said
tenants vacated the apartment and when plaintiff Mabasa went to see the premises, he saw that there
had been built an adobe fence in the first passageway making it narrower in width. Said adobe fence
was first constructed by defendants Santoses along their property which is also along the first
passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a
way that the entire passageway was enclosed (Exhibit 1-Santoses and Custodios, Exh. D for plaintiff,
Exhs. 1-C, 1-D and I -E) And it was then that the remaining tenants of said apartment vacated the
area. Defendant Ma. Cristina Santos testified that she constructed said fence because there was an
incident when her daughter was dragged by a bicycle pedalled by a son of one of the tenants in said
apartment along the first passageway. She also mentioned some other inconveniences of having (at) the
front of her house a pathway such as when some of the tenants were drunk and would bang their doors
and windows. Some of their footwear were even lost. x x x[3] (Italics in original text; corrections in
parentheses supplied)
On February 27, 1990, a decision was rendered by the trial court, with this dispositive part:
Accordingly, judgment is hereby rendered as follows:
1) Ordering defendants Custodios and Santoses to give plaintiff permanent access - ingress and egress,
to the public street;
2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos
(P8,000) as indemnity for the permanent use of the passageway.
The parties to shoulder their respective litigation expenses.[4]
Not satisfied therewith, therein plaintiff represented by his heirs, herein private respondents, went to
the Court of Appeals raising the sole issue of whether or not the lower court erred in not awarding
damages in their favor. On November 10, 1993, as earlier stated, the Court of Appeals rendered its
decision affirming the judgment of the trial court with modification, the decretal portion of which
disposes as follows:
WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH MODIFICATION only
insofar as the herein grant of damages to plaintiffs-appellants. The Court hereby orders defendants-
appellees to pay plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual Damages,
Thirty Thousand (P30,000) Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary
Damages. The rest of the appealed decision is affirmed to all respects.[5]
On July 8, 1994, the Court of Appeals denied petitioners motion for reconsideration.[6] Petitioners then
took the present recourse to us, raising two issues, namely, whether or not the grant of right of way to
herein private respondents is proper, and whether or not the award of damages is in order.
With respect to the first issue, herein petitioners are already barred from raising the same. Petitioners
did not appeal from the decision of the court a quo granting private respondents the right of way, hence
they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the
trial court as to petitioners, the issue of propriety of the grant of right of way has already been laid to
rest.
For failure to appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain any
affirmative relief other than those granted in the decision of the trial court. That decision of the court
below has become final as against them and can no longer be reviewed, much less reversed, by this
Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil case, an appellee who
has not himself appealed may not obtain from the appellate court any affirmative relief other than what
was granted in the decision of the lower court. The appellee can only advance any argument that he
may deem necessary to defeat the appellants claim or to uphold the decision that is being disputed,
and he can assign errors in his brief if such is required to strengthen the views expressed by the court a
quo. These assigned errors, in turn, may be considered by the appellate court solely to maintain the
appealed decision on other grounds, but not for the purpose of reversing or modifying the judgment in
the appellees favor and giving him other affirmative reliefs.[7]
However, with respect to the second issue, we agree with petitioners that the Court of Appeals erred in
awarding damages in favor of private respondents. The award of damages has no substantial legal
basis. A reading of the decision of the Court of Appeals will show that the award of damages was based
solely on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized
rentals when the tenants vacated the leased premises by reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover
damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong
inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a cause of action, since damages are merely part of the
remedy allowed for the injury caused by a breach or wrong.[8]
There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right;
damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal duty. These situations are
often called damnum absque injuria.[9] in order that a plaintiff may maintain an action for the injuries of
which he complains, he must establish that such injuries resulted from a breach of duty which the
defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the
person causing it.[10] The underlying basis for the award of tort damages is the premise that an
individual was injured in contemplation of law. Thus, there must first be the breach of some duty and
the imposition of liability for that breach before damages may be awarded; it is not sufficient to state
that there should be tort liability merely because the plaintiff suffered some pain and suffering)[11]
Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to
another but which violate no legal duty to such other person, and consequently create no cause of
action in his favor. In such cases, the consequences must be borne by the injured person alone. The law
affords no remedy for damages resulting from an act which does not amount to a legal injury or
wrong. [12]
In other words, in order that the law will give redress for an act causing damage, that act must be not
only hurtful, but wrongful. There must be damnum et injuria.[13] If, as may happen in many cases, a
person sustains actual damage, that is, harm or loss to his person or property, without sustaining any
legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded
as damnum absque injuria.[14]
In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of private
respondents, petitioners could not be said to have violated the principle of abuse of right. In order that
the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that
the following requisites concur: (1) The defendant should have acted in a manner that is contrary to
morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury
to the plaintiff.[15]
The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners,
hence not contrary to morals, good customs or public policy. The law recognizes in the owner the right
to enjoy and dispose of a thing, without other limitations than those established by law.[16] It is within
the right of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code
provides that (e)very owner may enclose or fence his land or tenements by means of walls, ditches, live
or dead hedges, or by any other means without detriment to servitudes constituted thereon.
