Professional Documents
Culture Documents
SUPREME COURT
Manila
EN BANC
CARSON, J.:
At or about the time when the chattel mortgage was executed in favor of
the machinery company, the mortgagor, the "Compañia Agricola Filipina"
executed another mortgage to the plaintiff upon the building, separate and
apart from the land on which it stood, to secure payment of the balance
of its indebtedness to the plaintiff under a contract for the construction
of the building. Upon the failure of the mortgagor to pay the amount of
the indebtedness secured by the mortgage, the plaintiff secured judgment
for that amount, levied execution upon the building, bought it in at the
sheriff's sale on or about the 18th of December, 1914, and had the
sheriff's certificate of the sale duly registered in the land registry of the
Province of Cavite.
At the time when the execution was levied upon the building, the
defendant machinery company, which was in possession, filed with the
sheriff a sworn statement setting up its claim of title and demanding the
release of the property from the levy. Thereafter, upon demand of the
sheriff, the plaintiff executed an indemnity bond in favor of the sheriff in
the sum of P12,000, in reliance upon which the sheriff sold the property
at public auction to the plaintiff, who was the highest bidder at the
sheriff's sale.
The trial judge, relying upon the terms of article 1473 of the Civil Code,
gave judgment in favor of the machinery company, on the ground that the
company had its title to the building registered prior to the date of
registry of the plaintiff's certificate.
Article 1473 of the Civil Code is as follows:
If the same thing should have been sold to different vendees, the
ownership shall be transfer to the person who may have the first taken
possession thereof in good faith, if it should be personal property.
Should there be no entry, the property shall belong to the person who
first took possession of it in good faith, and, in the absence thereof, to the
person who presents the oldest title, provided there is good faith.
It has been suggested that since the provisions of article 1473 of the Civil
Code require "good faith," in express terms, in relation to "possession" and
"title," but contain no express requirement as to "good faith" in relation to
the "inscription" of the property on the registry, it must be presumed that
good faith is not an essential requisite of registration in order that it may
have the effect contemplated in this article. We cannot agree with this
contention. It could not have been the intention of the legislator to base
the preferential right secured under this article of the code upon an
inscription of title in bad faith. Such an interpretation placed upon the
language of this section would open wide the door to fraud and collusion.
The public records cannot be converted into instruments of fraud and
oppression by one who secures an inscription therein in bad faith. The
force and effect given by law to an inscription in a public record
presupposes the good faith of him who enters such inscription; and rights
created by statute, which are predicated upon an inscription in a public
registry, do not and cannot accrue under an inscription "in bad faith," to
the benefit of the person who thus makes the inscription.
Construing the second paragraph of this article of the code, the supreme
court of Spain held in its sentencia of the 13th of May, 1908, that:
The agreed statement of facts clearly discloses that the plaintiff, when he
bought the building at the sheriff's sale and inscribed his title in the land
registry, was duly notified that the machinery company had bought the
building from plaintiff's judgment debtor; that it had gone into possession
long prior to the sheriff's sale; and that it was in possession at the time
when the sheriff executed his levy. The execution of an indemnity bond by
the plaintiff in favor of the sheriff, after the machinery company had filed
its sworn claim of ownership, leaves no room for doubt in this regard.
Having bought in the building at the sheriff's sale with full knowledge that
at the time of the levy and sale the building had already been sold to the
machinery company by the judgment debtor, the plaintiff cannot be said to
have been a purchaser in good faith; and of course, the subsequent
inscription of the sheriff's certificate of title must be held to have been
tainted with the same defect.
Perhaps we should make it clear that in holding that the inscription of the
sheriff's certificate of sale to the plaintiff was not made in good faith, we
should not be understood as questioning, in any way, the good faith and
genuineness of the plaintiff's claim against the "Compañia Agricola Filipina."
The truth is that both the plaintiff and the defendant company appear to
have had just and righteous claims against their common debtor. No
criticism can properly be made of the exercise of the utmost diligence by
the plaintiff in asserting and exercising his right to recover the amount of
his claim from the estate of the common debtor. We are strongly inclined
to believe that in procuring the levy of execution upon the factory building
and in buying it at the sheriff's sale, he considered that he was doing no
more than he had a right to do under all the circumstances, and it is
highly possible and even probable that he thought at that time that he
would be able to maintain his position in a contest with the machinery
company. There was no collusion on his part with the common debtor, and
no thought of the perpetration of a fraud upon the rights of another, in
the ordinary sense of the word. He may have hoped, and doubtless he did
hope, that the title of the machinery company would not stand the test of
an action in a court of law; and if later developments had confirmed his
unfounded hopes, no one could question the legality of the propriety of
the course he adopted.
One who purchases real estate with knowledge of a defect or lack of title
in his vendor cannot claim that he has acquired title thereto in good faith
as against the true owner of the land or of an interest therein; and the
same rule must be applied to one who has knowledge of facts which
should have put him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his vendor. A
purchaser cannot close his eyes to facts which should put a reasonable
man upon his guard, and then claim that he acted in good faith under the
belief that there was no defect in the title of the vendor. His mere refusal
to believe that such defect exists, or his willful closing of his eyes to the
possibility of the existence of a defect in his vendor's title, will not make
him an innocent purchaser for value, if afterwards develops that the title
was in fact defective, and it appears that he had such notice of the
defects as would have led to its discovery had he acted with that measure
of precaution which may reasonably be acquired of a prudent man in a like
situation. Good faith, or lack of it, is in its analysis a question of intention;
but in ascertaining the intention by which one is actuated on a given
occasion, we are necessarily controlled by the evidence as to the conduct
and outward acts by which alone the inward motive may, with safety, be
determined. So it is that "the honesty of intention," "the honest lawful
intent," which constitutes good faith implies a "freedom from knowledge
and circumstances which ought to put a person on inquiry," and so it is
that proof of such knowledge overcomes the presumption of good faith in
which the courts always indulge in the absence of proof to the contrary.
"Good faith, or the want of it, is not a visible, tangible fact that can be
seen or touched, but rather a state or condition of mind which can only be
judged of by actual or fancied tokens or signs." (Wilder vs. Gilman, 55 Vt.,
504, 505; Cf. Cardenas Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098;
Pinkerton Bros. Co. vs. Bromley, 119 Mich., 8, 10, 17.)
We conclude that upon the grounds herein set forth the disposing part of
the decision and judgment entered in the court below should be affirmed
with costs of this instance against the appellant. So ordered.
FIRST DIVISION
[G.R. No. 109946. February 9, 1996]
On 2 November 1978 the Olidiana spouses filed with the Bureau of Lands
a Request for Amendment of their Free Patent applications over several
parcels of land including Lot No. 2029 (PIs-61). In this request they
renounced, relinquished and waived all their rights and interests over Lot
No. 2029 (Pls-61) in favor of Jesusa Christine Chupuico and Mylo O. Quinto,
respondents herein. On 10 January 1979 Free Patent Nos. IX-5-2223
(covering one-half of Lot No. 2029 [Pls-61] and IX-5-2224 (covering the
other half of the same Lot No. 2029 [Pls-61]) were accordingly granted
respectively to respondents Jesusa Christine Chupuico and Mylo 0. Quinto
by the Bureau of Lands District Land Office No. IX-5, Pagadian City. Jesusa
Christine Chupuico later obtained Original Certificate of Title No. P-27,361
covering aforementioned property while Mylo O. Quinto was also issued
Original Certificate of Title No. P-27,362 in view of the previous free
patent.[3]
Thereafter, for failure of Santiago and Oliva Olidiana to comply with the
terms and conditions of their promissory notes and mortgage contracts,
petitioner extrajudicially foreclosed all their mortgaged properties.
