G.R. No. 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.
Actions; Res Judicata; Requisites.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.
Same; Same; Parties; For res judicata to apply, what is required is not absolute but only substantial identity of
parties.Petitioners 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. 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, or is a mere nominal party.
Same; Same; Forcible Entry; Ownership; A judgment rendered in a case for recovery of possession is conclusive
only on the question of possession and not on the ownership.But, there is merit in petitioners 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. 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. 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.
Same; Same; Remedies available to recover possession of real property; Accion reivindicatoria, accion interdictal
and accion publiciana, distinguished.The doctrine in Emilia v. Bado, 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 defendants possession of the property is illegal ab initio, or the summary action for unlawful detainer
(desahuico) where the defendants possession was originally lawful but ceased to be so by the expiration of his
right to possess, both of which must be brought within one year from the date of actual entry on the land, in case
of forcible entry, and from the date of last demand, in case of unlawful detainer, in the proper municipal trial court
or metropolitan trial court; accion publiciana which is a plenary action for recovery of the right to possess and
which should be brought in the proper regional trial court when the dispossession has lasted for more than one
year; and, accion reivindicatoria or accion de reivindicacion which seeks the recovery of ownership and includes
the jus utendi and the jus fruendi brought in the proper regional trial court.
Same; Same; Same; Same.Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff
alleges ownership over a parcel of land and seeks recovery of its full possession. It is different from accion
interdictal or accion publiciana where plaintiff merely alleges proof of a better right to possess without claim of
title.
Same; Same; A petition to quiet title has a cause of action different from that for ejectment.And, applying the
ruling of the Court En Banc in Quimpo v. De la Victoria, 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.
PETITION for review on certiorari of a decision of the then Court of First Instance of Zambales, Br. 1.
The facts are stated in the opinion of the Court.
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
x x x 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 x x x x 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 plaintiffs 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 x x x x.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
x x x plaintiff is the absolute owner in fee simple of a parcel of land identified as Lot No. 1641, Ts-308, Olongapo
Townsite Subdivision x x x covered by Original Certificate of Title No. P-3259, issued by the Register of Deeds for
the province of Zambales x x x x 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 plaintiffs 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 x x x x6
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, petitioners 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
of 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.
Petitioners 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 x x x 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 parties between the two actions. But, there is merit in petitioners 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. 43417 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 defendants possession of
the property is illegal ab initio, or the summary action for unlawful detainer (desahuico) where the defendants
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 the jus utendi and the jus fruendi brought in
the proper regional trial court.
Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff alleges ownership over a parcel
of land and seeks recovery of its full possession.21 It is different from accion interdictal or accion publiciana where
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 plaintiffs 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 a 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. Dela 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 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. Javier vs. Veridiano II, 237 SCRA 565, G.R. No. 48050 October 10, 1994
G.R. No. 181970.August 3, 2010.*
BERNARDO DE LEON, petitioner, vs. PUBLIC ESTATES AUTHORITY substituted by the CITY OF PARAAQUE, RAMON
ARELLANO, JR., RICARDO PENA and REYMUNDO ORPILLA, respondents.
G.R. No. 182678.August 3, 2010.*
PUBLIC ESTATES AUTHORITY (now PHILIPPINE RECLAMATION AUTHORITY), substituted by the CITY OF PARAAQUE,
petitioner, vs. HON. SELMA PALACIO ALARAS, in her capacity as the Acting Presiding Judge of Branch 135, Regional
Trial Court of Makati City, and BERNARDO DE LEON, respondents.
Judgments; Writs of Execution; Ownership; Where the ownership of a parcel of land was decreed in the judgment,
the delivery of the possession of the land should be considered included in the decision, it appearing that the
defeated partys claim to the possession thereof is based on his claim of ownership.As a general rule, a writ of
execution should conform to the dispositive portion of the decision to be executed; an execution is void if it is in
excess of and beyond the original judgment or award. The settled general principle is that a writ of execution must
conform strictly to every essential particular of the judgment promulgated, and may not vary the terms of the
judgment it seeks to enforce, nor may it go beyond the terms of the judgment sought to be executed. However, it
is equally settled that possession is an essential attribute of ownership. Where the ownership of a parcel of land
was decreed in the judgment, the delivery of the possession of the land should be considered included in the
decision, it appearing that the defeated partys claim to the possession thereof is based on his claim of ownership.
Furthermore, adjudication of ownership would include the delivery of possession if the defeated party has not
shown any right to possess the land independently of his claim of ownership which was rejected. This is precisely
what happened in the present case. This Court had already declared the disputed property as owned by the State
and that De Leon does not have any right to possess the land independent of his claim of ownership.
Same; Same; Same; A judgment for the delivery or restitution of property is essentially an order to place the
prevailing party in possession of the property.In addition, a judgment for the delivery or restitution of property is
essentially an order to place the prevailing party in possession of the property. If the defendant refuses to
surrender possession of the property to the prevailing party, the sheriff or other proper officer should oust him. No
express order to this effect needs to be stated in the decision; nor is a categorical statement needed in the
decision that in such event the sheriff or other proper officer shall have the authority to remove the improvements
on the property if the defendant fails to do so within a reasonable period of time. The removal of the improvements
on the land under these circumstances is deemed read into the decision, subject only to the issuance of a special
order by the court for the removal of the improvements.
Same; Same; Same; A judgment is not confined to what appears upon the face of the decision, but also those
necessarily included therein or necessary thereto.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. In the
present case, it would be redundant for PEA to go back to court and file an ejectment case simply to establish its
right to possess the subject property. Contrary to De Leons claims, the issuance of the writ of execution by the trial
court did not constitute an unwarranted modification of this Courts decision in PEA v. CA, but rather, was a

necessary complement thereto. Such writ was but an essential consequence of this Courts ruling affirming the
nature of the subject parcel of land as public and at the same time dismissing De Leons claims of ownership and
possession. To further require PEA to file an ejectment suit to oust de Leon and his siblings from the disputed
property would, in effect, amount to encouraging multiplicity of suits.
Certiorari; Principle of Judicial Courtesy; Section 7, Rule 65 of the Rules of Court provides the general rule that the
mere pendency of a special civil action for certiorari commenced in relation to a case pending before a lower court
or court of origin does not stay the proceedings therein in the absence of a writ of preliminary injunction or
temporary restraining order; It is true that there are instances where, even if there is no writ of preliminary
injunction or temporary restraining order issued by a higher court, it would be proper for a lower court or court of
origin to suspend its proceedings on the precept of judicial courtesy, but this principle of judicial courtesy remains
to be the exception rather than the rule.As to whether or not the RTC committed grave abuse of discretion in
holding in abeyance the resolution of PEAs Motion for the Issuance of a Writ of Demolition, Section 7, Rule 65 of
the Rules of Court provides the general rule that the mere pendency of a special civil action for certiorari
commenced in relation to a case pending before a lower court or court of origin does not stay the proceedings
therein in the absence of a writ of preliminary injunction or temporary restraining order. It is true that there are
instances where, even if there is no writ of preliminary injunction or temporary restraining order issued by a higher
court, it would be proper for a lower court or court of origin to suspend its proceedings on the precept of judicial
courtesy. The principle of judicial courtesy, however, remains to be the exception rather than the rule. As held by
this Court in Go v. Abrogar, 398 SCRA 166 (2003), the precept of judicial courtesy should not be applied
indiscriminately and haphazardly if we are to maintain the relevance of Section 7, Rule 65 of the Rules of Court.
Indeed, in the amendments introduced by A.M. No. 07-7-12-SC, a new paragraph is now added to Section 7, Rule
65, which provides as follows: The public respondent shall proceed with the principal case within ten (10) days
from the filing of a petition for certiorari with a higher court or tribunal, absent a temporary restraining order or a
preliminary injunction, or upon its expiration. Failure of the public respondent to proceed with the principal case
may be a ground for an administrative charge.
Temporary Restraining Orders (TROs); The Order of the Regional Trial Court (RTC) holding in abeyance the
resolution of Public Estates Authoritys (PEAs) Motion for the Issuance of a Writ of Demolition appears to be a
circumvention of the provisions of Section 5, Rule 58 of the Rules of Court, which limit the period of effectivity of
restraining orders issued by the courts.The Order of the RTC holding in abeyance the resolution of PEAs Motion
for the Issuance of a Writ of Demolition also appears to be a circumvention of the provisions of Section 5, Rule 58
of the Rules of Court, which limit the period of effectivity of restraining orders issued by the courts. In fact, the
assailed Orders of the RTC have even become more potent than a TRO issued by the CA because, under the Rules
of Court, a TRO issued by the CA is effective only for sixty days. In the present case, even in the absence of a TRO
issued by a higher court, the RTC, in effect, directed the maintenance of the status quo by issuing its assailed
Orders. Worse, the effectivity of the said Orders was made to last for an indefinite period because the resolution of
PEAs Motion for the Issuance of a Writ of Demolition was made to depend upon the finality of the judgment in G.R.
No. 181970. Based on the foregoing, the Court finds that the RTC committed grave abuse of discretion in issuing
the assailed Orders dated December 28, 2007 and March 4, 2008.
Judgments; To get the true intent and meaning of a decision, no specific portion thereof should be isolated and
read in this context, but the same must be considered in its entirety.The Court reminds the De Leon that it does
not allow the piecemeal interpretation of its Decisions as a means to advance his case. To get the true intent and
meaning of a decision, no specific portion thereof should be isolated and read in this context, but the same must
be considered in its entirety. Read in this manner, PEAs right to possession of the subject property, as well as the
removal of the improvements or structures existing thereon, fully follows after considering the entirety of the
Courts decision in PEA v. CA. This is consistent with the provisions of Section 10, paragraphs (c) and (d), Rule 39 of
the Rules of Court, which provide for the procedure for execution of judgments for specific acts.
Same; Just as a losing party has the right to file an appeal within the prescribed period, the winning party also has
the correlative right to enjoy the finality of the resolution of his case by the execution and satisfaction of the
judgment, which is the life of the law.As a final note, it bears to point out that this case has been dragging for
more than 15 years and the execution of this Courts judgment in PEA v. CA has been delayed for almost ten years
now simply because De Leon filed a frivolous appeal against the RTCs order of execution based on arguments that
cannot hold water. As a consequence, PEA is prevented from enjoying the fruits of the final judgment in its favor.
The Court agrees with the Office of the Solicitor General in its contention that every litigation must come to an end
once a judgment becomes final, executory and unappealable. Just as a losing party has the right to file an appeal
within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of
his case by the execution and satisfaction of the judgment, which is the life of the law. To frustrate it by dilatory
schemes on the part of the losing party is to frustrate all the efforts, time and expenditure of the courts. It is in the
interest of justice that this Court should write finis to this litigation.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals; and SPECIAL CIVIL ACTION
in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Felix B. Serina for Bernardo De Leon.
PERALTA,J.:
Before the Court are two consolidated petitions.
G.R. No. 181970 is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Bernardo de Leon
seeking the reversal and setting aside of the Decision1 of the Court of Appeals (CA), dated November 21, 2007, in
CA-G.R. SP No. 90328 which dismissed his petition for certiorari. De Leon also assails the CA Resolution2 dated
March 4, 2008 denying his Motion for Reconsideration.
On the other hand, G.R. No. 182678 is a petition for certiorari under Rule 65 of the Rules of Court filed by the Public
Estates Authority (PEA)3 seeking the nullification of the Orders dated December 28, 2007 and March 4, 2008 of the
Regional Trial Court (RTC) of Makati City, Branch 135 in Civil Case No. 93-143.
The pertinent factual and procedural antecedents of the case, as summarized by the CA, are as follows:
On [January 15, 1993], petitioner Bernardo De Leon (De Leon) filed a Complaint for Damages with Prayer for
Preliminary Injunction before the Regional Trial Court [RTC] of Makati City, raffled to Branch 135, against
respondent Public Estates Authority (PEA), a government-owned corporation, as well as its officers, herein private
respondents Ramon Arellano, Jr., Ricardo Pena and Reymundo Orpilla. The suit for damages hinged on the alleged
unlawful destruction of De Leons fence and houses constructed on Lot 5155 containing an area of 11,997 square
meters, situated in San Dionisio, Paraaque, which De Leon claimed has been in the possession of his family for
more than 50 years. Essentially, De Leon prayed thatone, lawful possession of the land in question be awarded to
him; two, PEA be ordered to pay damages for demolishing the improvements constructed on Lot 5155; and, three,
an injunctive relief be issued to enjoin PEA from committing acts which would violate his lawful and peaceful
possession of the subject premises.
The court a quo found merit in De Leons application for writ of preliminary injunction and thus issued the Order
dated 8 February 1993, pertinent portions of which read:
After a careful consideration of the evidence presented and without going into the actual merits of the case, this
Court finds that plaintiff (De Leon) has duly established by preponderance of evidence that he has a legal right
over the subject matter of the instant case and is entitled to the injunctive relief demanded for and may suffer
irreparable damage or injury if such right is not protected by Law [Rules (sic) 58, Section 3 of the Revised (Rules of
Court)].
Premises considered upon plaintiffs (De Leons) filing of a bond in the amount of P500,000.00, let a writ of
preliminary injunction be issued against the defendants, their agents, representatives and other persons (PEA and
its officers) acting for and in their behalf are hereby enjoined from disturbing the peaceful possession of plaintiff
(De Leon) and his co-owners over Lot 5155 and further, from destroying and/or removing whatever other
improvements thereon constructed, until further orders of this Court.
SO ORDERED. (Emphasis supplied)
PEA sought recourse before the Supreme Court through a Petition for Certiorari with Prayer for a Restraining Order,
ascribing grave abuse of discretion against the court a quo for issuing injunctive relief. The Petition was later
referred to this Court for proper determination and disposition, and was docketed as CA-G.R. SP No. 30630.
On 30 September 1993, the Ninth Division of this Court rendered a Decision discerning that the court a quo did not
act in a capricious, arbitrary and whimsical exercise of power in issuing the writ of preliminary injunction against
PEA. The Ninth Division ruled that the court a quo was precisely careful to state in its Order that it was without
going into the actual merits of the case and that the words plaintiff (De Leon) and his co-owners were used by
the court a quo rather loosely and did not intend it to be an adjudication of ownership.
Unfazed, PEA appealed to the Supreme Court via a Petition for Certiorari insisting that Lot 5155 was a salvage zone
until it was reclaimed through government efforts in 1982. The land was previously under water on the coastline
which reached nine to twenty meters deep. In 1989, PEA started constructing R-1 Toll Expressway Road for the
Manila-Cavite Coastal Road, which project directly traversed Lot 5155. PEA argued that the documentary evidence
presented by De Leon to bolster his fallacious claim of possession and ownership were procured only in 1992, thus

negating his very own allegation that he and his predecessors-in-interest have been in occupation since time
immemorial.
Ruling squarely on the issue adduced before it, the Supreme Court declared that Lot 5155 was a public land so that
De Leons occupation thereof, no matter how long ago, could not confer ownership or possessory rights.
Prescinding therefrom, no writ of injunction may lie to protect De Leons nebulous right of possession. Accordingly,
in its Decision dated 20 November 2000, the Supreme Court disposed of the controversy in this wise:
WHEREFORE, the Court REVERSES the decision of the Court of Appeals in CA-G.R. SP No. 30630, and DISMISSES
the complaint in Civil Case No. 93-143 of the Regional Trial Court, Makati.
No costs.
SO ORDERED.
The aforesaid Decision became final and executory as no motion for reconsideration was filed. In due course, PEA
moved for the issuance of a writ of execution praying that De Leon and persons claiming rights under him be
ordered to vacate and peaceably surrender possession of Lot 5155.
Acting on PEAs motion, the court a quo issued the first assailed Order dated 15 September 2004, viz:
Acting on the Motion For Issuance Of Writ of Execution filed by defendant Public Estate[s] Authority, and finding
the same to be impressed with merit, the same is GRANTED.
Let a Writ of Execution issue directing plaintiff, his agents, principals, successors-in-interest and all persons
claiming rights under him to vacate and peaceably turn over possession of Lot 5155 to defendant Public Estate[s]
Authority.
SO ORDERED.
As could well be expected, De Leon moved for reconsideration thereof and quashal of the writ of execution. He
adamantly insisted that the court a quos Order for the issuance of the writ of execution completely deviated from
the dispositive portion of the Supreme Courts Decision dated 20 November 2000 as it did not categorically direct
him to surrender possession of Lot 5155 in favor of PEA.
However, both motions met the same fate as these were denied by the court a quo in the second disputed Order
dated 29 April 2005.4
Dissatisfied, De Leon filed another Motion for Reconsideration dated July 1, 2005, but the same was denied by the
RTC in an Order dated July 27, 2005.
De Leon then filed a special civil action for certiorari with the CA assailing the September 15, 2004 and April 29,
2005 Orders of the RTC of Makati City. This was docketed as CA-G.R. SP No. 90328. In the same proceeding, De
Leon filed an Urgent-Emergency Motion for Temporary Restraining Order (TRO) and Issuance of Writ of Preliminary
Injunction but the same was denied by the CA in a Resolution dated April 24, 2006.
Subsequently, De Leon filed a second special civil action for certiorari with the CA seeking to annul and set aside
the same RTC Orders dated September 15, 2004 and April 29, 2005, as well as the RTC Order of July 27, 2005. The
case was docketed as CA-G.R. SP No. 90984.
On July 26, 2006, PEA filed a Very Urgent Motion for Issuance of Writ of Demolition5 praying that the RTC issue a
Special Order directing De Leon and persons claiming under him to remove all improvements erected inside the
premises of the subject property and, in case of failure to remove the said structures, that a Special Order and Writ
of Demolition be issued directing the sheriff to remove and demolish the said improvements.
On October 11, 2006, the RTC issued an Order6 holding in abeyance the Resolution of PEAs Motion. PEA filed a
Motion for Reconsideration,7 but it was denied by the RTC in an Order8 dated January 12, 2007.
On February 27, 2007, PEA filed an Omnibus Motion9 to dismiss or, in the alternative, resolve the petitions in CAG.R. SP No. 90328 and CA-G.R. SP No. 90984.
In its Decision10 dated March 21, 2007, the CA dismissed De Leons petition in CA-G.R. SP No. 90984 on the ground
of forum shopping.
Subsequently, on November 21, 2007, the CA also dismissed De Leons petition in CA-G.R. SP No. 90328 holding
that an earlier decision promulgated by the Supreme Court, finding the subject property to be public and that De

Leon has no title and no clear legal right over the disputed lot, has already attained finality.11 De Leon filed a
Motion for Reconsideration, but the CA denied it via its Resolution12 dated March 4, 2008.
Thereafter, PEA filed an Urgent Motion to Resolve (Re: Very Urgent Motion for Issuance of Writ of Demolition).13
On December 28, 2007, the RTC issued an Order14 holding in abeyance the resolution of PEAs Motion pending
receipt by the trial court of the entry of judgment pertaining to CA-G.R. SP No. 90328. PEA filed a Motion for
Reconsideration.15
In its Order dated March 4, 2008, the RTC issued an Order denying PEAs Motion for Reconsideration.
On April 23, 2008, De Leon filed the present petition for review on certiorari, docketed as G.R. No. 181970,
assailing the November 21, 2007 Decision of the CA.
Subsequently, on May 15, 2008, PEA, on the other hand, filed the instant special civil action for certiorari, docketed
as G.R. No. 182678, questioning the Orders of the RTC of Makati City, dated December 28, 2007 and March 4,
2008.
In G.R. No. 181970, De Leon questions the Decision of the CA on the following grounds: (a) he can only be removed
from the subject land through ejectment proceedings; (b) the Decision of this Court in G.R. No. 112172 merely
ordered the dismissal of De Leons complaint for damages in Civil Case No. 93-143; and (c) even though petitioner
is not the owner and has no title to the subject land, mere prior possession is only required for the establishment of
his right.
In G.R. No. 182678, the sole issue raised is whether respondent judge committed grave abuse of discretion in
issuing the assailed Orders which held in abeyance the resolution of PEAs Motion for the Issuance of a Writ of
Demolition.
On February 25, 2009, PEA and the City of Paraaque filed a Joint Motion for Substitution stating that PEA had
transferred its ownership and ceded its interests over the subject property to the City of Paraaque as full payment
for all of the formers real property tax liabilities. As a consequence, the movants prayed that PEA be substituted
by the City of Paraaque as petitioner in G.R. No. 182678 and respondent in G.R. No. 181970.16
In a Resolution17 dated on October 14, 2009, this Court granted the Motion for Substitution filed by PEA and the
City of Paraaque.
The issues raised in the present petitions boil down to the question of whether PEA is really entitled to possess the
subject property and, if answered in the affirmative, whether the RTC should proceed to hear PEAs Motion for the
Issuance of a Writ of Demolition.
The Court rules for PEA.
The question of ownership and rightful possession of the subject property had already been settled and laid to rest
in this Courts Decision dated November 20, 2000 in G.R. No. 112172 entitled, Public Estates Authority v. Court of
Appeals (PEA v. CA).18 In the said case, the Court ruled thus:
The issue raised is whether respondent and his brothers and sisters were lawful owners and possessors of Lot
5155 by mere claim of ownership by possession for a period of at least fifty (50) years.
The Court of Appeals ruled that respondent Bernardo de Leon and his brothers and sisters were lawful owners and
possessors of Lot 5155 entitled to protection by injunction against anyone disturbing their peaceful possession of
said Lot.
The ruling is erroneous. An applicant seeking to establish ownership of land must conclusively show that he is the
owner in fee simple, for the standing presumption is that all lands belong to the public domain of the State, unless
acquired from the Government either by purchase or by grant, except lands possessed by an occupant and his
predecessors 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 private property even before the Spanish conquest.
In this case, the land in question is admittedly public. The respondent Bernardo de Leon has no title thereto at all.
His claim of ownership is based on mere possession by himself and his predecessors-in-interests, who claim to
have been in open, continuous, exclusive and notorious possession of the land in question, under a bona fide claim
of ownership for a period of at least fifty (50) years. However, the survey plan for the land was approved only in
1992, and respondent paid the realty taxes thereon on October 30, 1992, shortly before the filing of the suit below
for damages with injunction. Hence, respondent must be deemed to begin asserting his adverse claim to Lot 5155
only in 1992. More, Lot 5155 was certified as alienable and disposable on March 27, 1972, per certificate of the

Department of Environment and Natural Resources. It is obvious that respondents possession has not ripened into
ownership.
xxxx
Consequently, respondent De Leon has no clear legal right to the lot in question, and a writ of injunction will not lie
to protect such nebulous right of possession. x x x19
The Court does not subscribe to De Leons argument that the issues of ownership and possession of the subject lot
should not have been taken up by the court on the ground that his complaint is only for damages. De Leon must be
aware that his action for damages is anchored on his claim that he owns and possesses the subject property.20 On
this basis, it would be inevitable for the court to discuss the issues of whether he, in fact, owns the disputed
property and, as such, has the right to possess the same. Moreover, it is clear from this Courts Decision in PEA v.
CA that the main issue resolved therein was whether respondent [De Leon] and his brothers and sisters were the
lawful owners and possessors of Lot 5155 by mere claim of ownership by possession for a period of at least fifty
(50) years.
De Leon insists that what this Court did in PEA v. CA was to simply dismiss his complaint for damages and nothing
more, and that the RTC erred and committed grave abuse of discretion in issuing a writ of execution placing PEA in
possession of the disputed property. He insists that he can only be removed from the disputed property through an
ejectment proceeding.
The Court is not persuaded.
As a general rule, a writ of execution should conform to the dispositive portion of the decision to be executed; an
execution is void if it is in excess of and beyond the original judgment or award.21 The settled general principle is
that a writ of execution must conform strictly to every essential particular of the judgment promulgated, and may
not vary the terms of the judgment it seeks to enforce, nor may it go beyond the terms of the judgment sought to
be executed.22
However, it is equally settled that possession is an essential attribute of ownership.23 Where the ownership of a
parcel of land was decreed in the judgment, the delivery of the possession of the land should be considered
included in the decision, it appearing that the defeated partys claim to the possession thereof is based on his
claim of ownership.24 Furthermore, adjudication of ownership would include the delivery of possession if the
defeated party has not shown any right to possess the land independently of his claim of ownership which was
rejected.25 This is precisely what happened in the present case. This Court had already declared the disputed
property as owned by the State and that De Leon does not have any right to possess the land independent of his
claim of ownership.
In addition, a judgment for the delivery or restitution of property is essentially an order to place the prevailing
party in possession of the property.26 If the defendant refuses to surrender possession of the property to the
prevailing party, the sheriff or other proper officer should oust him.27 No express order to this effect needs to be
stated in the decision; nor is a categorical statement needed in the decision that in such event the sheriff or other
proper officer shall have the authority to remove the improvements on the property if the defendant fails to do so
within a reasonable period of time.28 The removal of the improvements on the land under these circumstances is
deemed read into the decision, subject only to the issuance of a special order by the court for the removal of the
improvements.29
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.30 In the present case, it would be redundant for PEA to go back
to court and file an ejectment case simply to establish its right to possess the subject property. Contrary to De
Leons claims, the issuance of the writ of execution by the trial court did not constitute an unwarranted
modification of this Courts decision in PEA v. CA, but rather, was a necessary complement thereto. Such writ was
but an essential consequence of this Courts ruling affirming the nature of the subject parcel of land as public and
at the same time dismissing De Leons claims of ownership and possession. To further require PEA to file an
ejectment suit to oust de Leon and his siblings from the disputed property would, in effect, amount to encouraging
multiplicity of suits.
De Leon also contends that there was never any government infrastructure project in the subject land, much less
a Manila-Cavite Coastal Road traversing it, at any time ever since, until now and that allegations of a government
project in the subject land and of such Road traversing the subject land have been downright falsities and lies and
mere concoctions of respondent PEA.31 However, this Court has already ruled in PEA v. CA that it is not disputed
that there is a government infrastructure project in progress traversing Lot 5155, which has been enjoined by the
writ of injunction issued by the trial court.

In any case, De Leons argument that there was no government infrastructure project in the subject property begs
the issue of ownership and rightful possession. The subject lot was properly identified. There is no dispute as to its
exact location. Hence, whether or not there is a government project existing within the premises or that which
traverses it is not relevant to the issue of whether petitioner is the owner of the disputed lot and, therefore, has
legal possession thereof.
As to whether or not the RTC committed grave abuse of discretion in holding in abeyance the resolution of PEAs
Motion for the Issuance of a Writ of Demolition, Section 7,32 Rule 65 of the Rules of Court provides the general rule
that the mere pendency of a special civil action for certiorari commenced in relation to a case pending before a
lower court or court of origin does not stay the proceedings therein in the absence of a writ of preliminary
injunction or temporary restraining order. It is true that there are instances where, even if there is no writ of
preliminary injunction or temporary restraining order issued by a higher court, it would be proper for a lower court
or court of origin to suspend its proceedings on the precept of judicial courtesy.33 The principle of judicial courtesy,
however, remains to be the exception rather than the rule. As held by this Court in Go v. Abrogar,34 the precept of
judicial courtesy should not be applied indiscriminately and haphazardly if we are to maintain the relevance of
Section 7, Rule 65 of the Rules of Court.
Indeed, in the amendments introduced by A.M. No. 07-7-12-SC, a new paragraph is now added to Section 7, Rule
65, which provides as follows:
The public respondent shall proceed with the principal case within ten (10) days from the filing of a petition for
certiorari with a higher court or tribunal, absent a temporary restraining order or a preliminary injunction, or upon
its expiration. Failure of the public respondent to proceed with the principal case may be a ground for an
administrative charge.
While the above quoted amendment may not be applied in the instant case, as A.M. No. 07-7-12-SC was made
effective only on December 27, 2007, the provisions of the amendatory rule clearly underscores the urgency of
proceeding with the principal case in the absence of a temporary restraining order or a preliminary injunction.
This urgency is even more pronounced in the present case, considering that this Courts judgment in PEA v. Court
of Appeals(CA), finding that De Leon does not own the subject property and is not entitled to its possession, had
long become final and executory. As a consequence, the writ of execution, as well as the writ of demolition, should
be issued as a matter of course, in the absence of any order restraining their issuance. In fact, the writ of
demolition is merely an ancillary process to carry out the Order previously made by the RTC for the execution of
this Courts decision in PEA v. CA. It is a logical consequence of the writ of execution earlier issued.
Neither can De Leon argue that he stands to sustain irreparable damage. The Court had already determined with
finality that he is not the owner of the disputed property and that he has no right to possess the same independent
of his claim of ownership.
Furthermore, the Order of the RTC holding in abeyance the resolution of PEAs Motion for the Issuance of a Writ of
Demolition also appears to be a circumvention of the provisions of Section 5, Rule 58 of the Rules of Court, which
limit the period of effectivity of restraining orders issued by the courts. In fact, the assailed Orders of the RTC have
even become more potent than a TRO issued by the CA because, under the Rules of Court, a TRO issued by the CA
is effective only for sixty days. In the present case, even in the absence of a TRO issued by a higher court, the RTC,
in effect, directed the maintenance of the status quo by issuing its assailed Orders. Worse, the effectivity of the
said Orders was made to last for an indefinite period because the resolution of PEAs Motion for the Issuance of a
Writ of Demolition was made to depend upon the finality of the judgment in G.R. No. 181970. Based on the
foregoing, the Court finds that the RTC committed grave abuse of discretion in issuing the assailed Orders dated
December 28, 2007 and March 4, 2008.
Finally, the Court reminds the De Leon that it does not allow the piecemeal interpretation of its Decisions as a
means to advance his case. To get the true intent and meaning of a decision, no specific portion thereof should be
isolated and read in this context, but the same must be considered in its entirety.35 Read in this manner, PEAs
right to possession of the subject property, as well as the removal of the improvements or structures existing
thereon, fully follows after considering the entirety of the Courts decision in PEA v. CA. This is consistent with the
provisions of Section 10, paragraphs (c) and (d), Rule 39 of the Rules of Court, which provide for the procedure for
execution of judgments for specific acts, to wit:
SECTION10.Execution of judgments for specific act.
xxxx
(c)Delivery or restitution of real property.The officer shall demand of the person against whom the judgment
for the delivery or restitution of real property is rendered and all persons claiming rights under him to peaceably

10

vacate the property within the three (3) working days, and restore possession thereof to the judgment obligee;
otherwise, the officer shall oust all such persons therefrom with the assistance, if necessary, of appropriate peace
officers, and employing such means as may be reasonably necessary to retake possession, and place the judgment
obligee in possession of such property. Any costs, damages, rents or profits awarded by the judgment shall be
satisfied in the same manner as a judgment for money.
(d)Removal of improvements on property subject of execution.When the property subject of execution contains
improvements constructed or planted by the judgment obligor or his agent, the officer shall not destroy, demolish
or remove said improvements, except upon special order of the court, issued upon motion of the judgment obligee
after due hearing and after the former has failed to remove the same within a reasonable time fixed by the court.
As a final note, it bears to point out that this case has been dragging for more than 15 years and the execution of
this Courts judgment in PEA v. CA has been delayed for almost ten years now simply because De Leon filed a
frivolous appeal against the RTCs order of execution based on arguments that cannot hold water. As a
consequence, PEA is prevented from enjoying the fruits of the final judgment in its favor. The Court agrees with the
Office of the Solicitor General in its contention that every litigation must come to an end once a judgment becomes
final, executory and unappealable. Just as a losing party has the right to file an appeal within the prescribed period,
the winning party also has the correlative right to enjoy the finality of the resolution of his case by the execution
and satisfaction of the judgment, which is the life of the law.36 To frustrate it by dilatory schemes on the part of
the losing party is to frustrate all the efforts, time and expenditure of the courts.37 It is in the interest of justice
that this Court should write finis to this litigation.
WHEREFORE, the Court disposes and orders the following:
The petition for review on certiorari in G.R. No. 181970 is DENIED. The challenged Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 90328 dated November 21, 2007 and March 4, 2008, respectively, are
AFFIRMED.
The petition for certiorari in G.R. No. 182678 is GRANTED. The assailed Orders of the Regional Trial Court of Makati
City, Branch 135, dated December 28, 2007 and March 4, 2008, are ANNULLED and SET ASIDE.
The Regional Trial Court of Makati is hereby DIRECTED to hear and resolve PEAs Motion for the Issuance of a Writ
of Demolition with utmost dispatch. This Decision is IMMEDIATELY EXECUTORY. The Clerk of Court is DIRECTED to
remand the records of the case to the court of origin.
SO ORDERED. De leon vs. Public Estates Authority, 626 SCRA 547, G.R. No. 181970 August 3, 2010
G.R. Nos. 120784-85. January 24, 2001.*
SPOUSES WARLITO BUSTOS and HERMINIA REYES-BUSTOS, petitioners, vs. COURT OF APPEALS, SPOUSES
VENANCIO VIRAY and CECILIA NUNGA-VIRAY, respondents.
Actions; Judgments; Once a decision becomes final and executory, it is the ministerial duty of the court to order its
execution; Exceptions.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, 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 [1985]).
Same; Same; Ejectment; Unlawful Detainer; Accion Reivindicatoria; To execute the judgment in the unlawful
detainer case by ejecting a party from the land that he or she has been adjudged to own in accion reivindicatoria
would certainly result in grave injustice.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.
Same; Same; Ownership; Possession; One of the essential attributes of ownership is possessionan owner who
cannot exercise the seven (7) juses or attributes of ownership, namely, 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 fruitsis a crippled
owner.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. One of the essential attributes of ownership is

11

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 ownershipthe right to possess, to use and enjoy,
to abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruitsis a crippled
owner.
PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Victoriano M. David and Associates for petitioners.
Venancio M. Viray for private respondents.
PARDO, J.:

The case before the Court is an appeal via certiorari seeking to set aside the decision of the Court of Appeals1
modifying that of the Regional Trial Court, Pampanga, Macabebe, Branch 552 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 partition5 of the estate of Paulino Fajardo. On the
same date, Manuela sold her share to Moses6 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 (1/4) 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 1/4 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 1/4 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

12

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 detainer10 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 1/4
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 1/4 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 1/4 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.

13

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 [1985]).
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 ownershipthe right to possess, to use and enjoy, to abuse
or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruitsis 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. Bustos vs. Court of Appeals, 350 SCRA 155, G.R. Nos. 120784-85 January 24, 2001
G.R. No. 116100. February 9, 1996.*
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.
Remedial Law; Appeals; An appellee in a civil case, 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.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.

14

Civil Law; Action; Damages; To warrant the recovery of damages, there must be a right of action for a legal wrong
inflicted by the defendant, and damage resulting to the plaintiff.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.
Same; Same; Same; Injury is the illegal invasion of a legal right, damage is the harm which results from the injury
and damages are the compensation awarded for the damage suffered.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.
Same; Same; Same; To maintain an action for injuries, plaintiff must establish that such injuries resulted from a
breach of duty which the defendant owed to the plaintiff.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 plaintiffa concurrence of injury to the plaintiff and legal responsibility by the person
causing it. 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.
Same; Same; Same; The law affords no remedy for damages resulting from an act which does not amount to a
legal injury or wrong.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.
Same; Same; Same; In order that the law will give redress for an act causing damage, that act must not only be
hurtful, but also wrongful.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. 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.
Civil Law; Article 21, Civil Code; Principle of Abuse of Right; Requisites.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.
Same; Same; Same; There is no cause of action for lawful acts done by one person on his property although such
acts incidentally caused damage or loss to another.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. 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.
Same; Same; Same; 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.The proper exercise of a
lawful right cannot constitute a legal wrong for which an action will lie, although the act may result in damage to
another, for no legal right has been invaded. 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.
PETITION for review on certiorari of a decision of the Court of Appeals.

15

The facts are stated in the opinion of the Court.

Maria T.M. Leviste for petitioners.
Roberto B. Arca for private respondents.
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, Tagig, 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 Street as 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 with 5-6 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 1-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 accessingress 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 plaintiffsappellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000) Pesos as

16

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 plaintiffa 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

17

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 is damnum 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.
Romero, Puno and Mendoza, JJ., concur.
Judgment reversed and set aside, that of the court a quo reinstated.
Notes.There is no hard and fast rule which can be applied to determine whether or not the principle of abuse
ofrights may be invoked. (Albenson Enterprises Corp. vs. Court of Appeals, 217 SCRA 16 [1993])
In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded and that
the adverse result of an action does not per se make the action wrongful and subject the actor to the payment of
damages for the law could not have meant to impose a penalty on the right to litigate. (Ibid.) Custodio vs. Court of
Appeals, 253 SCRA 483, G.R. No. 116100 February 9, 1996
NICOLAS LUNOD ET AL., plaintiffs and appellees, vs. HIGINO MENESES, defendant and appellant.
1.REALTY; EASEMENT OF NATURAL, DRAINAGE.Where a statutory easement exists between adjoining estates, the
owner of the lower lands must not construct any work that may impair or obstruct an easement which consists in
receiving the waters which naturally, and without the intervention of man, descend from the more elevated lands;
neither shall the owner of the latter construct any work that may increase the easement. (Arts. 552 and 563 of the
Civil Code, and Law of Waters of August 3, 1866.)
2.ID.; RIGHTS OF OWNER SUBJECT TO EXISTING SERVITUDES.Every owner may enclose his property by means of
walls, dikes, fences, or any other device, but his right is limited by the easement with which his estate is charged.
APPEAL from a judgment of the Court of First Instance of Bulacan. (No. 304. March 13, 1907.)
The facts are stated in the opinion of the court.
T. Icasiano, for appellant.

18

R. Salinas, for appellees,

TORRES, J.:
On the 14th of March, 1904, Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez, Fernando Marcelo, Esteban Villena,
Benito Litao, Ventura Hernandez, and Casimiro Pantanilla, residents of the town of Bulacan, province of the same
name, filed a written complaint against Higino Meneses, alleging that they each owned and possessed farm lands
situated in the places known as Maytunas and Balot, near a small lake named Calalaran; that the defendant is the
owner of a, fish-pond and a strip of land situated in Paraanan, adjoining the said lake on one side, and the River
Taliptip on the other; that from time immemorial, and consequently for more than twenty years before 1901, there
existed and still exists in favor of the rice fields of the plaintiffs a statutory easement permitting the flow of water
over the said land in Paraanan, which easement; the said plaintiffs enjoyed until the year 1901 and consisted in
that the water collected upon their lands and in the Calalaran Lake could flow through Paraanan into the Taliptip
River. From that year however, the defendant, without any right or reason, converted the land in Paraanan into a
fish pond and by means of a dam and a bamboo net, prevented the free passage of the water through said place
into the Taliptip River; that in consequence the lands of the plaintiff became flooded and damaged by the stagnant
waters, there being no outlet except through the land in Paraanan; that their plantations were destroyed, causing
them loss and damage to the extent of about P1,000, which loss and damage will continue if the obstructions to
the flow of the water are allowed to remain, preventing its passage through said land and injuring the rice
plantations of the plaintiffs. They therefore asked that judgment be entered against the defendant, declaring that
the said tract of land in Paraanan is subject to a statutory easement permitting the flow of water from the property
of the plaintiffs, and that, without prejudice to the issuing of a preliminary injunction, the defendant be ordered to
remove and destroy the obstructions that impede the passage of the waters through Paraanan, and that in future,
and for ever, he abstain from closing in any manner the aforesaid tract of land; that, upon judgment being entered,
the said injunction be declared to be final and that the defendant be sentenced to pay to the plaintiffs an
indemnity of P1,000, and the costs in the proceedings; that they be granted any other and further equitable or
proper remedy in accordance with the facts alleged and proven.
In view of the demurrer interposed by the plaintiffs to the answer of the defendant, the latter, on the 29th of
August, 1904, filed an amended answer, denying each and every one of the allegations of the complaint, and
alleged that no statutory easement existed nor could exist in favor of the lands described in the complaint,
permitting the waters to flow over the fish pond that he, together with his brothers, owned in the sitio of Bambang,
the area and boundaries of which were stated by him, and which he and his brothers had inherited from their
deceased mother, Apolinaria de Leon; that the same had been surveyed by a land surveyor in September, 1881;
he also denied that he had occupied or converted any land in the barrio of Bambang into a fish pond; therefore, he
asked the court to enter judgment in his favor, and to sentence the plaintiffs to pay the costs and corresponding
damages.
Upon the evidence adduced by both parties to the suit, the court, on the 13th of March, 1907, entered judgment
declaring that the plaintiffs were entitled to a decision in their favor, and sentenced the defendant to remove the
dam placed to the east of the Paraanan passage on the side of the Taliptip River opposite the old dam in the barrio
of Bambang, as well as to remove and destroy the obstacles to the free passage of the waters through the strip of
land in Paraanan; to abstain in future, and forever, from obstructing or closing in any manner the course of the
waters through the said strip of land. The request that the defendant be sentenced to pay an indemnity was
denied, and no ruling was made as to costs.
The defendant excepted to the above judgment and furthermore asked for a new trial which was denied and also
excepted to, and, upon approval of the bill of exceptions, the question was submitted to, this court.
Notwithstanding the defendants denial in his amended answer, it appears to have been clearly proven in this case
that the lands owned by the plaintiffs in the aforesaid barrio, as well as the small adjoining lake, named Calalaran,
are located in places relatively higher than the sitio called Paraanan where the land and fish pond of the defendant
are situated, and which border on the Taliptip River; that during the rainy season the rain water which falls on the
land of the plaintiffs, and which flows toward the small Calalaran Lake at flood time, has no outlet to the Taliptip
River other than through the low land of Paraanan; that on the border line between Calalaran and Paraanan there
has existed from time immemorial a dam, constructed by the community for the purpose of preventing the salt
waters from the Taliptip River, at high tide, from flooding the land in Calalaran, passing through the lowlands of
Paraanan; but, when rainfall was abundant, one of the residents was designated in his turn by the lieutenant or
justice of the barrio to open the sluice gate in order to let out the water that flooded the rice fields, through the
land of Paraanan to the above-mentioned river; that since 1901, the defendant constructed another dam along the
boundary of his fish pond in Paraanan, thereby impeding the outlet of the waters that flood the fields at Calalaran,
to the serious detriment of the growing crops.

19

According to article 530 of the Civil Code, an easement is a charge imposed upon one estate for the benefit of
another estate belonging to a different owner, and the realty in favor of which the easement is established is called
the dominant estate, and the one charged with it the servient estate.
The lands of Paraanan being the lower are subject to the easement of receiving and giving passage to the waters
proceeding from the higher lands and the lake of Calalaran; this easement was not constituted by agreement
between the interested parties; it is of a statutory nature, and the law has imposed it for the common public utility
in view of the difference in the altitude of the lands in the barrio of Bambang.
Article 552 of the Civil Code provides:
Lower estates must receive the waters which naturally and without the intervention of man descend from the
higher estates, as well as the stone or earth which they carry with them.
Neither may the owner of the lower estate construct works preventing this easement, nor the one of the higher
estate works increasing the burden.
Article 563 of the said code reads also:
The establishment, extent, form, and conditions of the easements of waters to which this section refers shall be
governed by the special law relating thereto in everything not provided for in this code.
The special law cited is the Law of Waters of August 3,1866, article 111 of which, treating of natural easements
relating to waters, provides:
Lands situated at a lower level are subject to receive the waters that flow naturally, without the work of man, from
the higher lands together with the stone or earth which they carry with them.
Hence, the owner of the lower lands can not erect works that will impede or prevent such an easement or charge,
constituted and imposed by the law upon his estate for the benefit of the higher lands belonging to different
owners; neither can the latter do anything to increase or extend the easement.
According to the provisions of law above referred to, the defendant, Meneses, had no right to construct the works,
nor the dam which blocks the passage, through his lands and the outlet to the Taliptip River, of the waters which
flood the higher lands of the plaintiffs; and having done so, to the detriment of the easement charged on his
estate, he has violated the law which. protects and guarantees the respective rights and regulates the duties of the
owners of the fields in Calalaran and Paraanan.
It is true that article 388 of said code authorizes every owner to enclose his estate by means of walls, ditches,
fences or any other device, but his right is limited by the easement imposed upon his estate.
The defendant Meneses might have constructed the works necessary to make and maintain a fish pond within his
own land, but he was always under the strict and necessary obligation to respect the statutory easement of
waters charged upon his property, and had no right to close the passage and outlet of the waters flowing from the
lands of the plaintiffs and the lake of Calalaran into the Taliptip River. He could not lawfully injure the owners of the
dominant estates by obstructing the outlet to the Taliptip River of the waters flooding the upper lands belonging to
the plaintiffs.
It is perhaps useful and advantageous to the plaintiffs and other owners of high lands in Calalaran, in addition to
the old dike between the lake of said place and the low lands in Paraanan, to have another made by the defendant
at the border of Paraanan adjoining the said river, for the purpose of preventing the salt waters of the Taliptip River
flooding, at high tide, not only the lowlands in Paraanan but also the higher ones of Calalaran and its lake, since the
plaintiffs can not prevent the defendant from protecting his lands against the influx of salt water; but the
defendant could never be permitted to obstruct the flow of the waters through his lands to the Taliptip River during
the heavy rains, when the high lands in Calalaran and the lake in said place are flooded, thereby impairing the
right of the owners of the dominant estates.
For the above reasons, and accepting the findings of the court below in the judgment appealed from in so far as
they agree with the terms of this decision, we must and do hereby declare that the defendant, Higino Meneses, as
owner of the servient estate, is obliged to give passage to and allow the flow of the waters descending from the
Calalaran Lake and from the land of the plaintiffs through his lands in Paraanan for their discharge into the Taliptip
River; and he is hereby ordered to remove any obstacle that may obstruct the free passage of the waters
whenever there may be either a small or large volume of running water through his lands in the sitio of Paraanan
for their discharge into the Taliptip River; and in future to abstain from impeding, in any manner, the flow of the
waters coming from the higher lands. The judgment appealed from is affirmed, in so far as it agrees with this
decision, and reversed in other respects, with the costs of this instance against the appellant. So ordered.

20

Carson, Willard, and Tracey, JJ., concur.