At the time of the construction of the fence, the lot was not subject to any servitudes. There was no
easement of way existing in favor of private respondents, either by law or by contract. The fact that
private respondents had no existing right over the said passageway is confirmed by the very decision of
the trial court granting a compulsory right of way in their favor after payment of just compensation. It
was only that decision which gave private respondents the right to use the said passageway after
payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the
exercise of said right.
Hence, prior to said decision, petitioners had an absolute right over their property and their act of
fencing and enclosing the same was an act which they may lawfully perform in the employment and
exercise of said right. To repeat, whatever injury or damage may have been sustained by private
respondents by reason of the rightful use of the said land by petitioners isdamnum absque injuria.[17]
A person has a right to the natural use and enjoyment of his own property, according to his pleasure, for
all the purposes to which such property is usually applied. As a general rule, therefore, there is no cause
of action for acts done by one person upon his own property in a lawful and proper manner, although
such acts incidentally cause damage or an unavoidable loss to another, as such damage or loss
is damnum absque injuria.[18] When the owner of property makes use thereof in the general and
ordinary manner in which the property is used, such as fencing or enclosing the same as in this case,
nobody can complain of having been injured, because the inconvenience arising from said use can be
considered as a mere consequence of community life.[19]
The proper exercise of a lawful right cannot constitute a legal wrong for which an action will
lie,[20] although the act may result in damage to another, for no legal right has been invaded[21] One
may use any lawful means to accomplish a lawful purpose and though the means adopted may cause
damage to another, no cause of action arises in the latters favor. Any injury or damage occasioned
thereby is damnum absque injuria. The courts can give no redress for hardship to an individual resulting
from action reasonably calculated to achieve a lawful end by lawful means.[22]
WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of respondent
Court of Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is
correspondingly REINSTATED.
SO ORDERED.
PACENCIO ABEJARON, as represented by his Attorney-in-Fact, ALEJANDRO ABEJARON, petitioner,
vs. FELIX NABASA and the COURT OF APPEALS,respondents.
D E C I S I O N*
PUNO, J.:
With the burgeoning population comes a heightened interest in the limited land resource, especially so
if, as in the case at bar, one's home of many years stands on the land in dispute. It comes as no surprise
therefore that while this case involves a small parcel of land, a 118-square meter portion of Lot 1, Block
5, Psu-154953 in Silway, General Santos City, the parties have tenaciously litigated over it for more than
twenty years.
Petitioner Abejaron filed this petition for review on certiorari to annul the respondent court's Decision
dated April 26, 1988 and Resolution dated July 12, 1988 reversing the trial court's decision and declaring
respondent Nabasa the owner of the subject lot.
The following facts spurred the present controversy:
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 described as "Block 5, Lot 1,
Psu-154953, bounded on the North by Road, on the South by Lot 2 of the same Psu, on the East by Felix
Nabasa, and on the West by Road."[1] In 1945, petitioner Abejaron and his family started occupying the
118-square meter land. At that time, the land had not yet been surveyed. They fenced the area and
built thereon a family home with nipa roofing and a small store. In 1949, petitioner improved their
abode to become a two-storey house measuring 16 x 18 feet or 87.78 square meters made of round
wood and nipa roofing.[2] This house, which stands to this day, occupies a portion of Lot 1, Block 5, Psu-
154953 and a portion of the adjoining Lot 2 of the same Psu. Lot 2 belongs to petitioners daughter,
Conchita Abejaron-Abellon. In 1950, the small store was destroyed and in its stead, petitioner Abejaron
built another store which stands up to the present. In 1951, he planted five coconut trees on the
property in controversy. Petitioner's wife, Matilde Abejaron, harvested coconuts from these
trees.[3] Petitioner Abejaron also planted banana and avocado trees. He also put up a pitcher
pump.[4] All this time that the Abejarons introduced these improvements on the land in controversy,
respondent Nabasa did not oppose or complain about the improvements.
Knowing that the disputed land was public in character, petitioner declared only his house, and not the
disputed land, for taxation purposes in 1950, 1966, 1976, and 1978.[5] The last two declarations state
that petitioner Abejarons house stands on Lots 1 and 2, Block 5, Psu 154953.[6] Abejaron paid taxes on
the house in 1955, 1966, and 1981.[7]
Petitioner stated that beginning 1955, respondent Nabasa resided on the remaining 57-square meter
portion of Lot 1, Block 5, Psu-154953.[8] Nabasa built his house about four (4) meters away from
petitioner Abejaron's house. Beatriz Gusila, a neighbor of the Abejarons and the Nabasas confirmed
that when she arrived in Silway in 1949, Nabasa was not yet residing there while Abejaron was already
living in their house which stands to this day.