Consequently, on 14 April 1983 these properties, including Lot No. 2029
(Pls-61) were sold at public auction for P88,650.00 and awarded to
petitioner as the highest bidder. A Certificate of Sale was thereafter
executed in favor of petitioner and an Affidavit of Consolidation of
Ownership registered in its name. However, when petitioner tried to
register the sale and the affidavit of consolidation and to have the tax
declaration transferred in its name it was discovered that Lot No. 2029
(Pls-61) had already been divided into two (2) parcels, one-half (1/2) now
known as Lot 2029-A and covered by OCT No. P-27,361 in the name of
Jesusa Christine Chupuico, while the other half known as Lot 2029-B was
covered by the same OCT No. P-27,361 in the name of Mylo 0. Quinto.[5]
In view of the discovery, petitioner filed an action for Quieting of Title and
Cancellation or Annulment of Certificate of Title against respondents. After
trial the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23,
rendered judgment against petitioner.[6] The court ruled that the
contracts of mortgage entered into by petitioner and the subsequent
foreclosure of subject property could not have vested valid title to
petitioner bank because the mortgagors were not the owners in fee simple
of the property mortgaged. The court also found the mortgages over Lot
No. 2029 (Pls-61) of no legal consequence because they were executed in
violation of Art. 2085, par. 2, of the New Civil Code which requires that the
mortgagor be the absolute owner of the thing mortgaged. According to
the court a quo there was no evidence to prove that the mortgagors of
the land in dispute were its absolute owners at the time of the mortgage
to petitioner.
The factual findings of the lower court disclose that when the Olidiana
spouses mortgaged Lot No. 2029 (Pls-61) to petitioner it was still the
subject of a miscellaneous sales application by the spouses with the
Bureau of Lands. Since there was no showing that the sales application
was approved before the property was mortgaged, the trial court
concluded that the Olidiana spouses were not yet its owners in fee simple
when they mortgaged the property. The lower court also said that with
the subsequent issuance of the Free Patent by the Bureau of Lands in the
name of respondents Chupuico and Quinto, it could be gleaned that the
property was indeed public land when mortgaged to petitioner. Therefore
petitioner could not have acquired a valid title over the subject property
by virtue of the foreclosure and subsequent sale at public auction.[7]
Resultantly, the trial court declared the following as null and void insofar
as they related to Lot No. 2029 (Pls-61) being a public land: the real
estate mortgage dated 4 April 1978, the second mortgage dated 23 April
1979, the foreclosure sale on 14 April 1983, the certificate of sale
registered with the Register of Deeds of Zamboanga del Sur on 1
September 1983, and the affidavit of consolidation of ownership registered
with the Register of Deeds on 2 August 1985.
We agree with the court a quo. We hold that petitioner bank did not
acquire valid title over the land in dispute because it was public land when
mortgaged to the bank. We cannot accept petitioners contention that the
lot in dispute was no longer public land when mortgaged to it since the
Olidrana spouses had been in open, continuous, adverse and public
possession thereof for more than thirty (30) years.[10] In Visayan Realty,
Inc. v. Meer[11] we ruled that the approval of a sales application merely
authorized the applicant to take possession of the land so that he could
comply with the requirements prescribed by law before a final patent could
be issued in his favor. Meanwhile the government still remained the owner
thereof, as in fact the application could still be canceled and the land
awarded to another applicant should it be shown that the legal
requirements had not been complied with. What divests the government of
title to the land is the issuance of the sales patent and its subsequent
registration with the Register of Deeds. It is the registration and issuance
of the certificate of title that segregate public lands from the mass of
public domain and convert it into private property.[12] Since the disputed
lot in the case before us was still the subject of a Free Patent Application
when mortgaged to petitioner and no patent was granted to the Olidiana
spouses, Lot No. 2029 (Pis-61) remained part of the public domain.
With regard to the validity of the mortgage contracts entered into by the
parties, Art. 2085, par. 2, of the New Civil Code specifically requires that
the pledgor or mortgagor be the absolute owner of the thing pledged or
mortgaged. Thus, since the disputed property was not owned by the
Olidiana spouses when they mortgaged it to petitioner the contracts of
mortgage and all their subsequent legal consequences as regards Lot No.
2029 (Pls-61) are null and void. In a much earlier case[13] we held that it
was an essential requisite for the validity of a mortgage that the
mortgagor be the absolute owner of the property mortgaged, and it
appearing that the mortgage was constituted before the issuance of the
patent to the mortgagor, the mortgage in question must of necessity be
void and ineffective. For, the law explicitly requires as imperative for the
validity of a mortgage that the mortgagor be the absolute owner of what
is mortgaged.
SO ORDERED.
FIRST DIVISION
[G.R. No. 137887. February 28, 2000]
DECISION
YNARES_SANTIAGO, J.:
(1) In LRC Case No. TG-362, this Court hereby denies the application for
registration of the parcels of land mentioned therein by applicant Norma
R. Almanzor for lack of factual and legal bases;
(2) In LRC Case No. 396, this Court hereby approves the petition for
registration and thus places under the operation of Act 141, Act 946 and/
or P.D. 1529, otherwise known as the Property Registration Law, the land
described in Plan Psu-67537-Amd-2 and containing an area of 308,638
square meters, as supported by its technical descriptions now forming
parts of the records of these cases, in addition to other proofs adduced in
the names of petitioners Damian Ermitao De Guzman, Deogracias Ermitao
De Guzman, Zenaida Ermitao De Guzman, Alicia Ermitao De Guzman and
Salvador De Guzman, all married, of legal age and with residence and
postal addresses at Magallanes Street, Carmona, Cavite, subject to the
claims of oppositors Dominga Ermitao, Natividad Encarnacion, Melba E.
Torres, Flora Manalo, Socorro de la Rosa, Jose Ermitao and Esmeranso
Ermitao under an instrument entitled 'Waiver of Rights with Conformity"
the terms and conditions of which are hereby ordered by this Court to be
annotated at the back of the certificates of title to be issued to the
petitioners pursuant to the judgment of this Court. brnado
SO ORDERED."[3]
THE TRIAL COURT ERRED IN NOT FINDING THAT THE DE GUZMANS HAVE
NOT SUBMITTED PROOF OF THEIR FEE SIMPLE TITLE OR POSSESSION
IN THE MANNER AND FOR THE LENGTH OF TIME REQUIRED BY LAW TO
JUSTIFY CONFIRMATION OF AN IMPERFECT TITLE. novero
II
"(W)hile it is true that the land became alienable and disposable only in
December, 1965, however, records indicate that as early as 1928, Pedro
Ermitao, appellees' predecessor-in-interest, was already in possession of
the property, cultivating it and planting various crops thereon. It follows
that appellees' possession as of the time of the filing of the petition in
1991 when tacked to Pedro Ermitao's possession is 63 years or more than
the required 30 years period of possession. The land, which is agricultural,
has been converted to private property ."[7]
We disagree.
"The Court of Appeals correctly ruled that the private respondents had
not qualified for a grant under Section 48(b) of the Public Land Act
because their possession of the land while it was still inalienable forest
land, or before it was declared alienable and disposable land of the public
domain on January 13, 1968, could not ripen into private ownership, and
should be excluded from the computation of the 30-year open and
continuous possession in concept of owner required under Section 48(b) of
Com. Act 141. It accords with our ruling in Director of Lands vs. Court of
Appeals, Ibarra Bishar, et al., 178 SCRA 708, that: marinella
'Thus possession of forest lands, however long, cannot ripen into private
ownership (Vamo vs. Government, 41 Phil. 161 [1920]; Adorable vs. Director
of Forestry, 17 Phil. 410 [1960]). A parcel of forest land is within the
exclusive jurisdiction of the Bureau of Forestry and beyond the power and
jurisdiction of the cadastral court to register under the Torrens System
(Republic vs. Court of Appeals, 89 SCRA 648; Republic vs. Vera, 120 SCRA
210 [1983]; Director of Lands vs. Court of Appeals, 129 SCRA 689
[1984])." (emphasis ours)
So, too, is the Court of Appeals' reliance on the case of Director of Land
Management vs. Court of Appeals[9] misplaced. There, while the period of
possession of the applicant's predecessor-in-interest was tacked to his own
possession to comply with the required thirty year period possession
requirement, the land involved therein was not forest land but alienable
public land. On the other hand, in the case before us, the property
subject of private respondents' application was only declared alienable in
1965. Prior to such date, the same was forest land incapable of private
appropriation. It was not registrable and possession thereof, no matter
how lengthy, could not convert it into private property, (unless) and until
such lands were reclassified and considered disposable and alienable.[10]
alonzo
WHEREFORE, the instant Petition is GRANTED and the February 26, 1998
decision of the Court of Appeals in CA-G.R. CV No. 48785 as well as that
of the Regional Trial Court of Cavite, Branch 38, in LRC Case No. TG-396
are both REVERSED. Judgment is rendered dismissing LRC Case No. 396 for
failure of the applicants therein to comply with the thirty year occupancy
and possessory requirements of law for confirmation of imperfect title. No
pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
DECISION
AUSTRIA-MARTINEZ, J.:
The assailed Order was issued by the RTC after it rendered a favorable
judgment on respondent's application for registration in its Decision dated
November 3, 1998, and Original Certificate of Title (OCT) No. P-10053 was
issued in her name covering a parcel of land described as follows:
xxxx
Petitioners set forth the lone assignment of error that the RTC erred in
issuing the writ of possession and acted with grave abuse of discretion
amounting to lack and excess of jurisdiction.3 Petitioners reiterate their
argument that they cannot be ousted of their possession of the property,
having been in actual possession of the property since 1964, as evidenced
by petitioner Gerardo C. Mendoza's Sales Application made in January 1986
over the following property:
A parcel of land situated at Burgos St., Bo. Barretto, O.C. Bounded on the
North., by Benjamin Salinas; South., by Gloria Montemayor; East., by
Benjamin Salinas & Conrado Pilapil and West., Burgos St. situated in Bo.