Judgment affirmed. LUNOD ET AL. VS. MENESES., 11 Phil. 128, No. 4223 August 19, 1908
G.R. No. 74761. November 6, 1990.*
NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners, vs. INTERMEDIATE APPELLATE COURT (First Civil
Cases Division) and MISSIONARIES OF OUR LADY OF LA SALETTE, INC., respondents.
Civil Law; Action; The purpose of an action or suit and the law to govern it including the period of prescription is to
be determined not by the claim of the party filing the action made in his argument or brief but rather by the
complaint itself, its allegations and prayer for relief.It is axiomatic that the nature of an action filed in court is
determined by the facts alleged in the complaint as constituting the cause of action. The purpose of an action or
suit and the law to govern it, including the period of prescription, is to be determined not by the claim of the party
filing the action, made in his argument or brief, but rather by the complaint itself, its allegations and prayer for
relief. The nature of an action is not necessarily determined or controlled by its title or heading but by the body of
the pleading or complaint itself.
Same; Same; Quasi-delicts; Elements of quasi-delict.A careful examination of the aforequoted complaint shows
that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a
quasi-delict are present, to wit: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or
some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault
or negligence of the defendant and the damages incurred by the plaintiff.
Same; Same; Same; Same; There is an assertion of a causal connection between the act of building these
waterpaths and the damage sustained by petitioners; Case at bar.Clearly, from petitioners complaint, the
waterpaths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners.
There is therefore, an assertion of a causal connection between the act of building these waterpaths and the
damage sustained by petitioners. Such action if proven constitutes fault or negligence which may be the basis for
the recovery of damages.
Same; Same; Same; Same; Same; The recitals of the complaint, the alleged presence of damage to the petitioners,
the act or omission of respondent corporation supposedly constituting fault or negligence and the causal
connection between the act and the damage, with no preexisting contractual obligation between the parties make
a clear case of a quasi-delict or culpa aquiliana.While the property involved in the cited case belonged to the
public domain and the property subject of the instant case is privately owned, the fact ramains that petitioners
complaint sufficiently alleges that petitioners have sustained and will continue to sustain damage due to the
waterpaths and contrivances built by respondent corporation. Indeed, the recitals of the complaint, the alleged
presence of damage to the petitioners, the act or omission of respondent corporation supposedly constituting fault
or negligence, and the causal connection between the act and the damage, with no pre-existing contractual
obligation between the parties make a clear case of a quasi-delict or culpa aquiliana.
Same; Same; Same; A separate civil action lies against the offender in a criminal act whether or not he is criminally
prosecuted and found guilty or acquitted provided that the offended party is not allowed to recover damages on
both scores.Article 2176, whenever it refers to fault or negligence, covers not only acts not punishable by law
but also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil
action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or
acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually charged also criminally), to
recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two,
assuming the awards made in the two cases vary.
Same; Same; Same; Same; The same negligence causing damages may produce civil liability arising from a crime
under the Penal Code or create an action for quasi-delicts or culpa extra-contractual under the Civil Code.In the
case of Castillo vs. Court of Appeals, this Court held that a quasi-delict or culpa aquiliana is a separate legal
institution under the Civil Code with a substantivity all its own, and individuality that is entirely apart and
independent from a delict or crimea distinction exists between the civil liability arising from a crime and the
responsibility for quasi-delicts or culpa extra contractual. The same negligence causing damages may produce civil
liability arising from a crime under the Penal Code, or create an action for quasi-delicts or culpa extra-contractual
under the Civil Code. Therefore, the acquittal or conviction in the criminal case is entirely irrelevant in the civil
case, unless, of course, in the event of an acquittal where the court has declared that the fact from which the civil
action arose did not exist, in which case the extinction of the criminal liability would carry with it the extinction of
the civil liability.
Same; Same; Property; Adjoining landowners have mutual and reciprocal duties which require that each must use
his own land in a reasonable manner so as not to infringe upon the rights and interests of others.It must be

21

stressed that the use of ones property is not without limitations. Article 431 of the Civil Code provides that the
owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person. SIC UTERE
TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require
that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of
others. Although we recognize the right of an owner to build structures on his land, such structures must be so
constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners
and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining
landowner or a third person, the latter can claim indemnification for the injury or damage suffered.
PETITION for certiorari, prohibition and mandamus to review the decision of the then Intermediate Appellate Court.
The facts are stated in the opinion of the Court.
Lope E. Adriano for petitioners.
Padilla Law Office for private respondent.
FERNAN, C.J.:
The pivotal issue in this petition for certiorari, prohibition and mandamus is whether a corporation, which has built
through its agents, waterpaths, water conductors and contrivances within its land, thereby causing inundation and
damage to an adjacent land, can be held civilly liable for damages under Articles 2176 and 2177 of the Civil Code
on quasi-delicts such that the resulting civil case can proceed independently of the criminal case.
The antecedent facts are as follows:
Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga (Biluso)
Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a
religious corporation.
Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were
constructed, which allegedly inundated and eroded petitioners land, caused a young man to drown, damaged
petitioners crops and plants, washed away costly fences, endangered the lives of petitioners and their laborers
during rainy and stormy seasons, and exposed plants and other improvements to destruction.
In July 1982, petitioners instituted a criminal action, docketed as Criminal Case No. TG-907-82, before the Regional
Trial Court of Cavite, Branch 4 (Tagaytay City), against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers
and directors of herein respondent corporation, for destruction by means of inundation under Article 324 of the
Revised Penal Code. Subsequently, on February 22, 1983, petitioners filed another action against respondent
corporation, this time a civil case, docketed as Civil Case No. TG-748, for damages with prayer for the issuance of a
writ of preliminary injunction before the same court.1
On March 11, 1983, respondent corporation filed its answer to the complaint and opposition to the issuance of a
writ of preliminary injunction. Hearings were conducted including ocular inspections on the land. However, on April
26, 1984, the trial court, acting on respondent corporations motion to dismiss or suspend the civil action, issued
an order suspending further hearings in Civil Case No. TG-748 until after judgment in the related Criminal Case No.
TG-907-82.
Resolving respondent corporations motion to dismiss filed on June 22, 1984, the trial court issued on August 27,
1984 the disputed order dismissing Civil Case No. TG-748 for lack of jurisdiction, as the criminal case which was
instituted ahead of the civil case was still unresolved. Said order was anchored on the provision of Section 3 (a),
Rule III of the Rules of Court which provides that criminal and civil actions arising from the same offense may be
instituted separately, but after the criminal action has been commenced the civil action cannot be instituted until
final judgment has been rendered in the criminal action.2
Petitioners appealed from that order to the Intermediate Appellate Court.3
On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a decision,4 affirming
the questioned order of the trial court.5 A motion for reconsideration filed by petitioners was denied by the
Appellate Court in its resolution dated May 19, 1986.6
Directly at issue is the propriety of the dismissal of Civil Case No. TG-748 in accordance with Section 3 (a) of Rule
111 of the Rules of Court. Petitioners contend that the trial court and the Appellate Court erred in dismissing Civil
Case No. TG-748 since it is predicated on a quasi-delict. Petitioners have raised a valid point.

22

It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the complaint as
constituting the cause of action.7 The purpose of an action or suit and the law to govern it, including the period of
prescription, is to be determined not by the claim of the party filing the action, made in his argument or brief, but
rather by the complaint itself, its allegations and prayer for relief.8 The nature of an action is not necessarily
determined or controlled by its title or heading but by the body of the pleading or complaint itself. To avoid possible
denial of substantial justice due to legal technicalities, pleadings as well as remedial laws should be liberally
construed so that the litigants may have ample opportunity to prove their respective claims.9
Quoted hereunder are the pertinent portions of petitioners complaint in Civil Case No. TG-748:
4) That within defendants land, likewise located at Biga (Biluso), Silang, Cavite, adjacent on the right side of the
aforesaid land of plaintiffs, defendant constructed waterpaths starting from the middleright portion thereof leading
to a big hole or opening, also constructed by defendant, thru the lower portion of its concrete hollow-blocks fence
situated on the right side of its cemented gate fronting the provincial highway, and connected by defendant to a
man-height inter-connected cement culverts which were also constructed and lain by defendant cross-wise
beneath the tip of the said cemented gate, the left-end of the said inter-connected culverts again connected by
defendant to a big hole or opening thru the lower portion of the same concrete hollow-blocks fence on the left side
of the said cemented gate, which hole or opening is likewise connected by defendant to the cemented mouth of a
big canal, also constructed by defendant, which runs northward towards a big hole or opening which was also built
by defendant thru the lower portion of its concrete hollow-blocks fence which separates the land of plaintiffs from
that of defendant (and which serves as the exit-point of the floodwater coming from the land of defendant, and at
the same time, the entrance-point of the same floodwater to the land of plaintiffs, year after year, during rainy or
stormy seasons.
5) That moreover, on the middle-left portion of its land just beside the land of plaintiffs, defendant also
constructed an artificial lake, the base of which is soil, which utilizes the water being channeled thereto from its
water system thru inter-connected galvanized iron pipes (No. 2) and complimented by rain water during rainy or
stormy seasons, so much so that the water below it seeps into, and the excess water above it inundates, portions
of the adjoining land of plaintiffs.
6) That as a result of the inundation brought about by defendants aforementioned water conductors,
contrivances and manipulators, a young man was drowned to death, while herein plaintiffs suffered and will
continue to suffer, as follows:
a) Portions of the land of plaintiffs were eroded and converted to deep, wide and long canals, such that the same
can no longer be planted to any crop or plant.
b) Costly fences constructed by plaintiffs were, on several occasions, washed away.
c) During rainy and stormy seasons the lives of plaintiffs and their laborers are always in danger.
d) Plants and other improvements on other portions of the land of plaintiffs are exposed to destruction. x x x.10
A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177
of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a) damages suffered by the
plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c)
the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by
the plaintiff.11
Clearly, from petitioners complaint, the waterpaths and contrivances built by respondent corporation are alleged
to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act
of building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or
negligence which may be the basis for the recovery of damages.
In the case of Samson vs. Dionisio,12 the Court applied Article 1902, now Article 2176 of the Civil Code and held
that any person who without due authority constructs a bank or dike, stopping the flow or communication
between a creek or a lake and a river, thereby causing loss and damages to a third party who, like the rest of the
residents, is entitled to the use and enjoyment of the stream or lake, shall be liable to the payment of an indemnity
for loss and damages to the injured party.
While the property involved in the cited case belonged to the public domain and the property subject of the instant
case is privately owned, the fact ramains that petitioners complaint sufficiently alleges that petitioners have
sustained and will continue to sustain damage due to the waterpaths and contrivances built by respondent
corporation. Indeed, the recitals of the complaint, the alleged presence of damage to the petitioners, the act or
omission of respondent corporation supposedly constituting fault or negligence, and the causal connection

23

between the act and the damage, with no pre-existing contractual obligation between the parties make a clear
case of a quasidelict or culpa aquiliana.
It must be stressed that the use of ones property is not without limitations. Article 431 of the Civil Code provides
that the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person. SIC
UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which
require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests
of others. Although we recognize the right of an owner to build structures on his land, such structures must be so
constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners
and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining
landowner or a third person, the latter can claim indemnification for the injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission
constituting fault or negligence, thus:
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this chapter.
Article 2176, whenever it refers to fault or negligence, covers not only acts not punishable by law but also acts
criminal in character, whether intentional and voluntary or negligent. Consequently, a separate civil action lies
against the offender in a criminal act, whether or not he is criminally prosecuted and found guilty or acquitted,
provided that the offended party is not allowed, (if the tortfeasor is actually charged also criminally), to recover
damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming
the awards made in the two cases vary.13
The distinctness of quasi-delicts is shown in Article 2177 of the Civil Code, which states:
Article 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct
from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice
for the same act or omission of the defendant.
According to the Report of the Code Commission the foregoing provision though at first sight startling, is not so
novel or extraordinary when we consider the exact nature of criminal and civil negligence. The former is a violation
of the criminal law, while the latter is a distinct and independent negligence, which is a culpa aquiliana or quasidelict, of ancient origin, having always had its own foundation and individuality, separate from criminal negligence.
Such distinction between criminal negligence and culpa extra-contractual or cuasi-delito has been sustained by
decisions of the Supreme Court of Spain x x x.14
In the case of Castillo vs. Court of Appeals,15 this Court held that a quasi-delict or culpa aquiliana is a separate
legal institution under the Civil Code with a substantivity all its own, and individuality that is entirely apart and
independent from a delict or crimea distinction exists between the civil liability arising from a crime and the
responsibility for quasi-delicts or culpa extra-contractual. The same negligence causing damages may produce civil
liability arising from a crime under the Penal Code, or create an action for quasi-delicts or culpa extra-contractual
under the Civil Code. Therefore, the acquittal or conviction in the criminal case is entirely irrelevant in the civil
case, unless, of course, in the event of an acquittal where the court has declared that the fact from which the civil
action arose did not exist, in which case the extinction of the criminal liability would carry with it the extinction of
the civil liability.
In Azucena vs. Potenciano,16 the Court declared that in quasidelicts, (t)he civil action is entirely independent of
the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no logical conclusion than this,
for to subordinate the civil action contemplated in the said articles to the result of the criminal prosecution
whether it be conviction or acquittalwould render meaningless the independent character of the civil action and
the clear injunction in Article 31, that his action may proceed independently of the criminal proceedings and
regardless of the result of the latter.
WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate Court affirming the
order of dismissal of the Regional Trial Court of Cavite, Branch 18 (Tagaytay City) dated August 17, 1984 is hereby
REVERSED and SET ASIDE. The trial court is ordered to reinstate Civil Case No. TG-748 entitled Natividad V.
Andamo and Emmanuel R. Andamo vs. Missionaries of Our Lady of La Salette, Inc. and to proceed with the
hearing of the case with dispatch. This decision is immediately executory. Costs against respondent corporation.
SO ORDERED. Andamo vs. Intermediate Appellate Court, 191 SCRA 195, G.R. No. 74761 November 6, 1990
G.R. No. 125018. April 6, 2000.*

24

REMMAN ENTERPRISES, INC., petitioner, vs. COURT OF APPEALS and CRISPIN E. LAT, respondents.
Damages; Evidence; Income Tax Returns; The tax returns per se could not reflect the total amount of damages
suffered by a party, as income losses from a portion of his property could be offset by any profit derived from the
rest of said property or from other sources of income.REMMAN argues that the trial court as well as the Court of
Appeals should not have rejected its request for the production of Lats income tax returns. According to REMMAN
had Lats income tax returns been produced, the issue of the alleged damages suffered by Lat would have been
settled. This argument is moot, if not trite. For this matter has been laid to rest when we affirmed the Court of
Appeals decision in an earlier case involving the same parties. In sustaining the trial courts quashal of the
subpoena duces tecum previously issued compelling Lat to produce his income tax returns for the years 19821986, the appellate court explained that the production of the income tax returns would not necessarily serve to
prove the special and affirmative defenses set up by REMMAN nor rebut Lats testimony regarding the losses he
sustained due to the piggery. The tax returns per se could not reflect the total amount of damages suffered by Lat,
as income losses from a portion of the plantation could be offset by any profit derived from the rest of the
plantation or from other sources of income. Conversely, losses incurred from other sources of income would be
totally unrelated to the income from the particular portion of the plantation flooded with waste matter coming from
REMMANs piggery.
PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Venice A. Andaya for petitioner.
Maronilla and Maronilla Law Offices for private respondent.
BELLOSILLO, J.:
REMMAN ENTERPRISES, INC. (REMMAN), and CRISPIN E. LAT are adjoining landowners in Barangay Bugtong Na
Pulo, Lipa City. The land of Lat containing an area of 1.8 hectares is agricultural and planted mostly with fruit trees
while REMMAN occupies a land area of fifteen (15) hectares six (6) hectares of which are devoted to its piggery
business. REMMANs land is one and a half (1 1/2) meters higher in elevation than that of respondent Lat.
Sometime in July 1984 Lat noticed that REMMANs waste disposal lagoon was already overflowing and inundating
one-fourth (1/4) of Lats plantation. He made several representations with REMMAN but they fell on deaf ears. On
14 March 1985, after almost one (1) hectare of Lats plantation was already inundated with water containing pig
manure, as a result of which the trees growing on the flooded portion started to wither and die, Lat filed a
complaint for damages with preliminary mandatory injunction against REMMAN. Lat alleged that the acidity of the
soil in his plantation increased because of the overflow of the water heavy with pig manure from REMMANs
piggery farm.
REMMAN denied all the allegations of Lat and raised as an affirmative defense that measures such as the
construction of additional lagoons were already adopted to contain the waste water coming from its piggery to
prevent any damage to the adjoining estates.
After conducting an ocular inspection and evaluating the evidence of both parties the Regional Trial Court found
that indeed REMMANs waste disposal lagoon overflowed with the contaminated water flooding one (1) hectare of
Lats plantation. The waste water was ankle-deep and caused death and destruction to one (1) jackfruit tree,
fifteen (15) coconut trees, one hundred twenty-two (122) coffee trees, and an unspecified number of mango trees,
bananas and vegetables. As a consequence, the trial court ordered REMMAN to indemnify Lat P186,975.00 for lost
profits for three (3) crop years and P30,000.00 as attorneys fees.1
The decision of the court a quo was affirmed in toto by the Court of Appeals.2
In this Petition for Review on Certiorari REMMAN prays that we pass upon the findings of the trial court as well as of
the appellate court. REMMAN insists that factual findings of lower courts may be passed upon, reviewed and
reversed: (a) when the conclusion is a finding grounded entirely on speculation, surmises or conjectures; (b) when
the inference made is manifestly mistaken, absurd or impossible; (c) when there is grave abuse of discretion; (d)
when the judgment is based on a misapprehension of facts; (e) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties and which, if properly considered, would justify a different
conclusion; (f) when the conclusions of the Court of Appeals are not supported by the evidence on record; (g) when
facts of substance were overlooked which, if correctly considered, might have changed the outcome of the case;

25

and, (h) when the findings of the Court of Appeals are not in accord with what reasonable men would readily
accept are the correct inferences from the evidence extant in the records.3
Indeed, in the abovementioned instances, the factual milieu of a particular case may be passed upon, reversed or
modified by this Court. But examination of the record reveals that all the above instances are unavailing. From this
point of view alone the instant petition is dismissible. Nevertheless, we shall discuss them hereunder to dispose
finally of the contentions of REMMAN.
First, REMMAN argues that its liability for the damages suffered by Lat was not clearly established.
We disagree. During the ocular inspection conducted by the lower court where representatives of both parties were
preent, it was established that the waste water containing pig manure was continuously flowing from REMMANs
piggery farm to Lats plantation. The water was ankle-deep and flooded one (1) hectare of Lats plantation. The
overflow of the acidic, malodorous and polluted water continued from June 1984 to March 1985 thus destroying
one (1) jackfruit tree, fifteen (15) coconut trees, one hundred and twenty-two (122) coffee trees, and an
unspecified number of mango trees, bananas and vegetables.4
In addition, the appellate court found that there was indeed negligence on the part of REMMAN which directly
caused the damage to the plantation of Lat. Thus
x x x Negligence was clearly established. It is uncontroverted that the land of appellee was flooded on account of
the overflow of acidic, malodorous and polluted water coming from the adjacent piggery farm of appellant
sometime in May 1984. This resulted in the impairment of the productivity of appellees land as well as the
eventual destruction and death of several fruit trees, such as coconuts, coffee, jackfruits, bananas and other plants
x x x x Appellant cannot avoid liability because their negligence was the proximate cause of the damage.
Appellees property was practically made a catch-basin of polluted water and other noxious substances emptying
from appellants piggery which could have been prevented had it not been for the negligence of appellant arising
from its: (a) failure to monitor the increases in the level of water in the lagoons before, during and after the heavy
downpours which occurred during the rainy months of 1984; (b) failure to augment the existing lagoons prior to the
incident, notwithstanding the fact that at the time of the flooding, the piggery had grown to a capacity of 11,000
heads, and considering that it was reasonably forseeable that the existing waste disposal facilities were no longer
adequate to accomodate the increasing volume of waste matters in such a big farm; and more importantly, (c) the
repeated failure to comply with their promise to appellee.5 Second, REMMAN argues that the trial court as well as
the Court of Appeals should not have rejected its request for the production of Lats income tax returns. According
to REMMAN had Lats income tax returns been produced, the issue of the alleged damages suffered by Lat would
have been settled.
This argument is moot, if not trite. For this matter has been laid to rest when we affirmed the Court of Appeals
decision in an earlier case involving the same parties.6 In sustaining the trial courts quashal of the subpoena
duces tecum previously issued compelling Lat to produce his income tax returns for the years 1982-1986, the
appellate court explained that the production of the income tax returns would not necessarily serve to prove the
special and affirmative defenses set up by REMMAN nor rebut Lats testimony regarding the losses he sustained
due to the piggery. The tax returns per se could not reflect the total amount of damages suffered by Lat, as income
losses from a portion of the plantation could be offset by any profit derived from the rest of the plantation or from
other sources of income. Conversely, losses incurred from other sources of income would be totally unrelated to
the income from the particular portion of the plantation flooded with waste matter coming from REMMANs
piggery.7
Third, REMMAN contends that the damages allegedly sustained by Lat have not been satisfactorily established.
We are not convinced. The factual findings of the court a quo rightly support its conclusions on this respect
Coming now to the issue of damages, We find appellants allegations not well-taken. Appellant contends that actual
and compensatory damages require evidentiary proof, and there being no evidence presented as to the necessity
of the award for damages, it was erroneous for the lower court to have made such award. It must be remembered
that after the ocular inspection, the court a quo rendered an inventory of dead and rotten trees and plants found in
appellees property. Appellee also testified on the approximate annual harvest and fair market value thereof.
Significantly, no opposition or controverting evidence was presented by appellant on the matter. Hence, appellant
is bound thereby and cannot now be heard to complain. As correctly held by the court a quo:
An ocular inspection has been conducted by the trial court. The inventory of the trees damaged and the itemized
valuation placed therein by private respondent after the ocular inspection which is not rebutted by the petitioner, is
the more accurate indicator of the said amount prayed for as damages. If the valuation is indeed unreasonable,
petitioner should present controverting evidence of the fair market value of the crops involved. The trial court held

26

that the private respondent himself had been subjected to extensive cross and re-cross examination by the counsel
for the petitioner on the amount of damages.8
Finally, REMMAN complains that the damages, if any, were due to a fortuitous event.
Again, we cannot agree with petitioner. We defer instead to the findings opinions expressed by the lower courts
Even assuming that the heavy rains constituted an act of God, by reason of their negligence, the fortuitous event
became humanized, rendering appellants liable for the ensuing damages. In National Power Corporation v. Court of
Appeals, 233 SCRA 649 (1993), the Supreme Court held:
Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for the loss or
damage sustained by private respondents since they, the petitioners, were guilty of negligence. This event then
was not occasioned exclusively by an act of God or force majeure; a human factornegligence or imprudence
had intervened. The effect then of the force majeure in question may be deemed to have, even if only partly,
resulted from the participation of man. Thus, the whole occurrence was thereby humanized, as it were, and
removed from the rules applicable to acts of God.
As regards the alleged natural easement imposed upon the property of appellee, resort to pertinent provisions of
applicable law is imperative. Under the Civil Code, it is provided:
Art. 637. Lower estates are obliged to receive the waters which naturally and without the intervention of man
descend from the higher estates, as well as the stones or earth which they carry with them.
The owner of the lower estate cannot construct works which will impede this easement; neither can the owner of
the higher estate make works which will increase the burden.
A similar provision is found in the Water Code of the Philippines (P.D. No. 1067), which provides:
Art. 50. Lower estates are obliged to receive the water which naturally and without the intervention of man flow
from the higher estates, as well as the stone or earth which they carry with them.
The owner of the lower estate cannot construct works which will impede this natural flow, unless he provides an
alternative method of drainage; neither can the owner of the higher estate make works which will increase this
natural flow.
As worded, the two (2) aforecited provisions impose a natural easement upon the lower estate to receive the
waters which naturally and without the intervention of man descend from higher estates. However, where the
waters which flow from a higher estate are those which are artificially collected in man-made lagoons, any damage
occasioned thereby entitles the owner of the lower or servient estate to compensation.9
On the basis of the foregoing discussion, it is crystal clear that REMMAN is directly accountable to Lat for the
damages sustained by him. The negligence of REMMAN in maintaining the level of waste water in its lagoons has
been satisfactorily established. The extent of damages suffered by Lat remains unrebutted; in fact, has been
proved.
WHEREFORE, the petition is DENIED. The 19 October 1995 Decision of the Court of Appeals affirming that of the
Regional Trial Court-Br. 16, Lipa City, holding petitioner Remman Enterprises, Inc (REMMAN) liable to private
respondent Crispin E. Lat for damages and to indemnify the latter P186,975.00 for lost profits for three (3) crop
years and P30,000.00 as attorneys fees, is AFFIRMED. Costs against petitioner.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.
Petition denied, judgment affirmed.
Notes.Income tax returns, being public documents, until controverted by competent evidence, are prima facie
correct with respect to the entries therein. (Ropali Trading Corporation vs. National Labor Relations Commission,
296 SCRA 309 [1998])
Income tax returns are self-serving documents because they are generally filled up by the taxpayer himselfthey
are still to be examined by the Bureau of Internal Revenue for their correctness. (Favila vs. National Labor Relations
Commission, 308 SCRA 303 [1999]) Remman Enterprises, Inc. vs. Court of Appeals, 330 SCRA 145, G.R. No. 125018
April 6, 2000

27

G.R. No. 168732. June 29, 2007.*

NATIONAL POWER CORPORATION, petitioner, vs. LUCMAN G. IBRAHIM, respondents.
Appeals; In an appeal by certiorari under Rule 45, the jurisdiction of the Supreme Court is limited to reviewing and
revising the errors of law imputed to it, its findings of fact being as a rule conclusive and binding on the Court.
Generally, in an appeal by certiorari under Rule 45 of the Rules of Court, the Court does not pass upon questions of
fact. Absent any showing that the trial and appellate courts gravely abused their discretion, the Court will not
examine the evidence introduced by the parties below to determine if they correctly assessed and evaluated the
evidence on record. The jurisdiction of the Court in cases brought to it from the CA is limited to reviewing and
revising the errors of law imputed to it, its findings of fact being as a rule conclusive and binding on the Court.
Ownership; The sub-terrain portion of the property belongs to the surface owner of the land.In the present case,
petitioner failed to point to any evidence demonstrating grave abuse of discretion on the part of the CA or to any
other circumstances which would call for the application of the exceptions to the above rule. Consequently, the
CAs findings which upheld those of the trial court that respondents owned and possessed the property and that its
substrata was possessed by petitioner since 1978 for the underground tunnels, cannot be disturbed. Moreover, the
Court sustains the finding of the lower courts that the sub-terrain portion of the property similarly belongs to
respondents. This conclusion is drawn from Article 437 of the Civil Code which provides: ART. 437. The owner of a
parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or
make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to
special laws and ordinances. He cannot complain of the reasonable requirements of aerial navigation.
Same; The landowners right extends to such height or depth where it is possible for them to obtain some benefit
or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected by law.
Petitioners argument that the landowners right extends to the sub-soil insofar as necessary for their practical
interests serves only to further weaken its case. The theory would limit the right to the sub-soil upon the economic
utility which such area offers to the surface owners. Presumably, the landowners right extends to such height or
depth where it is possible for them to obtain some benefit or enjoyment, and it is extinguished beyond such limit
as there would be no more interest protected by law.
Same; Eminent Domain; The power of eminent domain encompasses not only the taking or appropriation of title to
and possession of the expropriated property but likewise covers even the imposition of a mere burden upon the
owner of the condemned property.Petitioner contends that the underground tunnels in this case constitute an
easement upon the property of respondents which does not involve any loss of title or possession. The manner in
which the ease-ment was created by petitioner, however, violates the due process rights of respondents as it was
without notice and indemnity to them and did not go through proper expropriation proceedings. Petitioner could
have, at any time, validly exercised the power of eminent domain to acquire the easement over respondents
property as this power encompasses not only the taking or appropriation of title to and possession of the
expropriated property but likewise covers even the imposition of a mere burden upon the owner of the condemned
property. Significantly, though, landowners cannot be deprived of their right over their land until expropriation
proceedings are instituted in court. The court must then see to it that the taking is for public use, that there is
payment of just compensation and that there is due process of law.
Same; Same; Where the nature of the easement practically deprives the owners of the propertys normal beneficial
use, notwithstanding the fact that the expropriator only occupies the sub-terrain portion, it is liable to pay not
merely an easement fee but rather the full compensation for land.In disregarding this procedure and failing to
recognize respondents ownership of the sub-terrain portion, petitioner took a risk and exposed itself to greater
liability with the passage of time. It must be emphasized that the acquisition of the easement is not without
expense. The underground tunnels impose limitations on respondents use of the property for an indefinite period
and deprive them of its ordinary use. Based upon the foregoing, respondents are clearly entitled to the payment of
just compensation. Notwithstanding the fact that petitioner only occupies the sub-terrain portion, it is liable to pay
not merely an easement fee but rather the full compensation for land. This is so because in this case, the nature of
the easement practically deprives the owners of its normal beneficial use. Respondents, as the owners of the
property thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it
is possible to make the assessment, than the money equivalent of said property.
Just Compensation; Words and Phrases; Just compensation has been understood to be the just and complete
equivalent of the loss and is ordinarily determined by referring to the value of the land and its character at the time
it was taken by the expropriating authority; There is a taking when the owners are actually deprived or
dispossessed of their property, where there is a practical destruction or a material impairment of the value of their
property, or when they are deprived of the ordinary use thereof.Just compensation has been understood to be
the just and complete equivalent of the loss and is ordinarily determined by referring to the value of the land and
its character at the time it was taken by the expropriating authority. There is a taking in this sense when the

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owners are actually deprived or dispossessed of their property, where there is a practical destruction or a material
impairment of the value of their property, or when they are deprived of the ordinary use thereof. There is a
taking in this context when the expropriator enters private property not only for a momentary period but for
more permanent duration, for the purpose of devoting the property to a public use in such a manner as to oust the
owner and deprive him of all beneficial enjoyment thereof. Moreover, taking of the property for purposes of
eminent domain entails that the entry into the property must be under warrant or color of legal authority.
Same; In determining the just compensation, the valuation of the property should be based on the value on the
date when the landowners discovered the presence of the huge underground tunnels beneath their lands, not the
value on the date on which the latter constructed the tunnels.In the present case, to allow petitioner to use the
date it constructed the tunnels as the date of valuation would be grossly unfair. First, it did not enter the land under
warrant or color of legal authority or with intent to expropriate the same. In fact, it did not bother to notify the
owners and wrongly assumed it had the right to dig those tunnels under their property. Secondly, the
improvements introduced by petitioner, namely, the tunnels, in no way contributed to an increase in the value of
the land. The trial court, therefore, as affirmed by the CA, rightly computed the valuation of the property as of
1992, when respondents discovered the construction of the huge underground tunnels beneath their lands and
petitioner confirmed the same and started negotiations for their purchase but no agreement could be reached.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Daud Calala and Alex Macabangkit for petitioner.
Dimnatang T. Saro and Casan Macabanding for respondents.
Pete Quirino-Quadra and Dipatuan P. Umpa for respondent Heirs of Lucman M. Ibrahim.
AZCUNA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul the Decision1 dated
June 8, 2005 rendered by the Court of Appeals (CA) in C.A.-G.R. CV No. 57792.
The facts are as follows:
On November 23, 1994, respondent Lucman G. Ibrahim, in his personal capacity and in behalf of his co-heirs Omar
G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom,
Rocania G. Maruhom, Potrisam G. Maruhom, Lumba G. Maruhom, Sinab G. Maruhom, Acmad G. Maruhom,
Solayman G. Maruhom, Mohamad M. Ibrahim and Caironesa M. Ibrahim, instituted an action against petitioner
National Power Corporation (NAPOCOR) for recovery of possession of land and damages before the Regional Trial
Court (RTC) of Lanao del Sur.
In their complaint, Ibrahim and his co-heirs claimed that they were owners of several parcels of land described in
Survey Plan FP (VII-5) 2278 consisting of 70,000 square meters, divided into three (3) lots, i.e. Lots 1, 2, and 3
consisting of 31,894, 14,915, and 23,191 square meters each respectively. Sometime in 1978, NAPOCOR, through
alleged stealth and without respondents knowledge and prior consent, took possession of the sub-terrain area of
their lands and constructed therein underground tunnels. The existence of the tunnels was only discovered
sometime in July 1992 by respondents and then later confirmed on November 13, 1992 by NAPOCOR itself through
a memorandum issued by the latters Acting Assistant Project Manager. The tunnels were apparently being used by
NAPOCOR in siphoning the water of Lake Lanao and in the operation of NAPOCORs Agus II, III, IV, V, VI, VII projects
located in Saguiran, Lanao del Sur; Nangca and Balo-i in Lanao del Norte; and Ditucalan and Fuentes in Iligan City.
On September 19, 1992, respondent Omar G. Maruhom requested the Marawi City Water District for a permit to
construct and/or install a motorized deep well in Lot 3 located in Saduc, Marawi City but his request was turned
down because the construction of the deep well would cause danger to lives and property. On October 7, 1992,
respondents demanded that NAPOCOR pay damages and vacate the sub-terrain portion of their lands but the latter
refused to vacate much less pay damages. Respondents further averred that the construction of the underground
tunnels has endangered their lives and properties as Marawi City lies in an area of local volcanic and tectonic
activity. Further, these illegally constructed tunnels caused them sleepless nights, serious anxiety and shock
thereby entitling them to recover moral damages and that by way of example for the public good, NAPOCOR must
be held liable for exemplary damages.
Disputing respondents claim, NAPOCOR filed an answer with counterclaim denying the material allegations of the
complaint and interposing affirmative and special defenses, namely that (1) there is a failure to state a cause of
action since respondents seek possession of the sub-terrain portion when they were never in possession of the

29

same, (2) respondents have no cause of action because they failed to show proof that they were the owners of the
property, and (3) the tunnels are a government project for the benefit of all and all private lands are subject to
such easement as may be necessary for the same.2
On August 7, 1996, the RTC rendered a Decision, the decretal portion of which reads as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying plaintiffs [private respondents] prayer for defendant [petitioner] National Power Corporation to
dismantle the underground tunnels constructed between the lands of plaintiffs in Lots 1, 2, and 3 of Survey Plan FP
(VII-5) 2278;
2. Ordering defendant to pay to plaintiffs the fair market value of said 70,000 square meters of land covering Lots
1, 2, and 3 as described in Survey Plan FP (VII-5) 2278 less the area of 21,995 square meters at P1,000.00 per
square meter or a total of P48,005,000.00 for the remaining unpaid portion of 48,005 square meters; with 6%
interest per annum from the filing of this case until paid;
3. Ordering defendant to pay plaintiffs a reasonable monthly rental of P0.68 per square meter of the total area of
48,005 square meters effective from its occupancy of the foregoing area in 1978 or a total of P7,050,974.40.
4. Ordering defendant to pay plaintiffs the sum of P200,000.00 as moral damages; and
5. Ordering defendant to pay the further sum of P200,000.00 as attorneys fees and the costs.
SO ORDERED.3
On August 15, 1996, Ibrahim, joined by his co-heirs, filed an Urgent Motion for Execution of Judgment Pending
Appeal. On the other hand, NAPOCOR filed a Notice of Appeal by registered mail on August 19, 1996. Thereafter,
NAPOCOR filed a vigorous opposition to the motion for execution of judgment pending appeal with a motion for
reconsideration of the Decision which it had received on August 9, 1996.
On August 26, 1996, NAPOCOR filed a Manifestation and Motion withdrawing its Notice of Appeal purposely to give
way to the hearing of its motion for reconsideration.
On August 28, 1996, the RTC issued an Order granting execution pending appeal and denying NAPOCORs motion
for reconsideration, which Order was received by NAPOCOR on September 6, 1996.
On September 9, 1996, NAPOCOR filed its Notice of Appeal by registered mail which was denied by the RTC on the
ground of having been filed out of time. Meanwhile, the Decision of the RTC was executed pending appeal and
funds of NAPOCOR were garnished by respondents Ibrahim and his co-heirs.
On October 4, 1996, a Petition for Relief from Judgment was filed by respondents Omar G. Maruhom, Elias G. Maru
hom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Potrisam G. Maruhom and
Lumba G. Maruhom asserting as follows:
1) they did not file a motion to reconsider or appeal the decision within the reglementary period of fifteen (15)
days from receipt of judgment because they believed in good faith that the decision was for damages and rentals
and attorneys fees only as prayed for in the complaint:
2) it was only on August 26, 1996 that they learned that the amounts awarded to the plaintiffs represented not
only rentals, damages and attorneys fees but the greatest portion of which was payment of just compensation
which in effect would make the defendant NPC the owner of the parcels of land involved in the case;
3) when they learned of the nature of the judgment, the period of appeal has already expired;
4) they were prevented by fraud, mistake, accident, or excusable negligence from taking legal steps to protect and
preserve their rights over their parcels of land in so far as the part of the decision decreeing just compensation for
petitioners properties;
5) they would never have agreed to the alienation of their property in favor of anybody, considering the fact that
the parcels of land involved in this case were among the valuable properties they inherited from their dear father
and they would rather see their land crumble to dust than sell it to anybody.4
The RTC granted the petition and rendered a modified judgment dated September 8, 1997, thus:
WHEREFORE, a modified judgment is hereby rendered:

30

1) Reducing the judgment award of plaintiffs for the fair market value of P48,005,000.00 by 9,526,000.00 or for a
difference by P38,479,000.00 and by the further sum of P33,603,500.00 subject of the execution pending appeal
leaving a difference of 4,878,500.00 which may be the subject of execution upon the finality of this modified
judgment with 6% interest per annum from the filing of the case until paid.
2) Awarding the sum of P1,476,911.00 to herein petitioners Omar G. Maruhom, Elias G. Maruhom, Bucay G.
Maruhom, Mahmod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Portrisam G. Maruhom and Lumba G.
Maruhom as reasonable rental deductible from the awarded sum of P7,050,974.40 pertaining to plaintiffs.
3) Ordering defendant embodied in the August 7, 1996 decision to pay plaintiffs the sum of P200,000.00 as moral
damages; and further sum of P200,000.00 as attorneys fees and costs.
SO ORDERED.5
Subsequently, both respondent Ibrahim and NAPOCOR appealed to the CA.
In the Decision dated June 8, 2005, the CA set aside the modified judgment and reinstated the original Decision
dated August 7, 1996, amending it further by deleting the award of moral damages and reducing the amount of
rentals and attorneys fees, thus:
WHEREFORE, premises considered, herein Appeals are hereby partially GRANTED, the Modified Judgment is
ordered SET ASIDE and rendered of no force and effect and the original Decision of the court a quo dated 7 August
1996 is hereby RESTORED with the MODIFICATION that the award of moral damages is DELETED and the amounts
of rentals and attorneys fees are REDUCED to P6,888,757.40 and P50,000.00, respectively.
In this connection, the Clerk of Court of RTC Lanao del Sur is hereby directed to reassess and determine the
additional filing fee that should be paid by Plaintiff-Appellant IBRAHIM taking into consideration the total amount of
damages sought in the complaint vis--vis the actual amount of damages awarded by this Court. Such additional
filing fee shall constitute a lien on the judgment.
SO ORDERED.6
Hence, this petition ascribing the following errors to the CA:
(a) RESPONDENTS WERE NOT DENIED THE BENEFICIAL USE OF THEIR SUBJECT PROPERTIES TO ENTITLE THEM TO
JUST COMPENSATION BY WAY OF DAMAGES;
(b) ASSUMING THAT RESPONDENTS ARE ENTITLED TO JUST COMPENSATION BY WAY OF DAMAGES, NO EVIDENCE
WAS PRESENTED ANENT THE VALUATION OF RESPONDENTS PROPERTY AT THE TIME OF ITS TAKING IN THE YEAR
1978 TO JUSTIFY THE AWARD OF ONE THOUSAND SQUARE METERS (P 1000.00/SQ. M.) EVEN AS PAYMENT OF BACK
RENTALS IS ITSELF IMPROPER.
This case revolves around the propriety of paying just compensation to respondents, and, by extension, the basis
for computing the same. The threshold issue of whether respondents are entitled to just compensation hinges upon
who owns the sub-terrain area occupied by petitioner.
Petitioner maintains that the sub-terrain portion where the underground tunnels were constructed does not belong
to respondents because, even conceding the fact that respondents owned the property, their right to the subsoil of
the same does not extend beyond what is necessary to enable them to obtain all the utility and convenience that
such property can normally give. In any case, petitioner asserts that respondents were still able to use the subject
property even with the existence of the tunnels, citing as an example the fact that one of the respondents, Omar
G. Maruhom, had established his residence on a part of the property. Petitioner concludes that the underground
tunnels 115 meters below respondents property could not have caused damage or prejudice to respondents and
their claim to this effect was, therefore, purely conjectural and speculative.7
The contention lacks merit.
Generally, in an appeal by certiorari under Rule 45 of the Rules of Court, the Court does not pass upon questions of
fact. Absent any showing that the trial and appellate courts gravely abused their discretion, the Court will not
examine the evidence introduced by the parties below to determine if they correctly assessed and evaluated the
evidence on record.8 The jurisdiction of the Court in cases brought to it from the CA is limited to reviewing and
revising the errors of law imputed to it, its findings of fact being as a rule conclusive and binding on the Court.
In the present case, petitioner failed to point to any evidence demonstrating grave abuse of discretion on the part
of the CA or to any other circumstances which would call for the application of the exceptions to the above rule.
Consequently, the CAs findings which upheld those of the trial court that respondents owned and possessed the

31

property and that its substrata was possessed by petitioner since 1978 for the underground tunnels, cannot be
disturbed. Moreover, the Court sustains the finding of the lower courts that the sub-terrain portion of the property
similarly belongs to respondents. This conclusion is drawn from Article 437 of the Civil Code which provides:
ART. 437. The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct
thereon any works or make any plantations and excavations which he may deem proper, without detriment to
servitudes and subject to special laws and ordinances. He cannot complain of the reasonable requirements of
aerial navigation.
Thus, the ownership of land extends to the surface as well as to the subsoil under it. In Republic of the Philippines
v. Court of Appeals,9 this principle was applied to show that rights over lands are indivisible and, consequently,
require a definitive and categorical classification, thus: The Court of Appeals justified this by saying there is no
conflict of interest between the owners of the surface rights and the owners of the sub-surface rights. This is
rather strange doctrine, for it is a well-known principle that the owner of a piece of land has rights not only to its
surface but also to everything underneath and the airspace above it up to a reasonable height. Under the aforesaid
ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of
title. This is also difficult to understand, especially in its practical application.
Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator
will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the mining
operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the farmer,
and how high can the miner go without encroaching on each others rights? Where is the dividi ng line between the
surface and the sub-surface rights?
The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and
half mineral. The classification must be categorical; the land must be either completely mineral or completely
agricultural.
Registered landowners may even be ousted of ownership and possession of their properties in the event the latter
are reclassified as mineral lands because real properties are characteristically indivisible. For the loss sustained by
such owners, they are entitled to just compensation under the
Mining Laws or in appropriate expropriation proceedings.10 Moreover, petitioners argument that the landowners
right extends to the sub-soil insofar as necessary for their practical interests serves only to further weaken its case.
The theory would limit the right to the sub-soil upon the economic utility which such area offers to the surface
owners. Presumably, the landowners right extends to such height or depth where it is possible for them to obtain
some benefit or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected
by law.11
In this regard, the trial court found that respondents could have dug upon their property motorized deep wells but
were prevented from doing so by the authorities precisely because of the construction and existence of the tunnels
underneath the surface of their property. Respondents, therefore, still had a legal interest in the sub-terrain portion
insofar as they could have excavated the same for the construction of the deep well. The fact that they could not
was appreciated by the RTC as proof that the tunnels interfered with respondents enjoyment of their property and
deprived them of its full use and enjoyment, thus:
Has it deprived the plaintiffs of the use of their lands when from the evidence they have already existing
residential houses over said tunnels and it was not shown that the tunnels either destroyed said houses or
disturb[ed] the possession thereof by plaintiffs? From the evidence, an affirmative answer seems to be in order.
The plaintiffs and [their] co-heirs discovered [these] big underground tunnels in 1992. This was confirmed by the
defendant on November 13, 1992 by the Acting Assistant Project Manager, Agus 1 Hydro Electric Project (Exh. K).
On September 16, 1992, Atty. Omar Maruhom (co-heir) requested the Marawi City Water District for permit to
construct a motorized deep well over Lot 3 for his residential house (Exh. Q). He was refused the perm it
because the construction of the deep well as (sic) the parcels of land will cause danger to lives and property. He
was informed that beneath your lands are constructed the Napocor underground tunnel in connection with Agua
Hydroelectric plant (Exh. Q-2). Ther e in fact exists ample evidence that this construction of the tunnel without
the prior consent of plaintiffs beneath the latters property endangered the lives and properties of said plaintiffs. It
has been proved indubitably that Marawi City lies in an area of local volcanic and tectonic activity. Lake Lanao has
been formed by extensive earth movements and is considered to be a drowned basin of volcano/tectonic origin. In
Marawi City, there are a number of former volcanoes and an extensive amount of faulting. Some of these faults are
still moving. (Feasibility Report on Marawi City Water District by Kampsa-Kruger, Consulting Engineers, Architects
and Economists, Exh. R). Moreover, it has been shown that the underground tunnels [have] deprived the
plaintiffs of the lawful use of the land and considerably reduced its value. On March 6, 1995, plaintiffs applied for a
two-million peso loan with the Amanah Islamic Bank for the expansion of the operation of the Ameer Construction

32

and Integrated Services to be secured by said land (Exh. N), but the application was disapproved by the bank in
its letter of April 25, 1995 (Exh. O) stating that:
Apropos to this, we regret to inform you that we cannot consider your loan application due to the following
reasons, to wit:
That per my actual ocular inspection and verification, subject property offered as collateral has an existing
underground tunnel by the NPC for the Agus I Project, which tunnel is traversing underneath your property, hence,
an encumbrance. As a matter of bank policy, property with an existing encumbrance cannot be considered neither
accepted as collateral for a loan.
All the foregoing evidence and findings convince this Court that preponderantly plaintiffs have established the
condemnation of their land covering an area of 48,005 sq. meters located at Saduc, Marawi City by the defendant
National Power Corporation without even the benefit of expropriation proceedings or the payment of any just
compensation and/or reasonable monthly rental since 1978.12
In the past, the Court has held that if the government takes property without expropriation and devotes the
property to public use, after many years, the property owner may demand payment of just compensation in the
event restoration of possession is neither convenient nor feasible.13 This is in accordance with the principle that
persons shall not be deprived of their property except by competent authority and for public use and always upon
payment of just compensation.14
Petitioner contends that the underground tunnels in this case constitute an easement upon the property of
respondents which does not involve any loss of title or possession. The manner in which the easement was created
by petitioner, however, violates the due process rights of respondents as it was without notice and indemnity to
them and did not go through proper expropriation proceedings. Petitioner could have, at any time, validly exercised
the power of eminent domain to acquire the easement over respondents property as this power encompasses not
only the taking or appropriation of title to and possession of the expropriated property but likewise covers even the
imposition of a mere burden upon the owner of the condemned property.15 Significantly, though, landowners
cannot be deprived of their right over their land until expropriation proceedings are instituted in court. The court
must then see to it that the taking is for public use, that there is payment of just compensation and that there is
due process of law.16
In disregarding this procedure and failing to recognize respondents ownership of the sub-terrain portion, petitioner
took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the
acquisition of the easement is not without expense. The underground tunnels impose limitations on respondents
use of the property for an indefinite period and deprive them of its ordinary use. Based upon the foregoing,
respondents are clearly entitled to the payment of just compensation.17 Notwithstanding the fact that petitioner
only occupies the sub-terrain portion, it is liable to pay not merely an easement fee but rather the full
compensation for land. This is so because in this case, the nature of the easement practically deprives the owners
of its normal beneficial use. Respondents, as the owners of the property thus expropriated, are entitled to a just
compensation which should be neither more nor less, whenever it is possible to make the assessment, than the
money equivalent of said property.18
The entitlement of respondents to just compensation having been settled, the issue now is on the manner of
computing the same. In this regard, petitioner claims that the basis for the computation of the just compensation
should be the value of the property at the time it was taken in 1978. Petitioner also impugns the reliance made by
the CA upon National Power Corporation v. Court of Appeals and Macapanton Mangondato 19 as the basis for
computing the amount of just compensation in this action. The CA found that the award of damages is not
excessive because the P1000 per square meter as the fair market value was sustained in a case involving a lot
adjoining the property in question which case involved an expropriation by [petitioner] of portion of Lot 1 of the
subdivision plan (LRC) PSD 116159 which is adjacent to Lots 2 and 3 of the same subdivision plan which is the
subject of the instant controversy.20
Just compensation has been understood to be the just and complete equivalent of the loss21 and is ordinarily
determined by referring to the value of the land and its character at the time it was taken by the expropriating
authority.22 There is a taking in this sense when the owners are actually deprived or dispossessed of their
property, where there is a practical destruction or a material impairment of the value of their property, or when
they are deprived of the ordinary use thereof. There is a taking in this context when the expropriator enters
private property not only for a momentary period but for more permanent duration, for the purpose of devoting the
property to a public use in such a manner as to oust the owner and deprive him of all beneficial enjoyment
thereof.23 Moreover, taking of the property for purposes of eminent domain entails that the entry into the
property must be under warrant or color of legal authority.24