Before 1974, employees of the Bureau of Lands surveyed the area in controversy. Abejaron merely
watched them do the survey[9] and did not thereafter apply for title of the land on the belief that he
could not secure title over it as it was government property.[10] Without his (Abejaron) knowledge and
consent, however, Nabasa "clandestinely, willfully, fraudulently, and unlawfully applied for and caused
the titling in his name" of the entire Lot 1, Block 5, Psu-154953, including petitioner Abejaron's 118-
square meter portion.[11] Petitioner imputes bad faith and fraud on the part of Nabasa because in
applying for and causing the titling in his name of Lot 1, Block 5, Psu-154953, Nabasa represented
himself to be the actual and lawful possessor of the entire Lot 1, Block 5, including petitioner Abejaron's
118-square meter portion despite knowledge of Abejaron's actual occupation and possession of said
portion.[12]
On September 24, 1974, Nabasa was issued Original Certificate of Title No. P-4140 pursuant to Free
Patent No. (XI-4) 2877 covering Lot 1, Block 5, Psu-154953. As the title included petitioner Abejarons
118-square meter portion of the lot, his son, Alejandro Abejaron, representing Matilde Abejaron
(petitioner Abejaron's wife), filed a protest with the Bureau of Lands, Koronadal, South Cotabato against
Nabasa's title and application. The protest was dismissed on November 22, 1979 for failure of Matilde
and Alejandro to attend the hearings.[13] Alejandro claims, however, that they did not receive notices
of the hearings. Alejandro filed a motion for reconsideration dated January 10, 1980. Alejandro also
filed a notice of adverse claim on January 14, 1980. Subsequently, he requested the Bureau of Lands to
treat the motion as an appeal considering that it was filed within the 60-day reglementary period. The
motion for reconsideration was endorsed and forwarded by the District Land Office XI-3 of the Bureau of
Lands in Koronadal, Cotabato to the Director of Lands in Manila on November 24, 1981.[14] But because
the appeal had not been resolved for a prolonged period for unknown reasons, petitioner Abejaron filed
on March 12, 1982 an action for reconveyance with damages against respondent Nabasa before Branch
22, Regional Trial Court of General Santos City.[15] On May 10, 1982, petitioner filed a notice of lis
pendens.[16]
Abner Lagsub, geodetic engineer, testified for the petitioner. Lagsub stated that on March 30, 1980,
Alejandro Abejaron hired him to relocate Lot 1, Block 5, Psu-154953, the land in controversy. He
surveyed the lot measuring 175 square meters. Fifty-seven (57) square meters of Lot 1 and a portion of
the adjoining Lot 3 were occupied by Nabasa's house. This portion was fenced partly by hollow blocks
and partly by bamboo. On the remaining 118 square meters stood a portion of petitioner Abejarons
house and two coconut trees near it, and his store. Abejaron's 118-square meter portion was separated
from Nabasa's 57-square meter part by Abejaron's fence made of hollow blocks. Both Nabasas and
Abejarons houses appeared more than twenty years old while the coconut trees appeared about 25
years old.
Back in 1971, Lagsub conducted a subdivision survey on Psu-154953. He was then hired by the Silway
Neighborhood Association to conduct the survey for purposes of allocating lots to the members of the
association, among whom were respondent Nabasa and petitioner Abejaron. When the 1971 survey
was conducted, both the Abejarons and Nabasa were already occupying their respective 118 and 57
square meter portions of Lot 1, Block 5. Nabasa and Matilde Abejaron, representative of petitioner,
were present during the survey.[17]
Respondent Nabasa had a different story to tell. He contends that he had been residing on a 12 x 15
meter or 180-square meter public land in Silway, General Santos City since 1945. He admits that
petitioner Abejaron was already residing in Silway when he arrived there. Nabasa constructed a house
which stands to this day and planted five coconut trees on this 180-square meter land, but only two of
the trees survived. Nabasa never harvested coconuts from these trees as petitioner Abejaron claims to
own them and harvests the coconuts. In many parts of respondent Nabasas testimony, however, he
declared that he started occupying the 180-square meter area in 1976.[18]
Nabasa avers that previously, he and petitioner Abejaron were in possession of portions of Lot 2, Psu-
154953. This lot was subsequently surveyed and divided into smaller lots with the area of petitioner
Abejaron designated as Lot 2, Block 5, Psu-154953 measuring one hundred eighty (180) square meters,
while his was designated as Lot 1, Block 5, Psu-154953 with an area of one hundred seventy five (175)
square meters.
Instead of applying for free patent over his Lot 2, petitioner Abejaron gave this lot to his daughter
Conchita Abejaron-Abellon and allowed her to file the application with the District Land Office XI-4,
Bureau of Lands, Koronadal, South Cotabato. Conchita secured Free Patent No. (XI-4)-3293 over Lot
2. Pursuant to this, she was issued Original Certificate of Title No. P-4420. On April 27, 1981, Conchita's
title was transcribed in the Registration Book of General Santos City.
Respondent Nabasa, on the other hand, filed an application for Free Patent over Lot 1, Block 5, Psu-
154953 with the District Land Office No. XI-4, Bureau of Lands, Koronadal, South Cotabato. While the
application was pending, petitioner Abejaron forcibly encroached upon the northern and southwestern
portion of Lot 1, Block 5, Psu-159543. Abejaron fenced the disputed 118-square meter portion of Lot 1
and despite Nabasa's opposition, constructed a store near the road. Petitioner Abejaron then
transferred his old house constructed on Lot 2, Block 5, Psu-154953 to a portion of the disputed 118-
square meter area. Petitioner's daughter, Conchita, patentee and title holder of Lot 2, constructed her
own house in Lot 2.