Barretto, Olongapo City, Zambales, and containing an area of 932 square
meters x x x.4
and a Declaration of Real Property for the years 1976 and 1985,5 among
others.
The substantive issue posed for resolution in the present case pertains to
the propriety of the issuance of the writ of possession by the RTC. This,
obviously, is a question of law; consequently, direct resort to this Court is
proper.
There is no question that the writ of possession granted in this case was
made by the RTC acting as a land registration court, after finality of its
Decision dated November 3, 1998 and the corresponding OCT No. P-10053
was issued in the name of respondent. As the soundness of the order
granting the writ of possession is a matter of judgment, the remedy is
ordinary appeal by way of petition for review on certiorari. An error of
judgment committed by a court in the exercise of its legitimate jurisdiction
is not the same as "grave abuse of discretion." Errors of judgment are
correctible by appeal, while those of jurisdiction are reviewable by
certiorari.7
A writ of possession may be issued under the following instances: (1) land
registration proceedings under Sec. 17 of Act No. 496; (2) judicial
foreclosure, provided the debtor is in possession of the mortgaged realty
and no third person, not a party to the foreclosure suit, had intervened;
and (3) extrajudicial foreclosure of a real estate mortgage under Sec. 7 of
Act No. 3135 as amended by Act No. 4118.
Thus, it was erroneous for the RTC to have issued the writ of possession
against petitioners. This conclusion, of course, is without prejudice to any
case that respondent may file for the recovery of the property.
SO ORDERED.
THIRD DIVISION
DECISION
GONZAGA-REYES, J.:
In this petition for review on certiorari under Rule 45 of the 1997 Revised
Rules of Civil Procedure, petitioner Cornelio M. Isaguirre assails the
October 5, 1998 decision[1] of the Court of Appeals[2] and its Resolution
promulgated on March 5, 1999.
On August 21, 1969, petitioner filed a sales application over the subject
property on the basis of the deed of sale. His application was approved on
January 17, 1984, resulting in the issuance of Original Certificate of Title
No. P-11566 on February 13, 1984, in the name of petitioner. Meanwhile,
the sales application of respondent over the entire 1,000 square meters of
subject property (including the 250 square meter portion claimed by
petitioner) was also given due course, resulting in the issuance of Original
Certificate of Title No. P-13038 on June 19, 1989, in the name of
respondent.[4]
On May 5, 1997, respondent filed a motion for execution with the trial
court, praying for the immediate delivery of possession of the subject
property, which motion was granted on August 18, 1997. On February 3,
1998, respondent moved for a writ of possession, invoking our ruling in G.
R. No. 120832. Petitioner opposed the motion, asserting that he had the
right of retention over the property until payment of the loan and the
value of the improvements he had introduced on the property. On March
12, 1998, the trial court granted respondents motion for writ of
possession. Petitioners motion for reconsideration was denied by the trial
court on May 21, 1998. Consequently, a writ of possession dated June 16,
1998, together with the Sheriffs Notice to Vacate dated July 7, 1998, were
served upon petitioner.
Petitioner filed with the Court of Appeals a special civil action for
certiorari and prohibition with prayer for a temporary restraining order or
preliminary injunction to annul and set aside the March 12, 1998 and May
21, 1998 orders of the trial court, including the writ of possession dated
June 16, 1998 and the sheriffs notice to vacate dated July 7, 1998.[6]
The appellate court summarized the issues involved in the case as follows:
(1) whether or not the mortgagee in an equitable mortgage has the right
to retain possession of the property pending actual payment to him of the
amount of indebtedness by the mortgagor; and (b) whether or not
petitioner can be considered a builder in good faith with respect to the
improvements he made on the property before the transaction was
declared to be an equitable mortgage.
The Court of Appeals held that petitioner was not entitled to retain
possession of the subject property. It said that -
the mortgagee merely has to annotate his claim at the back of the
certificate of title in order to protect his rights against third persons and
thereby secure the debt. There is therefore no necessity for him to
actually possess the property. Neither should a mortgagee in an equitable
mortgage fear that the contract relied upon is not registered and hence,
may not operate as a mortgage to justify its foreclosure. In Feliza Zubiri v.
Lucio Quijano, 74 Phil 47, it was ruled "that when a contract x x x is held
as an equitable mortgage, the same shall be given effect as if it had
complied with the formal requisites of mortgage. x x x by its very nature
the lien thereby created ought not to be defeated by requiring compliance
with the formalities necessary to the validity of a voluntary real estate
mortgage, as long as the land remains in the hands of the petitioner
(mortgagor) and the rights of innocent parties are not affected."
Proceeding from the foregoing, petitioners imagined fears that his lien
would be lost by surrendering possession are unfounded.
In the same vein, there is nothing to stop the mortgagor de Lara from
acquiring possession of the property pending actual payment of the
indebtedness to petitioner. This does not in anyway endanger the
petitioners right to security since, as pointed out by private respondents,
the petitioner can always have the equitable mortgage annotated in the
Certificate of Title of private respondent and pursue the legal remedies for
the collection of the alleged debt secured by the mortgage. In this case,
the remedy would be to foreclose the mortgage upon failure to pay the
debt within the required period.
Hence, this Court, once and for all resolves the matter by requiring the
trial court to determine the amount of total indebtedness and the period
within which payment shall be made.
Petitioners claims that he was a builder in good faith and entitled to
reimbursement for the improvements he introduced upon the property
were rejected by the Court of Appeals. It held that petitioner knew, or at
least had an inkling, that there was a defect or flaw in his mode of
acquisition. Nevertheless, the appellate court declared petitioner to have
the following rights:
The case was finally disposed of by the appellate court in the following
manner:
a) The period within which the mortgagor must pay his total amount of
indebtedness.
A.1......The RTC patently exceeded the scope of its authority and acted with
grave abuse of discretion in ordering the immediate delivery of possession
of the Property to respondent as said order exceeded the parameters of
the final and executory decision and constituted a variance thereof.
The dispositive portion of the March 31, 1995 decision of the Court of
Appeals in G.R. CV No. 42065, which was affirmed by this Court, provides
that
IN VIEW OF ALL THE FOREGOING, the judgment appealed from is
REVERSED and SET ASIDE and a new one entered: (1) dismissing the
complaint; (2) declaring the "Document of Sale and Special Cession of
Rights and Interests" (Exhibit B) dated February 10, 1960, to be an
equitable mortgage not a sale; (3) upholding the validity of OCT No.
P-13038 in the name of Felicitas de Lara; and (3) declaring null and void
OCT No. P-11566 in the name of plaintiff Cornelio Isaguirre. All other
counterclaims for damages are likewise dismissed. Costs against the
appellee.[11]
It is true that, in some instances, the actual possessor has some valid
rights over the property enforceable even against the owner thereof, such
as in the case of a tenant or lessee.[15] Petitioner anchors his own claim
to possession upon his declared status as a mortgagee. In his Memorandum,
he argues that
4.8 It was respondent who asserted that her transfer of the Property to
petitioner was by way of an equitable mortgage and not by sale. After her
assertion was sustained by the Courts, respondent cannot now ignore or
disregard the legal effects of such judicial declaration regarding the
nature of the transaction.
xxx......xxx......xxx
"Art. 2089. A pledge or mortgage is indivisible, even though the debt may
be divided among the successors in interest of the debtor or the creditor.