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Under the factual backdrop of this case, the last element of taking mentioned, i.e., that the entry into the property
is under warrant or color of legal authority, is patently lacking. Petitioner justified its nonpayment of the indemnity
due respondents upon its mistaken belief that the property formed part of the public dominion.
This situation is on all fours with that in the Mangondato case. NAPOCOR in that case took the property of therein
respondents in 1979, using it to build its Aqua I Hydroelectric Plant Project, without paying any compensation,
allegedly under the mistaken belief that it was public land. It was only in 1990, after more than a decade of
beneficial use, that NAPOCOR recognized therein respondents ownership and negotiated for the voluntary
purchase of the property.
In Mangondato, this Court held:
The First Issue: Date of Taking or Date of Suit?
The general rule in determining just compensation in eminent domain is the value of the property as of the date
of the filing of the complaint, as follows:
Sec. 4. Order of Condemnation.When such a motion is overruled or when any party fails to defend as required
by this rule, the court may enter an order of condemnation declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of
just compensation to be determined as of the date of the filing of the complaint. x x x (Italics supplied).
Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence, many ruling of
this Court have equated just compensation with the value of the property as of the time of filing of the complaint
consistent with the above provision of the Rules. So too, where the institution of the action precedes entry to the
property, the just compensation is to be ascertained as of the time of filing of the complaint.
The general rule, however, admits of an exception: where this Court fixed the value of the property as of the date it
was taken and not the date of the commencement of the expropriation proceedings.
In the old case of Provincial Government of Rizal vs. Caro de Araullo, the Court ruled that x x x the owners of the
land have no right to recover damages for this unearned increment resulting from the construction of the public
improvement (lengthening of Taft Avenue from Manila to Pasay) from which the land was taken. To permit them to
do so would be to allow them to recover more than the value of the land at the time it was taken, which is the true
measure of the damages, or just compensation, and would discourage the construction of important public
improvements.
In subsequent cases, the Court, following the above doctrine, invariably held that the time of taking is the critical
date in determining lawful or just compensation. Justifying this stance, Mr. Justice (later Chief Justice) Enrique
Fernando, speaking for the Court in Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente Gan,
said, x x x the owner as is the constitutional intent, is paid what he is entitled to according to the value of the
property so devoted to public use as of the date of taking. From that time, he had been deprived thereof. He had
no choice but to submit. He is not, however, to be despoiled of such a right. No less than the fundamental law
guarantees just compensation. It would be injustice to him certainly if from such a period, he could not recover the
value of what was lost. There could be on the other hand, injustice to the expropriator if by a delay in the
collection, the increment in price would accrue to the owner. The doctrine to which this Court has been committed
is intended precisely to avoid either contingency fraught with unfairness.
Simply stated, the exception finds the application where the owner would be given undue incremental advantages
arising from the use to which the government devotes the property expropriatedas for instance, the extension of
a main thoroughfare as was in the case in Caro de Araullo. In the instant case, however, it is difficult to conceive of
how there could have been an extra-ordinary increase in the value of the owners land arising from the
expropriation, as indeed the records do not show any evidence that the valuation of P1,000.00 reached in 1992
was due to increments directly caused by petitioners use of the land. Since the petitioner is claiming an exception
to Rule 67, Section 4, it has the burden in proving its claim that its occupancy and usenot ordinary inflation and
increase in land valueswas the direct cause of the increase in valuation from 1978 to 1992.
Side Issue: When is there Taking of Property?
But there is yet another cogent reason why this petition should be denied and why the respondent Court should be
sustained. An examination of the undisputed factual environment would show that the taking was not really
made in 1978.
This Court has defined the elements of taking as the main ingredient in the exercise of power of eminent domain,
in the follow-ing words:

34

A number of circumstances must be present in taking of property for purposes of eminent domain: (1) the
expropriator must enter a private property; (2) the entrance into private property must be for more than a
momentary period; (3) the entry into the property should be under warrant or color of legal authority; (4) the
property must be devoted to a public use or otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way to oust the owner and deprive him of all beneficial
enjoyment of the property. (Italics supplied)
In this case, the petitioners entrance in 1978 was without intent to expropriate or was not made under warrant or
color of legal authority, for it believed the property was public land covered by Proclamation No. 1354. When the
private respondent raised his claim of ownership sometime in 1979, the petitioner flatly refused the claim for
compensation, nakedly insisted that the property was public land and wrongly justified its possession by alleging it
had already paid financial assistance to Marawi City in exchange for the rights over the property. Only in 1990,
after more than a decade of beneficial use, did the petitioner recognize private respondents ownership and
negotiate for the voluntary purchase of the property. A Deed of Sale with provisional payment and subject to
negotiations for the correct price was then executed. Clearly, this is not the intent nor the expropriation
contemplated by law. This is a simple attempt at a voluntary purchase and sale. Obviously, the petitioner
neglected and/or refused to exercise the power of eminent domain.
Only in 1992, after the private respondent sued to recover possession and petitioner filed its Complaint to
expropriate, did petitioner manifest its intention to exercise the power of eminent domain. Thus the respondent
Court correctly held:
If We decree that the fair market value of the land be determined as of 1978, then We would be sanctioning a
deceptive scheme whereby NAPOCOR, for any reason other than for eminent domain would occupy anothers
property and when later pressed for payment, first negotiate for a low price and then conveniently expropriate the
property when the land owner refuses to accept its offer claiming that the taking of the property for the purpose of
the eminent domain should be reckoned as of the date when it started to occupy the property and that the value of
the property should be computed as of the date of the taking despite the increase in the meantime in the value of
the property.
In Noble vs. City of Manila, the City entered into a lease-purchase agreement of a building constructed by the
petitioners predecessor-in-interest in accordance with the specifications of the former. The Court held that being
bound by the said contract, the City could not expropriate the building. Expropriation could be resorted to only
when it is made necessary by the opposition of the owner to the sale or by the lack of any agreement as to the
price. Said the Court:
The contract, therefore, in so far as it refers to the purchase of the building, as we have interpreted it, is in force,
not having been revoked by the parties or by judicial decision. This being the case, the city being bound to buy the
building at an agreed price, under a valid and subsisting contract, and the plaintiff being agreeable to its sale, the
expropriation thereof, as sought by the defendant, is baseless. Expropriation lies only when it is made necessary by
the opposition of the owner to the sale or by the lack of any agreement as to the price. There being in the present
case a valid and subsisting contract, between the owner of the building and the city, for the purchase thereof at an
agreed price, there is no reason for the expropriation. (Italics supplied)
In the instant case, petitioner effectively repudiated the deed of sale it entered into with the private respondent
when it passed Resolution No. 92-121 on May 25, 1992 authorizing its president to negotiate, inter alia, that
payment shall be effective only after Agus I HE project has been placed in operation. It was only then that
petitioners intent to expropriate became manifest as private respondent disagreed and, barely a month, filed
suit.25
In the present case, to allow petitioner to use the date it constructed the tunnels as the date of valuation would be
grossly unfair. First, it did not enter the land under warrant or color of legal authority or with intent to expropriate
the same. In fact, it did not bother to notify the owners and wrongly assumed it had the right to dig those tunnels
under their property. Secondly, the improvements introduced by petitioner, namely, the tunnels, in no way
contributed to an increase in the value of the land. The trial court, therefore, as affirmed by the CA, rightly
computed the valuation of the property as of 1992, when respondents discovered the construction of the huge
underground tunnels beneath their lands and petitioner confirmed the same and started negotiations for their
purchase but no agreement could be reached.26
As to the amount of the valuation, the RTC and the CA both used as basis the value of the adjacent property, Lot 1
(the property involved herein being Lots 2 and 3 of the same subdivision plan), which was valued at P1,000 per sq.
meter as of 1990, as sustained by this Court in Mangondato, thus:
The Second Issue: Valuation

35

We now come to the issue of valuation.

The fair market value as held by the respondent Court, is the amount of P1,000.00 per square meter. In an
expropriation case where the principal issue is the determination of just compensation, as is the case here, a trial
before Commissioners is indispensable to allow the parties to present evidence on the issue of just compensation.
Inasmuch as the determination of just compensation in eminent domain cases is a judicial function and factual
findings of the Court of Appeals are conclusive on the parties and reviewable only when the case falls within the
recognized exceptions, which is not the situation obtaining in this petition, we see no reason to disturb the factual
findings as to valuation of the subject property. As can be gleaned from the records, the court-and-the-partiesappointed commissioners did not abuse their authority in evaluating the evidence submitted to them nor
misappreciate the clear preponderance of evidence. The amount fixed and agreed to by the respondent appellate
Court is not grossly exorbitant. To quote:
Commissioner Ali comes from the Office of the Register of Deeds who may well be considered an expert, with a
general knowledge of the appraisal of real estate and the prevailing prices of land in the vicinity of the land in
question so that his opinion on the valuation of the property cannot be lightly brushed aside.
The prevailing market value of the land is only one of the determinants used by the commissioners report the
other being as herein shown:
xxx
xxx
Commissioner Doromals report, recommending P300.00 per square meter, differs from the 2 commissioners only
because his report was based on the valuation as of 1978 by the City Appraisal Committee as clarified by the
latters chairman in response to NAPOCORs general counsels query.
In sum, we agree with the Court of Appeals that petitioner has failed to show why it should be granted an
exemption from the general rule in determining just compensation provided under Section 4 of Rule 67. On the
contrary, private respondent has convinced us that, indeed, such general rule should in fact be observed in this
case.27
Petitioner has not shown any error on the part of the CA in reaching such a valuation. Furthermore, these are
factual matters that are not within the ambit of the present review.
WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in CA-G.R. CV No. 57792 dated June
8, 2005 is AFFIRMED.
No costs.
SO ORDERED.
Puno (C.J., Chairperson), Corona and Garcia, JJ., concur.
Sandoval-Gutierrez, J., On Leave.
Petition denied, judgment affirmed.
Notes.The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain
and over criminal cases. (Republic vs. Court of Appeals, 263 SCRA 758 [1996])
Mere discontinuance of the use of the pipes does not amount to voluntary renunciation of a waterwork companys
claim over the land. (Santiago vs. Court of Appeals, 334 SCRA 454 [2000])
The expropriation of landholding covered by P.D. No. 27 did not take place on the effectivity of the Decree on 21
October 1973 but on the payment of just compensation, judicially determined. (Office of the President,
Malacaang, Manila vs. Court of Appeals, 361 SCRA 390 [2001]) National Power Corporation vs. Ibrahim, 526 SCRA
149, G.R. No. 168732 June 29, 2007
PAZ MERCADO, CAROLINA S. CHICO, LUCIANA CABRERA, JOAQUIN IGNACIO, ELMER FLORES, AVELINA C. NUCOM, et
al., petitioners, vs. HON. COURT OF APPEALS, HON. BENIGNO PUNO, LOLITA C. BULAONG, FLORENTINO AGULTO,
SEVERINO SALAYSAY, SUSANA BERNARDINO, et al., respondents.
Remedial Law; Judgment; A judgment contrary to the express provisions of a statute is erroneous but it is not void;
and if it becomes final and executory, it becomes as binding and effective as any valid judgment.That the

36

judgment of the Trial Court applied the wrong provision of the law in the resolution of the controversy has ceased
to be of any consequence. As already discussed instead of the legal provision governing lessees rights over
improvements on leased realty, the judgment invoked that relative to the rights of builders in good faith. But the
error did not render the judgment void. A judgment contrary to the express provisions of a statute is of course
erroneous, but it is not void; and if it becomes final and executory, it becomes as binding and effective as any valid
judgment; and though erroneous, will henceforth be treated as valid, and will be enforced in accordance with its
terms and dispositions.
Same; Same; Appeals; Availability of the right to appeal precludes recourse to the special civil action of certiorari.
The remedy available to the petitioners against such a final judgment, as repeatedly stated, was an appeal in
accordance with the aforementioned Rule 41 of the Rules of Court. But as observed in an analogous case recently
resolved by this Court.x x instead of resorting to this ordinary remedy of appeal, x x (the petitioners) availed of
the extraordinary remedy of a special civil action of certiorari in the x x (Court of Appeals), under Rule 65 of the
Rules of Court. The choice was clearly wrong. The availability of the right of appeal obviously precluded recourse to
the special civil action of certiorari. This is axiomatic. It is a proposition made plain by Section 1 of Rule 65 which
lays down as a condition for the filing of a certiorari petition that there be no appeal, nor any plain, speedy and
adequate remedy in the ordinary course of law.
Same; Same; Same; Same; Instances when certiorari may exceptionally be permitted in lieu of appeal.In the case
at bar, the petitioners lost their right to appeal by failing to avail of it seasonably. To remedy that loss, they have
resorted to the extraordinary remedy of certiorari, as a mode of obtaining reversal of the judgment from which
they failed to appeal. This cannot be done. The judgment was not in any sense null and void ab initio, incapable of
producing any legal effects whatever, which could never become final, and execution of which could be resisted at
any time and in any court it was attempted. It was a judgment which might and probably did suffer from some
substantial error in procedure or in findings of fact or of law, and could on that account have been reversed or
modified on appeal. But since it was not appealed, it became final and has thus gone beyond the reach of any
court to modify in any substantive aspect. The remedy to obtain a reversal or modification of the judgment on the
merits is appeal. This is true even if the error, or one of the errors, ascribed to the Court rendering the judgment is
its lack of jurisdiction of the subject matter, or the exercise of power in excess thereof, or grave abuse of discretion
in the findings of fact or of law set out in its decision. The existence and availability of the right of appeal
proscribes a resort to certiorari, one of the requisites for availment of the latter remedy being precisely that there
should be no appeal. There may to be sure, be instances when certiorari may exceptionally be permitted in lieu of
appeal, as when their appeal would be inadequate, slow, insufficient, and will not promptly relieve a party from the
injurious effect of the judgment complained of, or to avoid future litigations, none of which situations obtains in the
case at bar. And certain it is that the special civil action of certiorari cannot be a substitute for appeal, specially
where the right to appeal has been lost through a partys fault or inexcusable negligence.
Same; Same; Same; Summary Judgment; The summary judgment rendered by respondent judge was not an
interlocutory order but a final judgment.The summary judgment rendered by respondent Judge on October 24,
1975 was not an interlocutory disposition or order but a final judgment within the meaning of Section 2, Rule 41 of
the Rules of Court. By that summary judgment the Court finally disposed of the pending action, leaving nothing
more to be done by it with respect to the merits, thus putting an end to the litigation as its level.
PETITION to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
NARVASA, J.:
The question presented by this appeal is whether or not the special civil action of certiorari may be properly
resorted to by a party aggrieved by a judgment of a Regional Trial Court (or Court of First Instance)which became
final because not appealed within the reglementary periodto bring about its reversal on the ground that the
Court had applied the wrong provision of the Civil Code, and had rendered summary judgment at the instance of
the defendants without receiving evidence on the issue of damages allegedly suffered by the plaintiffs, thereby
denying them due process.
The private respondents, hereafter simply referred to as the Bulaong Group, had for many years been individual
lessees of stalls in the public market of Baliuag, Bulacan; from 1956 to 1972, to be more precise. The market was
destroyed by fire on February 17, 1956; the members of the Bulaong Group constructed new stalls therein at their
expense; and they thereafter paid rentals thereon to the Municipality of Baliuag.
Sometime in 1972, the members of the group sub-leased their individual stalls to other persons, hereafter simply
referred to as the Mercado Group. After the Mercado Group had been in possession of the market stalls for some
months, as sub-lessees of the Bulaong Group, the municipal officials of Baliuag cancelled the long standing leases
of the Bulaong Group and declared the persons comprising the Mercado Group as the rightful lessees of the stalls

37

in question, in substitution of the former. The municipal authorities justified the cancellation of the leases of the
Bulaong Group by invoking the provisions of Municipal Ordinance No. 14, dated December 14, 1964, which
prohibited the sub-leasing of stalls by the lessees thereof, as well as a directive of the Office of the President
(contained in a letter of Executive Secretary R. Zamora dated May 29, 1973) requiring enforcement of said
Ordinance No. 14. Recognition of the Mercado Groups rights over the stalls was subsequently manifested in
Municipal Ordinance No. 49, approved on July 5, 1973.
The members of the Bulaong Group sued. They filed several individual complaints with the Court of First Instance
seeking recovery of their stalls from the Mercado Group as well as damages.1 Their theory was anchored on their
claimed ownership of the stalls constructed by them at their own expense, and their resulting right, as such
owners, to sub-lease the stalls, and necessarily, to recover them from any person withholding possession thereof
from them. Answers were seasonably filed in behalf of the defendants, including the Municipality of Baliuag,2 after
which a pre-trial was held in the course of which the parties stipulated upon practically all the facts.
The Mercado Group thereafter filed motions for summary judgment, asserting that in light of the admissions made
at the pre-trial and in the pleadings, no issue remained under genuine controversion. The Bulaong Group filed an
opposition which, while generally stating that there were other material allegations in the amended complaint(s)
upon which proof was needful, actually identified only one issue of fact requiring formal submission of evidence,
i.e., the claim for actual damages x x x the exact amount of which shall be proven at the trial. The Bulaong Group
then filed a Motion to Accept Affidavits and Photographs as Annexes to the Opposition to the Motion for Summary
Judgment, which affidavits and photographs tended to establish the character and value of the improvements
they had introduced in the market stalls. As far as the records show, no objection whatever was presented to this
motion by the Mercado Group (movants for summary judgment), and the affidavits and photographs were admitted
by the Trial Court. Specifically, the Mercado Group never asked, either in their motion for summary judgment or at
any time after having received a copy of the motion to accept affidavits and photographs, etc., that a hearing be
scheduled for the reception of evidence on the issue of the Bulaong Groups claimed actual damages.
On October 24, 1975, respondent Judge rendered a summary judgment in all the cases.3 It rejected the claim of
the Municipality of Baliuag that it had automatically acquired ownership of the new stalls constructed after the old
stalls had been razed by fire, declaring the members of the Bulaong Group to be builders in good faith, entitled to
retain possession of the stalls respectively put up by them until and unless indemnified for the value thereof. The
decision also declared that the Bulaong and Mercado Groups had executed the subletting agreements with full
awareness that they were thereby violating Ordinance No. 14; they were thus in pari delicto, and hence had no
cause of action one against the other and no right to recover whatever had been given or demand performance of
anything undertaken. The judgment therefore decreed (1) the annulment of the leases between the Municipality
and the individuals comprising the Mercado Group (the defendants who had taken over the original leases of the
Bulaong Group); and (2) the payment to the individual members of the Bulaong Group (the plaintiffs) of the stated,
adjudicated value of the stalls, with interest IF
x x the Municipality x x would insist in its right rescind or annul its contracts of leases with the said plaintiffs over
the lots on which the stalls in question are erected; for this purpose, since the private defendants become
immediate beneficiaries to a transfer of possession over the stalls in question, the Municipality x x may require said
private defendants x x to pay the plaintiffs the aforesaid amounts in the event that said private defendants and the
Municipality x x should elect to oust the plaintiffs from the stalls in question and from the lots on which said stalls
are constructed; however, unless the plaintiffs shall have been fully paid of the value of their stalls in the amounts
mentioned above, they shall have the right to remain in their respective stalls and in case the private defendants
shall refuse to pay for the value of the stalls in this event, the ejectment of the said private defendants from the
stalls in question shall be ordered x x.
The Mercado Group and the Municipality filed on November 14, 1975, motions for reconsideration of the summary
judgment, notice of which had been served on them on November 3, 1975. These were denied, and notice of the
order of denial was received by them on December 18, 1975. On January 7, 1976, the Mercado Group filed a notice
of appeal, an appeal bond and a motion for extension of time to file their record on appeal. But by Order dated
January 9, 1976, the Trial Court directed inter alia the execution of the judgment, at the instance of the Bulaong
Group and despite the opposition of the Mercado Group, adjudging that its decision had become final because the
appeal documents had not been seasonably filed. The writ was issued, and the Mercado Groups motion to quash
the same and to re-open the case was denied.
The Group went to the Court of Appeals, instituting in that court a special civil action of certiorari and prohibition4
to annul that portion of the summary judgment x x awarding damages to private respondents (the Bulaong
Group), and to restrain the respondent Judge and the Provincial Sheriff of Bulacan from enforcing the same. That
Court rendered judgment on May 14, 1976,5 holding that (1) the summary judgment was properly rendered,
respondent Judge (having) merely adhered to the procedure set forth by the x x Rule (34); and if he committed
error in the appreciation of the probative values of the affidavits and counter-affidavits submitted by the parties,

38

such error is merely one of judgment, and not of jurisdiction; (2) the Mercado Group had not been denied due
process for failure of respondent Judge to conduct a formal trial x x (to receive) evidence on the question of
damages, since the parties were afforded the right, in connection with the motion for summary judgment, to
speak and explain their side of the case by means of affidavits and counter-affidavits; and (3) since the Mercado
Group had attempted to perfect an appeal from the summary judgment which was however futile because their
appeal papers were filed beyond the reglementary period, the judgment had become final and certiorari or
prohibition could not be availed of as a substitute for the groups lost appeal. Once again, the Mercado Group
moved for reconsideration of an adverse judgment, and once again were rebuffed.
The members of the Mercado Group are now before this Court on an appeal by certiorari, this time timely taken,
assailing the above rulings of the Court of Appeals. Their appeal must fail for lack of merit. No error can be
ascribed to the judgment of the Court of Appeals which is hereby affirmed in toto.
Upon the factual findings of the Court of Appeals, by which this court is bound, and taking account of well
established precedent from which there is no perceivable reason in the premises to depart, there is no question
that the petitioners (the Mercado Group) had failed to perfect an appeal from the summary judgment within the
reglementary period fixed by the Rules of Court. According to the Appellate Court
The summary judgment rendered by respondent Judge, being a final adjudication on the merits of the said cases,
could have been appealed by the petitioners. In point of fact, petitioners did attempt to perfect an appeal from said
judgment, but the attempt proved futile because their notice of appeal, appeal bond and motion for extension of
time to file record on appeal were filed beyond the reglementary period. The record discloses that they received
copy of the summary judgment on November 3, 1975; that on November 14, 1975, or after the lapse of eleven (11)
days from receipt of said decision, they filed their motion for reconsideration of said decision; that on December
18, 1975, they received copy of the order denying their motion for reconsideration; and that they did not file their
notice of appeal, appeal bond and motion for extension of time until January 7, 1976, or twenty (20) days after
receipt of the order denying their motion for reconsideration. The notice of appeal, appeal bond and motion for
extension were, therefore, presented one (1) day after the expiration of the 30-day period to perfect an appeal.
Thus, respondent Judge correctly disallowed the appeal. The Appellate Courts computation of the period is
correct, and is in accord with Section 3, Rule 41 of the Rules of Court providing that from the 30-day reglementary
period of appeal shall be deducted the time during which a motion to set aside the judgment or order or for a new
trial has been pending.6
Significantly, the petitioners have made no serious effort to explain and excuse the tardiness of their appeal. What
they have done and continue to do is to insist that the special civil action of certiorari is in truth the proper remedy
because the judgment is void. The judgment is void, they say, because they were denied due process, as
respondent Judge granted exorbitant damages, without reliable proof, and without giving petitioners the chance to
prove their claim that private respondents are not entitled to damages, and conceding that they are, the damages
are much lower than that awarded by the respondent Judge.7 According to them, since the matter of damages
was clearly a controverted fact, the Court had absolutely no jurisdiction to determine it on mere affidavits.
There can be no debate about the proposition that under the law, the Trial Court validly acquired jurisdiction not
only over the persons of the parties but also over the subject matter of the actions at bar. The parties composing
the Mercado Group cannot dispute this; they recognized the Courts competence when they filed their answers to
the complaints without questioning the Courts jurisdiction of the subject-matter; indeed neither at that time nor at
any other time thereafter did any one of them ever raise the question.
Now, jurisdiction, once acquired, is not lost by any error in the exercise thereof that might subsequently be
committed by the court. Where there is jurisdiction over the person and the subject matter, the decision of all
other questions arising in the case is but an exercise of that jurisdiction.8 And when a court exercises its
jurisdiction, an error committed while engaged in that exercise does not deprive it of the jurisdiction being
exercised when the error is committed. If it did, every error committed by a court would deprive it of jurisdiction
and every erroneous judgment would be a void judgment. This, of course, can not be allowed. The administration
of justice would not survive such a rule.9 Moreover, any error that the Court may commit in the exercise of its
jurisdiction, being merely an error of judgment, is reviewable only by appeal, not by the special civil action of
certiorari or prohibition.10
The petitioners do not dispute the propriety of the rendition of a summary judgment by the Court a quo, a remedy
that they themselves had in fact asked for. What they challenge is the inclusion in that judgment of an award of
damages on the basis merely of affidavits, without actual reception of evidence thereon at a hearing set for the
purpose.
The challenge is not however justified by the peculiar circumstances of the case at bar. The petitioners, to repeat,
were the parties who, as defendants, had moved for summary judgment. They knew or were supposed to know
that, as stated by the Rules, their motion would be granted if the pleadings, depositions, and admissions on file,

39

together with the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any
material fact and that x x (they are) entitled to a judgment as a matter of law.11 They knew that the private
respondents, as plaintiffs, had in fact opposed their motion and had pointed out precisely the need for a hearing on
the controverted matter of damages. That they did not join in the move to have a hearing on the issue of damages
is an indication that they considered it unnecessary. When the respondents (plaintiffs)apparently in view of the
Courts and the defendants indifference to the notion of having a hearing on the matter of damages, implicitly
indicating the belief of the superfluity of a hearingpresented affidavits and depositions to prove the value of the
improvements, for which they were seeking reimbursement, the petitioners (defendants) did not ask that the
matter be ventilated at a hearing, or submit counter-affidavits, as was their right. They made no response
whatever. They were evidently quite confident of obtaining a favorable judgment, and that such an eventuality
would preclude the claimed reimbursement or recovery of damages. As it turned out, they were wrong in their
prognostication.
In any event, even assuming error on the Courts part in relying on the unopposed affidavits and photographs as
basis for an award of damages, it was, as the Appellate Court has opined, not an error of jurisdiction under the
circumstances, but one in the exercise of jurisdiction, to correct which the prescribed remedy is appeal. This is not
to say that where a Court determines the propriety of a summary judgmentwhich it may do on the basis of the
pleadings, depositions, admissions and affidavits submitted by the partiesand discovers that there are genuine
issues of fact, these genuine issues may nonetheless be adjudicated on the basis of depositions, admissions or
affidavits and not of evidence adduced at a formal hearing or trial. This is not the rule.12 The rule is that it is only
the ascertainment of the character of the issues raised in the pleadingsas genuine, or sham or fictitiouswhich
can be done by depositions, admissions, or affidavits; the resolution of such issues as are found to be genuine
should be made upon proof proferred at a formal hearing. The peculiar circumstances of the case at bar, already
pointed out, operate to exclude it from the scope of the rule. It is an exception that should however be taken, as
affirming and not eroding the rule.
The petitioners other theory is more tenable, but will not appreciably advance their cause. They suggest that it
was a mistake for the Trial Court to have accorded to the individuals of the Bulaong Group the stalls and builders in
good faith in accordance with Article 526 of the Civil Code. They are correct. It was indeed error for the Court to
have so ruled. The members of this group were admittedly lessees of space in the public market; they therefore
could not, and in truth never did make the claim, that they were owners of any part of the land occupied by the
market so that in respect of any new structure put up by them thereon, they could be deemed builders in good
faith. To be deemed a builder in good faith, it is essential that a person assert title to the land on which he builds;
i.e., that he be a possessor in concept of owner,13 and that he be unaware that there exists in his title or mode of
acquisition any flaw which invalidates it.14 It is such a builder in good faith who is given the right to retain the
thing, even as against the real owner, until he has been reimbursed in full not only for the necessary expenses but
also for useful expenses.15 On the other hand, unlike the builder in good faith, a lessee who makes in good faith
useful improvements which are suitable to the use for which the lease is intended, without altering the form or
substance of the property leased, can only claim payment of one-half of the value of the improvements or,
should the lessor refuse to reimburse said amount, x x remove the improvements, even though the principal thing
may suffer damage thereby.16
But this error does not go to the Trial Courts jurisdiction. It is an error in the exercise of jurisdiction, which may be
corrected by the ordinary recourse of appeal, not by the extraordinary remedy of certiorari. It is an error that in the
premises can no longer be set aright.
The summary judgment rendered by respondent Judge on October 24, 1975 was not an interlocutory disposition or
order but a final judgment within the meaning of Section 2, Rule 41 of the Rules of Court. By that summary
judgment the Court finally disposed of the pending action, leaving nothing more to be done by it with respect to
the merits, thus putting an end to the litigation as its level.17
The remedy available to the petitioners against such a final judgment, as repeatedly stated, was an appeal in
accordance with the aforementioned Rule 41 of the Rules of Court.18 But as observed in an analogous case
recently resolved by this Court.19
x x instead of resorting to this ordinary remedy of appeal, x x (the petitioners) availed of the extraordinary
remedy of a special civil action of certiorari in the x x (Court of Appeals), under Rule 65 of the Rules of Court. The
choice was clearly wrong. The availability of the right of appeal obviously precluded recourse to the special civil
action of certiorari. This is axiomatic. It is a proposition made plain by Section 1 of Rule 65 which lays down as a
condition for the filing of a certiorari petition that there be no appeal, nor any plain, speedy and adequate remedy
in the ordinary course of law.
In the case at bar, the petitioners lost their right to appeal by failing to avail of it seasonably. To remedy that loss,
they have resorted to the extraordinary remedy of certiorari, as a mode of obtaining reversal of the judgment from

40

which they failed to appeal. This cannot be done. The judgment was not in any sense null and void ab initio,
incapable of producing any legal effects whatever, which could never become final, and execution of which could
be resisted at any time and in any court it was attempted.20 It was a judgment which might and probably did
suffer from some substantial error in procedure or in findings of fact or of law, and could on that account have been
reversed or modified on appeal. But since it was not appealed, it became final and has thus gone beyond the reach
of any court to modify in any substantive aspect. The remedy to obtain a reversal or modification of the judgment
on the merits is appeal. This is true even if the error, or one of the errors, ascribed to the Court rendering the
judgment is its lack of jurisdiction of the subject matter, or the exercise of power in excess thereof, or grave abuse
of discretion in the findings of fact or of law set out in its decision. The existence and availability of the right of
appeal proscribes a resort to certiorari, one of the requisites for availment of the latter remedy being precisely that
there should be no appeal.21 There may to be sure, be instances when certiorari may exceptionally be permitted
in lieu of appeal, as when their appeal would be inadequate, slow, insufficient, and will not promptly relieve a party
from the injurious effect of the judgment complained of, or to avoid future litigations,22 none of which situations
obtains in the case at bar. And certain it is that the special civil action of certiorari cannot be a substitute for
appeal, specially where the right to appeal has been lost through a partys fault or inexcusable negligence.23
That the judgment of the Trial Court applied the wrong provision of the law in the resolution of the controversy has
ceased to be of any consequence. As already discussed, instead of the legal provision governing lessees rights
over improvements on leased realty, the judgment invoked that relative to the rights of builders in good faith.24
But the error did not render the judgment void. A judgment contrary to the express provisions of a statute is of
course erroneous, but it is not void; and if it becomes final and executory, it becomes as binding and effective as
any valid judgment; and though erroneous, will henceforth be treated as valid, and will be enforced in accordance
with its terms and dispositions.25
WHEREFORE, the petition is dismissed, with costs against the petitioners.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Petition dismissed.
Note.Rule that certiorari cannot be a substitute for appeal, except when the questioned order is an oppressive
exercise of judicial authority. (Bautista vs. Sarmiento, 138 SCRA 587.) Mercado vs. Court of Appeals, 162 SCRA 75,
No. L-44001 June 10, 1988
G.R. No. 72876. January 18, 1991.*
FLORENCIO IGNAO, petitioner, vs. HON. INTERMEDIATE APPELLATE COURT, JUAN IGNAO, substituted by his Legal
Heirs, and ISIDRO IGNAO, respondents.
Co-ownership; Property; Art. 448, new Civil Code applies to property held in common once it is partitioned.In
other words, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile coowner has encroached upon a portion pertaining to another co-owner which was however made in good faith, then
the provisions of Article 448 should apply to determine the respective rights of the parties.
Same; Same; When co-owned estate is partitioned, it is the co-owner whose portion is encroached upon who has
the option to sell that portion or buy the improvement.Petitioners second assigned error is however well taken.
Both the trial court and the Appellate Court erred when they peremptorily adopted the workable solution in the
case of Grana vs. Court of Appeals, and ordered the owner of the land, petitioner Florencio, to sell to private
respondents, Juan and Isidro, the part of the land they intruded upon, thereby depriving petitioner of his right to
choose. Such ruling contravened the explicit provisions of Article 448 to the effect that (t)he owner of the land xxx
shall have the right to appropriate xxx or to oblige the one who built xxx to pay the price of the land xxx. The law
is clear and unambiguous when it confers the right of choice upon the landowner and not upon the builder and the
courts.
Same; Same; Same.Wherefore, the decision appealed from is hereby MODIFIED as follows: Petitioner Florencio
Ignao is directed within thirty (30) days from entry of judgment to exercise his option to either appropriate as his
own the portions of the houses of Juan and Isidro Ignao occupying his land upon payment of indemnity in
accordance with Articles 546 and 548 of the Civil Code, or sell to private respondents the 101 square meters
occupied by them at such price as may be agreed upon. Should the value of the land exceed the value of the
portions of the houses that private respondents have erected thereon, private respondents may choose not to buy
the land but they must pay reasonable rent for the use of the portion of petitioners land as may be agreed upon
by the parties. In case of disagreement, the rate of rental and other terms of the lease shall be determined by the
trial court. Otherwise, private respondents may remove or demolish at their own expense the said portions of their
houses encroaching upon petitioners land.

41

PETITION for certiorari to review the decision of the Intermediate Appellate Court.

The facts are stated in the opinion of the Court.

Dolorfino and Dominguez Law Offices for petitioner.
Ambrosio Padilla, Mempin & Reyes Law Offices for private respondents.
FERNAN, C.J.:
In this petition for review by certiorari, petitioner seeks the reversal of the decision of the Intermediate Appellate
Court (now Court of Appeals) affirming in toto the decision of the Court of First Instance of Cavite, ordering
petitioner Florencio Ignao to sell to private respondents Juan and Isidro Ignao, that part of his property where
private respondents had built a portion of their houses.
The antecedent facts are as follows:
Petitioner Florencio Ignao and his uncles private respondents Juan Ignao and Isidro Ignao were co-owners of a
parcel of land with an area of 534 square meters situated in Barrio Tabon, Municipality of Kawit, Cavite. Pursuant to
an action for partition filed by petitioner docketed as Civil Case No. N-1681, the then Court of First Instance of
Cavite in a decision dated February 6, 1975 directed the partition of the aforesaid land, alloting 133.5 square
meters or 2/8 thereof to private respondents Juan and Isidro, and giving the remaining portion with a total area of
266.5 square meters to petitioner Florencio. However, no actual partition was ever effected.1
On July 17, 1978, petitioner instituted a complaint for recovery of possession of real property against private
respondents Juan and Isidro before the Court of First Instance of Cavite, docketed as Civil Case No. 2662. In his
complaint petitioner alleged that the area occupied by the two (2) houses built by private respondents exceeded
the 133.5 square meters previously alloted to them by the trial court in Civil Case No. N-1681.
Consequently, the lower court conducted an ocular inspection. It was found that the houses of Juan and Isidro
actually encroached upon a portion of the land belonging to Florencio. Upon agreement of the parties, the trial
court ordered a licensed geodetic engineer to conduct a survey to determine the exact area occupied by the
houses of private respondents. The survey subsequently disclosed that the house of Juan occupied 42 square
meters while that of Isidro occupied 59 square meters of Florencios land or a total of 101 square meters.
In its decision, the trial court (thru Judge Luis L. Victor) ruled that although private respondents occupied a portion
of Florencios property, they should be considered builders in good faith. The trial court took into account the
decision of the Court of First Instance of Cavite in the action for partition2 and quoted:
xxx.Hence, it is the well-consired opinion of the Court that although it turned out that the defendants had, before
partition, been in possession of more than what rightfully belongs to them, their possession of what is in excess of
their rightful share can at worst be possession in good faith which exempts them from being condemned to pay
damages by reason thereof.3
Furthermore, the trial court stated that pursuant to Article 448 of the Civil Code, the owner of the land (Florencio)
should have the choice to either appropriate that part of the house standing on his land after payment of
indemnity or oblige the builders in good faith (Juan and Isidro) to pay the price of the land. However, the trial court
observed that based on the facts of the case, it would be useless and unsuitable for Florencio to exercise the first
option since this would render the entire houses of Juan and Isidro worthless. The trial court then applied the ruling
in the similar case of Grana vs. Court of Appeals,4 where the Supreme Court had advanced a more workable
solution. Thus, it ordered Florencio to sell to Juan and Isidro those portions of his land respectively occupied by the
latter. The dispositive portion of said decision reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the defendants and
(a) Ordering the plaintiff Florencio Ignao to sell to the defendants Juan and Isidro Ignao that portion of his property
with an area of 101 square meters at P40.00 per square meter, on which part the defendants had built their
houses; and
(b) Ordering the said plaintiff to execute the necessary deed of conveyance to the defendants in accordance with
paragraph (a) hereof. Without pronouncement as to costs.5
Petitioner Florencio Ignao appealed to the Intermediate Appellate Court. On August 27, 1985, the Appellate Court,
Second Civil Cases Division, promulgated a decision,6 affirming the decision of the trial court.

42

Hence the instant petition for review which attributes to the Appellate Court the following errors:
1. That the respondent Court has considered private respondents builders in good faith on the land on question,
thus applying Art. 448 of the Civil Code, although the land in question is still owned by the parties in co-ownership,
hence, the applicable provision is Art. 486 of the Civil Code, which was not applied.
2. That, granting for the sake of argument that Art. 448 x x x is applicable, the respondent Court has adjudged the
working solution suggested in Grana and Torralba vs. C.A. (109 Phil. 260), which is just an opinion by way of
passing, and not the judgment rendered therein, which is in accordance with the said provision of the Civil Code,
wherein the owner of the land to buy (sic) the portion of the building within 30 days from the judgment or sell the
land occupied by the building.
3. That, granting that private respondents could buy the portion of the land occupied by their houses, the price
fixed by the court is unrealistic and pre-war price.7
The records of the case reveal that the disputed land with an area of 534 square meters was originally owned by
Baltazar Ignao who married twice. In his first marriage, he had four children, namely Justo (the father of petitioner
Florencio), Leon and private respondents Juan and Isidro. In his second marriage, Baltazar had also four children
but the latter waived their rights over the controverted land in favor of Justo. Thus, Justo owned 4/8 of the land
which was waived by his half-brothers and sisters plus his 1/8 share or a total of 5/8. Thereafter, Justo acquired the
1/8 share of Leon for P500.00 which he later sold to his son Florencio for the same amount. When Justo died,
Florencio inherited the 5/8 share of his father Justo plus his 1/8 share of the land which he bought or a total of 6/8
(representing 400.5 square meters). Private respondents, Juan and Isidro, on the other hand, had 1/8 share (66.75
square meters) each of the land or a total of 133.5 square meters.
Before the decision in the partition case was promulgated, Florencio sold 134 square meters of his share to a
certain Victa ring for P5,000.00 on January 27, 1975. When the decision was handed down on February 6, 1975, the
lower court alloted 2/8 of the land to private respondents Juan and Isidro, or a total of 133.5 square meters.
It should be noted that prior to partition, all the co-owners hold the property in common dominion but at the same
time each is an owner of a share which is abstract and undetermined until partition is effected. As cited in Eusebio
vs. Intermediate Appellate Court,8 an undivided estate is co-ownership by the heirs.
As co-owners, the parties may have unequal shares in the common property, quantitatively speaking. But in a
qualitative sense, each co-owner has the same right as any one of the other co-owners. Every co-owner is
therefore the owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time
the owner of a portion which is truly abstract, because until division is effected such portion is not concretely
determined.9
Petitioner Florencio, in his first assignment of error, asseverates that the court a quo erred in applying Article 448
of the Civil Code, since this article contemplates a situation wherein the land belongs to one person and the thing
built, sown or planted belongs to another. In the instant case, the land in dispute used to be owned in common by
the contending parties.
Article 448 provides:
ART. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in
articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed,
the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof.
Whether or not the provisions of Article 448 should apply to a builder in good faith on a property held in common
has been resolved in the affirmative in the case of Spouses del Campo vs. Abesia,10 wherein the Court ruled that:
The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner builds, plants or
sows on the land owned in common for then he did not build, plant or sow upon land that exclusively belongs to
another but of which he is a co-owner. The co-owner is not a third person under the circumstances, and the
situation is governed by the rules of co-ownership.
However, when, as in this case, the ownership is terminated by the partition and it appears that the home of
defendants overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the
defendants obviously built in good faith, then the provisions of Article 448 of the new Civil Code should apply.

43

Manresa and Navarro Amandi agree that the said provision of the Civil Code may apply even when there is a coownership if good faith has been established.11
In other words, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile
co-owner has encroached upon a portion pertaining to another co-owner which was however made in good faith,
then the provisions of Article 448 should apply to determine the respective rights of the parties.
Petitioners second assigned error is however well taken. Both the trial court and the Appellate Court erred when
they peremptorily adopted the workable solution in the case of Grana vs. Court of Appeals,12 and ordered the
owner of the land, petitioner Florencio, to sell to private respondents, Juan and Isidro, the part of the land they
intruded upon, thereby depriving petitioner of his right to choose. Such ruling contravened the explicit provisions of
Article 448 to the effect that (t)he owner of the land xxx shall have the right to appropriate xxx or to oblige the
one who built xxx to pay the price of the land xxx. The law is clear and unambiguous when it confers the right of
choice upon the landowner and not upon the builder and the courts.
Thus, in Quemuel vs. Olaes,13 the Court categorically ruled that the right to appropriate the works or
improvements or to oblige the builder to pay the price of the land belongs to the landowner.
As to the third assignment of error, the question on the price to be paid on the land need not be discussed as this
would be premature inasmuch as petitioner Florencio has yet to exercise his option as the owner of the land.
WHEREFORE, the decision appealed from is hereby MODIFIED as follows: Petitioner Florencio Ignao is directed
within thirty (30) days from entry of judgment to exercise his option to either appropriate as his own the portions of
the houses of Juan and Isidro Ignao occupying his land upon payment of indemnity in accordance with Articles 546
and 548 of the Civil Code, or sell to private respondents the 101 square meters occupied by them at such price as
may be agreed upon. Should the value of the land exceed the value of the portions of the houses that private
respondents have erected thereon, private respondents may choose not to buy the land but they must pay
reasonable rent for the use of the portion of petitioners land as may be agreed upon by the parties. In case of
disagreement, the rate of rental and other terms of the lease shall be determined by the trial court. Otherwise,
private respondents may remove or demolish at their own expense the said portions of their houses encroaching
upon petitioners land.14 No costs.
SO ORDERED.
Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
Decision modified.
Notes.A person who obtains property through mistake or fraud is by force of law considered a trustee of an
implied trust for the benefit of the person from whom the property comes. (Tomas vs. Court of Appeals, 185 SCRA
627.)
Imprescriptibility of property inherited cannot be invoked when a co-owner possessed the property as exclusive
owner. (Bicarme vs. Court of Appeals, 186 SCRA 294.)
Barron being a builder in good faith the house she built cannot become the landowners property without proper
recompense. (Santos vs. Intermediate Appellate Court, 186 SCRA 694.) Ignao vs. Intermediate Appellate Court, 193
SCRA 17, G.R. No. 72876 January 18, 1991
G.R. Nos. 154391-92. September 30, 2004.*
Spouses ISMAEL and TERESITA MACASAET, petitioners, vs. Spouses VICENTE and ROSARIO MACASAET,
respondents.
Ejectment; Unlawful Detainer; In actions for unlawful detainer, possession that was originally lawful becomes
unlawful upon the expiration or termination of the defendants right to possess, arising from an express or implied
contract.In actions for unlawful detainer, possession that was originally lawful becomes unlawful upon the
expiration or termination of the defendants right to possess, arising from an express or implied contract. In other
words, the plaintiffs cause of action comes from the expiration or termination of the defendants right to continue
possession. The case resulting therefrom must be filed within one year from the date of the last demand.
Same; Same; To show a cause of action in an unlawful detainer, an allegation that the defendant is illegally
withholding possession from the plaintiff is sufficient.To show a cause of action in an unlawful detainer, an
allegation that the defendant is illegally withholding possession from the plaintiff is sufficient. The complaint may
lie even if it does not employ the terminology of the law, provided the said pleading is couched in a language
adequately stating that the withholding of possession or the refusal to vacate has become unlawful. It is equally

44

settled that the jurisdiction of the court, as well as the nature of the action, is determined from the averments of
the complaint.
Same; Same; This court has consistently held that those who occupy the land of another at the latters tolerance or
permission, without any contract between them, are necessarily bound by an implied promise that the occupants
will vacate the property upon demand. A summary action for ejectment is the proper remedy to enforce this
implied obligation.This Court has consistently held that those who occupy the land of another at the latters
tolerance or permission, without any contract between them, are necessarily bound by an implied promise that the
occupants will vacate the property upon demand. A summary action for ejectment is the proper remedy to enforce
this implied obligation. The unlawful deprivation or withholding of possession is to be counted from the date of the
demand to vacate.
Same; Same; Unless inconsistent with Rule 70, the provisions of Rule 18 on pre-trial applies to the preliminary
conference. Under section 4 of this Rule, the nonappearance of a party may be excused by the showing of a valid
cause.Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial applies to the preliminary
conference. Under Section 4 of this Rule, the nonappearance of a party may be excused by the showing of a valid
cause; or by the appearance of a representative, who has been fully authorized in writing to enter into an amicable
settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of
facts and of documents.
Same; Same; Respondents have the right to appropriateas their ownthe building and other improvements on
the subject lots, but only after (1) refunding the expenses of petitioners or (2) paying the increase in value
acquired by the properties by reason thereof. They have the option to oblige petitioners to pay the price of the
land, unless its value is considerably more than that of the structuresin which case, the petitioners shall pay
reasonable rent.Respondents have the right to appropriateas their ownthe building and other improvements
on the subject lots, but only after (1) refunding the expenses of petitioners or (2) paying the increase in value
acquired by the properties by reason thereof. They have the option to oblige petitioners to pay the price of the
land, unless its value is considerably more than that of the structuresin which case, petitioners shall pay
reasonable rent.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ismael H. Macasaet for petitioners.
De Jesus, Linatoc, Mendoza & Associates for respondents.
PANGANIBAN, J.:
The present case involves a dispute between parents and children. The children were invited by the parents to
occupy the latters two lots, out of parental love and a desire to foster family solidarity. Unfortunately, an
unresolved conflict terminated this situation. Out of pique, the parents asked them to vacate the premises. Thus,
the children lost their right to remain on the property. They have the right, however, to be indemnified for the
useful improvements that they constructed thereon in good faith and with the consent of the parents. In short,
Article 448 of the Civil Code applies.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the March 22, 2002 Decision2 and
the June 26, 2002 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP Nos. 56205 & 56467. The challenged
Decision disposed as follows:
WHEREFORE, the assailed Decision is AFFIRMED with the following MODIFICATIONS:
1. Vicente and Rosario should reimburse Ismael and Teresita one-half of the value of the useful improvements
introduced in the premises prior to demand, which is equivalent to P475,000.00. In case the former refuse to
reimburse the said amount, the latter may remove the improvements, even though the land may suffer damage
thereby. They shall not, however, cause any more impairment upon the property leased than is necessary.
2. The award of attorneys fees is DELETED.
3. The records of these consolidated cases are REMANDED to the Court of origin for further proceedings to
determine the option to be taken by Vicente and Rosario and to implement the same with dispatch. 4
The assailed Resolution denied petitioners Motion for Reconsideration.