Free Patent No. (XI-4)-2877, covering Lot 1, Block 5, was issued to respondent Nabasa on September 24,
1974. But before the patent could be transcribed on the Registration Book of the Registrar of Deeds of
General Santos City, the District Land Officer of District Land Office No. XI-4 recalled it for investigation
of an administrative protest filed by the petitioner.[19] The protest was given due course, but petitioner
Abejaron or his representative failed to appear in the hearings despite notice.
On November 22, 1979, the administrative protest was dismissed by the District Land Officer for failure
of petitioner Abejaron or his representative to appear in the hearings despite notice.[20] Respondent
Nabasa's Free Patent No. (XI-4)-2877 was then re-transmitted by the District Land Officer of District Land
Office XI-4 to the Register of Deeds, General Santos City, and the same was transcribed in the
Registration Book of the Registry of Property of General Santos City on December 13, 1979. Original
Certificate of Title No. P-4140, covering Lot 1, Block 2, Psu-154953, was issued to respondent
Nabasa.[21]
On March 12, 1982, petitioner Abejaron filed against respondent Nabasa an action for reconveyance
with damages seeking reconveyance of his 118-square meter portion of Lot 1, Block 5, Psu-154953.
During the trial, respondent Nabasa presented Abundio Guiral, his neighbor who had been living since
1945 in Lot 3, Block 5, Psu-154953, adjoining Nabasa's Lot 1. He testified that when he arrived in Silway,
petitioner Abejaron was already living there. Four months after, Nabasa started residing in the
area. Nabasa constructed a house, planted coconut trees, and fenced his 12 x 15 meter
area. Abejaron's house in 1945 is still the same house he lives in at present, but in 1977, it was jacked
up and transferred from Lot 2 to Lot 1, Block 5. Nabasa tried to prevent the transfer to no avail. The
house was then extended towards Lot 2.[22]
On rebuttal, petitioner Abejaron presented two neighbors. One of them, Alejandra Doria, started living
in Silway in 1947. She testified that when she arrived in the neighborhood, Abejaron's fence as it now
stands between the 57-square meter portion occupied by Nabasa's house and the 118-square meter
area claimed by petitioner Abejaron was already there.[23] The other neighbor, Pacencia Artigo, also
started living in Silway in 1947. She declared that the house of the Abejarons stands now where it stood
in 1947. She also testified that the Abejarons previously had a store smaller than their present
store.[24]
On September 27, 1985, after trial on the merits, the trial court ruled in favor of petitioner Abejaron, viz:
"WHEREFORE, IN VIEW OF ALL THE FOREGOING, this court hereby renders judgment as follows:
1. Declaring the possession and occupancy of Pacencio Abejaron over 118 square meters of Lot No. 1,
Block 5, Psu-154953 in good faith and thereby declaring the inclusion of 118 square meters of said lot in
OCT No. P-4140 erroneous and a mistake, and for which, defendant Felix Nabasa is hereby ordered to
reconvey and execute a registerable document in favor of plaintiff Pacencio Abejaron, Filipino, married
and a resident of Silway, General Santos City, his heirs, successors and assigns over an area of one
hundred eighteen (118) square meters of Lot No. 1, Block 5, Psu-154953, situated at Silway, General
Santos City, on the Western portion of said lot as shown in the sketch plan, Exhibit "R", and the
remaining portion of 57 square meters of said lot to be retained by defendant Felix Nabasa;
2) Should Felix Nabasa fails (sic) to do so, upon the finality of this judgment, the Clerk of Court shall
executed (sic) it in the name of Felix Nabasa, widower, and will have the same effect as if executed by
the latter and the Register of Deeds, General Santos City, is hereby directed to issue New Transfer
Certificate of Title to Alejandro Abejaron over 118 square meters of Lot No. 1, Block 5, Psu-154953, and
New Transfer Certificate of Title over 57 square meters of same Lot No. 1, Block 5, Psu-154953, in favor
of Felix Nabasa, and ultimately to have OCT No. P-4140 of Felix Nabasa cancelled accordingly."
Respondent Nabasa's motion for reconsideration having been denied, he appealed to the Court of
Appeals. On April 26, 1988, the Court of Appeals rendered a decision in favor of respondent Nabasa, viz:
". . . the only basis for reconveyance is actual fraud. In this case, Abejaron failed to substantiate the
existence of actual fraud. . . There was no proof of irregularity in the issuance of title nor in the
proceedings incident thereto nor was there a claim that fraud intervened in the issuance of the title,
thus, the title has become indefeasible (Frias v. Esquival, 67 SCRA 487). Abejaron was not able to
establish his allegation that Nabasa misrepresented his status of possession in his application for the
title. . . In fact, in Abejaron's answer to Nabasa's counterclaim, he said that Nabasa has been occupying
the area since 1950.