"Therefore, the debtors heir who has paid a part of the debt cannot ask
for the proportionate extinguishment of the pledge or mortgage as long as
the debt is not completely satisfied.
"Neither can the creditors heir who has received his share of the debt
return the pledge or cancel the mortgage, to the prejudice of the other
heirs who have not been paid."
(Emphasis supplied.)
xxx......xxx......xxx
4.14 ......To require petitioner to deliver possession of the Property to
respondent prior to the full payment of the latters mortgage loan would
be equivalent to the cancellation of the mortgage. Such effective
cancellation would render petitioners rights ineffectual and nugatory and
would constitute unwarranted judicial interference.
xxx......xxx......xxx
4.16 The fact of the present case show that respondent delivered
possession of the Property to petitioner upon the execution of the Deed
of Absolute Sale and Special Cession of Rights and Interest dated 10
February 1960. Hence, transfer of possession of the Property to petitioner
was an essential part of whatever agreement the parties entered into,
which, in this case, the Supreme Court affirmed to be an equitable
mortgage.
xxx......xxx......xxx
4.19 Petitioner does not have the mistaken notion that the mortgagee
must be in actual possession of the mortgaged property in order to secure
the debt. However, in this particular case, the delivery of possession of the
Property was an integral part of the contract between petitioner and
respondent. After all, it was supposed to be a contract of sale. If delivery
was not part of the agreement entered into by the parties in 1960, why
did respondent surrender possession thereof to petitioner in the first
place?
4.20 Now that the Courts have ruled that the transaction was not a sale
but a mortgage, petitioners entitlement to the possession of the Property
should be deemed as one of the provisions of the mortgage, considering
that at the time the contract was entered into, possession of the Property
was likewise delivered to petitioner. Thus, until respondent has fully paid
her mortgage loan, petitioner should be allowed to retain possession of the
subject property.[16]
Moreover, this Court cannot find any justification in the records to uphold
petitioners contention that respondent delivered possession of the subject
property upon the execution of the "Deed of Sale and Special Cession of
Rights and Interests" on February 10, 1960 and that the transfer of
possession to petitioner must therefore be considered an essential part of
the agreement between the parties. This self-serving assertion of
petitioner was directly contradicted by respondent in her pleadings.[22]
Furthermore, nowhere in the Court of Appeals decisions promulgated on
March 31, 1995 (G.R. CV No. 42065) and on October 5, 1998 (G.R. SP No.
48310), or in our own decision promulgated on July 8, 1996 (G.R. No.
120832) was it ever established that the mortgaged properties were
delivered by respondent to petitioner.
In Alvano v. Batoon,[23] this Court held that "[a] simple mortgage does not
give the mortgagee a right to the possession of the property unless the
mortgage should contain some special provision to that effect." Regrettably
for petitioner, he has not presented any evidence, other than his own
gratuitous statements, to prove that the real intention of the parties was
to allow him to enjoy possession of the mortgaged property until full
payment of the loan.
Therefore, we hold that the trial court correctly issued the writ of
possession in favor of respondent. Such writ was but a necessary
consequence of this Courts ruling in G.R. No. 120832 affirming the validity
of the original certificate of title (OCT No. P-13038) in the name of
respondent Felicitas de Lara, while at the same time nullifying the original
certificate of title (OCT No. P-11566) in the name of petitioner Cornelio
Isaguirre. Possession is an essential attribute of ownership; thus, it would
be redundant for respondent to go back to court simply to establish her
right to possess subject property. Contrary to petitioners claims, the
issuance of the writ of possession by the trial court did not constitute an
unwarranted modification of our decision in G.R. No. 120832, but rather,
was a necessary complement thereto.[24] It bears stressing that a
judgment is not confined to what appears upon the face of the decision,
but also those necessarily included therein or necessary thereto.[25]
SO ORDERED.
THIRD DIVISION
[G.R. No. 120303. July 24, 1996]
This petition for review on certiorari has its origins in Civil Case No. 9214
of Branch 3 of the Municipal Trial Court in Cities (MTCC) in Dagupan City
for unlawful detainer and damages. The petitioners ask the Court to set
aside the decision of the Court of Appeals affirming the decision of Branch
40 of the Regional Trial Court (RTC) of Dagupan City, which, in turn,
reversed the MTCC; ordered the petitioners to reimburse the private
respondents the value of the house in question and other improvements;
and allowed the latter to retain the premises until reimbursement was
made.
It appears that Lot No. 3765-B-1 containing an area of 314 square meters
was originally owned by the petitioners' mother, Paulina Amado vda. de
Geminiano. On a 12-square-meter portion of that lot stood the petitioners'
unfinished bungalow, which the petitioners sold in November 1978 to the
private respondents for the sum of P6,000.00, with an alleged promise to
sell to the latter that portion of the lot occupied by the house.
Subsequently, the petitioners' mother executed a contract of lease over a
126 square-meter portion of the lot, including that portion on which the
house stood, in favor of the private respondents for P40.00 per month for
a period of seven years commencing on 15 November 1978.[1] The private
respondents then introduced additional improvements and registered the
house in their names. After the expiration of the lease contract in
November 1985, however, the petitioners' mother refused to accept the
monthly rentals.
It turned out that the lot in question was the subject of a suit, which
resulted in its acquisition by one Maria Lee in 1972. In 1982, Lee sold the
lot to Lily Salcedo, who in turn sold it in 1984 to the spouses Agustin and
Ester Dionisio.
The parties then submitted their respective position papers and the case
was heard under the Rule on Summary Procedure.
On the first issue, the court held that since the petitioners' mother was no
longer the owner of the lot in question at the time the lease contract was
executed in 1978, in view of its acquisition by Maria Lee as early as 1972,
there was no lease to speak of, much less, a renewal thereof. And even if
the lease legally existed, its implied renewal was not for the period
stipulated in the original contract, but only on a month-to-month basis
pursuant to Article 1687 of the Civil Code. The refusal of the petitioners'
mother to accept the rentals starting January 1986 was then a clear
indication of her desire to terminate the monthly lease. As regards the
petitioners' alleged failed promise to sell to the private respondents the lot
occupied by the house, the court held that such should be litigated in a
proper case before the proper forum, not an ejectment case where the
only issue was physical possession of the property.
The court resolved the second issue in the negative, holding that Articles
448 and 546 of the Civil Code, which allow possessors in good faith to
recover the value of improvements and retain the premises until
reimbursed, did not apply to lessees like the private respondents, because
the latter knew that their occupation of the premises would continue only
during the life of the lease. Besides, the rights of the private respondents
were specifically governed by Article 1678, which allows reimbursement of
up to one-half of the value of the useful improvements, or removal of the
improvements should the lessor refuse to reimburse.
On appeal, this time by the petitioners, the Court of Appeals affirmed the
decision of the RTC[7] and denied[8] the petitioners' motion for
reconsideration. Hence, the present petition.
The Court is confronted with the issue of which provision of law governs
the case at bench: Article 448 or Article 1678 of the Civil Code? The said
articles read as follows:
Art. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the
works, sowing or planting, after payment of the indemnity provided for in
articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
Art. 1678. If the lessee makes, in good faith, useful improvements which
are suitable to the use for which the lease is intended, without altering
the form or substance of the property leased, the lessor upon the
termination of the lease shall pay the lessee one-half of the value of the
improvements at that time. Should the lessor refuse to reimburse said
amount, the lessee may remove the improvements, even though the
principal thing may suffer damage thereby. He shall not, however, cause
any more impairment upon the property leased than is necessary.
The crux of the said issue then is whether the private respondents are
builders in good faith or mere lessees.
The private respondents claim they are builders in good faith, hence,
Article 448 of the Civil Code should apply. They rely on the lack of title of
the petitioners' mother at the time of the execution of the contract of
lease, as well as the alleged assurance made by the petitioners that the
lot on which the house stood would be sold to them.