45

The Facts
Petitioners Ismael and Teresita5 Macasaet and Respondents Vicente and Rosario Macasaet are first-degree
relatives. Ismael is the son of respondents, and Teresita is his wife.6
On December 10, 1997, the parents filed with the Municipal Trial Court in Cities (MTCC) of Lipa City an ejectment
suit against the children.7 Respondents alleged that they were the owners of two (2) parcels of land covered by
Transfer Certificate of Title (TCT) Nos. T-78521 and T-103141, situated at Banay-banay, Lipa City; that by way of a
verbal lease agreement, Ismael and Teresita occupied these lots in March 1992 and used them as their residence
and the situs of their construction business; and that despite repeated demands, petitioners failed to pay the
agreed rental of P500 per week.8
Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents had
invited them to construct their residence and business on the subject lots in order that they could all live near one
other, employ Marivic (the sister of Ismael), and help in resolving the problems of the family.9 They added that it
was the policy of respondents to allot the land they owned as an advance grant of inheritance in favor of their
children. Thus, they contended that the lot covered by TCT No. T-103141 had been allotted to Ismael as advance
inheritance. On the other hand, the lot covered by TCT No. T-78521 was allegedly given to petitioners as payment
for construction materials used in the renovation of respondents house.10
The MTCC11 ruled in favor of respondents and ordered petitioners to vacate the premises. It opined that Ismael
and Teresita had occupied the lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente and
Rosario.12 As their stay was by mere tolerance, petitioners were necessarily bound by an implied promise to
vacate the lots upon demand.13 The MTCC dismissed their contention that one lot had been allotted as an advance
inheritance, on the ground that successional rights were inchoate. Moreover, it disbelieved petitioners allegation
that the other parcel had been given as payment for construction materials.14
On appeal, the regional trial court15 (RTC) upheld the findings of the MTCC. However, the RTC allowed respondents
to appropriate the building and other improvements introduced by petitioners, after payment of the indemnity
provided for by Article 448 in relation to Articles 546 and 548 of the Civil Code.16 It added that respondents could
oblige petitioners to purchase the land, unless its value was considerably more than the building. In the latter
situation, petitioners should pay rent if respondents would not choose to appropriate the building.17
Upon denial of their individual Motions for Reconsideration, the parties filed with the CA separate Petitions for
Review, which were later consolidated.18
Ruling of the Court of Appeals
The CA sustained the finding of the two lower courts that Ismael and Teresita had been occupying the subject lots
only by the tolerance of Vicente and Rosario.19 Thus, possession of the subject lots by petitioners became illegal
upon their receipt of respondents letter to vacate it.20
Citing Calubayan v. Pascual,21 the CA further ruled that petitioners status was analogous to that of a lessee or a
tenant whose term of lease had expired, but whose occupancy continued by tolerance of the owner.22
Consequently, in ascertaining the right of petitioners to be reimbursed for the improvements they had introduced
on respondents properties,23 the appellate court applied the Civil Codes provisions on lease. The CA modified the
RTC Decision by declaring that Article 448 of the Civil Code was inapplicable. The CA opined that under Article
1678 of the same Code, Ismael and Teresita had the right to be reimbursed for one half of the value of the
improvements made.24
Not satisfied with the CAs ruling, petitioners brought this recourse to this Court.25
The Issues
Petitioners raise the following issues for our consideration:
1. a) Whether or not Section 17[,] Rule 70 of the Rules of Court on Judgment should apply in the rendition of the
decision in this case;
b) Whether or not the Complaint should have been dismissed;
c) Whether or not damages including attorneys fees should have been awarded to herein petitioners;
2. a) Whether or not the rule on appearance of parties during the Pretrial should apply on appearance of parties
during Preliminary Conference in an unlawful detainer suit;

46

b) Whether or not the case of Philippine Pryce Assurance Corporation vs. Court of Appeals (230 SCRA 164) is
applicable to appearance of parties in an unlawful detainer suit;
3. Whether or not Article 1678 of the Civil Code should apply to the case on the matters of improvements, or is it
Article 447 of the Civil Code in relation to the Article 453 and 454 thereof that should apply, if ever to apply the
Civil Code;
4. Whether or not the [D]ecision of the Court of Appeals is supported by evidence, appropriate laws, rules and
jurisprudence; 5. Whether or not Assisting Judge Norberto Mercado of the MTCC Lipa City should be held
accountable in rendering the MTCC [D]ecision;
6. Whether or not Atty. Glenn Mendoza and Atty. Andrew Linatoc of the same [l]aw office should be held
accountable for pursuing the [e]jectment case[.]26
The Courts Ruling
The Petition is partly meritorious.
First Issue:
Ejectment
Who is entitled to the physical or material possession of the premises? At the outset, we stress that this is the main
issue in ejectment proceedings.27 In the present case, petitioners failed to justify their right to retain possession of
the subject lots, which respondents own. Since possession is one of the attributes of ownership,28 respondents
clearly are entitled to physical or material possession.
Allegations of the Complaint
Petitioners allege that they cannot be ejected from the lots, because respondents based their Complaint regarding
the nonpayment of rentals on a verbal lease agreement, which the latter failed to prove.29 Petitioners contend that
the lower courts erred in using another ground (tolerance of possession) to eject them.
In actions for unlawful detainer, possession that was originally lawful becomes unlawful upon the expiration or
termination of the defendants right to possess, arising from an express or implied contract.30 In other words, the
plaintiffs cause of action comes from the expiration or termination of the defendants right to continue
possession.31 The case resulting therefrom must be filed within one year from the date of the last demand.
To show a cause of action in an unlawful detainer, an allegation that the defendant is illegally withholding
possession from the plaintiff is sufficient. The complaint may lie even if it does not employ the terminology of the
law, provided the said pleading is couched in a language adequately stating that the withholding of possession or
the refusal to vacate has become unlawful.32 It is equally settled that the jurisdiction of the court, as well as the
nature of the action, is determined from the averments of the complaint.33
In the present case, the Complaint alleged that despite demands, petitioners refused to pay the accrued rentals
and [to] vacate the leased premises.34 It prayed that judgment be rendered [o]rdering [petitioners] and all those
claiming rights under them to vacate the properties x x x and remove the structures x x x constructed thereon.35
Effectively then, respondents averred that petitioners original lawful occupation of the subject lots had become
unlawful.
The MTCC found sufficient cause to eject petitioners. While it disbelieved the existence of a verbal lease
agreement, it nevertheless concluded that petitioners occupation of the subject lots was by mere tolerance of
respondents. Basing its conclusion on the fact that the parties were close relatives, the MTCC ruled thus:
x x x [T]he parties herein are first degree relatives. Because of this relationship, this Court takes judicial notice of
the love, care, concern and protection imbued upon the parents towards their [children], i.e., in the instant case,
the love, care, concern and protection of the [respondents] to the [petitioners]. With this in mind, this Court is
inclined to believe the position of the [petitioners] that there was no such verbal lease agreement between the
parties herein that took place in 1992. x x x.
From the allegations of the [petitioners], this Court is convinced that their stay and occupancy of the subject
premises was by mere tolerance of the [respondents], and not by virtue of a verbal lease agreement between
them.36
Having found a cause of action for unlawful detainer, the MTCC (as well as the RTC and the CA) did not err in
ordering the ejectment of petitioners as prayed for by respondents. There was no violation of Section 17 of Rule

47

7037 of the Rules of Court. As earlier explained, unlawful detainer was sufficiently alleged in the Complaint and
duly proven during the trial. Significantly, the issue of whether there was enough ground to eject petitioners was
raised during the preliminary conference.38
Not Merely Tolerated Possession
Petitioners dispute the lower courts finding that they occupied the subject lots on the basis of mere tolerance.
They argue that their occupation was not under such condition, since respondents had invited, offered and
persuaded them to use those properties.39
This Court has consistently held that those who occupy the land of another at the latters tolerance or permission,
without any contract between them, are necessarily bound by an implied promise that the occupants will vacate
the property upon demand.40 A summary action for ejectment is the proper remedy to enforce this implied
obligation.41 The unlawful deprivation or withholding of possession is to be counted from the date of the demand
to vacate.42
Toleration is defined as the act or practice of permitting or enduring something not wholly approved of.43 Sarona
v. Villegas44 described what tolerated acts means, in this language:
Professor Arturo M. Tolentino states that acts merely tolerated are those which by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another person to do on the property; they are generally
those particular services or benefits which ones property can give to another without material injury or prejudice
to the owner, who permits them out of friendship or courtesy. x x x. And, Tolentino continues, even though this is
continued for a long time, no right will be acquired by prescription. x x x. Further expounding on the concept,
Tolentino writes: There is tacit consent of the possessor to the acts which are merely tolerated. Thus, not every
case of knowledge and silence on the part of the possessor can be considered mere tolerance. By virtue of
tolerance that is considered as an authorization, permission or license, acts of possession are realized or
performed. The question reduces itself to the existence or non-existence of the permission.45
We hold that the facts of the present case rule out the finding of possession by mere tolerance. Petitioners were
able to establish that respondents had invited them to occupy the subject lots in order that they could all live near
one other and help in resolving family problems.46 By occupying those lots, petitioners demonstrated their
acceptance of the invitation. Hence, there was a meeting of minds, and an agreement regarding possession of the
lots impliedly arose between the parties.
The occupancy of the subject lots by petitioners was not merely something not wholly approved of by
respondents. Neither did it arise from what Tolentino refers to as neighborliness or familiarity. In point of fact,
their possession was upon the invitation of and with the complete approval of respondents, who desired that their
children would occupy the premises. It arose from familial love and a desire for family solidarity, which are basic
Filipino traits.
Right to Use the Lots Terminated
That Ismael and Teresita had a right to occupy the lots is therefore clear. The issue is the duration of possession. In
the absence of a stipulation on this point, Article 1197 of the Civil Code allows the courts to fix the duration or the
period.
Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred
that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case the courts shall determine such period as may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
Article 1197, however, applies to a situation in which the parties intended a period. Such qualification cannot be
inferred from the facts of the present case.
To repeat, when Vicente and Rosario invited their children to use the lots, they did so out of parental love and a
desire for solidarity expected from Filipino parents. No period was intended by the parties. Their mere failure to fix
the duration of their agreement does not necessarily justify or authorize the courts to do so.47
Based on respondents reasons for gratuitously allowing petitioners to use the lots, it can be safely concluded that
the agreement subsisted as long as the parents and the children mutually benefited from the arrangement.
Effectively, there is a resolutory condition in such an agreement.48 Thus, when a change in the condition existing
between the parties occurslike a change of ownership, necessity, death of either party or unresolved conflict or

48

animositythe agreement may be deemed terminated. Having been based on parental love, the agreement would
end upon the dissipation of the affection.
When persistent conflict and animosity overtook the love and solidarity between the parents and the children, the
purpose of the agreement ceased.49 Thus, petitioners no longer had any cause for continued possession of the
lots. Their right to use the properties became untenable. It ceased upon their receipt of the notice to vacate. And
because they refused to heed the demand, ejectment was the proper remedy against them. Their possession,
which was originally lawful, became unlawful when the reason thereforlove and solidarityceased to exist
between them.
No Right to Retain Possession
Petitioners have not given this Court adequate reasons to reverse the lower courts dismissal of their contention
that Lots T-78521 and T-103141, respectively, were allegedly allotted to them as part of their inheritance and given
in consideration for past debts.
The right of petitioners to inherit from their parents is merely inchoate and is vested only upon the latters demise.
Indisputably, rights of succession are transmitted only from the moment of death of the decedent.50 Assuming
that there was an allotment of inheritance, ownership nonetheless remained with respondents. Moreover, an
intention to confer title to certain persons in the future is not inconsistent with the owners taking back possession
in the meantime for any reason deemed sufficient.51 Other than their self-serving testimonies and their affidavits,
petitioners offered no credible evidence to support their outlandish claim of inheritance allocation.
We also agree with the lower courts that petitioners failed to prove the allegation that, through a dation in
payment, Lot T-78521 had been transferred to the latter as payment for respondents debts.52 The evidence
presented by petitioners related only to the alleged indebtedness of the parents arising from the latters purported
purchases and advances.53 There was no sufficient proof that respondents had entered into a contract of dation to
settle the alleged debt. Petitioners even stated that there was a disagreement in the accounting of the purported
debt,54 a fact that disproves a meeting of the minds with the parents.
Petitioners also admitted that a portion of the alleged debt is the subject matter of a collection case against
respondents (Civil Case No. 0594-96).55 Thus, the formers allegation that the indebtedness has been paid through
a dation cannot be given credence, inconsistent as it is with their action to recover the same debt.
Despite their protestations, petitioners recognized the right of the parents to recover the premises when they
admitted in their Position Paper filed with the MTCC that respondents had a title to the lots.
The [respondents] want to get their property because the title is theirs, the [petitioners] do not object but what is
due the [petitioners] including the reparation for the tarnish of their dignity and honor must be given the
[petitioners] for the benefits of their children before the premises will be turned over.56
As a rule, the right of ownership carries with it the right of possession.
Second Issue:
Appearance at the Preliminary Conference
Section 8 of Rule 70 of the Rules of Court requires the appearance of the plaintiff and the defendant during the
preliminary conference. On the basis of this provision, petitioners claim that the MTCC should have dismissed the
case upon the failure of respondents to attend the conference. However, petitioners do not dispute that an
attorney-in-fact with a written authorization from respondents appeared during the preliminary conference.57 The
issue then is whether the rules on ejectment allow a representative to substitute for a partys personal appearance.
Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial applies to the preliminary conference.58
Under Section 4 of this Rule, the nonappearance of a party may be excused by the showing of a valid cause; or by
the appearance of a representative, who has been fully authorized in writing to enter into an amicable settlement,
to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of
documents.59
Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus, the spirit behind the exception to personal
appearance under the rules on pretrial is applicable to the preliminary conference. If there are valid reasons or if a
representative has a special authority, a partys appearance may be waived. As petitioners are challenging only
the applicability of the rules on pretrial to the rule on preliminary conference, the written authorization from
respondents can indeed be readily considered as a special authorization.
Third Issue:

49

Rights of a Builder in Good Faith

As applied to the present case, accession refers to the right of the owner to everything that is incorporated or
attached to the property.60 Accession industrialbuilding, planting and sowing on an immovableis governed by
Articles 445 to 456 of the Civil Code.
Articles 447 and 1678 of the Civil Code Inapplicable
To buttress their claim of reimbursement for the improvements introduced on the property, petitioners cite Article
447.61 They allege that the CA erred in applying Article 1678, since they had no lease agreement with
respondents.
We clarify. Article 447 is not applicable, because it relates to the rules that apply when the owner of the property
uses the materials of another. It does not refer to the instance when a possessor builds on the property of another,
which is the factual milieu here.
In view of the unique factual setting of the instant case, the contention of petitioners regarding the inapplicability
of Article 1678 deserves attention. The CA applied the provisions on lease, because it found their possession by
mere tolerance comparable with that of a lessee, per the pronouncement in Calubayan v. Pascual,62 from which
we quote:
x x x. It has been held that a person who occupies the land of another at the latters tolerance or permission,
without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand,
failing which a summary action for ejectment is the proper remedy against them. The status of defendant is
analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by
tolerance of the owner. In such a case, the unlawful deprivation or withholding of possession is to be counted from
the date of the demand to vacate.63 (Emphasis in the original.)
As explained earlier, Ismael and Teresitas possession of the two lots was not by mere tolerance, a circumstance
that negates the applicability of Calubayan.
Article 448 Applicable
On the other hand, when a person builds in good faith on the land of another, the applicable provision is Article
448, which reads:64
Article 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed,
the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof.
This Court has ruled that this provision covers only cases in which the builders, sowers or planters believe
themselves to be owners of the land or, at least, to have a claim of title thereto.65 It does not apply when the
interest is merely that of a holder, such as a mere tenant, agent or usufructuary.66 From these pronouncements,
good faith is identified by the belief that the land is owned; or thatby some titleone has the right to build, plant,
or sow thereon.67
However, in some special cases, this Court has used Article 448 by recognizing good faith beyond this limited
definition. Thus, in Del Campo v. Abesia,68 this provision was applied to one whose housedespite having been
built at the time he was still co-owneroverlapped with the land of another.69 This article was also applied to
cases wherein a builder had constructed improvements with the consent of the owner. The Court ruled that the law
deemed the builder to be in good faith.70 In Sarmiento v. Agana,71 the builders were found to be in good faith
despite their reliance on the consent of another, whom they had mistakenly believed to be the owner of the
land.72
Based on the aforecited special cases, Article 448 applies to the present factual milieu. The established facts of this
case show that respondents fully consented to the improvements introduced by petitioners. In fact, because the
children occupied the lots upon their invitation, the parents certainly knew and approved of the construction of the
improvements introduced thereon.73 Thus, petitioners may be deemed to have been in good faith when they built
the structures on those lots.

50

The instant case is factually similar to Javier v. Javier.74 In that case, this Court deemed the son to be in good faith
for building the improvement (the house) with the knowledge and consent of his father, to whom belonged the land
upon which it was built. Thus, Article 44875 was applied.
Rule on Useful Expenses
The structures built by petitioners were useful improvements, because they augmented the value or income of
the bare lots.76 Thus, the indemnity to be paid by respondents under Article 448 is provided for by Article 546,
which we quote:
Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may
retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person
who has defeated him in the possession having the option of refunding the amount of the expenses or of paying
the increase in value which the thing may have acquired by reason thereof.
Consequently, respondents have the right to appropriateas their ownthe building and other improvements on
the subject lots, but only after (1) refunding the expenses of petitioners or (2) paying the increase in value
acquired by the properties by reason thereof. They have the option to oblige petitioners to pay the price of the
land, unless its value is considerably more than that of the structuresin which case, petitioners shall pay
reasonable rent.
In accordance with Depra v. Dumlao,77 this case must be remanded to the trial court to determine matters
necessary for the proper application of Article 448 in relation to Article 546. Such matters include the option that
respondents would take and the amount of indemnity that they would pay, should they decide to appropriate the
improvements on the lots. We disagree with the CAs computation of useful expenses, which were based only on
petitioners bare allegations in their Answer.78
Ruling on Improvement Justified
While, ordinarily, the jurisdiction of the MTCC on ejectment proceedings is limited to the issue of physical or
material possession of the property in question, this Court finds it necessary to abbreviate the issue on the
improvements in relation to Article 448. First, the determination of the parties right to those improvements is
intimately connected with the MTCC proceedings in the light of the ejectment of petitioners. Second, there is no
dispute that while they constructed the improvements, respondents owned the land. Third, both parties raised no
objection when the RTC and the CA ruled accordingly on this matter.
Equitable considerations compel us to settle this point immediately, pro hoc vice, to avoid needless delay. Both
parties have already been heard on this issue; to dillydally or equivocate would not serve the cause of substantial
justice.
Other Issues Raised
Given the foregoing rulings, it is no longer necessary to address petitioners allegation that the MTCC judge and
respondents lawyers should be respectively held personally accountable for the Decision and for filing the case.79
The insinuation of petitioners that the lawyers manipulated the issuance of a false barangay certification is
unavailing.80 Their contention that respondents did not attend the barangay conciliation proceedings was based
solely on hearsay, which has little or no probative value.81
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are AFFIRMED with the following
MODIFICATIONS:
1. The portion requiring Spouses Vicente and Rosario Macasaet to reimburse one half of the value of the useful
improvements, amounting to P475,000, and the right of Spouses Ismael and Rosita Macasaet to remove those
improvements (if the former refuses to reimburse) is DELETED.
2. The case is REMANDED to the court of origin for further proceedings to determine the facts essential to the
proper application of Articles 448 and 546 of the Civil Code, specifically to the following matters:
a. Spouses Vicente and Rosario Macasaets option to appropriateas their ownthe improvements on the lots,
after paying the indemnity, as provided under Article 546 in relation to Article 448 of the Civil Code; or in requiring
Spouses Ismael and Rosita Macasaet to pay for the value of the lots, unless it is considerably more than that of the
improvements, in which case petitioners shall pay reasonable rent based upon the terms provided under the Civil
Code

51

b. The value of the useful expenses incurred by Spouses Ismael and Rosita Macasaet in the construction of the
improvements on the lots
c. The increase in value acquired by the lots by reason of the useful improvements
d. Spouses Vicente and Rosario Macasaets choice of type of indemnity to be paid (whether b or c)
e. Whether the value of the lots is considerably more than that of the improvements built thereon
No pronouncement as to costs.
SO ORDERED.
Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.
Judgment affirmed with modifications.
Note.An unlawful detainer suit involves solely the issue of physical or material possession over the property or
possession de facto, that is, who between the plaintiff and the defendant has a better right to possess the property
in question. (Arcal vs. Court of Appeals, 285 SCRA 34 [1998]) Macasaet vs. Macasaet, 439 SCRA 625, G.R. Nos.
154391-92 September 30, 2004
G.R. No. 176791.November 14, 2012.*
COMMUNITIES CAGAYAN, INC., petitioner, vs. SPOUSES ARSENIO (Deceased) and ANGELES NANOL AND ANYBODY
CLAIMING RIGHTS UNDER THEM, respondents.
Civil Law; Maceda Law; Contracts to Sell; The Maceda Law governs sales of real estate on installments.
Considering that this case stemmed from a Contract to Sell executed by the petitioner and the respondentspouses, we agree with petitioner that the Maceda Law, which governs sales of real estate on installment, should
be applied. Sections 3, 4, and 5 of the Maceda Law provide for the rights of a defaulting buyer, to wit: Section 3. In
all transactions or contracts involving the sale or financing of real estate on installment payments, including
residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under
Republic Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred
eighty-nine, where the buyer has paid at least two years of installments, the buyer is entitled to the following rights
in case he defaults in the payment of succeeding installments: (a) To pay, without additional interest, the unpaid
installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace
period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer
only once in every five years of the life of the contract and its extensions, if any. (b) If the contract is canceled, the
seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty
percent of the total payments made, and, after five years of installments, an additional five percent every year but
not to exceed ninety percent of the total payments made: Provided, That the actual cancellation of the contract
shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer. Down
payments, deposits or options on the contract shall be included in the computation of the total number of
installment payments made. (Emphasis supplied.) Section 4. In case where less than two years of installments
were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment
became due. If the buyer fails to pay the installments due at the expiration of the grace period, the seller may
cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act. Section 5. Under Sections 3 and 4, the buyer shall have the right to sell
his rights or assign the same to another person or to reinstate the contract by updating the account during the
grace period and before actual cancellation of the contract. The deed of sale or assignment shall be done by
notarial act.
Same; Same; Same; Before a contract to sell can be validly and effectively cancelled, the seller has (1) to send a
notarized notice of cancellation to the buyer and (2) to refund the cash surrender value. Until and unless the seller
complies with these twin mandatory requirements, the contract to sell between the parties remains valid and
subsisting.We deem it necessary to point out that, under the Maceda Law, the actual cancellation of a contract to
sell takes place after 30 days from receipt by the buyer of the notarized notice of cancellation, and upon full
payment of the cash surrender value to the buyer. In other words, before a contract to sell can be validly and
effectively cancelled, the seller has (1) to send a notarized notice of cancellation to the buyer and (2) to refund the
cash surrender value. Until and unless the seller complies with these twin mandatory requirements, the contract to
sell between the parties remains valid and subsisting. Thus, the buyer has the right to continue occupying the
property subject of the contract to sell, and may still reinstate the contract by updating the account during the
grace period and before the actual cancellation of the contract.

52

Same; Builders in Good Faith; Petition for Review on Certiorari; The issue of whether respondent-spouses are
builders in good faith or bad faith is a factual question, which is beyond the scope of a petition filed under Rule 45
of the Rules of Court.At the outset, we emphasize that the issue of whether respondent-spouses are builders in
good faith or bad faith is a factual question, which is beyond the scope of a petition filed under Rule 45 of the Rules
of Court. In fact, petitioner is deemed to have waived all factual issues since it appealed the case directly to this
Court, instead of elevating the matter to the CA. It has likewise not escaped our attention that after their failed
preliminary conference, the parties agreed to submit the case for resolution based on the pleadings and exhibits
presented. No trial was conducted. Thus, it is too late for petitioner to raise at this stage of the proceedings the
factual issue of whether respondent-spouses are builders in bad faith. Hence, in view of the special circumstances
obtaining in this case, we are constrained to rely on the presumption of good faith on the part of the respondentspouses which the petitioner failed to rebut.
Same; Same; Article 448 of the Civil Code applies when the builder believes that he is the owner of the land or that
by some title he has the right to build thereon, or that, at least, he has a claim of title thereto.Article 448 of the
Civil Code applies when the builder believes that he is the owner of the land or that by some title he has the right
to build thereon, or that, at least, he has a claim of title thereto. Concededly, this is not present in the instant case.
The subject property is covered by a Contract to Sell hence ownership still remains with petitioner being the seller.
Nevertheless, there were already instances where this Court applied Article 448 even if the builders do not have a
claim of title over the property.
Same; Same; The Court applied Article 448 in Spouses Macasaet v. Spouses Macasaet, 439 SCRA 625 (2004),
notwithstanding the fact that the builders therein knew they were not the owners of the land.The Court likewise
applied Article 448 in Spouses Macasaet v. Spouses Macasaet, 439 SCRA 625 (2004), notwithstanding the fact that
the builders therein knew they were not the owners of the land. In said case, the parents who owned the land
allowed their son and his wife to build their residence and business thereon. As found by this Court, their
occupation was not by mere tolerance but upon the invitation of and with the complete approval of (their
parents), who desired that their children would occupy the premises. It arose from familial love and a desire for
family solidarity x x x. Soon after, conflict between the parties arose. The parents demanded their son and his
wife to vacate the premises. The Court thus ruled that as owners of the property, the parents have the right to
possession over it. However, they must reimburse their son and his wife for the improvements they had introduced
on the property because they were considered builders in good faith even if they knew for a fact that they did not
own the property.
Same; Same; The seller (the owner of the land) has two options under Article 448: (1) he may appropriate the
improvements for himself after reimbursing the buyer (the builder in good faith) the necessary and useful
expenses under Articles 546 and 548 of the Civil Code; or (2) he may sell the land to the buyer, unless its value is
considerably more than that of the improvements, in which case, the buyer shall pay reasonable rent.In Tuatis,
we ruled that the seller (the owner of the land) has two options under Article 448: (1) he may appropriate the
improvements for himself after reimbursing the buyer (the builder in good faith) the necessary and useful
expenses under Articles 546 and 548 of the Civil Code; or (2) he may sell the land to the buyer, unless its value is
considerably more than that of the improvements, in which case, the buyer shall pay reasonable rent.
PETITION for review on certiorari of the decision and order of the Regional Trial Court of Cagayan de Oro City, Br.
18.
The facts are stated in the opinion of the Court.
Salcedo-Babarin and Babarin Law Office for petitioner.
Rexy Pador for respondents.
DEL CASTILLO,J.:
Laws fill the gap in a contract.
This Petition for Certiorari1 under Rule 45 of the Rules of Court assails the December 29, 2006 Decision2 and the
February 12, 2007 Order3 of the Regional Trial Court (RTC), Cagayan de Oro City, Branch 18, in Civil Case No. 2005158.
Factual Antecedents
Sometime in 1994, respondent-spouses Arsenio and Angeles Nanol entered into a Contract to Sell4 with petitioner
Communities Cagayan, Inc.,5 whereby the latter agreed to sell to respondent-spouses a house and Lots 17 and 196
located at Block 16, Camella Homes Subdivision, Cagayan de Oro City,7 for the price of P368,000.00.8 Respondentspouses, however, did not avail of petitioners in-house financing due to its high interest rates.9 Instead, they

53

obtained a loan from Capitol Development Bank, a sister company of petitioner, using the property as collateral.10
To facilitate the loan, a simulated sale over the property was executed by petitioner in favor of respondentspouses.11 Accordingly, titles were transferred in the names of respondent-spouses under Transfer Certificates of
Title (TCT) Nos. 105202 and 105203, and submitted to Capitol Development Bank for loan processing.12
Unfortunately, the bank collapsed and closed before it could release the loan.13
Thus, on November 30, 1997, respondent-spouses entered into another Contract to Sell14 with petitioner over the
same property for the same price of P368,000.00.15 This time, respondent-spouses availed of petitioners in-house
financing16 thus, undertaking to pay the loan over four years, from 1997 to 2001.17
Sometime in 2000, respondent Arsenio demolished the original house and constructed a three-story house
allegedly valued at P3.5 million, more or less.18
In July 2001, respondent Arsenio died, leaving his wife, herein respondent Angeles, to pay for the monthly
amortizations.19
On September 10, 2003, petitioner sent respondent-spouses a notarized Notice of Delinquency and Cancellation of
Contract to Sell20 due to the latters failure to pay the monthly amortizations.
In December 2003, petitioner filed before Branch 3 of the Municipal Trial Court in Cities of Cagayan de Oro City, an
action for unlawful detainer, docketed as C3-Dec-2160, against respondent-spouses.21 When the case was referred
for mediation, respondent Angeles offered to pay P220,000.00 to settle the case but petitioner refused to accept
the payment.22 The case was later withdrawn and consequently dismissed because the judge found out that the
titles were already registered under the names of respondent-spouses.23
Unfazed by the unfortunate turn of events, petitioner, on July 27, 2005, filed before Branch 18 of the RTC, Cagayan
de Oro City, a Complaint for Cancellation of Title, Recovery of Possession, Reconveyance and Damages,24
docketed as Civil Case No. 2005-158, against respondent-spouses and all persons claiming rights under them.
Petitioner alleged that the transfer of the titles in the names of respondent-spouses was made only in compliance
with the requirements of Capitol Development Bank and that respondent-spouses failed to pay their monthly
amortizations beginning January 2000.25 Thus, petitioner prayed that TCT Nos. T-105202 and T-105203 be
cancelled, and that respondent Angeles be ordered to vacate the subject property and to pay petitioner reasonable
monthly rentals from January 2000 plus damages.26
In her Answer,27 respondent Angeles averred that the Deed of Absolute Sale is valid, and that petitioner is not the
proper party to file the complaint because petitioner is different from Masterplan Properties, Inc.28 She also prayed
for damages by way of compulsory counterclaim.29
In its Reply,30 petitioner attached a copy of its Certificate of Filing of Amended Articles of Incorporation31 showing
that Masterplan Properties, Inc. and petitioner are one and the same. As to the compulsory counterclaim for
damages, petitioner denied the same on the ground of lack of knowledge sufficient to form a belief as to the truth
or falsity of such allegation.32
Respondent Angeles then moved for summary judgment and prayed that petitioner be ordered to return the
owners duplicate copies of the TCTs.33
Pursuant to Administrative Order No. 59-2005, the case was referred for mediation.34 But since the parties failed
to arrive at an amicable settlement, the case was set for preliminary conference on February 23, 2006.35
On July 7, 2006, the parties agreed to submit the case for decision based on the pleadings and exhibits presented
during the preliminary conference.36
Ruling of the Regional Trial Court
On December 29, 2006, the RTC rendered judgment declaring the Deed of Absolute Sale invalid for lack of
consideration.37 Thus, it disposed of the case in this wise:
WHEREFORE, the Court hereby declares the Deed of Absolute Sale VOID. Accordingly, Transfer Certificate[s] of Title
Nos. 105202 and 105203 in the names of the [respondents], Arsenio (deceased) and Angeles Nanol, are ordered
CANCELLED. The [respondents] and any person claiming rights under them are directed to turn-over the
possession of the house and lot to [petitioner], Communities Cagayan, Inc., subject to the latters payment of their
total monthly installments and the value of the new house minus the cost of the original house.
SO ORDERED.38

54

Not satisfied, petitioner moved for reconsideration of the Decision but the Motion39 was denied in an Order40
dated February 12, 2007.
Issue
Instead of appealing the Decision to the Court of Appeals (CA), petitioner opted to file the instant petition directly
with this Court on a pure question of law, to wit:
WHETHER X X X THE ACTION [OF] THE [RTC] BRANCH 18 X X X IN ORDERING THE RECOVERY OF POSSESSION BY
PETITIONER subject to the latters payment of their total monthly installments and the value of the new house
minus the cost of the original house IS CONTRARY TO LAW AND JURISPRUDENCE X X X.41
Petitioners Arguments
Petitioner seeks to delete from the dispositive portion the order requiring petitioner to reimburse respondentspouses the total monthly installments they had paid and the value of the new house minus the cost of the original
house.42 Petitioner claims that there is no legal basis for the RTC to require petitioner to reimburse the cost of the
new house because respondent-spouses were in bad faith when they renovated and improved the house, which
was not yet their own.43 Petitioner further contends that instead of ordering mutual restitution by the parties, the
RTC should have applied Republic Act No. 6552, otherwise known as the Maceda Law,44 and that instead of
awarding respondent-spouses a refund of all their monthly amortization payments, the RTC should have ordered
them to pay petitioner monthly rentals.45
Respondent Angeles Arguments
Instead of answering the legal issue raised by petitioner, respondent Angeles asks for a review of the Decision of
the RTC by interposing additional issues.46 She maintains that the Deed of Absolute Sale is valid.47 Thus, the RTC
erred in cancelling TCT Nos. 105202 and 105203.
Our Ruling
The petition is partly meritorious.
At the outset, we must make it clear that the issues raised by respondent Angeles may not be entertained. For
failing to file an appeal, she is bound by the Decision of the RTC. Well entrenched is the rule that a party who does
not appeal from a judgment can no longer seek modification or reversal of the same. He may oppose the appeal of
the other party only on grounds consistent with the judgment.48 For this reason, respondent Angeles may no
longer question the propriety and correctness of the annulment of the Deed of Absolute Sale, the cancellation of
TCT Nos. 105202 and 105203, and the order to vacate the property.
Hence, the only issue that must be resolved in this case is whether the RTC erred in ordering petitioner to
reimburse respondent-spouses the total monthly installments and the value of the new house minus the cost of
the original house.49 Otherwise stated, the issues for our resolution are:
1)Whether petitioner is obliged to refund to respondent-spouses all the monthly installments paid; and
2)Whether petitioner is obliged to reimburse respondent-spouses the value of the new house minus the cost of
the original house.
Respondent-spouses are entitled to the cash surrender value of the payments on the property equivalent to 50%
of the total payments made.
Considering that this case stemmed from a Contract to Sell executed by the petitioner and the respondentspouses, we agree with petitioner that the Maceda Law, which governs sales of real estate on installment, should
be applied.
Sections 3, 4, and 5 of the Maceda Law provide for the rights of a defaulting buyer, to wit:
Section3.In all transactions or contracts involving the sale or financing of real estate on installment payments,
including residential condominium apartments but excluding industrial lots, commercial buildings and sales to
tenants under Republic Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered
Sixty-three hundred eighty-nine, where the buyer has paid at least two years of installments, the buyer is entitled
to the following rights in case he defaults in the payment of succeeding installments:
(a)To pay, without additional interest, the unpaid installments due within the total grace period earned by him
which is hereby fixed at the rate of one month grace period for every one year of installment payments made:

55

Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and
its extensions, if any.
(b)If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments on
the property equivalent to fifty percent of the total payments made, and, after five years of installments, an
additional five percent every year but not to exceed ninety percent of the total payments made: Provided, That the
actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash
surrender value to the buyer.
Down payments, deposits or options on the contract shall be included in the computation of the total number of
installment payments made. (Emphasis supplied.)
Section4. In case where less than two years of installments were paid, the seller shall give the buyer a grace
period of not less than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the
contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act.
Section5. Under Sections 3 and 4, the buyer shall have the right to sell his rights or assign the same to another
person or to reinstate the contract by updating the account during the grace period and before actual cancellation
of the contract. The deed of sale or assignment shall be done by notarial act.
In this connection, we deem it necessary to point out that, under the Maceda Law, the actual cancellation of a
contract to sell takes place after 30 days from receipt by the buyer of the notarized notice of cancellation,50 and
upon full payment of the cash surrender value to the buyer.51 In other words, before a contract to sell can be
validly and effectively cancelled, the seller has (1) to send a notarized notice of cancellation to the buyer and (2) to
refund the cash surrender value.52 Until and unless the seller complies with these twin mandatory requirements,
the contract to sell between the parties remains valid and subsisting.53 Thus, the buyer has the right to continue
occupying the property subject of the contract to sell,54 and may still reinstate the contract by updating the
account during the grace period and before the actual cancellation55 of the contract.
In this case, petitioner complied only with the first condition by sending a notarized notice of cancellation to the
respondent-spouses. It failed, however, to refund the cash surrender value to the respondent-spouses. Thus, the
Contract to Sell remains valid and subsisting and supposedly, respondent-spouses have the right to continue
occupying the subject property. Unfortunately, we cannot reverse the Decision of the RTC directing respondentspouses to vacate and turn-over possession of the subject property to petitioner because respondent-spouses
never appealed the order. The RTC Decision as to respondent-spouses is therefore considered final.
In addition, in view of respondent-spouses failure to appeal, they can no longer reinstate the contract by updating
the account. Allowing them to do so would be unfair to the other party and is offensive to the rules of fair play,
justice, and due process. Thus, based on the factual milieu of the instant case, the most that we can do is to order
the return of the cash surrender value. Since respondent-spouses paid at least two years of installment,56 they are
entitled to receive the cash surrender value of the payments they had made which, under Section 3(b) of the
Maceda Law, is equivalent to 50% of the total payments made.
Respondent-spouses are entitled to reimbursement of the improvements made on the property.
Petitioner posits that Article 448 of the Civil Code does not apply and that respondent-spouses are not entitled to
reimbursement of the value of the improvements made on the property because they were builders in bad faith. At
the outset, we emphasize that the issue of whether respondent-spouses are builders in good faith or bad faith is a
factual question, which is beyond the scope of a petition filed under Rule 45 of the Rules of Court.57 In fact,
petitioner is deemed to have waived all factual issues since it appealed the case directly to this Court,58 instead of
elevating the matter to the CA. It has likewise not escaped our attention that after their failed preliminary
conference, the parties agreed to submit the case for resolution based on the pleadings and exhibits presented. No
trial was conducted. Thus, it is too late for petitioner to raise at this stage of the proceedings the factual issue of
whether respondent-spouses are builders in bad faith. Hence, in view of the special circumstances obtaining in this
case, we are constrained to rely on the presumption of good faith on the part of the respondent-spouses which the
petitioner failed to rebut. Thus, respondent-spouses being presumed builders in good faith, we now rule on the
applicability of Article 448 of the Civil Code.
As a general rule, Article 448 on builders in good faith does not apply where there is a contractual relation between
the parties,59 such as in the instant case. We went over the records of this case and we note that the parties failed

56

to attach a copy of the Contract to Sell. As such, we are constrained to apply Article 448 of the Civil Code, which
provides viz.:
ART.448.The owner of the land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed,
the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof.
Article 448 of the Civil Code applies when the builder believes that he is the owner of the land or that by some title
he has the right to build thereon,60 or that, at least, he has a claim of title thereto.61 Concededly, this is not
present in the instant case. The subject property is covered by a Contract to Sell hence ownership still remains with
petitioner being the seller. Nevertheless, there were already instances where this Court applied Article 448 even if
the builders do not have a claim of title over the property. Thus:
This Court has ruled that this provision covers only cases in which the builders, sowers or planters believe
themselves to be owners of the land or, at least, to have a claim of title thereto. It does not apply when the interest
is merely that of a holder, such as a mere tenant, agent or usufructuary. From these pronouncements, good faith is
identified by the belief that the land is owned; or thatby some titleone has the right to build, plant, or sow
thereon.
However, in some special cases, this Court has used Article 448 by recognizing good faith beyond this limited
definition. Thus, in Del Campo v. Abesia, this provision was applied to one whose housedespite having been built
at the time he was still co-owneroverlapped with the land of another. This article was also applied to cases
wherein a builder had constructed improvements with the consent of the owner. The Court ruled that the law
deemed the builder to be in good faith. In Sarmiento v. Agana, the builders were found to be in good faith despite
their reliance on the consent of another, whom they had mistakenly believed to be the owner of the land.62
The Court likewise applied Article 448 in Spouses Macasaet v. Spouses Macasaet63 notwithstanding the fact that
the builders therein knew they were not the owners of the land. In said case, the parents who owned the land
allowed their son and his wife to build their residence and business thereon. As found by this Court, their
occupation was not by mere tolerance but upon the invitation of and with the complete approval of (their
parents), who desired that their children would occupy the premises. It arose from familial love and a desire for
family solidarity x x x.64 Soon after, conflict between the parties arose. The parents demanded their son and his
wife to vacate the premises. The Court thus ruled that as owners of the property, the parents have the right to
possession over it. However, they must reimburse their son and his wife for the improvements they had introduced
on the property because they were considered builders in good faith even if they knew for a fact that they did not
own the property, thus:
Based on the aforecited special cases, Article 448 applies to the present factual milieu. The established facts of this
case show that respondents fully consented to the improvements introduced by petitioners. In fact, because the
children occupied the lots upon their invitation, the parents certainly knew and approved of the construction of the
improvements introduced thereon. Thus, petitioners may be deemed to have been in good faith when they built
the structures on those lots.
The instant case is factually similar to Javier v. Javier. In that case, this Court deemed the son to be in good faith for
building the improvement (the house) with the knowledge and consent of his father, to whom belonged the land
upon which it was built. Thus, Article 448 was applied.65
In fine, the Court applied Article 448 by construing good faith beyond its limited definition. We find no reason not to
apply the Courts ruling in Spouses Macasaet v. Spouses Macasaet in this case. We thus hold that Article 448 is also
applicable to the instant case. First, good faith is presumed on the part of the respondent-spouses. Second,
petitioner failed to rebut this presumption. Third, no evidence was presented to show that petitioner opposed or
objected to the improvements introduced by the respondent-spouses. Consequently, we can validly presume that
petitioner consented to the improvements being constructed. This presumption is bolstered by the fact that as the
subdivision developer, petitioner must have given the respondent-spouses permits to commence and undertake
the construction. Under Article 453 of the Civil Code, [i]t is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and without opposition on his part.
In view of the foregoing, we find no error on the part of the RTC in requiring petitioner to pay respondent-spouses
the value of the new house minus the cost of the old house based on Article 448 of the Civil Code, subject to
succeeding discussions. Petitioner has two options under Article 448 and pursuant to the ruling in Tuatis v. Escol66

57

In Tuatis, we ruled that the seller (the owner of the land) has two options under Article 448: (1) he may appropriate
the improvements for himself after reimbursing the buyer (the builder in good faith) the necessary and useful
expenses under Articles 54667 and 54868 of the Civil Code; or (2) he may sell the land to the buyer, unless its
value is considerably more than that of the improvements, in which case, the buyer shall pay reasonable rent.69
Quoted below are the pertinent portions of our ruling in that case:
Taking into consideration the provisions of the Deed of Sale by Installment and Article 448 of the Civil Code,
Visminda has the following options:
Under the first option, Visminda may appropriate for herself the building on the subject property after indemnifying
Tuatis for the necessary and useful expenses the latter incurred for said building, as provided in Article 546 of the
Civil Code.
It is worthy to mention that in Pecson v. Court of Appeals, the Court pronounced that the amount to be refunded to
the builder under Article 546 of the Civil Code should be the current market value of the improvement, thus:
xxxx
Until Visminda appropriately indemnifies Tuatis for the building constructed by the latter, Tuatis may retain
possession of the building and the subject property.
Under the second option, Visminda may choose not to appropriate the building and, instead, oblige Tuatis to pay
the present or current fair value of the land. The P10,000.00 price of the subject property, as stated in the Deed of
Sale on Installment executed in November 1989, shall no longer apply, since Visminda will be obliging Tuatis to pay
for the price of the land in the exercise of Vismindas rights under Article 448 of the Civil Code, and not under the
said Deed. Tuatis obligation will then be statutory, and not contractual, arising only when Visminda has chosen her
option under Article 448 of the Civil Code.
Still under the second option, if the present or current value of the land, the subject property herein, turns out to
be considerably more than that of the building built thereon, Tuatis cannot be obliged to pay for the subject
property, but she must pay Visminda reasonable rent for the same. Visminda and Tuatis must agree on the terms of
the lease; otherwise, the court will fix the terms.
Necessarily, the RTC should conduct additional proceedings before ordering the execution of the judgment in Civil
Case No. S-618. Initially, the RTC should determine which of the aforementioned options Visminda will choose.
Subsequently, the RTC should ascertain: (a) under the first option, the amount of indemnification Visminda must
pay Tuatis; or (b) under the second option, the value of the subject property vis--vis that of the building, and
depending thereon, the price of, or the reasonable rent for, the subject property, which Tuatis must pay Visminda.
The Court highlights that the options under Article 448 are available to Visminda, as the owner of the subject
property. There is no basis for Tuatis demand that, since the value of the building she constructed is considerably
higher than the subject property, she may choose between buying the subject property from Visminda and selling
the building to Visminda for P502,073.00. Again, the choice of options is for Visminda, not Tuatis, to make. And,
depending on Vismindas choice, Tuatis rights as a builder under Article 448 are limited to the following: (a) under
the first option, a right to retain the building and subject property until Visminda pays proper indemnity; and (b)
under the second option, a right not to be obliged to pay for the price of the subject property, if it is considerably
higher than the value of the building, in which case, she can only be obliged to pay reasonable rent for the same.
The rule that the choice under Article 448 of the Civil Code belongs to the owner of the land is in accord with the
principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the
option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to
exercise either option and compel instead the owner of the building to remove it from the land.
The raison detre for this provision has been enunciated thus: Where the builder, planter or sower has acted in
good faith, a conflict of rights arises between the owners, and it becomes necessary to protect the owner of the
improvements without causing injustice to the owner of the land. In view of the impracticability of creating a state
of forced co-ownership, the law has provided a just solution by giving the owner of the land the option to acquire
the improvements after payment of the proper indemnity, or to oblige the builder or planter to pay for the land and
the sower the proper rent. He cannot refuse to exercise either option. It is the owner of the land who is authorized
to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the
ownership of the accessory thing.
Vismindas Motion for Issuance of Writ of Execution cannot be deemed as an expression of her choice to recover
possession of the subject property under the first option, since the options under Article 448 of the Civil Code and
their respective consequences were also not clearly presented to her by the 19 April 1999 Decision of the RTC. She

58

must then be given the opportunity to make a choice between the options available to her after being duly
informed herein of her rights and obligations under both.70 (Emphasis supplied.)
In conformity with the foregoing pronouncement, we hold that petitioner, as landowner, has two options. It may
appropriate the new house by reimbursing respondent Angeles the current market value thereof minus the cost of
the old house. Under this option, respondent Angeles would have a right of retention which negates the obligation
to pay rent.71 In the alternative, petitioner may sell the lots to respondent Angeles at a price equivalent to the
current fair value thereof. However, if the value of the lots is considerably more than the value of the improvement,
respondent Angeles cannot be compelled to purchase the lots. She can only be obliged to pay petitioner
reasonable rent.
In view of the foregoing disquisition and in accordance with Depra v. Dumlao72 and Technogas Philippines
Manufacturing Corporation v. Court of Appeals,73 we find it necessary to remand this case to the court of origin for
the purpose of determining matters necessary for the proper application of Article 448, in relation to Articles 546
and 548 of the Civil Code.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. The assailed Decision dated December 29, 2006 and the
Order dated February 12, 2007 of the Regional Trial Court, Cagayan de Oro City, Branch 18, in Civil Case No. 2005158 are hereby AFFIRMED with MODIFICATION that petitioner Communities Cagayan, Inc. is hereby ordered to
RETURN the cash surrender value of the payments made by respondent-spouses on the properties, which is
equivalent to 50% of the total payments made, in accordance with Section 3(b) of Republic Act No. 6552, otherwise
known as the Maceda Law.
The case is hereby REMANDED to the Regional Trial Court, Cagayan de Oro City, Branch 18, for further proceedings
consistent with the proper application of Articles 448, 546 and 548 of the Civil Code, as follows:
1.The trial court shall determine:
a)the present or current fair value of the lots;
b)the current market value of the new house;
c)the cost of the old house; and
d)whether the value of the lots is considerably more than the current market value of the new house minus the
cost of the old house.
2.After said amounts shall have been determined by competent evidence, the trial court shall render judgment
as follows:
a)Petitioner shall be granted a period of 15 days within which to exercise its option under the law (Article 448,
Civil Code), whether to appropriate the new house by paying to respondent Angeles the current market value of
the new house minus the cost of the old house, or to oblige respondent Angeles to pay the price of the lots. The
amounts to be respectively paid by the parties, in accordance with the option thus exercised by written notice to
the other party and to the court, shall be paid by the obligor within 15 days from such notice of the option by
tendering the amount to the trial court in favor of the party entitled to receive it.
b)If petitioner exercises the option to oblige respondent Angeles to pay the price of the lots but the latter rejects
such purchase because, as found by the trial court, the value of the lots is considerably more than the value of the
new house minus the cost of the old house, respondent Angeles shall give written notice of such rejection to
petitioner and to the trial court within 15 days from notice of petitioners option to sell the land. In that event, the
parties shall be given a period of 15 days from such notice of rejection within which to agree upon the terms of the
lease, and give the trial court formal written notice of the agreement and its provisos. If no agreement is reached
by the parties, the trial court, within 15 days from and after the termination of the said period fixed for negotiation,
shall then fix the period and terms of the lease, including the monthly rental, which shall be payable within the first
five days of each calendar month. Respondent Angeles shall not make any further constructions or improvements
on the building. Upon expiration of the period, or upon default by respondent Angeles in the payment of rentals for
two consecutive months, petitioner shall be entitled to terminate the forced lease, to recover its land, and to have
the new house removed by respondent Angeles or at the latters expense.
c)In any event, respondent Angeles shall pay petitioner reasonable compensation for the occupancy of the
property for the period counted from the time the Decision dated December 29, 2006 became final as to
respondent Angeles or 15 days after she received a copy of the said Decision up to the date petitioner serves
notice of its option to appropriate the encroaching structures, otherwise up to the actual transfer of ownership to

59

respondent Angeles or, in case a forced lease has to be imposed, up to the commencement date of the forced
lease referred to in the preceding paragraph.
d)The periods to be fixed by the trial court in its decision shall be non-extendible, and upon failure of the party
obliged to tender to the trial court the amount due to the obligee, the party entitled to such payment shall be
entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such
other acts as may be required by the prestation due the obligee.
SO ORDERED.
Carpio (Chairperson), Brion, Perez and Perlas-Bernabe, JJ., concur.
Petition partially granted, judgment and order affirmed with modification.
Notes.The Maceda Law applies to contracts of sale of real estate on installment payments, including residential
condominium apartments but excluding industrial lots, commercial buildings and sales to tenants. (Garcia vs. Court
of Appeals, 619 SCRA 280 [2010])
Good faith consists in the belief of the builder that the land he is building on is his and in his ignorance of a defect
or flaw in his title. (Angeles vs. Pascual, 658 SCRA 23 [2011]) Communities Cagayan, Inc. vs. Nanol, 685 SCRA 453,
G.R. No. 176791 November 14, 2012
G.R. No. 149295. September 23, 2003.*
PHILIPPINE NATIONAL BANK, petitioner, vs. GENEROSO DE JESUS, represented by his Attorney-in-Fact, CHRISTIAN
DE JESUS, respondent.
Possession; Builders in Good Faith; A builder in good faith can compel the landowner to make a choice between
appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land; In
order, however, that the builder can invoke the accruing benefit and enjoy his corresponding right to demand that
a choice be made by the landowner, he should be able to prove good faith on his part.A builder in good faith can,
under the foregoing provisions, compel the landowner to make a choice between appropriating the building by
paying the proper indemnity or obliging the builder to pay the price of the land. The choice belongs to the owner of
the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not
the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He
must choose one. He cannot, for instance, compel the owner of the building to instead remove it from the land. In
order, however, that the builder can invoke that accruing benefit and enjoy his corresponding right to demand that
a choice be made by the landowner, he should be able to prove good faith on his part.
Same; Same; Words and Phrases; Good faith is an intangible and abstract with no technical meaning or statutory
definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of
design to defraud or to seek an unconscionable advantage; Applied to possession, one is considered in good faith if
he is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.Good faith, here
understood, is an intangible and abstract quality with no technical meaning or statutory definition, and it
encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or
to seek an unconscionable advantage. An individuals personal good faith is a concept of his own mind and,
therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon inquiry. The essence of good faith
lies in an honest belief in the validity of ones right, ignorance of a superior claim, and absence of intention to
overreach another. Applied to possession, one is considered in good faith if he is not aware that there exists in his
title or mode of acquisition any flaw which invalidates it.
Same; Same; Ownership; Article 448, of the Civil Code refers to a piece of land whose ownership is claimed by two
or more parties, one of whom has built some works (or sown or planted something) and, not to a case where the
owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or otherwise
for where the true owner himself is the builder of works on his own land, the issue of good faith or bad faith is
entirely irrelevant.Equally significant is the fact that the building, constructed on the land by Ignacio, has in
actuality been part of the property transferred to petitioner. Article 448, of the Civil Code refers to a piece of land
whose ownership is claimed by two or more parties, one of whom has built some works (or sown or planted
something) and, not to a case where the owner of the land is the builder, sower, or planter who then later loses
ownership of the land by sale or otherwise for, elsewise stated, where the true owner himself is the builder of
works on his own land, the issue of good faith or bad faith is entirely irrelevant.
PETITION for review on certiorari of a decision of the Court of Appeals.