Contrary to the finding of the court a quo, the Bureau of Lands conducted an ocular inspection before
the title was issued. This was confirmed by Abejaron himself (tsn, January 19, 1984).
xxx
WHEREFORE, premises considered, the decision appealed from is hereby REVERSED and SET ASIDE and a
new one entered declaring Felix Nabasa as the owner of the lot covered by O.C.T. No. P-4140. Costs
against plaintif-appellee.
SO ORDERED."
Petitioner Abejaron filed a motion for reconsideration of the Court of Appeals decision. On July 22,
1988, the Court of Appeals rendered a resolution denying the motion for reconsideration for lack of
merit. Hence, this petition for review on certiorari with the following assignment of errors:
"I. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING THAT ACTUAL FRAUD WAS
COMMITTED BY THE PRIVATE RESPONDENT AND PROVEN BY THE PETITIONER AND SUSTAINED BY THE
TRIAL COURT WHEN PRIVATE RESPONDENT PROCURED THE TITLE IN HIS NAME OF THE AREA OF THE
LOT IN QUESTION, LOT 1, BLOCK 5, LOCATED AT SILWAY, DADIANGAS, GENERAL SANTOS CITY.
II. THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT THE LOT WHICH BELONGS TO
THE PETITIONER IS LOT 2 OF THE SAME BLOCK AND PSU, AND THAT THE PETITIONER FORCIBLY ENTERED
INTO LOT 1 OF THE SAME BLOCK AND PSU, AND FORCIBLY TRANSFERRED HIS OLD HOUSE FROM LOT 2
TO LOT 1 IS BASED ONLY ON THE SELF-SERVING ALLEGATIONS OF THE PRIVATE RESPONDENT AND NOT
SUPPORTED BY ANY COMPETENT AND CONVINCING EVIDENCE.
III. THE HONORABLE COURT OF APPEALS ERRED IN DISREGARDING THE FACT THAT PETITIONER HAS A
CLEAR RIGHT OVER THE PROPERTY IN QUESTION BECAUSE HE HAS BEEN IN ACTUAL AND LAWFUL
POSSESSION FOR SO MANY YEARS AND A CLAIMANT OF THE PROPERTY IN QUESTION."
We affirm the decision of the Court of Appeals.
An action for reconveyance of a property is the sole remedy of a landowner whose property has been
wrongfully or erroneously registered in another's name after one year from the date of the decree so
long as the property has not passed to an innocent purchaser for value.[25] 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.[26] 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.[27]
Petitioner Abejaron does not claim to own Lot 1, Block 5, Psu-154953. He in fact admits that he believed
the land in dispute was public in character, thus he did not declare it for taxation purposes despite
possession of it for a long time. Neither did he apply for title over it on the mistaken belief that he could
not apply for title of a public land. In his Complaint, he stated that respondent Nabasa's fraudulent
procurement of Free Patent No. (XI-4)-2877 and OCT No. P-4140 over the disputed land deprived him
not of ownership, but of his "right to file the necessary application thereon with the authorities
concerned"[28] as long-time possessor of the land.
Nonetheless, petitioner contends that an action for reconveyance is proper, viz:
". . . for an action of reconveyance of a parcel of land to prosper, it is not necessary that the proponent
be the absolute owner thereof. It is enough that the proponent has an equitable right thereon. In the
case at bar, the plaintiff had been in lawful, open, continuous and notorious possession, occupation and
control in the concept of an owner of a greater portion of the subject lot since 1945 and have (sic)
thereby acquired an equitable right thereon protected by law. Possession of public lands once
occupation of the same is proven, as the herein plaintiff did, under claim of ownership constitutes a
grant from the state (Republic vs. Vera, 120 SCRA 210). A portion of the public land ceased to be public
as soon as its claimant had performed all the conditions essential to a grant (Republic vs. Villanueva, 114
SCRA 875)."[29]
Petitioner's contention, buttressed by the Vera case and Chief Justice Teehankee's dissent in
the Villanueva case, is similar to the position taken by the plaintiff in Mesina v. Vda. de Sonza, et
al.[30] In that case, plaintiff filed in the Court of First Instance of Nueva Ecija an action for cancellation of
the original certificate of title procured by the defendant by virtue of a homestead patent. The title
covered a public land which she claimed to own through public, open, and peaceful possession for more
than thirty years. The law applicable in that case, which petitioner Abejaron apparently relies on in the
case at bar, is Sec. 48(b) of Commonwealth Act 141 or the Public Land Act, as amended by Republic Act
No. 1942, which took effect on June 22, 1957, viz:
"Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance (now Regional Trial Courts) of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title therefor,
under the Land Registration Act (now Property Registration Decree), to wit:
xxx
(b) Those who by themselves or through their predecessors in interest have been in open, continuous,
exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition of ownership, for at least thirty years immediately preceding the filing of
the application for confirmation of title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall
be entitled to a certificate of title under the provisions of this Chapter." (emphasis supplied)
Citing Susi v. Razon,[31] the Court interpreted this law, viz:
". . . where all the necessary requirements for a grant by the Government are complied with through
actual physical possession openly, continuously, and publicly with a right to a certificate of title to said
land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926 (carried over as Chapter
VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of
law not only a right to a grant, but a grant of the Government, for it is not necessary that a certificate of
title be issued in order that said grant may be sanctioned by the courts -an application therefor being
sufficient under the provisions of Section 47 of Act No. 2874 (reproduced as Section 50, Commonwealth
Act No. 141). If by a legal fiction, Valentin Susi had acquired the land in question by grant of the State, it
had already ceased to be of the public domain and had become private property, at least by
presumption, of Valentin Susi, beyond the control of the Director of Lands. (Italics supplied)"
The Mesina and Susi cases were cited in Herico v. Dar,[32] another action for cancellation of title issued
pursuant to a free patent. Again, the Court ruled that under Section 48(b) of the Public Land Act, as
amended by Rep. Act No. 1942, with the plaintiff's proof of occupation and cultivation for more than 30
years since 1914, by himself and by his predecessor-in-interest, title over the land had vested in him as
to segregate the land from the mass of public land. Thenceforth, the land was no longer disposable
under the Public Land Act by free patent.[33] The Court held, viz:
"As interpreted in several cases (Susi v. Razon, et al., 48 Phil. 424; Mesina v. Pineda Vda. de Sonza, G.R.
