SECOND DIVISION

[ G.R. No. 173252, July 17, 2009 ]

UNISOURCE COMMERCIAL AND DEVELOPMENT
CORPORATION, PETITIONER, VS. JOSEPH CHUNG, KIAT
CHUNG AND KLETO CHUNG, RESPONDENTS.

DECISION

QUISUMBING, J.:

The instant petition assails the Decision[1] dated October 27, 2005 and the
Resolution[2] dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No. 76213.
The appellate court had reversed and set aside the Decision[3] dated August 19, 2002
of the Regional Trial Court of Manila, Branch 49, in Civil Case No. 00-97526.

The antecedent facts are as follows:

Petitioner Unisource Commercial and Development Corporation is the

registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No.
176253[4] of the Register of Deeds of Manila. The title contains a memorandum of
encumbrance of a voluntary easement which has been carried over from the Original
Certificate of Title of Encarnacion S. Sandico. The certified English translation[5] of
the annotation reads:

By order dated 08 October 1924 of the Court of First Instance of Manila,

Chamber IV (AP-7571/T-23046), it is declared that Francisco Hidalgo y Magnifico has
the right to open doors in the course of his lot described as Lot No. 2, Block 2650 of
the map that has been exhibited, towards the left of the Callejon that is used as a
passage and that appears as adjacent to the said Lot 2 and to pass through the land
of Encarnacion Sandico y Santana, until the bank of the estero that goes to the Pasig
River, and towards the right of the other Callejon that is situated between the said
Lot 2 and Lot 4 of the same Block N.[6]

As Sandico's property was transferred to several owners, the memorandum of

encumbrance of a voluntary easement in favor of Francisco M. Hidalgo was
consistently annotated at the back of every title covering Sandico's property until TCT
No. 176253 was issued in petitioner's favor. On the other hand, Hidalgo's property
was eventually transferred to respondents Joseph Chung, Kiat Chung and Cleto
Chung under TCT No. 121488.[7]

On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of

Voluntary Easement of Right of Way[8] on the ground that the dominant estate has
an adequate access to a public road which is Matienza Street. The trial court
dismissed the petition on the ground that it is a land registration case. Petitioner
moved for reconsideration. Thereafter, the trial court conducted an ocular inspection
of the property. In an Order[9] dated November 24, 2000, the trial court granted the
motion and made the following observations:

1. The dominant estate is a property enclosed with a concrete fence with no less than
three (3) doors in it, opening to an alley belonging to the servient estate owned by
the petitioner. The alley is leading to Matienza St.;

2. The dominant estate has a house built thereon and said house has a very wide
door accessible to Matienza St. without any obstruction. Said street is perpendicular
to J.P. Laurel St.

1
 It is therefore found that the dominant estate has an egress to Matienza St.
and does not have to use the servient estate.[10]

In their Answer,[11] respondents countered that the extinguishment of the

easement will be of great prejudice to the locality and that petitioner is guilty of
laches since it took petitioner 15 years from acquisition of the property to file the
petition.

In a Decision dated August 19, 2002, the trial court ordered the cancellation
of the encumbrance of voluntary easement of right of way in favor of the dominant
estate owned by respondents. It found that the dominant estate has no more use for
the easement since it has another adequate outlet to a public road which is Matienza
Street. The dispositive portion of the decision reads:

IN VIEW OF ALL THE FOREGOING, the Court hereby orders the cancellation of
the Memorandum of Encumbrance annotated in TCT No. 176253 which granted a
right of way in favor of the person named therein and, upon the finality of this
decision, the Register of Deeds of the City of Manila is hereby directed to cancel said
encumbrance.

With respect to the other prayers in the petition, considering that the same
are mere incidents to the exercise by the owners of right of their ownership which
they could well do without the Court's intervention, this Court sees no need to
specifically rule thereon. The Court cannot award plaintiff's claims for damages and
attorney's fees for lack of sufficient bases therefor.

SO ORDERED.[12]

Respondents appealed to the Court of Appeals. On October 27, 2005, the

appellate court reversed the decision of the trial court and dismissed the petition to
cancel the encumbrance of voluntary easement of right of way.

The appellate court ruled that when petitioner's petition was initially dismissed
by the executive judge, the copy of the petition and the summons had not yet been
served on respondents. Thus, when petitioner moved to reconsider the order of
dismissal, there was no need for a notice of hearing and proof of service upon
respondents since the trial court has not yet acquired jurisdiction over them. The trial
court acquired jurisdiction over the case and over respondents only after the
summons was served upon them and they were later given ample opportunity to
present their evidence.

The appellate court also held that the trial court erred in canceling the
encumbrance of voluntary easement of right of way. The appellate court ruled that
Article 631(3)[13] of the Civil Code, which was cited by the trial court, is inapplicable
since the presence of an adequate outlet to a highway extinguishes only legal or
compulsory easements but not voluntary easements like in the instant case. There
having been an agreement between the original parties for the provision of an
easement of right of way in favor of the dominant estate, the same can be
extinguished only by mutual agreement or by renunciation of the owner of the
dominant estate.

The decretal portion of the decision reads:

WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the
assailed decision is REVERSED and SET ASIDE. Accordingly, the petition to cancel
the encumbrance of right of way is dismissed for lack of merit.

No costs.

2
SO ORDERED.[14]

Before us, petitioner alleges that the Court of Appeals erred in:

I.

... BRUSHING ASIDE PETITIONER'S CONTENTION THAT THE EASEMENT IS

PERSONAL SINCE THE ANNOTATION DID NOT PROVIDE THAT IT IS BINDING ON THE
HEIRS OR ASSIGNS OF SANDICO.

II.

... NOT CONSIDERING THAT THE EASEMENT IS PERSONAL SINCE NO

COMPENSATION WAS GIVEN TO PETITIONER.

III.

... DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT.

IV.

... TREATING THE EASEMENT AS PREDIAL.[15]

Petitioner contends that the fact that Sandico and Hidalgo resorted to judicial
intervention only shows that they contested the existence of the requisite factors
establishing a legal easement. Besides, the annotation itself provides that the
easement is exclusively confined to the parties mentioned therein, i.e., Sandico and
Hidalgo. It was not meant to bind their heirs or assigns; otherwise, they would have
expressly provided for it. Petitioner adds that it would be an unjust enrichment on
respondents' part to continue enjoying the easement without adequate compensation
to petitioner. Petitioner also avers that to say that the easement has attached to
Hidalgo's property is erroneous since such property no longer exists after it has been
subdivided and registered in respondents' respective names.[16] Petitioner further
argues that even if it is bound by the easement, the same can be cancelled or revoked
since the dominant estate has an adequate outlet without having to pass through the
servient estate.

Respondents adopted the disquisition of the appellate court as their counter-

arguments.

The petition lacks merit.

As defined, an easement is a real right on another's property, corporeal and

immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his property, for the benefit of
another person or tenement. Easements are established either by law or by the will
of the owner. The former are called legal, and the latter, voluntary easements.[17]

In this case, petitioner itself admitted that a voluntary easement of right of

way exists in favor of respondents. In its petition to cancel the encumbrance of
voluntary easement of right of way, petitioner alleged that "[t]he easement is
personal. It was voluntarily constituted in favor of a certain Francisco Hidalgo y
Magnifico, the owner of [the lot] described as Lot No. 2, Block 2650."[18] It further
stated that "the voluntary easement of the right of way in favor of Francisco Hidalgo
y Magnifico was constituted simply by will or agreement of the parties. It was not a

3
statutory easement and definitely not an easement created by such court order
because `[the] Court merely declares the existence of an easement created by the
parties."[19] In its Memorandum[20] dated September 27, 2001, before the trial court,
petitioner reiterated that "[t]he annotation found at the back of the TCT of Unisource
is a voluntary easement."[21]

Having made such an admission, petitioner cannot now claim that what exists
is a legal easement and that the same should be cancelled since the dominant estate
is not an enclosed estate as it has an adequate access to a public road which is
Callejon Matienza Street.[22] As we have said, the opening of an adequate outlet to a
highway can extinguish only legal or compulsory easements, not voluntary
easements like in the case at bar. The fact that an easement by grant may have also
qualified as an easement of necessity does not detract from its permanency as a
property right, which survives the termination of the necessity.[23] A voluntary
easement of right of way, like any other contract, could be extinguished only by
mutual agreement or by renunciation of the owner of the dominant estate.[24]

Neither can petitioner claim that the easement is personal only to Hidalgo since
the annotation merely mentioned Sandico and Hidalgo without equally binding their
heirs or assigns. That the heirs or assigns of the parties were not mentioned in the
annotation does not mean that it is not binding on them. Again, a voluntary easement
of right of way is like any other contract. As such, it is generally effective between
the parties, their heirs and assigns, except in case where the rights and obligations
arising from the contract are not transmissible by their nature, or by stipulation or
by provision of law.[25] Petitioner cites City of Manila v. Entote[26] in justifying that the
easement should bind only the parties mentioned therein and exclude those not so
mentioned. However, that case is inapplicable since the issue therein was whether
the easement was intended not only for the benefit of the owners of the dominant
estate but of the community and the public at large.[27] In interpreting the easement,
the Court ruled that the clause "any and all other persons whomsoever" in the
easement embraces only "those who are privy to the owners of the dominant estate,
Lots 1 and 2 Plan Pcs-2672" and excludes "the indiscriminate public from the
enjoyment of the right-of-way easement."[28]

We also hold that although the easement does not appear in respondents' title
over the dominant estate, the same subsists. It is settled that the registration of the
dominant estate under the Torrens system without the annotation of the voluntary
easement in its favor does not extinguish the easement. On the contrary, it is the
registration of the servient estate as free, that is, without the annotation of the
voluntary easement, which extinguishes the easement.[29]

Finally, the mere fact that respondents subdivided the property does not
extinguish the easement. Article 618 [30] of the Civil Code provides that if the
dominant estate is divided between two or more persons, each of them may use the
easement in its entirety, without changing the place of its use, or making it more
burdensome in any other way.

WHEREFORE, the instant petition is DENIED. The Decision dated October 27, 2005
and the Resolution dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No.
76213 are AFFIRMED.

SO ORDERED.

Carpio Morales, Chico-Nazario,* Leonardo-De Castro,** and Brion, JJ., concur.

*
Designated member of the Second Division per Special Order No. 658.

4
**
Designated member of the Second Division per Special Order No. 635.

[1]
Rollo, pp. 26-34. Penned by Associate Justice Josefina Guevara-Salonga, with
Associate Justices Delilah Vidallon-Magtolis and Fernanda Lampas Peralta concurring.

[2]
Id. at 35-36. Penned by Associate Justice Josefina Guevara-Salonga, with
Associate Justices Godardo A. Jacinto and Fernanda Lampas Peralta concurring.
[3]
Records, pp. 233-238. Penned by Judge Concepcion S. Alarcon-Vergara.
[4]
Id. at 10.
[5]
Id. at 11-12.

[6]
Id. at 12.

[7]
Id. at 50.
[8]
Id. at 1-8.

[9]
Id. at 34.
[10]
Id.

[11]
Id. at 42-47.

[12]
Id. at 237-238.
[13]
ART. 631. Easements are extinguished:

x x x x

(3) When either or both of the estates fall into such condition that the easement
cannot be used; but it shall revive if the subsequent condition of the estates or either
of them should again permit its use, unless when the use becomes possible, sufficient
time for prescription has elapsed, in accordance with the provisions of the preceding
number;
[14]
Rollo, p. 33.
[15]
Id. at 17-18.

Id. at 37-39. On May 3, 2005, the property was divided and TCT Nos. 267948,
[16]

267949 and 267950 were issued to respondents.

Private Development Corporation of the Philippines v. Court of Appeals, G.R. No.

[17]

136897, November 22, 2005, 475 SCRA 591, 602.

[18]
Records, p. 2.
[19]
Id. at 3-4.

[20]
Id. at 132-142.
[21]
Id. at 135.

[22]
Id. at 4.

La Vista Association, Inc. v. Court of Appeals, G.R. No. 95252, September 5,

[23]

1997, 278 SCRA 498, 514.

5
[24]
Id. at 513.
[25]
CIVIL CODE, Art. 1311.

[26]
No. L-24776, June 28, 1974, 57 SCRA 497.

[27]
Id. at 504.
[28]
Id. at 507.
[29]
Purugganan v. Paredes, No. L-23818, January 21, 1976, 69 SCRA 69, 77-78.

[30]
ART. 618. Easements are indivisible. If the servient estate is divided between two
or more persons, the easement is not modified, and each of them must bear it on
the part which corresponds to him.

If it is the dominant estate that is divided between two or more persons, each of
them may use the easement in its entirety, without changing the place of its use, or
making it more burdensome in any other way.

SECOND DIVISION
[ G.R. No. 194488, February 11, 2015 ]
ALICIA B. REYES, PETITIONER, VS. SPOUSES VALENTIN
RAMOS, FRANCISCO S. AND ANATALIA RESPONDENTS.

DECISION

LEONEN, J.:

This is a Rule 45 Petition[1] of the Court of Appeals Decision[2] dated August 12, 2010
and of the Court of Appeals Resolution[3] dated October 28, 2010.

On March 28, 2006, petitioner Alicia B. Reyes, through Dolores B. Cinco,[4] filed a
Complaint[5] before the Regional Trial Court of Malolos, Bulacan, for easement of
right of way against respondents, Spouses Francisco S. Valentin and Anatalia
Ramos.[6]

In her Complaint before the Regional Trial Court, petitioner alleged that she was the
registered owner of a 450-square-meter parcel of land in Barangay Malibong Bata,
Pandi, Bulacan, designated as Lot No. 3-B-12 and covered by TCT No. T-343642-
(M).[7] The property used to be a portion of Lot No. 3-B[8] and was surrounded by
estates belonging to other persons.[9]

Petitioner also alleged that respondents' 1,500-square-meter property surrounded

her property, and that it was the only adequate outlet from her property to the
highway.[10] A 113-square-meter portion of respondents' property was also the "point
least prejudicial to the [respondents]."[11] The easement sought was the vacant
portion near the boundary of respondents' other lot.[12]
(please see image: G.R. No. 194488, page 2.)

Figure 1. Drawing showing the location of petitioner's and respondents'

properties in relation to the proposed easement. Petitioner's property is located
on the leftmost part of the drawing. Respondents' property and the proposed 113-
square-meter easement are located on the drawing's right side that contains

6
petitioner's property. Barangay Malibong Bata Road can be seen on the rightmost
part of the drawing.
Petitioner insisted that her property was not isolated because of her own acts.[14]
When her mother gave the property to her as part of her inheritance, there was no
intention for the property to have no outlet.[15]

According to petitioner, her and respondents' lots were previously owned by her
mother. Respondents' lot was given to Dominador Ramos (Dominador) who allegedly
was respondents' predecessor-in-interest. Dominador was also her mother's brother
and caretaker of properties.[16]

Only 500 square meters were given to Dominador. Part of the 1,500 square meters
was intended as a right of way. Dominador was tasked to prepare the documents.
But, instead of limiting the conveyance to himself to 500 square meters of the
property, he conveyed the whole 1,500 square meters, including that which was
supposed to be the access to the barangay road.[17]

Petitioner's mother only learned about what Dominador did when a meeting was
called in 1989 regarding the implementation of the Comprehensive Agrarian Reform
Program.[18] She did not cause the recovery of her title because at that time, the
Register of Deeds of Bulacan was razed by fire, causing the destruction of the
documents covering the subject properties. Dominador was also her brother, whom
she presumed would give her a right of way to the main road. Instead of giving way,
however, he closed the passage, causing petitioner's property's isolation.[19]

Despite demands and willingness to pay the amount, respondents refused to accede
to petitioner's claims.[20]

In their Answer,[21] respondents contended that the isolation of petitioner's property

was due to her mother's own act of subdividing the property among her children
without regard to the pendency of an agrarian case between her and her tenants.[22]
The property chosen by petitioner as easement was also the most burdensome for
respondents.[23] Respondents pointed to an open space that connected petitioner's
property to another public road.[24]

Upon agreement by the parties, the Branch Clerk of Court conducted an ocular
inspection of the premises in February 2007, in the presence of the parties.[25]

After an Ocular Inspection Report[26] was submitted on March 2, 2007, the case was
considered submitted for decision.[27]

On April 11, 2007, the trial court issued its Decision,[28] dismissing the Complaint for
easement of right of way, thus:[29]

WHEREFORE, finding the prayer for a grant of compulsory easement of right of way
on a 113 square meter portion of defendants' property to be devoid of merit, the
same is hereby DENIED. Consequently, the case is ordered DISMISSED with no
pronouncements as to damages and costs.[30]

The trial court found that petitioner's proposed right of way was not the least onerous
to the servient estate of respondents.[31] It noted that the proposed right of way
would pass through improvements, such as respondents' garage, garden, and
grotto.[32] The trial court also noted the existence of an irrigation canal that limited
access to the public road.[33] However, the trial court pointed out that "[o]ther than
the existing irrigation canal, no permanent improvements/structures can be seen
standing on the subject rice land."[34] Moreover, the nearby landowner was able to
construct a bridge to connect a property to the public road.[35] Hence, "[t]he way
through the irrigation canal would . . . appear to be the shortest and easiest way to
reach the barangay road."[36]

7
Petitioner appealed the Regional Trial Court's Decision.[37]

On August 12, 2010, the Court of Appeals denied petitioner's appeal and affirmed in
toto the Regional Trial Court's Decision.[38] It found no reversible error in the trial
court's decision to dismiss petitioner's complaint.[39] Petitioner failed to discharge the
burden of proving the existence of the requisites for the grant of easement.[40] The
Court of Appeals also found that petitioner's property had an adequate outlet to the
public road.[41]

Petitioner's Motion for Reconsideration dated September 8, 2010 was denied by the
Court of Appeals in a Resolution promulgated on October 28, 2010.[42]

Petitioner filed this Petition on December 22, 2010[43] to assail the Decision and
Resolution of the Court of Appeals.[44]

We are asked to determine whether petitioner has the compulsory easement of right
of way over respondents' property.

Petitioner argued that the Regional Trial Court and the Court of Appeals failed to
consider that it was not her property that was adjacent to the irrigation canal but her
sister's. Her property was surrounded by other estates belonging to other persons.
Hence, she had to pass through other properties before reaching the irrigation
canal.[45]

Moreover, even if she traversed the other properties, she would only end up on the
bank of the irrigation canal without means to cross over.[46] The fact that she had to
construct a bridge over the irrigation canal supported her position that there was
indeed no adequate outlet from her property to the public road.[47] In any case, a
bridge will necessarily be an obstruction on the public road.[48]

Petitioner further argued, citing Quimen v. Court of Appeals,[49] that "[t]he owner of
the dominant estate can demand a right of way through the servient estate provided
he indemnifies the owner thereof for the beneficial use of his property."[50]

In their Comment[51] on the Petition, respondents argued that this case is already
barred by prior judgment.[52] Petitioner's predecessor-in-interest and her children had
already previously filed an action for easement of right of way against respondents.[53]
That case had already been dismissed in favor of respondents.[54] The reason for the
dismissal of the case was the possibility of constructing a bridge over the irrigation
canal.[55] Respondents further argued that the easement must be real and not
fictitious.[56]

The petition has no merit.

The issue of ownership is irrelevant

to the case; filing of a complaint for
easement is a recognition of the servient
property owner's rights

Petitioner points out that respondents' property was previously owned by her mother.
She alleged that her uncle who was her mother's caretaker of property fraudulently
caused the titling of the whole 1,500-square-meter property instead of just the 500-
square-meter portion under his name.[57]

These allegations are relevant only if we are determining the issue of the property's
ownership. However, this is not an issue in this case. Petitioner does not question the
ownership or the registration of respondents' title over the property. We are limited

8
to the issue of petitioner's easement rights. On that matter, petitioner's act of filing
a Complaint for easement of right of way is an acknowledgement that the property
is owned by respondents. It is tantamount to a waiver of whatever right or claim of
ownership petitioner had over the property.

II

Petitioner failed to satisfy the Civil

Code requirements for the grant of
easement rights

The acts of petitioner's predecessor-in-interest necessarily affect petitioner's rights

over the property. One of the requirements for the grant of an easement of right of
way is that the isolation of the property is not due to the acts of the dominant estate's
owners.

As shown in the pleadings submitted to the trial court, petitioner and respondents
had conflicting claims on this issue. Petitioner alleged that it was her uncle,
Dominador, who caused the isolation of her property through his act of appropriating
for himself the whole property entrusted to him by her mother. Moreover, he closed
the passage from petitioner's property to the public road.

On the other hand, respondents alleged that the isolation was due to the acts of
petitioner's predecessor-in-interest. She allegedly subdivided the property in favor of
her children, including petitioner, without regard to the pending dispute over the
property. If the latter is true, petitioner could not claim any right to compulsory
easement even if it was not she who caused the property's isolation. Petitioner is
bound by her predecessor-in-interest's act of causing the isolation of her property.

Assuming, however, that petitioner or her mother did not cause the isolation of
petitioner's property, petitioner still cannot be granted the easement of right of way
over the proposed portion of respondents' property. This is because she failed to
satisfy the requirements for an easement of right of way under the Civil Code.

Articles 649 and 650 of the Civil Code provide the requisites of an easement of right
of way:

ART. 649. The owner, or any person who by virtue of a real right may cultivate or
use any immovable, which is surrounded by other immovables pertaining to other
persons and without adequate outlet to a public highway, is entitled to demand a
right of way through the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be continuous
for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the
damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the
estate surrounded by others and for the gathering of its crops through the servient
estate without a permanent way, the indemnity shall consist in the payment of the
damage caused by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the
proprietor's own acts.

ART. 650. The easement of right of way shall be established at the point least
prejudicial to the servient estate, and, insofar as consistent with this rule, where the
distance from the dominant estate to a public highway may be the shortest.

9
Based on these provisions, the following requisites need to be established before a
person becomes entitled to demand the compulsory easement of right of way:[58]

1. An immovable is surrounded by other immovables belonging to other

persons, and is without adequate outlet to a public highway;

2. Payment of proper indemnity by the owner of the surrounded immovable;

3. The isolation of the immovable is not due to its owner's acts; and

4. The proposed easement of right of way is established at the point least

prejudicial to the servient estate, and insofar as consistent with this rule,
where the distance of the dominant estate to a public highway may be the
shortest.

An easement of right of way is a real right. When an easement of right of way is

granted to another person, the rights of the property's owner are limited.[59] An owner
may not exercise some of his or her property rights for the benefit of the person who
was granted the easement of right of way. Hence, the burden of proof to show the
existence of the above conditions is imposed on the person who seeks the easement
of right of way.[60]

We agree with the Regional Trial Court's and the Court of Appeals' findings that
petitioner failed to establish that there was no adequate outlet to the public highway
and that the proposed easement was the least prejudicial to respondents' estate.

There is an adequate exit to a public highway.

This court explained in Dichoso, Jr. v. Marcos[61] that the convenience of the dominant
estate's owner is not the basis for granting an easement of right of way, especially if
the owner's needs may be satisfied without imposing the easement.[62] Thus:

Mere convenience for the dominant estate is not what is required by law as the basis
of setting up a compulsory easement. Even in the face of necessity, if it can be
satisfied without imposing the easement, the same should not be imposed.

Also in Flow v. Llenado, we refused to impose a right of way over petitioner's property
although private respondent's alternative route was admittedly inconvenient because
he had to traverse several ricelands and rice paddies belonging to different persons,
not to mention that said passage is impassable during the rainy season.

And in Ramos, Sr. v. Gatchalian Realty, Inc., this Court refused to grant the easement
prayed for even if petitioner had to pass through lots belonging to other owners, as
temporary ingress and egress, which lots were grassy, cogonal, and greatly
inconvenient due to flood and mud because such grant would run counter to the
prevailing jurisprudence that mere convenience for the dominant estate does not
suffice to serve as basis for the easement.[63] (Citations omitted)

Access to the public highway can be satisfied without imposing an easement on

respondents' property.

The Ocular Inspection Report reads, in part:

Upon reaching the said place, pictures were taken in the presence of both parties and
their respective counsel. The undersigned observed that fronting the lot where the
house of the defendant is erected, is Brgy. Malibong Bata public road. The property
of the plaintiff is located at the back of defendant's lot. Plaintiff, through her counsel,
requested that the side portion of defendants' lot where the latter's garage and a

10
grotto are erected or a portion of defendants' newly acquired adjacent lot be the right
of way. This was objected to by Atty. Batalla arguing that to grant the same is more
prejudicial to the defendants considering that the improvements thereon will be
affected and that there is another existing public road which is nearer to the plaintiff's
property. Atty. Sali admitted that there is another existing public road but the right
of way cannot be done as there is more or less four-meter wide irrigation before
reaching the said public road.

In order to confirm if there is indeed another existing public road which is nearer to
plaintiff's property, the undersigned together with the above-mentioned court
personnel and the parties and their respective counsel, proceeded to the said place.
True enough, there is a public road also named Brgy. Malibong Bata public road,
fronting plaintiff's property. However, there is more or less four-meter wide irrigation
before reaching the said public road. It was also confirmed that the two properties of
the plaintiff are between the public road which is adjacent to the irrigation. Atty. Sali
manifested that they already requested before the officers of the National Irrigation
Administration (NIA) for the grant of the right of way but the same was disapproved.
Atty. Batalla pointed out that there are already some concrete bridges nearby the
properties of the plaintiff.[64]

Based on the Ocular Inspection Report, petitioner's property had another outlet to
the highway. In between her property and the highway or road, however, is an
irrigation canal, which can be traversed by constructing a bridge, similar to what was
done by the owners of the nearby properties.

There is, therefore, no need to utilize respondents' property to serve petitioner's

needs. Another adequate exit exists. Petitioner can use this outlet to access the public
roads.

The outlet referred to in the Ocular Inspection Report may be longer and more
inconvenient to petitioner because she will have to traverse other properties and
construct a bridge over the irrigation canal before she can reach the road. However,
these reasons will not justify the imposition of an easement on respondents' property
because her convenience is not the gauge in determining whether to impose an
easement of right of way over another's property.[65]

Petitioner also failed to satisfy the requirement of "least prejudicial to the servient
estate."

Article 650 of the Civil Code provides that in determining the existence of an
easement of right of way, the requirement of "least prejudice] to the servient estate"
trumps "distance [between] the dominant estate [and the] public highway."
"Distance" is considered only insofar as it is consistent to the requirement of "least
prejudice."

This court had already affirmed the preferred status of the requirement of "least
prejudice" over distance of the dominant estate to the public highway.[66] Thus, in
Quimen, this court granted the longer right of way over therein respondent's property
because the shorter route required that a structure of strong materials needed to be
demolished. This court said:

[T]he court is not bound to establish what is the shortest distance; a longer way may
be adopted to avoid injury to the servient estate, such as when there are
constructions or walls which can be avoided by a round about way, or to secure the
interest of the dominant owner, such as when the shortest distance would place the
way on a dangerous decline.

The criterion of least prejudice to the servient estate must prevail over the criterion
of shortest distance although this is a matter of judicial appreciation. While shortest

11
distance may ordinarily imply least prejudice, it is not always so as when there are
permanent structures obstructing the shortest distance; while on the other hand, the
longest distance may be free of obstructions and the easiest or most convenient to
pass through. In other words, where the easement may be established on any of
several tenements surrounding the dominant estate, the one where the way is
shortest and will cause the least damage should be chosen. However, as elsewhere
stated, if these two (2) circumstances do not concur in a single tenement, the way
which will cause the least damage should be used, even if it will not be the
shortest.[68] (Citation omitted)

Petitioner would have permanent structures such as the garage, garden, and grotto
already installed on respondent's property destroyed to accommodate her
preferred location for the right of way.

The cost of having to destroy these structures, coupled with the fact that there is an
available outlet that can be utilized for the right of way, negates a claim that
respondents' property is the point least prejudicial to the servient estate.

An easement is a limitation on the owner's right to use his or her property for the
benefit of another. By imposing an easement on a property, its owner will have to
forego using it for whatever purpose he or she deems most beneficial. Least
prejudice, therefore, is about the suffering of the servient estate. Its value is not
determined solely by the price of the property, but also by the value of the owner's
foregone opportunity for use, resulting from the limitations imposed by the
easement.[69]

Imposing an easement on the part of respondents' property for petitioner's benefit

would cost respondents not only the value of the property but also the value of
respondents' opportunity to use the property as a garage or a garden with a grotto.

Petitioner may use another outlet, which may provide longer access from her
property to the public highway, but is free from obstructions. The four-meter wide
irrigation canal may be traversed upon construction of a bridge. As noted by the trial
court:

A neighboring land owner was able to construct a short concrete bridge wide enough
even for vehicles to pass through the irrigation canal from his property to the
barangay road. The Court sees no reason why plaintiff could not do the same and
why it would not be allowed if carried in accordance with the requirements set by
NIA.[70]

Contrary to petitioner's assertion, a reading of the August 17, 2005 National Irrigation
Administration Letter-Response[71] to petitioner's query regarding the possibility of
constructing a concrete bridge over the irrigation canal shows that petitioner was not
really disallowed from constructing a bridge. She was merely given certain conditions,
thus:

Wherefore, this office could not negate such decision.[72] However, request for grant
of right of way for the construction of bridge over an irrigation canal could be granted
subject to the following conditions[:] (1) that the landowner will shoulder the cost of
construction subject to the design and specifications approved by this office[;] (2)
construction schedule must be informed for inspection[;] (3) subject construction will
not impede the free flow of irrigation water[;] (4) distance between bridges will not
hamper our mechanical equipment to move freely within the area during clearing
schedule; (5) active participation of the landowner in the clearing and maintenance
of the canal for continuous water flow; (6) any violation of the above conditions will
mean revocation of the permit and any damage to the canal structures will mean
restoration of the landowner at his own cost.[73]

12
It is true that an easement of right of way may be granted even if the construction
of the bridge was allowed. However, in determining if there is an adequate outlet or
if the choice of easement location is least prejudicial to the servient estate, this court
cannot disregard the possibility of constructing a bridge over the four-meter-wide
canal. This court must consider all the circumstances of the case in determining
whether petitioner was able to show the existence of all the conditions for the
easement of right of way.

The Regional Trial Court and the Court of Appeals also considered the aspect of
necessity for an easement in determining petitioner's rights.

The trial court found that there is still no necessity for an easement of right of way
because petitioner's property is among the lots that are presently being tenanted by
Dominador and Filomena Ramos' children.[74] Petitioner is yet to use her property.
The Complaint for easement was found to have been filed merely "for future
purposes."[75] Thus, according to the Court of Appeals, "[a]dmittedly, there is no
immediate and imperative need for the construction of a right of way as the dominant
estate and its surrounding properties remain as agricultural lands under tenancy."[76]

The aspect of necessity may not be specifically included in the requisites for the grant
of compulsory easement under the Civil Code. However, this goes into the question
of "least prejudice." An easement of right of way imposes a burden on a property and
limits the property owner's use of that property. The limitation imposed on a property
owner's rights is aggravated by an apparent lack of necessity for which his or her
property will be burdened.

III

The case is not barred by prior judgment

Respondents argued in their Comment that the case was already barred by prior
judgment because petitioner's predecessor-in-interest and her siblings had already
filed an action for easement against respondents in 2004. This case, according to
respondents, had already been dismissed because of the existence of another public
road or highway, which can be accessed after the construction of a bridge over the
irrigation canal.[77]

Respondents alleged that petitioner's predecessor-in-interest not only subdivided her

property among her children, which included petitioner. Petitioner's predecessor-in-
interest also converted her property from farmland to home lots. This, respondents
argued, is prohibited under Section 73(c) and 73(e), and Section 74 of the
Comprehensive Agrarian Reform Law.[78] Hence, the conversion was illegal, and this
case still involves the predecessor-in-interest's property prior to its subdivision.[79]

In her Reply,[80] petitioner argued that the property was not barred by prior judgment
because she was already the registered owner of her property before the complaint
for easement was filed by her mother and her siblings. She was not a party to that
case.[81]

Dismissal of a case on the ground of res judicata requires that a final judgment must
have been rendered between the same parties over the same subject matter and
cause of action.[82]

Even if it is true that this and the alleged previous case involve the same issue, there
can be no res judicata if there is no identity of parties and/or subject matter. For
purposes of determining if there is identity of parties, two different persons may be
considered as one identity if they represent the same interest or cause.[83]

13
Based on the records, petitioner's certificate of title was issued in her name on April
12, 1999.[84] If as admitted by respondents, the previous case for easement was filed
in 2004 and petitioner was not represented in the case, then there could have been
no identity of the parties and subject matter. Petitioner's interest could not have been
represented by her predecessor-in-interest or by her siblings because none of them
were the owners of petitioner's property in 2004.

Respondents' insistence that the cases involve the same interests because the alleged
conversion of petitioner's predecessor-in-interest's property from farmland to home
lots was illegal involves the determination of whether there was such conversion. The
determination of whether there was conversion may be relevant to the issue of the
validity of petitioner's title but is not relevant to the issue of the existence of
petitioner's easement rights. This determination needs proper reception and
assessment of evidence, which is not the province of this court. That issue should be
threshed out in a separate case directly attacking petitioner's certificate of title.

WHEREFORE, the Court of Appeals Decision promulgated on August 12, 2010 and
its Resolution promulgated on October 28, 2010 are AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Velasco Jr. J.,* Del Castillo, and Mendoza, JJ., concur.

*
Designated Acting Member per S.O. No. 1910 dated January 12, 2015.
[1]
Rollo, pp. 11-62.
[2]
Id. at 64-75. The Decision was penned by Associate Justice Josefina Guevara-
Salonga and concurred in by Associate Justices Mariflor P. Punzalan Castillo and
Samuel H. Gaerlan of the Special Fourth Division.
[3]
Id. at 16-11. The Resolution was penned by Associate Justice Josefina Guevara-
Salonga and concurred in by Associate Justices Mariflor P. Punzalan Castillo and
Samuel H. Gaerlan of the Former Special Fourth Division.
[50]
Rollo, p. 47.

Id. at 338-339, citing Costabella Corporation v. Court of Appeals, 271 Phil. 350,
[56]

359 (1991) [Per J. Sarmiento, Second Division].

[57]
Id. at 18 and 65-66.
[58]
See Bacolod-Murcia Milling Co., Inc., et al. v. Capitol Subdivision, Inc., et al., 124
Phil. 128, 132-133 (1966) [Per J. J.B.L. Reyes, En Banc].

[59]
See Cristobal v. Court of Appeals, 353 Phil. 318, 328 (1998) [Per J. Bellosillo,
First Division].
[60]
Cristobal v. Court of Appeals, 353 Phil. 318, 327 (1998) [Per J. Bellosillo, First
Division], citing Costabella Corporation v. Court of Appeals, 271 Phil. 350, 358 (1991)
[Per J. Sarmiento, Second Division], which in turn cited Locsin v. Climaco, G.R. No.
L-27319, January 31, 1969, 26 SCRA 816, 836 [Per J. Castro, En Bane], Angela
Estate, Inc. v. Court of First Instance ofNegros Occidental, 133 Phil. 561, 574 (1968)
[Per J. Castro, En Banc], and Bacolod-Murcia Milling Co., Inc., et al. v. Capitol
Subdivision, Inc., et al., 124 Phil. 128, 133 (1966) [Per J. J.B.L. Reyes, En Banc].

[61]
G.R. No. 180282, April 11, 2011, 647 SCRA 495 [Per J.Nachura, Second Division].

[62]
Id. at 504.

14
 Id. at 504-505. See also Cristobal v. Court of Appeals, 353 Phil. 318, 328-329
[63]

(1998) [Per J. Bellosillo, First Division].

[64]
Rollo, p. 134.
[65]
Dichoso, Jr. v. Marcos, G.R. No. 180282, April 11, 2011, 647 SCRA 495, 504 [Per
J. Nachura, Second Division].

[66]
Cristobal v. Court of Appeals, 353 Phil. 318, 329 (1998) [Per J. Bellosillo, First
Division]. Quimen v. Court of Appeals, 326 Phil. 969, 979 (1996) [Per J. Bellosillo,
First Division].

[67]
Quimen v. Court of Appeals, 326 Phil. 969, 981 (1996) [Per J. Bellosillo, First
Division].

[68]
Id. at 973-979.

PAUL A. SAMUELSON AND WILLIAM D. NORDHAUS, ECONOMICS 13 (18th ed.,

[69]

2005). Opportunity cost is defined as "[t]he cost of the forgone alternative[.]"

[70]
Rollo, p. 161.
[71]
Id. at 120.

[72]
The said Decision refers to the Regional Trial Court Decision dated August 4, 2005,
"denying the request of the Cinco family for easement of right of way from the
Valentin family, stating that the adequate and shorter way to the barangay road is
the irrigation canal." (Rollo, p. 120.)

See Archbishop of Manila v. Director of Lands, 35 Phil. 339, 351 (1916) [Per J.
[82]

Torres, En Banc]; University of the Philippines v. Court of Appeals, G.R. No. 97827,
February 9, 1993, 218 SCRA 728, 737 [Per J. Romero, Third Division].

See also University of the Philippines v. Court of Appeals, G.R. No. 97827,
[83]

February 9, 1993, 218 SCRA 728, 737-738 [Per J. Romero, Third Division].
[84]
Rollo, p. 84.

618 Phil. 170

THIRD DIVISION
[ G.R. No. 172077, October 09, 2009 ]
BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE, INC.
(BAPCI), PETITIONER, VS. EDMUNDO O. OBIAS, PERFECTO O.
OBIAS, VICTOR BAGASINA, ELENA BENOSA, MELCHOR
BRANDES, ROGELIO MONTERO, PEDRO MONTERO, CLAUDIO
RESARI, PILAR GALON, ANTONIO BUISON, PRUDENCIO
BENOSA, JR., MARIA VILLAMER AND ROBERTO PADUA,
RESPONDENT.

DECISION

15
PERALTA, J.:

Before this Court is a Petition for Review on certiorari[1] under Rule 65 of the Rules
of Court, seeking to set aside the August 24, 2005 Decision[2] and March 28, 2006
Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 59016.

The facts of the case:

Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) was

established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO constructed
a road ("the disputed road") - measuring approximately 7 meters wide and 2.9
kilometers long. The disputed road was used by BISUDECO in hauling and
transporting sugarcane to and from its mill site (Pensumil) and has thus become
indispensable to its sugar milling operations.[4]

On October 30, 1992, petitioner Bicol Agro-Industrial Producers Cooperative, Inc.

acquired the assets of BISUDECO. On April 19, 1993, petitioner filed a Complaint[5]
against respondents Edmundo Obias, Perfecto Obias, Victor Bagasina, Elena Benosa,
Melchor Brandes, Rogelio Montero, Pedro Montero, Claudio Resari, Pilar Galon,
Antonio Buison, Prudencio Benosa, Jr., Victor Bagasina Jr., Maria Villamer, and
Roberto Padua, alleging that on March 27, 1993 and April 3, 1993, respondents
unjustifiably barricaded the disputed road by placing bamboos, woods, placards and
stones across it, preventing petitioner's and the other sugar planter's vehicles from
passing through the disputed road, thereby causing serious damage and prejudice to
petitioner.[6]

Petitioner alleged that BISUDECO constructed the disputed road pursuant to an

agreement with the owners of the ricefields the road traversed. The agreement
provides that BISUDECO shall employ the children and relatives of the landowners in
exchange for the construction of the road on their properties. Petitioner contends
that through prolonged and continuous use of the disputed road, BISUDECO acquired
a right of way over the properties of the landowners, which right of way in turn was
acquired by it when it bought BISUDECO's assets. Petitioner prayed that respondents
be permanently ordered to restrain from barricading the disputed road and from
obstructing its free passage.[7]

In an Order[8] dated April 19, 1993, the Regional Trial Court of Pili (RTC), Camarines
Sur, 5th Judicial Region, Branch 31, ordered respondents, their agents and
representatives to cease and desist from placing barricades on the disputed road.[9]

In their Answer,[10] respondents denied having entered into an agreement with

BISUDECO regarding the construction and the use of the disputed road. They alleged
that BISUDECO, surreptitiously and without their knowledge and consent,
constructed the disputed road on their properties and has since then intermittently
and discontinuously used the disputed road for hauling sugarcane despite their
repeated protests. Respondents claimed they tolerated BISUDECO in the construction
and the use of the road since BISUDECO was a government-owned and controlled
corporation, and the entire country was then under Martial Law. Respondents likewise
denied that the road has become a public road, since no public funds were used for
its construction and maintenance. Moreover, respondents alleged that with the
exception of Edmundo and Perfecto Obias, they are actual tillers of the ricelands,
having acquired their rights over said lands under Presidential Decree No. 27 (PD
27). Edmundo and Perfecto Obias are the owners of the eastern portion of the
property on which a portion of the road going to BISUDECO was constructed.
Respondents denied that they barricaded the road.[11]

Jaime Manubay and Manolito Maralit, for themselves and in representation of other
sugarcane planters, filed the first complaint-in-intervention.[12]

16
Petitioner filed an Amended Complaint[13] and with leave of court a Re-Amended
Complaint,[14] where it averred, as an alternative cause of action in the event the
lower court does not find merit in its causes of action, that it will avail of the benefits
provided for under Article 649[15] of the New Civil Code. Petitioner thus demanded
from respondents a right of way over the disputed road for its use.[16]

Respondents filed an Answer[17] to refute petitioner's alternative cause of action.

Respondents claimed that the road from the sugarmill to the Maharlika Highway at
Barangay Romero, Bula, Camarines Sur, which exits at the Rural Bank of Bula site,
had a distance of only about 15 kilometers; hence, respondents asserted that said
road was shorter and was a more appropriate right of way than the disputed road.[18]

On July 21, 1993, the RTC issued a Writ of Preliminary Injunction[19] ordering the
respondents to desist from constructing barricades across the road.

On June 28, 1994, nine other cooperatives[20] filed their Complaint-in-Intervention.[21]

On June 25, 1997 the RTC rendered a Decision,[22] the dispositive portion of which
reads:
WHEREFORE, premises considered, a decision is hereby rendered declaring the Writ
of Preliminary Injunction issued against all the herein defendants, their agents,
representatives and such other persons acting in their behalf, permanent and
perpetual BUT the plaintiff Bicol Agro-Industrial Cooperative, Inc., (BAPCI) is hereby
ordered to pay the owners of the lots affected by the road, viz: Pedro Montero -
P299,040.00; Pedro Galon - P52,920.00; Clara Padua - P46,410.00; Antonio Buizon
- P35,070.00; Rogelio Montero - P41,160.00; Maria Villamer - P41,580.00; Melchor
Brandes - P76,440.00; Prudencio Benosa - P41, 650.00; Elena Benosa - P39,550.00;
Victor Bagasina, Jr. - P39,410.00; and Claudio Resari - P40,950.00. Upon full
payment thereof, the plaintiff shall be declared the absolute owner of the road in
question. Legal rate if interest is hereby imposed upon the plaintiff from the finality
of this decision until fully payment hereof. No costs.

SO ORDERED.[23]
The RTC ruled that petitioner failed to present any concrete evidence to prove that
there was an agreement between BISUDECO and respondents for the construction of
the disputed road.[24] Moreover, it held that petitioner did not acquire the same by
prescription.[25] The RTC, however, also held that petitioner was entitled to a
compulsory easement of right of way as provided for under Article 649 of the New
Civil Code upon payment of proper indemnity to respondents.[26]

Both parties filed a motion for reconsideration of the RTC Decision. Petitioner
contended that: (1) the value of the land is excessive; (2) the evidence is insufficient
to justify the award; (3) the decision is contrary to law and jurisprudence.
Respondents, on the other hand, alleged that: (1) the trial court erred in declaring
the persons mentioned in the decision's dispositive portion to be entitled to indemnity
for the construction and the use of the disputed road; (2) BAPCI should not be
declared the absolute owner of the disputed road upon full payment of the indemnity
due to the defendants; and (3) the decision failed to award damages.[27]

On September 24, 1997, the RTC denied both motions for reconsideration.[28] The
parties then appealed to the CA.