It has been said that while the right to let property is an incident of title
and possession, a person may be a lessor and occupy the position of a
landlord to the tenant although he is not the owner of the premises let.[9]
After all, ownership of the property is not being transferred,[10] only the
temporary use and enjoyment thereof.[11]
In this case, both parties admit that the land in question was originally
owned by the petitioners' mother. The land was allegedly acquired later by
one Maria Lee by virtue of an extrajudicial foreclosure of mortgage. Lee,
however, never sought a writ of possession in order that she gain
possession of the property in question.[12] The petitioners' mother
therefore remained in possession of the lot.
Being mere lessees, the private respondents knew that their occupation of
the premises would continue only for the life of the lease. Plainly, they
cannot be considered as possessors nor builders in good faith.[17]
In a plethora of cases,[18] this Court has held that Article 448 of the Civil
Code, in relation to Article 546 of the same Code, which allows full
reimbursement of useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith, i.e., one
who builds on land with the belief that he is the owner thereof. It does
not apply where one's only interest is that of a lessee under a rental
contract; otherwise, it would always be in the power of the tenant to
"improve" his landlord out of his property.
Anent the alleged promise of the petitioners to sell the lot occupied by
the private respondents' house, the same was not substantiated by
convincing evidence. Neither the deed of sale over the house nor the
contract of lease contained an option in favor of the respondent spouses to
purchase the said lot. And even if the petitioners indeed promised to sell,
it would not make the private respondents possessors or builders in good
faith so as to be covered by the provisions of Article 448 of the Civil Code.
The latter cannot raise the mere expectancy of ownership of the
aforementioned lot because the alleged promise to sell was not fulfilled
nor its existence even proven. The first thing that the private respondents
should have done was to reduce the alleged promise into writing, because
under Article 1403 of the Civil Code, an agreement for the sale of real
property or an interest therein is unenforceable, unless some note or
memorandum thereof be produced. Not having taken any steps in order
that the alleged promise to sell may be enforced, the private respondents
cannot bank on that promise and profess any claim nor color of title over
the lot in question.
SO ORDERED.
THIRD DIVISION
[G.R. No. 108894. February 10, 1997]
The parties in this case are owners of adjoining lots in Paraaque, Metro
Manila. It was discovered in a survey that a portion of a building of
petitioner, which was presumably constructed by its predecessor-in-
interest, encroached on a portion of the lot owned by private respondent.
What are the rights and obligations of the parties? Is petitioner
considered a builder in bad faith because, as held by respondent Court, he
is presumed to know the metes and bounds of his property as described in
his certificate of title? Does petitioner succeed into the good faith or bad
faith of his predecessor-in-interest which presumably constructed the
building?
These are the questions raised in the petition for review of the Decision[1]
dated August 28, 1992, in CA-G.R. CV No. 28293 of respondent Court[2]
where the disposition reads:[3]
4. Ordering appellee to pay the value of the land occupied by the two-
storey building;
4. Ordering appellee to pay the value of the land occupied by the two-
storey building.
The Facts
The facts are not disputed. Respondent Court merely reproduced the
factual findings of the trial court, as follows:[5]
After trial on the merits, the Regional Trial Court[6] of Pasay City, Branch
117, in Civil Case No. PQ-7631-P, rendered a decision dated December 4,
1989 in favor of petitioner who was the plaintiff therein. The dispositive
portion reads:[7]
(A)
(B)
Whether or not the respondent Court of Appeals erred when it used the
amicable settlement between the petitioner and the private respondent,
where both parties agreed to the demolition of the rear portion of the
fence, as estoppel amounting to recognition by petitioner of respondents
right over his property including the portions of the land where the other
structures and the building stand, which were not included in the
settlement.
(C)
A
The time when to determine the good faith of the builder under Article
448 of the New Civil Code, is reckoned during the period when it was
actually being built; and in a case where no evidence was presented nor
introduced as to the good faith or bad faith of the builder at that time,
as in this case, he must be presumed to be a builder in good faith, since
bad faith cannot be presumed.[9]
B.
C.
The respondent courts citation of the twin cases of Tuason & Co. v.
Lumanlan and Tuason & Co. v. Macalindong is not the judicial authority for
a boundary dispute situation between adjacent torrens titled lot owners,
as the facts of the present case do not fall within nor square with the
involved principle of a dissimilar case.[11]
D.
D. (E.)
E. (F.)
Private respondent, on the other hand, argues that the petition is suffering
from the following flaws:[15]
1. It did not give the exact citations of cases decided by the Honorable
Supreme Court that allegedly contradicts the ruling of the Hon. Court of
Appeals based on the doctrine laid down in Tuason vs. Lumanlan case citing
also Tuason vs. Macalindong case (Supra).
2. Assuming that the doctrine in the alleged Co Tao vs. Chico case is
contradictory to the doctrine in Tuason vs. Lumanlan and Tuason vs.
Macalindong, the two cases being more current, the same should prevail.
Respondent Court, citing the cases of J. M. Tuason & Co., Inc. vs. Vda. de
Lumanlan[17] and J. M. Tuason & Co., Inc. vs. Macalindong,[18] ruled that
petitioner cannot be considered in good faith because as a land owner, it is
presumed to know the metes and bounds of his own property, specially if
the same are reflected in a properly issued certificate of title. One who
erroneously builds on the adjoining lot should be considered a builder in
(b)ad (f)aith, there being presumptive knowledge of the Torrens title, the
area, and the extent of the boundaries.[19]
We disagree with respondent Court. The two cases it relied upon do not
support its main pronouncement that a registered owner of land has
presumptive knowledge of the metes and bounds of its own land, and is
therefore in bad faith if he mistakenly builds on an adjoining land. Aside
from the fact that those cases had factual moorings radically different
from those obtaining here, there is nothing in those cases which would
suggest, however remotely, that bad faith is imputable to a registered
owner of land when a part of his building encroaches upon a neighbors
land, simply because he is supposedly presumed to know the boundaries of
his land as described in his certificate of title. No such doctrinal statement
could have been made in those cases because such issue was not before
the Supreme Court. Quite the contrary, we have rejected such a theory in
Co Tao vs. Chico,[20] where we held that unless one is versed in the science
of surveying, no one can determine the precise extent or location of his
property by merely examining his paper title.
There is no question that when petitioner purchased the land from Pariz
Industries, the buildings and other structures were already in existence.
The record is not clear as to who actually built those structures, but it
may well be assumed that petitioners predecessor-in-interest, Pariz
Industries, did so. Article 527 of the Civil Code presumes good faith, and
since no proof exists to show that the encroachment over a narrow,
needle-shaped portion of private respondents land was done in bad faith
by the builder of the encroaching structures, the latter should be
presumed to have built them in good faith.[21] It is presumed that
possession continues to be enjoyed in the same character in which it was
acquired, until the contrary is proved.[22] Good faith consists in the belief
of the builder that the land he is building on is his, and his ignorance of
any defect or flaw in his title.[23] Hence, such good faith, by law, passed
on to Parizs successor, petitioner in this case. Further, (w)here one derives
title to property from another, the act, declaration, or omission of the
latter, while holding the title, in relation to the property, is evidence
against the former.[24] And possession acquired in good faith does not lose
this character except in case and from the moment facts exist which show
that the possessor is not unaware that he possesses the thing improperly
or wrongfully.[25] The good faith ceases from the moment defects in the
title are made known to the possessor, by extraneous evidence or by suit
for recovery of the property by the true owner.[26]
Recall that the encroachment in the present case was caused by a very
slight deviation of the erected wall (as fence) which was supposed to run
in a straight line from point 9 to point 1 of petitioners lot. It was an error
which, in the context of the attendant facts, was consistent with good
faith. Consequently, the builder, if sued by the aggrieved landowner for
recovery of possession, could have invoked the provisions of Art. 448 of
the Civil Code, which reads:
The owner of the land on which anything has been built, sown or planted
in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in articles
546 and 548, or to oblige the one who built or planted to pay the price of
the land, and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the terms of
the lease and in case of disagreement, the court shall fix the terms
thereof.
The obvious benefit to the builder under this article is that, instead of
being outrightly ejected from the land, he can compel the landowner to
make a choice between the two options: (1) to appropriate the building by
paying the indemnity required by law, or (2) sell the land to the builder.