60

The facts are stated in the opinion of the Court.

The Chief Legal Counsel for petitioner.
Rolando V. Zubiri for private respondent.
VITUG, J.:
Petitioner Philippine National Bank disputes the decision handed down by the Court of Appeals promulgated on 23
March 2001 in CA-G.R. CV No. 56001, entitled Generoso De Jesus, represented by his Attorney-in-Fact, Christian
De Jesus, versus Philippine National Bank. The assailed decision has affirmed the judgment rendered by the
Regional Trial Court, Branch 44, of Mamburao, Occidental Mindoro, declaring respondent Generoso De Jesus as
being the true and lawful owner of the 124-square-meter portion of the land covered by Transfer Certificate of Title
(TCT) No. T-17197 and ordering petitioner bank to vacate the premises, to deliver possession thereof to
respondent, and to remove the improvement thereon.
It would appear that on 10 June 1995, respondent filed a complaint against petitioner before the Regional Trial
Court of Occidental Mindoro for recovery of ownership and possession, with damages, over the questioned
property. In his complaint, respondent stated that he had acquired a parcel of land situated in Mamburao,
Occidental Mindoro, with an area of 1,144 square meters covered by TCT No. T-17197, and that on 26 March 1993,
he had caused a verification survey of the property and discovered that the northern portion of the lot was being
encroached upon by a building of petitioner to the extent of 124 square meters. Despite two letters of demand
sent by respondent, petitioner failed and refused to vacate the area.
Petitioner, in its answer, asserted that when it acquired the lot and the building sometime in 1981 from then Mayor
Bienvenido Ignacio, the encroachment already was in existence and to remedy the situation, Mayor Ignacio offered
to sell the area in question (which then also belonged to Ignacio) to petitioner at P100.00 per square meter which
offer the latter claimed to have accepted. The sale, however, did not materialize when, without the knowledge and
consent of petitioner, Mayor Ignacio later mortgaged the lot to the Development Bank of the Philippines.
The trial court decided the case in favor of respondent declaring him to be the rightful owner of the disputed 124square-meter portion of the lot and ordering petitioner to surrender possession of the property to respondent and
to cause, at its expense, the removal of any improvement thereon.
The Court of Appeals, on appeal, sustained the trial court but it ordered to be deleted the award to respondent of
attorneys fees, as well as moral and exemplary damages, and litigation expenses.
Petitioner went to this Court, via a petition for review, after the appellate court had denied the banks motion for
reconsideration, here now contending that
1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A BUILDER IN BAD FAITH OVER THE
ENCROACHED PROPERTY IN QUESTION;
2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN FAVOR OF PNB THE PROVISION OF
ARTICLE 448 OF THE CIVIL CODE AND THE RULING IN TECNOGAS PHILIPPINES MANUFACTURING CORP. VS. COURT
OF APPEALS, G.R. No. 108894, February 10, 1997, 268 SCRA 7.1
The Regional Trial Court and the Court of Appeals have both rejected the idea that petitioner can be considered a
builder in good faith. In the context that such term is used in particular reference to Article 448, et seq., of the Civil
Code, a builder in good faith is one who, not being the owner of the land, builds on that land believing himself to be
its owner and unaware of any defect in his title or mode of acquisition.
The various provisions of the Civil Code, pertinent to the subject, read:
Article 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed,
the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such a case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof.
Article 449. He who builds, plants, or sows in bad faith on the land of another, loses what is built, planted or sown
without right to indemnity.

61

Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand
the demolition of the work, or that the planting or sowing be removed in order to replace things in their former
condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay
the price of the land, and the sower the proper rent.
A builder in good faith can, under the foregoing provisions, compel the landowner to make a choice between
appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land. The
choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory
follows the principal and not the other way around.2 Even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one. He cannot, for instance, compel the owner of the building to
instead remove it from the land.3 In order, however, that the builder can invoke that accruing benefit and enjoy his
corresponding right to demand that a choice be made by the landowner, he should be able to prove good faith on
his part.
Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory definition,
and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to
defraud or to seek an uncon-scionable advantage. An individuals personal good faith is a concept of his own mind
and, therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon inquiry.4 The essence of good faith
lies in an honest belief in the validity of ones right, ignorance of a superior claim, and absence of intention to
overreach another.5 Applied to possession, one is considered in good faith if he is not aware that there exists in his
title or mode of acquisition any flaw which invalidates it.6
Given the findings of both the trial court and the appellate court, it should be evident enough that petitioner would
fall much too short from its claim of good faith. Evidently, petitioner was quite aware, and indeed advised, prior to
its acquisition of the land and building from Ignacio that a part of the building sold to it stood on the land not
covered by the land conveyed to it.
Equally significant is the fact that the building, constructed on the land by Ignacio, has in actuality been part of the
property transferred to petitioner. Article 448, of the Civil Code refers to a piece of land whose ownership is claimed
by two or more parties, one of whom has built some works (or sown or planted something) and, not to a case
where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or
otherwise for, elsewise stated, where the true owner himself is the builder of works on his own land, the issue of
good faith or bad faith is entirely irrelevant.7
In fine, petitioner is not in a valid position to invoke the provisions of Article 448 of the Civil Code. The Court
commiserates with petitioner in its present predicament; upon the other hand, respondent, too, is entitled to his
rights under the law, particularly after having long been deprived of the enjoyment of his property. Nevertheless,
the Court expresses hope that the parties will still be able to come up with an arrangement that can be mutually
suitable and acceptable to them.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001 is AFFIRMED. No costs.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Ynares-Santiago and Carpio, JJ., concur.
Azcuna, J., On sick leave.
Judgment affirmed.
Notes.Lessees, much less, sublessees, are not possessors or builders in good faith over rented land because they
know that their occupancy of the premises continues only during the life of the lease, or sublease as the case may
be; and, they cannot as a matter of right recover the value of their improvements from the lessor, much less retain
the premises until they are reimbursedtheir rights are governed by Art. 1678 of the Civil Code. (Jimenez vs.
Patricia, Inc., 340 SCRA 525 [2000])
A builder in good faith is one who builds with the belief that the land he is building on is his, and is ignorant of any
defect or flaw in his title. (Orquiola vs. Court of Appeals, 386 SCRA 301 [2002]) Philippine National Bank vs. De
Jesus, 411 SCRA 557, G.R. No. 149295 September 23, 2003
G.R. No. 136456. October 24, 2000.*
HEIRS OF RAMON DURANO, SR., RAMON DURANO III, AND ELIZABETH HOTCHKISS DURANO, petitioners, vs.
SPOUSES ANGELES SEPULVEDA UY AND EMIGDIO BING SING UY, SPOUSES FAUSTINO ALATAN AND VALERIANA

62

GARRO, AURELIA MATA, SILVESTRE RAMOS, HERMOGENES TITO, TEOTIMO GONZALES, PRIMITIVA GARRO, JULIAN
GARRO, ISMAEL GARRO, BIENVENIDO CASTRO, GLICERIO BARRIGA, BEATRIZ CALZADA, ANDREA MATA DE
BATULAN, TEOFISTA ALCALA, FILEMON LAVADOR, CANDELARIO LUMANTAO, GAVINO QUIMBO, JUSTINO TITO,
MARCELINO GONZALES, SALVADOR DAYDAY, VENANCIA REPASO, LEODEGARIO GONZALES, and RESTITUTA
GONZALES, respondents.
Appeals; Assignment of Errors; The Court of Appeals is imbued with sufficient discretion to review matters, not
otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and
just resolution of the case.We find untenable petitioners argument that since no party (whether petitioners or
respondents) appealed for the return of the properties to respondents other than Repaso, Tito and Gonzales, that
portion of the RTC decision that awards damages to such other respondents is final and may no longer be altered
by the Court of Appeals. A reading of the provisions of Section 8, Rule 51, aforecited, indicates that the Court of
Appeals is not limited to reviewing only those errors assigned by appellant, but also those that are closely related
to or dependent on an assigned error. In other words, the Court of Appeals is imbued with sufficient discretion to
review matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in
arriving at a complete and just resolution of the case. In this case, the Court of Appeals ordered the return of the
properties to respondents merely as a legal consequence of the finding that respondents had a better right of
possession than petitioners over the disputed properties, the former being possessors in the concept of owner.
Ownership; Prescription; Ordinary acquisitive prescription, in the case of immovable property, requires possession
of the thing in good faith and with just title, for a period of ten years.Ordinary acquisitive prescription, in the case
of immovable property, requires possession of the thing in good faith and with just title, for a period often years. A
possessor is deemed to be in good faith when he is not aware of any flaw in his title or mode of acquisition of the
property. On the other hand, there is just title when the adverse claimant came into possession of the property
through one of the modes for acquiring ownership recognized by law, but the grantor was not the owner or could
not transmit any right. The claimant by prescription may compute the ten-year period by tacking his possession to
that of his grantor or predecessor-in-interest.
Same; Land Titles; Notarial Law; Fraud in the issuance of a certificate of title may be raised only in an action
expressly instituted for that purpose, and not collaterally as in an action for reconveyance and damages;
Unregistrability of the deed of sale is a serious defect that should affect the validity of the certificates of title;
Notarization of the deed of sale is essential to its registrability, and the action of the Register of Deeds in allowing
the registration of the unacknowledged deed of sale is unauthorized and does not render validity to the registration
of the document.It is true that fraud in the issuance of a certificate of title may be raised only in an action
expressly instituted for that purpose, and not collaterally as in the instant case which is an action for reconveyance
and damages. While we cannot sustain the Court of Appeals finding of fraud because of this jurisdictional
impediment, we observe that the above-enumerated circumstances indicate none too clearly the weakness of
petitioners evidence on their claim of ownership. For instance, the non-production of the alleged reconstituted
titles of Cepoc despite demand therefor gives rise to a presumption (unrebutted by petitioners) that such evidence,
if produced, would be adverse to petitioners. Also, the unregistrability of the deed of sale is a serious defect that
should affect the validity of the certificates of title. Notarization of the deed of sale is essential to its registrability,
and the action of the Register of Deeds in allowing the registration of the unacknowledged deed of sale was
unauthorized and did not render validity to the registration of the document.
Same; Same; A buyer who could not have failed to know or discover that the land sold to him was in the adverse
possession of another is a buyer in bad faith.A purchaser of a parcel of land cannot close his eyes to facts which
should put a reasonable man upon his guard, such as when the property subject of the purchase is in the
possession of persons other than the seller. A buyer who could not have failed to know or discover that the land
sold to him was in the adverse possession of another is a buyer in bad faith. In the herein case, respondents were
in open possession and occupancy of the properties when Durano & Co. supposedly purchased the same from
Cepoc. Petitioners made no attempt to investigate the nature of respondents possession before they ordered
demolition in August 1970.
Same; Same; The rule on indefeasibility of title, i.e., that Torrens titles can be attacked for fraud only within one
year from the date of issuance of the decree of registration, does not altogether deprive an aggrieved party of a
remedy at lawan action for reconveyance may prosper if a property wrongfully registered has not passed to an
innocent purchaser for value.In the same manner, the purchase of the property by petitioner Ramon Durano III
from Durano & Co. could not be said to have been in good faith. It is not disputed that Durano III acquired the
property with full knowledge of respondents occupancy thereon. There even appears to be undue haste in the
conveyance of the property to Durano III, as the bulldozing operations by Durano & Co. were still underway when
the deed of sale to Durano III was executed on September 15, 1970. There is not even an indication that Durano &
Co. attempted to transfer registration of the property in its name before it conveyed the same to Durano III. In the
light of these circumstances, petitioners could not justifiably invoke the defense of indefeasibility of title to defeat
respondents claim of ownership by prescription. The rule on indefeasibility of title, i.e., that Torrens titles can be

63

attacked for fraud only within one year from the date of issuance of the decree of registration, does not altogether
deprive an aggrieved party of a remedy at law. As clarified by the Court in Javier vs. Court of AppealsThe decree
(of registration) becomes incontrovertible and can no longer be reviewed after one (1) year from the date of the
decree so that the only remedy of the landowner whose property has been wrongfully or erroneously registered in
anothers name is to bring an ordinary action in court for reconveyance, which is an action in personam and is
always available as long as the property has not passed to an innocent third party for value. If the property has
passed into the hands of an innocent purchaser for value, the remedy is an action for damages. In the instant case,
respondents action for reconveyance will prosper, it being clear that the property, wrongfully registered in the
name of petitioner Durano III, has not passed to an innocent purchaser for value.
Same; Same; Builders in Bad Faith; Remedies of the owner on whose land somebody has built in bad faith.Based
on these provisions, the owner of the land has three alternative rights: (1) to appropriate what has been built
without any obligation to pay indemnity therefor, or (2) to demand that the builder remove what he had built, or
(3) to compel the builder to pay the value of the land. In any case, the landowner is entitled to damages under
Article 451, abovecited.
Same; Same; Same; Although Article 451 does not elaborate on the basis for damages that the owner of the land
may recover from a builder in bad faith, the Court perceives that it should reasonably correspond with the value of
the properties lost or destroyed as a result of the occupation in bad faith, as well as the fruits (natural, industrial or
civil) from those properties that the owner of the land reasonably expected to obtain.The right of the owner of
the land to recover damages from a builder in bad faith is clearly provided for in Article 451 of the Civil Code.
Although said Article 451 does not elaborate on the basis for damages, the Court perceives that it should
reasonably correspond with the value of the properties lost or destroyed as a result of the occupation in bad faith,
as well as the fruits (natural, industrial or civil) from those properties that the owner of the land reasonably
expected to obtain. We sustain the view of the lower courts that the disparity between respondents affidavits and
their tax declarations on the amount of damages claimed should not preclude or defeat respondents right to
damages, which is guaranteed by Article 451. Moreover, under Article 2224 of the Civil Code: Temperate or
moderate damages, which are more than nominal but less than compensatory damages, may be recovered when
the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty.
Corporation Law; Doctrine of Piercing the Veil of Corporate Fiction; Test.The test in determining the applicability
of the doctrine of piercing the veil of corporate fiction is as follows: 1. Control, not mere majority or complete stock
control, but complete domination, not only of finances but of policy and business practice in respect to the
transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or
existence of its own; 2. Such control must have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust acts in contravention of
plaintiffs legal rights; and 3. The aforesaid control and breach of duty must proximately cause the injury or unjust
loss complained of. The absence of any one of these elements prevents piercing the corporate veil. In applying
the instrumentality or alter ego doctrine, the courts are concerned with reality and not form, with how the
corporation operated and the individual defendants relationship to that operation.
Same; Same; The question of whether a corporation is a mere alter ego is purely one of fact.The question of
whether a corporation is a mere alter ego is purely one of fact. The Court sees no reason to reverse the finding of
the Court of Appeals. The facts show that shortly after the purported sale by Cepco to Durano & Co., the latter sold
the property to petitioner Ramon Durano III, who immediately procured the registration of the property in his name.
Obviously, Durano & Co. was used by petitioners merely as an instrumentality to appropriate the disputed property
for themselves.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Rodrigo, Berenguer & Guno for petitioners.
Batiquin & Batiquin Law Office for respondents.
GONZAGA-REYES, J.:
Petitioners seek the reversal of the decision of the First Division of the Court of Appeals dated November 14, 1997
in CA-G.R. CV No. 27220, entitled Heirs of Ramon Durano, Sr., et al. versus Spouses Angeles Supelveda Uy, et al.,
and the resolution of the Court of Appeals dated October 29, 1998 which denied petitioners motion for
reconsideration.

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The antecedents of this case may be traced as far back as August 1970; it involves a 128-hectare parcel of land
located in the barrios of Dunga and Cahumayhumayan, Danao City. On December 27, 1973, the late Congressman
Ramon Durano, Sr., together with his son Ramon Durano III, and the latters wife, Elizabeth Hotchkiss Durano
(petitioners in the herein case), instituted an action for damages against spouses Angeles Supelveda Uy and
Emigdio Bing Sing Uy, spouses Faustino Alatan and Valeriana Garro, spouses Rufino Lavador and Aurelia Mata,
Silvestre Ramos, Hermogenes Tito, Teotimo Gonzales, Primitiva Garro, Julian Garro, Ismael Garro, Bienvenido
Castro, Glicerio Barriga, Beatriz Calzada, Andrea Mata de Batulan, Teofista Alcala, Filemon Lavador, Candelario
Lumantao, Gavino Quimbo, Justino Tito, Marcelino Gonzales, Salvador Dayday, Venancia Repaso, Leodegario
Gonzales, Jose de La Calzada, Restituta Gonzales, and Cosme Ramos (herein respondents1) before Branch XVII of
the then Court of First Instance of Cebu, Danao City.
In that case, docketed as Civil Case No. DC-56, petitioners accused respondents of officiating a hate campaign
against them by lodging complaints in the Police Department of Danao City in August 1970, over petitioners socalled invasion of respondents alleged properties in Cahumayhumayan, Danao City. This was followed by
another complaint sent by respondents to the President of the Philippines in February 1971, which depicted
petitioners as oppressors, landgrabbers and usurpers of respondents alleged rights. Upon the direction of
the President, the Department of Justice through City Fiscal Jesus Navarro and the Philippine Constabulary of Cebu
simultaneously conducted investigations on the matter. Respondents complaints were dismissed as baseless,
and they appealed the same to the Secretary of Justice, who called for another investigation to be jointly
conducted by the Special Prosecutor and the Office of the City Fiscal of Danao City. During the course of said joint
investigation, respondents Hermogenes Tito and Salvador Dayday again lodged a complaint with the Office of the
President, airing the same charges of landgrabbing. The investigations on this new complaint, jointly conducted
by the 3rd Philippine Constabulary Zone and the Citizens Legal Assistance Office resulted in the finding that
(petitioners) should not be held answerable therefor.2
Petitioners further alleged in their complaint before the CFI that during the course of the above investigations,
respondents kept spreading false rumors and damaging tales which put petitioners into public contempt and
ridicule.3
In their Answer, respondents lodged their affirmative defenses, demanded the return of their respective properties,
and made counterclaims for actual, moral and exemplary damages. Respondents stated that sometime in the early
part of August 1970 and months thereafter they received mimeographed notices dated August 2, 1970 and signed
by the late Ramon Durano, Sr., informing them that the lands which they are tilling and residing in, formerly owned
by the Cebu Portland Cement Company (hereafter, Cepoc), had been purchased by Durano & Co., Inc. The
notices also declared that the lands were needed by Durano & Co. for planting to sugar and for roads or
residences, and directed respondents to immediately turn over the said lands to the representatives of the
company. Simultaneously, tall bamboo poles with pennants at the tops thereof were planted in some areas of the
lands and metal sheets bearing the initials RMD were nailed to posts.
As early as the first week of August 1970, and even before many of the respondents received notices to vacate,
men who identified themselves as employees of Durano & Co. proceeded to bulldoze the lands occupied by various
respondents, destroying in their wake the plantings and improvements made by the respondents therein. On some
occasions, respondents alleged, these men fired shots in the air, purportedly acting upon the instructions of
petitioner Ramon Durano III and/or Ramon Durano, Jr. On at least one instance, petitioners Ramon Durano III and
Elizabeth Hotchkiss Durano were seen on the site of the bulldozing operations.
On September 15, 1970, Durano & Co. sold the disputed property to petitioner Ramon Durano III, who procured the
registration of these lands in his name under TCT No. T-103 and TCT No T-104.
Respondents contended that the display of force and the known power and prestige of petitioners and their family
restrained them from directly resisting this wanton depredation upon their property. During that time, the mayor of
Danao City was Mrs. Beatriz Durano, wife of Ramon Durano, Sr. and mother of petitioner Ramon Durano III. Finding
no relief from the local police, who respondents said merely laughed at them for daring to complain against the
Duranos, they organized themselves and sent a letter to then President Ferdinand Marcos reporting dispossession
of their properties and seeking a determination of the ownership of the land. This notwithstanding, the bulldozing
operations continued until the City Fiscal was requested by the Department of Justice to conduct an investigation
on the matter. When, on July 27, 1971, the City Fiscal announced that he would be unable to conduct a preliminary
investigation, respondents urged the Department of Justice to conduct the preliminary investigation. This was
granted, and the investigations which spanned the period March 1972 to April 1973 led to the conclusion that
respondents complaint was untenable.4
In their counterclaim, respondents alleged that petitioners acts deprived most of them of their independent source
of income and have made destitutes of some of them. Also, petitioners have done serious violence to respondents
spirit, as citizens and human beings, to the extent that one of them had been widowed by the emotional shock that

65

the damage and dispossession has caused.5 Thus, in addition to the dismissal of the complaint, respondents
demanded actual damages for the cost of the improvements they made on the land, together with the damage
arising from the dispossession itself; moral damages for the anguish they underwent as a result of the high-handed
display of power by petitioners in depriving them of their possession and property; as well as exemplary damages,
attorneys fees and expenses of litigation.
Respondents respective counterclaimsreferring to the improvements destroyed, their values, and the
approximate areas of the properties they owned and occupiedare as follows:
a) TEOFISTA ALCALATax Declaration No. 00223; .2400 ha.; bulldozed on August, 10, 1970. Improvements
destroyed consist of 47 trees, 10 bundles beatilis firewood and 2 sacks of cassava, all valued at P5,437.00. (Exh. B,
including submarkings)
b) FAUSTINO ALATAN and VALERIANA GARROTax Declaration No. 30758; .2480 ha.; Tax Declaration No. 32974; .
8944 ha.; Tax Declaration No. 38908; .8000 ha.; Bulldozed on September 9, 1970; Improvements destroyed consist
of 682 trees, a cornfield with one cavan per harvest 3 times a year, valued at P71,770.00; Bulldozed on March 13,
1971; 753 trees, 1,000 bundles beatilis firewood every year, valued at P29,100.00; Cut down in the later part of
March, 197122 trees, 1,000 bundles beatilis firewood every year, 6 cavans corn harvest per year, valued at
P1,940.00 or a total value of P102,810.00. (Exh. C, including submarkings)
c) ANDREA MATA DE BATULANTax Declaration No. 33033; .4259 ha.; bulldozed on September 11, 1970.
Improvements destroyed consist of 512 trees and 15 sacks cassava all valued at P79,425.00. (Exh. D, including
submarkings)
d) GLICERIO BARRIGATax Declaration No. 32290; .4000 ha.; bulldozed on September 10, 1990. Improvements
destroyed consist of 354 trees, cassava field if planted with corn good for one liter, 30 cavans harvest a year of
corn, and one resthouse, all valued at P35,500.00. (Exh. E, including submarkings)
e) BEATRIZ CALZADATax Declaration No. 03449; .900 ha.; Bulldozed on June 16, 1971. Improvements destroyed
consist of 2,864 trees, 1,600 bundles of beatilis firewood, 12 kerosene cans cassava every year and 48 cavans
harvest a year of corn all valued at P34,800.00. (Exh. F, including submarkings)
f) BIENVENIDO CASTROTax Declaration No. 04883; .6000 ha.; bulldozed on September 10, 1970. Improvements
destroyed consist of 170 trees, 10 sacks cassava every year, 500 bundles beatilis firewood every year, 60 cavans
corn harvest per year, all valued at P5,550.00. (Exh. G, including submarkings)
g) ISMAEL GARROTax Declaration No. 7185; 2 has. Bulldozed in August, 1970. Improvements destroyed consist of
6 coconut trees valued at P1,800.00. Bulldozed on February 3, 1971improvements destroyed consist of 607
trees, a corn field of 5 cavans produce per harvest thrice a year, all valued at P67,890.00. (Exh. H, including
submarkings)
h) JULIAN GARROTax Declaration No. 28653; 1 ha.; Bulldozed in the latter week of August, 1970. Improvements
destroyed consist of 365 trees, 1 bamboo grove, 1 tisa, 1,000 bundles of beatilis firewood, 24 cavans harvest a
year of corn, all valued at P46,060.00. (Exh. I, including submarkings)
i) PRIMITIVA GARROTax Declaration No. 28651; .3000 ha.; Bulldozed on September 7, 1970. Improvements
destroyed consist of 183 trees, 10 pineapples, a cassava field, area if planted with corn good for 1/2 liter, sweet
potato, area if planted with corn good for 1/2 liter all valued at P10,410.00. (Exh. J, including submarkings)
j) TEOTIMO GONZALESTax Declaration No. 38159; .8644 ha.; Tax Declaration No. 38158; .8000 ha.; Bulldozed on
September 10, 1970improvements destroyed consist of 460 trees valued at P20,000.00. Bulldozed on December
10, 1970Improvements destroyed consist of 254 trees valued at P65,600.00or a total value of P85,600.00.
(Exh. K, including submarkings)
k) LEODEGARIO GONZALESTax Declaration No. 36884; Bulldozed on February 24, 1971. Improvements destroyed
consist of 946 trees, 40 ubi, 15 cavans harvest a year of corn, all valued at P72,270.00. (Exh. L, including
submarkings)
l) FILEMON LAVADORTax Declaration No. 14036; 1 ha.; Bulldozed on February 5, 1971. Improvements destroyed
consist of 675 trees and 9 cavans harvest a year of corn all valued at P63,935.00. (Exh. M, including submarkings)
m) CANDELARIO LUMANTAOTax Declaration No. 18791; 1.660 ha. Bulldozed on the second week of August, 1970
Improvements destroyed consist of 1,377 trees, a cornfield with 3 cavans per harvest thrice a year and a copra
dryer all valued at P193,960.00. Bulldozed on February 26, 1971Improvements destroyed consist of 44 trees, one
pig pen and the fence thereof and the chicken roost all valued at P12,650.00. Tax Declaration No. 33159; 3.500
has. Bulldozed in the last week of March, 1971Improvements destroyed consist of 13 trees valued at P1,550.00.

66

Bulldozed in the latter part consist of 6 Bamboo groves and Ipil-Ipil trees valued at P700.00 with total value of
P208,860.00. (Exh. N, including submarkings)
n) AURELIA MATATax Declaration No. 38071; .3333 ha.; Bulldozed sometime in the first week of March, 1971
Improvements destroyed consist of 344 trees and 45 cavans corn harvest per year valued at P30,965.00. (Exh. Q,
including submarkings) o) GAVINO QUIMBOTax Declaration No. 33231; 2.0978 has.; Tax Declaration No. 24377; .
4960 ha. (.2480 ha. Belonging to your defendant) Bulldozed on September 12, 1970Improvements destroyed
consist of 200 coconut trees and 500 banana fruit trees valued at P68,500.00. Bulldozed on consist of 59 trees, 20
sacks cassava and 60 cavans harvest a year of corn valued at P9,660.00 or a total value of P78,160.00. (Exh. R,
including submarkings)
p) SILVESTRE RAMOSTax Declaration No. 24288; 1.5568 has.; Bulldozed on February 23, 1971.Improvements
destroyed consist of 737 trees, a cornfield with 3 cavans per harvest 3 times a year and 50 bundles of beatilis
firewood, all valued, at P118,170.00. (Exh. S, including submarkings)
q) MARCELINO GONZALESTax Declaration No. 34057; .4049 ha. Bulldozed on March 20, 1972Improvements
destroyed consist of 5 coconut trees and 9 cavans harvest a year of corn valued at P1,860.00.
Bulldozed on July 4, 1972destroying 19 coconut trees valued at P5,700.00 or a total value of P7,560.00. (Exh. U,
including submarkings)
r) JUSTINO TITOTax Declaration No. 38072; .2000 has.; Bulldozed on February 25, 1971Improvements
destroyed consist of 338 trees and 5 kamongay all valued at P29,650.00. (Exh. T, including submarkings)
s) EMIGDIO BING SING UY and ANGELES SEPULVEDA UYTransfer Certificate of Title No. T-35 (Register of Deeds of
Danao City); 140.4395 has.; Area bulldozed- 20.000 has. Bulldozed on August 5, 6 and 7, 1970destroying 565
coconut trees, 2-1/2 yrs. old, 65,422 banana groves with 3,600 mango trees, 3 years old, grafted and about to bear
fruit valued at P212,260.00. Bulldozed on November 24, 1970 and on February 16, 1971destroying 8,520 madricacao trees and 24 cylindrical cement posts boundaries valued at P18,540.00. Bulldozed on November 24, 1970
destroying 90 coconut trees, 3 years old cornfield at 40 cavans per harvest and at 3 harvests a year (120 cavans)
valued at P31,800.00. Bulldozed on February 16, 1971destroying 25,727 trees and sugarcane field value
P856,725.00 or a total value of P1,123,825.00. (Exh. V, including submarkings)
t) SALVADOR DAYDAYTax Declaration No. (unnumbered) dated September 14, 1967; 4.000 has. Bulldozed on May
6, 1971destroying 576 trees, 9 cavans yearly of corn, 30 kerosene cans of cassava yearly valued at P4,795.00.
Bulldozed from March 26, 1973 to the first week of April, 1973destroying 108 trees and cornland, 6 cavans
harvest per year valued at P53,900.00 or a total value of P58,695.00. (Exh. A, including submarkings)
u) VENANCIA REPASOTax Declaration No. 18867; 1.1667 has. Bulldozed on April 15, 1971Improvements
destroyed were 775 trees, 500 abaca, about to be reaped, and being reaped 3 times a year 2 bamboo groves all
valued at P47,700.00. (Exh. O, including submarkings)
v) HERMOGENES TITOTax Declaration No. 38009; over one (1) ha. Bulldozed in the latter part of September, 1970
destroying 1 coconut tree, 18 sacks of corn per year valued at P1,020.00. Bulldozed on March 15, 1973
destroying 2 coconut trees, 5 buri trees, 1 bamboo grove valued at P1,400.00. Bulldozed on March 26, 1974
destroying 3 coconut trees valued at P1,500.00 with a total value of P3,920.00. (Exh. P, including submarkings).6
On April 22, 1975, petitioners moved to dismiss their complaint with the trial court. The trial court granted the
motion to dismiss, without prejudice to respondents right to proceed with their counterclaim.
Hence, the trial proceeded only on the counterclaim.
On September 23, 1980, this Court issued a resolution in Administrative Matter No. 6290 changing the venue of
trial in Civil Case No. DC-56 to the Regional Trial Court of Cebu City. The change was mainly in line with the transfer
of Judge Bernardo Ll. Salas, who presided over the case in Danao City, to Cebu City.
The parties agreed to dispense with pre-trial, and for the evidence-in-chief to be submitted byway of affidavits
together with a schedule of documentary exhibits, subject to additional direct examination, cross examination and
presentation of rebuttal evidence by the parties.
The trial court and later, the Court of Appeals, took note of the following portions of affidavits submitted by
petitioners:
x x x City Fiscal Jesus Navarro said that in August, 1967, he issued subpoenas to several tenants in
Cahumayhumayan upon representation by Cepoc, the latter protesting failure by the tenants to continue giving
Cepoc its share of the corn produce. He learned from the tenants that the reason why they were reluctant and as a

67

matter of fact some defaulted in giving Cepoc its share, was that Uy Bing Sepulveda made similar demands to
them for his share in the produce, and that they did not know to whom the shares should be given.
xxx

xxx

xxx

Jesus Capitan said that he is familiar with the place Cahumayhumayan and that the properties in said locality were
acquired by Durano and Company and Ramon Durano III, but formerly owned by Cepoc.
When the properties of Ramonito Durano were cultivated, the owners of the plants requested him that they be
given something for their effort even if the properties do not belong to them but to Cepoc, and that he was
directed by Ramonito Durano to do a listing of the improvements as well as the owners. After he made a listing,
this was given to Ramonito who directed Benedicto Ramos to do payment.
When he was preparing the list, they did not object to the removal of the plants because the counterclaimants
understood that the lands did not belong to them, but later and because of politics a complaint was filed, and
finally that when he was doing the listing, the improvements were even pointed to him by the counterclaimants
themselves. (Exh. 48, Records, p. 385-386).
xxx

xxx

xxx

Ruperto Rom said that he had an occasion to work at Cepoc from 1947 to 1950 together with Benedicto and Tomas
Ramos, the latter a capataz of the Durano Sugar Mills. Owner of the properties, subject of the complaint, was
Cepoc.
The persons who eventually tilled the Cepoc properties were merely allowed to do cultivation if planted to corn,
and for Cepoc to be given a share, which condition was complied with by all including the counter-claimants. He
even possessed one parcel which he planted to coconuts, jackfruit trees and other plants. (Exh. 51, Records, pp.
383-384)
xxx

xxx

xxx

Co-defendant Ramon Durano III said that he agreed with the dismissal of the complaint because his fathers wish
was reconciliation with the defendants following the death of Pedro Sepulveda, father of Angeles Sepulveda Uy, but
inspite of the dismissal of the complaint, the defendants still prosecuted their counterclaim.
The disputed properties were owned formerly by Cepoc, and then of the latter selling the properties to Durano and
Company and then by the latter to him as of September 15, 1970. As a matter of fact, TCT T-103 and T-104 were
issued to him and that from that time on, he paid the taxes.
At the time he purchased the properties, they were not occupied by the defendants. The first time he learned
about the alleged bulldozing of the improvements was when the defendants filed the complaint of land grabbing
against their family with the Office of the President and the attendant publicity. Precisely his family filed the
complaint against them. (Exh. 57, Records, pp. 723-730)
xxx

xxx

xxx

Congressman Ramon Durano said he is familiar with the properties, being owned originally by Cepoc. Thereafter
they were purchased by Durano and Company and then sold to Ramon Durano III, the latter now the owner. He
filed a motion to dismiss the case against Angeles Sepulveda, et al. as a gesture of respect to the deceased Pedro
Sepulveda, father of Angeles Sepulveda, and as a Christian, said Pedro Sepulveda being the former Mayor of
Danao, if only to stop all misunderstanding between their families.
xxx

xxx

xxx

He was the one who did the discovery of the properties that belonged to Cepoc, which happened when he was
doing mining work near Cahumayhumayan and without his knowledge extended his operation within the area
belonging to Cepoc. After Cepoc learned of the substantial coal deposits, the property was claimed by Cepoc and
then a survey was made to relocate the muniments. Eventually he desisted doing mining work and limited himself
within the confines of his property that was adjacent to Cepocs property. All the claimants except Sepulveda Uy
were occupants of the Cepoc properties. Durano and Company purchased the property adjacent to Cepoc,
developed the area, mined the coal and had the surveyed area planted with sugar cane, and finally the notices to
the occupants because of their intention to plant sugar cane and other crops (T.S.N. December 4, 1985, pp. 31-32,
44-54, RTC Decision, pp. 16-19, Records, pp. 842-845).7
Petitioners also presented Court Commissioner, Engineer Leonidas Gicain, who was directed by the trial court to
conduct a field survey of the disputed property. Gicain conducted surveys on the areas subjected to bulldozing,

68

including those outside the Cepoc properties. The surveywhich was based on TCT No. T-103 and TCT No. T-104,
titled in the name of Ramon Durano III, and TCT No. 35, in the name of respondent Emigdio Bing Sing Uywas paid
for by petitioners.8
Respondents, for their part, also presented their affidavits and supporting documentary evidence, including tax
declarations covering such portions of the property as they formerly inhabited and cultivated.
On March 8, 1990, the RTC issued a decision upholding respondents counterclaim. The dispositive portion of said
decision reads:
THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the counter claimants and against the
plaintiffs directing the latter to pay the former:
a) With respect to Salvador Dayday P 14,400.00
b) With respect to Teofista Alcala 4,400.00
c) With respect to Faustino Alatan 118,400.00
d) With respect to Andrea Mata de Batulan 115,050.00
e) With respect to Glicerio Barriga 35,500.00
f) With respect to Beatriz Galzada 70,300.00
g) With respect to Bienvenido Castro 5,000.00
h) With respect to Ismael Garro 66,060.00
i) With respect to Julian Garro 48,600.00
j)With respect to Primitiva Garro13,000.00
k)With respect to Teotimo Gonzales63,200.00
1)With respect to Leodegario Gonzales85,300.00
m)With respect to Filemon Lavador 70,860.00
n)With respect to Venancia Repaso101,700.00
o)With respect to Candelario Lumantao192,550.00
p)With respect to Hermogenes Tito1,200.00
q)With respect to Aurelia Mata28,560.00
r)With respect to Gavino Quimbo81,500.00
s)With respect to Silvestre Ramos101,700.00
t)With respect to Justino Tito27,800.00
u)With respect to Marcelino Gonzales2,360.00
v)With respect to Angeles Supelveda902,840.00
P120,000.00 should be the figure in terms of litigation expenses and a separate amount of P100,000.00 as
attorneys fees.
Return of the properties to Venancia Repaso, Hermogenes Tito and Marcelino Gonzales is hereby directed.
With respect to counter claimant Angeles Sepulveda Uy, return of the property to her should be with respect to the
areas outside of the Cepoc property, as mentioned in the sketch, Exhibit 56-A.
Finally with costs against the plaintiffs.
SO ORDERED.9

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The RTC found that the case preponderated in favor of respondents, who all possessed their respective portions of
the property covered by TCT Nos. T-103 and T-104 thinking that they were the absolute owners thereof. A number
of these respondents alleged that they inherited these properties from their parents, who in turn inherited them
from their own parents. Some others came into the properties by purchase from the former occupants thereof.
They and their predecessors were responsible for the plantings and improvements on the property. They were the
ones who sought for the properties to be tax-declared in their respective names, and they continually paid the
taxes thereto. Respondents maintained that they were unaware of anyone claiming adverse possession or
ownership of these lands until the bulldozing operations in 1970.
As for Venancia Repaso, Hermogenes Tito and Marcelino Gonzales, the Court found that the properties they laid
claim to were not part of the land that was purchased by Durano & Co. from Cepoc. Thus, it found the bulldozing of
these lands by petitioners totally unjustified and ordered not only the total reimbursement of useful and necessary
expenses on the properties but also the return of these properties to Repaso, Tito and Gonzales, respectively. As for
all the other respondents, the RTC found their possession of the properties to be in the concept of owner and
adjudged them to be builders in good faith. Considering that petitioners in the instant case appropriated the
improvements on the areas overran by the bulldozers, the RTC ruled that (t)he right of retention to the
improvements necessarily should be secured (in favor of respondents) until reimbursed not only of the necessary
but also useful expenses.10
On the matter of litigation expenses and attorneys fees, the RTC observed that the trial period alone consisted of
forty (40) trial dates spread over a period of sixteen (16) years. At the time, respondents were represented by
counsel based in Manila, and the trial court took into consideration the travel, accommodation and miscellaneous
expenses of their lawyer that respondents must have shouldered during the trial of the case.
Dissatisfied, petitioners appealed the RTC decision to the Court of Appeals, which, in turn, affirmed the said
decision and ordered the return of the property to all the respondents-claimants, in effect modifying the RTC
decision which allowed return only in favor of respondents Repaso, Tito and Gonzales.
In its decision, the Court of Appeals upheld the factual findings and conclusions of the RTC, including the awards for
actual damages, attorneys fees and litigation expenses, and found additionally that the issuance of TCT Nos. T-103
and T-104 in the name of Ramon Durano III was attended by fraud. Evaluating the evidence before it, the Court of
Appeals observed that the alleged reconstituted titles of Cepoc over the property, namely, TCT No. (RT-38) (T14457)4 and TCT No. (RT-39) (T-14456)3 (Exhibits 19 and 20 of this case), which were claimed to be the
derivative titles of TCT Nos. T-103 and T-104, were not submitted in evidence before the RTC. Thus, in an Order
dated June 15, 1988, the RTC ordered Exhibits 19 and 20 deleted from petitioners Offer of Exhibits. The Court
of Appeals further noted that even among the exhibits subsequently produced by petitioners before the RTC, said
Exhibits 19 and 20 were still not submitted.11 Moreover, Cepoc had no registered title over the disputed
property as indicated in TCT Nos. T-103 and T-104. Thus:
TRANSFER CERTIFICATE OF TITLE
NO.-103
xxx

xxx

IT IS FURTHER CERTIFIED that said land was originally registered on the N.A. day of N.A. in the year nineteen
hundred and N.A. in Registration Book No. N.A. page N.A. of the Office of the Register of Deeds of N.A. as Original
Certificate of Title No. N.A. pursuant to a N.A. patent granted by the President of the Philippines, on the N.A. day of
N.A. in the year nineteen hundred and N.A. under Act No. N.A.
This certificate is a transfer from Transfer Certificate of Title No. (RT-39) (T-14456)3 which is cancelled by virtue
hereof in so far as the above described land is concerned.
xxx

xxx

TRANSFER CERTIFICATE OF TITLE

NO. T-104
xxx

xxx

IT IS FURTHER CERTIFIED that said land was originally registered on the N.A. day of N.A. in the year nineteen
hundred and N.A. in Registration Book No. N.A. page N.A. of the Office of the Register of Deeds of N.A. as Original
Certificate of Title No. N.A., pursuant to a N.A. patent granted by the President of the Philippines, on the N.A. day of
N.A. in the year nineteen hundred and N.A. under Act No. N.A.