On August 24, 2005, the CA rendered a Decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The assailed
decision of the Regional Trial Court, Branch 31, Pili, Camarines Sur, in Civil Case No.
P-1899 is hereby MODIFIED as follows: the awards of Php46,410.00 to Clara Padua
and Php41,650.00 to Prudencio Benosa are hereby DELETED, and the declaration

17
that the plaintiff BAPCI shall become the absolute owner of the disputed road upon
full payment of indemnity is REVERSED and SET ASIDE. Accordingly, the owners of
the servient estate in the easement of right of way recognized in this Decision shall
retain ownership of the lands affected by the easement in accordance with Art. 630
of the Civil Code. We hereby AFFIRM the appeal in all other respects.

SO ORDERED.[29]

The CA affirmed the finding of the RTC that there was no conclusive proof to
sufficiently establish the existence of an agreement between BISUDECO and
respondents regarding the construction of the disputed road.[30] Moreover, the CA
also declared that an easement of right of way is discontinuous and as such cannot
be acquired by prescription.[31] The CA likewise affirmed the finding of the RTC that
petitioner was entitled to a compulsory easement of right of way upon payment of
proper indemnity to respondents. The CA, however, declared that ownership over the
disputed road should remain with respondents, despite the grant of a compulsory
easement.[32] Lastly, the CA deleted the awards to Prudencio Benosa (Benosa) and
Clara Padua (Padua), since the former never claimed ownership of any portion of the
lands affected by the disputed road and the latter was not a party to the proceedings
below.[33]

Petitioner then filed a Motion for Reconsideration alleging among others that
the CA Decision failed to rule on the issue of estoppel and laches. Moreover, Benosa
and Padua filed a Motion for Reconsideration assailing the portion of the CA Decision
deleting the award of indemnity to them. On March 28, 2006, the CA issued a
Resolution denying the same.

Hence, herein petition, with petitioner raising the following assignment of errors, to
wit:
I.

THE HONORABLE COURT OF APPEALS ERRED SERIOUSLY IN NOT FINDING

THAT THERE WAS FORGED AN AGREEMENT BETWEEN BISUDECO
MANAGEMENT AND THE PRIVATE RESPONDENTS FOR THE CONTRUCTION OF
THE ROAD IN QUESTION.

II.

THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT

CONSIDERING THE PRINCIPLES OF PRESCRIPTION, LACHES AND ESTOPPEL
IN THE CASE AT BAR.

III.

THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY

DISREGARDING THE CLASSIFICATION OF THE ROAD IN QUESTION AS
BARANGAY ROAD.

IV.

IN THE ALTERNATIVE CAUSE OF ACTION, THE PUBLIC RESPONDENT

SERIOUSLY ERRED IN CONSIDERING THE VALUATION OF THE LANDS
AFFECTED BY THE ROAD IN 1994, AND NOT IN 1974, WHEN SAID ROAD WAS
CONSTRUCTED.

V.

THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT FAILED

ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST ENRIGHTMENT AT
THE EXPENSE OF ANOTHER.[34]

18
 At the outset, this Court shall address some procedural matters. Quite
noticeably, herein petition is denominated as one filed under Rule 65[35] of the Rules
of Court notwithstanding that it seeks to assail the Decision and Resolution of the CA.
Clearly, petitioner had availed of the improper remedy as the appeal from a final
disposition of the CA is a petition for review under Rule 45 and not a special civil
action under Rule 65 of the Rules of Court.[36]

In Active Realty and Development Corporation v. Fernandez,[37] this Court

discussed the difference between petitions filed under Rule 65 and Rule 45, viz:
A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction
committed by the lower court, or grave abuse of discretion which is tantamount to
lack of jurisdiction. This remedy can be availed of when "there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law."

Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, is a mode
of appeal available to a party desiring to raise only questions of law from a judgment
or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional
Trial Court or other courts whenever authorized by law.

x x x The general rule is that the remedy to obtain reversal or modification

of judgment on the merits is appeal. Thus, the proper remedy for the
petitioner should have been a petition for review on certiorari under Rule 45
of the Rules of Court since the decision sought to be reversed is that of the
CA. The existence and availability of the right of appeal proscribes a resort to
certiorari, because one of the requisites for availment of the latter is precisely that
"there should be no appeal. The remedy of appeal under Rule 45 of the Rules of Court
was still available to the petitioner.[38]
Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in
any case, i.e., regardless of the nature of the action or proceeding involved, may be
appealed to this Court by filing a petition for review, which would be but a
continuation of the appellate process over the original case.[39] Moreover, it is basic
that one cannot avail of the remedy provided for under Rule 65 when an appeal is
still available. Hence, petitioner should have filed its petition under Rule 45.

The procedural infirmity notwithstanding and in the interest of substantial

justice, this Court shall consider herein petition as one filed under Rule 45 especially
since it was filed well within the reglementary period proscribed under the said Rule.
The Court also takes notice that the assignment of errors raised by petitioner does
not allege grave abuse of discretion or lack of jurisdiction on the part of the CA.

On the Existence of an Agreement between BISUDECO and Respondents

Anent the first error raised, petitioner argues that the CA erred in not finding
that BISUDECO and respondents forged an agreement for the construction of the
road in dispute. Petitioner thus asserts its entitlement to an easement of right of way
over the properties of respondents by virtue of said agreement.

An easement of right of way was succinctly explained by the CA in the following

manner, to wit:
Easement or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner. By its creation,
easement is established either by law (in which case it is a legal easement) or by will
of the parties (a voluntary easement). In terms of use, easement may either be
continuous or discontinuous. The easement of right of way - the privilege of
persons or a particular class of persons to pass over another's land, usually
through one particular path or linen - is characterized as a discontinuous
easement because its use is in intervals and depends on the act of man.

19
Because of this character, an easement of a right of way may only be
acquired by virtue of a title.[40]
Article 622 of the New Civil Code is the applicable law in the case at bar, viz:
Art. 622. Continuous non-apparent easements, and discontinuous ones, whether
apparent or not, may be acquired only by virtue of a title(Emphasis underscorinh
supplied)
Based on the foregoing, in order for petitioner to acquire the disputed road as an
easement of right-of-way, it was incumbent upon petitioner to show its right by title
or by an agreement with the owners of the lands that said road traversed.

While conceding that they have no direct evidence of the alleged agreement,
petitioner posits that they presented circumstantial evidence which, if taken
collectively, would prove its existence.[41] Specifically, petitioner cites the following
circumstances, to wit:
a. The agreement was of public knowledge.[42] Allegedly BISUDECO and
respondents entered into an agreement for the construction of the road
provided that the latter, their children or relatives were employed with
BISUDECO.
b. The road was continuously used by BISUDECO and the public in general.[43]
c. There was no protest or complaint from respondents for almost a period of
two decades.[44]
d. The portions of the land formerly belonging to respondents affected by the
road were already segregated and surveyed from the main lots.[45]
e. The road in dispute is already a barangay road.
The well-entrenched rule in our jurisdiction is that only questions of law may
be entertained by this Court in a petition for review on certiorari. This rule, however,
is not iron-clad and admits certain exceptions, such as when (1) the conclusion is
grounded on speculations, surmises or conjectures; (2) the inference is manifestly
mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the
judgment is based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) there is no citation of specific evidence on which the factual findings
are based; (7) the findings of absence of facts are contradicted by the presence of
evidence on record; (8) the findings of the Court of Appeals are contrary to those of
the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and
undisputed facts that, if properly considered, would justify a different conclusion;
(10) the findings of the Court of Appeals are beyond the issues of the case; and (11)
such findings are contrary to the admissions of both parties.[46]

After a painstaking review of the records, this Court finds no justification to

warrant the application of any exception to the general rule.

Crucial to the petitioner's cause was its burden of proving the existence of the
alleged agreement between BISUDECO and respondents for the construction of the
road. In this regard, the RTC found that petitioner failed to prove its existence, to
wit:

It is clear that the plaintiff failed to present any concrete evidence to prove
that there was such an agreement between BISUDECO and defendants.
Hereunder quoted are the testimonies of plaintiff's witnesses regarding the alleged
agreement.

Romeo Deveterbo, Transportation Superintendent of BISUDECO testified -

Cross Examination by Atty. Pejo

20
 Q: You also mentioned that there was an agreement between Senator Cea,
Mr. Obias and some of the tenants?
A: Yes.

Q: You mentioned that this was not in writing, am I right?

A: Yes.

Q: How did you know about it that it was not in writing, who told you, Senator
Cea?
A: It was commonly known to all original employees of the BISUDECO.

Q: You know it from the management?

A: From co-employees.

Q: You learned about that agreement from you co-employees?

A: Yes.

Q: In other words, therefore, that is why you said you are confused between
Edmundo Cea and Perfecto Obias because you just learned it from other
employees and you were never present when they talked about it, am I
right?
A: Yes. x x x

To this effect also is the testimony of Angel Lobo, head of the agricultural Department
of BAPCI, to wit:

A: Yes, your Honor?

COUR
From where did you learn?
T:
A: From people whom I talked with at that time and it is a public common
knowledge at that time.
xxx

Atty. Carandang: I repeat my question, Your Honor.

You said you acquired it from or because of common knowledge and you
mentioned some people. Who are those people you are referring to whom
you acquired that knowledge?
A: Most of all, the late Benjamin Bagasina, Barangay Captain at that time who
was our employee in consideration of this agreement, then we have also a
Civil Engineering Head, Civil Engineering Department who is responsible for
the maintenance of this road. I learned from him that this arrangement
established the fact why this road was constructed.

21
 Q: Who is the head of the Engineering Dept?

xxx

COURT: May answer.

A: Engineer Pablo Tordilla who was then the head of our Civil Engineering
Dept.

But this Engineer Pablo Tordilla, Lobo's alleged source of the information, was never
presented in Court. And, according to the Chief Accountant of BAPCI, David Severo:

A: When I was interviewing Mrs. Alma Montero Penaflor she filed to me a

certain arrangement related to the used of the land to Himaao as road
going to the central.
COURT: You mean Himaao Millsite road?
A: Yes, sir.

Atty. Carandang:
Q: What arrangement is that supposedly filed to you?
A: She told me in exchange for the use of the road, the relatives or owners or
tenants of the land will be hired by the sugar Central?

COUR
T:
Q: So, only the tenants not the owners?
A: The tenant's children the road belongs.
xxx

Finally, intervenor Antonio Austria, in trying to show you that there was consent and
approval on the part of the defendant Edmundo Obias to give the right of way to
BISUDECO at the time to be used in hauling the sugarcane of the planters to the
Central, averred the following uncertain statements:

A: Well, he has (sic) having a case against PENSUNIL, regarding the property
I think the right of way going to PENSUMIL right now we discuss it and he
said he is allowing it anymore but then I reminded him wayback in 1974 to
1980 he was one of the biggest planters in the part of Partido so he
consented to the late I think Edmundo Cea, the owner of BISUDECO at that
time to pass his property since he is also milling a lot of things at that time
and many other things one of the concession mill was I think some of the
tenants there in Himaao will be employed in the mill.

22
 xxx

These aforequoted testimonies of the plaintiff's witnesses failed to

satisfactorily establish the plaintiff's contention that there was such an
agreement. Likewise, the list of the Employees of Defendants' relatives,
son/daughter employed by the BISUDECO (Exhibit H) does not in any
manner prove the alleged agreement.[47]
For its part, the CA also ruled that petitioner failed to prove the existence of the said
agreement, to wit:

Like the lower court, we found no conclusive proof to sufficiently

establish the existence of an agreement between BISUDECO and the
defendants-appellants regarding the construction and the use of the
disputed road. The lower court correctly disbelieved the plaintiffs-appellants'
contention that an agreement existed because there is simply no direct evidence to
support this allegation. BAPCI submitted purely circumstantial evidence that are not
sufficiently adequate as basis for the inference than an agreement existed. By
themselves, the circumstances the plaintiffs-appellants cited - i.e., the employment
of sixteen (16) relatives of the defendants-appellants; the defendants-appellants'
unjustified silence; the fact that the existence of the agreement is known to everyone,
etc. - are events susceptible of diverse interpretations and do not necessarily lead to
BAPCI's desired conclusion. Additionally, the testimonies that the plaintiffs-
appellants presented are mainly hearsay, as not one among the witnesses
had personal knowledge of the agreement by reason of direct participation
in the agreement or because the witness was present when the agreement
was concluded by the parties. Thus, given the defendants-appellants' categorical
denial that an agreement existed, we sustain the lower's conclusion that no
agreement existed between BISUDECO and the defendants-appellants.[48]

Based on the foregoing, the inability of petitioner to prove the existence of an

agreement militates its allegations in herein petition. On this score, both the RTC and
the CA are one in ruling that petitioner had failed to prove the existence of the
agreement between BISUDECO and the respondents for the construction of the road.
Also, well-established is the rule that "factual findings of the Court of Appeals are
conclusive on the parties and carry even more weight when the said court affirms the
factual findings of the trial court."[49] Hence, this Court finds no reason to reverse
such findings.

On Acquisition by Prescription

Petitioner would have this Court re-examine Costabella Corporation v. Court

of Appeals[50] (Costabella) where the Court held that, "It is already well-established
that a right of way is discontinuous and, as such, cannot be acquired by
prescription."[51] Petitioner contends that some recognized authorities[52] share its
view that an easement of right of way may be acquired by prescription.

Be that as it may, this Court finds no reason to re-examine Costabella. This

Court is guided by Bogo-Medellin Milling Co., Inc. v. Court of Appeals[53] (Bogo-
Medellin), involving the construction of a railroad track to a sugar mill. In Bogo-
Medellin, this Court discussed the discontinuous nature of an easement of right of
way and the rule that the same cannot be acquired by prescription, to wit:
Continuous and apparent easements are acquired either by virtue of a title or by
prescription of ten years.

The trial court and the Court of Appeals both upheld this view for the reason
that the railroad right of way was, according to them, continuous and apparent in

23
nature. The more or less permanent railroad tracks were visually apparent and they
continuously occupied the subject strip of land from 1959 (the year the easement
granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-
year prescriptive period in 1969, petitioner supposedly acquired the easement of right
of way over the subject land.

Following the logic of the courts a quo, if a road for the use of vehicles or
the passage of persons is permanently cemented or asphalted, then the right
of way over it becomes continuous in nature. The reasoning is erroneous.

Under civil law and its jurisprudence, easements are either continuous
or discontinuous according to the manner they are exercised, not according
to the presence of apparent signs or physical indications of the existence of
such easements. Thus, easement is continuous if its use is, or may be, incessant
without the intervention of any act of man, like the easement of drainage; and it is
discontinuous if it is used at intervals and depends on the act of man, like
the easement of right of way.

The easement of right of way is considered discontinuous because it

is exercised only if a person passes or sets foot on somebody else's land.
Like a road for the passage of vehicles or persons, an easement of right of
way of railroad tracks is discontinuous because the right is exercised only if
and when a train operated by a person passes over another's property. In
other words, the very exercise of the servitude depends upon the act or
intervention of man which is the very essence of discontinuous easements.

The presence of more or less permanent railroad tracks does not, in

any way, convert the nature of an easement of right of way to one that is
continuous. It is not the presence of apparent signs or physical indications
showing the existence of an easement, but rather the manner of exercise
thereof, that categorizes such easement into continuous or discontinuous. The
presence of physical or visual signs only classifies an easement into apparent or non-
apparent. Thus, a road (which reveals a right of way) and a window (which evidences
a right to light and view) are apparent easements, while an easement of not building
beyond a certain height is non-apparent.

In Cuba, it has been held that the existence of a permanent railway does not
make the right of way a continuous one; it is only apparent. Therefore, it cannot be
acquired by prescription. In Louisiana, it has also been held that a right of passage
over another's land cannot be claimed by prescription because this easement is
discontinuous and can be established only by title.

In this case, the presence of railroad tracks for the passage of petitioner's
trains denotes the existence of an apparent but discontinuous easement of right of
way. And under Article 622 of the Civil Code, discontinuous easements, whether
apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco
never acquired any title over the use of the railroad right of way whether by law,
donation, testamentary succession or contract. Its use of the right of way, however
long, never resulted in its acquisition of the easement because, under Article 622,
the discontinuous easement of a railroad right of way can only be acquired by title
and not by prescription.[54]
Applying Bogo-Medellin to the case at bar, the conclusion is inevitable that the road
in dispute is a discontinuous easement notwithstanding that the same may be
apparent. To reiterate, easements are either continuous or discontinuous according
to the manner they are exercised, not according to the presence of apparent signs or
physical indications of the existence of such easements. Hence, even if the road in
dispute has been improved and maintained over a number of years, it will not change
its discontinuous nature but simply make the same apparent. To stress, Article 622

24
of the New Civil Code states that discontinuous easements, whether apparent or not,
may be acquired only by virtue of a title.

On Laches and Estoppel

Petitioner argues that estoppel and laches bar respondents from exercising
ownership rights over the properties traversed by the road in dispute. In support of
said argument, petitioner posits that BISUDECO had been peacefully and
continuously using the road without any complaint or opposition on the part of the
respondents for almost twenty years. Respondents, on the other hand, claim that
they merely tolerated the use of their land as BISUDECO was a government-owned
and controlled corporation and considering that the disputed road was constructed
during the time of Martial Law.

There is no absolute rule on what constitutes laches. It is a rule of equity and

applied not to penalize neglect or sleeping on one's rights, but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The
question of laches is addressed to the sound discretion of the court and each case
must be decided according to its particular circumstances.[55] It is the better rule that
courts, under the principle of equity, should not be guided or bound strictly by the
statute of limitations or the doctrine of laches if wrong or injustice will result.[56]

In herein petition, the CA denied petitioner's argument in the wise:

As previously explained in our Decision, the applicable law is Article 622 of the Civil
Code of the Philippines, which provides:
Art. 622. Continuous non-apparent easements, and discontinuous ones, whether
apparent or not, may be acquired only by virtue of a title.
The eminent jurist, former Senator Arturo M. Tolentino, opines that this provision
seeks to prevent the imposition of a burden on a tenement based purely on the
generosity, tolerance and spirit of neighborliness of the owners thereof.

We applied the cited provision to the case in ruling that no easement of right
of way was acquired; based on the evidence presented, the plaintiff-appellant failed
to satisfactorily prove the existence of an agreement evidencing any right or title to
use the disputed road. We additionally rejected the plaintiff-appellant's position that
it had acquired the easement of right of way through acquisitive prescription, as
settled jurisprudence states that an easement of right of way cannot be acquired by
prescription.

We hold the same view on the issue of acquisition of an easement of right of

way by laches. To our mind, settled jurisprudence on the application of the principle
of estoppel by laches militates against the acquisition of an easement of right of way
by laches.

Laches is a doctrine in equity and our courts are basically courts of law and not
courts of equity; equity, which has been aptly described as "justice outside legality,"
should be applied only in the absence of, and never against, statutory law; Aeguetas
nunguam contravenit legis. Based on this principle, we find that the positive mandate
of Article 622 of the Civil Code - the statutory provision requiring title as basis for the
acquisition of an easement of a right of way - precludes the application of the
equitable principle of laches.[57]
This Court agrees with the CA. The fact that the law is categorical that discontinuous
easements cannot be acquired by prescription militates against petitioner's claim of
laches. To stress, discontinuous easements can only be acquired by title. More
importantly, whether or not the elements of laches are present is a question involving
a factual determination by the trial court.[58] Hence, the same being a question of
fact, it cannot be the proper subject of herein petition. On the other hand, as to the
issue of estoppel, this Court likewise agrees with the finding of the CA that petitioner

25
did not present any evidence that would show an admission, representation or
conduct by respondents that will give rise to estoppel.[59]

Classification of the Road in Dispute as a Barangay Road

Petitioner argues that the CA erred when it disregarded the classification of the
road in question as a barangay road. In support of said argument, petitioner
presented Exhibit Q, a Tax Declaration or Field Appraisal and Assessment Sheet[60]
(1991 FAAS) with Survey Number 1688-40 and PIN No. 026-01-009-08-037, dated
April 30, 1991, which they claim proves that the road in dispute is already a barangay
road.

The same is again a question of fact which cannot be the proper subject of
herein petition. Petitioner cannot have this Court re-examine the evidentiary value of
the documents it presented before the RTC as the same is not a function of this Court.
In any case, after a closer scrutiny of the 1991 FAAS, this Court holds that the same
is insufficient to prove petitioner's claim.

Respondents, in their Comment,[61] argue against the classification of the road

in dispute as a barangay road in the wise:
Petitioner also stated that the Honorable Court of Appeals fails to consider the fact
that the owner of the road in question is the Municipality of Pili in the Province of
Camarines Sur and as proof of such claim they presented and marked as Exhibit Q,
tax declaration no. 009-756 or Annex D of their Petition. However, private
respondents wish to call the attention of this Honorable Court to the following:
a. Tax Declaration No. 009-828 attached as Annex C-6 of the Verified Petition
declared in the name of Edmundo Obias (one of the private respondents);
b. Actual Use portion of said Annex C-6 marked as Exh. No. N-6-a-1
which states "Road Lot (BISUDECO Road)"; and
c. The Memoranda portion in the second page of Annex C-6 which
states: "Revised to declare the property in The name of the rightful
owner, Edmundo Obias based from the approved subdivision plan, Bsd-
05-000055 (OLT) & technical descriptions. Likewise area was made to
conform with the said subdivision plan from 4,773 sq.m. to 11,209 sq.m.
Obviously, the alleged Exhibit Q of the Petitioner is an erroneous tax
declaration, thus, negates the claim of the Petitioner that the same is owned by the
Municipality of Pili and has been declared a barangay road. Private respondents
cannot understand why the herein Petitioner alleged this matter and used it as a
proof to support their claim when they are already in possession of a tax declaration
correcting the same and even attached the same as part of their Petition.[62]
In its Reply,[63] petitioner counters:
II. While Petitioners claim that the road belongs to the Municipal Government of Pili,
yet what they attached to the Petition as Annex "C-7" is a tax declaration of Edmundo
Obias. Petitioners have the following observations:

x x x x

(b) That land of Edmundo Obias covered by Annex "C-6" to the Petition is not included
or involved in this case at bar. His name does not appear to be awarded in the
Decision of the Honorable Court of Appeals and also in the list of beneficiaries to
receive monetary considerations made by Mr. Angel Lobo.[64]
After a painstaking review of the records, this Court is more inclined to believe the
claim of respondents. The claim of petitioner to the effect that the land of Edmundo
Obias is not included in the case at bar is misleading. It may be true that Edmundo
was not awarded indemnity by the lower courts, however, the same does not mean
that his lands do not form part of the subject matter of herein petition.

It bears to stress that Edmundo claimed in the CA that he was the owner of

26
the affected ricelands and that respondents were merely his tenants-beneficiaries
under PD 27, otherwise known as the Tenant Emancipation Decree.[65] The CA,
however, dismissed said claim because it was raised for the first time on appeal. It
also held that the averments in the documents submitted by Edmundo in the RTC
described respondents as "owners" of the land they till; hence, the same constituted
binding judicial admissions.[66]

Based on the foregoing, petitioner's attempt to refute the contents of the 1995
FAAS by claiming that the lands of Edmundo are not involved in the case at bar must
fail. It is clear that respondents are the tenant-beneficiaries of the lands of Edmundo
under PD 27; hence, contrary to the claim of petitioner, the lands of Edmundo are
the subject matter of herein petition.

In addition, it is curious that petitioner relies on the 1991 FAAS yet finds
exception to the contents of the 1995 FAAS. After a closer scrutiny of both
documents, it appears to this Court that the land described in the 1991 FAAS is also
the same land described in the 1995 FAAS. Both FAAS involve land measuring 4,773
square meters. Likewise, both FAAS have the same PIN Number (026-01-009-08-
037) and Survey Number (1688-40). Accordingly, the annotation contained in the
1995 FAAS, to the effect that a "BISUDECO road" does not belong to the Municipality
of Pili, serves to weaken petitioner's claim.

The Court also considers portions of the RTC Decision where it can be gathered
that the road in dispute is not a barangay road, to wit:
At this point, it is important to note that defendants admitted the identity of the road
and the area of the same as reflected in the Commissioner's Report, during the Pre-
trial held last September 19, 1995.

Engr. Roberto Revilla testified that a portion of the road inside the
property of Edmundo Obias, is a barangay road which are lots A-52 sq.m.,
B-789 sq.m. and C-655 sq.m. or a total of 1,497 sq.m. which starts from the
intersection of the National Road and the road to Pensumil up to Corner 9 of Lot 37,
Bsc-05-000055 (OCT) in the name of Pedro O. Montero. Engr. Revilla concluded
that the actual area occupied by the road in question is the sum of areas of
Lots D-2042 sq.m., E-2230 sq.m., F-756 sq.m., G-663 sq.m., H-501 sq.m. , I-
588 sq.m., J-594 sq.m., K-l092 sq.m., L-595 sq.m., M-459 sq.m., N-106
sq.m., O-585 sq.m. and P-563 sq.m., or a total of 10,774 square meters. Said
road starts from corner 9 of the lot of Pedro Montero which is equivalent to corner 25
of Lot 40 Bsd-05-000055 (OCT) going to the Southern Direction and ending at corner
25 of Lot 1688 Cad. 291 Pili Cadastre covered by OCT No. 120-217 (1276) in the
name of spouses Edmundo Obias and Nelly Valencia and spouses Perfecto Obias and
Adelaida Abenojar.[67]
The RTC findings of fact thus shows that while certain portions of the property of
Edmundo is a barangay road, the same only pertains to Lots A, B and C, or a total of
1,497 square meters, which is distinct from the road in dispute which pertains to
different lots (lots E to P) and covers a total area of 10,774 square meters.

In light of the foregoing, considering that the contents of the 1991 FAAS is
disputable, it was incumbent on petitioner to present documents which would
evidence the expropriation of the road in dispute by the local government as a
barangay road. Under the prevailing circumstances, the documents of the
expropriation proceedings would have been the best evidence available and the
absence thereof is certainly damaging to petitioner's cause.

Amount of Indemnity Due & On Unjust Enrichment

Petitioner manifested in the RTC its desire, in the alternative, to avail of a

compulsory easement of right of way as provided for under Article 649 the New Civil
Code. Said relief was granted by the RTC because of the unavailability of another

27
adequate outlet from the sugar mill to the highway. Despite the grant of a compulsory
easement of right of way, petitioner, however, assails both the RTC and CA Decision
with regard to the amount of indemnity due respondents.

Petitioner likens the proceedings at bar to an expropriation proceeding where

just compensation must be based on the value of the land at the time of taking.[68]
Petitioner thus maintains that the compensation due to respondents should have
been computed in 1974 when the road was constructed.[69]

This Court does not agree. Article 649 of the New Civil Code states:
The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons
and without adequate outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage cause to the servient estate.(Emphasis suplied.)
Based on the foregoing, it is clear that the law does not provide for a specific formula
for the valuation of the land. Neither does the same state that the value of the land
must be computed at the time of taking. The only primordial consideration is that the
same should consist of the value of the land and the amount of damage caused to
the servient estate. Hence, the same is a question of fact which should be left to the
sound discretion of the RTC. In this regard, the RTC ruled:
The market value per hectare in 1974 or at the time of taking or prior to its conversion
to road is P6,500/hectare, the same being a first class riceland irrigated therefore the
total market value is P6,864.31. The 1994 Market Value of P1,292,880.00 is the value
assigned to the property in question after it was already developed as a road lot
where the unit value applied per square meter is P120.00 for 5th class residential lot.

It has to be remembered however that the cost of transforming the land to

road was entirely borne by BISUDECO including its maintenance, repair and the cost
of the improvements and by plaintiff after its acquisition. Thus, the P120.00 unit
value is exorbitant while the 1974 valuation of P6,500/hectare is low and
unreasonable.

In fine, this Court will adopt the unit value of P70.00 per square meter as
shown by Exhibit "Q," the Real Property Field Assessment Sheet No. 009-756.[70]
In addition, the CA ruled:
We stress that the amount of proper indemnity due to the landowners does not only
relate to the market value of their property but comprehends as well the
corresponding damage caused to the servient estate. It is undisputed that the
BISUDECO began the construction and used of the disputed road in 1974. While the
maintenance was borne by BISUDECO and now by BAPCI who principally used the
disputed road for their sugar milling operations, the defendants-appellants have been
deprived of the use do their ricefields because of the road's construction since 1974.
Thus, it is but proper to compensate them for this deprivation, over and above the
prevailing market value of the affected property. To our mind, in light of the
circumstances surrounding the acquisition of the affected ricelands and the
construction of the disputed road, particularly the absence of a definitive agreement
to show that the defendants-appellants consented to the road's construction, we find
the P70.00 per square meter indemnity awarded by the lower court in accordance
with the Real Property Field Assessment Sheet No. 009-756, to be fair and reasonable
under the circumstances.[71]
Withal, this Court finds no error as to the proper amount of indemnity due
respondents as the findings of both the RTC and the CA appear to be fair and
reasonable under the prevailing circumstances and in accordance with the provisions
of Article 649 of the New Civil Code.

28
WHEREFORE, premises considered, the petition is DENIED. The August 24, 2005
Decision and October 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV No.
59016 are hereby AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Carpio Morales*, Velasco, Jr., and Nachura, JJ., concur.

* Designated as an additional member in lieu of Associate Justice Minita V. Chico-

Nazario per Special Order No. 720 dated October 5, 2009.

[1]
Rollo, pp. 8-37.

[2]
Penned by Associate Justice Arturo D. Brion (now a member of this Court), with
Associate Justices Eugenio S. Labitoria and Eliezer R. de Los Santos concurring; id.
at 38-60.
[3]
Rollo pp. 62-68.
[4]
Id. at 39-40.
[5]
Records, p. 1.
[6]
Rollo, p. 40.
[7]
Rollo, pp. 40-41.
[8]
Records, p. 16.
[9]
Rollo, p. 41.
[10]
Records, p. 30.
[11]
Rollo, pp. 41-42.

Records, p. 39; Note that it does not appear that said intervenors join petitioner
[12]

in herein petition.

[13]
Id at 19.
[14]
Id at 67.

[15]
The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons
and without adequate outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be continuous
for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the
damage cause to the servient estate.
[16]
Rollo, p. 42.

[17]
Records, p. 73.
[18]
Rollo, p. 43.

29
[19]
Records, p. 145.
[20]
Peafrancia Multi-Purpose Sugar Coop.; San Isidro Development Coop. Inc.;
Ocampo Small Multi-Purpose Producers Coop. Inc.; Kilantao-Catalotoan Multi-
Purpose Coop. Inc.; May-ogob Planters Coop. Inc.; Aniog Planters Multi-Purpose
Coop. Inc., Sagnay Sugar Planters Coop. Inc.; Hda. Magdalena Farmers Coop.; and
Bicol Sugar Planters Coop. Inc. Note that it does not appear that said intervenors join
petitioner in herein petition.

[21]
Records, p. 198.

[22]
CA rollo, p. 94-102.

[23]
Id. at 102.

[24]
Id. at 96.
[25]
Id. at 98.

[26]
Id. at 99-100.

[27]
Rollo, p. 44.

[28]
Id.
[29]
Id. at 59-60.
[30]
Id. at 50.
[31]
Id. at 51-52.
[32]
Id. at 59.
[33]
Id. at 55-56.
[34]
Id. at 15-16.
[35]
1. Petition for Review - This is a petition for Review on Certiorari under Rule 65
of the New Rules on Civil Procedure assailing the Decision and Resolution rendered
by the Honorable Public Respondent Court of Appeals, xxx, with grave abuse of
discretion amounting to lack of or excess of jurisdiction and there is no appeal, or
any plain, speedy, and adequate remedy in the ordinary course of law, hence, this
Petition. (Rollo, p. 10).

See National Irrigation Administration v. Court of Appeals, G.R. No. 129169,

[36]

November 17, 1999, 318 SCRA 255.

[37]
G.R. No. 157186, October 19, 2007, 537 SCRA 116.
[38]
Id. at 126-127.

[39]
See National Irrigation Administration v. Court of Appeals, supra note 36, at 264.

[40]
Rollo, pp. 51-52.

[41]
Id at 18.
[42]
Id.

30
[43]
Id.

[44]
Id.

[45]
Id. at 19.
[46]
Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, April
28, 2004, 428 SCRA 79.

[47]
CA rollo, 96- 98. (Emphasis ours.)
[48]
Rollo, pp. 50-51. (Emphasis ours.)

Blanco v. Quasha, 376, Phil. 480, 491 (1999), citing Bridget Boneng y Bagawili v.
[49]

People of the Philippines, 304 SCRA 252. (1999).

[50]
G.R No. 80511, January 25, 1991, 193 SCRA 333.
[51]
Id. at 339.

[52]
See rollo, pp. 24-25. Petitioner contends:

There are some who believe, however, that the right of way can be acquired
by prescription (8 Vera 297). The continuity in the exercise of a right does not have
to be absolute. If the right is one that is to be exercised at intervals, there is continuity
notwithstanding such intervals. The use of the easement may be continuous. In
prescription, it is not the acts of possession which are required to be continuous. It
is enough that the acts be exercised with some degree of regularity to indicate
continuity of possession of the easement. The continuity of a discontinuous
easement, therefore, may be very well be continuous (2-11 Colin & Capitant 913;
Roggeiro 839-840).

We are inclined to agree with the view just expressed. We must admit that as
a general principle, the right of way being discontinuous, it cannot be acquired by
prescription, the owner of the tenement would be obliged to disregard the
considerations imposed by neighborhoodliness; he would have to prevent passage
over his tenement because he may wake up some day to find that the easement has
already been established. But if the right is permanent and has an apparent sign,
such as a road, we see no reason why it cannot be acquired by prescription. If the
land itself occupied by the road can be acquired in ownership, why can't a servitude,
which is less than ownership, be acquired? If in order to establish the right to the
road, the adverse claimant asserts ownership thereof and not merely the easement
of passage, the result would be serious and prejudicial to the owner, in protecting a
less right, a greater one would be lost. If there is permanent road, the easement, or
at least its possession, should be regarded as continuous, because the existence of
the road is a continuous assertion of a right against the exclusive domination of the
owner, which right of way under the circumstances should, therefore, be acquired by
prescription, so long as the exercise thereof is not by tolerance of the owner of the
tenement over which the road has been built. (Tolentino, Civil Code of the Philippines,
Vol. II, p. 331, 1963).

[53]
455 Phil. 285 (2003).
[54]
Id. at 303-305. (Emphasis and underscoring ours.)
[55]
Villanueva-Mijares v. Court of Appeals, 386 Phil. 555, 565 (2000).
[56]
Bogo-Medellin, supra note 53, at 303.

[57]
Rollo, pp. 65-66.

31
 Pineda v. Heirs of Eliseo Guevara, G.R No. 143188, February 14, 2007, 515 SCRA
[58]

627.

[59]
Rollo p. 68.
[60]
Id. at 77.
[61]
Id. at 81-86.

[62]
Id. at 83-84.

[63]
Id. at 97-100.

[64]
Id. at 99.

[65]
Id. at 45.
[66]
Id. at 54-55.

[67]
CA rollo, p. 100.
[68]
Rollo, p. 33.
[69]
Id.

[70]
CA rollo, pp. 100-101.
[71]
Rollo, p. 57.

399 Phil. 664

SECOND DIVISION
[ G.R. NO. 130845, November 27, 2000 ]
BRYAN U. VILLANUEVA,PETITIONER, VS.HON. TIRSO D.C.
VELASCO IN HIS CAPACITY AS PRESIDING JUDGE OF THE
REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 88, JULIO
N. SEBASTIAN AND SHIRLEY LORILLA, RESPONDENTS.

DECISION

QUISUMBING, J.:

This petition for certiorari assails (1) the decision[1] dated December 27, 1996 of the
Court of Appeals in CA-G.R. SP No. 39166, dismissing petitioner's petition for review
under Rule 65 with prayer for the issuance of a cease and desist order and/or
temporary restraining order, and (2) the resolution[2]dated August 14, 1997 denying
the subsequent motion for reconsideration.

Petitioner Bryan Villanueva is the registered owner of the parcel of land covered by
Transfer Certificate of Title No. 127862 of the Register of Deeds of Quezon City. He

32
bought it from Pacific Banking Corporation, the mortgagee of said property. The bank
had acquired it from the spouses Maximo and Justina Gabriel at a public auction on
March 19, 1983. When petitioner bought the parcel of land there was a small house
on its southeastern portion. It occupied one meter of the two-meter wide easement
of right of way the Gabriel spouses granted to the Espinolas, predecessors-in-interest
of private respondents, in a Contract of Easement of Right of Way. The pertinent
portion of the contract dated November 28, 1979, states:
. . . in order to have an access to and from their aforementioned land where their
houses are constructed and to have an outlet to Tandang Sora Ave. which is the
nearest public road and the least burdensome to the servient estate and to third
persons, it would be necessary for them to pass through spouses MAXIMO GABRIEL
and JUSTINA CAPUNO's land and for this purpose, a path or passageway of not less
than two (2) meters wide of said spouses' property is necessary for the use of
ROMEO, RODOLFO, NENITA and AURORA ESPINOLA and for all their needs in entering
their property.

xxx

WHEREFORE, in view of the fact that the property of the ESPINOLA had been bought
by them from MAXIMO CAPUNO, father of MAXIMO GABRIEL, spouses MAXIMO
GABRIEL and JUSTINA CAPUNO hereby agree and permit RODOLFO, ROMEO, NENITA
and AURORA ESPINOLA and their families to have a permanent easement of right
of way over the aforementioned property of said spouses limited to not more than
two meters wide, throughout the whole length of the southeast side of said property
and as specifically indicated in the attached plan which is made an integral part of
this Contract as Annex "A";

This Agreement shall be binding between the parties and upon their heirs,
successors, assigns, without prejudice in cases of sale of subject property that will
warrant the circumstances.[3]
Unknown to petitioner, even before he bought the land, the Gabriels had constructed
the aforementioned small house that encroached upon the two-meter
easement. Petitioner was also unaware that private respondents, Julio Sebastian and
Shirley Lorilla, had filed on May 8, 1991, Civil Case No. Q-91-8703, for easement,
damages and with prayer for a writ of preliminary injunction and/or restraining order
against the spouses Gabriel.[4] As successors-in-interest, Sebastian and Lorilla
wanted to enforce the contract of easement.

On May 15, 1991, the trial court issued a temporary restraining order. On
August 13, 1991, it issued a writ of preliminary mandatory injunction ordering the
Gabriels to provide the right of way and to demolish the small house encroaching on
the easement. On August 15, 1991, the Gabriels filed a motion for reconsideration
which was also denied. Thus, they filed a petition for certiorari before the Court of
Appeals.

On March 26, 1992, the Eighth Division of the Court of Appeals dismissed the
petition and upheld the RTC's issuances. The decision became final and executory
on July 31, 1992.[5]

On January 5, 1995, Judge Tirso Velasco of the RTC in Quezon City, Branch
88, issued an Alias Writ of Demolition. On June 20, 1995, the sheriff tried to demolish
the small house pursuant to the writ. Petitioner filed a Third Party Claim with Prayer
to Quash Alias Writ of Demolition. He maintains that the writ of demolition could not
apply to his property since he was not a party to the civil case. His Third Party Claim
with prayer to quash the writ of demolition was denied for lack of merit on August
16, 1995.[6] The motion for reconsideration as well as the Supplemental Motion for
Reconsideration dated September 12, 1995 were denied on October 19, 1995.[7]

Petitioner, thereafter, filed a petition for certiorari before the Court of Appeals,

33
docketed as CA-G.R. SP No. 39166, asserting that the existence of the easement of
right of way was not annotated in his title and that he was not a party to Civil Case
No. Q-91-8703, hence the contract of easement executed by the Gabriels in favor of
the Espinolas could not be enforced against him. The Court of Appeals dismissed the
petition for lack of merit and denied the reconsideration, disposing thus:

WHEREFORE, the instant petition is hereby dismissed by this court for lack of
merit.

No costs considering the failure of private respondents to file their comment, despite
notice.[8]

Hence, this instant petition.

Petitioner now avers that the appellate court erred in declaring,

(1) THAT FOLLOWING THE ESSENCE OF INHERENCE AND INTRANSMISSIBILITY OF

AN EASEMENT, A RIGHT OF WAY CAN EXIST EVEN IF THEY ARE NOT EXPRESSLY
STATED OR ANNOTATED ON THE TORRENS TITLE;

(2) THAT PETITIONER, AS PROSPECTIVE BUYER, SHOULD HAVE EXERCISED

ORDINARY PRUDENCE BY TAKING THE INITIATIVE TO DETERMINE THAT AN
EASEMENT HAS BEEN CONSTITUTED ON THE PROPERTY HE INTENDS TO BUY; AND,

(3) THAT IN AS MUCH AS THE HEREIN PETITIONER IS NOT A PARTY TO CIVIL CASE
NO. Q-91-8703, HE CANNOT BE BOUND BY ANY JUDGMENT OR ORDER RENDERED
THEREIN.[9]
Primarily, the issue is whether the easement on the property binds petitioner.

Petitioner argues it could not be enforced against him. First, he says that a
right of way cannot exist when it is not expressly stated or annotated on the Torrens
title. According to him, even if an easement is inherent and inseparable from the
estate to which it actively belongs as provided in Art. 617 of the Civil Code,[10] the
same is extinguished when the servient estate is registered and the easement was
not annotated in said title conformably with Section 39 of the Land Registration
Law. Second, petitioner points out that the trial court erred when it faulted him for
relying solely on the clean title of the property he bought, as it is well-settled that a
person dealing with registered land is not required to go beyond what is recorded in
the title. He adds that it is private respondents who should have made sure their
right of way was safeguarded by having the same annotated on the title with the
Register of Deeds. He adds that Section 76 of P.D. No. 1529[11] also requires that
when a case is commenced involving any right to registered land under the Land
Registration Law (now the Property Registration Decree), any decision on it will only
be effectual between or among the parties thereto, unless a notice of lis pendens of
such action is filed and registered in the registry office where the land is
recorded. There was no such annotation in the title of the disputed land, according
to petitioner. Lastly, since he was not a party to Civil Case No. Q-91-8703, petitioner
argues that he cannot be bound by the writ of demolition and be forcibly divested of
a portion of his land without having his day in court.

Private respondents Sebastian and Lorilla, for their part, adopted the
disquisition of the appellate court as their Comment and asked for the dismissal of
the petition and P100,000.00 in damages. In its decision the appellate court, citing
the decision of the lower court, stressed that unlike other types of encumbrance of
real property, a servitude like a right of way can exist even if they are not expressly
stated or annotated as an encumbrance in a Torrens title because servitudes are
inseparable from the estates to which they actively or passively belong. Moreover,
Villanueva was bound by the contract of easement, not only as a voluntary easement
but as a legal easement. A legal easement is mandated by law, and continues to

34
exists unless its removal is provided for in a title of conveyance or the sign of the
easement is removed before the execution of the conveyance conformably with
Article 649[12]in accordance with Article 617[13] of the Civil Code.

At the outset, we note that the subject easement (right of way) originally was
voluntarily constituted by agreement between the Gabriels and the Espinolas. But
as correctly observed by the Court of Appeals, the easement in the instant petition is
both (1) an easement by grant or a voluntary easement, and (2) an easement by
necessity or a legal easement. A legal easement is one mandated by law, constituted
for public use or for private interest, and becomes a continuing property right.[14] As
a compulsory easement, it is inseparable from the estate to which it belongs, as
provided for in said Article 617 of the Civil Code. The essential requisites for an
easement to be compulsory are: (1) the dominant estate is surrounded by other
immovables and has no adequate outlet to a public highway; (2) proper indemnity
has been paid; (3) the isolation was not due to acts of the proprietor of the dominant
estate; (4) the right of way claimed is at a point least prejudicial to the servient
estate; and (5) to the extent consistent with the foregoing rule, where the distance
from the dominant estate to a public highway may be the shortest.[15] The trial court
and the Court of Appeals have declared the existence of said easement (right of
way). This finding of fact of both courts below is conclusive on this Court,[16] hence
we see no need to further review, but only to re-affirm, this finding. The small house
occupying one meter of the two-meter wide easement obstructs the entry of private
respondents' cement mixer and motor vehicle. One meter is insufficient for the needs
of private respondents. It is well-settled that the needs of the dominant estate
determine the width of the easement.[17] Conformably then, petitioner ought to
demolish whatever edifice obstructs the easement in view of the needs of private
respondents' estate.