No. L-14722, May 25, 1960) when the conditions as specified in the foregoing provision are complied
with, the possessor is deemed to have acquired, by operation of law, a right to a grant, a government
grant, without the necessity of a certificate of title being issued. The land, therefore, ceases to be of
public domain, and beyond the authority of the Director of Lands to dispose of. The application for
confirmation is a mere formality, the lack of which does not affect the legal sufficiency of the title as
would be evidenced by the patent and the Torrens title to be issued upon the strength of said
patent."[34]
In citing Republic v. Villanueva, et al.,[35] petitioner Abejaron relied on the dissenting opinion of Chief
Justice Teehankee. However, the en banc majority opinion in that case and in Manila Electric Company
v. Bartolome,[36] departed from the doctrines enunciated in the Susi, Mesina, and Herico
cases. Citing Uy Un v. Perez,[37] the Court ruled that "the right of an occupant of public agricultural land
to obtain a confirmation of his title under Sec. 48(b) of Com. Act. No. 141, as amended by Rep. Act No.
1942, is 'derecho dominical incoativo' and that before the issuance of the certificate of title the
occupant is not in the juridical sense the true owner of the land since it still pertains to the State."[38]
The Court pointed out that the Villanueva and Meralco cases are different from the oft-cited Susi case as
the latter involved a parcel of land possessed by a Filipino citizen since time immemorial, while the land
in dispute in the Villanueva and Meralco cases were sought to be titled by virtue of Sec. 48(b) of the
Public Land Act, as amended. In explaining the nature of land possessed since time immemorial, the
Court quoted Oh Cho v. Director of Lands,[39] viz:
"All lands that were not acquired from the Government, either by purchase or by grant, belong to the
public domain. An exception to the rule would be any land that should have been in the possession of
an occupant and of his predecessors-in-interest since time immemorial, for such possession would
justify the presumption that the land had never been part of the public domain or that it had been a
private property even before the Spanish conquest."
In 1986, however, in Director of Lands v. Intermediate Appellate Court, et al.,[40] this Court en
banc recognized the strong dissent registered by Chief Justice Teehankee in the Villanueva case and
abandoned the Villanueva and Meralco ruling to revert to the Susi doctrine. Reiterating
the Susi and Herico cases, the Court ruled:
"Nothing can more clearly demonstrate the logical inevitability of considering possession of public land
which is of character and duration prescribed by statute as the equivalent of express grant from the
State than the dictum of the statute itself [Sec. 48(b)] that the possessor(s) 'x x x shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled to
a certificate of title x x x.' No proof being admissible to overcome a conclusive presumption,
confirmation proceedings would, in truth be little more than a formality, at the most limited to
ascertaining whether the possession claimed is of the required character and length of time; and
registration thereunder would not confer title, but simply recognize a title already vested. The
proceedings would not originally convert the land from public to private land, but only confirm such a
conversion already effected by operation of law from the moment the required period of possession
became complete."[41] (Emphasis supplied)
This is the prevailing rule as reiterated in the more recent case of Rural Bank of Compostela v. Court of
Appeals, a ponencia of now Chief Justice Davide, Jr.,[42] viz:
"The rule under the latter (Section 48[b] of the Public Land Act, as amended by R.A. No. 1942), is that
when the conditions specified therein are complied with, the possessor is deemed to have acquired, by
operation of law, a right to a government grant, without necessity of a certificate of title being issued,
and the land ceases to be part of the public domain and beyond the authority of the Director of
Lands."[43]
The question brought to the fore, therefore, is whether or not petitioner Abejaron has satisfied the
conditions specified in Sec. 48(b) of the Public Land Act, as amended by R.A. No. 1942. Sec. 48(b) has
been further amended by P.D. No. 1073 which took effect on January 25, 1977. Sec. 4 of the P.D. reads
as follows:
"Sec. 4. The provision of Section 48(b) and Section 48(c), Chapter VIII, of the Public Land Act, are hereby
amended in the sense that these provisions shall apply only to alienable and disposable lands of the
public domain which have been in open, continuous, exclusive and notorious possession and occupation
by the applicant himself or thru his predecessor-in-interest, under a bona fide claim of acquisition of
ownership, since June 12, 1945.