The landowner cannot refuse to exercise either option and compel instead
the owner of the building to remove it from the land.[27]
In the first place, there is no sufficient showing that petitioner was aware
of the encroachment at the time it acquired the property from Pariz
Industries. We agree with the trial court that various factors in evidence
adequately show petitioners lack of awareness thereof. In any case,
contrary proof has not overthrown the presumption of good faith under
Article 527 of the Civil Code, as already stated, taken together with the
disputable presumptions of the law on evidence. These presumptions state,
under Section 3 (a) of Rule 131 of the Rules of Court, that the person is
innocent of a crime or wrong; and under Section 3 (ff) of Rule 131, that
the law has been obeyed. In fact, private respondent Eduardo Uy himself
was unaware of such intrusion into his property until after 1971 when he
hired a surveyor, following his purchase of another adjoining lot, to survey
all his newly acquired lots. Upon being apprised of the encroachment,
petitioner immediately offered to buy the area occupied by its building --
a species of conduct consistent with good faith.
Estoppel
That the parties hereto have agreed that the rear portion of the fence
that separates the property of the complainant and respondent shall be
demolished up to the back of the building housing the machineries which
demolision (sic) shall be undertaken by the complainant at anytime.
From the foregoing, it is clear that petitioner agreed only to the demolition
of a portion of the wall separating the adjoining properties of the parties
-- i.e. up to the back of the building housing the machineries. But that
portion of the fence which served as the wall housing the electroplating
machineries was not to be demolished. Rather, it was to be subject to
negotiation by herein parties. The settlement may have recognized the
ownership of private respondent but such admission cannot be equated
with bad faith. Petitioner was only trying to avoid a litigation, one reason
for entering into an amicable settlement.
As was ruled in Osmea vs. Commission on Audit,[30]
The Civil Code not only defines and authorizes compromises, it in fact
encourages them in civil actions. Art. 2029 states that `The Court shall
endeavor to persuade the litigants in a civil case to agree upon some fair
compromise. x x x.
In the context of the established facts, we hold that petitioner did not
lose its rights under Article 448 of the Civil Code on the basis merely of
the fact that some years after acquiring the property in good faith, it
learned about -- and aptly recognized -- the right of private respondent
to a portion of the land occupied by its building. The supervening
awareness of the encroachment by petitioner does not militate against its
right to claim the status of a builder in good faith. In fact, a judicious
reading of said Article 448 will readily show that the landowners exercise
of his option can only take place after the builder shall have come to know
of the intrusion -- in short, when both parties shall have become aware of
it. Only then will the occasion for exercising the option arise, for it is only
then that both parties will have been aware that a problem exists in
regard to their property rights.
What then is the applicable provision in this case which private respondent
may invoke as his remedy: Article 448 or Article 450[31] of the Civil Code?
In view of the good faith of both petitioner and private respondent, their
rights and obligations are to be governed by Art. 448. The essential
fairness of this codal provision has been pointed out by Mme. Justice
Ameurfina Melencio-Herrera, citing Manresa and applicable precedents, in
the case of Depra vs. Dumlao,[32] to wit:
Where the builder, planter or sower has acted in good faith, a conflict of
rights arises between the owners, and it becomes necessary to protect
the owner of the improvements without causing injustice to the owner of
the land. In view of the impracticality of creating a state of forced co-
ownership, the law has provided a just solution by giving the owner of the
land the option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land and the
sower to pay the proper rent. It is the owner of the land who is
authorized to exercise the option, because his right is older, and because,
by the principle of accession, he is entitled to the ownership of the
accessory thing. (3 Manresa 213; Bernardo vs. Bataclan, 37 Off. Gaz. 1382;
Co Tao vs. Chan Chico, G. R. No. 49167, April 30, 1949; Article applied; see
Cabral, et al. vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. Velasco, [C.A.]
52 Off. Gaz. 2050).
Petitioner, however, must also pay the rent for the property occupied by
its building as prescribed by respondent Court from October 4, 1979, but
only up to the date private respondent serves notice of its option upon
petitioner and the trial court; that is, if such option is for private
respondent to appropriate the encroaching structure. In such event,
petitioner would have a right of retention which negates the obligation to
pay rent.[40] The rent should however continue if the option chosen is
compulsory sale, but only up to the actual transfer of ownership.
c) the fair market value of the encroaching portion of the building; and
d) whether the value of said area of land is considerably more than the
fair market value of the portion of the building thereon.
d) The periods to be fixed by the trial court in its decision shall be non-
extendible, and upon failure of the party obliged to tender to the trial
court the amount due to the obligee, the party entitled to such payment
shall be entitled to an order of execution for the enforcement of payment
of the amount due and for compliance with such other acts as may be
required by the prestation due the obligee.
No costs.
SO ORDERED.
THIRD DIVISION
[G.R. No. 79688. February 1, 1996]
By resolution dated November 13, 1995, the First Division of this Court
resolved to transfer this case (along with several others) to the Third
Division. After due deliberation and consultation, the Court assigned the
writing of this Decision to the undersigned ponente.
The Facts
On January 30, 1981, Jardinicos lawyer wrote Kee, demanding that the
latter remove all improvements and vacate Lot 9. When Kee refused to
vacate Lot 9, Jardinico filed with the Municipal Trial Court in Cities, Branch
3, Bacolod City (MTCC), a complaint for ejectment with damages against
Kee.
The MTCC held that the erroneous delivery of Lot 9 to Kee was
attributable to CTTEI. It further ruled that petitioner and CTTEI could not
successfully invoke as a defense the failure of Kee to give notice of his
intention to begin construction required under paragraph 22 of the
Contract to Sell on Installment and his having built a sari-sari store
without. the prior approval of petitioner required under paragraph 26 of
said contract, saying that the purpose of these requirements was merely
to regulate the type of improvements to be constructed on the lot[3].
However, the MTCC found that petitioner had already rescinded its
contract with Kee over Lot 8 for the latters failure to pay the installments
due, and that Kee had not contested the rescission. The rescission was
effected in 1979, before the complaint was instituted. The MTCC concluded
that Kee no longer had any right over the lot subject of the contract
between him and petitioner. Consequently, Kee must pay reasonable rentals
for the use of Lot 9, and, furthermore, he cannot claim reimbursement for
the improvements he introduced on said lot.
On appeal, the Regional Trial Court, Branch 48, Bacolod City (RTC) ruled
that petitioner and CTTEI were not at fault or were not negligent, there
being no preponderant evidence to show that they directly participated in
the delivery of Lot 9 to Kee.[5] It found Kee a builder in bad faith. It
further ruled that even assuming arguendo that Kee was acting in good
faith, he was, nonetheless, guilty of unlawfully usurping the possessory
right of Jardinico over Lot 9 from the time he was served with notice to
vacate said lot, and thus was liable for rental.
Following the denial of his motion for reconsideration on October 20, 1986,
Kee appealed directly to the Supreme Court, which referred the matter to
the Court of Appeals.
The appellate court ruled that Kee was a builder in good faith, as he was
unaware of the mix-up when he began construction of the improvements
on Lot 8. It further ruled that the erroneous delivery was due to the
negligence of CTTEI, and that such wrong delivery was likewise imputable
to its principal, petitioner herein. The appellate court also ruled that the
award of rentals was without basis.
b. If Jardinico prefers that Kee buy the land, the third-party defendants
shall answer for the amount representing the value of Lot 9 that Kee
should pay to Jardinico.
Petitioner then filed the instant petition against Kee, Jardinico and CTTEI.
The Issues
2. The Court of Appeals has so far departed from the accepted course of
judicial proceedings, by granting to private respondent-Kee the rights of a
builder in good faith in excess of what the law provides, thus enriching
private respondent Kee at the expense of the petitioner;
(2) What is the liability, if any, of petitioner and its agent, C.T. Torres
Enterprises, Inc.? and
Under the circumstances, Kee had acted in the manner of a prudent man
in ascertaining the identity of his property. Lot 8 is covered by Transfer
Certificate of Title No. T-69561, while Lot 9 is identified in Transfer
Certificate of Title No. T-106367. Hence, under the Torrens system of land
registration, Kee is presumed to have knowledge of the metes and bounds
of the property with which he is dealing. x x x
Good faith consists in the belief of the builder that the land he is building
on is his and his ignorance of any defect or flaw in his title.[9] And as
good faith is presumed, petitioner has the burden of proving bad faith on
the part of Kee.[10]
At the time he built improvements on Lot 8, Kee believed that said lot was
what he bought from petitioner. He was not aware that the lot delivered
to him was not Lot 8. Thus, Kees good faith. Petitioner failed to prove
otherwise.