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This certificate is a transfer from Transfer Certificate of Title No. (RT-38) (T-14457)4 which is cancelled by virtue
hereof in so far as the above described land is concerned.12
From the foregoing, the Court of Appeals concluded that the issuance of the TCT Nos. T-103 and T-104 in favor of
petitioner Ramon Durano III was attended by fraud; hence, petitioners could not invoke the principle of
indefeasibility of title. Additionally, the Court of Appeals found that the alleged Deed of Absolute Sale, undated,
between Cepoc Industries, Inc. and Durano & Co. was not notarized and thus, unregistrable.
The Court of Appeals went on to state that while, on the one hand, no valid issuance of title may be imputed in
favor of petitioners from the private Deed of Sale and the alleged reconstituted titles of Cepoc that were not
presented in evidence, respondents, in contrastwho although admittedly had no registered titles in their names
were able to demonstrate possession that was public, continuous and adverseor possession in the concept of
owner, and which was much prior (one or two generations back for many of respondents) to the claim of ownership
of petitioners.
Thus, the Court of Appeals ordered the return of the properties covered by TCT Nos. T-103 and T-104 to all
respondents who made respective claims thereto. Corollarily, it declared that petitioners were possessors in bad
faith, and were not entitled to reimbursement for useful expenses incurred in the conversion of the property into
sugarcane lands. It also gave no merit to petitioners allegation that the actual damages awarded by the trial court
were excessive, or to petitioners argument that they should not have been held personally liable for any damages
imputable to Durano & Co.
Following is the dispositive portion of the decision of the Court of Appeals:
WHEREFORE, the appealed decision of the lower court in Civil Case No. DC-56 is hereby AFFIRMED with
MODIFICATION ordering the return of the respective subject properties to all the defendants-appellees, without
indemnity to the plaintiffs-appellants as regards whatever improvements made therein by the latter. In all other
respects, said decision in affirmed.
Costs against plaintiffs-appellants.
SO ORDERED.13
On October 29, 1998, the Court of Appeals denied petitioners motion for reconsideration for lack of merit. Hence,
this petition.
Petitioners assign the following errors from the CA decision:
1. The Court of Appeals erred in granting relief to the respondents who did not appeal the decision of the lower
court.
2. The Court of Appeals erred in collaterally attacking the validity of the title of petitioner Ramon Durano III.
3. The respondents should not have been adjudged builders in good faith.
4. The petitioners should not be held personally liable for damages because of the doctrine of separate corporate
personality.
5. It was an error to hold that the respondents had proved the existence of improvements on the land by
preponderance of evidence, and in awarding excessive damages therefor.
6. It was error to direct the return of the properties to respondents Venancia Repaso, Hermogenes Tito and
Marcelino Gonzales.
7. The award of litigation expenses and attorneys fees was erroneous.
8. The petitioners are not possessors in bad faith.
On their first assignment of error, petitioners contend that before the Court of Appeals, they only questioned that
portion of the RTC decision which directed the return of the properties to respondents Repaso, Tito and Gonzales.
They argued that the return of the properties to all the other respondents by the Court of Appeals was erroneous
because it was not among the errors assigned or argued by petitioners on appeal. Besides, since respondents
themselves did not appeal from the RTC decision on the issue of return of the physical possession of the property,
it is understood that judgment as to them has already become final by operation of law. To support its argument,
petitioners cited the cases of Madrideo vs. Court of Appeals 14 and Medida vs. Court of Appeals,15 which held that

71

whenever an appeal is taken in a civil case an appellee who has not himself appealed cannot obtain from the
appellate court any affirmative relief other than the ones granted in the decision of the court below.
Rule 51 of the New Rules of Civil Procedure provides:
Sec. 8. Questions that may be decided.No error which does not affect the jurisdiction over the subject matter or
the validity of the judgment appealed from or the proceedings therein will be considered unless stated in the
assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save
as the court may pass upon plain errors and clerical errors.
We find untenable petitioners argument that since no party (whether petitioners or respondents) appealed for the
return of the properties to respondents other than Repaso, Tito and Gonzales, that portion of the RTC decision that
awards damages to such other respondents is final and may no longer be altered by the Court of Appeals. A
reading of the provisions of Section 8, Rule 51, aforecited, indicates that the Court of Appeals is not limited to
reviewing only those errors assigned by appellant, but also those that are closely related to or dependent on an
assigned error.16 In other words, the Court of Appeals is imbued with sufficient discretion to review matters, not
otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and
just resolution of the case. In this case, the Court of Appeals ordered the return of the properties to respondents
merely as a legal consequence of the finding that respondents had a better right of possession than petitioners
over the disputed properties, the former being possessors in the concept of owner. Thus, it held
Plaintiffs-appellants have to return possession of the subject property, not only to defendants-appellees Venancia
Repaso, Hermogenes Tito and Marcelino Gonzales but to all other defendants-appellees herein, by virtue of the
latters priority in time of declaring the corresponding portions of the subject properties in their name and/or their
predecessors-in-interest coupled with actual possession of the same property through their predecessors-ininterest in the concept of an owner. Plaintiffs-appellants who had never produced in court a valid basis by which
they are claiming possession or ownership over the said property cannot have a better right over the subject
properties than defendants-appellees.17
Moreover, petitioners reliance on the Madrideo and Medida cases is misplaced. In the Madrideo case, the
predecessors-ininterest of the Llorente Group sold the disputed property to the Alcala Group, who in turn sold the
same to the spouses Maturgo. The RTC adjudged the spouses Maturgo purchasers in good faith, such that they
could retain their title to the property, but held that the Llorente Group was unlawfully divested of its ownership of
the property by the Alcala Group. The Alcala Group appealed this decision to the Court of Appeals, who denied the
appeal and ordered the reinstatement in the records of the Registry of Deeds of the Original Certificates of Title of
the predecessors-in-interest of the Llorente Group. In setting aside the decision of the Court of Appeals, this Court
held that no relief may be afforded in favor of the Llorente Group to the prejudice of the spouses Maturgo, who
the Court carefully emphasizedwere third parties to the appeal, being neither appellants nor appellees before the
Court of Appeals, and whose title to the disputed property was confirmed by the RTC. The application of the ruling
in Madrideo to the instant case bears no justification because it is clear that petitioners, in appealing the RTC
decision, impleaded all the herein respondents.
Meanwhile, in the Medida case, petitioners (who were the appellees before the Court of Appeals) sought the
reversal of a finding of the RTC before the Supreme Court. The Court explained that since petitioners failed to
appeal from the RTC decision, theyas appellees before the Court of Appealscould only argue for the purpose of
sustaining the judgment in their favor, and could not ask for any affirmative relief other than that granted by the
court below. The factual milieu in Medida is different from that of the instant case, where the return of the
properties to respondents was not an affirmative relief sought by respondents but an independent determination
of the Court of Appeals proceeding from its findings that respondents were long-standing possessors in the concept
of owner while petitioners were builders in bad faith. Certainly, under such circumstances, the Court of Appeals is
not precluded from modifying the decision of the RTC in order to accord complete relief to respondents.
Moving now to the other errors assigned in the petition, the return of the properties to respondents Repaso, Tito
and Gonzales was premised upon the factual finding that these lands were outside the properties claimed by
petitioners under TCT Nos. T-103 and T-104. Such factual finding of the RTC, sustained by the Court of Appeals, is
now final and binding upon this Court.
In respect of the properties supposedly covered by TCT Nos. T-103 and T-104, the Court of Appeals basically
affirmed the findings of the RTC that respondents have shown prior and actual possession thereof in the concept of
owner, whereas petitioners failed to substantiate a valid and legitimate acquisition of the propertyconsidering
that the alleged titles of Cepoc from which TCT Nos. T-103 and T-104 were supposed to have derived title were not
produced, and the deed of sale between Cepoc and Durano & Co. was unregistrable.
The records clearly bear out respondents prior and actual possession; more exactly, the records indicate that
respondents possession has ripened into ownership by acquisitive prescription.

72

Ordinary acquisitive prescription, in the case of immovable property, requires possession of the thing in good faith
and with just title,18 for a period of ten years.19 A possessor is deemed to be in good faith when he is not aware
of any flaw in his title or mode of acquisition of the property.20 On the other hand, there is just title when the
adverse claimant came into possession of the property through one of the modes for acquiring ownership
recognized by law, but the grantor was not the owner or could not transmit any right.21 The claimant by
prescription may compute the ten-year period by tacking his possession to that of his grantor or predecessor-ininterest.22
The evidence shows that respondents successfully complied with all the requirements for acquisitive prescription to
set in. The properties were conveyed to respondents by purchase or inheritance, and in each case the respondents
were in actual, continuous, open and adverse possession of the properties. They exercised rights of ownership over
the lands, including the regular payment of taxes and introduction of plantings and improvements. They were
unaware of anyone claiming to be the owner of these lands other than themselves until the notices of demolition in
1970and at the time each of them had already completed the ten-year prescriptive period either by their own
possession or by obtaining from the possession of their predecessors-in-interest. Contrary to the allegation of
petitioners that the claims of all twenty-two (22) respondents were lumped together and indiscriminately
sustained, the lower courts (especially the RTC) took careful consideration of the claims individually, taking note of
the respective modes and dates of acquisition. Whether respondents predecessors-in-interest in fact had title to
convey is irrelevant under the concept of just title and for purposes of prescription.
Thus, respondents counterclaim for reconveyance and damages before the RTC was premised upon a claim of
ownership as indicated by the following allegations:
(Y)our defendants are owners and occupants of different parcels of land located in Barrio Cahumayhumayan, your
defendants having occupied these parcels of land for various periods by themselves or through their predecessorsin-interest, some for over fifty years, and some with titles issued under the Land Registration Act; x x x x x23
Respondents claim of ownership by acquisitive prescription (in respect of the properties covered by TCT Nos. T-103
and T-104) having been duly alleged and proven, the Court deems it only proper that such claim be categorically
upheld. Thus, the decision of the Court of Appeals insofar as it merely declares those respondents possessors in
the concept of owner is modified to reflect the evidence on record which indicates that such possession had been
converted to ownership by ordinary prescription.
Turning now to petitioners claim to ownership and title, it is uncontested that their claim hinges largely on TCT
Nos. T-103 and T-104, issued in the name of petitioner Ramon Durano III. However, the validity of these certificates
of title was put to serious doubt by the following: (1) the certificates reveal the lack of registered title of Cepoc to
the properties;24 (2) the alleged reconstituted titles of Cepoc were not produced in evidence; and (3) the deed of
sale between Cepoc and Durano & Co. was unnotarized and thus, unregistrable.
It is true that fraud in the issuance of a certificate of title may be raised only in an action expressly instituted for
that purpose,25 and not collaterally as in the instant case which is an action for reconveyance and damages. While
we cannot sustain the Court of Appeals finding of fraud because of this jurisdictional impediment, we observe that
the above-enumerated circumstances indicate none too clearly the weakness of petitioners evidence on their
claim of ownership. For instance, the non-production of the alleged reconstituted titles of Cepoc despite demand
therefor gives rise to a presumption (unrebutted by petitioners) that such evidence, if produced, would be adverse
to petitioners.26 Also, the unregistrability of the deed of sale is a serious defect that should affect the validity of
the certificates of title. Notarization of the deed of sale is essential to its registrability,27 and the action of the
Register of Deeds in allowing the registration of the unacknowledged deed of sale was unauthorized and did not
render validity to the registration of the document.28
Furthermore, a purchaser of a parcel of land cannot close his eyes to facts which should put a reasonable man
upon his guard, such as when the property subject of the purchase is in the possession of persons other than the
seller.29 A buyer who could not have failed to know or discover that the land sold to him was in the adverse
possession of another is a buyer in bad faith.30 In the herein case, respondents were in open possession and
occupancy of the properties when Durano & Co. supposedly purchased the same from Cepoc. Petitioners made no
attempt to investigate the nature of respondents possession before they ordered demolition in August 1970.
In the same manner, the purchase of the property by petitioner Ramon Durano III from Durano & Co. could not be
said to have been in good faith. It is not disputed that Durano III acquired the property with full knowledge of
respondents occupancy thereon. There even appears to be undue haste in the conveyance of the property to
Durano III, as the bulldozing operations by Durano & Co. were still underway when the deed of sale to Durano III
was executed on September 15, 1970. There is not even an indication that Durano & Co. attempted to transfer
registration of the property in its name before it conveyed the same to Durano III.

73

In the light of these circumstances, petitioners could not justifiably invoke the defense of indefeasibility of title to
defeat respondents claim of ownership by prescription. The rule on indefeasibility of title, i.e., that Torrens titles
can be attacked for fraud only within one year from the date of issuance of the decree of registration, does not
altogether deprive an aggrieved party of a remedy at law. As clarified by the Court in Javier vs. Court of Appeals 31

The decree (of registration) becomes incontrovertible and can no longer be reviewed after one (1) year from the
date of the decree so that the only remedy of the landowner whose property has been wrongfully or erroneously
registered in anothers name is to bring an ordinary action in court for reconveyance, which is an action in
personam and is always available as long as the property has not passed to an innocent third party for value. If the
property has passed into the hands of an innocent purchaser for value, the remedy is an action for damages.
In the instant case, respondents action for reconveyance will prosper, it being clear that the property, wrongfully
registered in the name of petitioner Durano III, has not passed to an innocent purchaser for value.
Since petitioners knew fully well the defect in their titles, they were correctly held by the Court of Appeals to be
builders in bad faith.
The Civil Code provides:
Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown
without right of indemnity.
Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the
demolition of the work, or that the planting or sowing be removed, in order to replace things in their former
condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay
the price of the land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter
or sower.
Based on these provisions, the owner of the land has three alternative rights: (1) to appropriate what has been
built without any obligation to pay indemnity therefor, or (2) to demand that the builder remove what he had built,
or (3) to compel the builder to pay the value of the land.32 In any case, the landowner is entitled to damages
under Article 451, abovecited.
We sustain the return of the properties to respondents and the payment of indemnity as being in accord with the
reliefs under the Civil Code.
On petitioners fifth assignment of error that respondents had not proved the existence of improvements on the
property by preponderance of evidence, and that the damages awarded by the lower courts were excessive and
not actually proved, the Court notes that the issue is essentially factual. Petitioners, however, invoke Article 2199
of the Civil Code which requires actual damages to be duly proved. Passing upon this matter, the Court of Appeals
cited with approval the decision of the RTC which stated:
The counter claimants made a detail of the improvements that were damaged. Then the query, how accurate were
the listings, supposedly representing damaged improvements. The Court notes, some of the counter claimants
improvements in the tax declarations did not tally with the listings as mentioned in their individual affidavits. Also,
others did not submit tax declarations supporting identity of the properties they possessed. The disparity with
respect to the former and absence of tax declarations with respect to the latter, should not be a justification for
defeating right of reimbursement. As a matter of fact, no controverting evidence was presented by the plaintiffs
that the improvements being mentioned individually in the affidavits did not reflect the actual improvements that
were overran by the bulldozing operation. Aside from that, the City Assessor, or any member of his staff, were not
presented as witnesses. Had they been presented by the plaintiffs, the least that can be expected is that they
would have enlightened the Court the extent of their individual holdings being developed in terms of existing
improvements. This, the plaintiffs defaulted. It might be true that there were tax declarations, then presented as
supporting documents by the counter claimants, but then mentioning improvements but in variance with the
listings in the individual affidavits. This disparity similarly cannot be accepted as a basis for the setting aside of the
listing of improvements being adverted to by the counter claimants in their affidavits. This Court is not foreclosing
the possibility that the tax declarations on record were either table computations by the Assessor or his deputy, or
tax declarations whose entries were merely copied from the old tax declarations during the period of revision. (RTC
Decision, p. 36, Records, p. 862)33
The right of the owner of the land to recover damages from a builder in bad faith is clearly provided for in Article
451 of the Civil Code. Although said Article 451 does not elaborate on the basis for damages, the Court perceives

74

that it should reasonably correspond with the value of the properties lost or destroyed as a result of the occupation
in bad faith, as well as the fruits (natural, industrial or civil) from those properties that the owner of the land
reasonably expected to obtain. We sustain the view of the lower courts that the disparity between respondents
affidavits and their tax declarations on the amount of damages claimed should not preclude or defeat respondents
right to damages, which is guaranteed by Article 451. Moreover, under Article 2224 of the Civil Code:
Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature
of the case, be proved with certainty.
We also uphold the award of litigation expenses and attorneys fees, it being clear that petitioners acts compelled
respondents to litigate and incur expenses to regain rightful possession and ownership over the disputed
property.34
The last issue presented for our resolution is whether petitioners could justifiably invoke the doctrine of separate
corporate personality to evade liability for damages. The Court of Appeals applied the well-recognized principle of
piercing the corporate veil, i.e., the law will regard the act of the corporation as the act of its individual
stockholders when it is shown that the corporation was used merely as an alter ego by those persons in the
commission of fraud or other illegal acts.
The test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as follows:
1. Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy
and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had
at the time no separate mind, will or existence of its own;
2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a
statutory or other positive legal duty, or dishonest and unjust acts in contravention of plaintiffs legal rights; and
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.
The absence of any one of these elements prevents piercing the corporate veil. In applying the instrumentality
or alter ego doctrine, the courts are concerned with reality and not form, with how the corporation operated and
the individual defendants relationship to that operation.35
The question of whether a corporation is a mere alter ego is purely one of fact.36 The Court sees no reason to
reverse the finding of the Court of Appeals. The facts show that shortly after the purported sale by Cepco to
Durano & Co., the latter sold the property to petitioner Ramon Durano III, who immediately procured the
registration of the property in his name. Obviously, Durano & Co. was used by petitioners merely as an
instrumentality to appropriate the disputed property for themselves.
WHEREFORE, the instant petition is DENIED. The decision of the Court of Appeals is MODIFIED to declare
respondents with claims to the properties covered by Transfer Certificate of Title Nos. T-103 and T-104 owners by
acquisitive prescription to the extent of their respective claims. In all other respects, the decision of the Court of
Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
Melo (Chairman), Vitug and Panganiban, JJ., concur.
Purisima, J., No part.
Petition denied, judgment affirmed with modification.
Notes.Questions not assigned as error may be considered on appeal if necessary for the just and complete
resolution of the case. (Korean Airlines Co., Ltd. vs. Court of Appeals, 234 SCRA 717 [1994])
The appellate court is accorded a broad discretionary power to waive the lack of proper assignment of errors and to
consider errors not assigned. (Catholic Bishop of Balanga vs. Court of Appeals, 264 SCRA 181 [1996])
An appeal in a criminal proceeding throws the whole case open for review and it becomes the duty of the appellate
court to correct an error as maybe found in the appealed judgment, whether it is made the subject of assignment
of errors or not. (People vs. Calayca, 301 SCRA 192 [1999])
The rule that an appellate court may only pass upon errors assigned, as well as its exceptions, is also applicable to
administrative bodies. (Diamonon vs. Department of Labor and Employment, 327 SCRA 283 [2000])

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The purpose of an assignment of errors is to point out to the appellate court the specific portions of the decision
appealed from which the appellant seeks to controvert. (Bayer Philippines, Inc. vs. Court of Appeals, 340 SCRA 437
[2000]) Heirs of Ramon Durano, Sr. vs. Uy, 344 SCRA 238, G.R. No. 136456 October 24, 2000
G.R. No. 160453.November 12, 2012.*
REPUBLIC OF THE PHILIPPINES, petitioner, vs. ARCADIO IVAN A. SANTOS III and ARCADIO C. SANTOS, JR.,
respondents.
Civil Law; Land Registration; Preponderance of Evidence; The applicants for land registration carry the burden of
proof to establish the merits of their application by a preponderance of evidence, by which is meant such evidence
that is of greater weight, or more convincing than that offered in opposition to it.Respondents as the applicants
for land registration carried the burden of proof to establish the merits of their application by a preponderance of
evidence, by which is meant such evidence that is of greater weight, or more convincing than that offered in
opposition to it. They would be held entitled to claim the property as their own and apply for its registration under
the Torrens system only if they established that, indeed, the property was an accretion to their land.
Same; Property; Accretion; Words and Phrases; Accretion is the process whereby the soil is deposited along the
banks of rivers.Accretion is the process whereby the soil is deposited along the banks of rivers. The deposit of
soil, to be considered accretion, must be: (a) gradual and imperceptible; (b) made through the effects of the
current of the water; and (c) taking place on land adjacent to the banks of rivers. Accordingly, respondents should
establish the concurrence of the elements of accretion to warrant the grant of their application for land
registration.
Same; Same; River Beds; River beds that dry up continue to belong to the State as its property of public dominion,
unless there is an express law that provides that the dried-up river beds should belong to some other person.
Article 502 of the Civil Code expressly declares that rivers and their natural beds are public dominion of the State.
It follows that the river beds that dry up, like Lot 4998-B, continue to belong to the State as its property of public
dominion, unless there is an express law that provides that the dried-up river beds should belong to some other
person.
Remedial Law; Civil Procedure; Appeals; Although it is well settled that the findings of fact of the trial court,
especially when affirmed by the Court of Appeals, are accorded the highest degree of respect, and generally will
not be disturbed on appeal, with such findings being binding and conclusive on the Court, the Court has
consistently recognized exceptions to this rule.Although it is well settled that the findings of fact of the trial court,
especially when affirmed by the CA, are accorded the highest degree of respect, and generally will not be disturbed
on appeal, with such findings being binding and conclusive on the Court, the Court has consistently recognized
exceptions to this rule, including the following, to wit: (a) when the findings are grounded entirely on speculation,
surmises, or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) when
there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the
findings of fact are conflicting; (f) when in making its findings the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee; (g) when the findings are contrary
to those of the trial court; (h) when the findings are conclusions without citation of specific evidence on which they
are based; (i) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not
disputed by respondent; and (j) when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record.
Civil Law; Property; Alluvium; The principle that the riparian owner whose land receives the gradual deposits of soil
does not need to make an express act of possession, and that no acts of possession are necessary in that instance
because it is the law itself that pronounces the alluvium to belong to the riparian owner from the time that the
deposit created by the current of the water becomes manifest.The principle that the riparian owner whose land
receives the gradual deposits of soil does not need to make an express act of possession, and that no acts of
possession are necessary in that instance because it is the law itself that pronounces the alluvium to belong to the
riparian owner from the time that the deposit created by the current of the water becomes manifest has no
applicability herein. This is simply because Lot 4998-B was not formed through accretion.
Same; Same; River Beds; Article 502 of the Civil Code declares that rivers and their natural beds are of public
dominion.Article 419 of the Civil Code distinguishes property as being either of public dominion or of private
ownership. Article 420 of the Civil Code lists the properties considered as part of public dominion, namely: (a) those
intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character; and (b) those which belong to the State, without being for
public use, and are intended for some public service or for the development of the national wealth. As earlier
mentioned, Article 502 of the Civil Code declares that rivers and their natural beds are of public dominion.

76

Same; Same; Regalian Doctrine; Under the Regalian doctrine, all lands not otherwise appearing to be clearly within
private ownership are presumed to belong to the State.Under the Regalian doctrine, all lands not otherwise
appearing to be clearly within private ownership are presumed to belong to the State. No public land can be
acquired by private persons without any grant, express or implied, from the Government. It is indispensable,
therefore, that there is a showing of a title from the State. Occupation of public land in the concept of owner, no
matter how long, cannot ripen into ownership and be registered as a title.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
Orosa, Blanco, Dime and Ortiz Law Offices for respondents.
BERSAMIN,J.:
By law, accretionthe gradual and imperceptible deposit made through the effects of the current of the
waterbelongs to the owner of the land adjacent to the banks of rivers where it forms. The drying up of the river is
not accretion. Hence, the dried-up river bed belongs to the State as property of public dominion, not to the riparian
owner, unless a law vests the ownership in some other person.
Antecedents

Alleging continuous and adverse possession of more than ten years, respondent Arcadio Ivan A. Santos III (Arcadio
Ivan) applied on March 7, 1997 for the registration of Lot 4998-B (the property) in the Regional Trial Court (RTC) in
Paraaque City. The property, which had an area of 1,045 square meters, more or less, was located in Barangay
San Dionisio, Paraaque City, and was bounded in the Northeast by Lot 4079 belonging to respondent Arcadio C.
Santos, Jr. (Arcadio, Jr.), in the Southeast by the Paraaque River, in the Southwest by an abandoned road, and in
the Northwest by Lot 4998-A also owned by Arcadio Ivan.1
On May 21, 1998, Arcadio Ivan amended his application for land registration to include Arcadio, Jr. as his coapplicant because of the latters co-ownership of the property. He alleged that the property had been formed
through accretion and had been in their joint open, notorious, public, continuous and adverse possession for more
than 30 years.2
The City of Paraaque (the City) opposed the application for land registration, stating that it needed the property
for its flood control program; that the property was within the legal easement of 20 meters from the river bank;
and that assuming that the property was not covered by the legal easement, title to the property could not be
registered in favor of the applicants for the reason that the property was an orchard that had dried up and had not
resulted from accretion.3
Ruling of the RTC
On May 10, 2000,4 the RTC granted the application for land registration, disposing:
WHEREFORE, the Court hereby declares the applicants, ARCADIO IVAN A. SANTOS, III and ARCADIO C. SANTOS, JR.,
both Filipinos and of legal age, as the TRUE and ABSOLUTE OWNERS of the land being applied for which is situated
in the Barangay of San Dionisio, City of Paraaque with an area of one thousand forty five (1045) square meters
more or less and covered by Subdivision Plan Csd-00-000343, being a portion of Lot 4998, Cad. 299, Case 4,
Paraaque Cadastre, LRC Rec. No. and orders the registration of Lot 4998-B in their names with the following
technical description, to wit:
xxxx
Once this Decision became (sic) final and executory, let the corresponding Order for the Issuance of the Decree be
issued.
SO ORDERED.
The Republic, through the Office of the Solicitor General (OSG), appealed.
Ruling of the CA
In its appeal, the Republic ascribed the following errors to the RTC,5 to wit:

77

I
THE TRIAL COURT ERRED IN RULING THAT THE PROPERTY SOUGHT TO BE REGISTERED IS AN ACCRETION TO THE
ADJOINING PROPERTY OWNED BY APPELLEES DESPITE THE ADMISSION OF APPELLEE ARCADIO C. SANTOS JR. THAT
THE SAID PROPERTY WAS NOT FORMED AS A RESULT OF THE GRADUAL FILLING UP OF SOIL THROUGH THE
CURRENT OF THE RIVER.
II
THE TRIAL COURT ERRED IN GRANTING THE APPLICATION FOR LAND REGISTRATION DESPITE APPELLEES FAILURE
TO FORMALLY OFFER IN EVIDENCE AN OFFICIAL CERTIFICATION THAT THE SUBJECT PARCEL OF LAND IS ALIENABLE
AND DISPOSABLE.
III
THE TRIAL COURT ERRED IN RULING THAT APPELLEES HAD SUFFICIENTLY ESTABLISHED THEIR CONTINUOUS, OPEN,
PUBLIC AND ADVERSE OCCUPATION OF THE SUBJECT PROPERTY FOR A PERIOD OF MORE THAN THIRTY (30) YEARS.
On May 27, 2003, the CA affirmed the RTC.6The Republic filed a motion for reconsideration, but the CA denied the
motion on October 20, 2003.7
Issues
Hence, this appeal, in which the Republic urges that:8
I
RESPONDENTS CLAIM THAT THE SUBJECT PROPERTY IS AN ACCRETION TO THEIR ADJOINING LAND THAT WOULD
ENTITLE THEM TO REGISTER IT UNDER ARTICLE 457 OF THE NEW CIVIL CODE IS CONTRADICTED BY THEIR OWN
EVIDENCE.
II
ASSUMING THAT THE LAND SOUGHT TO BE REGISTERED WAS PREVIOUSLY A PART OF THE PARAAQUE RIVER
WHICH BECAME AN ORCHARD AFTER IT DRIED UP, THE REGISTRATION OF SAID PROPERTY IN FAVOR OF
RESPONDENTS CANNOT BE ALTERNATIVELY JUSTIFIED UNDER ARTICLE 461 OF THE CIVIL CODE.
III
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE FAILURE OF RESPONDENTS TO
FORMALLY OFFER IN EVIDENCE AN OFFICIAL CERTIFICATION THAT THE SUBJECT PROPERTY IS ALIENABLE AND
DISPOSABLE IS FATAL TO THEIR APPLICATION FOR LAND REGISTRATION.
IV
THE FINDING OF THE COURT OF APPEALS THAT RESPONDENTS HAVE CONTINUOUSLY, OPENLY, PUBLICLY AND
ADVERSELY OCCUPIED THE SUBJECT PROPERTY FOR MORE THAN THIRTY (30) YEARS IS NOT SUPPORTED BY WELLNIGH INCONTROVERTIBLE EVIDENCE.
To be resolved are whether or not Article 457 of the Civil Code was applicable herein; and whether or not
respondents could claim the property by virtue of acquisitive prescription pursuant to Section 14(1) of Presidential
Decree No. 1529 (Property Registration Decree).
Ruling
The appeal is meritorious.
I.
The CA grossly erred in applying Article 457 of the Civil Code to respondents benefit
Article 457 of the Civil Code provides that (t)o the owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the currents of the waters.
In ruling for respondents, the RTC pronounced as follows:

78

On the basis of the evidence presented by the applicants, the Court finds that Arcadio Ivan A. Santos III and
Arcadio C. Santos, Jr., are the owners of the land subject of this application which was previously a part of the
Paraaque River which became an orchard after it dried up and further considering that Lot 4 which adjoins the
same property is owned by applicant, Arcadio C. Santos, Jr., after it was obtained by him through inheritance from
his mother, Concepcion Cruz, now deceased.
Conformably with Art. 457 of the New Civil Code, it is provided that:
Article 457.To the owners of the lands adjoining the bank of rivers belong the accretion which they gradually
receive from the effects of the current of the waters.9
The CA upheld the RTCs pronouncement, holding:
It could not be denied that to the owners of the lands adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the waters (Article 457 New Civil Code) as in this case,
Arcadio Ivan Santos III and Arcadio Santos, Jr., are the owners of the land which was previously part of the
Paraaque River which became an orchard after it dried up and considering that Lot 4 which adjoins the same
property is owned by the applicant which was obtained by the latter from his mother (Decision, p. 3; p. 38,
Rollo).10
The Republic submits, however, that the application by both lower courts of Article 457 of the Civil Code was
erroneous in the face of the fact that respondents evidence did not establish accretion, but instead the drying up
of the Paraaque River.
The Republics submission is correct.
Respondents as the applicants for land registration carried the burden of proof to establish the merits of their
application by a preponderance of evidence, by which is meant such evidence that is of greater weight, or more
convincing than that offered in opposition to it.11 They would be held entitled to claim the property as their own
and apply for its registration under the Torrens system only if they established that, indeed, the property was an
accretion to their land.
Accretion is the process whereby the soil is deposited along the banks of rivers.12 The deposit of soil, to be
considered accretion, must be: (a) gradual and imperceptible; (b) made through the effects of the current of the
water; and (c) taking place on land adjacent to the banks of rivers.13 Accordingly, respondents should establish
the concurrence of the elements of accretion to warrant the grant of their application for land registration.
However, respondents did not discharge their burden of proof. They did not show that the gradual and
imperceptible deposition of soil through the effects of the current of the river had formed Lot 4998-B. Instead, their
evidence revealed that the property was the dried-up river bed of the Paraaque River, leading both the RTC and
the CA to themselves hold that Lot 4998-B was the land which was previously part of the Paraaque River xxx
(and) became an orchard after it dried up.
Still, respondents argue that considering that Lot 4998-B did not yet exist when the original title of Lot 4 was issued
in their mothers name in 1920, and that Lot 4998-B came about only thereafter as the land formed between Lot 4
and the Paraaque River, the unavoidable conclusion should then be that soil and sediments had meanwhile been
deposited near Lot 4 by the current of the Paraaque River, resulting in the formation of Lot 4998-B.
The argument is legally and factually groundless. For one, respondents thereby ignore that the effects of the
current of the river are not the only cause of the formation of land along a river bank. There are several other
causes, including the drying up of the river bed. The drying up of the river bed was, in fact, the uniform conclusion
of both lower courts herein. In other words, respondents did not establish at all that the increment of land had
formed from the gradual and imperceptible deposit of soil by the effects of the current. Also, it seems to be highly
improbable that the large volume of soil that ultimately comprised the dry land with an area of 1,045 square
meters had been deposited in a gradual and imperceptible manner by the current of the river in the span of about
20 to 30 yearsthe span of time intervening between 1920, when Lot 4 was registered in the name of their
deceased parent (at which time Lot 4998-B was not yet in existence) and the early 1950s (which respondents
witness Rufino Allanigue alleged to be the time when he knew them to have occupied Lot 4988-B). The only
plausible explanation for the substantial increment was that Lot 4988-B was the dried-up bed of the Paraaque
River. Confirming this explanation was Arcadio, Jr.s own testimony to the effect that the property was previously a
part of the Paraaque River that had dried up and become an orchard.
We observe in this connection that even Arcadio, Jr.s own Transfer Certificate of Title No. 44687 confirmed the
uniform conclusion of the RTC and the CA that Lot 4998-B had been formed by the drying up of the Paraaque
River. Transfer Certificate of Title No. 44687 recited that Lot 4 of the consolidated subdivision plan Pcs-13-002563,

79

the lot therein described, was bounded on the SW along line 5-1 by Dried River Bed.14 That boundary line of SW
along line 5-1 corresponded with the location of Lot 4998-B, which was described as bounded by Lot 4079 Cad.
299, (Lot 1, Psu-10676), in the name of respondent Arcadio Santos, Jr. (Now Lot 4, Psd-13-002563) in the
Northeast.15
The RTC and the CA grossly erred in treating the dried-up river bed as an accretion that became respondents
property pursuant to Article 457 of the Civil Code. That land was definitely not an accretion. The process of drying
up of a river to form dry land involved the recession of the water level from the river banks, and the dried-up land
did not equate to accretion, which was the gradual and imperceptible deposition of soil on the river banks through
the effects of the current. In accretion, the water level did not recede and was more or less maintained. Hence,
respondents as the riparian owners had no legal right to claim ownership of Lot 4998-B. Considering that the clear
and categorical language of Article 457 of the Civil Code has confined the provision only to accretion, we should
apply the provision as its clear and categorical language tells us to. Axiomatic it is, indeed, that where the
language of the law is clear and categorical, there is no room for interpretation; there is only room for
application.16 The first and fundamental duty of courts is then to apply the law.17
The State exclusively owned Lot 4998-B and may not be divested of its right of ownership. Article 502 of the Civil
Code expressly declares that rivers and their natural beds are public dominion of the State.18 It follows that the
river beds that dry up, like Lot 4998-B, continue to belong to the State as its property of public dominion, unless
there is an express law that provides that the dried-up river beds should belong to some other person.19
II
Acquisitive prescription was not applicable in favor of respondents
The RTC favored respondents application for land registration covering Lot 4998-B also because they had taken
possession of the property continuously, openly, publicly and adversely for more than 30 years based on their
predecessor-in-interest being the adjoining owner of the parcel of land along the river bank. It rendered the
following ratiocination, viz.:20
In this regard, the Court found that from the time the applicants became the owners thereof, they took possession
of the same property continuously, openly, publicly and adversely for more than thirty (30) years because their
predecessors-in-interest are the adjoining owners of the subject parcel of land along the river bank. Furthermore,
the fact that applicants paid its realty taxes, had it surveyed per subdivision plan Csd-00-000343 (Exh. L) which
was duly approved by the Land Management Services and the fact that Engr. Chito B. Cainglet, OICChief, Surveys
Division Land Registration Authority, made a Report that the subject property is not a portion of the Paraaque
River and that it does not fall nor overlap with Lot 5000, thus, the Court opts to grant the application.
Finally, in the light of the evidence adduced by the applicants in this case and in view of the foregoing reports of
the Department of Agrarian Reforms, Land Registration Authority and the Department of Environment and Natural
Resources, the Court finds and so holds that the applicants have satisfied all the requirements of law which are
essential to a government grant and is, therefore, entitled to the issuance of a certificate of title in their favor. So
also, oppositor failed to prove that the applicants are not entitled thereto, not having presented any witness.
In fine, the application is GRANTED.
As already mentioned, the CA affirmed the RTC.
Both lower courts erred.
The relevant legal provision is Section 14(1) of Presidential Decree No. 1529 (Property Registration Decree), which
pertinently states:
Section14.Who may apply.The following persons may file in the proper [Regional Trial Court] an application for
registration of title to land, whether personally or through their duly authorized representatives:
(1)Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide
claim of ownership since June 12, 1945, or earlier.
xxxx
Under Section 14(1), then, applicants for confirmation of imperfect title must prove the following, namely: (a) that
the land forms part of the disposable and alienable agricultural lands of the public domain; and (b) that they have
been in open, continuous, exclusive, and notorious possession and occupation of the land under a bona fide claim
of ownership either since time immemorial or since June 12, 1945.21

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The Republic assails the findings by the lower courts that respondents took possession of the same property
continuously, openly, publicly and adversely for more than thirty (30) years.22
Although it is well settled that the findings of fact of the trial court, especially when affirmed by the CA, are
accorded the highest degree of respect, and generally will not be disturbed on appeal, with such findings being
binding and conclusive on the Court,23 the Court has consistently recognized exceptions to this rule, including the
following, to wit: (a) when the findings are grounded entirely on speculation, surmises, or conjectures; (b) when the
inference made is manifestly mistaken, absurd, or impossible; (c) when there is grave abuse of discretion; (d) when
the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when in
making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of
both the appellant and the appellee; (g) when the findings are contrary to those of the trial court; (h) when the
findings are conclusions without citation of specific evidence on which they are based; (i) when the facts set forth
in the petition as well as in the petitioners main and reply briefs are not disputed by respondent; and (j) when the
findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.24
Here, the findings of the RTC were obviously grounded on speculation, surmises, or conjectures; and that the
inference made by the RTC and the CA was manifestly mistaken, absurd, or impossible. Hence, the Court should
now review the findings.
In finding that respondents had been in continuous, open, public and adverse possession of the land for more than
30 years, the RTC declared:
In this regard, the Court found that from the time the applicant became the owners thereof, they took possession
of the same property continuously, openly, publicly and adversely for more than thirty years because their
predecessor in interest are the adjoining owners of the subject parcel of land along the river banks. Furthermore,
the fact that the applicant paid its realty taxes, had it surveyed per subdivision plan Csd-00-000343 (Exh. L)
which was duly approved by the Land Management Services and the fact that Engr. Chito B. Cainglet, OICChief,
Surveys Division Land Registration Authority, made a Report that the subject property is not a portion of the
Paraaque River and that it does not fall nor overlap with Lot 5000, thus, the Court opts to grant the application.
The RTC apparently reckoned respondents period of supposed possession to be more than thirty years from the
fact that their predecessors in interest are the adjoining owners of the subject parcel of land. Yet, its decision
nowhere indicated what acts respondents had performed showing their possession of the property continuously,
openly, publicly and adversely in that length of time. The decision mentioned only that they had paid realty taxes
and had caused the survey of the property to be made. That, to us, was not enough to justify the foregoing
findings, because, firstly, the payment of realty taxes did not conclusively prove the payors ownership of the land
the taxes were paid for,25 the tax declarations and payments being mere indicia of a claim of ownership;26 and,
secondly, the causing of surveys of the property involved was not itself an of continuous, open, public and adverse
possession.
The principle that the riparian owner whose land receives the gradual deposits of soil does not need to make an
express act of possession, and that no acts of possession are necessary in that instance because it is the law itself
that pronounces the alluvium to belong to the riparian owner from the time that the deposit created by the current
of the water becomes manifest27 has no applicability herein. This is simply because Lot 4998-B was not formed
through accretion. Hence, the ownership of the land adjacent to the river bank by respondents predecessor-ininterest did not translate to possession of Lot 4998-B that would ripen to acquisitive prescription in relation to Lot
4998-B.
On the other hand, the claim of thirty years of continuous, open, public and adverse possession of Lot 4998-B was
not even validated or preponderantly established. The admission of respondents themselves that they declared the
property for taxation purposes only in 1997 and paid realty taxes only from 199928 signified that their alleged
possession would at most be for only nine years as of the filing of their application for land registration on March 7,
1997.
Yet, even conceding, for the sake of argument, that respondents possessed Lot 4998-B for more than thirty years in
the character they claimed, they did not thereby acquire the land by prescription or by other means without any
competent proof that the land was already declared as alienable and disposable by the Government. Absent that
declaration, the land still belonged to the State as part of its public dominion.
Article 419 of the Civil Code distinguishes property as being either of public dominion or of private ownership.
Article 420 of the Civil Code lists the properties considered as part of public dominion, namely: (a) those intended
for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character; and (b) those which belong to the State, without being for public use,
and are intended for some public service or for the development of the national wealth. As earlier mentioned,
Article 502 of the Civil Code declares that rivers and their natural beds are of public dominion.

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Whether the dried-up river bed may be susceptible to acquisitive prescription or not was a question that the Court
resolved in favor of the State in Celestial v. Cachopero,29 a case involving the registration of land found to be part
of a dried-up portion of the natural bed of a creek. There the Court held:
As for petitioners claim of ownership over the subject land, admittedly a dried-up bed of the Salunayan Creek,
based on (1) her alleged long term adverse possession and that of her predecessor-in-interest, Marcelina Basadre,
even prior to October 22, 1966, when she purchased the adjoining property from the latter, and (2) the right of
accession under Art. 370 of the Spanish Civil Code of 1889 and/or Article 461 of the Civil Code, the same must fail.
Since property of public dominion is outside the commerce of man and not susceptible to private appropriation and
acquisitive prescription, the adverse possession which may be the basis of a grant of title in the confirmation of an
imperfect title refers only to alienable or disposable portions of the public domain. It is only after the Government
has declared the land to be alienable and disposable agricultural land that the year of entry, cultivation and
exclusive and adverse possession can be counted for purposes of an imperfect title.
A creek, like the Salunayan Creek, is a recess or arm extending from a river and participating in the ebb and flow of
the sea. As such, under Articles 420(1) and 502(1) of the Civil Code, the Salunayan Creek, including its natural bed,
is property of the public domain which is not susceptible to private appropriation and acquisitive prescription. And,
absent any declaration by the government, that a portion of the creek has dried-up does not, by itself, alter its
inalienable character.
xxxx
Had the disputed portion of the Salunayan Creek dried up after the present Civil Code took effect, the subject land
would clearly not belong to petitioner or her predecessor-in-interest since under the aforementioned provision of
Article 461, river beds which are abandoned through the natural change in the course of the waters ipso facto
belong to the owners of the land occupied by the new course, and the owners of the adjoining lots have the right
to acquire them only after paying their value.
And both Article 370 of the Old Code and Article 461 of the present Civil Code are applicable only when [r]iver
beds are abandoned through the natural change in the course of the waters. It is uncontroverted, however, that,
as found by both the Bureau of Lands and the DENR Regional Executive Director, the subject land became dry as a
result of the construction an irrigation canal by the National Irrigation Administration. Thus, in Ronquillo v. Court of
Appeals, this Court held:
The law is clear and unambiguous. It leaves no room for interpretation. Article 370 applies only if there is a natural
change in the course of the waters. The rules on alluvion do not apply to man-made or artificial accretions nor to
accretions to lands that adjoin canals or esteros or artificial drainage systems. Considering our earlier finding that
the dried-up portion of Estero Calubcub was actually caused by the active intervention of man, it follows that
Article 370 does not apply to the case at bar and, hence, the Del Rosarios cannot be entitled thereto supposedly as
riparian owners.
The dried-up portion of Estero Calubcub should thus be considered as forming part of the land of the public domain
which cannot be subject to acquisition by private ownership. xxx (Emphasis supplied)
Furthermore, both provisions pertain to situations where there has been a change in the course of a river, not
where the river simply dries up. In the instant Petition, it is not even alleged that the Salunayan Creek changed its
course. In such a situation, commentators are of the opinion that the dry river bed remains property of public
dominion. (Bold emphases supplied)
Indeed, under the Regalian doctrine, all lands not otherwise appearing to be clearly within private ownership are
presumed to belong to the State.30 No public land can be acquired by private persons without any grant, express
or implied, from the Government. It is indispensable, therefore, that there is a showing of a title from the State.31
Occupation of public land in the concept of owner, no matter how long, cannot ripen into ownership and be
registered as a title.32
Subject to the exceptions defined in Article 461 of the Civil Code (which declares river beds that are abandoned
through the natural change in the course of the waters as ipso facto belonging to the owners of the land occupied
by the new course, and which gives to the owners of the adjoining lots the right to acquire only the abandoned
river beds not ipso facto belonging to the owners of the land affected by the natural change of course of the waters
only after paying their value), all river beds remain property of public dominion and cannot be acquired by
acquisitive prescription unless previously declared by the Government to be alienable and disposable.
Considering that Lot 4998-B was not shown to be already declared to be alienable and disposable, respondents
could not be deemed to have acquired the property through prescription.

82

Nonetheless, respondents insist that the property was already classified as alienable and disposable by the
Government. They cite as proof of the classification as alienable and disposable the following notation found on the
survey plan, to wit:33
NOTE
ALL CORNERS NOT OTHERWISE DESCRIBED ARE OLD BL CYL. CONC. MONS 15 X 60CM
All corners marked PS are cyl. conc. mons 15 x 60 cm
Surveyed in accordance with Survey Authority No. 007604-48 of the Regional Executive Director issued by the
CENR-OFFICER dated Dec. 2, 1996.
This survey is inside L.C. Map No. 2623, Proj. No. 25 classified as alienable/disposable by the Bureau of Forest
Devt. on Jan. 3, 1968.
Lot 4998-A = Lot 5883} Cad 299
Lot 4998-B = Lot 5884} Paraaque Cadastre.
Was the notation on the survey plan to the effect that Lot 4998-B was inside the map classified as alienable/dis posable by the Bureau of Forest Development on 03 Jan. 1968 sufficient proof of the propertys nature as
alienable and disposable public land?
To prove that the land subject of an application for registration is alienable, an applicant must conclusively
establish the existence of a positive act of the Government, such as a presidential proclamation, executive order,
administrative action, investigation reports of the Bureau of Lands investigator, or a legislative act or statute. Until
then, the rules on confirmation of imperfect title do not apply.
As to the proofs that are admissible to establish the alienability and disposability of public land, we said in
Secretary of the Department of Environment and Natural Resources v. Yap34 that:
The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the
person applying for registration (or claiming ownership), who must prove that the land subject of the application is
alienable or disposable. To overcome this presumption, incontrovertible evidence must be established that the land
subject of the application (or claim) is alienable or disposable. There must still be a positive act declaring land of
the public domain as alienable and disposable. To prove that the land subject of an application for registration is
alienable, the applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands
investigators; and a legislative act or a statute. The applicant may also secure a certification from the government
that the land claimed to have been possessed for the required number of years is alienable and disposable.
In the case at bar, no such proclamation, executive order, administrative action, report, statute, or certification was
presented to the Court. The records are bereft of evidence showing that, prior to 2006, the portions of Boracay
occupied by private claimants were subject of a government proclamation that the land is alienable and
disposable. Absent such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands
occupied by private claimants were already open to disposition before 2006. Matters of land classification or
reclassification cannot be assumed. They call for proof. (Emphasis supplied) In Menguito v. Republic,35 which we
reiterated in Republic v. Sarmiento,36 we specifically resolved the issue of whether the notation on the survey plan
was sufficient evidence to establish the alienability and disposability of public land, to wit:
To prove that the land in question formed part of the alienable and disposable lands of the public domain,
petitioners relied on the printed words which read: This survey plan is inside Alienable and Disposable Land Area,
Project No. 27-B as per L.C. Map No. 2623, certified by the Bureau of Forestry on January 3, 1968, appearing on
Exhibit E (Survey Plan No. Swo-13-000227).
This proof is not sufficient. Section 2, Article XII of the 1987 Constitution, provides: All lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources are owned by the State. x x x.
For the original registration of title, the applicant (petitioners in this case) must overcome the presumption that the
land sought to be registered forms part of the public domain. Unless public land is shown to have been reclassified
or alienated to a private person by the State, it remains part of the inalienable public domain. Indeed, occupation
thereof in the concept of owner, no matter how long, cannot ripen into ownership and be registered as a title. To
overcome such presumption, incontrovertible evidence must be shown by the applicant. Absent such evidence, the
land sought to be registered remains inalienable.