Petitioner's second proposition, that he is not bound by the contract of

easement because the same was not annotated in the title and that a notice of lis
pendens of the complaint to enforce the easement was not recorded with the Register
of Deeds, is obviously unmeritorious. As already explained, it is in the nature of legal
easement that the servient estate (of petitioner) is legally bound to provide the
dominant estate (of private respondents in this case) ingress from and egress to the
public highway.

Petitioner's last argument that he was not a party to Civil Case No. Q-91-8703
and that he had not been given his day in court, is also without merit. Rule 39, Sec.
47, of the Revised Rules of Court:
SEC. 47. Effect of judgments or final orders. - The effect of a judgment or final order
rendered by a court of the Philippines, having jurisdiction to pronounce the judgment
or final order, may be as follows:

(a) In case of a judgment or final order against a specific thing, or in respect to the
probate of a will, or the administration of the estate of a deceased person, or in
respect to the personal, political, or legal condition or status of a particular person or
his relationship to another, the judgment or final order is conclusive upon the title to
the thing, the will or administration, or the condition, status or relationship of the
person; however, the probate of a will or granting of letters of administration shall
only be prima facie evidence of the death of the testator or intestate;

(b) In other cases, the judgment or final 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; and

(c) In any other litigation between the same parties or their successors in interest,

35
that only is deemed to have been adjudged in a former judgment or final order which
appears upon its face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto. (Emphasis ours).
Simply stated, a decision in a case is conclusive and binding upon the parties to said
case and those who are their successor in interest by title after said case has been
commenced or filed in court.[18] In this case, private respondents, Julio Sebastian and
Shirley Lorilla, initiated Civil Case No. Q-91-8703 on May 8, 1991,[19] against the
original owners, the spouses Maximo and Justina Gabriel. Title in the name of
petitioner was entered in the Register of Deeds[20] on March 24, 1995, after he bought
the property from the bank which had acquired it from the Gabriels. Hence, the
decision in Civil Case No. Q-91-8703 binds petitioner. For, although not a party to
the suit, he is a successor-in-interest by title subsequent to the commencement of
the action in court.

WHEREFORE, the instant petition is DENIED. The assailed decision and resolution
of the Court of Appeals are AFFIRMED. Costs against petitioner.

SO ORDERED.

Bellosillo (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

[1]
Rollo, pp. 33-39.

[2]
Id. at 40.
[3]
CA Rollo, p. 55.

[4]
Id. at 43.
[5]
CA Records, pp. 80-91.
[6]
Id. at 36.

[7]
Id. at 38-39.
[8]
Rollo, p. 38.
[9]
Id. at 20, 24 and 26.

Art. 617. Easements are inseparable from the estate to which they actively or
[10]

passively belong.

[11]
Section 76. Notice of lis pendens. No action to recover possession of real estate,
or to quiet title thereto, or to remove clouds upon the title thereof, or for partition,
or other proceedings of any kind in court directly affecting the title to land or the use
or occupation thereof or the building thereon, and no judgment, and no
proceeding to vacate or reverse any judgment, have any effect upon registered
land as against persons other than the parties thereto, unless a memorandum
or notice stating the institution of such action or proceedings and the court
wherein the same is pending, as well as the date of the institution thereof, together
with a reference to the number of the certificate of title, and the adequate description
of the land affected and the registered owner thereof, shall have been filed and
registered.

Art. 649. The owner, or any person who by virtue of a real right may cultivate or
[12]

use any immovable, which is surrounded by other immovables pertaining to other

persons and without adequate outlet to a public highway, is entitled to demand a

36
right of way through the neighboring estates, after payment of the proper
indemnity.

Should this easement be established in such a manner that its use may be continuous
for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the
damage cause to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the
estate surrounded by others and for the gathering of its crops through the servient
estate without a permanent way, the indemnity shall consist in the payment of the
damage caused by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the
proprietor's own acts.
[13]
Supra, note 6.

Benedicto vs. Court of Appeals, 25 SCRA 145, 153 (1968). Citing Valicenti v.
[14]

Schultz, 209 N.Y.S. 2d 33 (1960).

[15]
Cristobal vs. Court of Appeals, 291 SCRA 122, 129 (1998).
[16]
Villanueva vs. Court of Appeals, 294 SCRA 90, 92-93 (1998).

[17]
Sta. Maria vs. Court of Appeals, 285, SCRA 351, 362 (1998).

Ayala Corporation vs. Ray Burton Development Corporation, 294 SCRA 48, 65
[18]

(1998).

[19]
CA Rollo, p. 43.

[20]
Id. at 40.

624 Phil. 422

SECOND DIVISION
[ G.R. No. 185240, January 21, 2010 ]
SPS. MANUEL AND VICTORIA SALIMBANGON, PETITIONERS,
VS. SPS. SANTOS AND ERLINDA TAN, RESPONDENTS.

DECISION

ABAD, J.:

This case is about the admissibility of testimony that tends to modify a written
agreement among the parties and the extinction of the easement of right of way upon
consolidation in one person of the ownership of the dominant and the servient
estates.

The Facts and the Case

Guillermo Ceniza died intestate on July 11, 1951, leaving a parcel of land at Poblacion,
Mandaue City. Twenty years later on July 17, 1973 his children Benedicta, Guillermo,

37
Jr., Victoria, Eduardo, and Carlos executed an extrajudicial declaration of heirs and
partition, adjudicating and dividing the land among themselves as follows:

1. To Benedicta T. Cabahug, Lot A subject to a perpetual and grat[u]itous

road right of way 1.50 m. wide along its NW. boundary in favor of Lots B, E,
and D, of the subdivision;

2. To Eduardo Ceniza, Lot B subject to a perpetual and grat[u]itous road

right of way 1.50 m. wide along its SW. boundary in favor of Lots A, D & E of
the subdivision;

3. To Carlos Ceniza, Lot C;

4. To Guillermo Ceniza Jr., Lot D subject to a perpetual and grat[u]itous road

right of way 1.50 m. wide along its NE. boundary in favor of Lot B and E of
the subdivision; and

5. To Victoria Ceniza, Lot E, subject to a perpetual and grat[u]itous road

right of way 1.50 m. wide along its SW. boundary in favor of Lot D of the
subdivision.[1]

Lots A, B, and C were adjacent to a city street. But Lots D and E were not, they being
interior lots. To give these interior lots access to the street, the heirs established in
their extrajudicial partition an easement of right of way consisting of a 3-meter wide
alley between Lots D and E that continued on between Lots A and B and on to the
street. The partition that embodied this easement of right of way was annotated on
the individual titles issued to the heirs.

Roughly, the lots including the easement of right of way would take the following
configurations,[2] not drawn here to accurate size and proportion but illustrative of
their relative locations:

CITYSTREET

LOT A LOT B LOT C

LOT D LOT E

But, realizing that the partition resulted in an unequal division of the property, the
heirs modified their agreement by eliminating the easement of right of way along
Lots A, D, and E, and in its place, imposed a 3-meter wide alley, an easement of right
of way, that ran exclusively along the southwest boundary of Lot B from Lots D and
E to the street.[3] Thus:

38
 CITYSTREET

LOT A LOT B LOT C

LOT D LOT E

Victoria (now petitioner Victoria Salimbangon) later swapped lots with Benedicta with
the result that Victoria became the owner of Lot A, one of the three lots adjacent to
the city street. Victoria and her husband (the Salimbangons) constructed a residential
house on this lot and built two garages on it. One garage abutted the street while the
other, located in the interior of Lot A, used the alley or easement of right of way
existing on Lot B to get to the street. Victoria had this alley cemented and gated.

Subsequently, however, respondent spouses Santos and Erlinda Tan (the Tans)
bought Lots B, C, D, and E from all their owners. The Tans built improvements on Lot
B that spilled into the easement area. They also closed the gate that the
Salimbangons built. Unable to use the old right of way, the Salimbangons lodged a
complaint with the City Engineer of Mandaue against the Tans. For their part, the
Tans filed an action with the Regional Trial Court (RTC) of Mandaue against the
Salimbangons in Civil Case MAN-3223 for the extinguishment of the easement on Lot
B and damages with application for preliminary injunction.[4] The Salimbangons filed
their answer with counterclaims.

After hearing or on February 9, 2001 the RTC rendered judgment, upholding the
Salimbangons' easement of right of way over the alley on Lot B, the lot that belonged
to the Tans. The court pointed out that the easement in this case was established by
agreement of the parties for the benefit of Lots A, D, and E. Consequently, only by
mutual agreement of the parties could such easement be extinguished. The RTC
declined, however, to award damages to the Salimbangons.

Both parties appealed to the Court of Appeals (CA) in CA-G.R. CV 73468. On July 27,
2007 the CA[5] reversed the RTC decision, extinguished the easement of right of way
established on the alley in Lot B of the Tans, and denied the Salimbangons' claim for
damages. The court ruled that based on the testimony of one of the previous owners,
Eduardo Ceniza, the true intent of the parties was to establish that easement of right
of way for the benefit of the interior lots, namely, Lots D and E. Consequently, when
ownership of Lots B, D, and E was consolidated into the Tans, the easement ceased
to have any purpose and became extinct. The Salimbangons filed a motion for
reconsideration but the CA denied the same in its resolution of October 14, 2008.
This prompted them to file the present petition.

Questions Presented

Two questions are presented:

39
1. Whether or not the CA erred in admitting in evidence contrary to the parol evidence
rule Eduardo Ceniza's testimony respecting the true intent of the heirs in establishing
the easement of right of way as against what they stated in their written agreement;
and

2. Whether or not the CA erred in ruling that the easement of right of way established
by the partition agreement among the heirs for the benefit of Lot A has been
extinguished.

The Court's Ruling

One. The Salimbangons point out that the CA ought to have rejected Eduardo
Ceniza's testimony that the heirs had intended to establish the easement of right of
way solely for the benefit of the interior Lots D and E which had no access to the city
street. The partition agreement also made Lot A, now owned by the Salimbangons,
a beneficiary of that easement. Thus:

2. To Eduardo Ceniza [now the Tans], Lot B subject to a perpetual and

grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor
of Lots A, D & E of the subdivision;[6] (Underscoring supplied)

The parol evidence rule, said the Salimbangons, precluded the parties from
introducing testimony that tended to alter or modify what the parties had agreed on
above.

But the exclusionary provision of the parol evidence rule admits of exceptions.
Section 9, Rule 130 of the Revised Rules on Evidence states:

Sec. 9. Evidence of written agreements. - When the terms of an agreement

have been reduced to writing, it is considered as containing all the terms
agreed upon and there can be, between the parties and their successors in
interest, no evidence of such terms other than the contents of the written
agreement. However, a party may present evidence to modify, explain or
add to the terms of the written agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written

agreement;
(b) The failure of the written agreement to express the true intent and
agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors
in interest after the execution of the written agreement.

The term "agreement" includes wills. (7a)

Here, the Tans had put in issue the true intent and agreement of the parties to the
partition when they alleged in their complaint that, contrary to what paragraph 2
quoted above seems to imply, the easement was actually for the benefit of Lots D
and E only. The complaint thus said:

So that in the same partition instrument, the said heirs voluntarily agreed
to establish the so-called "perpetual and gratuitous easement of road right
of way" along LOT A, with 1.50 meters wide and along LOT B, with the same
1.50 meters wide.

Understandably, this servitude voluntarily constituted on LOTS A and B was

had for the benefit and use by the owners of LOTS D (Guillermo Ceniza, Jr.)
and E (defendant Victoria Ceniza Salimbagon).[7] (Underscoring supplied)

40
Consequently, with the above averment, the Tans were entitled to introduce evidence
to establish the true intent and agreement of the parties although this may depart
from what the partition agreement literally provided.

At any rate, as the CA said, the Salimbangons did not object at the hearing to
admission of Eduardo Ceniza's testimony even when this seemed at variance, as far
as they were concerned, with the partition agreement among the heirs.
Consequently, the Salimbangons may also be deemed to have waived their right to
now question such testimony on appeal.

Two. The Salimbangons point out that the partition agreement among the heirs
established in their favor, as owners of Lot A, an easement of right of way on Lot B
from the interior of their lot to the city street. Since theirs was an easement
established by agreement of the parties, only by mutual agreement could the same
be extinguished.

But, firstly, as Eduardo Ceniza testified, the true agreement of the heirs was for the
establishment of an easement of right of way for the benefit solely of the lots that
did not have direct access to the street, namely Lots D and E. His testimony made
sense.

As originally constituted in that agreement, each of Lots A and B was to contribute a

strip of 1.5 meters between them that when combined formed a 3-meter wide alley
leading from Lots D and E to the street. To the extent that Lots A and B retained the
right to use the 1.5-meter portion that they contributed to the establishment of the
easement, the agreement gave their owners the right to use the common alley as
well. As Eduardo testified, however, the true intent of the heirs was to give Lots D
and E access to the street. Lots A and B did not need this alley since they were facing
the street.

Consequently, when the owner of Lots D and E also became the owner of Lot B, the
easement of right of way on Lot B became extinct by operation of law.[8] The existence
of a dominant estate and a servient estate is incompatible with the idea that both
estates belong to the same person.

Secondly, there is no question that when the heirs realized that it was not fair to take
strips of 1.5 meters from each of Lots A, D, and E for the easement of right of way
when these lots were already small, the heirs executed a "Cancellation of Annotation
of Right of Way, etc." that cancelled the easement of right of way they earlier
established on Lots A, D, and E and in its place imposed a 3-meter wide easement of
right of way solely on Lot B.

Although the "cancellation" document did not say so, it was implicit that the changed
location of the easement cancelled not only the 1.5-meter strip of easement imposed
on Lot A of the Salimbangons but also their right to use the new 3-meter easement
alley that lay entirely on Lot B. Strictly speaking, if the Salimbangons insist that their
right as dominant estate under the original partition agreement remains, then that
would be partly on a 1.5-meter strip of their own Lot A and partly on the equivalent
1.5-meter strip on the side of Lot B, not on the new 3-meter alley established entirely
on Lot B.

The point is that, obviously, in establishing the new easement of right of way, the
heirs intended to abandon the old one. Since this 3-meter alley on Lot B directly
connected Lots D and E to the street, it is also obvious that only the latter lots were
its intended beneficiary. And, with the ownership of Lots B, D, and E now consolidated
in a common owner, namely, the Tans, then the easement of right of way on Lot B
may be said to have been extinguished by operation of law.[9]

41
ACCORDINGLY, this Court DENIES the petition and AFFIRMS in all respects the
decision dated July 27, 2007 and resolution dated October 14, 2008 of the Court of
Appeals in CA-G.R. CV 73468.

SO ORDERED.

Carpio, (Chairperson), Brion, Del Castillo, and Perez, JJ., concur.

[1]
Annex "C" of Petition, rollo, pp. 54-55.
[2]
Based on sketch appearing on Annex "C" of Petition, id. at 55.

[3]
Based on sketch appearing on Annex "D" of Petition, id. at 58.

[4]
Raffled to Branch 55 and docketed as Civil Case MAN-3223.

[5]
Raffled to the 19th division and docketed as CA-G.R. CV 73468.

See Extrajudicial Declaration of Heirs and Partition dated July 17, 1973, rollo, pp.
[6]

54-55.

[7]
Annex I, Petition, id. at 65, 67.

[8]
CIVIL CODE OF THE PHILIPPINES, Article 631 (1).
[9]
Id.

455 Phil. 285

THIRD DIVISION
[ G.R. No. 124699, July 31, 2003 ]
BOGO-MEDELLIN MILLING CO., INC., PETITIONER, VS. COURT
OF APPEALS AND HEIRS OF MAGDALENO VALDEZ SR.,
RESPONDENTS.

DECISION

CORONA, J.:

This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to annul
and set aside the decision[1] dated November 17, 1995 of the Court of Appeals, Tenth
Division, which reversed the decision[2] dated November 27, 1991 of the Regional
Trial Court of Cebu City, Branch IX, which ruled in favor of herein petitioner, Bogo-
Medellin Milling Company, Inc. and dismissed herein private respondents' complaint
for payment of compensation and/or recovery of possession of real property and
damages with application for restraining order or preliminary injunction; and its
resolution dated March 2, 1996 denying petitioner's motion for reconsideration.

The antecedent facts follow.

Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez, Angelina
Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-Melendres

42
(hereafter the heirs), purchased from Feliciana Santillan, on December 9, 1935, a
parcel of unregistered land covered by Tax Declaration No. 3935 with an area of one
hectare, 34 ares and 16 centares, located in Barrio Dayhagon, Medellin, Cebu.[3] He
took possession of the property and declared it for tax purposes in his name.[4]

Prior to the sale, however, the entire length of the land from north to south was
already traversed in the middle by railroad tracks owned by petitioner Bogo-Medellin
Milling Co., Inc. (hereafter Bomedco). The tracks were used for hauling sugar cane
from the fields to petitioner's sugar mill.

When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents
inherited the land. However, unknown to them, Bomedco was able to have the
disputed middle lot which was occupied by the railroad tracks placed in its name in
the Cadastral Survey of Medellin, Cebu in 1965. The entire subject land was divided
into three, namely, Cadastral Lot Nos. 953, 954 and 955. Lot Nos. 953 and 955
remained in the name of private respondents. However, Lot No. 954, the narrow lot
where the railroad tracks lay, was claimed by Bomedco as its own and was declared
for tax purposes in its name. [5]

It was not until 1989 when private respondents discovered the aforementioned claim
of Bomedco on inquiry with the Bureau of Lands. Through their lawyer, they
immediately demanded the legal basis for Bomedco's claim over Cadastral Lot No.
954 but their letter of inquiry addressed to petitioner went unheeded, as was their
subsequent demand for payment of compensation for the use of the land.[6]

On June 8, 1989, respondent heirs filed a "Complaint for Payment of Compensation

and/or Recovery of Possession of Real Property and Damages with Application for
Restraining Order/Preliminary Injunction" against Bomedco before the Regional Trial
Court of Cebu.[7] Respondent heirs alleged that, before she sold the land to Valdez,
Sr. in 1935, Santillan granted Bomedco, in 1929, a railroad right of way for a period
of 30 years. When Valdez, Sr. acquired the land, he respected the grant. The right of
way expired sometime in 1959 but respondent heirs allowed Bomedco to continue
using the land because one of them was then an employee of the company.[8]

In support of the complaint, they presented an ancient document an original copy

of the deed of sale written in Spanish and dated December 9, 1935[9] to evidence
the sale of the land to Magdaleno Valdez, Sr.; several original real estate tax
receipts[10] including Real Property Tax Receipt No. 3935[11] dated 1922 in the name
of Graciano de los Reyes, husband of Feliciana Santillan, and Real Property Tax
Receipt No. 09491[12] dated 1963 in the name of Magdaleno Valdez, Sr. Magdaleno
Valdez, Jr. also testified for the plaintiffs during the trial.

On the other hand, Bomedco's principal defense was that it was the owner and
possessor of Cadastral Lot No. 954, having allegedly bought the same from Feliciana
Santillan in 1929, prior to the sale of the property by the latter to Magdaleno Valdez,
Sr. in 1935. It also contended that plaintiffs' claim was already barred by prescription
and laches because of Bomedco's open and continuous possession of the property for
more than 50 years.

Bomedco submitted in evidence a Deed of Sale[13] dated March 18, 1929; seven real
estate tax receipts[14] for the property covering the period from 1930 to 1985; a 1929
Survey Plan of private land for Bogo-Medellin Milling Company;[15] a Survey
Notification Card;[16] Lot Data Computation for Lot No. 954;[17] a Cadastral Map for
Medellin Cadastre[18] as well as the testimonies of Vicente Basmayor, Geodetic
Engineer and property custodian for Bomedco, and Rafaela A. Belleza, Geodetic
Engineer and Chief of the Land Management Services of the DENR, Region VIII.

In its decision dated November 27, 1991, the trial court[19] rejected Bomedco's
defense of ownership on the basis of a prior sale, citing that its evidence - a xerox

43
copy of the Deed of Sale dated March 18, 1929 - was inadmissible and had no
probative value. Not only was it not signed by the parties but defendant Bomedco
also failed to present the original copy without valid reason pursuant to Section 4,
Rule 130 of the Rules of Court.[20]

Nonetheless, the trial court held that Bomedco had been in possession of Cadastral
Lot No. 954 in good faith for more than 10 years, thus, it had already acquired
ownership of the property through acquisitive prescription under Article 620 of the
Civil Code. It explained:
Under Article 620 of the Civil Code, CONTINUOUS and APPARENT easements can be
acquired by prescription after ten (10) years. The "apparent" characteristic of the
questioned property being used by defendant as an easement is no longer at issue,
because plaintiffs themselves had acknowledged that the existence of the railway
tracks of defendant Bomedco was already known by the late Magdaleno Valdez,
herein plaintiffs' predecessor-in-interest, before the late Magdaleno Valdez purchased
in 1935 from the late Feliciana Santillan the land described in the Complaint where
defendant's railway tracks is traversing [sic] (TSN of February 5, 1991, pp. 7-8). As
to the continuity of defendant's use of the strip of land as easement is [sic] also
manifest from the continuous and uninterrupted occupation of the questioned
property from 1929 up to the date of the filing of the instant Complaint. In view of
the defendant's UNINTERRUPTED possession of the strip of land for more than fifity
(50) years, the Supreme Court's ruling in the case of Ronquillo, et al. v. Roco, et al.
(103 Phil 84) is not applicable. This is because in said case the easement in question
was a strip of dirt road whose possession by the dominant estate occurs only
everytime said dirt road was being used by the dominant estate. Such fact would
necessarily show that the easement's possession by the dominant estate was never
continuous. In the instant case however, there is clear continuity of defendant's
possession of the strip of land it had been using as railway tracks. Because the railway
tracks which defendant had constructed on the questioned strip of land had been
CONTINUOUSLY occupying said easement. Thus, defendant Bomedco's apparent and
continuous possession of said strip of land in good faith for more than ten (10) years
had made defendant owner of said strip of land traversed by its railway tracks.
Because the railway tracks which defendant had constructed on the questioned strip
of land had been continuously occupying said easement [sic]. Thus, defendant
Bomedco's apparent and continuous possession of said strip of land in good faith for
more than ten (10) years had made defendant owner of said strip of land traversed
by its railway tracks.
Respondent heirs elevated the case to the Court of Appeals which found that
Bomedco did not acquire ownership over the lot. It consequently reversed the trial
court. In its decision dated November 17, 1995, the appellate court held that
Bomedco only acquired an easement of right of way by unopposed and continuous
use of the land, but not ownership, under Article 620 of the Civil Code.

The appellate court further ruled that Bomedco's claim of a prior sale to it by Feliciana
Santillan was untrue. Its possession being in bad faith, the applicable prescriptive
period in order to acquire ownership over the land was 30 years under Article 1137
of the Civil Code. Adverse possession of the property started only in 1965 when
Bomedco registered its claim in the cadastral survey of Medellin. Since only 24 years
from 1965 had elapsed when the heirs filed a complaint against Bomedco in 1989,
Bomedco's possession of the land had not yet ripened into ownership.

And since there was no showing that respondent heirs or their predecessor-in-interest
was ever paid compensation for the use of the land, the appellate court awarded
compensation to them, to be computed from the time of discovery of the adverse
acts of Bomedco.

Its motion for reconsideration having been denied by the appellate court in its
resolution dated March 22, 1996, Bomedco now interposes before us this present
appeal by certiorari under Rule 45, assigning the following errors:

44
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT REVERSED AND
SET ASIDE THE TRIAL COURT'S DECISION DISMISSING PRIVATE RESPONDENT'S
COMPLAINT.

II

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT ORDERED THE

PETITIONER TO PAY THE PRIVATE RESPONDENT THE REASONABLE VALUE OF LOT
954 AND THE AMOUNT OF TEN THOUSAND (P10,000.00) PESOS AS REASONABLE
ATTORNEY'S FEES.
Petitioner Bomedco reiterates its claim of ownership of the land through extraordinary
acquisitive prescription under Article 1137 of the Civil Code and laches to defeat the
claim for compensation or recovery of possession by respondent heirs. It also submits
a third ground originally tendered by the trial court acquisition of the easement
of right of way by prescription under Article 620 of the Civil Code.

EXTRAORDINARY ACQUISITIVE PRESCRIPTION

UNDER ART. 1137 OF THE CIVIL CODE

Petitioner's claim of ownership through extraordinary acquisitive prescription under

Article 1137 of the Civil Code cannot be sustained.

There is no dispute that the controversial strip of land has been in the continuous
possession of petitioner since 1929. But possession, to constitute the foundation of a
prescriptive right, must be possession under a claim of title, that is, it must be
adverse.[21] Unless coupled with the element of hostility towards the true owner,
possession, however long, will not confer title by prescription.[22]

After a careful review of the records, we are inclined to believe the version of
respondent heirs that an easement of right of way was actually granted to petitioner
for which reason the latter was able to occupy Cadastral Lot No. 954. We cannot
disregard the fact that, for the years 1930, 1937, 1949, 1962 and 1963, petitioner
unequivocally declared the property to be a "central railroad right of way" or "sugar
central railroad right of way" in its real estate tax receipts when it could have declared
it to be "industrial land" as it did for the years 1975 and 1985.[23] Instead of indicating
ownership of the lot, these receipts showed that all petitioner had was possession by
virtue of the right of way granted to it. Were it not so and petitioner really owned the
land, petitioner would not have consistently used the phrases "central railroad right
of way" and "sugar central railroad right of way" in its tax declarations until 1963.
Certainly an owner would have found no need for these phrases. A person cannot
have an easement on his own land, since all the uses of an easement are fully
comprehended in his general right of ownership.[24]

While it is true that, together with a person's actual and adverse possession of the
land, tax declarations constitute strong evidence of ownership of the land occupied
by him,[25] this legal precept does not apply in cases where the property is declared
to be a mere easement of right of way.

An easement or servitude is a real right, constituted on the corporeal immovable

property of another, by virtue of which the owner has to refrain from doing, or must
allow someone to do, something on his property, for the benefit of another thing or
person. It exists only when the servient and dominant estates belong to two different
owners. It gives the holder of the easement an incorporeal interest on the land but
grants no title thereto. Therefore, an acknowledgment of the easement is an
admission that the property belongs to another.[26]

Having held the property by virtue of an easement, petitioner cannot now assert that
its occupancy since 1929 was in the concept of an owner. Neither can it declare that

45
the 30-year period of extraordinary acquisitive prescription started from that year.

Petitioner, however, maintains that even if a servitude was merely imposed on the
property in its favor, its possession immediately became adverse to the owner in the
late 1950's when the grant was alleged by respondent heirs to have expired. It
stresses that, counting from the late 1950's (1959 as found by the trial court), the
30-year extraordinary acquisitive prescription had already set in by the time
respondent heirs made a claim against it in their letters dated March 1 and April 6,
1989.

We do not think so. The mere expiration of the period of easement in 1959 did not
convert petitioner's possession into an adverse one. Mere material possession of land
is not adverse possession as against the owner and is insufficient to vest title, unless
such possession is accompanied by the intent to possess as an owner.[27] There should
be a hostile use of such a nature and exercised under such circumstances as to
manifest and give notice that the possession is under a claim of right.

In the absence of an express grant by the owner, or conduct by petitioner sugar mill
from which an adverse claim can be implied, its possession of the lot can only be
presumed to have continued in the same character as when it was acquired (that is,
it possessed the land only by virtue of the original grant of the easement of right of
way),[28] or was by mere license or tolerance of the owners (respondent heirs).[29] It
is a fundamental principle of law in this jurisdiction that acts of possessory character
executed by virtue of license or tolerance of the owner, no matter how long, do not
start the running of the period of prescription.[30]

After the grant of easement expired in 1959, petitioner never performed any act
incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On
the contrary, until 1963, petitioner continued to declare the "sugar central railroad
right of way" in its realty tax receipts, thereby doubtlessly conceding the ownership
of respondent heirs. Respondents themselves were emphatic that they simply
tolerated petitioner's continued use of Cadastral Lot No. 954 so as not to jeopardize
the employment of one of their co-heirs in the sugar mill of petitioner.[31]

The only time petitioner assumed a legal position adverse to respondents' was when
it filed a claim over the property in 1965 during the cadastral survey of Medellin.
Since then (1965) and until the filing of the complaint for the recovery of the subject
land before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required
30-year extraordinary prescriptive period had not yet been complied with in 1989,
petitioner never acquired ownership of the subject land.

LACHES

Neither can petitioner find refuge in the principle of laches. It is not just the lapse of
time or delay that constitutes laches. The essence of laches is the failure or neglect,
for an unreasonable and unexplained length of time, to do that which, through due
diligence, could or should have been done earlier, thus giving rise to a presumption
that the party entitled to assert it had either abandoned or declined to assert it.[32]

Its essential elements are: (a) conduct on the part of the defendant, or of one under
whom he claims, giving rise to the situation complained of; (b) delay in asserting
complainant's rights after he had knowledge of defendant's acts and after he has had
the opportunity to sue; (c) lack of knowledge or notice by defendant that the
complainant will assert the right on which he bases his suit; and (d) injury or
prejudice to the defendant in the event the relief is accorded to the complainant.[33]

The second element (which in turn has three aspects) is lacking in the case at bar.
These aspects are: (a) knowledge of defendant's action, (b) opportunity to sue
defendant after obtaining such knowledge and (c) delay in the filing of such suit.[34]

46
Records show that respondent heirs only learned about petitioner's claim on their
property when they discovered the inscription for the cadastral survey in the records
of the Bureau of Lands in 1989. Respondents lost no time in demanding an
explanation for said claim in their letters to the petitioner dated March 1, 1989 and
April 6, 1989. When petitioner ignored them, they instituted their complaint before
the Regional Trial Court of Cebu City on June 8, 1989.

Petitioner's reliance on Caro vs. Court of Appeals [35] and Vda. de Alberto vs. Court of
Appeals [36] is misplaced. There, laches was applied to bar petitioners from
questioning the ownership of the disputed properties precisely because they had
knowledge of the adverse claims on their properties yet tarried for an extraordinary
period of time before taking steps to protect their rights.

Further, there is no absolute rule on what constitutes laches. It is a rule of equity and
applied not to penalize neglect or sleeping on one's rights but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The
question of laches is addressed to the sound discretion of the court and each case
must be decided according to its particular circumstances.[37] It is the better rule that
courts, under the principle of equity, should not be guided or bound strictly by the
statute of limitations or the doctrine of laches if wrong or injustice will result.

It is clear that petitioner never acquired ownership over Cadastral Lot No. 954
whether by extraordinary acquisitive prescription or by laches.

ACQUISITION OF EASEMENT OF RIGHT OF WAY BY

PRESCRIPTION UNDER ART. 620 OF THE CIVIL CODE

Petitioner contends that, even if it failed to acquire ownership of the subject land, it
nevertheless became legally entitled to the easement of right of way over said land
by virtue of prescription under Article 620 of the Civil Code:
Continuous and apparent easements are acquired either by virtue of a title or by
prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the reason that the
railroad right of way was, according to them, continuous and apparent in nature. The
more or less permanent railroad tracks were visually apparent and they continuously
occupied the subject strip of land from 1959 (the year the easement granted by
Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year
prescriptive period in 1969, petitioner supposedly acquired the easement of right of
way over the subject land.

Following the logic of the courts a quo, if a road for the use of vehicles or the passage
of persons is permanently cemented or asphalted, then the right of way over it
becomes continuous in nature. The reasoning is erroneous.

Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the
presence of apparent signs or physical indications of the existence of such easements.
Thus, an easement is continuous if its use is, or may be, incessant without the
intervention of any act of man, like the easement of drainage;[38] and it is
discontinuous if it is used at intervals and depends on the act of man, like the
easement of right of way.[39]

The easement of right of way is considered discontinuous because it is exercised only

if a person passes or sets foot on somebody else's land. Like a road for the passage
of vehicles or persons, an easement of right of way of railroad tracks is discontinuous
because the right is exercised only if and when a train operated by a person passes
over another's property. In other words, the very exercise of the servitude depends
upon the act or intervention of man which is the very essence of discontinuous

47
easements.

The presence of more or less permanent railroad tracks does not in any way convert
the nature of an easement of right of way to one that is continuous. It is not the
presence of apparent signs or physical indications showing the existence of an
easement, but rather the manner of exercise thereof, that categorizes such easement
into continuous or discontinuous. The presence of physical or visual signs only
classifies an easement into apparent or non-apparent. Thus, a road (which reveals a
right of way) and a window (which evidences a right to light and view) are apparent
easements, while an easement of not building beyond a certain height is non-
apparent.[40]

In Cuba, it has been held that the existence of a permanent railway does not make
the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired
by prescription.[41] In Louisiana, it has also been held that a right of passage over
another's land cannot be claimed by prescription because this easement is
discontinuous and can be established only by title.[42]

In this case, the presence of railroad tracks for the passage of petitioner's trains
denotes the existence of an apparent but discontinuous easement of right of way.
And under Article 622 of the Civil Code, discontinuous easements, whether apparent
or not, may be acquired only by title. Unfortunately, petitioner Bomedco never
acquired any title over the use of the railroad right of way whether by law, donation,
testamentary succession or contract. Its use of the right of way, however long, never
resulted in its acquisition of the easement because, under Article 622, the
discontinuous easement of a railroad right of way can only be acquired by title and
not by prescription.

To be sure, beginning 1959 when the original 30-year grant of right of way given to
petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to
be by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in
1989 for the return of the subject land and the removal of the railroad tracks, or, in
the alternative, payment of compensation for the use thereof, petitioner Bomedco
which had no title to the land should have returned the possession thereof or should
have begun paying compensation for its use.

But when is a party deemed to acquire title over the use of such land (that is, title
over the easement of right of way)? In at least two cases, we held that if: (a) it had
subsequently entered into a contractual right of way with the heirs for the continued
use of the land under the principles of voluntary easements or (b) it had filed a case
against the heirs for conferment on it of a legal easement of right of way under Article
629 of the Civil Code, then title over the use of the land is deemed to exist. The
conferment of a legal easement of right of way under Article 629 is subject to proof
of the following:

(1) it is surrounded by other immovables and has no adequate outlet to a public

highway;

(2) payment of proper indemnity;

(3) the isolation is not the result of its own acts; and

(4) the right of way claimed is at the point least prejudicial to the servient
estate, and, insofar as consistent with this rule, the distance from the
dominant estate to the highway is the shortest.[43]

48
None of the above options to acquire title over the railroad right of way was ever
pursued by petitioner despite the fact that simple resourcefulness demanded such
initiative, considering the importance of the railway tracks to its business. No doubt,
it is unlawfully occupying and using the subject strip of land as a railroad right of way
without valid title yet it refuses to vacate it even after demand of the heirs.
Furthermore, it tenaciously insists on ownership thereof despite a clear showing to
the contrary.

We thus uphold the grant by the Court of Appeals of attorney's fees in the amount of
P10,000 considering the evident bad faith of petitioner in refusing respondents' just
and lawful claims, compelling the latter to litigate.[44]

WHEREFORE, the petition is DENIED. The appealed decision dated November 17,
1995 and resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED
with MODIFICATION. Petitioner Bogo-Medellin Milling Company, Inc. is hereby
ordered to vacate the subject strip of land denominated as Cadastral Lot No. 954,
remove its railway tracks thereon and return its possession to the private
respondents, the heirs of Magdaleno Valdez, Sr. It is also hereby ordered to pay
private respondents attorney's fees in the amount of P10,000.

SO ORDERED.

Puno, (Chairman), Panganiban, and Carpio-Morales, JJ., concur.

Sandoval-Gutierrez, J., on official leave.

[1]
Penned by Associate Justice Celia Lipana-Reyes and concurred in by Associate
Justices Alfredo L. Benipayo and Corona Ibay-Somera.

[2]
Penned by Presiding Judge Benigno G. Gaviola.
[3]
Exhibit "A," Folder of Plaintiffs' Exhibits, p. 1.
[4]
Exhibits "B," "B-1," "B-4" and "D," Folder of Plaintiffs' Exhibits, pp. 2-4, 6.

[5]
Exhibit "H," Folder of Plaintiffs' Exhibits, p. 11.
[6]
Exhibits "E" and "F," Id. at pp. 7, 8-9.
[7]
Records, pp. 1-7.

[8]
Exhibits "Y," Folder of Plaintiffs' Exhibits, pp. 102-103.

[9]
Exhibit "A," Id. at p. 1.

[10]
Exhibits "B," "B1," "B2," "B3" and "B4," Id. at pp. 2-4.
[11]
Exhibit "C," Id. at p. 5.

[12]
Exhibit "D," Id. at p. 6.

[13]
Exhibit "1," Folder of Defendant's Exhibits, pp. 8-9.

[14]
Exhibits "2," "3," "4," "5," "6," "7" and "8," Id. at pp. 10-15.
[15]
Exhibit "9," Id. at p. 17.

49
[16]
Exhibit "10," Id. at p. 18.

[17]
Exhibit "11," Id. at p. 19.

[18]
Exhibit "12," Id. at pp. 20-21.
[19]
Presiding Judge Benigno G. Gaviola.
[20]
Rollo, p. 39.

[21]
Ordoez vs. Court of Appeals, 188 SCRA 109 [1990].

[22]
Cequea vs. Bolante, 330 SCRA 216 [2000].

[23]
Folder of Defendant's Offer of Exhibits, pp. 10-16.

[24]
Articles 428 and 437, Civil Code.
[25]
DBP vs. Court of Appeals, 331 SCRA 267 [2000]; Article 233, Civil Code.

[26]
2 TOLENTINO, CIVIL CODE 353-354 [1992].
[27]
Compaia Agricula de Ultramar vs. Domingo, 6 Phil 246 [1906].
[28]
Article 529, Civil Code.

[29]
Manila Electric Company vs. IAC, 174 SCRA 313 [1989].
[30]
Article 1119, Civil Code.
[31]
Exhibit "Y," Records, pp. 102-103.
[32]
Espao vs. Court of Appeals, 268 SCRA 511[1997].
[33]
Avisado vs. Rumbaua, 354 SCRA 245 [2001].

[34]
Catholic Bishop of Balanga vs. CA, 264 SCRA 181 [1996].
[35]
180 SCRA 401[1989].
[36]
173 SCRA 436 [1989].

[37]
Villanueva vs. Court of Appeals, 330 SCRA 349 [2000].

3 PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 597-598 (13th ed.,

[38]

1994); Articles 615 and 646, Civil Code.

[39]
Ibid.

[40]
Supra note 26, 358.

[41]
Ibid. at 365, citing Sentencia (Cuba) of December 14,1928.

[42]
Ibid., citing Broussard vs. Etie, 11 La. 394; Burgas vs. Stontz, 174 La. 586, 141
So. 67.

Bacolod-Murcia Milling Co., Inc., et. al. vs. Capital Subd. Inc., et. al., 124 SCRA
[43]

128 [1966]; Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental, et. al., 149
SCRA 676 [1971].

50
 Article 2208 (2) (5), Civil Code; Songcuan vs. Intermediate Appellate Court, 191
[44]

SCRA 1 [1990].

512 Phil. 237

THIRD DIVISION
[ G.R. No. 136897, November 22, 2005 ]
PRIVATE DEVELOPMENT CORPORATION OF THE PHILIPPINES,
PELAGIO TOLOSA, IN HIS CAPACITY AS REGISTER OF DEEDS,
GENERAL SANTOS CITY, AND ATANACIO M. VILLEGAS,
PETITIONERS, VS. THE COURT OF APPEALS AND GENERAL
SANTOS DOCTORS' HOSPITAL, INC., RESPONDENTS.

DECISION

GARCIA, J.:

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners
Private Development Corporation of the Philippines and Atanacio M. Villegas seek the
reversal and setting aside of the following issuances of the Court of Appeals in CA-
G.R. CV No. 52542, to wit:
1. Decision dated July 16, 1998,[1] affirming an earlier decision of the Regional
Trial Court at General Santos City which ordered the petitioners, in
particular petitioner Atanacio M. Villegas, to present before the Register of
Deeds of General Santos City TCT No. T-32610 covering Lot 908-B-6-L-4-
B for the annotation thereon of a Memorandum of Agreement establishing
an easement of right-of-way in favor of private respondent General Santos
Doctor's Hospital, Inc.; and

2. Resolution dated January 8, 1999,[2] denying petitioners' motion for

reconsideration.
Culled from the records are the following factual antecedents:

The spouses Agustin Narciso and Aurora Narciso (the Narcisos, for short) were the
original owners of two (2) lots situated at Barrio Lagao, General Santos City,
Cotabato.

The first lot, which is a portion of a bigger parcel of land known as Lot No. 908-B-6-
L-3 and covered by TCT No. 22608, is identified as Lot No. 908-B-6-L-3-A,
hereinafter referred to as the interior lot, with an area of one (1) hectare. Adjacent
to this lot and abutting the national highway is the second lot, Lot No. 908-B-6-L-4-
B, hereinafter referred to as the exterior lot, covered by TCT No. 13550.[3]

On September 6, 1968, the Narcisos executed in favor of herein respondent, General

Santos Doctor's Hospital, Inc. (GSDHI) an Option to Buy[4] the interior lot,
subject, among others, to the condition that:
5. The vendors shall construct a 10 meter wide road commencing from the
National Highway, traversing the property of the Vendors and terminating
perpendicularly at the mid-point of the Southern boundary of the property
subject of this Option, facing the national highway. Additionally, the

51
 vendors shall also construct a 10 meter wide road alongside the same
southern boundary of the subject land, forming a right angle with the road
first above described. The Vendors shall also provide drainage facilities.[5]
True enough, on September 25, 1968, the interior lot was bought by GSDHI, as
evidenced by a Deed of Absolute Sale.[6]

On the same day of the sale, a Memorandum of Agreement[7] was executed by and
between the Narcisos and GSDHI, paragraph 7 of which practically reproduced the
same condition, supra, appearing in the earlier Option to Buy, thus:
7. The vendors [Narcisos] also known as Party of the First Part, shall construct
a ten (10) meter wide road commencing from the National Highway,
traversing the property of the vendors and terminating perpendicularly at
the mid-point of the Southern boundary of the property subject of the sale
facing the National Highway. Additionally, the vendors or party of the first
part, shall also construct a ten (10) meter wide road alongside the same
Southern boundary of the subject land, forming a right angle with the road
first above-described. The vendors shall also provide drainage facilities.[8]
Years later, or on September 30, 1977, the exterior lot was mortgaged by the
Narcisos to one of the petitioners herein, Private Development Corporation of
the Philippines (PDCP). Upon the Narcisos' failure to pay the mortgage obligation,
the mortgage was foreclosed and the mortgaged property (exterior lot) sold at a
public auction on June 21, 1982 with PDCP as the lone bidder. Accordingly, the
Narcisos' title covering the exterior lot was cancelled and in lieu thereof TCT No.
23202 was issued in the name of PDCP.

On April 18, 1988, in the Regional Trial Court at General Santos City, respondent
GSDHI, claiming that it has an easement of right-of-way over the foreclosed property
(exterior lot), filed a complaint for specific performance against PDCP, therein
impleading the Register of Deeds of General Santos City, Pelagio T. Tolosa, as a
nominal party-defendant, to compel PDCP to present before the Register of Deeds its
duplicate copy of TCT No. 23202 over the exterior lot for the annotation thereon of
the Memorandum of Agreement establishing an easement of right-of-way in favor of
GSDHI.

In its complaint, docketed with the trial court as Civil Case No. 4128, respondent
GSDHI, as plaintiff, alleged that the easement was a condition and primary
consideration for its purchase from the Narcisos of the interior lot so that the
hospital it intends to build thereat would have an access to the national
highway; that the grant is evidenced by two (2) public documents executed between
it and the Narcisos, i.e., "Option to Buy"[9] the interior lot dated September 6, 1968
and "Memorandum of Agreement"[10] dated September 25, 1968; that the portion
covered by the easement was inadvertently and erroneously included in the mortgage
of the exterior lot as the same was not segregated from the mother title; that upon
informing PDCP of the easement on January 27, 1983, it (respondent) even offered
to buy the whole exterior lot so as to avoid future litigation but although
negotiations lasted until August of 1988, no agreement was reached on the price,
hence, it (respondent) opted to continue and preserve the easement of right-of-way
established in its favor since 1968.