Petitioner also points out that, as found by the trial court, the Contract of
Sale on Installment covering Lot 8 between it and Kee was rescinded long
before the present action was instituted. This has no relevance on the
liability of petitioner, as such fact does not negate the negligence of its
agent in pointing out the wrong lot to Kee. Such circumstance is relevant
only as it gives Jardinico a cause of action for unlawful detainer against
Kee.
Petitioner next contends that Kee cannot claim that another lot was
erroneously pointed out to him because the latter agreed to the following
provision in the Contract of Sale on Installment, to wit:
13. The Vendee hereby declares that prior to the execution of his contract
he/she has personally examined or inspected the property made subject-
matter hereof, as to its location, contours, as well as the natural condition
of the lots and from the date hereof whatever consequential change
therein made due to erosion, the said Vendee shall bear the expenses of
the necessary fillings, when the same is so desired by him/her.[11]
The subject matter of this provision of the contract is the change of the
location, contour and condition of the lot due to erosion. It merely provides
that the vendee, having examined the property prior to the execution of
the contract, agrees to shoulder the expenses resulting from such change.
Kee filed a third-party complaint against petitioner and CTTEI, which was
dismissed by the RTC after ruling that there was no evidence from which
fault or negligence on the part of petitioner and CTTEI can be inferred.
The Court of Appeals disagreed and found CTTEI negligent for the
erroneous delivery of the lot by Octaviano, its employee.
Petitioner does not dispute the fact that CTTEI was its agent. But it
contends that the erroneous delivery of Lot 9 to Kee was an act which
was clearly outside the scope of its authority, and consequently, CTTEI
alone should be liable. It asserts that while [CTTEI] was authorized to sell
the lot belonging to the herein petitioner, it was never authorized to
deliver the wrong lot to Kee.[13]
The rule is that the principal is responsible for the acts of the agent, done
within the scope of his authority, and should bear the damage caused to
third persons.[14] On the other hand, the agent who exceeds his authority
is personally liable for the damage.[15]
CTTEI was acting within its authority as the sole real estate representative
of petitioner when it made the delivery to Kee. In acting within its scope
of authority, it was, however, negligent. It is this negligence that is the
basis of petitioners liability, as principal of CTTEI, per Articles 1909 and
1910 of the Civil Code.
Pending resolution of the case before the Court of Appeals, Jardinico and
Kee on July 24, 1987 entered into a deed of sale, wherein the former sold
Lot 9 to Kee. Jardinico and Kee did not inform the Court of Appeals of
such deal.
1. That Civil Case No. 3815 entitled Jardinico vs. Kee which is now pending
appeal with the Court of Appeals, regardless of the outcome of the
decision shall be mutually disregarded and shall not be pursued by the
parties herein and shall be considered dismissed and without effect
whatsoever;[16]
Kee asserts though that the terms and conditions in said deed of sale are
strictly for the parties thereto and that (t)here is no waiver made by
either of the parties in said deed of whatever favorable judgment or
award the honorable respondent Court of Appeals may make in their favor
against herein petitioner Pleasantville Development Corporation and/or
private respondent C.T. Torres Enterprises, Inc.[17]
Obviously, the deed of sale can have no effect on the liability of petitioner.
As we have earlier stated, petitioners liability is grounded on the
negligence of its agent. On the other hand, what the deed of sale
regulates are the reciprocal rights of Kee and Jardinico; it stressed that
they had reached an agreement independent of the outcome of the case.
b. If Jardinico prefers that Kee buy the land, the third-party defendants
shall answer for the amount representing the value of Lot 9 that Kee
should pay to Jardinico.[18]
Petitioner contends that if the above holding would be carried out, Kee
would be unjustly enriched at its expense. In other words, Kee would be -
able to own the lot, as buyer, without having to pay anything on it, because
the aforequoted portion of respondent Courts Decision would require
petitioner and CTTEI jointly and solidarily to answer or reimburse Kee
there for.
Petitioners liability lies in the negligence of its agent CTTEI. For such
negligence, the petitioner should be held liable for damages. Now, the
extent and/or amount of damages to be awarded is a factual issue which
should be determined after evidence is adduced. However, there is no
showing that such evidence was actually presented in the trial court;
hence no damages could now be awarded.
The rights of Kee and Jardinico vis-a-vis each other, as builder in good
faith and owner in good faith, respectively, are regulated by law (i.e., Arts.
448, 546 and 548 of the Civil Code). It was error for the Court of
Appeals to make a slight modification in the application of such law, on the
ground of equity. At any rate, as it stands now, Kee and Jardinico have
amicably settled through their deed of sale their rights and obligations
with regards to Lot 9. Thus, we delete items 2 (a) and (b) of the dispositive
portion of the Court of Appeals Decision [as reproduced above] holding
petitioner and CTTEI solidarily liable.
The MTCC awarded Jardinico attorneys fees and costs in the amount of
P3,000.00 and P700.00, respectively, as prayed for in his complaint. The
RTC deleted the award, consistent with its ruling that petitioner was
without fault or negligence. The Court of Appeals, however, reinstated the
award of attorneys fees after ruling that petitioner was liable for its
agents negligence.
The award of attorneys fees lies within the discretion of the court and
depends upon the circumstances of each case.[19] We shall not interfere
with the discretion of the Court of Appeals. Jardinico was compelled to
litigate for the protection of his interests and for the recovery of damages
sustained as a result of the negligence of petitioners agent.[20]
In sum, we rule that Kee is a builder in good faith. The disposition of the
Court of Appeals that Kee is entitled to the rights granted him under
Articles 448, 546 and 548 of the New Civil Code is deleted, in view of the
deed of sale entered into by Kee and Jardinico, which deed now governs
the rights of Jardinico and Kee as to each other. There is also no further
need, as ruled by the appellate Court, to remand the case to the court of
origin for determination of the actual value of the improvements and the
property (Lot 9), as well as for further proceedings in conformity with
Article 448 of the New Civil Code.
WHEREFORE, the petition is partially GRANTED. The Decision of the Court
of Appeals is hereby MODIFIED as follows:
SO ORDERED.
THIRD DIVISION
[G.R. No. 104828. January 16, 1997]
This is the main question raised by the petition for review on certiorari
assailing the Resolution[1] of the Court of Appeals, Sixth Division,[2] dated
March 24, 1992, in CA-G.R. SP No. 26853 denying due course to
petitioner's appeal and affirming the decision of the Regional Trial Court
of Pasig in Civil Case No. 61004, which in turn affirmed the decision of the
Metropolitan Trial Court of San Juan, Metro Manila, Branch 58.
The Facts
On January 18, 1990, private respondents filed with the Metropolitan Trial
Court of San Juan, Branch 58, Civil Case No. 61004 for ejectment against
petitioners. The MeTC of San Juan decided in favor of the former, with
the following disposition:[3]
1. The amount of P930.00 a month starting July 17, 1989 until they finally
vacate the subject premises;
3. Cost of suit."
On appeal, the Regional Trial Court of Pasig, Branch 167, affirmed said
decision.[4] The RTC said:[5]
SO ORDERED."
"4) Since petitioners are not builders in good faith, they cannot demand
that respondents sell the disputed portion; what the law provides is that
the builders in bad faith can be ordered to dismantle said structure at
their own expense. In the interim period that petitioners' structure
remains, they should pay reasonable rent until they remove the structure."
"For reasons indicated, We find the appeal without merit and deny it due
course, with costs against the petitioners.
SO ORDERED."
The Issues
The main issue is whether the possession of the portion of the private
respondents' land encroached by petitioners' house can be recovered
through an action of ejectment, not accion publiciana. Corollarily,
petitioners question (a) the validity of the imposition of "rental" for the
occupancy of the encroached portion, (b) the denial of their claimed pre-
emptive right to purchase the encroached portion of the private
respondents' land, and (c) the propriety of a factual review of the CA's
finding of bad faith on the part of petitioners.