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In the present case, petitioners cite a surveyor-geodetic engineers notation in Exhibit E indicating that the
survey was inside alienable and disposable land. Such notation does not constitute a positive government act
validly changing the classification of the land in question. Verily, a mere surveyor has no authority to reclassify
lands of the public domain. By relying solely on the said surveyors assertion, petitioners have not sufficiently
proven that the land in question has been declared alienable. (Emphasis supplied)
In Republic v. T.A.N. Properties, Inc.,37 we dealt with the sufficiency of the certification by the Provincial
Environmental Officer (PENRO) or Community Environmental Officer (CENRO) to the effect that a piece of public
land was alienable and disposable in the following manner, viz.:
x x x it is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The applicant for
land registration must prove that the DENR Secretary had approved the land classification and released the land of
the public domain as alienable and disposable, and that the land subject of the application for registration falls
within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant for
land registration must present a copy of the original classification approved by the DENR Secretary and certified as
a true copy by the legal custodian of the official records. These facts must be established to prove that the land is
alienable and disposable. Respondent failed to do so because the certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable.
Only Torres, respondents Operations Manager, identified the certifications submitted by respondent. The
government officials who issued the certifications were not presented before the trial court to testify on their
contents. The trial court should not have accepted the contents of the certifications as proof of the facts stated
therein. Even if the certifications are presumed duly issued and admissible in evidence, they have no probative
value in establishing that the land is alienable and disposable.
xxxx
The CENRO and Regional Technical Director, FMS-DENR, certifications do not prove that Lot 10705-B falls within the
alienable and disposable land as proclaimed by the DENR Secretary. Such government certifications do not, by
their mere issuance, prove the facts stated therein. Such government certifications may fall under the class of
documents contemplated in the second sentence of Section 23 of Rule 132. As such, the certifications are prima
facie evidence of their due execution and date of issuance but they do not constitute prima facie evidence of the
facts stated therein. (Emphasis supplied)
These rulings of the Court indicate that the notation on the survey plan of Lot 4998-B, Cad-00-000343 to the effect
that the survey is inside a map classified as alienable/disposable by the Bureau of Forest Devt did not prove that
Lot 4998-B was already classified as alienable and disposable. Accordingly, respondents could not validly assert
acquisitive prescription of Lot 4988-B.
WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals promulgated on May 27,
2003; DISMISSES the application for registration of Arcadio C. Santos, Jr. and Arcadio Ivan S. Santos III respecting
Lot 4998-B with a total area of 1,045 square meters, more or less, situated in Barangay San Dionisio, Paraaque
City, Metro Manila; and DECLARES Lot 4998-B as exclusively belonging to the State for being part of the dried-up
bed of the Paraaque River.
Respondents shall pay the costs of suit.
SO ORDERED.
Sereno (C.J.), Leonardo-De Castro, Villarama, Jr. and Reyes, JJ., concur.
Judgment reversed and set aside.
Notes.Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of
the following requisites: (1) that the deposition of soil or sediment be gradual and imperceptible; (2) that it be the
result of the action of the waters of the river; and (3) that the land where accretion takes place is adjacent to the
banks of rivers. (New Regent Sources, Inc. vs. Tanjuatco, Jr., 585 SCRA 329 [2009])
The reason for the grant of preferential right to the riparian or littoral owner is the same as the justification for
giving accretions to the riparian owner, which is that accretion compensates the riparian owner for the diminutions
which his land suffers by reason of the destructive force of the watersin the case of littoral lands, he who loses by
the encroachments of the sea should gain by its recession. (Cantoja vs. Lim, 617 SCRA 44 [2010])
All lands not appearing to be clearly of private dominion presumptively belong to the State. (DCD Construction, Inc.
vs. Republic, 656 SCRA 560 [2012]) Republic vs. Santos III, 685 SCRA 51, G.R. No. 160453 November 12, 2012

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G.R. No. 92161. March 18, 1991.*

SIMPLICIO BINALAY, PONCIANO GANNABAN, NICANOR MACUTAY, DOMINGO ROSALES, GREGORIO ARGONZA,
EUSTAQUIO BAUA, FLORENTINO ROSALES, TEODORO MABBORANG, PATRICIO MABBORANG and FULGENCIO MORA,
petitioners, vs. GUILLERMO MANALO and COURT OF APPEALS, respondents.
Property; Ownership; Respondent Manalo did not acquire private ownership of the bed of the eastern branch of the
river even if the same was included in the deeds of sale executed in his favor, because it constituted property of
public dominion.Now, then, pursuant to Article 420 of the Civil Code, respondent Manalo did not acquire private
ownership of the bed of the eastern branch of the river even if it was included in the deeds of absolute sale
executed by Gregorio Taguba and Faustina Taccad in his favor. These vendors could not have validly sold land that
constituted property of public dominion. x x x Although Article 420 speaks only of rivers and banks, rivers is a
composite term which includes: (1) the running waters, (2) the bed, and (3) the banks.
Same; Same; Same; Accretion; Accretion, as a mode of acquiring ownership, requires the concurrence of three (3)
requisites: (a) that the deposition of soil be gradual and imperceptible; (b) that it be the result of the action of the
waters of the river; and (c) that the land where accretion takes place is adjacent to the banks of rivers.We turn
next to the issue of accretion. After examining the records of the case, the Court considers that there was no
evidence to prove that Lot 821 is an increment to Lot 307 and the bed of the eastern branch of the river. Accretion
as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of three (3) requisites:
(a) that the deposition of soil or sediment be gradual and imperceptible; (b) that it be the result of the action of the
waters of the river (or sea); and (c) that the land where accretion takes place is adjacent to the banks of rivers (or
the sea coast). The Court notes that the parcels of land bought by respondent Manalo border on the eastern branch
of the Cagayan River. Any accretion formed by this eastern branch which respondent Manalo may claim must be
deposited on or attached to Lot 307. As it is, the claimed accretion (Lot 821) lies on the bank of the river not
adjacent to Lot 307 but directly opposite Lot 307 across the river.
Same; Same; Same; Same; A sudden and forceful action like that of flooding is not the alluvial process
contemplated under Art. 457 of the Civil Code.Assuming (arguendo only) that the Cagayan River referred to in
the Deeds of Sale transferring ownership of the land to respondent Manalo is the western branch, the decision of
the Court of Appeals and of the trial court are bare of factual findings to the effect that the land purchased by
respondent Manalo received alluvium from the action of the river in a slow and gradual manner. On the contrary,
the decision of the lower court made mention of several floods that caused the land to reappear making it
susceptible to cultivation. A sudden and forceful action like that of flooding is hardly the alluvial process
contemplated under Article 457 of the Civil Code. It is the slow and hardly perceptible accumulation of soil deposits
that the law grants to the riparian owner.
Same; Same; Quieting of Title; Under Art. 477 of the Civil Code, the plaintiff in an action for quieting of title must at
least have equitable title to or interest in the real property which is the subject matter of the action.If respondent
Manalo had proved prior possession, it was limited physically to Lot 307 and the depressed portion or the eastern
river bed. The testimony of Dominga Malana who was a tenant for Justina Taccad did not indicate that she was also
cultivating Lot 821. In fact, the complaints for forcible entry lodged before the Municipal Trial Court of Tumauini,
Isabela pertained only to Lot 307 and the depressed portion or river bed and not to Lot 821. In the same manner,
the tax declarations presented by petitioners conflict with those of respondent Manalo. Under Article 477 of the
Civil Code, the plaintiff in an action for quieting of title must at least have equitable title to or interest in the real
property which is the subject matter of the action. The evidence of record on this point is less than satisfactory and
the Court feels compelled to refrain from determining the ownership and possession of Lot 821, adjudging neither
petitioners nor respondent Manalo as owner(s) thereof.
PETITION to review the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Josefin De Alban Law Office for petitioners.
FELICIANO, J.:
The late Judge Taccad originally owned a parcel of land situated in Tumauini, Isabela having an estimated area of
twenty (20) hectares. The western portion of this land bordering on the Cagayan River has an elevation lower than
that of the eastern portion which borders on the national road. Through the years, the western portion would
periodically go under the waters of the Cagayan River as those waters swelled with the coming of the rains. The
submerged portion, however, would reappear during the dry season from January to August. It would remain under
water for the rest of the year, that is, from September to December during the rainy season.

85

The ownership of the landholding eventually moved from one person to another. On 9 May 1959, respondent
Guillermo Manalo acquired 8.65 hectares thereof from Faustina Taccad, daughter of Judge Juan Taccad. The land
sold was described in the Deed of Absolute Sale1 as follows:
x x x a parcel of agricultural land in Balug, Tumauini, Isabela, containing an area of 8.6500 hectares, more or less;
bounded on the North by Francisco Forto; on the East by National Road; on South by Julian Tumolva; and on the
West by Cagayan River; declared for taxation under Tax Declaration No. 12681 in the name of Faustina Taccad, and
assessed at P750.00. x x x
Later in 1964, respondent Manalo purchased another 1.80 hectares from Gregorio Taguba who had earlier acquired
the same from Judge Juan Taccad. The second purchase brought the total acquisition of respondent Manalo to
10.45 hectares. The second piece of property was more particularly described as follows:
x x x a piece of agricultural land consisting of tobacco land, and containing an area of 18,000 square meters,
more or less, bounded on the North by Balug Creek; on the South, by Faustina Taccad (now Guillermo R. Manalo);
on the East, by a Provincial Road; and on the West, by Cagayan River assessed at P440.00, as tax Declaration No.
3152. x x x2
During the cadastral survey conducted at Balug, Tumauini, Isabela on 21 October 1969, the two (2) parcels of land
belonging to respondent Manalo were surveyed and consolidated into one lot, designated as Lot No. 307, Pls-964.
Lot 307 which contains 4.6489 hectares includes: (a) the whole of the 1.80 hectares acquired from Gregorio
Taguba; and (b) 2.8489 hectares out of the 8.65 hectares purchased from Faustina Taccad. As the survey was
conducted on a rainy month, a portion of the land bought from Faustina Taccad then under water was left
unsurveyed and was not included in Lot 307.
The Sketch Plan3 submitted during the trial of this case and which was identified by respondent Manalo shows that
the Cagayan River running from south to north, forks at a certain point to form two (2) branchesthe western and
the eastern branchesand then unites at the other end, further north, to form a narrow strip of land. The eastern
branch of the river cuts through the land of respondent Manalo and is inundated with water only during the rainy
season. The bed of the eastern branch is the submerged or the unsurveyed portion of the land belonging to
respondent Manalo. For about eight (8) months of the year when the level of water at the point where the Cagayan
River forks is at its ordinary depth, river water does not flow into the eastern branch. While this condition persists,
the eastern bed is dry and is susceptible to cultivation.
Considering that water flowed through the eastern branch of the Cagayan River when the cadastral survey was
conducted, the elongated strip of land formed by the western and the eastern branches of the Cagayan River
looked very much like an island. This strip of land was surveyed on 12 December 1969.4 It was found to have a
total area of 22.7209 hectares and was designated as Lot 821 and Lot 822. The area of Lot 822 is 10.8122 hectares
while Lot 821 has an area of 11.9087 hectares. Lot 821 is located directly opposite Lot 307 and is separated from
the latter only by the eastern branch of the Cagayan River during the rainy season and, during the dry season, by
the exposed, dry river bed, being a portion of the land bought from Faustina Taccad. Respondent Manalo claims
that Lot 821 also belongs to him by way of accretion to the submerged portion of the property to which it is
adjacent.
Petitioners who are in possession of Lot 821, upon the other hand, insist that they own Lot 821. They occupy the
outer edges of Lot 821 along the river banks, i.e., the fertile portions on which they plant tobacco and other
agricultural products. They also cultivate the western strip of the unsurveyed portion during summer.5 This
situation compelled respondent Manalo to file a case for forcible entry against petitioners on 20 May 1969. The
case was dismissed by the Municipal Court of Tumauini, Isabela for failure of both parties to appear. On 15
December 1972, respondent Manalo again filed a case for forcible entry against petitioners. The latter case was
similarly dismissed for lack of jurisdiction by the Municipal Court of Tumauini, Isabela.
On 24 July 1974, respondent Manalo filed a complaint6 before the then Court of First Instance of Isabela, Branch 3
for quieting of title, possession and damages against petitioners. He alleged ownership of the two (2) parcels of
land he bought separately from Faustina Taccad and Gregorio Taguba for which reason he prayed that judgment be
entered ordering petitioners to vacate the western strip of the unsurveyed portion. Respondent Manalo likewise
prayed that judgment be entered declaring him as owner of Lot 821 on which he had laid his claim during the
survey.
Petitioners filed their answer denying the material allegations of the complaint. The case was then set for trial for
failure of the parties to reach an amicable agreement or to enter into a stipulation of facts.7 On 10 November
1982, the trial court rendered a decision with the following dispositive portion:
WHEREFORE, in the light of the foregoing premises, the Court renders judgment against the defendants and in
favor of the plaintiff and orders:

86

1. That plaintiff, Guillermo Manalo, is declared the lawful owner of the land in question, Lot No. 821, Pls-964 of
Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint;
2. That the defendants are hereby ordered to vacate the premises of the land in question, Lot No. 821, Pls-964 of
Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint;
3. That the defendants are being restrained from entering the premises of the land in question, Lot No. 821, Pls964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint; and
4. That there is no pronouncement as to attorneys fees and costs.
SO ORDERED.8
Petitioners appealed to the Court of Appeals which, however, affirmed the decision of the trial court. They filed a
motion for reconsideration, without success.
While petitioners insist that Lot 821 is part of an island surrounded by the two (2) branches of the Cagayan River,
the Court of Appeals found otherwise. The Court of Appeals concurred with the finding of the trial court that Lot
821 cannot be considered separate and distinct from Lot 307 since the eastern branch of the Cagayan River
substantially dries up for the most part of the year such that when this happens, Lot 821 becomes physically (i.e.,
by land) connected with the dried up bed owned by respondent Manalo. Both courts below in effect rejected the
assertion of petitioners that the depression on the earths surface which separates Lot 307 and Lot 821 is, during
part of the year, the bed of the eastern branch of the Cagayan River.
It is a familiar rule that the findings of facts of the trial court are entitled to great respect, and that they carry even
more weight when affirmed by the Court of Appeals.9 This is in recognition of the peculiar advantage on the part of
the trial court of being able to observe first-hand the deportment of the witnesses while testifying. Jurisprudence is
likewise settled that the Court of Appeals is the final arbiter of questions of fact.10 But whether a conclusion drawn
from such findings of facts is correct, is a question of law cognizable by this Court.11
In the instant case, the conclusion reached by both courts below apparently collides with their findings that
periodically at the onset of and during the rainy season, river water flows through the eastern bed of the Cagayan
River. The trial court held:
The Court believes that the land in controversy is of the nature and character of alluvion (Accretion), for it appears
that during the dry season, the body of water separating the same land in controversy (Lot No. 821, Pls-964) and
the two (2) parcels of land which the plaintiff purchased from Gregorio Taguba and Justina Taccad Cayaba becomes
a marshy land and is only six (6) inches deep and twelve (12) meters in width at its widest in the northern tip
(Exhs. W, W-1, W-2, W-3 and W-4). It has been held by our Supreme Court that the owner of the riparian
land which receives the gradual deposits of alluvion, does not have to make an express act of possession. The law
does not require it, and the deposit created by the current of the water becomes manifest (Roxas vs. Tuazon, 6
Phil. 408).12
The Court of Apppeals adhered substantially to the conclusion reached by the trial court, thus:
As found by the trial court, the disputed property is not an island in the strict sense of the word since the eastern
portion of the said property claimed by appellants to be part of the Cagayan River dries up during summer.
Admittedly, it is the action of the heavy rains which comes during rainy season especially from September to
November which increases the water level of the Cagayan river. As the river becomes swollen due to heavy rains,
the lower portion of the said strip of land located at its southernmost point would be inundated with water. This is
where the water of the Cagayan river gains its entry. Consequently, if the water level is high the whole strip of land
would be under water.
In Government of the Philippine Islands vs. Colegio de San Jose, it was held that
According to the foregoing definition of the words ordinary and extra-ordinary, the highest depth of the waters
of Laguna de Bay during the dry season is the ordinary one, and the highest depth they attain during the extraordinary one (sic); inasmuch as the former is the one which is regular, common, natural, which occurs always or
most of the time during the year, while the latter is uncommon, transcends the general rule, order and measure,
and goes beyond that which is the ordinary depth. If according to the definition given by Article 74 of the Law of
Waters quoted above, the natural bed or basin of the lakes is the ground covered by their waters when at their
highest ordinary depth, the natural bed or basin of Laguna de Bay is the ground covered by its waters when at
their highest depth during the dry season, that is up to the northeastern boundary of the two parcels of land in
question.

87

We find the foregoing ruling to be analogous to the case at bar. The highest ordinary level of the waters of the
Cagayan River is that attained during the dry season which is confined only on the west side of Lot [821] and Lot
[822]. This is the natural Cagayan river itself. The small residual of water between Lot [821] and 307 is part of the
small stream already in existence when the whole of the late Judge Juan Taccads property was still susceptible to
cultivation and uneroded.13
The Court is unable to agree with the Court of Appeals that Government of the Philippine Islands vs. Colegio de San
Jose14 is applicable to the present case. That case involved Laguna de Bay; since Laguna de Bay is a lake, the
Court applied the legal provisions governing the ownership and use of lakes and their beds and shores, in order to
determine the character and ownership of the disputed property. Specifically, the Court applied the definition of the
natural bed or basin of lakes found in Article 74 of the Law of Waters of 3 August 1866. Upon the other hand, what
is involved in the instant case is the eastern bed of the Cagayan River.
We believe and so hold that Article 70 of the Law of Waters of 3 August 1866 is the law applicable to the case at
bar:
Art. 70. The natural bed or channel of a creek or river is the ground covered by its waters during the highest
floods. (Italics supplied)
We note that Article 70 defines the natural bed or channel of a creek or river as the ground covered by its waters
during the highest floods. The highest floods in the eastern branch of the Cagayan River occur with the annual
coming of the rains as the river waters in their onward course cover the entire depressed portion. Though the
eastern bed substantially dries up for the most part of the year (i.e., from January to August), we cannot ignore the
periodical swelling of the waters (i.e., from September to December) causing the eastern bed to be covered with
flowing river waters.
The conclusion of this Court that the depressed portion is a river bed rests upon evidence of record. Firstly,
respondent Manalo admitted in open court that the entire area he bought from Gregorio Taguba was included in Lot
307.15 If the 1.80 hectares purchased from Gregorio Taguba was included in Lot 307, then the Cagayan River
referred to as the western boundary in the Deed of Sale transferring the land from Gregorio Taguba to respondent
Manalo as well as the Deed of Sale signed by Faustina Taccad, must refer to the dried up bed (during the dry
months) or the eastern branch of the river (during the rainy months). In the Sketch Plan attached to the records of
the case, Lot 307 is separated from the western branch of the Cagayan River by a large tract of land which
includes not only Lot 821 but also what this Court characterizes as the eastern branch of the Cagayan River.
Secondly, the pictures identified by respondent Manalo during his direct examination depict the depressed portion
as a river bed. The pictures, marked as Exhibits W to W-4, were taken in July 1973 or at a time when the
eastern bed becomes visible.16 Thus, Exhibit W-2 which according to respondent Manalo was taken facing the
east and Exhibit W-3 which was taken facing the west both show that the visible, dried up portion has a markedly
lower elevation than Lot 307 and Lot 821. It has dike-like slopes on both sides connecting it to Lot 307 and Lot 821
that are vertical upward and very prominent. This topographic feature is compatible with the fact that a huge
volume of water passes through the eastern bed regularly during the rainy season. In addition, petitioner Ponciano
Gannaban testified that one had to go down what he called a cliff from the surveyed portion of the land of
respondent Manalo to the depressed portion. The cliff, as related by petitioner Gannaban, has a height of eight (8)
meters.17
The records do not show when the Cagayan River began to carve its eastern channel on the surface of the earth.
However, Exhibit E18 for the prosecution which was the Declaration of Real Property standing in the name of
Faustina Taccad indicates that the eastern bed already existed even before the sale to respondent Manalo. The
words old bed enclosed in parenthesesperhaps written to make legitimate the claim of private ownership over
the submerged portionis an implied admission of the existence of the river bed. In the Declaration of Real
Property made by respondent Manalo, the depressed portion assumed the name Rio Muerte de Cagayan. Indeed,
the steep dike-like slopes on either side of the eastern bed could have been formed only after a prolonged period of
time.
Now, then, pursuant to Article 420 of the Civil Code, respondent Manalo did not acquire private ownership of the
bed of the eastern branch of the river even if it was included in the deeds of absolute sale executed by Gregorio
Taguba and Faustina Taccad in his favor. These vendors could not have validly sold land that constituted property of
public dominion. Article 420 of the Civil Code states:
The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads, and others of similar character;

88

(2) Those which belong to the State, without being for public use, and are intended for some public service or for
the development of the national wealth. (Italics supplied)
Although Article 420 speaks only of rivers and banks, rivers is a composite term which includes: (1) the running
waters, (2) the bed, and (3) the banks.19 Manresa, in commenting upon Article 339 of the Spanish Civil Code of
1889 from which Article 420 of the Philippine Civil Code was taken, stressed the public ownership of river beds:
La naturaleza especial de los rios, en punto a su disfrute general, hace que sea necesario considerar en su
relacion de dominio algo mas que sus aguas corrientes. En efecto, en todo rio es preciso distinguir: 1. esta agua
corriente; 2. el alveo o cauce, y 3. las riberas. Ahora bien: son estas dos ultimas cosas siempre de dominio publico,
como las aguas?
Realmente, no puede imaginarse un rio sin alveo y sin ribera; de suerte que al decir el Codigo civil que los rios son
de dominio publico, parece que debe ir implicito el dominio publico de aquellos tres elementos que integran el rio.
Por otra parte, en cuanto a los alveos o cauces tenemos la declaracion del art. 407, num. 1, donde dice: son de
dominio publico ... los rios y sus cauces naturales; declaracion que con lo que dispone el art. 34 de la ley de
[Aguas], segun el cual, son de dominio publico: 1. los alveos o cauces de los arroyos que no se hallen
comprendidos en el art. 33, y 2. los alveos o cauces naturales de los rios en la extension que cubran sus aguas en
las mayores crecidas ordinarias.20 (Italics supplied)
The claim of ownership of respondent Manalo over the submerged portion is bereft of basis even if it were alleged
and proved that the Cagayan River first began to encroach on his property after the purchase from Gregorio
Taguba and Faustina Taccad. Article 462 of the Civil Code would then apply divesting, by operation of law,
respondent Manalo of private ownership over the new river bed. The intrusion of the eastern branch of the
Cagayan River into his landholding obviously prejudiced respondent Manalo but this is a common occurrence since
estates bordering on rivers are exposed to floods and other evils produced by the destructive force of the waters.
That loss is compensated by, inter alia, the right of accretion acknowledged by Article 457 of the Civil Code.21 It so
happened that instead of increasing the size of Lot 307, the eastern branch of the Cagayan River had carved a
channel on it.
We turn next to the issue of accretion. After examining the records of the case, the Court considers that there was
no evidence to prove that Lot 821 is an increment to Lot 307 and the bed of the eastern branch of the river.
Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of three (3)
requisites: (a) that the deposition of soil or sediment be gradual and imperceptible; (b) that it be the result of the
action of the waters of the river (or sea); and (c) that the land where accretion takes place is adjacent to the banks
of rivers (or the sea coast).22 The Court notes that the parcels of land bought by respondent Manalo border on the
eastern branch of the Cagayan River. Any accretion formed by this eastern branch which respondent Manalo may
claim must be deposited on or attached to Lot 307. As it is, the claimed accretion (Lot 821) lies on the bank of the
river not adjacent to Lot 307 but directly opposite Lot 307 across the river.
Assuming (arguendo only) that the Cagayan River referred to in the Deeds of Sale transferring ownership of the
land to respondent Manalo is the western branch, the decision of the Court of Appeals and of the trial court are
bare of factual findings to the effect that the land purchased by respondent Manalo received alluvium from the
action of the river in a slow and gradual manner. On the contrary, the decision of the lower court made mention of
several floods that caused the land to reappear making it susceptible to cultivation. A sudden and forceful action
like that of flooding is hardly the alluvial process contemplated under Article 457 of the Civil Code. It is the slow
and hardly perceptible accumulation of soil deposits that the law grants to the riparian owner.
Besides, it is important to note that Lot 821 has an area of 11.91 hectares. Lot 821 is the northern portion of the
strip of land having a total area of 22.72 hectares. We find it difficult to suppose that such a sizable area as Lot 821
resulted from slow accretion to another lot of almost equal size. The total landholding purchased by respondent
Manalo is 10.45 hectares (8.65 hectares from Faustina Taccad and 1.80 hectares from Gregorio Taguba in 1959 and
1964, respectively), in fact even smaller than Lot 821 which he claims by way of accretion. The cadastral survey
showing that Lot 821 has an area of 11.91 hectares was conducted in 1969. If respondent Manalos contention
were accepted, it would mean that in a span of only ten (10) years, he had more than doubled his landholding by
what the Court of Appeals and the trial court considered as accretion. As already noted, there are steep vertical
dike-like slopes separating the depressed portion or river bed and Lot 821 and Lot 307. This topography of the
land, among other things, precludes a reasonable conclusion that Lot 821 is an increment to the depressed portion
by reason of the slow and constant action of the waters of either the western or the eastern branches of the
Cagayan River.
We turn finally to the issue of ownership of Lot 821. Respondent Manalos claim over Lot 821 rests on accretion
coupled with alleged prior possession. He alleged that the parcels of land he bought separately from Gregorio
Taguba and Faustina Taccad were formerly owned by Judge Juan Taccad who was in possession thereof through his
(Judge Taccads) tenants. When ownership was transferred to him, respondent Manalo took over the cultivation of

89

the property and had it declared for taxation purposes in his name. When petitioners forcibly entered into his
property, he twice instituted the appropriate action before the Municipal Trial Court of Tumauini, Isabela. Against
respondent Manalos allegation of prior possession, petitioners presented tax declarations standing in their
respective names. They claimed lawful, peaceful and adverse possession of Lot 821 since 1955.
If respondent Manalo had proved prior possession, it was limited physically to Lot 307 and the depressed portion or
the eastern river bed. The testimony of Dominga Malana who was a tenant for Justina Taccad did not indicate that
she was also cultivating Lot 821. In fact, the complaints for forcible entry lodged before the Municipal Trial Court of
Tumauini, Isabela pertained only to Lot 307 and the depressed portion or river bed and not to Lot 821. In the same
manner, the tax declarations presented by petitioners conflict with those of respondent Manalo. Under Article 477
of the Civil Code, the plaintiff in an action for quieting of title must at least have equitable title to or interest in the
real property which is the subject matter of the action. The evidence of record on this point is less than satisfactory
and the Court feels compelled to refrain from determining the ownership and possession of Lot 821, adjudging
neither petitioners nor respondent Manalo as owner(s) thereof.
WHEREFORE, the Decision and Resolution of the Court of Appeals in C.A.-G.R. CV No. 04892 are hereby SET ASIDE.
Respondent Manalo is hereby declared the owner of Lot 307. The regularly submerged portion or the eastern bed
of the Cagayan River is hereby DECLARED to be property of public dominion. The ownership of Lot 821 shall be
determined in an appropriate action that may be instituted by the interested parties inter se. No pronouncement as
to costs.
SO ORDERED.
Fernan (C.J., Chairman), Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.
Decision and resolution set aside.
Note.For accretion or alluvion to form part of registered land of riparian owner, the gradual alluvial deposits made
by human intervention are excluded. (Republic vs. Court of Appeals, 132 SCRA 514.) Binalay vs. Manalo, 195 SCRA
374, G.R. No. 92161 March 18, 1991

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant and appellant, vs. CONSORCIA CABAGIS ET AL.,
claimants and appellees.
LAND REGISTRATION ; LAND DISAPPEARING INTO SEA; PUBLIC DOMAIN.As the lots in question disappeared by
natural erosion due to the ebb and flow of the tide, and as they remained in that condition until reclaimed from the
sea by the filling in done by the Government, they belong to the public domain for public use. (Aragon vs. Insular
Government, 19 Phil., 223; Francisco vs. Government of the Philippine Islands, 28 Phil., 505.)
APPEAL from a judgment of the Court of First Instance of Manila. Imperial, J.
The facts are stated in the opinion of the court.
Attorney-General Jaranilla, for appellant.
Abad Santos, Camus & Delgado for appellees.
VILLA-REAL, J.:
The Government of the Philippine Islands appeals to this court from the judgment of the Court of First Instance of
Manila in cadastral proceeding No. 373 of the Court of First Instance of Manila, G. L. R. O. Cadastral Record No. 373,
adjudicating the title and decreeing the registration of lots Nos. 36, 39 and 40, block 3055 of the cadastral survey
of the City of Manila in f avor of Consuelo, Consorcia, Elvira and Tomas, surnamed Cabangis, in equal parts, and
dismissing the claims presented by the Government of the Philippine Islands and the City of Manila.
In support of its appeal, the appellant assigns the following alleged errors as committed by the trial court in its
judgment, to wit:
"1. The lower court erred in not holding that the lots in question are of the public domain, the same having been
gained from the sea (Manila Bay) by accession, by fillings made by the Bureau of Public Works and by the
construction of the break-water (built by the Bureau of Navigation) near the mouth of Vitas Estero.

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"2. The lower court erred in holding that the lots in question formed part of the big parcel of land belonging to the
spouses Maximo Cabangis and Tita Andres, and in holding that these spouses and their successors in interest have
been in continuous, public, peaceful, and uninterrupted possession of said lots up to the time this case came up.
"3. The lower court erred in holding that said lots existed before, but that due to the current of the Pasig River and
to the action of the big waves in Manila Bay during south-west monsoons, the same disappeared.
"4. The lower court erred in adjudicating the registration of the lands in question in the name of the appellees, and
in denying the appellant's motion for a new trial."
A preponderance of the evidence in the record which may properly be taken into consideration in deciding the
case, proves the following facts:
Lots 36, 39 and 40, block 3035 of cadastral proceeding No. 71 of the City of Manila, G. L. R. O. Record No. 373,
were formerly a part of a large parcel of land belonging to the predecessor of the herein claimants and appellees.
From the year 1896 said land began to wear away, due to the action of the waves of Manila Bay, until the year
1901 when the said lots became completely submerged in water in ordinary tides, and remained in such a state
until 1912 when the Government undertook the dredging of Vitas Estuary in order to facilitate navigation,
depositing all the sand and silt taken from the bed of the estuary on the low lands which were completely covered
with water, surrounding that belonging to the Philippine Manufacturing Company, thereby slowly and gradually
forming the lots, the subject matter of this proceeding.
Up to the month of February, 1927 nobody had declared lot 39 for the purposes of taxation, and it was only in the
year 1926 that Dr. Pedro Gil, in behalf of the claimants and appellees, declared lot No. 40 for such purpose.
In view of the facts just stated, as proved by a preponderance of the evidence, the question arises: Who owns lots
86, 39 and 40 in question?
The claimants-appellees contend that inasmuch as the said lots once formed a part of a large parcel of land
belonging to their predecessors, whom they succeeded, and their immediate predecessor in interest, Tomas
Cabangis, having taken possession thereof as soon as they were reclaimed, giving his permission to some
fishermen to dry their fishing nets and deposit their bancas thereon, said lots belong to them.
Article 339, subsection 1, of the Civil Code, reads:
"Art. 339. Property of public ownership is
"1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State,
riverbanks, shores, roadsteads, and that of a similar character."
*

Article 1, case 3, of the Law of Waters of August 3, 1866, provides as follows:

"ARTICLE 1. The following are part of the national domain open to public use:
*

"3. The Shores. By the shore is understood that space covered and uncovered by the movement of the tide. Its
interior or terrestrial limit is the line reached by the highest equinoctial tides. Where the tides are not appreciable,
the shore begins on the land side at the line reached by the sea during ordinary storms or tempests."
In the case of Aragon vs. Insular Government (19 Phil., 223), with reference to article 339 of the Civil Code just
quoted, this court said:
"We should not be understood, by this decision, to hold that in a case of gradual encroachment or erosion by the
ebb and flow of the tide, private property may not become 'property of public ownership/ as defined in article 339
of the code, where it appears that the owner has to all intents and purposes abandoned it and permitted it to be
totally destroyed, so as to become a part of the 'playa' (shore of the sea), 'rada' (roadstead), or the like. * * *"
In the Enciclopedia Jurdica Espaola, volume XII, page 558, we read the following:
"With relative frequency the opposite phenomenon occurs; that is, the sea advances and private properties are
permanently invaded by the waves, and in this case they become part of the shore or beach. They then pass to the
public domain, but the owner thus dispossessed does not retain any right to the natural products resulting from
their new nature; it is a de facto case of eminent domain, and not subject to indemnity."

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Now then, when said land was reclaimed, did the claimants-appellees. or their predecessors recover it as their
original property?
As we have seen, the land belonging to the predecessors of the herein claimants-appellees began to wear away in
1896, owing to the gradual erosion caused by the ebb and flow of the tide, until the year 1901, when the waters of
Manila Bay completely submerged a portion of it, included within lots 36, 39 and 40 here in question, remaining
thus under water until reclaimed as a result of certain work done by the Government in 1912. According to the
above-cited authorities said portion of land, that is, lots 36, 39 and 40, which was private property, became a part
of the public domain. The predecessors of the herein claimants-appellees could have protected their land by
building a retaining wall, with the consent of competent authority, in 1896 when the waters of the sea began to
wear it away, in accordance with the provisions of article 29 of the aforecited Law of Waters of August 3, 1866, and
their failure to do so until 1901, when a portion of the same became completely covered by said waters, remaining
thus submerged until 1912, constitutes abandonment.
Now then: The lots under discussion having been reclaimed from the sea as a result of certain work done by the
Government, to whom do they belong?
The answer to this question is found in article 5 of the aforementioned Law of Waters, which is as follows:
"ART. 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces,
pueblos, or private persons, with proper permission, shall become the property of the party constructing such
works, unless otherwise provided by the terms of the grant of authority."
The fact that from 1912 some fishermen had been drying their fishing nets and depositing their bancas on lots 36,
39 and 40, by permission of Tomas Cabangis, does not confer on the latter or his successors the ownership of said
lots, because, as they were converted into public land, no private person could acquire title thereto except in the
form and manner established by the law.
In the case of Buzon vs. Insular Government and City of Manila (13 Phil., 324), cited by the claimants-appellees,
this court, admitting the findings and holdings of the lower court, said the following:
"If we heed the parol evidence, we find that the seashore was formerly about one hundred brazas distant from the
land in question; that, in the course of time, and by the removal of a considerable quantity of sand from the shore
at the back of the land for the use of the street car company in filling in Calle Cervantes, the sea water in ordinary
tides now covers part of the land described in the petition.
"The fact that certain land, not the bed of a river or of the sea, is covered by sea water during the period of
ordinary high tide, is not a reason established by any law to cause the loss thereof, especially when, as in the
present case, it becomes covered by water owing to circumstances entirely independent of the will of the owner."
In the case of Director of Lands vs. Aguilar (G. R. No. 22034) ,1 also cited by the claimants-appellees, wherein the
Government adduced no evidence in support of its contention, the lower court said in part:
"The contention of the claimants Cabangis is to the effect that said lots are a part of the adjoining land adjudicated
to their deceased father, Don Tomas Cabangis, which, for over fifty years had belonged to their deceased
grandmother, Tita Andres, and that, due to certain improvements made in Manila Bay, the waters of the sea
covered a large part of the lots herein claimed.
"The Government of the Philippine Islands also claims the ownership of said lots, because, at ordinary high tide,
they are covered by the sea.
"Upon petition of the parties, the lower court made an ocular inspection of said lots on September 12, 1923, and on
said inspection found some light material houses built thereon, and that on that occasion the waters of the sea did
not reach the aforesaid lots.
"From the evidence adduced at the trial of this cause, it may be inferred that Tita Andres, during her lifetime, was
the owner of a rather large parcel of land which was adjudicated by a decree to her son Tomas Cabangis; the lots
now in question are contiguous to that land and are covered by the waters of the sea at extraordinary high tide;
some 50 years before the sea did not reach said strip of land, and on it were constructed, for the most part, light
material houses, occupied by the tenants of Tita Andres, to whom they paid rent. Upon her death, her son Tomas
Cabangis succeeded to the possession, and his children succeeded him, they being the present claimants,
Consuelo, Jesus, Tomas, and Consorcia Cabangis.
"The Government of the Philippine Islands did not adduce any evidence in support of its contention, with the
exception of registry record No. 8147, to show that the lots here in question were not excluded f rom the
application presented in said proceeding."

92

It will be seen that in the case of Buzon vs. Insular Government and City of Manila, cited above, the rise of the
waters of the sea that covered the lands there in dispute, was due not to the action of the tide but to the fact that
a large quantity of sand was taken from the sea at the side of said land in order to fill in Cervantes Street, and this
court properly held that because of this act, entirely independent of the will of the owner of said land, the latter
could not lose the ownership thereof, and the mere fact that the waters of the sea covered it as a result of said act,
is not sufficient to convert it into public land, especially, as the land was high and appropriate for building
purposes.
In the case of the Director of Lands vs. Aguilar also cited by the claimants-appellees, the Insular Government did
not present any evidence in support of its contention,. thus leaving uncontradicted the evidence adduced by the
claimants Aguilar et al., as to the ownership, possession and occupation of said lots.
In the instant case the evidence shows that from 1896, the waves of Manila Bay had been gradually and constantly
washing away the sand that f ormed the lots here in question, until 1901, when the sea water completely covered
them, and thus they remained until the year 1912. In the latter year they were reclaimed from the sea by filling in
with sand and silt extracted from the bed of Vitas Estuary when the Government dredged said estuary in order to
facilitate navigation. Neither the herein claimants-appellees nor their predecessors did anything to prevent their
destruction.
In conclusion, then, we hold that the lots in question having disappeared on account of the gradual erosion due to
the ebb and flow of the tide, and having remained in such a state until they were reclaimed from. the sea by the
filling in done by the Government, they are public land. (Aragon vs. Insular Government, 19 Phil., 223; Francisco vs.
Government of the Philippine Islands, 28 Phil., 505.)
By virtue whereof, the judgment appealed from is reversed and lots Nos. 36, 39 and 40 of cadastral proceeding No.
373 of the City of Manila are held to be public land belonging to the Government of the United States under the
administration and control of the Government of the Philippine Islands. So ordered.
Johnson, Street, Malcolm, Ostrand, Johns, and Romual-dez, JJ., concur.
Judgment reversed. Government of the Philippine Islands vs. Cabangis, 53 Phil. 112, No. 28379 March 27, 1929
G.R. No. 95907. April 8, 1992.*
JOSE REYNANTE, petitioner, vs. THE HONORABLE COURT OF APPEALS, THE HON. VALENTIN CRUZ, as Presiding
Judge, Regional Trial Court of Bulacan, Branch VIII, and the HEIRS OF LEONCIO CARLOS and DOLORES A. CARLOS;
and HEIRS OF GORGONIO CARLOS and CONCEPCION CARLOS, respondents.
Civil Law; Ownership; Property; Possession; A party who can prove prior possession can recover such possession
even against the owner himself.A party who can prove prior possession can recover such possession even
against the owner himself. Whatever may be the character of his prior possession, if he has in his favor priority in
time, he has the security that entitles him to remain on the property until he is lawfully ejected by a person having
a better right by accion publiciana or accion reinvindicatoria.
Same; Same; Same; Accretion.Accretion benefits a riparian owner when the following requisites are present: (1)
that the deposit be gradual and imperceptible; (2) that it resulted from the effects of the current of the water; and
(c) that the land where accretion takes place is adjacent to the bank of a river.
Same; Same; Same; Prescription; Failure to register the acquired alluvial deposit by accretion for a period of fifty
(50) years subjected said accretion to acquisition through prescription by third persons.Assuming private
respondents had acquired the alluvial deposit (the lot in question), by accretion, still their failure to register said
accretion for a period of fifty (50) years subjected said accretion to acquisition through prescription by third
persons. It is undisputed that petitioner has been in possession of the subject lots for more than fifty (50) years
and unless private respondents can show a better title over the subject lots, petitioners possession over the
property must be respected.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals. Dayrit, J.
The facts are stated in the opinion of the Court.
Edgardo V. Cruz for petitioner.
Magtanggol C. Gunigundo for private respondents.
PARAS, J.:

93

This is a petition for review on certiorari which seeks the reversal of: a) decision1 of the Court of Appeals dated
February 28, 1990 in CA-G.R. No. 19171 entitled JOSE REYNANTE versus HON. VALENTIN CRUZ, Judge, RTC of
Malolos, Bulacan, and HEIRS OF LEONCIO AND DOLORES CARLOS, et al., affirming the decision2 of the Regional
Trial Court of Malolos, Bulacan, Branch 8, Third Judicial Region which reversed the decision3 of the Municipal Trial
Court of Meycauayan, Bulacan, Branch I, Third Judicial Region in Civil Case No. 1526 entitled HEIRS OF LEONCIO
CARLOS & DOLORES A. CARLOS and HEIRS OF GORGONIO A. CARLOS & CONCEPCION CARLOS versus JOSE
REYNANTE: and b) the resolution denying the motion for reconsideration.
The facts as culled from the records of the case are as follows: More than 50 years ago, petitioner Jose Reynante
was taken as tenant by the late Don Cosme Carlos, owner and father-in-law of herein private respondents, over a
fishpond located at Barrio Liputan, Meycauayan, Bulacan with an area of 188.711 square meters, more or less and
covered by Transfer Certificate of Title No. 25618, Land Registry of Bulacan.
During the tenancy, petitioner Jose Reynante constructed a nipa hut where he and his family lived and took care of
the nipa palms (sasahan) he had planted on lots 1 and 2 covering an area of 5,096 square meters and 6,011
square meters respectively. These lots are located between the fishpond covered by TCT No. 25618 and the
Liputan (formerly Meycauayan) River. Petitioner harvested and sold said nipa palms without interference and
prohibition from anybody. Neither did the late Don Cosme Carlos question his right to plant the nipa palms near the
fishpond or to harvest and appropriate them as his own.
After the death of Don Cosme Carlos, his heirs (private respondents predecessors-in-interest) entered into a
written agreement denominated as SINUMPAANG SALAYSAY NG PAGSASAULI NG KARAPATAN dated November 29,
1984 with petitioner Jose Reynante whereby the latter for and in consideration of the sum of P200,000.00 turned
over the fishpond he was tenanting to the heirs of Don Cosme Carlos and surrendered all his rights therein as
caretaker or bantay-kasama at tagapamahala (Rollo, p. 77).
Pursuant to the said written agreement, petitioner surrendered the fishpond and the two huts located therein to
private respondents. Private respondents thereafter leased the said fishpond to one Carlos de la Cruz. Petitioner
continued to live in the nipa hut constructed by him on lots 1 and 2 and to take care of the nipa palms he had
planted therein.
On February 17, 1988, private respondents formally demanded that the petitioner vacate said portion since
according to them petitioner had already been indemnified for the surrender of his rights as a tenant. Despite
receipt thereof, petitioner refused and failed to relinquish possession of lots 1 and 2.
Hence, on April 22, 1988, private respondents filed a complaint for forcible entry with preliminary mandatory
injunction against petitioner alleging that the latter by means of strategy and stealth, took over the physical, actual
and material possession of lots 1 and 2 by residing in one of the kubos or huts bordering the Liputan River and
cutting off and/or disposing of the sasa or nipa palms adjacent thereto.
On January 10, 1989, the trial court rendered its decision dismissing the complaint and finding that petitioner had
been in prior possession of lots 1 and 2.
Private respondents appealed to the Regional Trial Court and on August 8, 1989 it rendered its decision, the
dispositive portion of which reads as follows:
WHEREFORE, this Court renders judgment in favor of the plaintiffs and against defendant and hereby reverses the
decision of the Court a quo. Accordingly, the defendant is ordered to restore possession of that piece of land
particularly described and defined as Lots 1 & 2 of the land survey conducted by Geodetic Engineer Restituto Buan
on March 2, 1983, together with the sasa or nipa palms planted thereon. No pronouncement as to attorneys fees.
Each party shall bear their respective costs of the suit.
SO ORDERED. (Rollo, p. 55; Decision, p. 4).
From said decision, petitioner filed with the Court of Appeals a petition for review (Rollo, p. 30; Annex A). On
February 28, 1990, the Court of Appeals rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the decision of the court a quo, being consistent with law and jurisprudence, is hereby AFFIRMED in
toto. The instant petition seeking to issue a restraining order is hereby denied.
SO ORDERED. (Rollo, p. 30; Decision, p. 3).
On November 5, 1990, the Court of Appeals denied the motion for reconsideration filed by petitioner (Rollo, p. 35;
Annex B).
Hence, this petition.