In its Answer, PDCP denied any knowledge of the alleged easement of right-of-way,
averring that it was not a party to any of the transactions between respondent and
the Narcisos. PDCP argued that the "Option to Buy" and "Memorandum of Agreement"
cannot by themselves constitute a valid agreement to create and vest in favor on
respondent an easement of right-of-way in the absence of terms providing for, among
others, the amount of consideration therefor. And, even assuming that the
Memorandum of Agreement created such an easement, PDCP contended that it
cannot be bound thereby because said agreement was not duly inscribed and
registered with the Registry of Deeds. Furthermore, PDCP asserted that it is an

52
innocent purchaser for value and in good faith, hence, the alleged easement cannot
be enforced against it.

Meanwhile, during the pendency of the case, or sometime in January, 1989, PDCP
sold the exterior lot to the other petitioner herein, Atanacio M. Villegas. On
account thereof, PDCP's title over the exterior lot was cancelled and TCT No. 32610
issued in the name of Villegas.

Consequently, respondent GSDHI amended its complaint by impleading Villegas as

additional party-defendant. For his part, Villegas formally adopted PDCP's
aforementioned allegations and defenses in its Answer.

Eventually, in a decision dated December 15, 1998,[11] the trial court rendered
judgment for plaintiff GSDHI and against defendants PDCP and Villegas, to wit:
Accordingly, judgment is rendered for the plaintiff and against the defendants
ordering the latter, particularly Atanacio M. Villegas to present before the Register of
Deeds of General Santos City Transfer Certificate of Title No. T-32610 for annotation
of the Memorandum of Agreement establishing the casement of right-of-way in favor
of the plaintiff.

SO ORDERED.
Explains the trial court in its decision:
The long and short of the seeming complexity of the issues raised by the parties is
summed up by the question of whether or not the plaintiff under the circumstances
is entitled to compel the defendants particularly Atanacio M. Villegas to respect and
annotate in the certificate of title the easement of right of way, or conversely whether
the defendants are innocent mortgagor or purchaser for value, hence not bound by
it.

The dominion of the plaintiff over the disputed road that virtually cut into two lot 908-
B-6-L-4-B comprising a total area of 1,000 square (10 m x 100m) was elucidated
and clarified by Agustin N. Narciso, the source of plaintiff's rights. (Exhibits "A" and
"B") When Lot 908-B-L-3-A was sold by Narciso to GSDHI way back on September
25, 1963 the imperfection of the document of absolute sale was discovered at once.
(Exhibit "D") So a "Memorandum of Agreement" was executed that same day to
rectify the omission and put in black and white the agreement regarding the direct
access road to the national highway passing through the adjoining lot 908-B-6-L-4-
B then owned by Narciso. (Exhibit "E") The relevant portion of the agreement
provides:
xxx "7. The vendors also known as Party of the First Part, shall construct a ten (10)
meter wide road commencing from the National Highway, traversing the property of
the vendors and terminating perpendicularly at the mid-point of the Southern
boundary of the property subject of the sale facing the National Highway.
Additionally, the vendors or party of the first part, shall also construct a ten (10)
meter wide road alongside the same Southern boundary of the subject land, forming
a right angle with the road first above-described. The vendors shall also provide
drainage facilities." xxx
Prior to the execution of the Deed of Absolute Sale and the Memorandum of
Agreement, the Narcisos and the plaintiff executed a document denominated "Option
to Buy" on September 6, 1968, the pertinent portion of which provides:
xxx "5. The vendors shall construct a 10 meter wide road commencing from the
National Highway, traversing the property of the Vendors and terminating
perpendicularly at the mid-point of the Southern boundary of the property subject of
this Option, facing the national highway. Additionally, the vendors shall also construct
a 10 meter wide road alongside the same southern boundary of the subject land,
forming a right angle with the road first above described. The Vendors shall also
provide drainage facilities." xxx
In keeping with their agreement with the plaintiff, the Narcisos caused to be
constructed a 10 meter wide road starting from the National Highway passing through

53
Lot 908-B-6-L-4-B until the mid-point of the Southern boundary of Lot 908-B-L-3-A
which was the property sold to the plaintiff. He also had a 10 meter wide road
alongside the southern boundary of the land sold to the plaintiff forming an angle
with the road that commenced from the national highway.

These undertakings of the Narcisos were in compliance with their agreement with the
plaintiff to guarantee direct access to the national highway from the hospital that was
to be constructed by the plaintiff on inner Lot 908-B-L-3-A. The total consideration
for the sale of Lot 908-B-L-3-A covering an area of one hectare was P100,000.00 and
an additional of P10,000.00 was paid for the 10 meter wide road right-of-way from
the southern boundary of the property straight to the national highway with an
approximate length of 100 meters. This was not specifically mentioned in the Deed
of Absolute Sale but this was in pursuance of their agreement that the one hectare
lot was priced at P10.00 per square meter, or for P100,000.00. Narcisos' agreement
with the plaintiff for the construction of the road right-of-way was for its use in
perpetuity by the plaintiff as well as the public. The road right-of-way was constructed
immediately upon execution of the Deed of Sale but it is being maintained ever since
by the plaintiff. The road was located in the shortest distance between the national
highway and the hospital of the plaintiff and because of it the property over which
the easement of road right-of-way passing through at the middle was substantially
benefited making it commercial.

Sometime in 1976 or 1977, the Narcisos mortgaged Lot 908-B-6-L-4-B which was
the servient estate to PDCP thru its branch office in Davao City. As a requirement,
the Narcisos submitted to PDCP the title of the land, the map and the sketch on the
easement that was granted by the plaintiff to the CSDHI. When the property was
inspected, Agustin Narciso showed the extent of the property offered as collateral
and together with the manager and other officers of the PDCP even passed through
the road right-of-way in question. The metes and bounds of the Narcisos property
was also shown to the officers of the PDCP including the signboard along the national
highway leading to the hospital. Thereafter the loan was approved.

On cross-examination, Agustin Narciso admitted having mortgaged the property

covered by his title but excluding the 10 X 100 meter road which was paid for by the
plaintiff. The "Memorandum of Agreement," however, and the "Option to Buy" which
embodied the meeting of minds of the plaintiff and the Narcisos regarding the
easement of right-of-way over Lot 908-B-6-L-4-B was not registered or
annotated. Agustin Narciso reiterated that when the property mortgaged to PDCP
was verified, several personnel of PDCP came, a certain Mr. Rey Feria, Mr. Lim, Mr.
Alcantara and a certain Mr. Delgado. He did not, however, furnish them copies of
the "Option to Buy" and the "Memorandum of Agreement."

The importance of the road right-of-way to the plaintiff was underscored by officers
of the plaintiff. Acquisition of the hospital site was premised on the grant by the then
owner and seller Agustin Narciso of the ten meter wide access road through the
servient property owned by the seller. It was a condition sine qua non of the contract
between plaintiff and the Narcisos because the plaintiff wanted the site to be a bit far
from the national highway but with easy and direct access to the highway because of
the nature of the business they were putting up. The hospital having been constructed
sometime in 1968, plaintiff maintained the 10 x 100 meters road to the highway and
used it including the public openly, continuously and notoriously without being
challenged by any party.

When the Narcisos failed to pay their account with the defendant PDCP Lot 908-B-L-
3-B which was put up as guarantee thereof was foreclosed and in the subsequent
public auction sale the defendant PDCP was the lone bidder and therefore it became
the owner.

The plaintiff learned of the acquisition by PDCP of the property previously owned by

54
the Narcisos and steps were taken by the plaintiff to buy peace when it was realized
that the "Memorandum of Agreement" as well as the "Option to Buy" evidencing their
ownership of the road right-of-way of 10 x 100 meters was only duly recorded with
the Register of Deeds. Negotiations were had with the defendant PDCP but no
agreement was reached because of the wide gap between the offers and counter
offers made.

In the meantime, the defendant PDCP never asserted that it is the rightful owner of
the road right-of-way, neither did it interrupt the continued use by the plaintiff and
the general public of the road in question.

Requests were made of the defendant PDCP to allow the plaintiff to have its right
over the road right-of-way annotated in the title of the said defendant but it was
ignored. Overtures were made by the plaintiff to buy peace or as gesture of
compromise to the defendant PDCP but those were fruitless.

The defendants, particularly the original and one of the principal defendants, did not
challenge the genuiness and authenticity of the documents in the possession of the
plaintiff and presented in evidence like the Option to Buy, Memorandum of Agreement
and the Deed of Absolute Sale. The centerpiece of PDCP's defense was the
nonregistration of the "Option to Buy" and "Memorandum of Agreement" embodying
the right of the plaintiff over the contested road right of way.

The defendant Atanacio M. Villegas relied entirely on the defenses put up by its
predecessor-in-interest PDCP.

It was the contention also of the defendant PDCP that had it known of the existence
of the road right-of-way over the property mortgaged and subsequently acquired by
it in a public auction sale, they would not have paid the big amount for the property
considering that with the existence of the road right-of-way the value of the property
was very much diminished.

Considering, however, that the defendant PDCP is a banking institution and it is

normal business practice that when loan is granted the property offered as security
is invariably inspected, it would be unlikely cr unrealistic that the defendant PDCP
accepted Lot-908-B-6-L-4-B without knowing its actual state. The evidence also
disclosed that when the loan was contracted by the previous owner Agustin Narciso
several officers of the bank repaired to the area and made an on-the-spot verification
of the land.

On the part of Atanacio Villegas, his attorney-in-fact who took the witness stand
affirmed that the road right-of-way has been in existence way back in the late 1960's
and he noticed it when he frequently traveled to General Santos City even when this
was still a rustic community as reflected in his testimony.

In the light of the undisputed facts obtaining that the road right-of-way is
conspicuously situated and has been in existence and in constant use for a long period
of time, or for over 25 years failure of the plaintiff to cause the registration of its road
right-of-way did not in the face of reality militate against its right over the
casement.[12]
From the trial court's decision, petitioners went to the Court of Appeals (CA) whereat
their appellate recourse was docketed as CA-G.R. CV No. 52542.

In the herein assailed Decision dated July 16, 1998, the CA affirmed that of the
trial court.

With their motion for reconsideration having been denied by the appellate court in
its equally challenged Resolution of January 8, 1999, petitioners are now with us via
this petition for review, imputing error to the CA: (1) in affirming the lower court's

55
decision without first resolving the issue of whether or not respondent is entitled to
an easement of right-of-way; (2) in finding and concluding that petitioners are not
innocent mortgagees or purchasers for value; and (3) in not holding that respondent
GSDHI is not entitled to a legal easement of right-of-way.

The petition is bereft of merit.

At bottom, the issues are: (1) whether or not respondent GSDHI has an easement of
right-of-way over the exterior lot (Lot No. 908-B-6-L-4-B); and (2) whether or not
petitioners are innocent mortgagees/purchasers for value of the same lot.

We resolve both issues in favor of respondent.

As defined, an easement "is a real right on another's property, corporeal and

immovable, whereby the owner of the latter must refrain from doing or allow
somebody else to do or something to be done on his property, for the benefit of
another person or tenement".[13] Easements are established either by law or by the
will of the owner. The former are called legal, and the latter, voluntary easements.[14]

As correctly found by the trial court, the easement of right-of-way over the exterior
lot in favor of respondent GSDHI was voluntarily constituted by agreement between
the latter and the original owner thereof, the Narcisos.

It is beyond cavil that the Narcisos did intend to establish an easement of right-of-
way over the exterior lot for the respondent's benefit. This is very evident from the
fact that in the "Option to Buy" in connection with the interior lot, one of the
conditions stipulated upon is that the Narcisos will construct two (2) ten-meter wide
roads along the exterior lot from the interior lot leading to the national highway.[15]

True, the Deed of Absolute Sale between respondent and the Narcisos covering the
interior lot did not embody the aforementioned condition. It was precisely to
cure this deficiency, however, that on the very same day the deed of sale was
executed, the Narcisos and respondent forged a "Memorandum of Agreement" to
reflect what they failed to state in the document of sale. In the precise words of the
trial court: "xxx the imperfection of the document of absolute sale was discussed at
once (Exhibit "D"). So a 'Memorandum of Agreement' was executed that same day
to rectify the omission and put in black and white the agreement regarding the direct
access road to the national highway passing through the adjoining lot 908-B-6-L-4-
B then owned by Narciso".

Moreover, contrary to the petitioners' assertion, the

Narcisos' grant of the easement to respondent was for a valuable consideration.
Again, we quote from the trial court's decision:
The total consideration for the sale of Lot 908-B-L-3-A covering an area of one
hectare was P100,000.00 and an additional of P10,000.00 was paid for the 10 meter
wide road right-of-way from the southern boundary of the property straight to the
national highway with an approximate length of 100 meters. This was not specifically
mentioned in the Deed of Absolute Sale but this was in pursuance of their agreement
that the one hectare lot was priced at P10.00 per square meter, or for
P100,000.00.[16]
In any event, it bears stressing that the two courts below are one in their common
factual finding about the existence of the conventional easement of right of way in
favor of respondent. Absent, as here, of any credible evidence to the contrary, the
Court is not inclined to disturb such a finding. After all, this Court is not a trier of
facts.

Having ruled on the existence of an easement of right of way, we now come to the
second issue.

56
It is petitioners' posture that they cannot be bound by the subject easement because
the Memorandum of Agreement establishing the same was not annotated in the
certificate of title of the exterior lot and registered with the Registry of
Deeds. Having relied on a title which does not reflect any easement thereon,
petitioner PDCP contends that it was an innocent mortgagee and later an innocent
purchaser for value. Chanting the same tone, petitioner Villegas insists that he, too,
is an innocent purchaser of said lot.

We are unimpressed.

Concededly, a person, be he a buyer or mortgagee, dealing with a titled property,

as the exterior lot is, is not required to go beyond what appears on the face of the
covering title itself.[17] Section 39 of Act 496 or the Land Registration Decree[18]says
as much.

Unfortunately for petitioner PDCP, however, the aforementioned rule does not apply
to banks,[19] of which PDCP is. So it is that in Robles vs. CA,[20] this Court, citing
Tomas vs. Tomas,[21] ruled:
xxx Banks, indeed, should exercise more care and prudence in dealing even with
registered lands, than private individuals, for their business is one affected with public
interest, keeping in trust money belonging to their depositors, which they should
guard against loss by not committing any act of negligence which amounts to lack of
good faith by which they would be denied the protective mantle of land registration
statute, Act 496, extended only to purchasers for value and in good faith, as well as
to mortgagees of the same character and description. xxx
Considering the foregoing, and bearing in mind that judicial notice is taken of the
standard practice for banks, before approving a loan, to send representatives to the
premises of the land offered as collateral,[22] PDCP's feigned ignorance of the road
right-of-way, much less of the existence of the road itself along the exterior lot, is
simply ridiculous, to say the least, more so in the light of the factual findings of the
two courts below that PDCP, contrary to its assertion, had indeed sent its personnel
to inspect the land when the same was mortgaged to it by the Narcisos. For sure, as
found by the appellate court, no less than PDCP's own Legal Officer, Virgilio Lagunilla,
admitted that an appraisal was conducted by the bank on the exterior lot before
accepting the mortgage thereof. Says the appellate court in this respect:
We have the confirmation on cross examination of the PDCP Legal Officer, Virgilio
Lagunilla, in the matter of PDCP's practice of appraising the property, being offered
as collateral, which calls for an actual examination of the condition of the
property. He even admitted that an appraisal was conducted by the bank on the
exterior lot before the mortgage, the reason being that it is the Central Bank's
requirement to limit the loans of commercial banks to only 70% of the appraise value
of the security being offered. As for PDCP, there was an "uncharacteristic silence"
on the result of the appraisal of the exterior lot which presupposes the observation
that the bank, at the time of the mortgage, knew about the existence of the
easement. The nature alone of the easement of right-of-way, which is ten meters
wide and open to the public for its use continuously supports the observation that its
easement was never overlooked by the bank at the time of the property's
appraisal. We cannot allow actual notice of knowledge of the burden on the property
to be denied on the mere pretension alone that the title does not bear any annotation
of such burden.
Equally unworthy of belief is petitioner Villegas' protestation of innocence of the
easement in question.

It is a matter of record that prior to his purchase of the exterior lot, Villegas, through
his attorney-in-fact, Benjamin Miranda, was very much aware of the existence of a
road over said lot since the 1960s. Again, to quote from the assailed decision of the
appellate court:
xxx His (Miranda's) other admission was that Villegas knew of the easement before
purchasing the property. He even added that he was consulted by Villegas himself

57
before the purchase and he told him (Villegas) that there was an existing road from
the hospital leading to the national highway.
In Lagandaon vs. CA,[23] we said:
As a general rule, every buyer of a registered land who takes a certificate of title for
value and in good faith shall hold the same free of all encumbrances except those
noted on said certificate. It has been held, however, that "where the party has
knowledge of a prior existing interest which is unregistered at the time he acquired
a right to the same land, his knowledge of that prior unregistered interest has the
effect of registration as to him. xxx "
WHEREFORE, the assailed issuances of the appellate court are AFFIRMED and this
petition DISMISSED for lack of merit.

Costs against petitioners.

SO ORDERED.

Panganiban, (Chairman), Corona, and Carpio-Morales, JJ., concur.

Sandoval-Gutierrez, J., on official leave.

[1]
Penned by Associate Justice Bernardo LL. Salas (ret.) and concurred in by
Associate Justices, (now both ret.) Fermin Martin, Jr. and Candido V. Rivera; Rollo,
pp. 149-161.

[2]
Rollo, p. 163.
[3]
Mistakenly referred to as TCT No. 3550 in the RTC Decision.
[4]
Rollo, pp. 48-50.

[5]
Ibid at p. 49.

[6]
Rollo, pp. 46-47.

[7]
Rollo, pp. 51-52.
[8]
Ibid at p. 52.
[9]
Supra.

[10]
Supra.
[11]
Rollo, pp. 62-69.

[12]
Ibid at pp. 64-68.
[13]
3 Sanchez Roman 472; Quimen vs. CA, 257 SCRA 163, 169 [1996].
[14]
Art. 619, Civil Code.

[15]
See par. 5, Option to Buy, supra at p. 49.

[16]
RTC DECISION, supra at p. 65.
[17]
Cavite Development Bank vs. Lim, 324 SCRA 346, 358 [2000].

[18]
Sec. 39. Every person receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land who takes a
certificate of title for value in good faith shall hold the same free of all encumbrance

58
except those noted on said certificate, and any of the following encumbrances which
may be subsisting, namely:

First. Liens, claims, or rights arising or existing under the laws or Constitution of the
United States or of the Philippine Islands which the statutes of the Philippine Islands
cannot require to appear of record in the Registry.

Second. Taxes within two years after the same became due and payable.

Third. Any public highway, way, private way established by law, or any Government
irrigation canal or lateral thereof, where the certificate of title does not state that the
boundaries of such highway, way, or irrigation canal or lateral thereof, have been
determined. "But if there are easements or other rights appurtenant to a parcel of
registered land which for any reason have failed to be registered, such easements or
rights shall remain so appurtenant notwithstanding such failure, and shall be held to
pass with the land until cut off or extinguished by the registration of the servient
estate, or in any other manner.; now Section 44 of PD 1529 or The Property
Registration Decree.

[19]
Robles vs. CA, 328 SCRA 97, 113 [2000].
[20]
Supra.
[21]
98 SCRA 267 [1980].

[22]
DBP vs. CA, 331 SCRA 267, 289 [2000].

[23]
Supra at pp. 342-343 [1998].

611 Phil. 16

THIRD DIVISION
[ G.R. No. 147957, July 22, 2009 ]
PRIVATIZATION AND MANAGEMENT OFFICE, PETITIONER, VS.
LEGASPI TOWERS 300, INC., RESPONDENT.

DECISION

PERALTA, J.:

This is a petition for review on certiorari seeking to annul and set aside the Decision[1]
dated February 16, 2001, of the Court of Appeals (CA) in CA-G.R. CV No. 48984,
affirming the Decision of the Regional Trial Court (RTC).

The factual and procedural antecedents are as follows:

Caruff Development Corporation owned several parcels of land along the stretch of
Roxas Boulevard, Manila. Among them were contiguous lots covered by Transfer
Certificate of Title (TCT) Nos. 120311, 120312, 120313, and 127649 (now TCT No.
200760).

Sometime in December 1975, Caruff obtained a loan from the Philippine National
Bank (PNB) to finance the construction of a 21-storey condominium along Roxas
Boulevard.[2] The loan accommodation was secured by a real estate mortgage over
three (3) parcels of land covered by TCT Nos. 120311, 120312, and 120313,[3] where

59
Caruff planned to erect the condominium.

In 1979, Caruff started constructing a multi-storey building on the mortgaged parcels

of land. Along with the other appurtenances of the building constructed by Caruff, it
built a powerhouse (generating set) and two sump pumps in the adjacent lot covered
by TCT No. 127649 (now TCT No. 200760).

After the completion of the condominium project, it was constituted pursuant to the
Condominium Act (Republic Act No. 4726), as the Legaspi Towers 300, Inc.

However, for Caruff's failure to pay its loan with PNB, the latter foreclosed the
mortgage and acquired some of the properties of Caruff at the sheriff's auction sale
held on January 30, 1985.[4]

Thereafter, Proclamation No. 50[5] was issued. It was aimed to promote privatization
"for the prompt disposition of the large number of non-performing assets of the
government financial institutions, and certain government-owned and controlled
corporations, which have been found unnecessary or inappropriate for the
government sector to maintain." It also provided for the creation of the Asset
Privatization Trust (APT).

By virtue of Administrative Order No. 14 and the Deed of Transfer executed by PNB,
the National Government, thru the APT, became the assignee and transferee of all its
rights and titles to and interests in its receivables with Caruff, including the properties
it acquired from the foreclosure of Caruff's mortgage.

Meanwhile, Caruff filed a case against PNB before the RTC of Manila, Branch 2,
whereby Caruff sought the nullification of PNB's foreclosure of its properties.[6] The
case was docketed as Civil Case No. 85-29512.

A Compromise Agreement[7] dated August 31, 1988 was later entered into by Caruff,
PNB, and the National Government thru APT. The parties agreed, among other things,
that Caruff would transfer and convey in favor of the National Government, thru the
APT, the lot covered by TCT No. 127649 (now TCT No. 200760), where it built the
generating set and sump pumps.

On September 9, 1988, the RTC rendered a Decision approving the Compromise

Agreement executed and submitted by the parties. The dispositive portion of said
Decision reads:

x x x and finding the foregoing compromise agreement to be well-taken, the Court

hereby approves the same and renders judgment in accordance with the terms and
conditions set forth [sic] therein and enjoins the parties to comply strictly therewith.

SO ORDERED.[8]

Thus, by virtue of the Decision, the subject property was among those properties
that were conveyed by Caruff to PNB and the National Government thru APT.

On July 5, 1989, respondent filed a case for Declaration of the existence of an

easement before the RTC of Manila, docketed as Spec. Proc. No. 89-49563.
Respondent alleged that the act of Caruff of constructing the powerhouse and sump
pumps on its property constituted a voluntary easement in favor of the respondent.
It prayed, among other things, that judgment be rendered declaring the existence of
an easement over the portion of the property covered by TCT No. 127649 (now TCT
No. 200760) that was being occupied by the powerhouse and the sump pumps in its
favor, and that the Register of Deeds of Manila annotate the easement at the back of
said certificate of title.[9]

60
In its Answer with Counterclaim and Cross-claim,[10] APT alleged that respondent had
no cause of action against it, because it was but a mere transferee of the land. It
acquired absolute ownership thereof by virtue of the Compromise Agreement in Civil
Case No. 85-2952, free from any liens and/or encumbrances. It was not a privy to
any transaction or agreement entered into by and between Caruff, respondent, and
the bank. It further alleged that the continued use of the subject property by
respondent and the condominium owners without its consent was an encroachment
upon its rights as absolute owner and for which it should be properly compensated.

On January 12, 1995, after trial on the merits, the RTC rendered a Decision[11]
declaring the existence of an easement over the portion of the land covered by TCT
No. 127649 (TCT No. 200760), the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the petitioner and against the
respondents hereby declaring the existence of an easement over the portion of land
covered by TCT No. 200760 (previously No. 127649) occupied at present [by the]
powerhouse and sump pumps nos. 1 and 2 only, of Legaspi Towers 300, in favor of
Legaspi Towers 300, Incorporated. The Register of Deeds of Manila is, likewise,
hereby directed to annotate this easement at the back of the said certificate of title.
The counterclaim and cross-claim are dismissed accordingly.

SO ORDERED.

Aggrieved, APT sought recourse before the CA in CA-G.R. CV No. 48984.

Subsequently, the term of existence of APT expired and, pursuant to Section 2, Article
III of Executive Order No. 323, the powers, functions, duties and responsibilities of
APT, as well as all the properties, real or personal assets, equipments and records
held by it and its obligations and liabilities that were incurred, was transferred to
petitioner Privatization and Management Office (PMO). Thus, the PMO substituted
APT in its appeal.

On February 16, 2001, finding no reversible error on the part of the RTC, the CA
rendered a Decision[12] affirming the decision appealed from. PMO filed a Motion for
Reconsideration, but it was denied in the Resolution[13] dated May 3, 2001.

Hence, the present petition assigning the following errors:

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION

OF THE COURT A QUO IN FINDING THAT [THE] PRESENCE OF THE GENERATOR SET
(GENERATING SET) AND SUMP PUMPS CONSTITUES AN EASEMENT.

II

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION

OF THE COURT A QUO IN DECLARING THE EXISTENCE OF AN EASEMENT OVER THE
PORTION OF LAND COVERED BY TCT NO. [200760] OCCUPIED BY THE GENERATOR
SET AND SUMP PUMPS NOS. 1 AND 2, PURSUANT TO ARTICLE 688 OF THE CIVIL
CODE.

III

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION

OF THE COURT A QUO IN NOT REQUIRING THE RESPONDENT-PETITIONER TO PAY

61
ANY COMPENSATION TO PETITIONER, THE OWNER OF THE LAND, FOR THE USE OF
ITS PROPERTY.[14]

Petitioner argues that the presence of the generator set and sump pumps does not
constitute an easement. They are mere improvements and/or appurtenances
complementing the condominium complex, which has not attained the character of
immovability. They were placed on the subject property as accessories or
improvements for the general use and comfort of the occupants of the condominium
complex.

Petitioner maintains that, as the generator set and sump pumps are improvements
of the condominium, the same should have been removed after Caruff undertook to
deliver the subject property free from any liens and encumbrances by virtue of the
Decision of the RTC in Civil Case No. 85-29512 approving the parties' Compromise
Agreement. It adds that, in alienating the property in favor of APT/PMO, Caruff could
not have intended to include as encumbrance the voluntary easement.

Petitioner posits that respondent failed to present any evidence to prove the existence
of the necessary requisites for the establishment of an easement. There is no
concrete evidence to show that Caruff had a clear and unequivocal intention to
establish the placing of the generator set and sump pumps on the subject property
as an easement in favor of respondent.

Lastly, petitioner contends that respondent is a "squatter" for having encroached on

the former's property without its consent and without paying any rent or indemnity.
Petitioner submits that respondent's presence on the subject property is an
encroachment on ownership and, thus, cannot be properly considered an easement.
It adds that an easement merely produces a limitation on ownership, but the general
right of ownership of the servient tenement must not be impaired so as to amount to
a taking of property. When the benefit being imposed is so great as to impair
usefulness of the servient estate, it would amount to a cancellation of the rights of
the latter.

Petitioner insists that, for having unjustly enriched itself at the expense of the
National Government and for encroaching on the latter's rights as the absolute owner,
respondent should rightfully compensate the National Government for the use of the
subject property which dates back to August 28, 1989 up to the present.

For its part, respondent argues that it was the intention of Caruff to have a voluntary
easement in the subject property and for it to remain as such even after the property
was subsequently assigned to APT. It was Caruff who constructed the generating set
and sump pumps on its adjacent property for the use and benefit of the condominium
adjoining it. Also, the manner in which the sump pumps were installed is permanent
in nature, since their removal and transfer to another location would render the same
worthless and would cut off the supply of electricity and water to the condominium
and its owners.

Respondent maintains that petitioner cannot assume that Caruff intended to

renounce the voluntary easement over the subject property by virtue of the
Compromise Agreement, since such defense can only be presented by Caruff and not
the petitioner. It added that petitioner had actual notice of the presence of the
generating set and sump pumps when they were negotiating with Caruff regarding
the compromise agreement and at the time the subject property was transferred to
petitioner. Also, petitioner cannot claim the payment of rent, considering that there
was no written demand for respondent to pay rent or indemnity.

Respondent submits that the mandate of petitioner to privatize or dispose of the non-
performing assets transferred to it does not conflict with the issue of the declaration
of the easement over the subject property, considering that petitioner is not

62
prevented from privatizing the same despite the presence of the voluntary easement.

The petition is meritorious.

An easement or servitude is "a real right constituted on another's property, corporeal

and immovable, by virtue of which the owner of the same has to abstain from doing
or to allow somebody else to do something on his property for the benefit of another
thing or person."[15] The statutory basis of this right is Article 613 of the Civil Code,
which provides:

Art. 613. An easement or servitude is an encumbrance imposed upon an immovable

for the benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the dominant
estate; that which is subject thereto, the servient estate.

There are two sources of easements: by law or by the will of the owners. Article 619
of the Civil Code states:

Art. 619. Easements are established either by law or by the will of the owners. The
former are called legal and the latter voluntary easements.

In the present case, neither type of easement was constituted over the subject
property.

In its allegations, respondent claims that Caruff constituted a voluntary easement

when it constructed the generating set and sump pumps over the disputed portion of
the subject property for its benefit. However, it should be noted that when the
appurtenances were constructed on the subject property, the lands where the
condominium was being erected and the subject property where the generating set
and sump pumps were constructed belonged to Caruff. Therefore, Article 613 of the
Civil Code does not apply, since no true easement was constituted or existed, because
both properties were owned by Caruff.

Also, Article 624 of the Civil Code is controlling, as it contemplates a situation where
there exists an apparent sign of easement between two estates established or
maintained by the owner of both. The law provides:

Art. 624. The existence of an apparent sign of easement between two estates,
established or maintained by the owner of both, shall be considered, should either of
them be alienated, as a title in order that the easement may continue actively and
passively, unless, at the time the ownership of the two estates is divided, the contrary
should be provided in the title of conveyance of either of them, or the sign aforesaid
should be removed before the execution of the deed. This provision shall also apply
in case of the division of a thing owned in common by two or more persons.[16]

From the foregoing, it can be inferred that when the owner of two properties alienates
one of them and an apparent sign of easement exists between the two estates,
entitlement to it continues, unless there is a contrary agreement, or the indication
that the easement exists is removed before the execution of the deed.

In relation thereto, the Compromise Agreement, as approved by the court, clearly

states, among other things, that:

x x x x

2.0 That in consideration of the covenants hereunder stipulated, plaintiff [Caruff]

Development Corporation (CDC), hereby terminates the instant case against
defendants Philippine National Bank (PNB) and the National Government/APT, and
hereby:

63
2.1 Assigns, transfers and conveys in favor of defendant National government thru
APT, CDC's rights, title and interest in the Maytubig property, situated at the back of
the Legaspi Towers 300 Condominium, consisting of seven (7) contiguous lots with
an aggregate area of 1,504.90 square meters, covered by the following Transfer
Certificate of Title, viz: TCT No. 23663 - Pasay City Registry; TCT No. 142497 - Metro
Manila 1 Registry; TCT No. 142141 - Metro Manila 1 Registry; TCT No. 127649 -
Metro Manila 1 Registry; x x x; all titles, free from any and all liens and
encumbrances, to be delivered, and the necessary papers and documents to be
turned over/executed to effect transfer in favor of the National Government/APT,
upon approval of this Compromise Agreement;

x x x x.[17]

Thus, when the subject property was assigned to the National Government thru the
APT, no easement arose or was voluntarily created from the transfer of ownership,
considering that the parties, more particularly, Caruff, pledged that it was assigning,
transferring, and conveying the subject property in favor of the National Government
thru the APT "free from any and all liens and encumbrances."

Compromise agreements are contracts, whereby the parties undertake reciprocal

obligations to resolve their differences, thus, avoiding litigation, or put an end to one
already commenced.[18] As a contract, when the terms of the agreement are clear
and explicit that they do not justify an attempt to read into it any alleged intention
of the parties; the terms are to be understood literally, just as they appear on the
face of the contract.[19] Considering that Caruff never intended to transfer the subject
property to PMO, burdened by the generating set and sump pumps, respondent
should remove them from the subject property.

As regards PMO's claim for rent, respondent has been enjoying the use of the subject
property for free from the time the rights over the property were transferred and
conveyed by Caruff to the National Government.

We have held that "[t]here is unjust enrichment when a person unjustly retains a
benefit to the loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity and good conscience." Article 22
of the Civil Code provides that "[e]very person who, through an act or performance
by another, or any other means, acquires or comes into possession of something at
the expense of the latter, without just or legal ground, shall return the same to him."
The principle of unjust enrichment under Article 22 of the Civil Code requires two
conditions: (1) that a person is benefited without a valid basis or justification, and(2)
that such benefit is derived at another's expense or damage.[20]

In the present case, there is no dispute as to who owns the subject property and as
to the fact that the National Government has been deprived of the use thereof for
almost two decades. Thus, it is but just and proper that respondent should pay
reasonable rent for the portion of the subject property occupied by the generating
set and sump pumps, from the time respondent deprived the lawful owner of the use
thereof up to the present. To rule otherwise would be unjust enrichment on the part
of respondent at the expense of the Government.

From the records, APT/PMO submitted, as part of its evidence, a letter[21] dated June
18, 1992, wherein it fixed the monthly rental fee per square meter of the entire
property at P56.25, or P1.81 per square meter per day. Hence, respondent should
pay the National Government reasonable rent in the amount of P56.25 per square
meter per month, to be reckoned from August 28, 1989 up to the time when the
generating set and sump pumps are completely removed therefrom.

WHEREFORE, premises considered, the Decision of the Regional Trial Court in Spec.

64
Proc. No. 89-49563 dated January 12, 1995, and the Decision and Resolution of the
Court of Appeals in CA-G.R. CV No. 48984 dated February 16, 2001 and May 3, 2001,
respectively, are REVERSED and SET ASIDE.

Legaspi Towers 300, Inc. is DIRECTED to REMOVE the generating set and sump
pumps 1 and 2 from the property covered by TCT No. 200760 and to PAY reasonable
rent at the rate of P56.25 per square meter/per month from August 28, 1989 until
the same are completely removed.

SO ORDERED.

Ynares-Santiago, (Chairperson), Chico-Nazario, Velasco, Jr., and Nachura, JJ.,

concur.

[1]
Penned by Associate Justice Oswaldo D. Agcaoili, with Associate Justices Cancio C.
Garcia (now a retired member of this Court) and Elvi John S. Asuncion, concurring;
rollo, pp. 41-48.

[2]
Id. at 18.
[3]
Records, pp. 133-134.
[4]
Id. at 134.

[5]
Proclaiming and Launching a Program for the Expeditious Disposition and
Privatization of Certain Government Corporations and/or the Assets Thereof, and
Creating the Committee on Privatization and the Asset Privatization Trust; 82 O.G.
No. 51, pp. 5954-5966.

[6]
Rollo, p. 20.
[7]
Records, pp. 46-51.

[8]
Id. at 135-136.

[9]
Rollo, p. 42.
[10]
Records, pp. 155-161.

[11]
Id. at 334-336.

[12]
Supra note 1.

[13]
Rollo, p. 50.
[14]
Id. at 22.
[15]
Valdez v. Tabisura, G.R. No. 175510, July 28, 2008, 560 SCRA 332, 337-338,
citing 3 Sanchez Roman 572.

[16]
Emphasis ours.

[17]
Records, p. 133. (Emphasis ours.)
[18]
Alonzo v. San Juan, G.R. No. 137549, February 11, 2005, 451 SCRA 45, 58-59.

First Fil-Sin Lending Corporation v. Padillo, G.R. No. 160533, January 12, 2005,
[19]

448 SCRA 71, 76.

65
 Car Cool Philippines, Inc. v. Ushio Realty and Development Corporation, G.R. No.
[20]

138088, January 23, 2006, 479 SCRA 404, 412-413.

[21]
Records, pp. 299-300.

G.R. No. 194336

THIRD DIVISION
[ G.R. No. 194336, March 11, 2013 ]
PILAR DEVELOPMENT CORPORATION, PETITIONER, VS.
RAMON DUMADAG, EMMA BACABAC, RONALDO NAVARRO,
JIMMY PAGDALIAN, PAY DELOS SANTOS, ARMANDO
TRILLOS, FELICISIMO TRILLOS, ARCANGEL FLORES, EDDIE
MARTIN, PRESILLA LAYOG, CONRADO CAGUYONG, GINA
GONZALES, ARLENE PEDROSA, JOCELYN ABELINO, ROQUE
VILLARAZA, ROLANDO VILLARAZA, CAMILO GENOVE, NILDA
ROAYANA, SUSAN ROAYANA, JUANCHO PANGANIBAN, BONG
DE GUZMAN, ARNOLD ENVERSO, DONNA DELA RAZA, EMELYN
HAGNAYA, FREDDIE DE LEON, RONILLO DE LEON, MARIO
MARTINEZ, AND PRECY LOPEZ, RESPONDENTS.

DECISION

PERALTA, J.:

Challenged in this petition for review on certiorari under Rule 45 of the Rules of Civil
Procedure are the March 5, 2010 Decision[1] and October 29, 2010 Resolution[2] of
the Court of Appeals (CA) in CA-G.R. CV No. 90254, which affirmed the May 30, 2007
Decision[3] of the Las Pias Regional Trial Court, Branch 197 (trial court) dismissing
the complaint filed by petitioner.

On July 1, 2002, petitioner filed a Complaint[4] for accion publiciana with damages
against respondents for allegedly building their shanties, without its knowledge and
consent, in its 5,613-square-meter property located at Daisy Road, Phase V, Pilar
Village Subdivision, Almanza, Las Pias City. It claims that said parcel of land, which
is duly registered in its name under Transfer Certificate of Title No. 481436 of the
Register of Deeds for the Province of Rizal, was designated as an open space of Pilar
Village Subdivision intended for village recreational facilities and amenities for
subdivision residents.[5] In their Answer with Counterclaim,[6] respondents denied the
material allegations of the Complaint and briefly asserted that it is the local
government, not petitioner, which has jurisdiction and authority over them.

Trial ensued. Both parties presented their respective witnesses and the trial court
additionally conducted an ocular inspection of the subject property.

On May 30, 2007, the trial court dismissed petitioners complaint, finding that the
land being occupied by respondents are situated on the sloping area going down and
leading towards the Mahabang Ilog Creek, and within the three-meter legal
easement; thus, considered as public property and part of public dominion under
Article 502[7] of the New Civil Code (Code), which could not be owned by petitioner.
The court held:

66
x x x The land title of [petitioner] only proves that it is the owner in fee simple of the
respective real properties described therein, free from all liens and encumbrances,
except such as may be expressly noted thereon or otherwise reserved by law x x x.
And in the present case, what is expressly reserved is what is written in TCT No. T-
481436, to wit that the 3.00 meter strip of the lot described herein along the
Mahabang Ilog Creek is reserved for public easement purposes. (From OCT 1873/A-
50) and to the limitations imposed by Republic Act No. 440. x x x[8]

The trial court opined that respondents have a better right to possess the occupied
lot, since they are in an area reserved for public easement purposes and that only
the local government of Las Pias City could institute an action for recovery of
possession or ownership.

Petitioner filed a motion for reconsideration, but the same was denied by the trial
court in its Order dated August 21, 2007.[9] Consequently, petitioner elevated the
matter to the Court of Appeals which, on March 5, 2010, sustained the dismissal of
the case.

Referring to Section 2[10] of Administrative Order (A.O.) No. 99-21 of the Department
of Environment and Natural Resources (DENR), the appellate court ruled that the 3-
meter area being disputed is located along the creek which, in turn, is a form of a
stream; therefore, belonging to the public dominion. It said that petitioner could not
close its eyes or ignore the fact, which is glaring in its own title, that the 3-meter
strip was indeed reserved for public easement. By relying on the TCT, it is then
estopped from claiming ownership and enforcing its supposed right. Unlike the trial
court, however, the CA noted that the proper party entitled to seek recovery of
possession of the contested portion is not the City of Las Pias, but the Republic of
the Philippines, through the Office of the Solicitor General (OSG), pursuant to Section
101[11] of Commonwealth Act (C.A.) No. 141 (otherwise known as The Public Land
Act).

The motion for reconsideration filed by petitioner was denied by the CA per Resolution
dated October 29, 2010, hence, this petition.

Anchoring its pleadings on Article 630[12] of the Code, petitioner argues that although
the portion of the subject property occupied by respondents is within the 3-meter
strip reserved for public easement, it still retains ownership thereof since the strip
does not form part of the public dominion. As the owner of the subject parcel of land,
it is entitled to its lawful possession, hence, the proper party to file an action for
recovery of possession against respondents conformably with Articles 428[13] and
539[14] of Code.

We deny.

An easement or servitude is a real right on another's property, corporeal and

immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his or her property, for the benefit
of another person or tenement; it is jus in re aliena, inseparable from the estate to
which it actively or passively belongs, indivisible, perpetual, and a continuing
property right, unless extinguished by causes provided by law.[15] The Code defines
easement as an encumbrance imposed upon an immovable for the benefit of another
immovable belonging to a different owner or for the benefit of a community, or of
one or more persons to whom the encumbered estate does not belong.[16] There are
two kinds of easement according to source: by law or by will of the owners the
former are called legal and the latter voluntary easement.[17] A legal easement or
compulsory easement, or an easement by necessity constituted by law has for its
object either public use or the interest of private persons.[18]

While Article 630 of the Code provides for the general rule that [t]he owner of the

67
servient estate retains the ownership of the portion on which the easement is
established, and may use the same in such a manner as not to affect the exercise of
the easement, Article 635 thereof is specific in saying that [a]ll matters
concerning easements established for public or communal use shall be
governed by the special laws and regulations relating thereto, and, in the
absence thereof, by the provisions of this Title [Title VII on Easements or
Servitudes].

In the case at bar, the applicability of DENR A.O. No. 99-21 dated June 11, 1999,
which superseded DENR A.O. No. 97-05[19] dated March 6, 1997 and prescribed the
revised guidelines in the implementation of the pertinent provisions of Republic Act
(R.A.) No. 1273 and Presidential Decree (P.D.) Nos. 705 and 1067, cannot be
doubted. Inter alia, it was issued to further the governments program of biodiversity
preservation. Aside from Section 2.1 above-quoted, Section 2.3 of which further
mandates:

2.3 Survey of Titled Lands:

2.3.1 Administratively Titled Lands:

The provisions of item 2.1.a and 2.1.b shall be observed as the above. However,
when these lands are to be subdivided, consolidated or consolidated-subdivided, the
strip of three (3) meters which falls within urban areas shall be demarcated and
marked on the plan for easement and bank protection.

The purpose of these strips of land shall be noted in the technical description and
annotated in the title.

x x x x

2.3.3 Complex Subdivision or Consolidation Subdivision Surveys for

Housing/Residential, Commercial or Industrial Purposes:

When titled lands are subdivided or consolidated-subdivided into lots for residential,
commercial or industrial purposes the segregation of the three (3) meter wide strip
along the banks of rivers or streams shall be observed and be made part of the open
space requirement pursuant to P.D. 1216.