Sec. 48(b) of the Public Land Act, as further amended by P.D. No. 1073, now reads:
"(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of agricultural lands of the public domain, under
a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier, immediately preceding the
filing of the application for confirmation of title, except when prevented by wars or force
majeure. Those shall be conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the provisions of this chapter."
(Italics ours)[44]
However, as petitioner Abejaron's 30-year period of possession and occupation required by the Public
Land Act, as amended by R.A. 1942 ran from 1945 to 1975, prior to the effectivity of P.D. No. 1073 in
1977, the requirement of said P.D. that occupation and possession should have started on June 12, 1945
or earlier, does not apply to him. As the Susi doctrine holds that the grant of title by virtue of Sec. 48(b)
takes place by operation of law, then upon Abejaron's satisfaction of the requirements of this law, he
would have already gained title over the disputed land in 1975. This follows the doctrine laid down
in Director of Lands v. Intermediate Appellate Court, et al.,[45] that the law cannot impair vested rights
such as a land grant. More clearly stated, "Filipino citizens who by themselves or their predecessors-in-
interest have been, prior to the effectivity of P.D. 1073 on January 25, 1977, in open, continuous,
exclusive and notorious possession and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition of ownership, for at least 30 years, or at least since January 24, 1947" may
apply for judicial confirmation of their imperfect or incomplete title under Sec. 48(b) of the Public Land
Act.[46]
Having laid down the law applicable to the case at bar, i.e., Sec. 48(b) of the Public Land Act, as
amended by R.A. 1942, we now determine whether or not petitioner has acquired title over the
disputed land. In doing so, it is necessary for this Court to wade through the evidence on record to
ascertain whether petitioner has been in open, continuous, exclusive and notorious possession and
occupation of the 118-square meter disputed land for 30 years at least since January 24, 1947. It is
axiomatic that findings of fact by the trial court and the Court of Appeals are final and conclusive on the
parties and upon this Court, which will not be reviewed or disturbed on appeal unless these findings are
not supported by evidence or unless strong and cogent reasons dictate otherwise.[47] One instance
when findings of fact of the appellate court may be reviewed by this Court is when, as in the case at bar,
the factual findings of the Court of Appeals and the trial court are contradictory.[48]
Petitioner claims that he started occupying the disputed land in 1945. At that time, he built
a nipa house, a small store, and a fence made of wood to delineate his area. This nipa house was
improved in 1949 into a two-storey house. The small store was also made bigger in 1950. The wooden
fence was also changed to a fence made of hollow blocks. The two-storey house, bigger store, and
hollow-block fence all stand to this day. In 1951, petitioner planted coconut trees near his house. While
the petitioner has shown continued existence of these improvements on the disputed land, they were
introduced later than January 24, 1947. He has failed to establish the portion of the disputed land that
his original nipa house, small store and wooden fence actually occupied as of January 24, 1947. In the
absence of this proof, we cannot determine the land he actually possessed and occupied for thirty years
which he may acquire under Sec. 48(b) of the Public Land Act. Worthy of notice is the fact that the
disputed land was surveyed, subdivided into and identified by lots only in the 1970's. Therefore, prior to
the survey, it would be difficult to determine the metes and bounds of the land petitioner claims to have
occupied since 1947 in the absence of specific and incontrovertible proof.
The neighbors presented by the petitioner, namely Alejandra Doria, Pacencia Artigo, and Beatriz Gusila,
could not also further his cause as both Doria and Artigo stated that they started residing in Silway in
1947, without specifying whether it was on or prior to January 24, 1947, while Gusila arrived in the
neighborhood in 1949. While Doria testified that there was a fence between Abejaron's and Nabasa's
houses in 1947, she did not state that Abejaron's 118-square meter area was enclosed by a fence which
stands to this day. This is confirmed by Geodetic Engineer Lagsub's 1984 survey plan which shows that a
fence stands only on one side of the 118-square meter area, the side adjacent to Nabasa's 57-square
meter portion. Again, this poses the problem of determining the area actually occupied and possessed
by Abejaron at least since January 24, 1947.
Finally, as admitted by the petitioner, he has never declared the disputed land for taxation
purposes. While tax receipts and tax declarations are not incontrovertible evidence of ownership, they
become strong evidence of ownership acquired by prescription when accompanied by proof of actual
possession of the property or supported by other effective proof.[49] Even the tax declarations and
receipts covering his house do not bolster his case as the earliest of these was dated 1950.
Petitioner's evidence does not constitute the "well-nigh incontrovertible" evidence necessary to acquire
title through possession and occupation of the disputed land at least since January 24, 1947 as required
by Sec. 48(b) of the Public Land Act, as amended by R.A. 1942. The basic presumption is that lands of
whatever classification belong to the State and evidence of a land grant must be "well-nigh
incontrovertible."[50] As petitioner Abejaron has not adduced any evidence of title to the land in
controversy, whether by judicial confirmation of title, or homestead, sale, or free patent, he cannot
maintain an action for reconveyance.