94

In its resolution dated May 6, 1991, the Second Division of this Court gave due course to the petition and required
both parties to file their respective memoranda (Rollo, p. 93).
The main issues to be resolved in this case are: a) who between the petitioner and private respondents has prior
physical possession of lots 1 and 2; and b) whether or not the disputed lots belong to private respondents as a
result of accretion.
An action for forcible entry is merely a quieting process and actual title to the property is never determined. A
party who can prove prior possession can recover such possession even against the owner himself. Whatever may
be the character of his prior possession, if he has in his favor priority in time, he has the security that entitles him
to remain on the property until he is lawfully ejected by a person having a better right by accion publiciana or
accion reinvindicatoria (German Management & Services, Inc. v. Court of Appeals, G.R. No. 76216, September 14,
1989, 177 SCRA 495, 498, 499). On the other hand, if a plaintiff cannot prove prior physical possession, he has no
right of action for forcible entry and detainer even if he should be the owner of the property (Lizo v. Carandang, 73
Phil. 469 [1942]).
Hence, the Court of Appeals could not legally restore private respondents possession over lots 1 and 2 simply
because petitioner has clearly proven that he had prior possession over lots 1 and 2.
The evidence on record shows that petitioner was in possession of the questioned lots for more than 50 years. It is
undisputed that he was the caretaker of the fishpond owned by the late Don Cosme Carlos for more than 50 years
and that he constructed a nipa hut adjacent to the fishpond and planted nipa palms therein. This fact is bolstered
by the SINUMPAANG SALAYSAY executed by Epifanio Lucero (Records, p. 66), Apolonio D. Morte (Records, p. 101)
and Carling Dumalay (Records, p. 103), all of whom are disinterested parties with no motive to falsify that can be
attributed to them, except their desire to tell the truth.
Moreover, an ocular inspection was conducted by the trial court dated December 2, 1988 which was attended by
the parties and their respective counsels and the court observed the following:
The Court viewed the location and the distance of the constructed nipa hut and the subject sasahan which
appears exists (sic) long ago, planted and stands (sic) adjacent to the fishpond and the dikes which serves (sic) as
passage way of water river of lot 1 and lot 2. During the course of the hearing, both counsel oberved a muniment
of title embedded on the ground which is located at the inner side of the pilapil separating the fishpond from the
subject sasa plant with a height of 20 to 25 feet from water level and during the ocular inspection it was judicially
observed that the controversial premises is beyond the titled property of the plaintiffs but situated along the
Liputan, Meycauayan River it being a part of the public domain. (Rollo, p. 51; Decision, p. 12).
On the other hand, private respondents based their claim of possession over lots 1 and simply on the written
agreement signed by petitioner whereby the latter surrendered his rights over the fishpond.
Evidently, the trial court did not err when it ruled that:
An examination of the document signed by the defendant (Exhibit B), shows that what was surrendered to the
plaintiffs was the fishpond and not the sasahan or the land on which he constructed his hut where he now lives.
That is a completely different agreement in which a tenant would return a farm or a fishpond to his landlord in
return for the amount that the landlord would pay to him as a disturbance compensation. There is nothing that
indicates that the tenant was giving other matters not mentioned in a document like Exhibit B. Moreover, when
the plaintiffs leased the fishpond to Mr. Carlos de la Cruz there was no mention that the lease included the hut
constructed by the defendant and the nipa palms planted by him (Exhibit 1), a circumstance that gives the
impression that the nipa hut and the nipa palms were not included in the lease to Mr. de la Cruz, which may not
belong to the plaintiffs. (Rollo, p. 49; Decision, p. 9).
With regard to the second issue, it must be noted that the disputed lots involved in this case are not included in
Transfer Certificate of Title No. 25618 as per verification made by the Forest Management Bureau, Department of
Environment and Natural Resources. That tract of land situated at Barrio Liputan, Meycauayan, Bulacan containing
an area of 1.1107 hectares as described in the plan prepared and surveyed by Geodetic Engineer Restituto Buan
for Jose Reynante falls within Alienable and Disposable Land (for fishpond development) under Project No. 15 per
B.F.L.C. Map No. 3122 dated May 8, 1987 (Rollo, p. 31; Decision, p. 2).
The respondent Court of Appeals ruled that lots 1 and 2 were created by alluvial formation and hence the property
of private respondents pursuant to Article 457 of the New Civil Code, to wit:
Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive
from the effects of the current of the waters.

95

Accretion benefits a riparian owner when the following requisites are present: (1) that the deposit be gradual and
imperceptible; (2) that it resulted from the effects of the current of the water; and (c) that the land where accretion
takes place is adjacent to the bank of a river (Republic v. Court of Appeals, G.R. No. L-61647, October 12, 1984,
132 SCRA 514, cited in Agustin v. Intermediate Appellate Court, G.R. Nos. 66075-76, July 5, 1990, 187 SCRA 218).
Granting without conceding that lots 1 and 2 were created by alluvial formation and while it is true that accretions
which the banks of rivers may gradually receive from the effect of the current become the property of the owner of
the banks, such accretion to registered land does not preclude acquisition of the additional area by another person
through prescription.
This Court ruled in the case of Ignacio Grande, et al. v. Hon. Court of Appeals, et al., G.R. No. L-17652, June 30,
1962, 115 Phil. 521 that:
An accretion does not automatically become registered land just because the lot which receives such accretion is
covered by a Torrens Title. Ownership of a piece of land is one thing; registration under the Torrens system of that
ownership is another. Ownership over the accretion received by the land adjoining a river is governed by the Civil
Code. Imprescriptibility of registered land is provided in the registration law. Registration under the Land
Registration and Cadastral Act does not vest or give title to the land, but merely confirms and, thereafter, protects
the title already possessed by the owner, making it imprescriptible by occupation of third parties. But to obtain this
protection, the land must be placed under the operation of the registration laws, wherein certain judicial
procedures have been provided.
Assuming private respondents had acquired the alluvial deposit (the lot in question), by accretion, still their failure
to register said accretion for a period of fifty (50) years subjected said accretion to acquisition through prescription
by third persons.
It is undisputed that petitioner has been in possession of the subject lots for more than fifty (50) years and unless
private respondents can show a better title over the subject lots, petitioners possession over the property must be
respected.
PREMISES CONSIDERED, the decision of the respondent Court of Appeals dated February 28, 1990 is REVERSED
and SET ASIDE and the decision of the Municipal Trial Court of Meycauayan, Bulacan, Branch I, is hereby
REINSTATED.
SO ORDERED.
Melencio-Herrera (Chairman, Actg. C.J.), Padilla, Regalado and Nocon, JJ., concur.
Decision reversed and set aside.
Notes.The main issue in action for unlawful detainer is determination of who between rival claimants has better
right of possession to the property. (Dalida vs. Court of Appeals, 117 SCRA 480.)
The requisites for land accretion to take place for benefit of riparian owner are: (1) that the deposit be gradual and
imperceptible (2) that it can be made through the effects of the current of the water; and (3) that the land where
accretion takes place is adjacent to the bank of rivers. (Republic vs. Court of Appeals, 132 SCRA 514.) Reynante vs.
Court of Appeals, 207 SCRA 794, G.R. No. 95907 April 8, 1992
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant and appellant, vs. COLEGIO DE SAN JOSE ET AL.,
claimants. COLEGIO DE SAN JOSE, appellee.
1 REGISTRATION OF LAND; LANDS BORDERING ON LAGUNA DE BAY; BED OF LAGUNA DE BAY.The natural bed or
basin of Laguna de Bay is the ground covered by its waters at their highest ordinary level during the dry season,
that is, from December to August. Their highest level during the rainy season, or from September to November, is
extraordinary.
2.ID.; ID.; OWNERSHIP AND PROPERTY.The two parcels of land in litigation form an integral part of the Hacienda
de San Pedro Tunasan belonging to the claimant Colegio de San Jose. These two parcels of land continue to be the
property of the claimant Colegio de San Jose though accidentally inundated by the waters of Laguna de Bay.
3.ID.; ID.; ID.; LAW OF WATERS; ACCESSION.Even supposing that the said two parcels of land have been formed
by accession or deposits of sediment by the waters of said Laguna de Bay, they still belong to the aforesaid
claimant Colegio de San Jose as owner of the land of the Hacienda de San Pedro Tunasan, which borders on the
said Laguna de Bay. (Art. 84, Law of Waters of August 3, 1866.)

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4.ID.; ID.; ID.; ID.The provisions of the Law of Waters regulating the ownership and use of sea waters are not
applicable to the ownership and use of lakes, which are governed by special provisions.
APPEAL from a judgment of the Court of First Instance of Laguna. Recto, J.
The facts are stated in the opinion of the court.
Attorney-General Jaranilla for appellant.
Vicente O. Romualdez for appellee.
VlLLA-REAL, J.:
This is an appeal taken by the Government of the Philippine Islands from a decision of the Court of First Instance of
Laguna, rendered in cadastral case No. 30, G. L. R. O. Record No. 359 of the municipality of San Pedro, Province of
Laguna, ordering the registration of the two parcels of land known as lots 1 and 2 described in the application, in
favor of the Colegio de San Jose in accordance with the provisions of law, without special pronouncement as to the
costs, it being understood, however, that the lease of said lands executed by the aforesaid Colegio de San Jose in
favor of Carlos Young y Baldwin is valid and subsists under the terms and conditions set forth in the instruments,
Exhibits Y-1 and Y-2, and providing for the issuance of the proper decree once said decision becomes final.
In support of the appeal, the appellant assigns the following alleged errors as committed by the court below in its
judgment, to wit:
"1. The lower court erred in not holding that the parcels of land in question are part of the bed of Laguna Lake and,
therefore, belong to the public domain.
"2. The lower court erred in finding that said lands are included in the title of the appellee and in finding that the
appellee has been in the possession and occupation of the same.
"3. The lower court erred in qualifying as extraordinary inundations the fact that the lands in dispute are under
water during the rainy season.
"4. The lower court erred in decreeing the registration of the lands in dispute to the appellee and in denying the
appellant's motion for a new trial."
The pertinent facts necessary to decide the questions of fact and of law raised in the instant appeal, are as f
ollows:
During the months of September, October and November every year, the waters of Laguna de Bay cover a long
strip of land along the eastern border of the two parcels of land in question, the width of which strip varies from 50
to 70 meters according to the evidence of the Colegio de San Jose and up to the eastern border of the pass claimed
by the municipality of San Pedro Tunasan, according to some witnesses for the Insular Government; and, according
to other witnesses for the Insular Government, the flooded strip includes the aforementioned pass itself, which is
usually completely covered with water, so that the people can fish in said flooded strip.
The claimant Colegio de San Jose contends, and its evidence tends to prove, that the above-named parcels of land
are a part of the Hacienda de San Pedro Tunasan belonging to said claimant, which has been in possession thereof
since time immemorial by means of its tenants or lessees and farmers.
On the other hand, the Government of the Philippine Islands contends that the said two parcels of land belong to
the public domain, and its evidence tends to prove that they have always been known as the shores of Laguna de
Bay, and they are situated alongside the highway running parallel to said shore; that the water of the lake has
receded a great distance on that side; that said parcels of land had been under water formerly; that at present,
during the rainy season, the water of the lake reaches the highway, and that when the water recedes the people of
the place occupy and cultivate said lands during the dry season.
The only question to be decided in the present appeal is whether the two aforesaid parcels of land in controversy
belong to the Hacienda de San Pedro Tunasan and are owned by the claimant Colegio de San Jose, or whether they
belong to the public domain as a part of the bed of Laguna de Bay.
It is of primary importance to determine whether the body of water called Laguna de Bay is naturally and legally a
lake or a lagoon.
The Enciclopedia Jurdica Espaola, volume XXI, pages 124 and 125, defines "lake" and "lagoon" as follows:

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"LAKE, A body of water formed in depressions of the earth. Ordinarily fresh water, coming from rivers, brooks, or
springs, and connected with the sea by them."
"LAGOON. A small lake, ordinarily of fresh water, and not very deep, fed by floods, the hollow bed of which is
bounded by elevations of land."
Laguna de Bay is a body of water formed in depressions of the earth; it contains fresh water coming from rivers
and brooks or springs, and is connected with Manila Bay by the Pasig River. According to the definition just quoted,
Laguna de Bay is a lake.
Inasmuch as Laguna de Bay is a lake, we must resort to the legal provisions governing the ownership and use of
lakes and their beds and shores, in order to determine the character and ownership of the parcels of land in
question.
Article 407 of the Civil Code says the following in its pertinent part:
"ART. 407, The following are of public ownership:
*

"4. Lakes and ponds formed by nature on public lands, and their channels."
*

And article 44 of the Law of Waters of August 3, 1866, provides as follows:

"ART. 44. Natural ponds and lakes existing upon public lands and fed by public waters, belong to the public
domain/'
*

It is beyond discussion that Laguna de Bay belongs to the public domain, being a natural lake existing upon public
lands, and fed by public waters from rivers, brooks and springs.
Now then, what is the bed of Laguna de Bay?
Article 74 of the Law of Waters cited above defines the bed of a lake as f ollows:
"ART. 74. The natural bed or basin of lakes, ponds, or pools, is the ground covered by their waters when at their
highest ordinary depth."
This definition raises the question: Which is the natural bed or basin of Laguna de Bay?
The evidence shows that during the dry season, that is, during the months of December, January, February, March,
April, May, June, July and August, the water of the lake at its highest depth reaches no farther than the line forming the northeastern boundary of the two parcels of land in controversy, and that it is only during the wet season,
that is, during the months of September, October and November that said water rises to the highway, completely
covering said parcels of land. Therefore, the waters of Laguna de Bay have two different levels during the year:
One during the dry season, which obtains during nine months, and the other during the wet season, which
continues for three months. Which of these two heights marks the land limit of the waters of Laguna de Bay, that
is, which of them forms its natural bed or basin? The law says, the highest ordinary depth. Now then, which of the
two aforesaid depths of the waters of Laguna de Bay is the ordinary one? The word "ordinary" is defined in the
Dictionary of the Spanish Academy as follows:
"ORDINARY. Not exceeding the average; common, natural, occurring always or most of the time; not going beyond
what often happens or takes place."
The word extraordinary is defined in the same dictionary as follows:
"EXTRAORDINARY. Uncommon, transcending the general rule, order, or measure; exceeding, surpassing, or going
beyond that which is ordinary, commonly met with, current, settled, or admitted by the majority."
According to the foregoing definitions of the words "ordinary" and "extraordinary," the highest depth of the waters
of Laguna de Bay during the dry season is the ordinary one, and the highest depth they attain during the rainy
season is the extraordinary one; inasmuch as the former is the one which is regular, common, natural, which
occurs always or most of the time during the year, while the latter is uncommon, transcends the general rule, order

98

or measure, and goes beyond that which is the ordinary depth. If, according to the definition given by article 74 of
the Law of Waters quoted above, the natural bed or basin of the lakes is the ground covered by their waters when
at their highest ordinary depth, the natural bed or basin of Laguna de Bay is the ground covered by its waters
when at their highest depth during the dry season, that is, up to the northeastern boundary of the two parcels of
land in question.
Inasmuch as, according to article 407 of the Civil Code, cited above, lakes and their beds belong to the public do
main. and inasmuch as, according to article 74 of the Law of Waters cited above, the bed of a lake is the ground
covered by its waters at their highest ordinary depth; whereas the waters of Laguna de Bay at their highest depth
reach no f arther than the northeastern boundary of the two parcels of land in question, said parcels are outside
said bed and, consequently, do not belong to the public domain.
The Government of the Philippine Islands also contends that as the waters of Laguna de Bay have receded very
much, as a result of which the two parcels of land under discussion, which had been under water before, were left
uncovered, the claimant Colegio de San Jose which owned the estate bordering upon said Laguna de Bay, did not
acquire said two parcels of land, in accordance with the provisions of article 367 of the Civil Code, as follows:
"ART. 367. The owners of estates bordering on ponds or lagoons, do not acquire the land left dry by the natural
decrease of the waters, nor lose those inundated by them in extraordinary floods."
As may be seen, the legal provision quoted above, cited by the appellant in support of its contention, refers to
ponds and lagoons, and has therefore no application to the case at bar, which refers to a lake, a lagoon being
legally distinct in character from a lake.
Having pointed out that the inundation of the two parcels of land in question during the months of September,
October and November, is extraordinary, the legal provision applicable to the case is that contained in article 77 of
the aforesaid Law of Waters, which reads:
"ART. 77. Lands accidentally inundated by the waters of lakes, or by creeks, rivers, and other streams, shall
continue to be the property of their respective owners."
If, as we have seen, the two parcels of land in litigation form no part of the bed of Laguna de Bay, and,
consequently, do not belong to the public domain, they must belong to the claimant Colegio de San Jose as a part
of the
Hacienda de San Pedro Tunasan, owned by it, the northeastern part of which borders on said lake, and in
accordance with the legal provision just quoted, the fact that they are inundated by its waters during extraordinary
risings, which take place during the months of September, October and November, does not deprive said claimant
of the ownership thereof.
Article 84 of the said Law of Waters further provides:
"ART. 84. Accretions deposited gradually upon lands contiguous to creeks, streams, rivers, and lakes, by accessions
or sediments from the waters thereof, belong to the owners of such lands."
*

Even if, therefore, the two parcels of land in litigation were considered as accretions gradually deposited by
accessions or sediments from the.waters of Laguna de Bay, they would still, according to the legal provision just
quoted, belong to the claimant Colegio de San Jose as owner of the lands bordering on said Laguna de Bay.
The appellant also contends that the two parcels of land form a part of the shores of Laguna de Bay and are
therefore of public ownership, citing paragraph 3 of article 1 of the Law of Waters, which says:
"ART. 1. The following are part of the national domain open to public use:
*

"3. The shores.By the shore is understood that space covered and uncovered by the movement of the tide. Its
interior or terrestrial limit is the line reached by the highest equinoctial tides. Where the tides are not appreciable,
the shore begins on the land side at the line reached by the sea during ordinary storms or tempests."
As the court below correctly held, this legal provision refers to the waters of the sea, being included under Title I,
which treats of the ownership and use of said waters of the sea. Lake waters, being terrestrial waters, their
ownership and use are governed by Title II of said Law of Waters. In the same manner as the shore of the sea is
that space covered and uncovered by the waters during tides, the exterior or terrestrial limit being the line reached

99

by the highest equinoctial tides, so the shore of a lake is that space covered and uncovered by the waters during
the tides, its interior or terrestrial limit being the line reached by its highest ordinary depth. In the instant case, the
interior or terrestrial limit of the Laguna de Bay is the ground covered by its waters in its highest ordinary depth,
that is, up to the northeastern boundary of the two parcels of land in question.
Summarizing, we find: (1) That the natural bed or basin of Laguna de Bay is the ground covered by its waters at
their highest ordinary depth during the dry season, that is, during the months of December, January, February,
March, April, May, June, July and August; (2) that the highest depth reached by said waters during the rainy season,
or during the months of September, October and November, is extraordinary; (3) that the two parcels of land in
litigation form an integral part of the Hacienda de San Pedro Tunasan belonging to the claimant Colegio de San
Jose; (4) that said two parcels of land, being accidentally inundated by the waters of Laguna de Bay continue to be
the property of the claimant Colegio de San Jose (art. 77, Law of Waters of August 3, 1866); (5) that even
supposing that the said two parcels of land have been formed by accession or deposits of sediment by the waters
of said Laguna de Bay, they still belong to the said claimant Colegio de San Jose, as owner of the land of the
Hacienda de San Pedro Tunasan, bordering on said Laguna de Bay (art. 84, Law of Waters of August 3, 1866); (6)
that the provisions of the Law of Waters regulating the ownership and use of the waters of the sea are not
applicable to the ownership and use of lakes, which are governed by special provisions.
In view of the foregoing considerations, we are of opinion and so hold, that the judgment appealed from should be
affirmed, without special pronouncement as to costs. So ordered.
Avancea, C. J., Johnson, Street, Villamor and Johns, JJ., concur.
Judgment affirmed. Government of the P. I. vs. Colegio de San Jose, 53 Phil. 423, No. 30829 August 28, 1929
MARIA DE LA CONCEPCION MARTINEZ CAAS, plaintiff and appellee, vs. MARIANO TUASON ET AL., defendants and
appellants.
1.REALTY; ACCRETION.The mere fact that a tract of land 30 hectares in extent was thirty years ago on the
Mariquina side of the San Mateo River, and is now on the Payatas side, is not sufficient to show that this tract now
belongs to Mariquina.
2.ID.; ID.; EVIDENCE.The evidence referred to in the opinion does not prove that a known portion of the hacienda
of Mariquina had been by the current of the San Mateo River separated therefrom and carried to the hacienda of
Payatas, on the other side of the river.
APPEAL from a judgment of the Court of Land Registration.
The facts are stated in the opinion of the court.
Palma, Gerona and Mercado, for appellants.
Carlos Casademunt, for appellees.
WILLARD, J.:
Maria de la Concepcin Martinez Caas filed a petition in the Court of Land Registration asking that she be
registered as the owner of the hacienda of Payatas, situated in the Province of Rizal. Mariano Tuason and others,
the owners of the hacienda of Mariquina, appeared in the Court of Land Registration, and objected to the
inscription asked for on the ground that they were the owners of a part of the land included in the petition. The
objection of Tuason and others was overruled, and judgment was entered in favor of the petitioner as prayed for in
her petition. Tuason and others excepted to the judgment and moved for a new trial on the ground that the
decision was not justified by the evidence. This motion was denied, to which denial they excepted, and they have
brought the case here by bill of exceptions.
The San Mateo River separates the hacienda of Payatas from the hacienda of Mariquina, and the controversy
relates to a tract of land about 30 hectares in extent, which appellants claim formerly belonged to the hacienda of
Mariquina, but which, by the action of the river, had been carried to the hacienda of Payatas. In 1894 or 1895 the
appellants took possession of the land in question, which was then on the west, or Payatas side of the river. For the
purpose of settling the conflicting claims of the parties to this tract of land, they on the 19th day of June, 1896,
made a contract by the terms of which they agreed that each one of the respective parties should appoint a civil
engineer as an expert; that the two engineers after an examination of the land and of such evidence as might be
presented to them, should make a report in which they should set forth the causes which had occasioned the
changes in the course of the San Mateo River and also the principles of law which were applicable to the case. It
was provided, further, that this report should be submitted to a member of the bar in Manila, who, as judge, should

100

decide to whom the lands which had been gained by the respective owners by reason of the alterations in the
course of the river, belonged. Each one of the parties, in accordance with this agreement, appointed a civil
engineer. They met, examined the ground, heard the evidence of witnesses, and not agreeing as to the manner in
which the changes in the course of the river had been effected, filed separate reports. The expert appointed by the
owner of the hacienda of Payatas was of the opinion that the change had been gradual, and that the land in
question belonged to the owner of that estate. The expert appointed by the owners of the hacienda of Mariquina
thought that the change in the course of the river had been sudden or abrupt, and that the land in question
belonged to the owners of the Mariquina estate. This report, together with the testimony of the witnesses
presented before the engineers, was submitted to the arbitrator in 1897, but by reason of the disturbed condition
of the country at that time he never made any report thereon. In this case the parties agreed in the Court of Land
Registration that the case should be decided with reference to the facts agreed upon, and documents which were
submitted to the arbitrator, and that the same effect should be given to the reports of the experts and to the
testimony of the witnesses who appeared before the experts, as if they had testified in the Court of Land
Registration. It was also admitted that since the time when the owners of the hacienda of Mariquina had taken
possession of the property in question the extent thereof had been increasing, and that the river had eaten away
and was still eating away the opposite bank, belonging to the hacienda of Mariquina. The parties agree that the law
applicable to the case is that which now appears in articles 366, 368, and 374 of the Civil Code. These articles are
as follows:
"ART. 366. The accretions which banks of rivers may gradually receive from the effects of the currents belong to
the owners of the estates bordering thereon.
"ART. 368. When the current of a river, creek, or torrent detaches from an estate fronting thereon a known portion
of land and transfers it to another estate, the owner of the estate to which the detached part belonged retains the
ownership thereof.
"ART. 374. When the current of a river divides itself into branches, leaving an estate or part thereof isolated the
owner of the same retains his ownership. He also retains it if a portion of the land is separated from the estate by
the current."
If article 366 is applicable the judgment should be affirmed. If article 368 or 374 is applicable, the judgment should
be reversed.
The area of the land claimed by Mariquina, which is now on the Payatas side of the river, is about 30 hectares. At
what time this tract of land was on the other side of the river, does not clearly appear. The first map of the
hacienda, made in 1746, and the one made in 1845, have been lost. There is no evidence to show when the land
was carried over to the Payatas side; there is no evidence that it was done at any particular time; there is no
evidence of any sudden change in the course of the river by which it left its former bed and made a new one, nor is
there any indication on the ground of any abandoned bed. The only evidence in the case to show that this tract of
land of 30 hectares had been separated by the current and transported to the other side of the river is the
testimony of some of the witnesses examined before the engineers in 1896. The witnesses for Mariquina then
testified that they remembered that about thirty years before the river had run upon the west side of the tract of
land in question. The witnesses for Payatas, with one exception, all testified to the contrary.
As to the manner in which the land had been separated from the Mariquina estate, one witness for that estate
testified that the river ate away the bank piece by piece, some of the pieces being of the size of 2 or 3 balitas.
Three balitas are about equal to 1 hectare. Two other witnesses testified that the river changed its course 4 yards
every year; another witness testified that he did not remember how the change took place; three other witnesses
testified that the river took away every year large pieces from the Mariquina shore, of 4 or 6 yards in width;
another witness limited the size of the pieces to 2 or 4 yards. The only witness who testified to a sudden change of
the bed of the river was Pedro Trinidad, but he could not point out the former bed. Two other witnesses testified
that the river took away the east bank to the width of 10 yards, and in pieces of the superficial area of a balita, but
made no islands; another witness limited the size of the pieces to 6 yards. No one of these witnesses declared how
frequently during the year these pieces were separated. No witness declared that any of the pieces so separated
had been carried to the other side of the river. This fact alone shows that the testimony of the witnesses is not
sufficient to bring the case under article 368. Although a piece of land of the size of a hectare may have been
separated from Mariquina, yet if it were destroyed by the river and were not carried to Payatas, article 368 would
not apply. We are inclined to think that what the witnesses observed was,- as testified by one or two of them, that
the bank was eaten away every year to a certain extent by the riverthat is, that the river, to use the word
employed by the counsel for the appellants in their brief, destroyed the bank of the river. From the evidence in the
case it is impossible to say that the current of this river has separated from the Mariquina estate a known parcel of
land and has transported it to the Payatas side, The mere fact that thirty years ago the land new in question was
on the Mariquina side of the river is not sufficient to prove that article 368 is applicable.

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It is to be observed that the engineer appointed by the Mariquina estate placed no reliance upon the testimony of
these witnesses. He based his opinion upon what he called a scientific demonstration of the fact that the change of
the river must have been sudden and not gradual, and this is the basis of the first three items of proof mentioned
in the brief of the appellant in this case.
In this same case in the court below the pueblo of San Mateo objected to the inscription of the land, claiming that
four parcels of land which are now upon the San Mateo side of the river, and which were claimed by the petitioner,
belonged, not to the petitioner, but to San Mateo. The court below decided this claim in favor of the petitioner,
basing it upon the ground that the evidence upon that part of the case showed that the land had been transferred
from the Payatas side of the river to the San Mateo side by a sudden change in 1888. The appellant in this case
insists that the decision of the court below is inconsistent, in that it holds that in the case of San Mateo the change
of the river was sudden, while in the case of the hacienda of Mariquina it was gradual. When the proofs in each
case are examined, however, no such inconsistency is apparent. The evidence in the case of San Mateo, presented
by San Mateo itself, showed that the river in 1888 changed its course, and that the old bed of the river was still
visible. No such evidence was presented in this part of the case.
The judgment of the court below, so far as it relates to the opposition of Tuason et al. is affirmed, with the costs of
this instance against the appellants. After the expiration of twenty days judgment shall be entered in accordance
herewith and the case remanded to the lower court for execution. So ordered.
Arellano, C. J., Torres, Mapa, Johnson, and Carson, JJ., concur.
Judgment affirmed. Caas vs. Tuason, 5 Phil. 688, No. 2500 March 8, 1906
G.R. No. 98045. June 26, 1996.*
DESAMPARADO VDA. DE NAZARENO and LETICIA NAZARENO TAPIA, petitioners, vs. THE COURT OF APPEALS, MR. &
MRS. JOSE SALASALAN, MR. & MRS. LEO RABAYA, AVELINO LABIS, HON. ROBERTO G. HILARIO, ROLLEO I. IGNACIO,
ALBERTO M. GILLERA and HON. ABELARDO G. PALAD, JR., in their official and/or private capacities, respondents.
Public Lands; Property; Accretion; Requisites of Accretion.In the case of Meneses v. CA, this Court held that
accretion, as a mode of acquiring property under Art. 457 of the Civil Code, requires the concurrence of these
requisites: (1) that the deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the
action of the waters of the river (or sea); and (3) that the land where accretion takes place is adjacent to the banks
of rivers (or the sea coast). These are called the rules on alluvion which if present in a case, give to the owners of
lands adjoining the banks of rivers or streams any accretion gradually received from the effects of the current of
waters.
Same; Same; Same; Words and Phrases; Claimants, not having met the first and second requirements of the rules
on alluvion, cannot claim the rights of riparian owner.In Hilario v. City of Manila, this Court held that the word
current indicates the participation of the body of water in the ebb and flow of waters due to high and low tide.
Petitioners submission not having met the first and second requirements of the rules on alluvion, they cannot
claim the rights of a riparian owner.
Administrative Law; When findings of administrative agencies are accorded not only respect but finality.This
Court has often enough held that findings of administrative agencies which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Again, when
said factual findings are affirmed by the Court of Appeals, the same are conclusive on the parties and not
reviewable by this Court.
Public Lands; Property; Accretion; The requirement that the deposit should be due to the effect of the current of the
river is indispensable.In Republic v. CA, this Court ruled that the requirement that the deposit should be due to
the effect of the current of the river is indispensable. This excludes from Art. 457 of the Civil Code all deposits
caused by human intervention. Putting it differently, alluvion must be the exclusive work of nature. Thus, in
Tiongco v. Director of Lands, et al., where the land was not formed solely by the natural effect of the water current
of the river bordering said land but is also the consequence of the direct and deliberate intervention of man, it was
deemed a man-made accretion and, as such, part of the public domain.
Same; Same; Same; The dumping of boulders, soil and other filling materials into the creek and river bounding the
land, the same would still be part of the public domain.In the case at bar, the subject land was the direct result of
the dumping of sawdust by the Sun Valley Lumber Co. consequent to its sawmill operations. Even if this Court were
to take into consideration petitioners submission that the accretion site was the result of the late Antonio
Nazarenos labor consisting in the dumping of boulders, soil and other filling materials into the Balacanas Creek
and Cagayan River bounding his land, the same would still be part of the public domain.

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Same; Same; Same; Jurisdiction; When Bureau of Lands and Office of the Secretary of Agriculture and Natural
Resources have jurisdiction over the land.Having determined that the subject land is public land, a fortiori, the
Bureau of Lands, as well as the Office of the Secretary of Agriculture and Natural Resources have jurisdiction over
the same in accordance with the Public Land Law. Accordingly, the court a quo dismissed petitioners complaint for
non-exhaustion of administrative remedies which ruling the Court of Appeals affirmed.
Administrative Law; Exhaustion of Administrative Remedies; When administrative remedies have been exhausted.
However, this Court agrees with petitioners that administrative remedies have been exhausted. Petitioners could
not have intended to appeal to respondent Ignacio as an Officer-In-Charge of the Bureau of Lands. The decision
being appealed from was the decision of respondent Hilario who was the Regional Director of the Bureau of Lands.
Said decision was made for and by authority of the Director of Lands. It would be incongruous to appeal the
decision of the Regional Director of the Bureau of Lands acting for the Director of the Bureau of Lands to an OfficerIn-Charge of the Bureau of Lands.
Same; Same; When the Undersecretary of Agriculture and Natural Resources may modify, adopt, or set aside the
orders or decisions of Director of Lands.In any case, respondent Rolleo Ignacios official designation was
Undersecretary of the Department of Agriculture and Natural Resources. He was only an Officer-In-Charge of
the Bureau of Lands. When he acted on the late Antonio Nazarenos motion for reconsideration by affirming or
adopting respondent Hilarios decision, he was acting on said motion as an Undersecretary on behalf of the
Secretary of the Department. In the case of Hamoy v. Secretary of Agriculture and Natural Resources, this Court
held that the Undersecretary of Agriculture and Natural Resources may modify, adopt, or set aside the orders or
decisions of the Director of Lands with respect to questions involving public lands under the administration and
control of the Bureau of Lands and the Department of Agriculture and Natural Resources. He cannot, therefore, be
said to have acted beyond the bounds of his jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. 141.
Public Lands; Property; Accretion; Jurisdiction; When Director of Lands has jurisdiction over the land.As borne out
by the administrative findings, the controverted land is public land, being an artificial accretion of sawdust. As
such, the Director of Lands has jurisdiction, authority and control over the same, as mandated under Sections 3
and 4 of the Public Land Law (C.A. No. 141) which states, thus: Sec. 3. The Secretary of Agriculture and Natural
Resources shall be the exclusive officer charged with carrying out the provisions of this Act through the Director of
Lands who shall act under his immediate control. Sec. 4. Subject to said control, the Director of Lands shall have
direct executive control of the survey, classification, lease, sale or any other form of concession or disposition and
management of the lands of the public domain, and his decisions as to questions of fact shall be conclusive when
approved by the Secretary of Agriculture and Natural Resources.
Same; Same; When the execution of the order was issued not arbitrarily and capricious.In connection with the
second issue, petitioners ascribe whim, arbitrariness or capriciousness in the execution order of public respondent
Abelardo G. Palad, the Director of Lands. This Court finds otherwise since said decision was based on the
conclusive finding that the subject land was public land. Thus, this Court agrees with the Court of Appeals that the
Director of Lands acted within his rights when he issued the assailed execution order, as mandated by the
aforecited provisions.
Same; Same; When Director of Lands is authorized to exercise executive control of public domain.As Director of
Lands, respondent Palad is authorized to exercise executive control over any form of concession, disposition and
management of the lands of the public domain. He may issue decisions and orders as he may see fit under the
circumstances as long as they are based on the findings of fact.
Same; Same; When Director of Lands acts within his jurisdiction in disposing public lands.In the case of Calibo v.
Ballesteros, this Court held that where, in the disposition of public lands, the Director of Lands bases his decision
on the evidence thus presented, he clearly acts within his jurisdiction, and if he errs in appraising the evidence, the
error is one of judgment, but not an act of grave abuse of discretion annullable by certiorari. Thus, except for the
issue of non-exhaustion of administrative remedies, this Court finds no reversible error nor grave abuse of
discretion in the decision of the Court of Appeals.
PETITION for review of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Manolo L. Tagarda, Sr. for petitioners.
Arturo R. Legaspi for private respondents.
ROMERO, J.:

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Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno Tapia challenge the decision of the Court of
Appeals which affirmed the dismissal of petitioners complaint by the Regional Trial Court of Misamis Oriental,
Branch 22. The complaint was for annulment of the verification, report and recommendation, decision and order of
the Bureau of Lands regarding a parcel of public land.
The only issue involved in this petition is whether or not petitioners exhausted administrative remedies before
having recourse to the courts.
The subject of this controversy is a parcel of land situated in Telegrapo, Puntod, Cagayan de Oro City. Said land was
formed as a result of sawdust dumped into the dried-up Balacanas Creek and along the banks of the Cagayan river.
Sometime in 1979, private respondents Jose Salasalan and Leo Rabaya leased the subject lots on which their
houses stood from one Antonio Nazareno, petitioners predecessor-in-interest. In the latter part of 1982, private
respondents allegedly stopped paying rentals. As a result, Antonio Nazareno and petitioners filed a case for
ejectment with the Municipal Trial Court of Cagayan de Oro City, Branch 4. A decision was rendered against private
respondents, which decision was affirmed by the Regional Trial Court of Misamis Oriental, Branch 20.
The case was remanded to the municipal trial court for execution of judgment after the same became final and
executory. Private respondents filed a case for annulment of judgment before the Regional Trial Court of Misamis
Oriental, Branch 24 which dismissed the same. Antonio Nazareno and petitioners again moved for execution of
judgment but private respondents filed another case for certiorari with prayer for restraining order and/or writ of
preliminary injunction with the Regional Trial Court of Misamis Oriental, Branch 25 which was likewise dismissed.
The decision of the lower court was finally enforced with the private respondents being ejected from portions of the
subject lots they occupied.
Before he died, Antonio Nazareno caused the approval by the Bureau of Lands of the survey plan designated as
Plan Csd-106-00571 with a view to perfecting his title over the accretion area being claimed by him. Before the
approved survey plan could be released to the applicant, however, it was protested by private respondents before
the Bureau of Lands.
In compliance with the order of respondent District Land Officer Alberto M. Gillera, respondent Land Investigator
Avelino G. Labis conducted an investigation and rendered a report to the Regional Director recommending that
Survey Plan No. MSI-10-06-000571-D (equivalent to Lot No. 36302, Cad. 237) in the name of Antonio Nazareno, be
cancelled and that private respondents be directed to file appropriate public land applications.
Based on said report, respondent Regional Director of the Bureau of Lands Roberto Hilario rendered a decision
ordering the amendment of the survey plan in the name of Antonio Nazareno by segregating therefrom the areas
occupied by the private respondents who, if qualified, may file public land applications covering their respective
portions.
Antonio Nazareno filed a motion for reconsideration with respondent Rolleo Ignacio, Undersecretary of the
Department of Natural Resources and Officer-in-Charge of the Bureau of Lands who denied the motion. Respondent
Director of Lands Abelardo Palad then ordered him to vacate the portions adjudicated to private respondents and
remove whatever improvements they have introduced thereon. He also ordered that private respondents be placed
in possession thereof.
Upon the denial of the late Antonio Nazarenos motion for reconsideration, petitioners Desamparado Vda. de
Nazareno and Leticia Tapia Nazareno, filed a case before the RTC, Branch 22 for annulment of the following: order
of investigation by respondent Gillera, report and recommendation by respondent Labis, decision by respondent
Hilario, order by respondent Ignacio affirming the decision of respondent Hilario and order of execution by
respondent Palad. The RTC dismissed the complaint for failure to exhaust administrative remedies which resulted in
the finality of the administrative decision of the Bureau of Lands.
On appeal, the Court of Appeals affirmed the decision of the RTC dismissing the complaint. Applying Section 4 of
C.A. No. 141, as amended, it contended that the approval of the survey plan belongs exclusively to the Director of
Lands. Hence, factual findings made by the Metropolitan Trial Court respecting the subject land cannot be held to
be controlling as the preparation and approval of said survey plans belong to the Director of Lands and the same
shall be conclusive when approved by the Secretary of Agriculture and Natural Resources.1
Furthermore, the appellate court contended that the motion for reconsideration filed by Antonio Nazareno cannot
be considered as an appeal to the Office of the Secretary of Agriculture and Natural Resources, as mandated by
C.A. No. 141 inasmuch as the same had been acted upon by respondent Undersecretary Ignacio in his capacity as
Officer-in-Charge of the Bureau of Lands and not as Undersecretary acting for the Secretary of Agriculture and
Natural Resources. For the failure of Antonio Nazareno to appeal to the Secretary of Agriculture and Natural
Resources, the present case does not fall within the exception to the doctrine of exhaustion of administrative

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remedies. It also held that there was no showing of oppressiveness in the manner in which the orders were issued
and executed.
Hence, this petition.
Petitioners assign the following errors:
I. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE
DECISION OF THE LOWER COURT WHICH IS CONTRARY TO THE PREVAILING FACTS AND THE LAW ON THE MATTER;
II. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE
DECISION OF THE LOWER COURT DISMISSING THE ORIGINAL CASE WHICH FAILED TO CONSIDER THAT THE
EXECUTION ORDER OF PUBLIC RESPONDENT ABELARDO G. PALAD, JR., DIRECTOR OF LANDS, MANILA, PRACTICALLY
CHANGED THE DECISION OF PUBLIC RESPONDENT ROBERTO HILARIO, REGIONAL DIRECTOR, BUREAU OF LANDS,
REGION 10, THUS MAKING THE CASE PROPER SUBJECT FOR ANNULMENT WELL WITHIN THE JURISDICTION OF THE
LOWER COURT.
The resolution of the above issues, however, hinges on the question of whether or not the subject land is public
land. Petitioners claim that the subject land is private land being an accretion to his titled property, applying Article
457 of the Civil Code which provides:
To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the
effects of the current of the waters.
In the case of Meneses v. CA,2 this Court held that accretion, as a mode of acquiring property under Art. 457 of the
Civil Code, requires the concurrence of these requisites: (1) that the deposition of soil or sediment be gradual and
imperceptible; (2) that it be the result of the action of the waters of the river (or sea); and (3) that the land where
accretion takes place is adjacent to the banks of rivers (or the sea coast). These are called the rules on alluvion
which if present in a case, give to the owners of lands adjoining the banks of rivers or streams any accretion
gradually received from the effects of the current of waters.
For petitioners to insist on the application of these rules on alluvion to their case, the above-mentioned requisites
must be present. However, they admit that the accretion was formed by the dumping of boulders, soil and other
filling materials on portions of the Balacanas Creek and the Cagayan River bounding their land.3 It cannot be
claimed, therefore, that the accumulation of such boulders, soil and other filling materials was gradual and
imperceptible, resulting from the action of the waters or the current of the Balacanas Creek and the Cagayan River.
In Hilario v. City of Manila,4 this Court held that the word current indicates the participation of the body of water
in the ebb and flow of waters due to high and low tide. Petitioners submission not having met the first and second
requirements of the rules on alluvion, they cannot claim the rights of a riparian owner.
In any case, this court agrees with private respondents that petitioners are estopped from denying the public
character of the subject land, as well as the jurisdiction of the Bureau of Lands when the late Antonio Nazareno
filed his Miscellaneous Sales Application MSA (G-6) 571.5 The mere filing of said Application constituted an
admission that the land being applied for was public land, having been the subject of Survey Plan No. MSi-10-06000571-D (Equivalent to Lot No. 36302, Cad-237) which was conducted as a consequence of Antonio Nazarenos
Miscellaneous Sales Application wherein said land was described as an orchard. Said description by Antonio
Nazareno was, however, controverted by respondent Labis in his investigation report to respondent Hilario based
on the findings of his ocular inspection that said land actually covers a dry portion of Balacanas Creek and a
swampy portion of Cagayan River. The investigation report also states that, except for the swampy portion which is
fully planted to nipa palms, the whole area is fully occupied by a part of a big concrete bodega of petitioners and
several residential houses made of light materials, including those of private respondents which were erected by
themselves sometime in the early part of 1978.6
Furthermore, the Bureau of Lands classified the subject land as an accretion area which was formed by deposits of
sawdust in the Balacanas Creek and the Cagayan river, in accordance with the ocular inspection conducted by the
Bureau of Lands.7 This Court has often enough held that findings of administrative agencies which have acquired
expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even
finality.8 Again, when said factual findings are affirmed by the Court of Appeals, the same are conclusive on the
parties and not reviewable by this Court.9
It is this Courts irresistible conclusion, therefore, that the accretion was man-made or artificial. In Republic v. CA,10
this Court ruled that the requirement that the deposit should be due to the effect of the current of the river is
indispensable. This excludes from Art. 457 of the Civil Code all deposits caused by human intervention. Putting it
differently, alluvion must be the exclusive work of nature. Thus, in Tiongco v. Director of Lands, et al.,11 where the
land was not formed solely by the natural effect of the water current of the river bordering said land but is also the

105

consequence of the direct and deliberate intervention of man, it was deemed a man-made accretion and, as such,
part of the public domain.
In the case at bar, the subject land was the direct result of the dumping of sawdust by the Sun Valley Lumber Co.
consequent to its sawmill operations.12 Even if this Court were to take into consideration petitioners submission
that the accretion site was the result of the late Antonio Nazarenos labor consisting in the dumping of boulders,
soil and other filling materials into the Balacanas Creek and Cagayan River bounding his land,13 the same would
still be part of the public domain.
Having determined that the subject land is public land, a fortiori, the Bureau of Lands, as well as the Office of the
Secretary of Agriculture and Natural Resources have jurisdiction over the same in accordance with the Public Land
Law. Accordingly, the court a quo dismissed petitioners complaint for non-exhaustion of administrative remedies
which ruling the Court of Appeals affirmed.
However, this Court agrees with petitioners that administrative remedies have been exhausted. Petitioners could
not have intended to appeal to respondent Ignacio as an Officer-In-Charge of the Bureau of Lands. The decision
being appealed from was the decision of respondent Hilario who was the Regional Director of the Bureau of Lands.
Said decision was made for and by authority of the Director of Lands.14 It would be incongruous to appeal the
decision of the Regional Director of the Bureau of Lands acting for the Director of the Bureau of Lands to an OfficerIn-Charge of the Bureau of Lands.
In any case, respondent Rolleo Ignacios official designation was Undersecretary of the Department of Agriculture
and Natural Resources. He was only an Officer-In-Charge of the Bureau of Lands. When he acted on the late
Antonio Nazarenos motion for reconsideration by affirming or adopting respondent Hilarios decision, he was
acting on said motion as an Undersecretary on behalf of the Secretary of the Department. In the case of Hamoy v.
Secretary of Agriculture and Natural Resources,15 this Court held that the Undersecretary of Agriculture and
Natural Resources may modify, adopt, or set aside the orders or decisions of the Director of Lands with respect to
questions involving public lands under the administration and control of the Bureau of Lands and the Department
of Agriculture and Natural Resources. He cannot, therefore, be said to have acted beyond the bounds of his
jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. 141.16
As borne out by the administrative findings, the controverted land is public land, being an artificial accretion of
sawdust. As such, the Director of Lands has jurisdiction, authority and control over the same, as mandated under
Sections 3 and 4 of the Public Land Law (C.A. No. 141) which states, thus:
Sec. 3. The Secretary of Agriculture and Natural Resources shall be the exclusive officer charged with carrying out
the provisions of this Act through the Director of Lands who shall act under his immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have direct executive control of the survey, classification,
lease, sale or any other form of concession or disposition and management of the lands of the public domain, and
his decisions as to questions of fact shall be conclusive when approved by the Secretary of Agriculture and Natural
Resources.
In connection with the second issue, petitioners ascribe whim, arbitrariness or capriciousness in the execution
order of public respondent Abelardo G. Palad, the Director of Lands. This Court finds otherwise since said decision
was based on the conclusive finding that the subject land was public land. Thus, this Court agrees with the Court of
Appeals that the Director of Lands acted within his rights when he issued the assailed execution order, as
mandated by the aforecited provisions.
Petitioners allegation that respondent Palads execution order directing them to vacate the subject land practically
changed respondent Hilarios decision is baseless. It is incorrect for petitioners to assume that respondent Palad
awarded portions of the subject land to private respondents Salasalans and Rabayas as they had not yet been
issued patents or titles over the subject land. The execution order merely directed the segregation of petitioners
titled lot from the subject land which was actually being occupied by private respondents before they were ejected
from it. Based on the finding that private respondents were actually in possession or were actually occupying the
subject land instead of petitioners, respondent Palad, being the Director of Lands and in the exercise of his
administrative discretion, directed petitioners to vacate the subject land on the ground that private respondents
have a preferential right, being the occupants thereof.
While private respondents may not have filed their application over the land occupied by them, they nevertheless
filed their protest or opposition to petitioners Miscellaneous Sales Application, the same being preparatory to the
filing of an application as they were in fact directed to do so. In any case, respondent Palads execution order
merely implements respondent Hilarios order. It should be noted that petitioners own application still has to be
given due course.17

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As Director of Lands, respondent Palad is authorized to exercise executive control over any form of concession,
disposition and management of the lands of the public domain.18 He may issue decisions and orders as he may
see fit under the circumstances as long as they are based on the findings of fact.
In the case of Calibo v. Ballesteros,19 this Court held that where, in the disposition of public lands, the Director of
Lands bases his decision on the evidence thus presented, he clearly acts within his jurisdiction, and if he errs in
appraising the evidence, the error is one of judgment, but not an act of grave abuse of discretion annullable by
certiorari. Thus, except for the issue of non-exhaustion of administrative remedies, this Court finds no reversible
error nor grave abuse of discretion in the decision of the Court of Appeals.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Regalado (Chairman), Puno, Mendoza and Torres, Jr., JJ., concur.
Petition dismissed.
Notes.Director of Lands has no authority to grant a free patent over land that has passed to private ownership
and which has thereby ceased to be public land. Any title thus issued or conveyed by him would be null and void.
(Ferrer vs. Bautista, 231 SCRA 257 [1994])
It is only after the issuance of a Free Patent and title that the Government is divested of its ownership of the land
subject of said grant. (Javier vs. Court of Appeals, 231 SCRA 498 [1994]) Vda. de Nazareno vs. Court of Appeals,
257 SCRA 589, G.R. No. 98045 June 26, 1996

107