The strip shall be preserved and shall not be subject to subsequent subdivision.
(Underscoring supplied)

Certainly, in the case of residential subdivisions, the allocation of the 3-meter strip
along the banks of a stream, like the Mahabang Ilog Creek in this case, is required
and shall be considered as forming part of the open space requirement pursuant to
P.D. 1216 dated October 14, 1977.[20] Said law is explicit: open spaces are for public
use and are, therefore, beyond the commerce of men and that [the] areas reserved
for parks, playgrounds and recreational use shall be non-alienable public lands, and
non-buildable.

Running in same vein is P.D. 1067 or The Water Code of the Philippines[21] which
provides:

Art. 51. The banks of rivers and streams and the shores of the seas and lakes
throughout their entire length and within a zone of three (3) meters in urban areas,
twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along
their margins, are subject to the easement of public use in the interest of recreation,
navigation, floatage, fishing and salvage. No person shall be allowed to stay in this
zone longer than what is necessary for recreation, navigation, floatage, fishing or
salvage or to build structures of any kind. (Underscoring supplied)

68
Thus, the above prove that petitioners right of ownership and possession has been
limited by law with respect to the 3-meter strip/zone along the banks of Mahabang
Ilog Creek. Despite this, the Court cannot agree with the trial courts opinion, as to
which the CA did not pass upon, that respondents have a better right to possess the
subject portion of the land because they are occupying an area reserved for public
easement purposes. Similar to petitioner, respondents have no right or title over it
precisely because it is public land. Likewise, we repeatedly held that squatters have
no possessory rights over the land intruded upon.[22] The length of time that they
may have physically occupied the land is immaterial; they are deemed to have
entered the same in bad faith, such that the nature of their possession is presumed
to have retained the same character throughout their occupancy.[23]

As to the issue of who is the proper party entitled to institute a case with respect to
the 3-meter strip/zone, We find and so hold that both the Republic of the Philippines,
through the OSG and the local government of Las Pias City, may file an action
depending on the purpose sought to be achieved. The former shall be responsible in
case of action for reversion under C.A. 141, while the latter may also bring an action
to enforce the relevant provisions of Republic Act No. 7279 (otherwise known as the
Urban Development and Housing Act of 1992).[24] Under R.A. 7279, which was
enacted to uplift the living conditions in the poorer sections of the communities in
urban areas and was envisioned to be the antidote to the pernicious problem of
squatting in the metropolis,[25] all local government units (LGUs) are mandated to
evict and demolish persons or entities occupying danger areas such as esteros,
railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public
places such as sidewalks, roads, parks, and playgrounds.[26] Moreover, under pain of
administrative and criminal liability in case of non-compliance,[27] it obliges LGUs to
strictly observe the following:

Section 29. Resettlement. - Within two (2) years from the effectivity of this Act, the
local government units, in coordination with the National Housing Authority, shall
implement the relocation and resettlement of persons living in danger areas such as
esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and in
other public places such as sidewalks, roads, parks and playgrounds. The local
government unit, in coordination with the National Housing Authority, shall provide
relocation or resettlement sites with basic services and facilities and access to
employment and livelihood opportunities sufficient to meet the basic needs of the
affected families.

Section 30. Prohibition Against New Illegal Structures. - It shall be unlawful for any
person to construct any structure in areas mentioned in the preceding section.

After the effectivity of this Act, the barangay, municipal or city government units shall
prevent the construction of any kind or illegal dwelling units or structures within their
respective localities. The head of any local government unit concerned who allows,
abets or otherwise tolerates the construction of any structure in violation of this
section shall be liable to administrative sanctions under existing laws and to penal
sanctions provided for in this Act.

Yet all is not lost for petitioner. It may properly file an action for mandamus to compel
the local government of Las Pias City to enforce with reasonable dispatch the
eviction, demolition, and relocation of respondents and any other persons similarly
situated in order to give flesh to one of the avowed policies of R.A. 7279, which is to
reduce urban dysfunctions, particularly those that adversely affect public health,
safety, and ecology.[28] Indeed, as one of the basic human needs, housing is a matter
of state concern as it directly and significantly affects the general welfare.[29]

WHEREFORE, the petition is DENIED. The March 5, 2010 Decision and October 29,
2010 Resolution of the Court of Appeals in CA- G.R. CV No. 90254, which affirmed

69
the May 30, 2007 Decision of the Las Pias RTC, Branch 197, dismissing petitioners
complaint, is hereby AFFIRMED.

SO ORDERED.

Velasco, Jr., (Chairperson), Abad, Mendoza, and Leonen, JJ., concur.

[1]
Penned by Associate Justice Michael P. Elbinias, with Associate Justices Rebecca
De Guia-Salvador and Estela M. Perlas-Bernabe (now Supreme Court Associate
Justice) concurring; rollo, pp. 21-28.
[2]
Id. at 30-35. .

[3]
Id. at 46-52.
[4]
Id. at 36-39.

[5]
Id. at 11-12.
[6]
Id. at 40-44.

[7]
Art. 502 of the New Civil Code provides:
Art. 502. The following are of public dominion:

(1) Rivers and their natural beds;

(2) Continuous or intermittent waters of springs and brooks running in their natural
beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands of public dominion;
(4) Lakes and lagoons formed by Nature on public lands, and their beds;
(5) Rain waters running through ravines or sand beds, which are also of public
dominion;
(6) Subterranean waters on public lands;
(7) Waters found within the zone of operation of public works, even if constructed by
a contractor;
(8) Waters rising continuously or intermittently on lands belonging to private persons,
to the State, to a province, or to a city or a municipality from the moment they leave
such lands;
(9) The waste waters of fountains, sewers and public establishments.
[8]
Rollo, p. 51.
[9]
Id. at 13.
[10]
Sec. 2 of DENR A.O. No. 99-21 states as follows:

2.1 Original Surveys:

2.1.a Public Lands:

All alienable and disposable (A and D) lands of the public domain shall be surveyed
pursuant to Section 1 Par. (1) of R.A. 1273 [C.A. No. 141, Section 90(i)] whereby a
strip of forty (40) meters wide starting from the banks on each side of any river or
stream that may be found on the land shall be demarcated and preserved as
permanent timberland.

Likewise, to be demarcated are public lands along the banks of rivers and streams
and the shores of the seas and lakes throughout their entire length and within a zone
of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty
(40) meters in forest area, along their margins which are subject to the easement
for public use in the interest of recreation, navigation, floatage, fishing and salvage.

70
[11]
Sec. 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor-General or the
officer acting in his stead, in the proper courts, in the name of the [Republic] of the
Philippines.

Art. 630. The owner of the servient estate retains the ownership of the portion on
[12]

which the easement is established, and may use the same in such a manner as not
to affect the exercise of the easement.

[13]
Art. 428. The owner has the right to enjoy and dispose of a thing, without other
limitations than those established by law.

The owner has also a right of action against the holder and possessor of the thing in
order to recover it.

Art. 539. Every possessor has a right to be respected in his possession; and should
[14]

he be disturbed therein he shall be protected in or restored to said possession by the

means established by the laws and the Rules of Court.

A possessor deprived of his possession through forcible entry may within ten days
from the filing of the complaint present a motion to secure from the competent court,
in the action for forcible entry, a writ of preliminary mandatory injunction to restore
him in his possession. The court shall decide the motion within thirty (30) days from
the filing thereof.

Villanueva v. Velasco, 399 Phil. 664, 672 (2000) and Quimen v. Court of Appeals,
[15]

326 Phil. 969, 976-977 (1996).

[16]
CIVIL CODE, Arts. 613 and 614.

CIVIL CODE, Art. 619. See also Castro v. Monsod, G.R. No. 183719, February 2,
[17]

2011, 641 SCRA 486, 493-494.

CIVIL CODE, Art. 634, NCC. See also Woodridge School, Inc. v. ARB Construction
[18]

Co., Inc., G.R. No. 157285, February 16, 2007, 516 SCRA 176, 183; Villanueva v.
Velasco, supra note 15; La Vista Association, Inc. v. Court of Appeals, 311 Phil. 30,
46 (1997) and Quimen v. Court of Appeals, supra note 15, at 977.

Entitled Procedures in the Retention of Areas Within Certain Distances Along

[19]

the Banks of Rivers, Streams, and Shores of Seas, Lakes and Oceans for
Environmental Protection.

[20]
P.D. 1216 is entitled Defining "Open Space" in Residential Subdivisions and
Amending Section 31 of Presidential Decree No. 957 Requiring Subdivision Owners
to Provide Roads, Alleys, Sidewalks and Reserve Open Space for Parks or Recreational
Use.

Entitled A Decree Instituting a Water Code, thereby Revising and Consolidating

[21]

the Laws Governing the Ownership, Appropriation, Utilization, Exploitation,

Development, Conservation and Protection of Water Resources, dated December 31,
1976.

D'Oro Land Realty and Development Corporation v. Claunan, 545 Phil. 573, 583-
[22]

584 (2007); De Vera-Cruz v. Miguel, 505 Phil. 591, 607 (2005); and Pendot v. Court
of Appeals, 254 Phil. 19, 28 (1989).

D'Oro Land Realty and Development Corporation v. Claunan, supra note 22, at
[23]

584.

[24]
Approved on March 24, 1992 and published in the May 4, 1992 issue of the Official

71
Gazette. (Macasiano v. National Housing Authority, G.R. No. 107921, July 1, 1993,
224 SCRA 236, 239).

[25]
Galay v. Court of Appeals, 321 Phil. 224, 226 (1995).

[26]
R.A. 7279, Sec. 28 (a).
[27]
Dec. 45 of R.A. No. 7279 provides:

Section 45. Penalty Cause. - Any person who violates any provision of this Act shall
be imposed the penalty of not more than six (6) years of imprisonment or a fine of
not less than Five thousand pesos (P5,000) but not more than One hundred thousand
pesos (P100,000), or both, at the discretion of the court: Provided, That, if the
offender is a corporation, partnership, association or other juridical entity, the penalty
shall be imposed on the officer or officers of said corporation, partnership, association
or juridical entity who caused the violation.

[28]
R.A. No. 7279, Sec. 2 (b) (4).
[29]
Sumulong v. Guerrero, 238 Phil. 462, 467 (1987).

349 Phil. 275

FIRST DIVISION
[ G.R. No. 127549, January 28, 1998 ]
SPOUSES CESAR AND RAQUEL STA. MARIA AND
FLORCERFIDA STA. MARIA, PETITIONERS, VS. COURT OF
APPEALS, AND SPOUSES ARSENIO AND ROSLYNN FAJARDO,
RESPONDENTS.

DECISION

DAVIDE, JR., J.:

This is an appeal under Rule 45 of the Rules of Court from the decision[1] of 18
December 1996 of the Court of Appeals in CA-G.R. CV No. 48473, which affirmed
with modification the 30 June 1994 Decision[2] of Branch 19 of the Regional Trial
Court of Bulacan in Civil Case No. 77-M-92 granting the private respondents a right
of way through the property of the petitioners.

The antecedent facts, as summarized by the Court of Appeals, are as follows:

Plaintiff spouses Arsenio and Roslynn Fajardo are the registered owners of a piece of
land, Lot No. 124 of the Obando Cadastre, containing an area of 1,043 square meters,
located at Paco, Obando, Bulacan, and covered by Transfer Certificate Title (TCT) No.
T-147729 (M) of the Registry of Deeds of Meycauayan, Bulacan (Exhibit B, p. 153
Orig. Rec.). They acquired said lot under a Deed of Absolute Sale dated February 6,
1992 executed by the vendors Pedro M. Sanchez, et al. (Annex A, Complaint; pp.
7-8 ibid.).

Plaintiffs aforesaid Lot 124 is surrounded by Lot 1 (Psd 45412), a fishpond (Exh. C-
5; p. 154, ibid.), on the northeast portion thereof; by Lot 126, owned by Florentino
Cruz, on the southeast portion; by Lot 6-a and a portion of Lot 6-b (both Psd-297786)
owned respectively by Spouses Cesar and Raquel Sta. Maria and Florcerfida Sta.
Maria (Exhs. C-2 and C-3, ibid.), on the southwest; and by Lot 122, owned by
the Jacinto family, on the northwest.

72
On February 17, 1992, plaintiff spouses Fajardo filed a complaint against defendants
Cesar and Raquel Sta. Maria or Florcerfida Sta. Maria for the establishment of an
easement of right of way. Plaintiffs alleged that their lot, Lot 124, is surrounded by
properties belonging to other persons, including those of the defendants; that since
plaintiffs have no adequate outlet to the provincial road, an easement of a right of
way passing through either of the alternative defendants properties which are
directly abutting the provincial road would be plaintiffs only convenient, direct and
shortest access to and from the provincial road; that plaintiffs predecessors-in-
interest have been passing through the properties of defendants in going to and from
their lot; that defendants mother even promised plaintiffs predecessors-in-interest
to grant the latter an easement of right of way as she acknowledged the absence of
an access from their property to the road; and that alternative defendants, despite
plaintiffs request for a right of way and referral of the dispute to the barangay
officials, refused to grant them an easement. Thus, plaintiffs prayed that an easement
of right of way on the lots of defendants be established in their favor. They also
prayed for damages, attorneys fees and costs of suit.

Defendants, instead of filing an answer, filed a motion to dismiss (pp. 41-45, ibid.)
on the ground that the lower court has no jurisdiction to hear the case since plaintiffs
failed to refer the matter to the barangay lupon in accordance with Presidential
Decree No. 1508. The lower court, however, in its Order dated May 18, 1992, denied
said motion on the premise that there was substantial compliance with the law.

On May 25, 1992, defendants filed a Notice of Appeal to the Supreme Court of the
questioned order of the lower court denying their motion to dismiss, under Rule 45
of the Rules of Court (p. 54, ibid.). On June 24, 1992, the lower court denied the
notice of appeal for lack of merit (p. 86, ibid.).

In the meantime, defendants filed a petition for review on certiorari of the lower
courts Order dated May 18, 1992 (pp. 64-84, ibid.). In an Order dated July 8, 1992,
the Third Division of the Supreme Court denied said petition for failure to comply with
Revised Circular Nos. 1-88 and Circular No. 28-01 (p. 97, ibid.). Defendants motion
for reconsideration was likewise denied with finality on July 20, 1992 (p. 96, ibid.).

Consequently, defendants filed their answer to the court below where they alleged
that the granting of an easement in favor of plaintiffs would cause them great damage
and inconvenience; and that there is another access route from plaintiffs lot to the
main road through the property of Florentino Cruz which was likewise abutting the
provincial road and was being offered for sale. By way of counterclaim, defendants
prayed for damages and attorneys fees.

The parties not having settled their dispute during the pre-trial (p.120, Orig. Record),
the court directed that an ocular inspection be conducted of the subject property,
designating the branch clerk of court as its commissioner. In time, an Ocular
Inspection Report dated December 3, 1992 (Exhs. J and J-1) was submitted. After
trial on the merits, the lower court rendered the assailed decision granting plaintiffs
prayer for an easement of right of way on defendants properties.[3]
The trial court found that based on the Ocular Inspection Report there was no other
way through which the private respondents could establish a right of way in order to
reach the provincial road except by traversing directly the property of the petitioners.
It further found that (a) no significant structure, save for a wall or fence about three
feet high, would be adversely affected; (b) there was sufficient vacant space of
approximately 11 meters between petitioners houses; and (c) petitioners property
could provide the shortest route from the provincial road to the private respondents
property. Consequently, the trial court granted the easement prayed for by the
private respondents in a decision dated 30 June 1994,[4] whose decretal portion reads
as follows:

73
WHEREFORE, premises considered the Court orders that a right-of-way be
constructed on the defendants property covered by TCT No. 0-6244 of about 75 sq.
meters, 25 sq. meters shall be taken from the lot of Florcerfida Sta. Maria and 50 sq.
meters from the property of Cesar Sta. Maria to be established along lines 1-2 of lot
6-c and along lines 3-4 of lot 6-b and to indemnify the owners thereof in the total
amount of P3, 750.00 (P1, 250.00 goes to Florcerfida Sta. Maria and P2,500.00 to
Cesar Sta. Maria) and to reconstruct the fence to be destroyed in the manner it was
at the time of the filing of this action.
The petitioners seasonably appealed from the aforementioned decision to the Court
of Appeals, which docketed the case as CA-G.R. CV No. 48473.

The Court of Appeals agreed with the trial court that the private respondents had
sufficiently established the existence of the four requisites for compulsory easement
of right of way on petitioners property, to wit: (1) private respondents property was,
as revealed by the Ocular Inspection Report, surrounded by other immovables owned
by different individuals and was without an adequate outlet to a public highway; (2)
the isolation of private respondents property was not due to their own acts, as it was
already surrounded by other immovables when they purchased it; (3) petitioners
property would provide the shortest way from private respondents property to the
provincial road, and this way would cause the least prejudice because no significant
structure would be injured thereby; and (4) the private respondents were willing to
pay the corresponding damages provided for by law if the right of way would be
granted.

Accordingly, in its decision[5] of 18 December 1996, the Court of Appeals affirmed the
trial courts decision, but modified the property valuation by increasing it from P50
to P2,000 per square meter.

The petitioners forthwith filed this petition for review on certiorari based on the
following assignment of errors:
I.

WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT OF WAY CAN BE

ESTABLISHED IN THE LIGHT OF THE DOCTRINE LAID DOWN BY THE HON. SUPREME
COURT IN COSTABELLA CORPORATION VS. COURT OF APPEALS, 193 SCRA 333, 341
WHICH HELD THAT [FOR] THE FAILURE OF PRIVATE RESPONDENTS TO SHOW THAT
THE ISOLATION OF THEIR PROPERTY WAS NOT DUE TO THEIR PERSONAL OR THEIR
PREDECESSORS-IN-INTERESTS OWN ACTS, THEY ARE NOT ENTITLED TO A
COMPULSORY EASEMENT OF RIGHT OF WAY.

II.

WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN BE GRANTED TO PRIVATE

RESPONDENTS WHO HAVE TWO OTHER EXISTING PASSAGE WAYS OTHER THAN
THAT OF PETITIONERS AND AN ALTERNATIVE VACANT LOT FRONTING THE
PROVINCIAL ROAD ALSO ADJACENT TO PRIVATE RESPONDENTS PROPERTY, WHICH
CAN BE USED IN GOING TO AND FROM PRIVATE RESPONDENTS PROPERTY.

III.

RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED IN MAKING A PORTION OF

ITS STATEMENT OF FACTS FROM ALLEGATIONS IN THE COMPLAINT AND NOT FROM
THE EVIDENCE ON RECORD.

IV.

RESPONDENT HON. COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT

PRIVATE RESPONDENTS HAVE NO ADEQUATE OUTLET TO A PUBLIC HIGHWAY
WHICH INFERENCE DRAWN FROM FACTS WAS MANIFESTLY MISTAKEN.[6]

74
The first, second, and fourth assigned errors involve questions of fact. Settled is the
rule that the jurisdiction of this Court in cases brought before it from the Court of
Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings
of fact of the latter are conclusive, except in the following instances: (1) when the
findings are grounded entirely on speculation, surmises, or conjectures; (2) when the
inference made is manifestly mistaken, absurd, or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when in making its findings
the Court of Appeals went beyond the issues of the case, or its findings are contrary
to the admissions of both the appellant and the appellee; (7) when the findings are
contrary to those of the trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9) when the facts set forth in
the petition as well as in the petitioners main and reply briefs are not disputed by
the respondent; and (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record.[7]

A perusal of the pleadings and the assailed decision of the Court of Appeals, as well
as of the decision of the trial court, yields no ground for the application of any of the
foregoing exceptions. All told, the findings of fact of both courts satisfied the following
requirements for an estate to be entitled to a compulsory servitude of right of way
under the Civil Code, to wit:
1. the dominant estate is surrounded by other immovables and has no
adequate outlet to a public highway (Art. 649, par. 1);

2. there is payment of proper indemnity (Art. 649, par. 1);

3. the isolation is not due to the acts of the proprietor of the dominant estate
(Art. 649, last par.); and

4. the right of way claimed is at the point least prejudicial to the servient
estate; and insofar as consistent with this rule, where the distance from the
dominant estate to a public highway may be the shortest (Art. 650).[8]
As to such requisites, the Court of Appeals made the following disquisitions:
Anent the first requisite, there is no dispute that the plaintiffs-appellees property is
surrounded by other immovables owned by different individuals. The ocular
inspection report submitted to the lower court reveals that:
The property of the plaintiffs, spouses Arsenio and Roslynn Fajardo, is completely
surrounded with adobe fence without any point of egress and ingress to the national
road. Said plaintiffs property containing an area of 1,043 square meters and covered
by OCT No. 0-6244 of the Registry of Deeds of Bulacan was situated directly behind
defendants property which abuts the national road. Defendants, spouses Cesar and
Racquel Sta. Maria, are the absolute owners of the parcel of land with an area of 537
square meters and embraced under TCT No. T-37.763(M) situated on the left side
abutting the national road with their house thereon made of wood and hollow blocks,
while defendant Florcerfida Sta. Maria is the absolute owner of a parcel of land with
a similar area of 537 square meters and covered by TCT No. T-37.762(M) situated
on the right side and likewise abutting the national road with an impressive house
thereon of modern vintage made of strong materials. As depicted in the rough sketch
hereto attached, plaintiffs have absolutely no means of ingress and egress to their
property as the same is completely isolated by properties owned by other persons.
On the left side is the property of Florentino Cruz, on the right side is the property
reportedly owned by the Jacintos; and on the front portion are properties owned by
defendants. x x x

(Ocular Inspection Report, p. 135, Orig. Rec.)

Plaintiffs-appellees property is likewise without adequate outlet to a public highway.
The existing passage way for people (daang tao) at the back of plaintiffs-appellees
property leading to the provincial road (TSN, May 17, 1993, p. 12) cannot be

75
considered an adequate outlet for purposes of establishing an easement. Article 651
of the Code provides that (t)he width of the easement of right of way shall be that
which is sufficient for the needs of the dominant estate, and may accordingly be
changed from time to time. Thus in the case of Larracas vs. Del Rio (37 Official
Gazette 287), this Court had occasion to rule that it is not necessary for a person,
like his neighbors, to content himself with a footpath and deny himself the use of an
automobile. So in an age when motor cars are a vital necessity, the dominant
proprietor has a right to demand a driveway for his automobile, and not a mere lane
or pathway (Cited in Tolentino, ibid., p. 391).

The second requisite for the establishment of an easement of right way, i.e., payment
of indemnity, is likewise present in this case. Plaintiff-appellee spouse Roslynn
Fajardo testified on direct examination that they are willing to pay the corresponding
damages provided for by law if granted the right of way (TSN, November 5, 1992, p.
11).

The third requisite is that the isolation of plaintiffs-appellees property should not
have been due to their own acts. In the case under consideration, the isolation of
their lot is not due to plaintiffs acts. The property they purchased was already
surrounded by other immovables leaving them no adequate ingress or egress to a
public highway.

Going now to the fourth requisite of least prejudice and shortest distance, We
agree with the lower court that this twin elements have been complied with in
establishing the easement of right of way on defendants-appellants properties.

It has been commented upon that where there are several tenements surrounding
the dominant estate, and the easement may be established on any of them, the one
where the way is shortest and will cause the least damage should be chosen. But if
these two circumstances do not concur in a single tenement, the way which will cause
the least damage should be used, even if it will not be the shortest. And if the
conditions of the various tenements are the same, all the adjoining owners should be
cited and experts utilized to determine where the easement shall be established
(Tolentino, ibid., pp. 108-109, citing Casals Colldecarrera).

In the case at bar, the ocular inspection disclosed that there are three options open
to the plaintiffs-appellees as a route to reach the national road, to wit:
(1) To traverse directly through defendants property which is the shortest route of
approximately 20 to 25 meters away from the national road;

(2) To purchase a right of way from the adjoining property of Florentino Cruz on the
left side of their property; and

(3) To negotiate with Jacinto family on the right side of their property.

In all instances, no significant structures would be adversely affected. There is

sufficient vacant space between defendants houses of approximately 11 meters. The
distance of defendant Florcerfidas house with the adjoining adobe wall separating
that of the property of defendants Cesar and Racquel Sta. Maria is about 4 meters,
while the space between the adobe wall and that of the latters house is about 7
meters or a total of 11 meters vacant space for purposes of a right of way. On the
other hand, plaintiffs may negotiate with a right of way with Florentino Cruz on the
left side of their property although the same is quite circuitous. Lastly, the option
through the property of the Jacinto on the right side is very circuitous and longer.
The route involves a total of about 50 yards as it has to go straight to the right of
about 35 yards and turn left of about another 15 yards before reaching the common
right of way.

(Ocular Inspection report, pp. 135-136, ibis.)

76
Among the three (3) possible servient estates, it is clear that defendants-appellants
property would afford the shortest distance from plaintiffs-appellees property to the
provincial road. Moreover, it is the least prejudicial since as found by the lower court,
(i)t appears that there would be no significant structures to be injured in the
defendants property and the right-of-way to be constructed thereon would be the
shortest of all the alternative routes pointed to by the defendants (p. 4, RTC,
Decision; p. 223, ibid.).
Petitioners reliance on Costabella Corporation v. Court of Appeals[9] to support their
first assigned error is misplaced. In said case we reversed the decision of the Court
of Appeals granting a compulsory easement of a right of way to the private
respondents therein because of the absence of any showing that the private
respondents had established the existence of the four requisites mandated by law.
As to the third requisite, we explicitly pointed out; thus: Neither have the private
respondents been able to show that the isolation of their property was not due to
their personal or their predecessors-in-interest's own acts. In the instant case, the
Court of Appeals have found the existence of the requisites. The petitioners, however,
insist that private respondents predecessors-in-interest have, through their own acts
of constructing concrete fences at the back and on the right side of the property,
isolated their property from the public highway. The contention does not impress
because even without the fences private respondents property remains landlocked
by neighboring estates belonging to different owners.

Under the second and fourth assigned errors, the petitioners try to convince us that
there are two other existing passage ways over the property of Cruz and over that of
Jacinto, as well as a daang tao, for private respondents use. Our examination of
the records yields otherwise. Said lots of Cruz and Jacinto do not have existing
passage ways for the private respondents to use. Moreover, the Ocular Inspection
Report[10] reveals that the suggested alternative ways through Cruzs or Jacintos
properties are longer and circuitous than that through petitioners property. This is
also clear from the Sketch Plan[11] submitted by the private respondents wherein it is
readily seen that the lots of Cruz and Jacinto are only adjacent to that of private
respondents unlike that of petitioners which is directly in front of private respondents
property in relation to the public highway.

Under Article 650 of the Civil Code, the easement of right of way shall be established
at the point least prejudicial to the servient estate, and, insofar as consistent with
this rule, where the distance from the dominant estate to a public highway may be
the shortest. Where there are several tenements surrounding the dominant estate,
and the easement may be established on any of them, the one where the way is
shortest and will cause the least damage should be chosen.[12] The conditions of least
damage and shortest distance are both established in one tenement -- petitioners
property.

As to the daang tao at the back of private respondents property, it must be stressed
that under Article 651 the width of the easement of right of way shall be that which
is sufficient for the needs of the dominant estate, and may accordingly be changed
from time to time. Therefore, the needs of the dominant estate determine the width
of the easement.[13] The needs of private respondents property could hardly be
served by this daang tao located at the back and which is bordered by a fishpond.[14]

The third assigned error is without basis and is nothing but a misreading of the
challenged decision. The Court of Appeals did not declare as established facts the
allegations of the complaint referred to by the petitioner. It merely made a brief
summary of what were alleged in the complaint as part of its narration of the
antecedents of the case on appeal.

WHEREFORE, the instant petition for review is DENIED and the challenged decision
of the Court of Appeals is AFFIRMED in toto.

77
Costs against petitioners.

SO ORDERED.

Bellosillo, Vitug, and Kapunan, JJ., concur.

[1]
Rollo, 18-29. Per Martin, Jr. F., J., with Morales, C. and Amin, O., JJ, concurring.

Original Record (OR), Civil Case No. 77-M-92, 220-224. Per Judge Camilo O.
[2]

Montesa, Jr.

[3]
Rollo, 19-21.

[4]
Supra note 2.

[5]
Supra note 1.
[6]
Rollo, 7.

[7]
Medina v. Asistio, 191 SCRA 218, 223-224 [1990].

[8]
Quimen v. Court of Appeals, 257 SCRA 163, 169 [1996]; Vda. de Baltazar v. Court
of Appeals, 245 SCRA 333, 337 [1995]; Floro v. Llenado, 244 SCRA 713, 723 [1995];
Francisco v. Intermediate Appellate Court, 177 SCRA 527, 533 [1989]; Jose C. Vitug,
Compendium of Civil Law and Jurisprudence, 330 (1993).
[9]
193 SCRA 333 [1991].
[10]
OR, 135-136.
[11]
Id., 17.
[12]
2 Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil Code of the
Philippines 355 (1983).
[13]
Encarnacion v. Court of Appeals, 195 SCRA 74, 79 [1991]
[14]
Lot Psd 45412; OR, 17.

Source: Supreme Court E-Library | Date created: September 29, 2014

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FIRST DIVISION
[ G.R. No. 193659, June 15, 2015 ]
SPS. FERNANDO VERGARA AND HERMINIA VERGARA,
PETITIONERS, VS. ERLINDA TORRECAMPO SONKIN,
RESPONDENT.

DECISION

78
PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari[1] are the Decision[2] dated February
24, 2010 and the Resolution[3] dated September 2, 2010 of the Court of Appeals
(CA) in CA-G.R. CV No. 89357, which reversed and set aside the Decision[4] dated
January 4, 2007 of the Regional Trial Court of Malolos City, Bulacan, Branch 19
(RTC) in Civil Case. No. 900-M-2002 and entered a new one in its stead.

The Facts

Petitioners-spouses Fernando Vergara and Herminia Vergara (Sps. Vergara) and

Spouses Ronald Mark Sonkin and Erlinda Torrecampo Sonkin (Sps. Sonkin) are
adjoining landowners in Poblacion, Norzagaray, Bulacan. In view of the
geographical configuration of the adjoining properties, the property owned by Sps.
Sonkin (Sonkin Property) is slightly lower in elevation than that owned by Sps.
Vergara (Vergara Property).[5]

When Sps. Sonkin bought the Sonkin Property sometime in 1999, they raised the
height of the partition wall and caused the construction of their house thereon. The
house itself was attached to the partition wall such that a portion thereof became
part of the wall of the master's bedroom and bathroom.[6]

Sometime in 2001, Sps. Vergara levelled the uneven portion of the Vergara
Property by filling it with gravel, earth, and soil. As a result, the level of the Vergara
Property became even higher than that of the Sonkin Property by a third of a
meter. Eventually, Sps. Sonkin began to complain that water coming from the
Vergara Property was leaking into their bedroom through the partition wall, causing
cracks, as well as damage, to the paint and the wooden parquet floor. Sps. Sonkin
repeatedly demanded that Sps. Vergara build a retaining wall on their property in
order to contain the landfill that they had dumped thereon, but the same went
unheeded.[7] Hence, Sps. Sonkin filed the instant complaint for damages and
injunction with prayer for preliminary mandatory injunction and issuance of a
temporary restraining order against Sps. Vergara, as well as Sps. Rowena Santiago
and Harold Santiago, Dolores Vergara-Orbistondo, and Rosario Vergara-Payumo,
the other possessors of the Vergara Property.[8]

In defense, Sps. Vergara, in their Answer with Compulsory Counterclaim,[9] claimed

that Sps. Sonkin's act of raising the partition wall made the same susceptible to
breakage, which therefore cannot be attributed to them (Sps. Vergara). They
likewise claimed that when they levelled their own property by filling it with gravel
and soil, they left a distance of one (1) meter from the partition wall such that the
edge of the landfill did not breach it, asserting further that there was no valid and
legal reason why they should be enjoined from exercising their proprietary
rights.[10]

During the trial, Sps. Sonkin presented the testimony of Engineer Ma. Victoria
Mendoza, considered an expert witness, who categorically declared that in view of
the sloping terrain and the Sonkin Property being lower in elevation than that of the
Vergara Property, the Sps. Vergara were then duty bound to provide a retaining
wall because they were the ones who caused the landfill, citing Section 1202[11] of
Presidential Decree No. 1096,[12] otherwise known as the "National Building Code of
the Philippines" (National Building Code). Likewise, citing Sections 3.2.1, 3.2.3, and
3.2.4 of Section 3.2, Rule XV of the original Implementing Rules and Regulations[13]
of the National Building Code, she explained that it was Sps. Vergara's duty to
provide safety requirements for the landfill they made on their property to prevent
any danger to life or property. Moreover, Sps. Vergara failed to provide a sewerage
line to divert the flow of the water into the adjoining property, in violation of
Section 901[14] of the National Building Code.[15]

79
Finally, the Provincial Engineer of Bulacan, Romeo S. Castro, who was appointed as
Commissioner by the RTC to conduct his own investigation, likewise found, inter
alia, that the introduction of filling materials on the Vergara Property has "affected"
the house of Sps. Sonkin.[16]

The RTC Ruling

In a Decision[17] dated January 4, 2007, the RTC found Sps. Vergara civilly liable to
Sps. Sonkin for damages and directed them: (a) to scrape the earth and other
filling materials dumped in the adjacent perimeter wall of the Sonkin Property and
erect a retaining wall in accordance with the standards of the National Building
Code; (b) to install and provide an adequate drainage system in accordance with
the same Code; and (c) to jointly and severally pay Sps. Sonkin P300,000.00 as
actual damages, P50,000.00 as moral damages, P50,000.00 as exemplary
damages, P100,000.00 as attorney's fees, and costs of suit. It dismissed all other
claims of the Sps. Sonkin, as well as the counterclaims of Sps. Vergara, for lack of
merit.[18]

The RTC found that the earth dumped on the Vergara Property pushed back the
perimeter wall, causing cracks on Sps. Sonkin's bedroom wall and water to seep
through the floor of the house. Moreover, the water seepage could only have come
from the Vergara Property which was higher in elevation, as Sps. Vergara have
failed to provide any drainage to divert the flow of water. Given the foregoing, the
RTC concluded that Sps. Vergara's act of dumping earth, soil, and other materials
in their property directly caused the damage to the house of Sps. Sonkin and, thus,
they should be held liable for damages in favor of the latter. Needless to state, Sps.
Vergara's co-defendants were exculpated from liability since they were not shown
to have participated in the former's act.[19]

Aggrieved, Sps. Vergara appealed[20] the entire RTC Decision to the CA. They
reiterated that they were merely exercising their proprietary rights over their
property, i.e., the Vergara Property, when they filled the area with soil and gravel,
and that it was Sps. Sonkin who transgressed the National Building Code when they
failed to leave a setback of two (2) meters between their house and the property
line.[21]

On the other hand, Sps. Sonkin filed only a partial appeal,[22] assailing the amount
of actual, moral, and exemplary damages.

The CA Ruling

In a Decision[23] dated February 24, 2010, the CA reversed and set aside the
assailed RTC Decision and entered a new one: (a) ordering the Sps. Vergara to
install and provide an adequate drainage system on their property to prevent the
flow of water into the Sonkin Property, and to pay Sps. Sonkin the amounts of
P50,000.00 as moral damages and P100,000.00 as attorney's fees; (b) setting
aside the directive to Sps. Vergara to remove the landfill and build a retaining wall
on their property; (c) deleting the award of actual damages, as well as exemplary
damages; and (d) dismissing the separate appeal of the Sps. Sonkin for lack of
merit.[24]

While the CA concurred with the finding of the RTC that the cause of the water
seepage into the Sonkin Property was the act of Sps. Vergara in elevating their own
property by filling it with gravel and soil, it ascribed error upon the RTC in not
fmding that Sps. Sonkin were likewise guilty of contributory negligence in building
their house directly abutting the perimeter wall.[25] The CA explained that despite
the fact that under Article 637 of the Civil Code, the Sonkin Property is legally
obliged to receive any water from higher estates such as the Vergara Property, it

80
being the lower estate, the Sps. Sonkin still built their house with parts thereof
directly abutting the perimeter wall and, in the process, violated the two (2)-meter
setback rule under Section 708[26] of the National Building Code.[27] Thus, the CA
deduced that had Sps. Sonkin followed such rule, then their house would not have
sustained any damage from water coming from the Vergara property.[28] Proceeding
from such ratiocination, the CA deleted the award of actual damages in the absence
of evidence, i.e., actual receipts, showing the amount actually spent by Sps. Sonkin
in the repairs or renovation of their property. Similarly, it deleted the award of
exemplary damages, as Sps. Vergara was not proven to have acted with gross
negligence in levelling their property with the landfill and in mitigation of their
liability in light of Sps. Sonkin's contributory negligence. The award of moral
damages and attorney's fees, however, were affirmed.[29]

Finally, the CA found the order directing Sps. Vergara to remove the landfill on their
property to be unreasonable and an interference on their proprietary rights. It
considered the order to provide an adequate drainage system on their property to
be sufficient under the circumstances. Neither did it find the need to build a
retaining wall on the Vergara Property for the purpose of containing the landfill
thereon, opining that if it was Sps. Vergara's obligation to prevent damage to Sps.
Sonkin's house by erecting a retaining wall, then it was the latter's concomitant
obligation to detach their house from the perimeter wall in order to prevent any
future damage or injury.[30]

Only Sps. Vergara sought reconsideration[31] from the CA Decision, which was
denied in a Resolution[32] dated September 2, 2010. Hence, this petition impleading
only respondent Erlinda Torrecampo Sonkin (Erlinda), essentially arguing that Sps.
Sonkin: (a) are not entitled to damages; and (b) should be ordered to demolish the
parts of their house directly abutting the perimeter wall in compliance with Section
708 (a) of the National Building Code.[33] Records are bereft of showing that Sps.
Sonkin made a further appeal to the Court.

The Issue Before the Court

The issues for the Court's resolution are (a) whether or not the CA erred in
upholding the award of moral damages and attorney's fees; and (b) whether or not
it should have ordered the demolition of the portion of the Sps. Sonkin's house that
adjoins the partition wall.

The Court's Ruling

The petition is meritorious.

Article 2179 of the Civil Code reads:

Art. 2179. When the plaintiffs own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence was only
contributory, the immediate and proximate cause of the injury being the
defendant's lack of due care, the plaintiff may recover damages, but the courts
shall mitigate the damages to be awarded.
Verily, contributory negligence is conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below the
standard to which he is required to conform for his own protection.[34]

In the case at bar, it is undisputed that the Sonkin property is lower in elevation
than the Vergara property, and thus, it is legally obliged to receive the waters that
flow from the latter, pursuant to Article 637 of the Civil Code. This provision refers
to the legal easement pertaining to the natural drainage of lands, which obliges
lower estates to receive from the higher estates water which naturally and without
the intervention of man descends from the latter, i.e., not those collected artificially
in reservoirs, etc., and the stones and earth carried by the waters,[35] viz.:

81
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.[36] (Emphasis and underscoring supplied)
In this light, Sps. Sonkin should have been aware of such circumstance and,
accordingly, made the necessary adjustments to their property so as to minimize
the burden created by such legal easement. Instead of doing so, they disregarded
the easement and constructed their house directly against the perimeter wall which
adjoins the Vergara property, thereby violating the National Building Code in the
process, specifically Section 708 (a) thereof which reads:
Section 708. Minimum Requirements for Group A Dwellings.

(a) Dwelling Location and Lot Occupancy.

The dwelling shall occupy not more than ninety percent of a corner lot and eighty
percent of an inside lot, and subject to the provisions on Easement on Light and
View of the Civil Code of the Philippines, shall be at least 2 meters from the
property line.

x x x x (Emphasis and underscoring supplied)

Hence, the CA correctly held that while the proximate cause of the damage
sustained by the house of Sps. Sonkin was the act of Sps. Vergara in dumping
gravel and soil onto their property, thus, pushing the perimeter wall back and
causing cracks thereon, as well as water seepage, the former is nevertheless guilty
of contributory negligence for not only failing to observe the two (2)-meter setback
rule under the National Building Code, but also for disregarding the legal easement
constituted over their property. As such, Sps. Sonkin must necessarily and equally
bear their own loss.

In view of Sps. Sonkin's contributory negligence, the Court deems it appropriate to

delete the award of moral damages in their favor. While moral damages may be
awarded whenever the defendant's wrongful act or omission is the proximate cause
of the plaintiffs physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and
similar injury in the cases specified or analogous to those provided in Article
2219[37] of the Civil Code,[38] they are only given to ease the defendant's grief and
suffering and should, therefore, reasonably approximate the extent of hurt caused
and the gravity of the wrong done.[39]

Anent the issue on attorney's fees, the general rule is that the same cannot be
recovered as part of damages because of the policy that no premium should be
placed on the right to litigate. They are not to be awarded every time a party wins
a suit. The power of the court to award attorney's fees under Article 2208[40] of the
Civil Code demands factual, legal, and equitable justification. Even when a claimant
is compelled to litigate with third persons or to incur expenses to protect his rights,
still attorney's fees may not be awarded where no sufficient showing of bad faith
could be reflected in a party's persistence in a case other than an erroneous
conviction of the righteousness of his cause.[41] In this case, the Court observes
that neither Sps. Sonkin nor Sps. Vergara (thru their compulsory counterclaim)
were shown to have acted in bad faith in pursuing their respective claims against
each other. The existence of bad faith is negated by the fact that both parties have
valid contentions against each other. Thus, absent cogent reason to hold otherwise,
the Court deems it inappropriate to award attorney's fees in favor of either
party.[42]

Finally, in view of Sps. Sonkin's undisputed failure to observe the two (2)-meter

82
setback rule under the National Building Code, and in light of the order of the courts
a quo directing Sps. Vergara to provide an adequate drainage system within their
property, the Court likewise deems it proper, equitable, and necessary to order
Erlinda, who is solely impleaded as respondent before the Court, to comply with the
aforesaid rule by the removal of the portion of her house directly abutting the
partition wall. The underlying precept on contributory negligence is that a plaintiff
who is partly responsible for his own injury should not be entitled to recover
damages in full but must bear the consequences of his own negligence. The
defendant must therefore be held liable only for the damages actually caused by his
negligence.[43]

WHEREFORE, the petition is GRANTED. The Decision dated February 24, 2010
and the Resolution dated September 2, 2010 of the Court of Appeals (CA) in CA-
G.R. CV No. 89357 are hereby AFFIRMED with MODIFICATIONS. The awards of
moral damages and attorney's fees are DELETED and respondent Erlinda
Torrecampo Sonkin is DIRECTED to strictly comply with Section 708 (a) of the
National Building Code by removing or demolishing the portion of her house that
occupies the two-meter easement from the property line. The rest of the CA
Decision stands.

SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo-De Castro, Bersamin, and Perez, JJ., concur.

Rollo, pp. 11-18. Petitioners also filed an amended petition on December 12,
[1]

2011 (id. at 160-169) which was noted by the Court in a Resolution dated January
30, 2012 (id. at 280-281).

Id. at 21-34. Penned by Associate Justice Ricardo R. Rosario with Associate

[2]

Justices Jose C. Reyes, Jr. and Amy C. Lazaro-Javier concurring.

[3]
Id. at 117-118.
[4]
Id. at 60-72. Penned by Presiding Judge Renato C. Francisco.

[5]
Id. at 22.

[6]
Id.

[7]
See id. at 22-23.
[8]
See Complaint dated December 9, 2002; id. at 35-41.
[9]
See Answer with Compulsory Counterclaim dated January 10, 2003; id. at 48-52.

[10]
See id. at 23 and 50.

The pertinent portion of Section 1202 of the National Building Code reads:
[11]

Section 1202. Excavation, Foundation and Retaining Walls.

xxxx

(c) Footings, Foundations, and Retaining Walls

xxxx

83
 (2 Whenever or wherever there exists in the site of the construction an abrupt
) change in the ground levels or level of the foundation such that instability of
the soil could result, retaining walls shall be provided and such shall be of
adequate design and type of construction as prescribed by the Secretary.

Entitled "ADOPTING A NATIONAL BUILDING CODE OF THE PHILIPPINES

[12]

THEREBY REVISING REPUBLIC ACT NUMBERED SIXTY-FIVE HUNDRED FORTY-ONE"

(February 19, 1977).
[13]
The original IRR have been revised in October 29, 2004.