In De La Pea v. Court of Appeals and Herodito Tan,[51] the petitioner filed an action for reconveyance,
claiming preferential right to acquire ownership over a 3/4 hectare of land and imputing fraud and
misrepresentation to respondent in securing a free patent and original certificate of title over the land in
controversy. The action for reconveyance was dismissed by the trial court and the Court of
Appeals. This Court affirmed the decision of the Court of Appeals, viz:
"It is well-settled that reconveyance is a remedy granted only to the owner of the property alleged to
be erroneously titled in another's name. (Tomas v. Court of Appeals, G.R. No. 79328, 21 May 1990, 185
SCRA 627, 633; Esconde v. Barlongay, G.R. No. 67583, 31 July 1987, 152 SCRA 603, 611; Nebrada v. Heirs
of Alivio, et al., 104 Phil. 126 [1958]; Director of Lands v. Register of Deeds of Rizal, 92 Phil. 826 [1953];
Azurin v. Quitoriano, et al., 81 Phil. 261 [1948]). 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 thirty (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. (Reyes v. Rodriguez, 62 Phil. 771, 776 [1936]) In such cases, the real party in interest is the
Republic of the Philippines to whom the property would revert if it is ever established, after appropriate
proceedings, that the free patent issued to the grantee is indeed vulnerable to annulment on the ground
that the grantee failed to comply with the conditions imposed by the law. (See Sec. 101 of C.A. 141
[Public Land Act]; Lucas v. Durian, 102 Phil. 1157, 1158 [1957]; Sumail v. Judge of the Court of First
Instance of Cotabato, et al., 96 Phil. 946, 953 [1955]). Not being an applicant, much less a grantee,
petitioner cannot ask for reconveyance." (emphasis supplied)[52]
In the more recent case of Tankiko, et al. v. Cezar, et al.,[53] plaintiffs filed an action for reconveyance
claiming that they were the actual occupants and residents of a 126,112-square meter land which was
titled to another person. The trial court dismissed the action, but the Court of Appeals reversed the
dismissal. Despite the appellate court's finding that plaintiffs had no personality to file the action for
reconveyance, the disputed land being part of the public domain, it exercised equity jurisdiction to avoid
leaving unresolved the matter of possession of the land in dispute. On appeal to this Court, we
reinstated the decision of the trial court and dismissed the action for reconveyance, viz:
". . . equity is invoked only when the plaintiff, on the basis of the action filed and relief sought, has a
clear right that he seeks to enforce, or that would obviously be violated if the action filed were to be
dismissed for lack of standing. In the present case, respondents have no clear enforceable right, since
their claim over the land in question is merely inchoate and uncertain. Admitting that they are only
applicants for sales patents on the land, they are not and they do not even claim to be owners thereof.
Second, it is evident that respondents are not the real parties in interest. Because they admit that they
are not the owners of the land but mere applicants for sales patents thereon, it is daylight clear that the
land is public in character and that it should revert to the State. This being the case, Section 101 of the
Public Land Act categorically declares that only the government may institute an action for
reconveyance of ownership of a public land. . .
x x x
In the present dispute, only the State can file a suit for reconveyance of a public land. Therefore, not
being the owners of the land but mere applicants for sales patents thereon, respondents have no
personality to file the suit. Neither will they be directly affected by the judgment in such suit.
x x x
Clearly, a suit filed by a person who is not a party in interest must be dismissed. Thus, in Lucas v. Durian,
102 Phil. 1157, September 23, 1957, the Court affirmed the dismissal of a Complaint filed by a party who
alleged that the patent was obtained by fraudulent means and consequently, prayed for the annulment
of said patent and the cancellation of a certificate of title. The Court declared that the proper party to
bring the action was the government, to which the property would revert."[54]
Similarly, as petitioner Abejaron has failed to show his title to the disputed land, he is not the proper
party to file an action for reconveyance that would result in the reversion of the land to the
government. It is the Solicitor General, on behalf of the government, who is by law mandated to
institute an action for reversion.[55] He has the specific power and function to "represent the
Government in all land registration and related proceedings" and to "institute actions for the reversion
to the Government of lands of the public domain and improvements thereon as well as lands held in
violation of the Constitution."[56] Since respondent Nabasa's Free Patent and Original Certificate of Title
originated from a grant by the government, their cancellation is a matter between the grantor and the
grantee.[57]
Having resolved that petitioner Abejaron does not have legal standing to sue and is not the real party in
interest, we deem it unnecessary to resolve the question of fraud and the other issues raised in the
petition. These shall be timely for adjudication if a proper suit is filed by the Solicitor General in the
future.
WHEREFORE, the petition is DENIED and the impugned decision of the Court of Appeals is
AFFIRMED. The Complaint filed in Civil Case No. 2492 before the Regional Trial Court of South Cotabato,
Branch 1, is DISMISSED. No costs.
SO ORDERED.