Section 901 of the National Building Code provides:

[14]

Section 901. General.

Subject to the provisions of Book II of the Civil Code of the Philippines on Property,
Ownership, and its Modification, all buildings hereafter erected, altered, remodeled,
relocated or repaired for human habitation shall be provided with adequate and
potable water supply, plumbing installation, and suitable wastewater treatment or
disposal system, storm water drainage, pest and vermin control, noise abatement
device, and such other measures required for the protection and promotion of
health of persons occupying the premises and others living nearby.
[15]
See rollo, pp. 66-68.

[16]
See id. 63-64.

[17]
Id. at 60-72.
[18]
Id. at 71-72.
[19]
Id. at 68-71.
[20]
See Notice of Appeal dated February 7, 2007; id. at 73-74.

[21]
See id. at 25.
[22]
See Notice of Partial Appeal dated February 15, 2007; id. at 75-76.
[23]
Id. at 21-34.
[24]
Id. at 32-33.
[25]
Id. at 26-27.

Section 708 (a) of the National Building Code provides:

[26]

Section 708. Minimum Requirements for Group A Dwellings.

(a) Dwelling Location and Lot Occupancy.

The dwelling shall occupy not more than ninety percent of a corner lot and eighty
percent of an inside lot, and subject to the provisions on Easement on Light and
View of the Civil Code of the Philippines, shall be at least 2 meters from the
property line.

xxxx
[27]
See id. at 27-28.
[28]
Id. at 27.
[29]
See id. at 30-33.

84
[30]
Id. at 31-32.
[31]
See motion for reconsideration dated March 18, 2010; id at 110-114.

[32]
Id. at 117-118.

See id. at 15-17. See also amended petition dated December 6, 2011; id. at
[33]

166-168.

Allied Banking Corporation v. Bank of the Philippine Islands, G.R. No. 188363,
[34]

February 27, 2013, 692 SCRA 186, 201, citing Philippine National Bank v. Cheah
Chee Chong, G.R. Nos. 170865 & 170892, April 25, 2012, 671 SCRA 49, 64.

See Paras, Edgardo L., CIVIL CODE OR THE PHILIPPINES ANNOTATED, Vol. II,
[35]

Sixteenth Edition (2008), pp. 686-687.

[36]
See also Article 50 of Presidential Decree No. 1067, entitled "A DECREE
INSTITUTING A WATER CODE, THEREBY REVISING AND CONSOLIDATING THE
LAWS GOVERNING THE OWNERSHIP, APPROPRIATION, UTILIZATION,
EXPLOITATION, DEVELOPMENT, CONSERVATION AND PROTECTION OF WATER
RESOURCES" (December 31, 1976), which provides:
Art. 50. Lower estates are obliged to receive the waters 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 can not 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.
[37]
Article 2219 of the Civil Code reads:
Art. 2219. Moral damages may be recovered in the following and analogous
instances:
(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in article 309;

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3
of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the
action mentioned in No. 9 of this article, in the order named.
[38]
California Clothing, Inc. v. Quiones, G.R. No. 175822, October 23, 2013, 708
SCRA 420, 431, citing Carpio v. Valmonte, 481 Phil. 352, 364 (2004).
[39]
Id., citing Villanueva v. Rosqueta, 624 Phil. 330, 337 (2010).

85
[40]
Article 2208 of the Civil Code reads:
Article 2208. In the absence of stipulation, attorney's fees and expenses of
litigation, other than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy
the plaintiffs plainly valid, just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;

(8) In actions for indemnity under workmen's compensation and employer's liability
laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.
[41]
See The President of the Church of Jesus Christ of Latter Day Saints v. BTL
Construction Corporation, G.R. No. 176439, January 15, 2014, citing Development
Bank of the Philippines v. Traverse Development Corporation, 674 Phil. 405, 415
(2011)
[42]
See id.

[43]
Bank of America NT & SA v. Philippine Racing Club, 611 Phil. 687, 702 (2009),
citing Lambert v. Heirs of Ray Castillon, 492 Phil. 384, 391-392 (2005).

618 Phil. 170

THIRD DIVISION
[ G.R. No. 172077, October 09, 2009 ]
BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE, INC.
(BAPCI), PETITIONER, VS. EDMUNDO O. OBIAS, PERFECTO O.
OBIAS, VICTOR BAGASINA, ELENA BENOSA, MELCHOR
BRANDES, ROGELIO MONTERO, PEDRO MONTERO, CLAUDIO
RESARI, PILAR GALON, ANTONIO BUISON, PRUDENCIO
BENOSA, JR., MARIA VILLAMER AND ROBERTO PADUA,
RESPONDENT.

86
 DECISION

PERALTA, J.:

Before this Court is a Petition for Review on certiorari[1] under Rule 65 of the Rules
of Court, seeking to set aside the August 24, 2005 Decision[2] and March 28, 2006
Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 59016.

The facts of the case:

Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) was

established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO
constructed a road ("the disputed road") - measuring approximately 7 meters wide
and 2.9 kilometers long. The disputed road was used by BISUDECO in hauling and
transporting sugarcane to and from its mill site (Pensumil) and has thus become
indispensable to its sugar milling operations.[4]

On October 30, 1992, petitioner Bicol Agro-Industrial Producers Cooperative, Inc.

acquired the assets of BISUDECO. On April 19, 1993, petitioner filed a Complaint[5]
against respondents Edmundo Obias, Perfecto Obias, Victor Bagasina, Elena
Benosa, Melchor Brandes, Rogelio Montero, Pedro Montero, Claudio Resari, Pilar
Galon, Antonio Buison, Prudencio Benosa, Jr., Victor Bagasina Jr., Maria Villamer,
and Roberto Padua, alleging that on March 27, 1993 and April 3, 1993, respondents
unjustifiably barricaded the disputed road by placing bamboos, woods, placards and
stones across it, preventing petitioner's and the other sugar planter's vehicles from
passing through the disputed road, thereby causing serious damage and prejudice
to petitioner.[6]

Petitioner alleged that BISUDECO constructed the disputed road pursuant to an

agreement with the owners of the ricefields the road traversed. The agreement
provides that BISUDECO shall employ the children and relatives of the landowners
in exchange for the construction of the road on their properties. Petitioner contends
that through prolonged and continuous use of the disputed road, BISUDECO
acquired a right of way over the properties of the landowners, which right of way in
turn was acquired by it when it bought BISUDECO's assets. Petitioner prayed that
respondents be permanently ordered to restrain from barricading the disputed road
and from obstructing its free passage.[7]

In an Order[8] dated April 19, 1993, the Regional Trial Court of Pili (RTC),
Camarines Sur, 5th Judicial Region, Branch 31, ordered respondents, their agents
and representatives to cease and desist from placing barricades on the disputed
road.[9]

In their Answer,[10] respondents denied having entered into an agreement with

BISUDECO regarding the construction and the use of the disputed road. They
alleged that BISUDECO, surreptitiously and without their knowledge and consent,
constructed the disputed road on their properties and has since then intermittently
and discontinuously used the disputed road for hauling sugarcane despite their
repeated protests. Respondents claimed they tolerated BISUDECO in the
construction and the use of the road since BISUDECO was a government-owned
and controlled corporation, and the entire country was then under Martial Law.
Respondents likewise denied that the road has become a public road, since no
public funds were used for its construction and maintenance. Moreover,
respondents alleged that with the exception of Edmundo and Perfecto Obias, they
are actual tillers of the ricelands, having acquired their rights over said lands under
Presidential Decree No. 27 (PD 27). Edmundo and Perfecto Obias are the owners of
the eastern portion of the property on which a portion of the road going to

87
BISUDECO was constructed. Respondents denied that they barricaded the road.[11]

Jaime Manubay and Manolito Maralit, for themselves and in representation of other
sugarcane planters, filed the first complaint-in-intervention.[12]

Petitioner filed an Amended Complaint[13] and with leave of court a Re-Amended

Complaint,[14] where it averred, as an alternative cause of action in the event the
lower court does not find merit in its causes of action, that it will avail of the
benefits provided for under Article 649[15] of the New Civil Code. Petitioner thus
demanded from respondents a right of way over the disputed road for its use.[16]

Respondents filed an Answer[17] to refute petitioner's alternative cause of action.

Respondents claimed that the road from the sugarmill to the Maharlika Highway at
Barangay Romero, Bula, Camarines Sur, which exits at the Rural Bank of Bula site,
had a distance of only about 15 kilometers; hence, respondents asserted that said
road was shorter and was a more appropriate right of way than the disputed
road.[18]

On July 21, 1993, the RTC issued a Writ of Preliminary Injunction[19] ordering the
respondents to desist from constructing barricades across the road.

On June 28, 1994, nine other cooperatives[20] filed their Complaint-in-

Intervention.[21]

On June 25, 1997 the RTC rendered a Decision,[22] the dispositive portion of which
reads:
WHEREFORE, premises considered, a decision is hereby rendered declaring the Writ
of Preliminary Injunction issued against all the herein defendants, their agents,
representatives and such other persons acting in their behalf, permanent and
perpetual BUT the plaintiff Bicol Agro-Industrial Cooperative, Inc., (BAPCI) is
hereby ordered to pay the owners of the lots affected by the road, viz: Pedro
Montero - P299,040.00; Pedro Galon - P52,920.00; Clara Padua - P46,410.00;
Antonio Buizon - P35,070.00; Rogelio Montero - P41,160.00; Maria Villamer -
P41,580.00; Melchor Brandes - P76,440.00; Prudencio Benosa - P41, 650.00; Elena
Benosa - P39,550.00; Victor Bagasina, Jr. - P39,410.00; and Claudio Resari -
P40,950.00. Upon full payment thereof, the plaintiff shall be declared the absolute
owner of the road in question. Legal rate if interest is hereby imposed upon the
plaintiff from the finality of this decision until fully payment hereof. No costs.

SO ORDERED.[23]
The RTC ruled that petitioner failed to present any concrete evidence to prove that
there was an agreement between BISUDECO and respondents for the construction
of the disputed road.[24] Moreover, it held that petitioner did not acquire the same
by prescription.[25] The RTC, however, also held that petitioner was entitled to a
compulsory easement of right of way as provided for under Article 649 of the New
Civil Code upon payment of proper indemnity to respondents.[26]

Both parties filed a motion for reconsideration of the RTC Decision. Petitioner
contended that: (1) the value of the land is excessive; (2) the evidence is
insufficient to justify the award; (3) the decision is contrary to law and
jurisprudence. Respondents, on the other hand, alleged that: (1) the trial court
erred in declaring the persons mentioned in the decision's dispositive portion to be
entitled to indemnity for the construction and the use of the disputed road; (2)
BAPCI should not be declared the absolute owner of the disputed road upon full
payment of the indemnity due to the defendants; and (3) the decision failed to
award damages.[27]

On September 24, 1997, the RTC denied both motions for reconsideration.[28] The
parties then appealed to the CA.

88
On August 24, 2005, the CA rendered a Decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The assailed
decision of the Regional Trial Court, Branch 31, Pili, Camarines Sur, in Civil Case
No. P-1899 is hereby MODIFIED as follows: the awards of Php46,410.00 to Clara
Padua and Php41,650.00 to Prudencio Benosa are hereby DELETED, and the
declaration that the plaintiff BAPCI shall become the absolute owner of the disputed
road upon full payment of indemnity is REVERSED and SET ASIDE. Accordingly, the
owners of the servient estate in the easement of right of way recognized in this
Decision shall retain ownership of the lands affected by the easement in accordance
with Art. 630 of the Civil Code. We hereby AFFIRM the appeal in all other respects.

SO ORDERED.[29]
The CA affirmed the finding of the RTC that there was no conclusive proof to
sufficiently establish the existence of an agreement between BISUDECO and
respondents regarding the construction of the disputed road.[30] Moreover, the CA
also declared that an easement of right of way is discontinuous and as such cannot
be acquired by prescription.[31] The CA likewise affirmed the finding of the RTC that
petitioner was entitled to a compulsory easement of right of way upon payment of
proper indemnity to respondents. The CA, however, declared that ownership over
the disputed road should remain with respondents, despite the grant of a
compulsory easement.[32] Lastly, the CA deleted the awards to Prudencio Benosa
(Benosa) and Clara Padua (Padua), since the former never claimed ownership of
any portion of the lands affected by the disputed road and the latter was not a
party to the proceedings below.[33]

Petitioner then filed a Motion for Reconsideration alleging among others that the CA
Decision failed to rule on the issue of estoppel and laches. Moreover, Benosa and
Padua filed a Motion for Reconsideration assailing the portion of the CA Decision
deleting the award of indemnity to them. On March 28, 2006, the CA issued a
Resolution denying the same.

Hence, herein petition, with petitioner raising the following assignment of errors, to
wit:
I.

THE HONORABLE COURT OF APPEALS ERRED SERIOUSLY IN NOT FINDING

THAT THERE WAS FORGED AN AGREEMENT BETWEEN BISUDECO
MANAGEMENT AND THE PRIVATE RESPONDENTS FOR THE CONTRUCTION
OF THE ROAD IN QUESTION.

II.

THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT

CONSIDERING THE PRINCIPLES OF PRESCRIPTION, LACHES AND
ESTOPPEL IN THE CASE AT BAR.

III.

THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY

DISREGARDING THE CLASSIFICATION OF THE ROAD IN QUESTION AS
BARANGAY ROAD.

IV.

IN THE ALTERNATIVE CAUSE OF ACTION, THE PUBLIC RESPONDENT

SERIOUSLY ERRED IN CONSIDERING THE VALUATION OF THE LANDS

89
AFFECTED BY THE ROAD IN 1994, AND NOT IN 1974, WHEN SAID ROAD
WAS CONSTRUCTED.

V.

THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT

FAILED ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST
ENRIGHTMENT AT THE EXPENSE OF ANOTHER.[34]
At the outset, this Court shall address some procedural matters. Quite noticeably,
herein petition is denominated as one filed under Rule 65[35] of the Rules of Court
notwithstanding that it seeks to assail the Decision and Resolution of the CA.
Clearly, petitioner had availed of the improper remedy as the appeal from a final
disposition of the CA is a petition for review under Rule 45 and not a special civil
action under Rule 65 of the Rules of Court.[36]

In Active Realty and Development Corporation v. Fernandez,[37] this Court discussed

the difference between petitions filed under Rule 65 and Rule 45, viz:
A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction
committed by the lower court, or grave abuse of discretion which is tantamount to
lack of jurisdiction. This remedy can be availed of when "there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law."

Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, is a
mode of appeal available to a party desiring to raise only questions of law from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan,
the Regional Trial Court or other courts whenever authorized by law.

x x x The general rule is that the remedy to obtain reversal or modification

of judgment on the merits is appeal. Thus, the proper remedy for the
petitioner should have been a petition for review on certiorari under Rule
45 of the Rules of Court since the decision sought to be reversed is that of
the CA. The existence and availability of the right of appeal proscribes a resort to
certiorari, because one of the requisites for availment of the latter is precisely that
"there should be no appeal. The remedy of appeal under Rule 45 of the Rules of
Court was still available to the petitioner.[38]
Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in
any case, i.e., regardless of the nature of the action or proceeding involved, may be
appealed to this Court by filing a petition for review, which would be but a
continuation of the appellate process over the original case.[39] Moreover, it is basic
that one cannot avail of the remedy provided for under Rule 65 when an appeal is
still available. Hence, petitioner should have filed its petition under Rule 45.

The procedural infirmity notwithstanding and in the interest of substantial justice,

this Court shall consider herein petition as one filed under Rule 45 especially since it
was filed well within the reglementary period proscribed under the said Rule. The
Court also takes notice that the assignment of errors raised by petitioner does not
allege grave abuse of discretion or lack of jurisdiction on the part of the CA.

On the Existence of an Agreement between BISUDECO and Respondents

Anent the first error raised, petitioner argues that the CA erred in not finding that
BISUDECO and respondents forged an agreement for the construction of the road in
dispute. Petitioner thus asserts its entitlement to an easement of right of way over
the properties of respondents by virtue of said agreement.

An easement of right of way was succinctly explained by the CA in the following

manner, to wit:
Easement or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner. By its creation,

90
easement is established either by law (in which case it is a legal easement) or by
will of the parties (a voluntary easement). In terms of use, easement may either be
continuous or discontinuous. The easement of right of way - the privilege of
persons or a particular class of persons to pass over another's land, usually
through one particular path or linen - is characterized as a discontinuous
easement because its use is in intervals and depends on the act of man.
Because of this character, an easement of a right of way may only be
acquired by virtue of a title.[40]
Article 622 of the New Civil Code is the applicable law in the case at bar, viz:
Art. 622. Continuous non-apparent easements, and discontinuous ones, whether
apparent or not, may be acquired only by virtue of a title(Emphasis
underscorinh supplied)
Based on the foregoing, in order for petitioner to acquire the disputed road as an
easement of right-of-way, it was incumbent upon petitioner to show its right by title
or by an agreement with the owners of the lands that said road traversed.

While conceding that they have no direct evidence of the alleged agreement,
petitioner posits that they presented circumstantial evidence which, if taken
collectively, would prove its existence.[41] Specifically, petitioner cites the following
circumstances, to wit:
a. The agreement was of public knowledge.[42] Allegedly BISUDECO and
respondents entered into an agreement for the construction of the road
provided that the latter, their children or relatives were employed with
BISUDECO.
b. The road was continuously used by BISUDECO and the public in
general.[43]
c. There was no protest or complaint from respondents for almost a period
of two decades.[44]
d. The portions of the land formerly belonging to respondents affected by
the road were already segregated and surveyed from the main lots.[45]
e. The road in dispute is already a barangay road.
The well-entrenched rule in our jurisdiction is that only questions of law may be
entertained by this Court in a petition for review on certiorari. This rule, however, is
not iron-clad and admits certain exceptions, such as when (1) the conclusion is
grounded on speculations, surmises or conjectures; (2) the inference is manifestly
mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the
judgment is based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) there is no citation of specific evidence on which the factual findings
are based; (7) the findings of absence of facts are contradicted by the presence of
evidence on record; (8) the findings of the Court of Appeals are contrary to those of
the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and
undisputed facts that, if properly considered, would justify a different conclusion;
(10) the findings of the Court of Appeals are beyond the issues of the case; and
(11) such findings are contrary to the admissions of both parties.[46]

After a painstaking review of the records, this Court finds no justification to warrant
the application of any exception to the general rule.

Crucial to the petitioner's cause was its burden of proving the existence of the
alleged agreement between BISUDECO and respondents for the construction of the
road. In this regard, the RTC found that petitioner failed to prove its existence, to
wit:

It is clear that the plaintiff failed to present any concrete evidence to prove
that there was such an agreement between BISUDECO and defendants.
Hereunder quoted are the testimonies of plaintiff's witnesses regarding the alleged
agreement.

91
Romeo Deveterbo, Transportation Superintendent of BISUDECO testified -

Cross Examination by Atty. Pejo

Q: You also mentioned that there was an agreement between Senator Cea,
Mr. Obias and some of the tenants?
A: Yes.

Q: You mentioned that this was not in writing, am I right?

A: Yes.

Q: How did you know about it that it was not in writing, who told you,
Senator Cea?
A: It was commonly known to all original employees of the BISUDECO.

Q: You know it from the management?

A: From co-employees.

Q: You learned about that agreement from you co-employees?

A: Yes.

Q: In other words, therefore, that is why you said you are confused between
Edmundo Cea and Perfecto Obias because you just learned it from other
employees and you were never present when they talked about it, am I
right?
A: Yes. x x x

To this effect also is the testimony of Angel Lobo, head of the agricultural
Department of BAPCI, to wit:

A: Yes, your Honor?

COUR
From where did you learn?
T:
A: From people whom I talked with at that time and it is a public common
knowledge at that time.
xxx

Atty. Carandang: I repeat my question, Your Honor.

You said you acquired it from or because of common knowledge and you
mentioned some people. Who are those people you are referring to whom
you acquired that knowledge?

92
 A: Most of all, the late Benjamin Bagasina, Barangay Captain at that time
who was our employee in consideration of this agreement, then we have
also a Civil Engineering Head, Civil Engineering Department who is
responsible for the maintenance of this road. I learned from him that this
arrangement established the fact why this road was constructed.

Q: Who is the head of the Engineering Dept?

xxx

COURT: May answer.

A: Engineer Pablo Tordilla who was then the head of our Civil Engineering
Dept.

But this Engineer Pablo Tordilla, Lobo's alleged source of the information, was never
presented in Court. And, according to the Chief Accountant of BAPCI, David Severo:

A: When I was interviewing Mrs. Alma Montero Penaflor she filed to me a

certain arrangement related to the used of the land to Himaao as road
going to the central.
COURT: You mean Himaao Millsite road?
A: Yes, sir.

Atty. Carandang:
Q: What arrangement is that supposedly filed to you?
A: She told me in exchange for the use of the road, the relatives or owners
or tenants of the land will be hired by the sugar Central?

COUR
T:
Q: So, only the tenants not the owners?
A: The tenant's children the road belongs.
xxx

Finally, intervenor Antonio Austria, in trying to show you that there was consent
and approval on the part of the defendant Edmundo Obias to give the right of way
to BISUDECO at the time to be used in hauling the sugarcane of the planters to the
Central, averred the following uncertain statements:

93
 A: Well, he has (sic) having a case against PENSUNIL, regarding the
property I think the right of way going to PENSUMIL right now we discuss
it and he said he is allowing it anymore but then I reminded him wayback
in 1974 to 1980 he was one of the biggest planters in the part of Partido
so he consented to the late I think Edmundo Cea, the owner of BISUDECO
at that time to pass his property since he is also milling a lot of things at
that time and many other things one of the concession mill was I think
some of the tenants there in Himaao will be employed in the mill.
xxx

These aforequoted testimonies of the plaintiff's witnesses failed to

satisfactorily establish the plaintiff's contention that there was such an
agreement. Likewise, the list of the Employees of Defendants' relatives,
son/daughter employed by the BISUDECO (Exhibit H) does not in any
manner prove the alleged agreement.[47]
For its part, the CA also ruled that petitioner failed to prove the existence of the
said agreement, to wit:
Like the lower court, we found no conclusive proof to sufficiently establish
the existence of an agreement between BISUDECO and the defendants-
appellants regarding the construction and the use of the disputed road. The
lower court correctly disbelieved the plaintiffs-appellants' contention that an
agreement existed because there is simply no direct evidence to support this
allegation. BAPCI submitted purely circumstantial evidence that are not sufficiently
adequate as basis for the inference than an agreement existed. By themselves, the
circumstances the plaintiffs-appellants cited - i.e., the employment of sixteen (16)
relatives of the defendants-appellants; the defendants-appellants' unjustified
silence; the fact that the existence of the agreement is known to everyone, etc. -
are events susceptible of diverse interpretations and do not necessarily lead to
BAPCI's desired conclusion. Additionally, the testimonies that the plaintiffs-
appellants presented are mainly hearsay, as not one among the witnesses
had personal knowledge of the agreement by reason of direct participation
in the agreement or because the witness was present when the agreement
was concluded by the parties. Thus, given the defendants-appellants' categorical
denial that an agreement existed, we sustain the lower's conclusion that no
agreement existed between BISUDECO and the defendants-appellants.[48]
Based on the foregoing, the inability of petitioner to prove the existence of an
agreement militates its allegations in herein petition. On this score, both the RTC
and the CA are one in ruling that petitioner had failed to prove the existence of the
agreement between BISUDECO and the respondents for the construction of the
road. Also, well-established is the rule that "factual findings of the Court of Appeals
are conclusive on the parties and carry even more weight when the said court
affirms the factual findings of the trial court."[49] Hence, this Court finds no reason
to reverse such findings.

On Acquisition by Prescription

Petitioner would have this Court re-examine Costabella Corporation v. Court of

Appeals[50] (Costabella) where the Court held that, "It is already well-established
that a right of way is discontinuous and, as such, cannot be acquired by
prescription."[51] Petitioner contends that some recognized authorities[52] share its
view that an easement of right of way may be acquired by prescription.

Be that as it may, this Court finds no reason to re-examine Costabella. This Court is
guided by Bogo-Medellin Milling Co., Inc. v. Court of Appeals[53] (Bogo-Medellin),
involving the construction of a railroad track to a sugar mill. In Bogo-Medellin, this

94
Court discussed the discontinuous nature of an easement of right of way and the
rule that the same cannot be acquired by prescription, to wit:
Continuous and apparent easements are acquired either by virtue of a title or by
prescription of ten years.

The trial court and the Court of Appeals both upheld this view for the reason that
the railroad right of way was, according to them, continuous and apparent in
nature. The more or less permanent railroad tracks were visually apparent and they
continuously occupied the subject strip of land from 1959 (the year the easement
granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-
year prescriptive period in 1969, petitioner supposedly acquired the easement of
right of way over the subject land.

Following the logic of the courts a quo, if a road for the use of vehicles or
the passage of persons is permanently cemented or asphalted, then the
right of way over it becomes continuous in nature. The reasoning is
erroneous.

Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according
to the presence of apparent signs or physical indications of the existence
of such easements. Thus, easement is continuous if its use is, or may be,
incessant without the intervention of any act of man, like the easement of
drainage; and it is discontinuous if it is used at intervals and depends on the
act of man, like the easement of right of way.

The easement of right of way is considered discontinuous because it is

exercised only if a person passes or sets foot on somebody else's land. Like
a road for the passage of vehicles or persons, an easement of right of way
of railroad tracks is discontinuous because the right is exercised only if and
when a train operated by a person passes over another's property. In other
words, the very exercise of the servitude depends upon the act or
intervention of man which is the very essence of discontinuous easements.

The presence of more or less permanent railroad tracks does not, in any
way, convert the nature of an easement of right of way to one that is
continuous. It is not the presence of apparent signs or physical indications
showing the existence of an easement, but rather the manner of exercise
thereof, that categorizes such easement into continuous or discontinuous. The
presence of physical or visual signs only classifies an easement into apparent or
non-apparent. Thus, a road (which reveals a right of way) and a window (which
evidences a right to light and view) are apparent easements, while an easement of
not building beyond a certain height is non-apparent.

In Cuba, it has been held that the existence of a permanent railway does not make
the right of way a continuous one; it is only apparent. Therefore, it cannot be
acquired by prescription. In Louisiana, it has also been held that a right of passage
over another's land cannot be claimed by prescription because this easement is
discontinuous and can be established only by title.

In this case, the presence of railroad tracks for the passage of petitioner's trains
denotes the existence of an apparent but discontinuous easement of right of way.
And under Article 622 of the Civil Code, discontinuous easements, whether
apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco
never acquired any title over the use of the railroad right of way whether by law,
donation, testamentary succession or contract. Its use of the right of way, however
long, never resulted in its acquisition of the easement because, under Article 622,
the discontinuous easement of a railroad right of way can only be acquired by title
and not by prescription.[54]

95
Applying Bogo-Medellin to the case at bar, the conclusion is inevitable that the road
in dispute is a discontinuous easement notwithstanding that the same may be
apparent. To reiterate, easements are either continuous or discontinuous according
to the manner they are exercised, not according to the presence of apparent signs
or physical indications of the existence of such easements. Hence, even if the road
in dispute has been improved and maintained over a number of years, it will not
change its discontinuous nature but simply make the same apparent. To stress,
Article 622 of the New Civil Code states that discontinuous easements, whether
apparent or not, may be acquired only by virtue of a title.

On Laches and Estoppel

Petitioner argues that estoppel and laches bar respondents from exercising
ownership rights over the properties traversed by the road in dispute. In support of
said argument, petitioner posits that BISUDECO had been peacefully and
continuously using the road without any complaint or opposition on the part of the
respondents for almost twenty years. Respondents, on the other hand, claim that
they merely tolerated the use of their land as BISUDECO was a government-owned
and controlled corporation and considering that the disputed road was constructed
during the time of Martial Law.

There is no absolute rule on what constitutes laches. It is a rule of equity and

applied not to penalize neglect or sleeping on one's rights, but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The
question of laches is addressed to the sound discretion of the court and each case
must be decided according to its particular circumstances.[55] It is the better rule
that courts, under the principle of equity, should not be guided or bound strictly by
the statute of limitations or the doctrine of laches if wrong or injustice will result.[56]

In herein petition, the CA denied petitioner's argument in the wise:

As previously explained in our Decision, the applicable law is Article 622 of the Civil
Code of the Philippines, which provides:
Art. 622. Continuous non-apparent easements, and discontinuous ones, whether
apparent or not, may be acquired only by virtue of a title.
The eminent jurist, former Senator Arturo M. Tolentino, opines that this provision
seeks to prevent the imposition of a burden on a tenement based purely on the
generosity, tolerance and spirit of neighborliness of the owners thereof.

We applied the cited provision to the case in ruling that no easement of right of way
was acquired; based on the evidence presented, the plaintiff-appellant failed to
satisfactorily prove the existence of an agreement evidencing any right or title to
use the disputed road. We additionally rejected the plaintiff-appellant's position that
it had acquired the easement of right of way through acquisitive prescription, as
settled jurisprudence states that an easement of right of way cannot be acquired by
prescription.

We hold the same view on the issue of acquisition of an easement of right of way
by laches. To our mind, settled jurisprudence on the application of the principle of
estoppel by laches militates against the acquisition of an easement of right of way
by laches.

Laches is a doctrine in equity and our courts are basically courts of law and not
courts of equity; equity, which has been aptly described as "justice outside
legality," should be applied only in the absence of, and never against, statutory
law; Aeguetas nunguam contravenit legis. Based on this principle, we find that the
positive mandate of Article 622 of the Civil Code - the statutory provision requiring
title as basis for the acquisition of an easement of a right of way - precludes the
application of the equitable principle of laches.[57]

96
This Court agrees with the CA. The fact that the law is categorical that
discontinuous easements cannot be acquired by prescription militates against
petitioner's claim of laches. To stress, discontinuous easements can only be
acquired by title. More importantly, whether or not the elements of laches are
present is a question involving a factual determination by the trial court.[58] Hence,
the same being a question of fact, it cannot be the proper subject of herein petition.
On the other hand, as to the issue of estoppel, this Court likewise agrees with the
finding of the CA that petitioner did not present any evidence that would show an
admission, representation or conduct by respondents that will give rise to
estoppel.[59]

Classification of the Road in Dispute as a Barangay Road

Petitioner argues that the CA erred when it disregarded the classification of the
road in question as a barangay road. In support of said argument, petitioner
presented Exhibit Q, a Tax Declaration or Field Appraisal and Assessment Sheet[60]
(1991 FAAS) with Survey Number 1688-40 and PIN No. 026-01-009-08-037, dated
April 30, 1991, which they claim proves that the road in dispute is already a
barangay road.

The same is again a question of fact which cannot be the proper subject of herein
petition. Petitioner cannot have this Court re-examine the evidentiary value of the
documents it presented before the RTC as the same is not a function of this Court.
In any case, after a closer scrutiny of the 1991 FAAS, this Court holds that the
same is insufficient to prove petitioner's claim.

Respondents, in their Comment,[61] argue against the classification of the road in

dispute as a barangay road in the wise:
Petitioner also stated that the Honorable Court of Appeals fails to consider the fact
that the owner of the road in question is the Municipality of Pili in the Province of
Camarines Sur and as proof of such claim they presented and marked as Exhibit Q,
tax declaration no. 009-756 or Annex D of their Petition. However, private
respondents wish to call the attention of this Honorable Court to the following:
a. Tax Declaration No. 009-828 attached as Annex C-6 of the Verified
Petition declared in the name of Edmundo Obias (one of the private
respondents);
b. Actual Use portion of said Annex C-6 marked as Exh. No. N-6-a-1
which states "Road Lot (BISUDECO Road)"; and
c. The Memoranda portion in the second page of Annex C-6 which
states: "Revised to declare the property in The name of the
rightful owner, Edmundo Obias based from the approved subdivision
plan, Bsd-05-000055 (OLT) & technical descriptions. Likewise area was
made to conform with the said subdivision plan from 4,773 sq.m. to
11,209 sq.m.
Obviously, the alleged Exhibit Q of the Petitioner is an erroneous tax declaration,
thus, negates the claim of the Petitioner that the same is owned by the Municipality
of Pili and has been declared a barangay road. Private respondents cannot
understand why the herein Petitioner alleged this matter and used it as a proof to
support their claim when they are already in possession of a tax declaration
correcting the same and even attached the same as part of their Petition.[62]
In its Reply,[63] petitioner counters:
II. While Petitioners claim that the road belongs to the Municipal Government of
Pili, yet what they attached to the Petition as Annex "C-7" is a tax declaration of
Edmundo Obias. Petitioners have the following observations:

xxxx

(b) That land of Edmundo Obias covered by Annex "C-6" to the Petition is not

97
included or involved in this case at bar. His name does not appear to be awarded in
the Decision of the Honorable Court of Appeals and also in the list of beneficiaries to
receive monetary considerations made by Mr. Angel Lobo.[64]
After a painstaking review of the records, this Court is more inclined to believe the
claim of respondents. The claim of petitioner to the effect that the land of Edmundo
Obias is not included in the case at bar is misleading. It may be true that Edmundo
was not awarded indemnity by the lower courts, however, the same does not mean
that his lands do not form part of the subject matter of herein petition.

It bears to stress that Edmundo claimed in the CA that he was the owner of the
affected ricelands and that respondents were merely his tenants-beneficiaries under
PD 27, otherwise known as the Tenant Emancipation Decree.[65] The CA, however,
dismissed said claim because it was raised for the first time on appeal. It also held
that the averments in the documents submitted by Edmundo in the RTC described
respondents as "owners" of the land they till; hence, the same constituted binding
judicial admissions.[66]

Based on the foregoing, petitioner's attempt to refute the contents of the 1995
FAAS by claiming that the lands of Edmundo are not involved in the case at bar
must fail. It is clear that respondents are the tenant-beneficiaries of the lands of
Edmundo under PD 27; hence, contrary to the claim of petitioner, the lands of
Edmundo are the subject matter of herein petition.

In addition, it is curious that petitioner relies on the 1991 FAAS yet finds exception
to the contents of the 1995 FAAS. After a closer scrutiny of both documents, it
appears to this Court that the land described in the 1991 FAAS is also the same
land described in the 1995 FAAS. Both FAAS involve land measuring 4,773 square
meters. Likewise, both FAAS have the same PIN Number (026-01-009-08-037) and
Survey Number (1688-40). Accordingly, the annotation contained in the 1995
FAAS, to the effect that a "BISUDECO road" does not belong to the Municipality of
Pili, serves to weaken petitioner's claim.

The Court also considers portions of the RTC Decision where it can be gathered that
the road in dispute is not a barangay road, to wit:
At this point, it is important to note that defendants admitted the identity of the
road and the area of the same as reflected in the Commissioner's Report, during
the Pre-trial held last September 19, 1995.

Engr. Roberto Revilla testified that a portion of the road inside the property
of Edmundo Obias, is a barangay road which are lots A-52 sq.m., B-789
sq.m. and C-655 sq.m. or a total of 1,497 sq.m. which starts from the
intersection of the National Road and the road to Pensumil up to Corner 9 of Lot 37,
Bsc-05-000055 (OCT) in the name of Pedro O. Montero. Engr. Revilla concluded
that the actual area occupied by the road in question is the sum of areas of
Lots D-2042 sq.m., E-2230 sq.m., F-756 sq.m., G-663 sq.m., H-501 sq.m. ,
I-588 sq.m., J-594 sq.m., K-l092 sq.m., L-595 sq.m., M-459 sq.m., N-106
sq.m., O-585 sq.m. and P-563 sq.m., or a total of 10,774 square meters.
Said road starts from corner 9 of the lot of Pedro Montero which is equivalent to
corner 25 of Lot 40 Bsd-05-000055 (OCT) going to the Southern Direction and
ending at corner 25 of Lot 1688 Cad. 291 Pili Cadastre covered by OCT No. 120-217
(1276) in the name of spouses Edmundo Obias and Nelly Valencia and spouses
Perfecto Obias and Adelaida Abenojar.[67]
The RTC findings of fact thus shows that while certain portions of the property of
Edmundo is a barangay road, the same only pertains to Lots A, B and C, or a total
of 1,497 square meters, which is distinct from the road in dispute which pertains to
different lots (lots E to P) and covers a total area of 10,774 square meters.

In light of the foregoing, considering that the contents of the 1991 FAAS is
disputable, it was incumbent on petitioner to present documents which would

98
evidence the expropriation of the road in dispute by the local government as a
barangay road. Under the prevailing circumstances, the documents of the
expropriation proceedings would have been the best evidence available and the
absence thereof is certainly damaging to petitioner's cause.

Amount of Indemnity Due & On Unjust Enrichment

Petitioner manifested in the RTC its desire, in the alternative, to avail of a

compulsory easement of right of way as provided for under Article 649 the New
Civil Code. Said relief was granted by the RTC because of the unavailability of
another adequate outlet from the sugar mill to the highway. Despite the grant of a
compulsory easement of right of way, petitioner, however, assails both the RTC and
CA Decision with regard to the amount of indemnity due respondents.

Petitioner likens the proceedings at bar to an expropriation proceeding where just

compensation must be based on the value of the land at the time of taking.[68]
Petitioner thus maintains that the compensation due to respondents should have
been computed in 1974 when the road was constructed.[69]

This Court does not agree. Article 649 of the New Civil Code states:
The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons
and without adequate outlet to a public highway, is entitled to demand a right of
way through the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and
the amount of the damage cause to the servient estate.(Emphasis suplied.)
Based on the foregoing, it is clear that the law does not provide for a specific
formula for the valuation of the land. Neither does the same state that the value of
the land must be computed at the time of taking. The only primordial consideration
is that the same should consist of the value of the land and the amount of damage
caused to the servient estate. Hence, the same is a question of fact which should
be left to the sound discretion of the RTC. In this regard, the RTC ruled:
The market value per hectare in 1974 or at the time of taking or prior to its
conversion to road is P6,500/hectare, the same being a first class riceland irrigated
therefore the total market value is P6,864.31. The 1994 Market Value of
P1,292,880.00 is the value assigned to the property in question after it was already
developed as a road lot where the unit value applied per square meter is P120.00
for 5th class residential lot.

It has to be remembered however that the cost of transforming the land to road
was entirely borne by BISUDECO including its maintenance, repair and the cost of
the improvements and by plaintiff after its acquisition. Thus, the P120.00 unit value
is exorbitant while the 1974 valuation of P6,500/hectare is low and unreasonable.

In fine, this Court will adopt the unit value of P70.00 per square meter as shown by
Exhibit "Q," the Real Property Field Assessment Sheet No. 009-756.[70]
In addition, the CA ruled:
We stress that the amount of proper indemnity due to the landowners does not only
relate to the market value of their property but comprehends as well the
corresponding damage caused to the servient estate. It is undisputed that the
BISUDECO began the construction and used of the disputed road in 1974. While the
maintenance was borne by BISUDECO and now by BAPCI who principally used the
disputed road for their sugar milling operations, the defendants-appellants have
been deprived of the use do their ricefields because of the road's construction since
1974. Thus, it is but proper to compensate them for this deprivation, over and
above the prevailing market value of the affected property. To our mind, in light of

99
the circumstances surrounding the acquisition of the affected ricelands and the
construction of the disputed road, particularly the absence of a definitive agreement
to show that the defendants-appellants consented to the road's construction, we
find the P70.00 per square meter indemnity awarded by the lower court in
accordance with the Real Property Field Assessment Sheet No. 009-756, to be fair
and reasonable under the circumstances.[71]
Withal, this Court finds no error as to the proper amount of indemnity due
respondents as the findings of both the RTC and the CA appear to be fair and
reasonable under the prevailing circumstances and in accordance with the
provisions of Article 649 of the New Civil Code.

WHEREFORE, premises considered, the petition is DENIED. The August 24, 2005
Decision and October 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV
No. 59016 are hereby AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Carpio Morales*, Velasco, Jr., and Nachura, JJ., concur.

* Designated as an additional member in lieu of Associate Justice Minita V. Chico-

Nazario per Special Order No. 720 dated October 5, 2009.
[1]
Rollo, pp. 8-37.

[2]
Penned by Associate Justice Arturo D. Brion (now a member of this Court), with
Associate Justices Eugenio S. Labitoria and Eliezer R. de Los Santos concurring; id.
at 38-60.

[3]
Rollo pp. 62-68.

[4]
Id. at 39-40.
[5]
Records, p. 1.

[6]
Rollo, p. 40.

[7]
Rollo, pp. 40-41.
[8]
Records, p. 16.
[9]
Rollo, p. 41.
[10]
Records, p. 30.

[11]
Rollo, pp. 41-42.
[12]
Records, p. 39; Note that it does not appear that said intervenors join petitioner
in herein petition.

[13]
Id at 19.

[14]
Id at 67.

The owner, or any person who by virtue of a real right may cultivate or use any
[15]

immovable, which is surrounded by other immovables pertaining to other persons

and without adequate outlet to a public highway, is entitled to demand a right of
way through the neighboring estates, after payment of the proper indemnity.

100
Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage cause to the servient estate.

[16]
Rollo, p. 42.

[17]
Records, p. 73.

[18]
Rollo, p. 43.
[19]
Records, p. 145.

[20]
Peafrancia Multi-Purpose Sugar Coop.; San Isidro Development Coop. Inc.;
Ocampo Small Multi-Purpose Producers Coop. Inc.; Kilantao-Catalotoan Multi-
Purpose Coop. Inc.; May-ogob Planters Coop. Inc.; Aniog Planters Multi-Purpose
Coop. Inc., Sagnay Sugar Planters Coop. Inc.; Hda. Magdalena Farmers Coop.; and
Bicol Sugar Planters Coop. Inc. Note that it does not appear that said intervenors
join petitioner in herein petition.

[21]
Records, p. 198.

[22]
CA rollo, p. 94-102.
[23]
Id. at 102.

[24]
Id. at 96.
[25]
Id. at 98.
[26]
Id. at 99-100.
[27]
Rollo, p. 44.

[28]
Id.
[29]
Id. at 59-60.
[30]
Id. at 50.

[31]
Id. at 51-52.
[32]
Id. at 59.
[33]
Id. at 55-56.

[34]
Id. at 15-16.
[35]
1. Petition for Review - This is a petition for Review on Certiorari under Rule 65
of the New Rules on Civil Procedure assailing the Decision and Resolution rendered
by the Honorable Public Respondent Court of Appeals, xxx, with grave abuse of
discretion amounting to lack of or excess of jurisdiction and there is no appeal, or
any plain, speedy, and adequate remedy in the ordinary course of law, hence, this
Petition. (Rollo, p. 10).

See National Irrigation Administration v. Court of Appeals, G.R. No. 129169,

[36]

November 17, 1999, 318 SCRA 255.

[37]
G.R. No. 157186, October 19, 2007, 537 SCRA 116.

101
[38]
Id. at 126-127.

See National Irrigation Administration v. Court of Appeals, supra note 36, at

[39]

264.

[40]
Rollo, pp. 51-52.
[41]
Id at 18.

[42]
Id.
[43]
Id.
[44]
Id.

[45]
Id. at 19.

Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850,
[46]

April 28, 2004, 428 SCRA 79.

[47]
CA rollo, 96- 98. (Emphasis ours.)
[48]
Rollo, pp. 50-51. (Emphasis ours.)

[49]
Blanco v. Quasha, 376, Phil. 480, 491 (1999), citing Bridget Boneng y Bagawili
v. People of the Philippines, 304 SCRA 252. (1999).
[50]
G.R No. 80511, January 25, 1991, 193 SCRA 333.
[51]
Id. at 339.

[52]
See rollo, pp. 24-25. Petitioner contends:

There are some who believe, however, that the right of way can be acquired by
prescription (8 Vera 297). The continuity in the exercise of a right does not have to
be absolute. If the right is one that is to be exercised at intervals, there is
continuity notwithstanding such intervals. The use of the easement may be
continuous. In prescription, it is not the acts of possession which are required to be
continuous. It is enough that the acts be exercised with some degree of regularity
to indicate continuity of possession of the easement. The continuity of a
discontinuous easement, therefore, may be very well be continuous (2-11 Colin &
Capitant 913; Roggeiro 839-840).

We are inclined to agree with the view just expressed. We must admit that as a
general principle, the right of way being discontinuous, it cannot be acquired by
prescription, the owner of the tenement would be obliged to disregard the
considerations imposed by neighborhoodliness; he would have to prevent passage
over his tenement because he may wake up some day to find that the easement
has already been established. But if the right is permanent and has an apparent
sign, such as a road, we see no reason why it cannot be acquired by prescription. If
the land itself occupied by the road can be acquired in ownership, why can't a
servitude, which is less than ownership, be acquired? If in order to establish the
right to the road, the adverse claimant asserts ownership thereof and not merely
the easement of passage, the result would be serious and prejudicial to the owner,
in protecting a less right, a greater one would be lost. If there is permanent road,
the easement, or at least its possession, should be regarded as continuous,
because the existence of the road is a continuous assertion of a right against the
exclusive domination of the owner, which right of way under the circumstances
should, therefore, be acquired by prescription, so long as the exercise thereof is not
by tolerance of the owner of the tenement over which the road has been built.

102
(Tolentino, Civil Code of the Philippines, Vol. II, p. 331, 1963).

[53]
455 Phil. 285 (2003).

[54]
Id. at 303-305. (Emphasis and underscoring ours.)
[55]
Villanueva-Mijares v. Court of Appeals, 386 Phil. 555, 565 (2000).
[56]
Bogo-Medellin, supra note 53, at 303.

[57]
Rollo, pp. 65-66.

Pineda v. Heirs of Eliseo Guevara, G.R No. 143188, February 14, 2007, 515
[58]

SCRA 627.

[59]
Rollo p. 68.

[60]
Id. at 77.

[61]
Id. at 81-86.

[62]
Id. at 83-84.
[63]
Id. at 97-100.

[64]
Id. at 99.

[65]
Id. at 45.
[66]
Id. at 54-55.

[67]
CA rollo, p. 100.
[68]
Rollo, p. 33.

[69]
Id.

[70]
CA rollo, pp. 100-101.
[71]
Rollo, p. 57.

455 Phil. 285

THIRD DIVISION
[ G.R. No. 124699, July 31, 2003 ]
BOGO-MEDELLIN MILLING CO., INC., PETITIONER, VS.
COURT OF APPEALS AND HEIRS OF MAGDALENO VALDEZ SR.,
RESPONDENTS.

DECISION

CORONA, J.:

This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to annul
and set aside the decision[1] dated November 17, 1995 of the Court of Appeals,
Tenth Division, which reversed the decision[2] dated November 27, 1991 of the

103
Regional Trial Court of Cebu City, Branch IX, which ruled in favor of herein
petitioner, Bogo-Medellin Milling Company, Inc. and dismissed herein private
respondents' complaint for payment of compensation and/or recovery of possession
of real property and damages with application for restraining order or preliminary
injunction; and its resolution dated March 2, 1996 denying petitioner's motion for
reconsideration.

The antecedent facts follow.

Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez, Angelina
Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-
Melendres (hereafter the heirs), purchased from Feliciana Santillan, on December 9,
1935, a parcel of unregistered land covered by Tax Declaration No. 3935 with an
area of one hectare, 34 ares and 16 centares, located in Barrio Dayhagon, Medellin,
Cebu.[3] He took possession of the property and declared it for tax purposes in his
name.[4]

Prior to the sale, however, the entire length of the land from north to south was
already traversed in the middle by railroad tracks owned by petitioner Bogo-
Medellin Milling Co., Inc. (hereafter Bomedco). The tracks were used for hauling
sugar cane from the fields to petitioner's sugar mill.

When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents
inherited the land. However, unknown to them, Bomedco was able to have the
disputed middle lot which was occupied by the railroad tracks placed in its name in
the Cadastral Survey of Medellin, Cebu in 1965. The entire subject land was divided
into three, namely, Cadastral Lot Nos. 953, 954 and 955. Lot Nos. 953 and 955
remained in the name of private respondents. However, Lot No. 954, the narrow lot
where the railroad tracks lay, was claimed by Bomedco as its own and was declared
for tax purposes in its name. [5]

It was not until 1989 when private respondents discovered the aforementioned
claim of Bomedco on inquiry with the Bureau of Lands. Through their lawyer, they
immediately demanded the legal basis for Bomedco's claim over Cadastral Lot No.
954 but their letter of inquiry addressed to petitioner went unheeded, as was their
subsequent demand for payment of compensation for the use of the land.[6]

On June 8, 1989, respondent heirs filed a "Complaint for Payment of Compensation

and/or Recovery of Possession of Real Property and Damages with Application for
Restraining Order/Preliminary Injunction" against Bomedco before the Regional
Trial Court of Cebu.[7] Respondent heirs alleged that, before she sold the land to
Valdez, Sr. in 1935, Santillan granted Bomedco, in 1929, a railroad right of way for
a period of 30 years. When Valdez, Sr. acquired the land, he respected the grant.
The right of way expired sometime in 1959 but respondent heirs allowed Bomedco
to continue using the land because one of them was then an employee of the
company.[8]

In support of the complaint, they presented an ancient document an original

copy of the deed of sale written in Spanish and dated December 9, 1935[9] to
evidence the sale of the land to Magdaleno Valdez, Sr.; several original real estate
tax receipts[10] including Real Property Tax Receipt No. 3935[11] dated 1922 in the
name of Graciano de los Reyes, husband of Feliciana Santillan, and Real Property
Tax Receipt No. 09491[12] dated 1963 in the name of Magdaleno Valdez, Sr.
Magdaleno Valdez, Jr. also testified for the plaintiffs during the trial.

On the other hand, Bomedco's principal defense was that it was the owner and
possessor of Cadastral Lot No. 954, having allegedly bought the same from
Feliciana Santillan in 1929, prior to the sale of the property by the latter to
Magdaleno Valdez, Sr. in 1935. It also contended that plaintiffs' claim was already

104
barred by prescription and laches because of Bomedco's open and continuous
possession of the property for more than 50 years.

Bomedco submitted in evidence a Deed of Sale[13] dated March 18, 1929; seven
real estate tax receipts[14] for the property covering the period from 1930 to 1985;
a 1929 Survey Plan of private land for Bogo-Medellin Milling Company;[15] a Survey
Notification Card;[16] Lot Data Computation for Lot No. 954;[17] a Cadastral Map for
Medellin Cadastre[18] as well as the testimonies of Vicente Basmayor, Geodetic
Engineer and property custodian for Bomedco, and Rafaela A. Belleza, Geodetic
Engineer and Chief of the Land Management Services of the DENR, Region VIII.

In its decision dated November 27, 1991, the trial court[19] rejected Bomedco's
defense of ownership on the basis of a prior sale, citing that its evidence - a xerox
copy of the Deed of Sale dated March 18, 1929 - was inadmissible and had no
probative value. Not only was it not signed by the parties but defendant Bomedco
also failed to present the original copy without valid reason pursuant to Section 4,
Rule 130 of the Rules of Court.[20]

Nonetheless, the trial court held that Bomedco had been in possession of Cadastral
Lot No. 954 in good faith for more than 10 years, thus, it had already acquired
ownership of the property through acquisitive prescription under Article 620 of the
Civil Code. It explained:
Under Article 620 of the Civil Code, CONTINUOUS and APPARENT easements can be
acquired by prescription after ten (10) years. The "apparent" characteristic of the
questioned property being used by defendant as an easement is no longer at issue,
because plaintiffs themselves had acknowledged that the existence of the railway
tracks of defendant Bomedco was already known by the late Magdaleno Valdez,
herein plaintiffs' predecessor-in-interest, before the late Magdaleno Valdez
purchased in 1935 from the late Feliciana Santillan the land described in the
Complaint where defendant's railway tracks is traversing [sic] (TSN of February 5,
1991, pp. 7-8). As to the continuity of defendant's use of the strip of land as
easement is [sic] also manifest from the continuous and uninterrupted occupation
of the questioned property from 1929 up to the date of the filing of the instant
Complaint. In view of the defendant's UNINTERRUPTED possession of the strip of
land for more than fifity (50) years, the Supreme Court's ruling in the case of
Ronquillo, et al. v. Roco, et al. (103 Phil 84) is not applicable. This is because in
said case the easement in question was a strip of dirt road whose possession by the
dominant estate occurs only everytime said dirt road was being used by the
dominant estate. Such fact would necessarily show that the easement's possession
by the dominant estate was never continuous. In the instant case however, there is
clear continuity of defendant's possession of the strip of land it had been using as
railway tracks. Because the railway tracks which defendant had constructed on the
questioned strip of land had been CONTINUOUSLY occupying said easement. Thus,
defendant Bomedco's apparent and continuous possession of said strip of land in
good faith for more than ten (10) years had made defendant owner of said strip of
land traversed by its railway tracks. Because the railway tracks which defendant
had constructed on the questioned strip of land had been continuously occupying
said easement [sic]. Thus, defendant Bomedco's apparent and continuous
possession of said strip of land in good faith for more than ten (10) years had made
defendant owner of said strip of land traversed by its railway tracks.
Respondent heirs elevated the case to the Court of Appeals which found that
Bomedco did not acquire ownership over the lot. It consequently reversed the trial
court. In its decision dated November 17, 1995, the appellate court held that
Bomedco only acquired an easement of right of way by unopposed and continuous
use of the land, but not ownership, under Article 620 of the Civil Code.

The appellate court further ruled that Bomedco's claim of a prior sale to it by
Feliciana Santillan was untrue. Its possession being in bad faith, the applicable
prescriptive period in order to acquire ownership over the land was 30 years under

105
Article 1137 of the Civil Code. Adverse possession of the property started only in
1965 when Bomedco registered its claim in the cadastral survey of Medellin. Since
only 24 years from 1965 had elapsed when the heirs filed a complaint against
Bomedco in 1989, Bomedco's possession of the land had not yet ripened into
ownership.

And since there was no showing that respondent heirs or their predecessor-in-
interest was ever paid compensation for the use of the land, the appellate court
awarded compensation to them, to be computed from the time of discovery of the
adverse acts of Bomedco.

Its motion for reconsideration having been denied by the appellate court in its
resolution dated March 22, 1996, Bomedco now interposes before us this present
appeal by certiorari under Rule 45, assigning the following errors:

I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT REVERSED
AND SET ASIDE THE TRIAL COURT'S DECISION DISMISSING PRIVATE
RESPONDENT'S COMPLAINT.

II

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT ORDERED THE

PETITIONER TO PAY THE PRIVATE RESPONDENT THE REASONABLE VALUE OF LOT
954 AND THE AMOUNT OF TEN THOUSAND (P10,000.00) PESOS AS REASONABLE
ATTORNEY'S FEES.
Petitioner Bomedco reiterates its claim of ownership of the land through
extraordinary acquisitive prescription under Article 1137 of the Civil Code and
laches to defeat the claim for compensation or recovery of possession by
respondent heirs. It also submits a third ground originally tendered by the trial
court acquisition of the easement of right of way by prescription under Article
620 of the Civil Code.

EXTRAORDINARY ACQUISITIVE PRESCRIPTION

UNDER ART. 1137 OF THE CIVIL CODE

Petitioner's claim of ownership through extraordinary acquisitive prescription under

Article 1137 of the Civil Code cannot be sustained.

There is no dispute that the controversial strip of land has been in the continuous
possession of petitioner since 1929. But possession, to constitute the foundation of
a prescriptive right, must be possession under a claim of title, that is, it must be
adverse.[21] Unless coupled with the element of hostility towards the true owner,
possession, however long, will not confer title by prescription.[22]

After a careful review of the records, we are inclined to believe the version of
respondent heirs that an easement of right of way was actually granted to
petitioner for which reason the latter was able to occupy Cadastral Lot No. 954. We
cannot disregard the fact that, for the years 1930, 1937, 1949, 1962 and 1963,
petitioner unequivocally declared the property to be a "central railroad right of way"
or "sugar central railroad right of way" in its real estate tax receipts when it could
have declared it to be "industrial land" as it did for the years 1975 and 1985.[23]
Instead of indicating ownership of the lot, these receipts showed that all petitioner
had was possession by virtue of the right of way granted to it. Were it not so and
petitioner really owned the land, petitioner would not have consistently used the
phrases "central railroad right of way" and "sugar central railroad right of way" in
its tax declarations until 1963. Certainly an owner would have found no need for
these phrases. A person cannot have an easement on his own land, since all the
uses of an easement are fully comprehended in his general right of ownership.[24]

106
While it is true that, together with a person's actual and adverse possession of the
land, tax declarations constitute strong evidence of ownership of the land occupied
by him,[25] this legal precept does not apply in cases where the property is declared
to be a mere easement of right of way.

An easement or servitude is a real right, constituted on the corporeal immovable

property of another, by virtue of which the owner has to refrain from doing, or must
allow someone to do, something on his property, for the benefit of another thing or
person. It exists only when the servient and dominant estates belong to two
different owners. It gives the holder of the easement an incorporeal interest on the
land but grants no title thereto. Therefore, an acknowledgment of the easement is
an admission that the property belongs to another.[26]

Having held the property by virtue of an easement, petitioner cannot now assert
that its occupancy since 1929 was in the concept of an owner. Neither can it
declare that the 30-year period of extraordinary acquisitive prescription started
from that year.

Petitioner, however, maintains that even if a servitude was merely imposed on the
property in its favor, its possession immediately became adverse to the owner in
the late 1950's when the grant was alleged by respondent heirs to have expired. It
stresses that, counting from the late 1950's (1959 as found by the trial court), the
30-year extraordinary acquisitive prescription had already set in by the time
respondent heirs made a claim against it in their letters dated March 1 and April 6,
1989.

We do not think so. The mere expiration of the period of easement in 1959 did not
convert petitioner's possession into an adverse one. Mere material possession of
land is not adverse possession as against the owner and is insufficient to vest title,
unless such possession is accompanied by the intent to possess as an owner.[27]
There should be a hostile use of such a nature and exercised under such
circumstances as to manifest and give notice that the possession is under a claim of
right.

In the absence of an express grant by the owner, or conduct by petitioner sugar

mill from which an adverse claim can be implied, its possession of the lot can only
be presumed to have continued in the same character as when it was acquired
(that is, it possessed the land only by virtue of the original grant of the easement of
right of way),[28] or was by mere license or tolerance of the owners (respondent
heirs).[29] It is a fundamental principle of law in this jurisdiction that acts of
possessory character executed by virtue of license or tolerance of the owner, no
matter how long, do not start the running of the period of prescription.[30]

After the grant of easement expired in 1959, petitioner never performed any act
incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On
the contrary, until 1963, petitioner continued to declare the "sugar central railroad
right of way" in its realty tax receipts, thereby doubtlessly conceding the ownership
of respondent heirs. Respondents themselves were emphatic that they simply
tolerated petitioner's continued use of Cadastral Lot No. 954 so as not to jeopardize
the employment of one of their co-heirs in the sugar mill of petitioner.[31]

The only time petitioner assumed a legal position adverse to respondents' was
when it filed a claim over the property in 1965 during the cadastral survey of
Medellin. Since then (1965) and until the filing of the complaint for the recovery of
the subject land before the RTC of Cebu in 1989, only 24 years had lapsed. Since
the required 30-year extraordinary prescriptive period had not yet been complied
with in 1989, petitioner never acquired ownership of the subject land.

107
LACHES

Neither can petitioner find refuge in the principle of laches. It is not just the lapse
of time or delay that constitutes laches. The essence of laches is the failure or
neglect, for an unreasonable and unexplained length of time, to do that which,
through due diligence, could or should have been done earlier, thus giving rise to a
presumption that the party entitled to assert it had either abandoned or declined to
assert it.[32]

Its essential elements are: (a) conduct on the part of the defendant, or of one
under whom he claims, giving rise to the situation complained of; (b) delay in
asserting complainant's rights after he had knowledge of defendant's acts and after
he has had the opportunity to sue; (c) lack of knowledge or notice by defendant
that the complainant will assert the right on which he bases his suit; and (d) injury
or prejudice to the defendant in the event the relief is accorded to the
complainant.[33]

The second element (which in turn has three aspects) is lacking in the case at bar.
These aspects are: (a) knowledge of defendant's action, (b) opportunity to sue
defendant after obtaining such knowledge and (c) delay in the filing of such suit.[34]

Records show that respondent heirs only learned about petitioner's claim on their
property when they discovered the inscription for the cadastral survey in the
records of the Bureau of Lands in 1989. Respondents lost no time in demanding an
explanation for said claim in their letters to the petitioner dated March 1, 1989 and
April 6, 1989. When petitioner ignored them, they instituted their complaint before
the Regional Trial Court of Cebu City on June 8, 1989.

Petitioner's reliance on Caro vs. Court of Appeals [35] and Vda. de Alberto vs. Court
of Appeals [36] is misplaced. There, laches was applied to bar petitioners from
questioning the ownership of the disputed properties precisely because they had
knowledge of the adverse claims on their properties yet tarried for an extraordinary
period of time before taking steps to protect their rights.

Further, there is no absolute rule on what constitutes laches. It is a rule of equity

and applied not to penalize neglect or sleeping on one's rights but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The
question of laches is addressed to the sound discretion of the court and each case
must be decided according to its particular circumstances.[37] It is the better rule
that courts, under the principle of equity, should not be guided or bound strictly by
the statute of limitations or the doctrine of laches if wrong or injustice will result.

It is clear that petitioner never acquired ownership over Cadastral Lot No. 954
whether by extraordinary acquisitive prescription or by laches.

ACQUISITION OF EASEMENT OF RIGHT OF WAY BY

PRESCRIPTION UNDER ART. 620 OF THE CIVIL CODE

Petitioner contends that, even if it failed to acquire ownership of the subject land, it
nevertheless became legally entitled to the easement of right of way over said land
by virtue of prescription under Article 620 of the Civil Code:
Continuous and apparent easements are acquired either by virtue of a title or by
prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the reason that
the railroad right of way was, according to them, continuous and apparent in
nature. The more or less permanent railroad tracks were visually apparent and they
continuously occupied the subject strip of land from 1959 (the year the easement
granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-
year prescriptive period in 1969, petitioner supposedly acquired the easement of

108
right of way over the subject land.

Following the logic of the courts a quo, if a road for the use of vehicles or the
passage of persons is permanently cemented or asphalted, then the right of way
over it becomes continuous in nature. The reasoning is erroneous.

Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the
presence of apparent signs or physical indications of the existence of such
easements. Thus, an easement is continuous if its use is, or may be, incessant
without the intervention of any act of man, like the easement of drainage;[38] and it
is discontinuous if it is used at intervals and depends on the act of man, like the
easement of right of way.[39]

The easement of right of way is considered discontinuous because it is exercised

only if a person passes or sets foot on somebody else's land. Like a road for the
passage of vehicles or persons, an easement of right of way of railroad tracks is
discontinuous because the right is exercised only if and when a train operated by a
person passes over another's property. In other words, the very exercise of the
servitude depends upon the act or intervention of man which is the very essence of
discontinuous easements.

The presence of more or less permanent railroad tracks does not in any way
convert the nature of an easement of right of way to one that is continuous. It is
not the presence of apparent signs or physical indications showing the existence of
an easement, but rather the manner of exercise thereof, that categorizes such
easement into continuous or discontinuous. The presence of physical or visual signs
only classifies an easement into apparent or non-apparent. Thus, a road (which
reveals a right of way) and a window (which evidences a right to light and view) are
apparent easements, while an easement of not building beyond a certain height is
non-apparent.[40]

In Cuba, it has been held that the existence of a permanent railway does not make
the right of way a continuous one; it is only apparent. Therefore, it cannot be
acquired by prescription.[41] In Louisiana, it has also been held that a right of
passage over another's land cannot be claimed by prescription because this
easement is discontinuous and can be established only by title.[42]

In this case, the presence of railroad tracks for the passage of petitioner's trains
denotes the existence of an apparent but discontinuous easement of right of way.
And under Article 622 of the Civil Code, discontinuous easements, whether
apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco
never acquired any title over the use of the railroad right of way whether by law,
donation, testamentary succession or contract. Its use of the right of way, however
long, never resulted in its acquisition of the easement because, under Article 622,
the discontinuous easement of a railroad right of way can only be acquired by title
and not by prescription.

To be sure, beginning 1959 when the original 30-year grant of right of way given to
petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came
to be by mere tolerance of the respondent heirs. Thus, upon demand by said heirs
in 1989 for the return of the subject land and the removal of the railroad tracks, or,
in the alternative, payment of compensation for the use thereof, petitioner
Bomedco which had no title to the land should have returned the possession thereof
or should have begun paying compensation for its use.

But when is a party deemed to acquire title over the use of such land (that is, title
over the easement of right of way)? In at least two cases, we held that if: (a) it had
subsequently entered into a contractual right of way with the heirs for the

109
continued use of the land under the principles of voluntary easements or (b) it had
filed a case against the heirs for conferment on it of a legal easement of right of
way under Article 629 of the Civil Code, then title over the use of the land is
deemed to exist. The conferment of a legal easement of right of way under Article
629 is subject to proof of the following:

(1) it is surrounded by other immovables and has no adequate outlet to a

public highway;

(2) payment of proper indemnity;

(3) the isolation is not the result of its own acts; and

(4) the right of way claimed is at the point least prejudicial to the servient
estate, and, insofar as consistent with this rule, the distance from the
dominant estate to the highway is the shortest.[43]

None of the above options to acquire title over the railroad right of way was ever
pursued by petitioner despite the fact that simple resourcefulness demanded such
initiative, considering the importance of the railway tracks to its business. No
doubt, it is unlawfully occupying and using the subject strip of land as a railroad
right of way without valid title yet it refuses to vacate it even after demand of the
heirs. Furthermore, it tenaciously insists on ownership thereof despite a clear
showing to the contrary.

We thus uphold the grant by the Court of Appeals of attorney's fees in the amount
of P10,000 considering the evident bad faith of petitioner in refusing respondents'
just and lawful claims, compelling the latter to litigate.[44]

WHEREFORE, the petition is DENIED. The appealed decision dated November 17,
1995 and resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED
with MODIFICATION. Petitioner Bogo-Medellin Milling Company, Inc. is hereby
ordered to vacate the subject strip of land denominated as Cadastral Lot No. 954,
remove its railway tracks thereon and return its possession to the private
respondents, the heirs of Magdaleno Valdez, Sr. It is also hereby ordered to pay
private respondents attorney's fees in the amount of P10,000.

SO ORDERED.

Puno, (Chairman), Panganiban, and Carpio-Morales, JJ., concur.

Sandoval-Gutierrez, J., on official leave.

Penned by Associate Justice Celia Lipana-Reyes and concurred in by Associate

[1]

Justices Alfredo L. Benipayo and Corona Ibay-Somera.

[2]
Penned by Presiding Judge Benigno G. Gaviola.
[3]
Exhibit "A," Folder of Plaintiffs' Exhibits, p. 1.

[4]
Exhibits "B," "B-1," "B-4" and "D," Folder of Plaintiffs' Exhibits, pp. 2-4, 6.
[5]
Exhibit "H," Folder of Plaintiffs' Exhibits, p. 11.

110
[6]
Exhibits "E" and "F," Id. at pp. 7, 8-9.

[7]
Records, pp. 1-7.

[8]
Exhibits "Y," Folder of Plaintiffs' Exhibits, pp. 102-103.
[9]
Exhibit "A," Id. at p. 1.
[10]
Exhibits "B," "B1," "B2," "B3" and "B4," Id. at pp. 2-4.

[11]
Exhibit "C," Id. at p. 5.

[12]
Exhibit "D," Id. at p. 6.

[13]
Exhibit "1," Folder of Defendant's Exhibits, pp. 8-9.

[14]
Exhibits "2," "3," "4," "5," "6," "7" and "8," Id. at pp. 10-15.
[15]
Exhibit "9," Id. at p. 17.

[16]
Exhibit "10," Id. at p. 18.
[17]
Exhibit "11," Id. at p. 19.
[18]
Exhibit "12," Id. at pp. 20-21.

[19]
Presiding Judge Benigno G. Gaviola.
[20]
Rollo, p. 39.
[21]
Ordoez vs. Court of Appeals, 188 SCRA 109 [1990].
[22]
Cequea vs. Bolante, 330 SCRA 216 [2000].
[23]
Folder of Defendant's Offer of Exhibits, pp. 10-16.

[24]
Articles 428 and 437, Civil Code.
[25]
DBP vs. Court of Appeals, 331 SCRA 267 [2000]; Article 233, Civil Code.
[26]
2 TOLENTINO, CIVIL CODE 353-354 [1992].

[27]
Compaia Agricula de Ultramar vs. Domingo, 6 Phil 246 [1906].

[28]
Article 529, Civil Code.

[29]
Manila Electric Company vs. IAC, 174 SCRA 313 [1989].
[30]
Article 1119, Civil Code.
[31]
Exhibit "Y," Records, pp. 102-103.

[32]
Espao vs. Court of Appeals, 268 SCRA 511[1997].
[33]
Avisado vs. Rumbaua, 354 SCRA 245 [2001].
[34]
Catholic Bishop of Balanga vs. CA, 264 SCRA 181 [1996].

[35]
180 SCRA 401[1989].

111
[36]
173 SCRA 436 [1989].

[37]
Villanueva vs. Court of Appeals, 330 SCRA 349 [2000].

3 PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 597-598 (13th ed.,

[38]

1994); Articles 615 and 646, Civil Code.

[39]
Ibid.

[40]
Supra note 26, 358.
[41]
Ibid. at 365, citing Sentencia (Cuba) of December 14,1928.

Ibid., citing Broussard vs. Etie, 11 La. 394; Burgas vs. Stontz, 174 La. 586, 141
[42]

So. 67.

Bacolod-Murcia Milling Co., Inc., et. al. vs. Capital Subd. Inc., et. al., 124 SCRA
[43]

128 [1966]; Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental, et. al., 149
SCRA 676 [1971].

Article 2208 (2) (5), Civil Code; Songcuan vs. Intermediate Appellate Court, 191
[44]

SCRA 1 [1990].

391 Phil. 799

THIRD DIVISION
[ G.R. No. 134692, August 01, 2000 ]
ELISEO FAJARDO, JR., AND MARISSA FAJARDO,
PETITIONERS, VS. FREEDOM TO BUILD, INC., RESPONDENT.

DECISION

VITUG, J.:

Freedom To Build, Incorporated, an owner-developer and seller of low-cost housing,

sold to petitioner-spouses, a house and lot designated Lot No. 33, Block 14, of the
De la Costa Homes in Barangka, Marikina, Metro Manila. The Contract to Sell executed
between the parties, contained a Restrictive Covenant providing certain prohibitions,
to wit:[1]
"Easements. For the good of the entire community, the homeowner must observe a
two-meter easement in front. No structure of any kind (store, garage, bodega, etc.)
may be built on the front easement.
"x x x x x x x x
"Upward expansion. A second storey is not prohibited. But the second storey
expansion must be placed above the back portion of the house and should not extend
forward beyond the apex of the original building.
"x x x x x x x x
"Front expansion: 2nd Storey: No unit may be extended in the front beyond the
line as designed and implemented by the developer in the 60 sq. m. unit. In other
words, the 2nd floor expansion, in front, is 6 meters back from the front property line
and 4 meters back from the front wall of the house, just as provided in the 60 sq. m.
units."[2]

112
The above restrictions were also contained in Transfer Certificate of Title No. N-
115384 covering the lot issued in the name of petitioner-spouses.
The controversy arose when petitioners, despite repeated warnings from respondent,
extended the roof of their house to the property line and expanded the second floor
of their house to a point directly above the original front wall.[3] Respondent filed
before the Regional Trial Court, National Capital Judicial Region, Branch 261, Pasig
City, an action to demolish the unauthorized structures.
After trial, judgment was rendered against petitioners; thus:
"WHEREFORE, premises considered, defendant spouses Eliseo B. Fajardo, Jr., and
Marissa F. Fajardo are hereby directed to immediately demolish and remove the
extension of their expanded housing unit that exceeds the limitations imposed by the
Restrictive Covenant, otherwise the Branch Sheriff of this Court shall execute this
decision at the expense of the defendants.
"As to damages and attorney's fees, it appearing from the records of this case that
no evidence to sustain the same was adduced by either of the parties, the Court
deems it proper not to award any.
"SO ORDERED."[4]
On appeal to it, the Court of Appeals affirmed the decision of the trial court.
In their petition for review to this Court, the spouses contest the judgment of the
courts below. Adjacent owners reportedly have no objection to the construction, and
have even expressed interest in undertaking a similar expansion in their respective
residences. Moreover, the couple's two children, a son and a daughter, might soon
get married and then share, with their families, living quarters with petitioners. The
latter also assail the personality of private respondent to question the construction
which have effectively relinquished its ownership, right or interest over the
subdivision upon the execution of the Deed of Absolute Sale in favor of the individual
homeowners. Per the contract between Freedom to Build Incorporated and the De la
Costa Low Income Project Homeowners' Association (hereinafter homeowners'
association), petitioners aver, the enforcement of the prohibitions contained in the
"Restrictive Covenant" originally residing on respondent is now lodged in the
homeowners' association. Petitioners maintain that it is incumbent upon the
homeowners' association, not on respondent, to enforce compliance with the
provisions of the covenant.
A perusal of the provisions of the covenant would show that the restrictions therein
imposed were intended -
"For the protection and benefit of the De La Costa Low Income Housing Project, and
of all the persons who may now, or hereafter become owners of any part of the
project, and as part of the consideration for the conveyance of the housing unit, these
restrictions are promulgated in order that; the intents and purposes for which the
project was designed shall be upheld; to wit: subsequent duly approved sale and
assignments of housing units shall be made only to low income families; a certain
level of privacy shall be observed; a community spirit shall be fostered; and an
undisturbed possession and occupancy at the homeowners shall be maintained."[5]
Restrictive covenants are not, strictly speaking, synonymous with easements.
While it may be correct to state that restrictive covenants on the use of land or the
location or character of buildings or other structures thereon may broadly be said to
create easements or rights, it can also be contended that such covenants, being
limitations on the manner in which one may use his own property,[6] do not result in
true easements,[7] but a case of servitudes (burden), sometimes characterized to be
negative easements or reciprocal negative easements. Negative easement is the
most common easement created by covenant or agreement whose effect is to
preclude the owner of the land from doing an act, which, if no easement existed, he
would be entitled to do.[8]
Courts which generally view restrictive covenants with disfavor for being a
restriction on the use of one's property, have, nevertheless, sustained them[9]

113
where the covenants are reasonable,[10] not contrary to public policy,[11] or to
law,[12] and not in restraint of trade.[13] Subject to these limitations, courts enforce
restrictions to the same extent that will lend judicial sanction to any other valid
contractual relationship.[14] In general, frontline restrictions on constructions have
been held to be valid stipulations.[15]
The provisions in a restrictive covenant prescribing the type of the building to
be erected are crafted not solely for the purpose of creating easements, generally
of light and view, nor as a restriction as to the type of construction,[16] but may also
be aimed as a check on the subsequent uses of the building[17] conformably with
what the developer originally might have intended the stipulations to be. In its
Memorandum, respondent states in arguing for the validity of the restrictive
covenant that the -
"x x x restrictions are not without specific purpose. In a low cost-socialized
housing, it is of public knowledge that owners-developers are constrained to build
as many number of houses on a limited land area precisely to accommodate
marginalized lot buyers, providing as much as possible the safety, aesthetic and
decent living condition by controlling overcrowding. Such project has been designed
to accommodate at least 100 families per hectare."[18]
There appears to be no cogent reasons for not upholding restrictive covenants
aimed to promote aesthetics, health, and privacy or to prevent overcrowding.
Viewed accordingly, the statement of petitioners that their immediate
neighbors have not opposed the construction is unavailing to their cause, the
subject restrictive covenant not being intended for the benefit of adjacent owners
but to prescribe the uses of the building, i.e., to ensure, among other things, that
the structures built on De la Costa Homes Subdivision would prevent overcrowding
and promote privacy among subdivision dwellers. The argument then of petitioners
that expansion is necessary in order to accommodate the individual families of their
two children must fail for like reason. Nor can petitioners claim good faith; the
restrictive covenants are explicitly written in the Contract To Sell and annotated at
the back of the Transfer Certificate of Title.
Petitioners raise the issue of the personality of respondent to enforce the
provisions of the covenant. Broadly speaking, a suit for equitable enforcement of a
restrictive covenant can only be made by one for whose benefit it is intended.[19] It
is not thus normally enforceable by one who has no right nor interest in the land for
the benefit of which the restriction has been imposed.[20] Thus, a developer of a
subdivision can enforce restrictions, even as against remote grantees of lots, only if
he retains part of the land.[21] There would have been merit in the argument of
petitioners - that respondent, having relinquished ownership of the subdivision to
the homeowners, is precluded from claiming any right or interest on the same
property - had not the homeowners' association, confirmed by its board of
directors, allowed respondent to enforce the provisions of the restrictive covenant.
Finally, petitioners argue that for lack of a specific provision, prescribing the
penalty of demolition in the "Restrictive Covenant" in the event of a breach thereof,
the prayer of respondent to demolish the structure should fail. This argument has
no merit; Article 1168 of the New Civil Code states:
"When the obligation consists in not doing and the obligor does what has
been forbidden him, it shall be undone at his expense."
This Court is not unaware of its ruling in Ayala Corporation vs. Ray Burton
Development Corporation,[22] which has merely adjudged the payment of damages
in lieu of demolition. In the aforementioned case, however, the elaborate
mathematical formula for the determination of compensatory damages which takes
into account the current construction cost index during the immediately preceding 5
years based on the weighted average of wholesale price and wage indices of the
National Census and Statistics Office and the Bureau of Labor Statistics is explicitly
provided for in the Deed of Restrictions entered into by the parties. This unique and

114
peculiar circumstance, among other strong justifications therein mentioned, is not
extant in the case at bar.
In sum, the Court holds that -
(1) The provisions of the Restrictive Covenant are valid;
(2) Petitioners must be held to be bound thereby; and
(3) Since the extension constructed exceeds the floor area limits of the Restrictive
Covenant, petitioner-spouses can be required to demolish the structure to the
extent that it exceeds the prescribed floor area limits.
WHEREFORE, the assailed decision, dated 13 July 1998, of the Court of Appeals in
CA-G.R. CV No. 50085, sustaining that of the court a quo, is AFFIRMED. No costs.
SO ORDERED.
Melo, (Chairman), Panganiban, Purisima, and Gonzaga-Reyes, JJ., concur.

[1]
Restrictive Covenants: Apendix, Records, p. 11.
[2]
Records, pp. 9-11.
By mutual agreement between the Homeowners Association and the developer,
[3]

the restriction was relaxed from 4-meters to a 2-meter setback.

[4]
Records, p. 191.
[5]
Memorandum for respondent, Rollo, pp. 62-63.
[6]
Kutchinski vs. Thompson, 101 NJ Eq. 649, 138 A569.
[7]
Moses vs. Hazen, 63 App DC 104, 69 F 2d 842, 98 ALR 386.
[8]
Wilson vs. Owen (Mo) 261 SW2d 19.
[9]
Firth vs. Marovich, 160 Cal 257, 116 P729.
[10]
Townsend vs. Allen, 114 Cal App 2d 291, 250 P2d 292, 39 ALR 2d 1108.
[11]
Fusha vs. Dacono Town Site Co. 60 Colo 315, 153 P226.
[12]
Supra, Townsend.
[13]
Whitney vs. Union R. Co. 11 Gray (Mass) 359.
[14]
Hartman vs. Wells, 257 III 167, 100 NE 500. In a notable number of cases,
restrictions imposed on property conveyed were declared invalid for having
contravened some constitutional or statutory provision, or where found to be of no
benefit to anyone and a serious interference in the proper development of the
community (Harris vs. Pease, 135 Conn 535, 66 A2d 590, 10 ALR 2d 819) and
where it amounted to a prohibition of the use of property. (Baker vs. Henderson,
137 Tex 266, 153 SW2d 465.)
[15]
Bagiano vs. Harrow, 247 Mich 481 226 NW 262.
[16]
Hutchinson vs. Ulrich, 145 III 336, 34 NE 556.
[17]
Id, See also Schwarzchild vs. Welborne 186 Va 1052, 45 SE 2d 152.
[18]
Memorandum for Respondent, Rollo, p. 62.
[19]
Aull vs. Kraft (Tex Civ App) 286 SW2d 460.
[20]
Lillard vs. Jet Homes, Inc. (La App) 129 So2d 109)
[21]
19 ALR 2d 1281 No. 5.
[22]
294 SCRA 48.

FIRST DIVISION
[ G.R. No. 193659, June 15, 2015 ]

115
 SPS. FERNANDO VERGARA AND HERMINIA VERGARA,
PETITIONERS, VS. ERLINDA TORRECAMPO SONKIN,
RESPONDENT.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari[1] are the Decision[2] dated February
24, 2010 and the Resolution[3] dated September 2, 2010 of the Court of Appeals (CA)
in CA-G.R. CV No. 89357, which reversed and set aside the Decision[4] dated January
4, 2007 of the Regional Trial Court of Malolos City, Bulacan, Branch 19 (RTC) in Civil
Case. No. 900-M-2002 and entered a new one in its stead.

The Facts

Petitioners-spouses Fernando Vergara and Herminia Vergara (Sps. Vergara) and

Spouses Ronald Mark Sonkin and Erlinda Torrecampo Sonkin (Sps. Sonkin) are
adjoining landowners in Poblacion, Norzagaray, Bulacan. In view of the geographical
configuration of the adjoining properties, the property owned by Sps. Sonkin (Sonkin
Property) is slightly lower in elevation than that owned by Sps. Vergara (Vergara
Property).[5]

When Sps. Sonkin bought the Sonkin Property sometime in 1999, they raised the
height of the partition wall and caused the construction of their house thereon. The
house itself was attached to the partition wall such that a portion thereof became
part of the wall of the master's bedroom and bathroom.[6]

Sometime in 2001, Sps. Vergara levelled the uneven portion of the Vergara Property
by filling it with gravel, earth, and soil. As a result, the level of the Vergara Property
became even higher than that of the Sonkin Property by a third of a meter.
Eventually, Sps. Sonkin began to complain that water coming from the Vergara
Property was leaking into their bedroom through the partition wall, causing cracks,
as well as damage, to the paint and the wooden parquet floor. Sps. Sonkin repeatedly
demanded that Sps. Vergara build a retaining wall on their property in order to
contain the landfill that they had dumped thereon, but the same went unheeded.[7]
Hence, Sps. Sonkin filed the instant complaint for damages and injunction with prayer
for preliminary mandatory injunction and issuance of a temporary restraining order
against Sps. Vergara, as well as Sps. Rowena Santiago and Harold Santiago, Dolores
Vergara-Orbistondo, and Rosario Vergara-Payumo, the other possessors of the
Vergara Property.[8]

In defense, Sps. Vergara, in their Answer with Compulsory Counterclaim,[9] claimed

that Sps. Sonkin's act of raising the partition wall made the same susceptible to
breakage, which therefore cannot be attributed to them (Sps. Vergara). They likewise
claimed that when they levelled their own property by filling it with gravel and soil,
they left a distance of one (1) meter from the partition wall such that the edge of the
landfill did not breach it, asserting further that there was no valid and legal reason
why they should be enjoined from exercising their proprietary rights.[10]

During the trial, Sps. Sonkin presented the testimony of Engineer Ma. Victoria
Mendoza, considered an expert witness, who categorically declared that in view of
the sloping terrain and the Sonkin Property being lower in elevation than that of the
Vergara Property, the Sps. Vergara were then duty bound to provide a retaining wall
because they were the ones who caused the landfill, citing Section 1202[11] of
Presidential Decree No. 1096,[12] otherwise known as the "National Building Code of
the Philippines" (National Building Code). Likewise, citing Sections 3.2.1, 3.2.3, and
3.2.4 of Section 3.2, Rule XV of the original Implementing Rules and Regulations[13]

116
of the National Building Code, she explained that it was Sps. Vergara's duty to provide
safety requirements for the landfill they made on their property to prevent any danger
to life or property. Moreover, Sps. Vergara failed to provide a sewerage line to divert
the flow of the water into the adjoining property, in violation of Section 901[14] of the
National Building Code.[15]

Finally, the Provincial Engineer of Bulacan, Romeo S. Castro, who was appointed as
Commissioner by the RTC to conduct his own investigation, likewise found, inter alia,
that the introduction of filling materials on the Vergara Property has "affected" the
house of Sps. Sonkin.[16]

The RTC Ruling

In a Decision[17] dated January 4, 2007, the RTC found Sps. Vergara civilly liable to
Sps. Sonkin for damages and directed them: (a) to scrape the earth and other filling
materials dumped in the adjacent perimeter wall of the Sonkin Property and erect a
retaining wall in accordance with the standards of the National Building Code; (b) to
install and provide an adequate drainage system in accordance with the same Code;
and (c) to jointly and severally pay Sps. Sonkin P300,000.00 as actual damages,
P50,000.00 as moral damages, P50,000.00 as exemplary damages, P100,000.00 as
attorney's fees, and costs of suit. It dismissed all other claims of the Sps. Sonkin, as
well as the counterclaims of Sps. Vergara, for lack of merit.[18]

The RTC found that the earth dumped on the Vergara Property pushed back the
perimeter wall, causing cracks on Sps. Sonkin's bedroom wall and water to seep
through the floor of the house. Moreover, the water seepage could only have come
from the Vergara Property which was higher in elevation, as Sps. Vergara have failed
to provide any drainage to divert the flow of water. Given the foregoing, the RTC
concluded that Sps. Vergara's act of dumping earth, soil, and other materials in their
property directly caused the damage to the house of Sps. Sonkin and, thus, they
should be held liable for damages in favor of the latter. Needless to state, Sps.
Vergara's co-defendants were exculpated from liability since they were not shown to
have participated in the former's act.[19]

Aggrieved, Sps. Vergara appealed[20] the entire RTC Decision to the CA. They
reiterated that they were merely exercising their proprietary rights over their
property, i.e., the Vergara Property, when they filled the area with soil and gravel,
and that it was Sps. Sonkin who transgressed the National Building Code when they
failed to leave a setback of two (2) meters between their house and the property
line.[21]

On the other hand, Sps. Sonkin filed only a partial appeal,[22] assailing the amount of
actual, moral, and exemplary damages.

The CA Ruling

In a Decision[23] dated February 24, 2010, the CA reversed and set aside the assailed
RTC Decision and entered a new one: (a) ordering the Sps. Vergara to install and
provide an adequate drainage system on their property to prevent the flow of water
into the Sonkin Property, and to pay Sps. Sonkin the amounts of P50,000.00 as moral
damages and P100,000.00 as attorney's fees; (b) setting aside the directive to Sps.
Vergara to remove the landfill and build a retaining wall on their property; (c) deleting
the award of actual damages, as well as exemplary damages; and (d) dismissing the
separate appeal of the Sps. Sonkin for lack of merit.[24]

While the CA concurred with the finding of the RTC that the cause of the water
seepage into the Sonkin Property was the act of Sps. Vergara in elevating their own
property by filling it with gravel and soil, it ascribed error upon the RTC in not fmding
that Sps. Sonkin were likewise guilty of contributory negligence in building their

117
house directly abutting the perimeter wall.[25] The CA explained that despite the fact
that under Article 637 of the Civil Code, the Sonkin Property is legally obliged to
receive any water from higher estates such as the Vergara Property, it being the
lower estate, the Sps. Sonkin still built their house with parts thereof directly abutting
the perimeter wall and, in the process, violated the two (2)-meter setback rule under
Section 708[26] of the National Building Code.[27] Thus, the CA deduced that had Sps.
Sonkin followed such rule, then their house would not have sustained any damage
from water coming from the Vergara property.[28] Proceeding from such ratiocination,
the CA deleted the award of actual damages in the absence of evidence, i.e., actual
receipts, showing the amount actually spent by Sps. Sonkin in the repairs or
renovation of their property. Similarly, it deleted the award of exemplary damages,
as Sps. Vergara was not proven to have acted with gross negligence in levelling their
property with the landfill and in mitigation of their liability in light of Sps. Sonkin's
contributory negligence. The award of moral damages and attorney's fees, however,
were affirmed.[29]

Finally, the CA found the order directing Sps. Vergara to remove the landfill on their
property to be unreasonable and an interference on their proprietary rights. It
considered the order to provide an adequate drainage system on their property to be
sufficient under the circumstances. Neither did it find the need to build a retaining
wall on the Vergara Property for the purpose of containing the landfill thereon, opining
that if it was Sps. Vergara's obligation to prevent damage to Sps. Sonkin's house by
erecting a retaining wall, then it was the latter's concomitant obligation to detach
their house from the perimeter wall in order to prevent any future damage or
injury.[30]

Only Sps. Vergara sought reconsideration[31] from the CA Decision, which was denied
in a Resolution[32] dated September 2, 2010. Hence, this petition impleading only
respondent Erlinda Torrecampo Sonkin (Erlinda), essentially arguing that Sps.
Sonkin: (a) are not entitled to damages; and (b) should be ordered to demolish the
parts of their house directly abutting the perimeter wall in compliance with Section
708 (a) of the National Building Code.[33] Records are bereft of showing that Sps.
Sonkin made a further appeal to the Court.

The Issue Before the Court

The issues for the Court's resolution are (a) whether or not the CA erred in upholding
the award of moral damages and attorney's fees; and (b) whether or not it should
have ordered the demolition of the portion of the Sps. Sonkin's house that adjoins
the partition wall.

The Court's Ruling

The petition is meritorious.

Article 2179 of the Civil Code reads:

Art. 2179. When the plaintiffs own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence was only
contributory, the immediate and proximate cause of the injury being the defendant's
lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded.
Verily, contributory negligence is conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below the
standard to which he is required to conform for his own protection.[34]

In the case at bar, it is undisputed that the Sonkin property is lower in elevation than
the Vergara property, and thus, it is legally obliged to receive the waters that flow
from the latter, pursuant to Article 637 of the Civil Code. This provision refers to the
legal easement pertaining to the natural drainage of lands, which obliges lower

118
estates to receive from the higher estates water which naturally and without the
intervention of man descends from the latter, i.e., not those collected artificially in
reservoirs, etc., and the stones and earth carried by the waters,[35] viz.:
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.[36] (Emphasis and underscoring supplied)
In this light, Sps. Sonkin should have been aware of such circumstance and,
accordingly, made the necessary adjustments to their property so as to minimize the
burden created by such legal easement. Instead of doing so, they disregarded the
easement and constructed their house directly against the perimeter wall which
adjoins the Vergara property, thereby violating the National Building Code in the
process, specifically Section 708 (a) thereof which reads:
Section 708. Minimum Requirements for Group A Dwellings.

(a) Dwelling Location and Lot Occupancy.

The dwelling shall occupy not more than ninety percent of a corner lot and eighty
percent of an inside lot, and subject to the provisions on Easement on Light and View
of the Civil Code of the Philippines, shall be at least 2 meters from the property
line.

x x x x (Emphasis and underscoring supplied)

Hence, the CA correctly held that while the proximate cause of the damage sustained
by the house of Sps. Sonkin was the act of Sps. Vergara in dumping gravel and soil
onto their property, thus, pushing the perimeter wall back and causing cracks
thereon, as well as water seepage, the former is nevertheless guilty of contributory
negligence for not only failing to observe the two (2)-meter setback rule under the
National Building Code, but also for disregarding the legal easement constituted over
their property. As such, Sps. Sonkin must necessarily and equally bear their own
loss.

In view of Sps. Sonkin's contributory negligence, the Court deems it appropriate to

delete the award of moral damages in their favor. While moral damages may be
awarded whenever the defendant's wrongful act or omission is the proximate cause
of the plaintiffs physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and similar
injury in the cases specified or analogous to those provided in Article 2219[37] of the
Civil Code,[38] they are only given to ease the defendant's grief and suffering and
should, therefore, reasonably approximate the extent of hurt caused and the gravity
of the wrong done.[39]

Anent the issue on attorney's fees, the general rule is that the same cannot be
recovered as part of damages because of the policy that no premium should be placed
on the right to litigate. They are not to be awarded every time a party wins a suit.
The power of the court to award attorney's fees under Article 2208[40] of the Civil
Code demands factual, legal, and equitable justification. Even when a claimant is
compelled to litigate with third persons or to incur expenses to protect his rights, still
attorney's fees may not be awarded where no sufficient showing of bad faith could
be reflected in a party's persistence in a case other than an erroneous conviction of
the righteousness of his cause.[41] In this case, the Court observes that neither Sps.
Sonkin nor Sps. Vergara (thru their compulsory counterclaim) were shown to have
acted in bad faith in pursuing their respective claims against each other. The
existence of bad faith is negated by the fact that both parties have valid contentions
against each other. Thus, absent cogent reason to hold otherwise, the Court deems
it inappropriate to award attorney's fees in favor of either party.[42]

119
Finally, in view of Sps. Sonkin's undisputed failure to observe the two (2)-meter
setback rule under the National Building Code, and in light of the order of the courts
a quo directing Sps. Vergara to provide an adequate drainage system within their
property, the Court likewise deems it proper, equitable, and necessary to order
Erlinda, who is solely impleaded as respondent before the Court, to comply with the
aforesaid rule by the removal of the portion of her house directly abutting the
partition wall. The underlying precept on contributory negligence is that a plaintiff
who is partly responsible for his own injury should not be entitled to recover damages
in full but must bear the consequences of his own negligence. The defendant must
therefore be held liable only for the damages actually caused by his negligence.[43]

WHEREFORE, the petition is GRANTED. The Decision dated February 24, 2010 and
the Resolution dated September 2, 2010 of the Court of Appeals (CA) in CA-G.R. CV
No. 89357 are hereby AFFIRMED with MODIFICATIONS. The awards of moral
damages and attorney's fees are DELETED and respondent Erlinda Torrecampo
Sonkin is DIRECTED to strictly comply with Section 708 (a) of the National Building
Code by removing or demolishing the portion of her house that occupies the two-
meter easement from the property line. The rest of the CA Decision stands.

SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo-De Castro, Bersamin, and Perez, JJ., concur.

[1]
Rollo, pp. 11-18. Petitioners also filed an amended petition on December 12, 2011
(id. at 160-169) which was noted by the Court in a Resolution dated January 30,
2012 (id. at 280-281).

Id. at 21-34. Penned by Associate Justice Ricardo R. Rosario with Associate Justices
[2]

Jose C. Reyes, Jr. and Amy C. Lazaro-Javier concurring.

[3]
Id. at 117-118.
[4]
Id. at 60-72. Penned by Presiding Judge Renato C. Francisco.
[5]
Id. at 22.

[6]
Id.

[7]
See id. at 22-23.
[8]
See Complaint dated December 9, 2002; id. at 35-41.
[9]
See Answer with Compulsory Counterclaim dated January 10, 2003; id. at 48-52.

[10]
See id. at 23 and 50.

The pertinent portion of Section 1202 of the National Building Code reads:
[11]

Section 1202. Excavation, Foundation and Retaining Walls.

x x x x

(c) Footings, Foundations, and Retaining Walls

x x x x

120
 (2 Whenever or wherever there exists in the site of the construction an abrupt
) change in the ground levels or level of the foundation such that instability of
the soil could result, retaining walls shall be provided and such shall be of
adequate design and type of construction as prescribed by the Secretary.

[12]
Entitled "ADOPTING A NATIONAL BUILDING CODE OF THE PHILIPPINES THEREBY
REVISING REPUBLIC ACT NUMBERED SIXTY-FIVE HUNDRED FORTY-ONE" (February
19, 1977).
[13]
The original IRR have been revised in October 29, 2004.

Section 901 of the National Building Code provides:

[14]

Section 901. General.

Subject to the provisions of Book II of the Civil Code of the Philippines on Property,
Ownership, and its Modification, all buildings hereafter erected, altered, remodeled,
relocated or repaired for human habitation shall be provided with adequate and
potable water supply, plumbing installation, and suitable wastewater treatment or
disposal system, storm water drainage, pest and vermin control, noise abatement
device, and such other measures required for the protection and promotion of health
of persons occupying the premises and others living nearby.
[15]
See rollo, pp. 66-68.

[16]
See id. 63-64.

[17]
Id. at 60-72.
[18]
Id. at 71-72.
[19]
Id. at 68-71.
[20]
See Notice of Appeal dated February 7, 2007; id. at 73-74.

[21]
See id. at 25.
[22]
See Notice of Partial Appeal dated February 15, 2007; id. at 75-76.
[23]
Id. at 21-34.
[24]
Id. at 32-33.
[25]
Id. at 26-27.

Section 708 (a) of the National Building Code provides:

[26]

Section 708. Minimum Requirements for Group A Dwellings.

(a) Dwelling Location and Lot Occupancy.

The dwelling shall occupy not more than ninety percent of a corner lot and eighty
percent of an inside lot, and subject to the provisions on Easement on Light and View
of the Civil Code of the Philippines, shall be at least 2 meters from the property line.

xxxx
[27]
See id. at 27-28.

[28]
Id. at 27.
[29]
See id. at 30-33.

121
[30]
Id. at 31-32.

[31]
See motion for reconsideration dated March 18, 2010; id at 110-114.

[32]
Id. at 117-118.

See id. at 15-17. See also amended petition dated December 6, 2011; id. at 166-
[33]

168.

Allied Banking Corporation v. Bank of the Philippine Islands, G.R. No. 188363,
[34]

February 27, 2013, 692 SCRA 186, 201, citing Philippine National Bank v. Cheah
Chee Chong, G.R. Nos. 170865 & 170892, April 25, 2012, 671 SCRA 49, 64.

[35]
See Paras, Edgardo L., CIVIL CODE OR THE PHILIPPINES ANNOTATED, Vol. II,
Sixteenth Edition (2008), pp. 686-687.

[36]
See also Article 50 of Presidential Decree No. 1067, entitled "A DECREE
INSTITUTING A WATER CODE, THEREBY REVISING AND CONSOLIDATING THE LAWS
GOVERNING THE OWNERSHIP, APPROPRIATION, UTILIZATION, EXPLOITATION,
DEVELOPMENT, CONSERVATION AND PROTECTION OF WATER RESOURCES"
(December 31, 1976), which provides:
Art. 50. Lower estates are obliged to receive the waters 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 can not 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.
[37]
Article 2219 of the Civil Code reads:
Art. 2219. Moral damages may be recovered in the following and analogous
instances:
(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in article 309;

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped, or abused, referred to in No. 3
of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.
[38]
California Clothing, Inc. v. Quiones, G.R. No. 175822, October 23, 2013, 708
SCRA 420, 431, citing Carpio v. Valmonte, 481 Phil. 352, 364 (2004).
[39]
Id., citing Villanueva v. Rosqueta, 624 Phil. 330, 337 (2010).

122
[40]
Article 2208 of the Civil Code reads:
Article 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy
the plaintiffs plainly valid, just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;

(8) In actions for indemnity under workmen's compensation and employer's liability
laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.
[41]
See The President of the Church of Jesus Christ of Latter Day Saints v. BTL
Construction Corporation, G.R. No. 176439, January 15, 2014, citing Development
Bank of the Philippines v. Traverse Development Corporation, 674 Phil. 405, 415
(2011)
[42]
See id.

[43]
Bank of America NT & SA v. Philippine Racing Club, 611 Phil. 687, 702 (2009),
citing Lambert v. Heirs of Ray Castillon, 492 Phil. 384, 391-392 (2005).
523 Phil. 69

FIRST DIVISION
[ G.R. NO. 141447, May 04, 2006 ]
HEIRS OF MACABANGKIT SANGKAY, NAMELY, CEBU
BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI,
MONKOY AND AMIR, ALL SURNAMED MACABANGKIT,
PETITIONERS, VS. NATIONAL POWER CORPORATION,
RESPONDENT.

DECISION

CALLEJO, SR., J.:

123
Before this Court is a Petition for Review on Certiorari of the Decision[1] of the Court
of Appeals (CA) in CA-G.R. SP No. 54889 which set aside the Special Order[2] dated
September 7, 1999 issued by the Regional Trial Court (RTC) of Iligan City, Branch 61
in Civil Case No. 4094, as well as the Resolution dated November 12, 1999 denying
the motion for reconsideration thereof. The said Special Order of the RTC granted the
Urgent Motion for Execution Pending Appeal filed by plaintiffs therein of its Decision
and Supplemental Decision, thus obliging the National Power Corporation (NAPOCOR)
to pay plaintiffs P79,472.750.00 as just compensation.

The antecedents are as follows:

Macabangkit Sangkay was the owner of a 227,065-square-meter parcel of land

located in Iligan City. When he died intestate, the property was subdivided into nine
parcels and subsequently titled to his heirs, namely:

Name Title No.

1) Edgar Macabangkit - OCT No. P-1003
2) Nasser Macabangkit - OCT No. P-1004
3) Sayana Macabangkit - OCT No. P-1005
4) Manta Macabangkit - OCT No. P-1007
5) Cebu Macabangkit - OCT No. P-1008
6) Batowa-an
- OCT No. P-1010
Macabangkit
7) Amir Macabangkit - OCT No. P-1012
8) Monkoy Macabangkit - OCT No. P-1027
9) Putri Macabangkit - OCT No. P-1028[3]

The said Heirs declared their properties for taxation purposes in their respective
names.[4]

In 1979, NAPOCOR constructed an underground three-kilometer long tunnel

traversing the properties of the Heirs, about 100 meters beneath the surface. The
tunnel was used to siphon water and divert the flow of the Agus River for the
operation of NAPOCOR's Hydro-Electric Project in Agus V, VI, and VII, at Ditucalan
and Fuentes, Iligan City. A transmission line also traversed the property. The Heirs
were not informed that such underground tunnel had been constructed; neither did
NAPOCOR compensate them for the use of their property.[5]

The Heirs filed a complaint for damages and recovery of possession of the property
with alternative prayer for just compensation against NAPOCOR before the RTC of
Iligan City, alleging the following in their complaint:
8. In the early part of 1996, plaintiffs entered into a Memorandum of
Agreement with Global Asia Management and Resource Corporation for the
sale of their property. On July 5, 1996, plaintiffs received a letter from the
Global Asia Management and Resource Corporation, refusing the plaintiffs'
land due to the presence of defendant's underground tunnel. Copy of the
Memorandum of Agreement and the subsequent withdrawal of Global Asia
Management and Resource Corporation, from the agreement are attached
herewith as ANNEXES "W" and "X," forming as part hereof;

124
9. On October 10, 1996, plaintiffs offered their land as collateral for a loan
applied with the Al-Amanah Islamic Investment Bank of the Philippines,
Iligan City Branch, and again the said parcels of land were not accepted as
collateral due to the presence of defendant's underground tunnel, copy of
the letter of the said Bank, dated October 10, 1996 is herewith attached
and marked as ANNEX "Y," forming as part hereof;

10.That the act of defendant is equivalent to unlawful taking and condemnation

of plaintiffs' parcels of land, without just compensation and/or reasonable
rental since 1979. Written and oral demands were made for defendant to
vacate and remove its tunnel, or, in the alternative, to pay just
compensation and rental of plaintiffs' parcels of land, but defendant refused
and continuously refuses, sans any valid ground. Copy of plaintiffs' demand
letter is attached herewith as ANNEX "Z" forming as part hereof. Also, the
answer of defendant to plaintiffs' demand letter is also attached herewith
and marked as ANNEX "Z-1," forming as part hereof;

11.That, as a consequence of defendant's unlawful taking and condemnation

of plaintiffs' properties and the illegal construction of defendant's
underground tunnel, the defendant were deprived of the agricultural,
commercial, industrial and residential value of their land aforesaid;

So also, by the same reason aforestated, the surface of plaintiffs' land

became unsafe for habitation as the defendant's tunnel will someday
collapse, and the surface will be carried by the current of the water. Those
of plaintiffs and workers with houses on the surface were forced to transfer
to a safer site in 1996, as they were continuously disturb day and night,
because of fear and the danger, coupled by the sound being produce by the
water flow and which sometime shake the surface;

12.That the current aggregate assessed value of plaintiffs, parcels of land as

indicated in their respective Tax Declarations is ONE HUNDRED SIX
THOUSAND AND SEVEN HUNDRED TEN (P106,710.00) PESOS, more or
less;

13.That defendant must be held liable for damages in the form of rental and
other damages starting [from] 1979 when the defendant's underground
tunnel was constructed up to the present, plus additional damages beyond
1997, should defendant continue to illegally stay on plaintiffs' land, in such
amount as may be determined and deemed just and equitable by the
Honorable Court;

14.That it is necessary for defendant to dismantle its underground tunnel

illegally constructed beneath the lands of plaintiffs and to deliver possession
of the same to plaintiff the subterrain illegally occupied by defendant;

15.The construction of the tunnel by defendant beneath plaintiffs' parcels of

lands have caused danger to their lives and properties; sleepless nights,
serious anxiety, and shock, thereby entitling them to recover moral
damages in the amount of TWO HUNDRED THOSUAND (P200,000.00)
PESOS. And by way of example to deter persons similarly minded and for
public good, defendant may be held liable for exemplary damages, also in
the amount of TWO HUNDRED THOUSAND (P200,000.00) PESOS. Or in
both cases, in such amount as may be determined by the Honorable Court;

16.That to protect the interest of the plaintiffs and for purposes of filing the
instant case, they were compelled to engage the services of counsel, in the
amount equivalent to TWO [HUNDRED] THOUSAND (P200,000.00), plus
court appearance fee of ONE THOUSAND (P1,000.00), as and by way of
attorney's fees.[6]

125
They prayed that judgment be rendered in their favor after due proceedings, to wit:
WHEREFORE, premises considered, plaintiffs pray that judgment be rendered as
follows:
1. Directing defendants to remove and dismantle its underground tunnel
constructed beneath the land of plaintiffs and to deliver possession of the
subterrain area illegally occupied by defendant;

2. To pay plaintiffs a monthly rental from 1979 up to the time the defendant
vacates the subterrain of the land of plaintiffs, in such amount as may be
considered reasonable by the Honorable Court;

3. In the alternative, if and when the removal of defendant's underground

tunnel is not legally possible, to pay plaintiffs of the just compensation of
their land in the amount as may be deemed reasonable by the Honorable
Court. But, in either case, (either by the removal of the tunnel or by paying
just compensation) to pay plaintiffs a reasonable rental;

4. To pay moral damages in the amount of TWO HUNDRED THOUSAND

(P200,00.00) PESOS and exemplary damages of another TWO HUNDRED
THOUSAND (P200,000.00) PESOS, or in such respective amount as may be
determined by the Honorable Court;

5. Pay attorney's fees in the amount of TWO HUNDRED THOUSAND

(P200,000.00), plus appearance fee of ONE THOUSAND (P1,0000.00)
PESOS, as and by way of attorney's fees;

6. Such other relief deemed just and equitable under the circumstance.[7]
In its answer to the complaint, NAPOCOR interposed the following special and
affirmative defenses:
6. That while it is true that under Article 437 of the New Civil Code, the owner
of a parcel of land is the owner of its surface and everything under it and
can therefore construct thereon any work or make any plantation and
excavation which he may deem proper, yet, such exercise of right is without
detriment to servitude and is subject to other limitations imposed either by
special law or ordinances;

7. That under Section 3, paragraph (f) of Republic Act 6395, as amended,

which, by its nature, is a special law, defendant herein is authorized to take
water from any public stream, river, creek, lake, spring or waterfall in the
Philippines for the purposes specified therein; to intercept and divert the
flow of water from lands of riparian owners and from persons owning or
interested in water which are or may be necessary to said purposes, upon
payment of just compensation therefor; to alter, straighten, obstruct or
increase the flow of water in streams or water channels intersecting or
connecting therewith or continuous to its works or any part thereof; thus,
the construction of tunnel by defendant is legal and sanctioned by law;

8. That assuming arguendo, without admitting, that a tunnel was indeed

constructed in 1979 under the land claimed by the plaintiffs, their cause of
action against the defendant is barred not only by prescription but also by
estoppel and laches. Under our laws and jurisprudence, easement of
aqueduct canals and tunnels are apparent and continuous easement and
any action arising therefrom prescribes in five (5) years which prescriptive
period is to be reckoned from its accrual. In the instant case, the cause of
action of the plaintiffs, if any, has accrued in 1979 and yet they only filed
the complaint in 1997 or after the lapse of almost eighteen (18) years;[8]
The Heirs adduced in evidence the Certificate issued by the City Assessor's Office
stating that the property had an assessed value of P400.00 to P500.00 per square

126
meter. Witnesses testified that the adjacent parcels of land were sold at P700.00 and
P750.00 per square meter and that the area where the property is located is classified
as industrial, and residential and adjacent to subdivisions with industrial
classification.[9]

On August 13, 1999, the RTC rendered judgment in favor of the Heirs. The fallo of
the decision reads:
WHEREFORE, premises considered:

1. The prayer for the removal or dismantling of defendant's tunnel is denied[.]

However, defendant is hereby directed and ordered:

a) To pay plaintiffs' land with a total area of 227,065 square meters, at the rate of
FIVE HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED
THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED
(P113,532,500.00) PESOS, plus interest, as actual damages or just compensation;

b) To pay plaintiffs a monthly rental of their land in the amount of THIRTY THOUSAND
(P30,000.00) PESOS from 1979 up to July 1999 with 12% interest per annum;

c) To pay plaintiffs the sum of TWO HUNDRED THOUSAND (P200,000.00) PESOS, as

moral damages;

d) To pay plaintiffs, the sum of TWO HUNDRED THOUSAND (P200,000.00) PESOS,

as exemplary damages;

e) To pay plaintiffs, the sum equivalent to 15% of the total amount awarded, as
attorney's fees, and to pay the cost.

SO ORDERED.[10]
The RTC declared that the construction of the underground tunnel affected the entire
area of the Heirs' property. Consequently, plaintiffs lost the agricultural, industrial,
commercial and residential value of the land.

On August 18, 1999, the RTC rendered a Supplemental Decision, the dispositive
portion of which reads:
Therefore, paragraph 1(a) of the dispositive portion of the original decision should
read, as follows:

a) To pay plaintiffs' land with a total area of 227,065 square meters, at the rate of
FIVE HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED
THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED
(P113,532,500.00) PESOS, plus interest, as actual damages or just compensation;
Consequently, plaintiffs' land or properties are hereby condemned in favor of
defendant National Power Corporation, upon payment of the aforesaid sum;

This supplemental decision shall be considered as part of paragraph 1(a) of the

dispositive portion of the original decision.[11]
Before NAPOCOR was served with a copy of said Decision, the Heirs filed an Urgent
Motion for Execution of Judgment Pending Appeal, alleging that execution pending
appeal was justified, considering the trial court's finding that it (NAPOCOR) had acted
in bad faith in constructing the tunnel. They pointed out that it had been illegally
occupying their land for a long period of time without any compensation or rental
having been paid to them, and that to prolong the execution of the decision would
likewise prolong its illegal act. The Heirs pointed out that once they received their
share of the money judgment, they would be able to purchase safer lands and build
new houses thereon. They insisted that any appeal which may be taken by NAPOCOR
would be dilatory and frivolous.

127
The Heirs appended to their motion their Joint Affidavit wherein they alleged that
they constantly feared that an earthquake could happen at any time, and that the
tunnel could collapse or cave in, which would necessarily cause serious injuries or
even death.[12]

NAPOCOR opposed the motion. It contended that the Heirs failed to prove that it
acted in bad faith when it constructed the tunnel; hence, there was no justification
to grant their motion. It pointed out that the Heirs were never deprived of the
beneficial use of their land; in fact, there was no evidence on record that they ever
attempted to use the affected portion of the property. NAPOCOR claimed that the
Heirs' demand for rentals was without factual and legal basis.

NAPOCOR further alleged that the Heirs' claim that the tunnel exposed them to
danger was belied by the testimony of Nasser Macabangkit. On cross-examination,
he testified that only two of his siblings, Sayana and Edgar Macabangkit, starter to
reside in the subject property in 1998, after the complaint was filed on November 21,
1987. It further alleged that it had already filed an appeal, which, as gleaned from
the evidence and the applicable jurisprudence, was not a mere dilatory tactic.[13]

On September 7, 1997, the trial court issued the Special Order granting the motion
for execution pending appeal and awarded 70% of the money judgment, or
P79,472,750.00, upon the filing of a P1,000,000.00 bond. The dispositive portion of
the Order reads:
WHEREFORE, premises considered, the Motion for Execution Pending Appeal is
therefore granted, but only for the amount equivalent to SEVENTY PERCENT (70%)
of the amount awarded as fair market value of plaintiffs land or for a total of
SEVENTY-NINE MILLION FOUR-HUNDRED SEVENTY-TWO THOUSAND AND SEVEN
HUNDRED FIFTY (P79,472,750.00) PESOS, Philippine Currency, subject to the
condition that plaintiffs shall file an execution bond duly approved by this Court,
either in cash, surety or property in the amount of ONE MILLION (P1,000,000.00)
PESOS, which bond is in addition to plaintiffs land already condemned in favor of the
defendant, to answer for any damage that defendant may suffer as a result of the
execution of the decision pending appeal, should it later on be ruled on appeal that
plaintiffs be not entitled to it and the decision be reversed.

Monthly rentals, moral and exemplary damages, attorney's fee and cost are excluded
from the execution pending appeal.

Let the corresponding Writ of Execution Pending appeal be issued upon the posting
and approval of the aforesaid execution bond. Mr. Montoy Lomondot, Sheriff-IV, RTC,
Lanao del Norte is hereby commanded to cause the implementation and execution of
the portion of the aforesaid decision in accordance with the Rules of Court, together
with his lawful fees for the service of the Writ. He shall be assisted by the other
deputy sheriffs assigned to this Court or in another branch after securing the consent
of the presiding Judge thereof. He shall likewise be assisted by Atty. Cairoding
Maruhom, Ex-officio Provincial/City Sheriff of Lanao del Sur-Marawi City, and Palao
Diamla, Sheriff-IV, RTC, Lanao del Sur, subject to the consent of the Presiding Judge
concerned.

The Clerk of Court is hereby ordered to assess and collect the corresponding
additional filing fee from the judgment award.

SO ORDERED.[14]
The trial court declared that among the good reasons to grant the motion for
execution pending appeal was the fact that NAPOCOR had occupied the property and
had used it in bad faith since 1979 without having paid just compensation therefor.
Moreover, the construction of the tunnel rendered the subject property unfit for
industrial, residential, or commercial use because of the danger it posed; neither
could the Heirs dispose of the property. Thus, they had the right to compel NAPOCOR

128
to pay the price of the land or the proper rent under Article 450 of the New Civil Code.
The trial court also declared that the appeal of defendant was dilatory and frivolous,
which was resorted to so that it could continue enjoying and using the property for
free. It also stated execution of judgment pending appeal would not cause prejudice
or irreparable damage to defendant, since the amount of just compensation sought
to be executed was equivalent to the fair market value of the Heirs' land, while the
rentals were for NAPOCOR'S use of the land. It also ruled that the Heirs could file
their motion for execution pending appeal even before NAPOCOR received a copy of
the decision.[15]

The RTC thereafter issued the Writ of Execution[16] on September 9, 1999.

NAPOCOR assailed the trial court's Special Order and Writ of Execution before the CA
via petition for review on certiorari under Rule 65, claiming that respondent Judge
acted without or in excess of jurisdiction and gravely abused his discretion in granting
the Motion for Execution Pending Appeal and issuing the concomitant writ despite the
absence of compelling reasons therefor.[17] It cited Aquino v. Santiago[18] to support
its argument. It claimed that it was not in danger of being insolvent as would justify
execution of the decision pending appeal. It further posited that since Republic Act
No. 6395, as amended, was a special law which recognized the construction of water
pipes to divert the flow of water for purposes of generating electricity as a limitation
to ownership of property.

NAPOCOR further claimed that the assailed Special Order rendered nugatory its right
to appeal the decision sought to be executed. It insisted that it should not be obliged
to pay the alleged market value of the property since it was not entirely affected by
the support tunnel.

For their part, the Heirs averred that execution pending appeal is a matter addressed
to the second discretion of the trial court and cannot be nullified by the appellate
court unless grave abuse of discretion amounting to excess or lack of jurisdiction is
shown. They claimed that NAPOCOR failed to prove that the trial court was guilty of
grave abuse of discretion in granting their motion for execution pending appeal. They
pointed out that it was justified by good reasons, and that they adduced proof of the
fair market value of the property and posted the required P1,000,000.00 bond. The
Heirs cited the ruling of the CA in National Power Corporation v. Ibrahim[19] and
Municipality of Bian, Laguna v. Court of Appeals.[20]

The appellate court heard the parties on oral argument. On November 12, 1999, the
CA rendered judgment granting the petition and set aside the assailed orders of the
trial court.[21] According to the appellate court, even assuming NAPOCOR's bad faith
in constructing its tunnel beneath the surface of the property, it was not an urgent
and compelling reason to grant the motion for execution pending appeal. The matter
goes into the merits of the case, which the CA should resolve on appeal. Moreover,
it was not for the trial court to rule on whether NAPOCOR's appeal was dilatory; the
merits of the appeal should be resolved first, considering the other matters involved
in the appeal aside from the fact that the total amount of the award was
P113,532,500.00.

According to the CA, under Section 3(i) of Republic Act No. 6395, the act revising the
charter of NAPOCOR, any action by any person claiming compensation and/or
damages shall be filed within five (5) years after the right-of-way, transmission lines,
substations, plants or other facilities shall have been established; after the said
period, no suit can be brought to question the same. It stressed that the effect of
this proviso on the decision of the trial court can be better addressed in the appeal.

The Heirs filed a Motion for Reconsideration,[22] which the trial court denied for lack
of merit on January 13, 2000;[23] hence, the instant petition.

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Petitioners allege that the CA erred in granting the writ of certiorari in favor of
respondent NAPOCOR on its finding that the trial court committed grave abuse of its
discretion in issuing the Special Order. Petitioners maintain that the trial court's
finding that respondent NAPOCOR acted in bad faith and that its appeal was dilatory
was supported by the evidence on record and the pleadings of the parties. They
insisted that the appellate court should not substitute its findings for those of the trial
court. Its reliance on Section 3(i) of Republic Act No. 6395 was misplaced because
the law does not apply to the construction of a tunnel underneath the surface of their
property. Petitioners further aver that the CA should have applied its ruling in National
Power Corporation v. Ibrahim.[24] By its decision, the CA condoned the unjust
enrichment of private respondent at their expense.

The issue for resolution is whether the CA erred in finding that the trial court
committed grave abuse of its discretion in granting petitioners' motion for execution
pending appeal of its decision and supplemental decision in the amount of
P79,472,750.00.

The petition is dismissed for lack of merit.

The rule is that execution shall issue as a matter of right, on motion, upon a judgment
or order that disposes of the action or proceedings upon the expiration of the period
to appeal therefrom if no appeal has been perfected.[25] However, the trial court may
grant execution before the expiration of the period to appeal upon motion of the
prevailing party provided that it has jurisdiction over the case and is in possession of
either the original record or the record on appeal, as the case may be, and there are
good reasons for such execution to be stated in a special order after due hearing.
The rule does not proscribe the prevailing party from filing such motion even before
the losing party has received his copy of the decision or final order of the trial court.
Such motion for execution pending appeal may be filed by the prevailing party at any
time before the expiration of the period to appeal. It may happen that, upon service
on the prevailing party of a copy of the decision or final order of the trial court, he
files a motion for execution pending appeal but the losing party files a motion for
reconsideration of the decision or final order within the required 15-day period under
Rule 39 of the Revised Rules of Court. In such a case, the motion of the prevailing
party for execution pending appeal may be held in abeyance pending final resolution
of the losing party's motion for reconsideration of the decision or final order. Upon
the other hand, if the losing party does not appeal the decision or final order, the
execution of the decision becomes a matter of right on the part of the prevailing
party. In such case, the motion for execution pending appeal becomes moot and
academic, as the prevailing party may file a motion for a writ of execution of the
decision or final order.

As provided in Section 2, Rule 39 of the Revised Rules of Court, execution of the

judgment or final order pending appeal is discretionary. It is the exception to the rule
that only a final judgment may be executed, hence, must be strictly construed.
Execution pending appeal should not be granted routinely but only in extraordinary
circumstances.[26] However, if the trial court grants execution pending appeal in the
absence of good reasons therefor, it is incumbent upon the CA to issue a writ of
certiorari; failure to do so would constitute grave abuse of discretion on its part.[27]

The CA ruled correctly when it held that the trial court acted with grave abuse of its
discretion amounting to excess or lack of jurisdiction when it granted private
respondents' motion for execution pending appeal in the absence of good reasons to
justify the grant of said motion.

The Rules of Court do not enumerate the circumstances which would justify the
execution of the judgment or decision pending appeal.[28] However, this Court has
held that "good reasons" consist of compelling or superior circumstances demanding
urgency which will outweigh the injury or damages should the losing party secure a

130
reversal of the judgment or final order. Were the rule otherwise, execution pending
appeal may well become a tool of oppression and inequity instead of an instrument
of solicitude and justice.[29]

The existence of good reasons is what confers discretionary power on a court to issue
a writ of execution pending appeal. These reasons must be stated in the order
granting the same. Unless they are divulged, it would be difficult to determine
whether judicial discretion has been properly exercised in the case. The mere posting
of a bond will not justify execution pending appeal. Furthermore, a combination of
circumstances is the dominant consideration which impels the grant of immediate
execution. The requirement of a bond is imposed merely as an additional factor for
the protection of the defendant's creditor; otherwise, execution pending appeal could
be obtained through the mere filing of such bond.[30]

Petitioners insist that, as gleaned from their Joint Affidavit, when they discovered the
existence of respondent's tunnel in 1996, they were impelled to transfer their
residence; they then lived with one of their brothers-in-law, Camama Ibrahim in
Mahayahay, Iligan City. They assert that there is nothing in the testimony of
petitioner Nasser Macabangkit which would negate the urgency to buy properties
located in a safe area. The relevant portion of the Joint Affidavit reads:
4. That we constantly fear that an earthquake may happen at any time which
would could cause the collapse or caving in of the tunnel with the resultant
violent destruction of our houses, and would necessarily cause us serious
injuries, or even our death or those of the members of our family. The
recent incident of erosion and landslide at Cherry Hills, Antipolo
City, is not remote possibility, that it may had happen to us. May
God forbid.

5. That our fear has been aggravated by the fact that we often feel the
vibration of the area beneath our houses whenever the volume of the water
that passes through the tunnel increases, especially at midnight. Thus, we
have been suffering from sleepless nights or, at least troubled sleep, for
countless times ever since the tunnel was illegally constructed by the
defendant;

6. That as a result of the very real danger that we have been exposed to, we
have long decided to leave our houses and reside at the residence of our
brother-in-law, one Camama Ibrahim, at Mahayahay, Iligan City, and
suffered a humiliating condition, as well as the congestion. As soon as we
have the financial means, we have to liberate our family from the same
humiliation and congestion, by purchasing a lot and construct a house. We
are entitled to a humane, dignified and decent shelter which commensurate
to our social standing in the community.

7. That we, therefore, need money very badly right now and, if we received
our share in the damages awarded to us in the decision, we would readily
use it for a suitable land far from the area where the tunnel exists, and
build our houses thereon, so that we may be freed from the ever-present
fear of a very real danger to ourselves, our families and our properties,
which we have been subjected to for many years due to the illegal acts of
the National Power Corporation.[31]
On the other hand, in their Complaint filed before the RTC on November 11, 1997,
petitioners alleged that the construction of the tunnel by the respondent caused
danger to their lives and properties, and gave them sleepless nights, serious anxiety
and shock. The Court rules, however, that this claim of petitioners was merely an
afterthought and is barren of merit.

Petitioner Nasser Macabangkit testified before the trial court on December 1, 1998,

131
and declared that only two of the petitioners, Edgar and Sayana Macabangkit, resided
in the property starting only in 1998:

Q Was there anyone of your brothers and sisters who have actually
visited/resided in this land in question?
A As of now, there is, Sir.

Q Will you tell us the name of your brother or sister who is now residing in
this land of yours?
A Edgar and Sayana Macabangkit.

Q Do you know when was it when they started residing in that land of yours?

A This year, Sir.

COURT
:
Q This year 1998?
A Yes, Your Honor. (TSN, December 1, 1998, pp. 21-23)[32]

What the Court cannot fathom is the fact that shortly after filing their complaint on
November 11, 1997, petitioners Edgar and Sayana Macabangkit still dared to
establish their residence in the property. Indeed, it is incredible that after discovering
the existence of the tunnel and finding the area "very dangerous," petitioners would
still choose to live therein. If petitioners truly believed that the tunnel posed danger
to their property and their very lives, any decision to stay on would be short of suicidal
on their part.

Thus, the Court holds that the trial court committed grave abuse of discretion when
it ordered the execution of its Decision and Supplemental Decision pending appeal,
compelling respondent to remit P70,472,750.00 to petitioners simply because
petitioners Edgar and Sayana Macabangkit needed their share (P11,353,370.00
each) just so they could buy land and establish their new homes.

Petitioners insist, however, that the "good reasons" cited by the trial court for
granting their motion for execution pending appeal are based on the trial court's
findings of facts, i.e, respondent acted in bad faith in constructing a three-kilometer
long tunnel underneath petitioners' property without their knowledge and consent;
respondent had not compensated the petitioners for its use of the property since
1979; respondent profited from its use of their properties; the existence of the tunnel
rendered petitioners' property unfit for industrial, residential or commercial use due
to the danger posed by it, and no one was willing to buy the property; and the fair
market value of the property had been amply proved by evidence.

For its part, respondent avers that, it acted in good faith based on Section 3(f) and
(g) of Republic Act No. 6395,[33] as amended. Respondent posits that it is incredible
that petitioners failed to discover the tunnel when it was constructed in 1979; hence,
petitioners slept on their rights for 18 years or so. It further averred that the precise
amount due to petitioners for the respondent's use of the tunnel, by way of
compensation, is another contentious issue on appeal. Even assuming that petitioners
are entitled to compensation or reasonable rentals for the portion appropriated by
respondent, the appellate court still has to resolve the issue of whether, as claimed
by the respondent, petitioners' claim is barred by Section 3(i)[34] of Republic Act No.
6395.

132
The well-established rule is that it is not for the trial court to determine the merits of
the decision it rendered and use the same as basis for its order allowing execution
pending appeal. The authority to determine the merits of the appeal and the
correctness of the findings and conclusions of the trial court is lodged in the appellate
court. The trial court cannot preempt the decision of the appellate court and use its
own decision as basis for affirming the trial court's order of execution pending
appeal.[35]

Neither is the trial court justified to order execution pending appeal, on its assertion
that the appeal of the respondent is a dilatory tactic. As the Court held in Manacop
v. Equitable PCI Bank:[36]
Besides, that the appeal is merely dilatory is not a good reason for granting execution
pending appeal. As held in BF Corporation v. Edsa Shangri-la Hotel:

... it is not for the trial judge to determine the merit of a decision he rendered as this
is the role of the appellate court. Hence, it is not within competence of the trial court,
in resolving a motion for execution pending appeal, to rule that the appeal is patently
dilatory and rely on the same as basis for finding good reasons to grant the motion.
Only an appellate court can appreciate the dilatory intent of an appeal as an additional
good reason in upholding an order for execution pending appeal...
Petitioners' reliance on the ruling of the CA in National Power Corporation v.
Ibrahim,[37] is misplaced. We agree with the following ratiocination of the CA in its
decision:
We note that in support of its case, private respondents cited the case of National
Power Corporation v. Hon. Amer Ibrahim, et al. (CA-G.R. SP No. 41897) which was
decided by the Special Seventeenth Division of this Court. In the said case, the
discretionary execution granted by the public respondent was upheld. While we are
not unmindful of the findings in the said case, it is our opinion that based on the
circumstances obtaining in this case, it would best serve the ends of justice if the
appeal on the merits of the case is first resolved without any execution pending
appeal, not only because the total amount involved is quite substantial - ONE
HUNDRED THIRTEEN MILLION FIVE HUNDRED THIRTY-TWO THOUSAND AND FIVE
HUNDRED PESOS (P113,532,500.00), but also because of the other matters involved
in the appeal.(citation omitted)[38]
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. Costs
against the petitioners.

SO ORDERED.

Panganiban, C. J., (Chairperson), Ynares-Santiago, Austria-Martinez, and Chico-

Nazario, JJ., concur.

Penned by Associate Justice Eubulo G. Verzola (deceased), with Associate Justices

[1]

Artemio G. Tuquero (retired) and Elvi John S. Asuncion, concurring; rollo, pp. 176-
187.

[2]
Penned by Judge Mamindiara P. Mangotara.
[3]
Rollo, p. 44.
[4]
Id. at 40.

[5]
Id. at 20-28.

[6]
Id. at 33-35.

[7]
Id. at 35.

133
[8]
Id. at 38.
[9]
Id. at 46-47.

[10]
Id. at 59-60.

[11]
Id. at 61.
[12]
Id. at 68.
[13]
Rollo, pp. 70-76.

[14]
Id. at 77-87.
[15]
Id. at 85.

[16]
Id. at 88-90.

[17]
Id. at 98.

[18]
61 SCRA 570.
[19]
CA-G.R. SP No. 41897.

[20]
219 SCRA 69.

[21]
Rollo, pp. 176-187.

[22]
Id. at 188-193.

[23]
Id. at 195-196.
[24]
Supra.

[25]
Section 1, Rule 39, REVISED RULES OF COURT.
[26]
Corona International, Inc. v. Court of Appeals, 397 Phil. 575.582-585 (2000).
[27]
Philippine Bank of Communications v. Court of Appeals, 344 Phil. 777,789 (1997).

[28]
Flexo Manufacturing Corporation v. Columbus Foods, Incorporated, et al., G.R.
No. 164857, April 11, 2005, 455 SCRA 272, 277.

Intramuros Tennis Club, Inc. v. Philippine Tourism Authority, 395 Phil. 278, 296
[29]

(2000)
[30]
See note 28, pp.279-280.

[31]
Rollo, pp. 68-69.

[32]
Id. at 102.

[33]
Section 3. - Powers and General Functions of the Corporation. - The powers,
functions, rights and activities of the corporation shall be the following:

xxxx

(f) To take water from any public stream, river, creek, lake, spring or waterfall in
the Philippines, for the purposes specified in this Act; to intercept and divert the

134
flow of waters from lands or riparian which are or may be necessary for said
purposes, upon payment of just compensation therefore; to alter, straighten,
obstruct or increase the flow of water in streams or water channels intersecting or
connecting therewith or contiguous to its works or any part thereof; Provided, That
just compensation shall be paid to any person or persons whose property is directly
or indirectly, adversely affected or damaged thereby;

(g) To construct, operate and maintain power plants, auxiliary plants, dams,
reservoirs, pipes, mains, transmission lines, power stations and substations, and
other works for the purpose of developing hydraulic power from any river, creek,
lake, spring and waterfall in the Philippines and supplying such power to the
inhabitants thereof; to acquire, construct, install, maintain, operate and improve
gas, oil, or stream engines, and/or other prime movers, generators and machinery
in plants and/or auxiliary plants for the production of electric power; to establish,
develop, operate, maintain and administer power and lighting systems for the
transmission and utilization of its power generation;

xxx

[34]
Sec. 3. Powers and General Functions of the Corporation.

xxxx

Provided, further, That any action by any person claiming compensation and/or
damages shall be filed within five (5) years after the right-of-way, transmission
lines, sub-stations, plants or other facilities shall have been established; Provided,
finally, That after the said period no suit shall be brought to question the said
rights-of-way, transmission lines, substations, plants or other facilities nor the
amounts of compensation and/or damages involved.

Marcopper Mining Corporation v. Solidbank Corporation, G.R. No. 134049, June

[35]

17, 2004, 432 SCRA 360, 391.

[36]
G.R. Nos. 162814-17, August 25, 2005, 468 SCRA 256, 277.
[37]
G.R. No. 41897 (SP)

[38]
Rollo, p. 185.

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