In a nutshell, petitioners insist that the MeTC had no jurisdiction over the
case at bar because its real nature is accion publiciana or recovery of
possession, not unlawful detainer. It is not forcible entry because private
respondents did not have prior possession of the contested property as
petitioners possessed it ahead of private respondents. It is not unlawful
detainer because petitioners were not the private respondents' tenants nor
vendee unlawfully withholding possession thereof. Said court also has no
jurisdiction to impose payment of "rentals" as there is no lessor-lessee
relationship between the parties. They pray for a review of the factual
finding of bad faith, insisting that the facts uphold their position. Due to
their alleged good faith, they claim the pre-emptive right to purchase the
litigated portion as a matter of course. Finally, they insist that the award
of attorney's fees is unwarranted as private respondents allegedly had
knowledge of the encroachment prior to their acquisition of said land.
Possession can also be acquired, not only by material occupation, but also
by the fact that a thing is subject to the action of one's will or by the
proper acts and legal formalities established for acquiring such right.[11]
Possession of land can be acquired upon the execution of the deed of sale
thereof by its vendor. Actual or physical occupation is not always
necessary.
In the case before us, considering that private respondents are unlawfully
deprived of possession of the encroached land and that the action for the
recovery of possession thereof was made within the one- year
reglementary period, ejectment is the proper remedy.[12] The MeTC of San
Juan had jurisdiction.
Article 448 of the Civil Code[17] is unequivocal that the option to sell the
land on which another in good faith builds, plants or sows on, belongs to
the landowner.
The option is to sell, not to buy, and it is the landowner's choice. Not even
a declaration of the builder, planter, or sower's bad faith shifts this option
to him per Article 450 of the Civil Code.[18] This advantage in Article 448
is accorded the landowner because "his right is older, and because, by the
principle of accession, he is entitled to the ownership of the accessory
thing."[19] There can be no pre-emptive right to buy even as a
compromise, as this prerogative belongs solely to the landowner. No
compulsion can be legally forced on him, contrary to what petitioners asks
from this Court. Such an order would certainly be invalid and illegal. Thus,
the lower courts were correct in rejecting the petitioners' offer to buy
the encroached land.
Petitioners ask this Court to review the alleged error of the respondent
Court in appreciating bad faith on their part. According to them, this is
contradictory to the fact that private respondents acquired their lot and
discovered the encroachment after petitioners bought their house. After
careful deliberation on this issue, this Court finds this petition for review
inadequate as it failed to show convincingly a reversible error on the part
of the respondent Court in this regard. Thus, for very good reasons, this
Court has consistently and emphatically declared that review of the
factual findings of the Court of Appeals is not a function that is normally
undertaken in petitions for review under Rule 45 of the Rules of Court.
Such findings, as a general rule, are binding and conclusive.[20] The
jurisdiction of this Court is limited to reviewing errors of law unless there
is a showing that the findings complained of are totally devoid of support
in the records or that they are so glaringly erroneous as to constitute
reversible error.[21]
Even respondent Court has taken note of the inadequacy of the petition
before it, as it wryly said:[22]
In sum, the petition has not shown cogent reasons and sufficient grounds
to reverse the unanimous ruling of the three lower courts. The MeTC, RTC
and the Court of Appeals were all in agreement in sustaining private
respondents' rights. And we uphold them.
SO ORDERED.
SECOND DIVISION
[G.R. No. 138842. October 18, 2000]
NATIVIDAD P. NAZARENO, MAXIMINO P. NAZARENO, JR., petitioners, vs.
COURT OF APPEALS, ESTATE OF MAXIMINO A. NAZARENO, SR., ROMEO P.
NAZARENO and ELIZA NAZARENO, respondents.
DECISION
MENDOZA, J.:
Maximino Nazareno, Sr. and Aurea Poblete were husband and wife. Aurea
died on April 15, 1970, while Maximino, Sr. died on December 18, 1980.
They had five children, namely, Natividad, Romeo, Jose, Pacifico, and
Maximino, Jr. Natividad and Maximino, Jr. are the petitioners in this case,
while the estate of Maximino, Sr., Romeo, and his wife Eliza Nazareno are
the respondents.
During their marriage, Maximino Nazareno, Sr. and Aurea Poblete acquired
properties in Quezon City and in the Province of Cavite. It is the
ownership of some of these properties that is in question in this case.
It appears that after the death of Maximino, Sr., Romeo filed an intestate
case in the Court of First Instance of Cavite, Branch XV, where the case
was docketed as Sp. Proc. No. NC-28. Upon the reorganization of the
courts in 1983, the case was transferred to the Regional Trial Court of
Naic, Cavite. Romeo was appointed administrator of his fathers estate.
-WITNESSETH-
That I am the absolute registered owner of six (6) parcels of land with
the improvements thereon situated in Quezon City, Philippines, which
parcels of land are herewith described and bounded as follows, to wit:
A parcel of land (Lot No. 10, of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No. 917),
situated in the District of Cubao, Quezon City, Island of Luzon. Bounded on
the NE., by Lot No. 4 of the consolidation and subdivision plan; on the SE.,
by Lot No. 11 of the consolidation and subdivision plan; on the SW., by Lot
No. 3 of the consolidation and subdivision plan; and on the NW., by Lot No.
9 of the consolidation and subdivision plan. Beginning at a point marked 1
on the plan, being S. 7 deg. 26W., 4269.90 m. more or less from B.L.L.M.
No. 1, Mp. of Mariquina;
A parcel of land (Lot No. 11, of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No. 917),
situated in the District of Cubao, Quezon City, Island of Luzon. Bounded on
the NE., by Lot No. 4 of the consolidation and subdivision plan; on the SE.,
by Lot No. 12 of the consolidation and subdivision plan; on the SW., by Lot
No. 3 of the consolidation and subdivision plan; on the NW., by Lot No. 10
of the consolidation and subdivision plan. Beginning at a point marked 1 on
plan, being S. 79 deg. 07W., 4264.00 m. more or less from B.L.L.M. No. 1,
Mp. of Mariquina;
A parcel of land (Lot No. 14, of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No. 917),
situated in the District of Cubao, Quezon City, Island of Luzon. Bounded on
the NE., by Lot No. 4 of the consolidation and subdivision plan; on the SE.,
by Lot No. 15, of the consolidation and subdivision plan; on the SW., by Lot
No. 3 of the consolidation and subdivision plan; and on the NW., by Lot No.
13 of the consolidation and subdivision plan. Beginning at the point marked
1 on plan, being S.78 deg. 48W., 4258.20 m. more or less from B.L.L.M. No.
1, Mp. of Mariquina;
Among the lots covered by the above Deed of Sale is Lot 3-B which is
registered under TCT No. 140946. This lot had been occupied by Romeo, his
wife Eliza, and by Maximino, Jr. since 1969. Unknown to Romeo, Natividad
sold Lot 3-B on July 31, 1982 to Maximino, Jr.,[8] for which reason the
latter was issued TCT No. 293701 by the Register of Deeds of Quezon City.
[9]
When Romeo found out about the sale to Maximino, Jr., he and his wife
Eliza locked Maximino, Jr. out of the house. On August 4, 1983, Maximino,
Jr. brought an action for recovery of possession and damages with prayer
for writs of preliminary injunction and mandatory injunction with the
Regional Trial Court of Quezon City. On December 12, 1986, the trial
court ruled in favor of Maximino, Jr. In CA-G.R. CV No. 12932, the Court
of Appeals affirmed the decision of the trial court.[10]
The issues having been joined, the case was set for trial. Romeo presented
evidence to show that Maximino and Aurea Nazareno never intended to sell
the six lots to Natividad and that Natividad was only to hold the said lots
in trust for her siblings. He presented the Deed of Partition and
Distribution dated June 28, 1962 executed by Maximino Sr. and Aurea and
duly signed by all of their children, except Jose, who was then abroad and
was represented by their mother, Aurea. By virtue of this deed, the nine
lots subject of this Deed of Partition were assigned by raffle as follows:
Romeo also testified that Lot 3-B was bought for him by his father, while
Lot 3 was sold to him for P7,000.00 by his parents on July 4, 1969.[17]
However, he admitted that a document was executed by his parents
transferring six properties in Quezon City, i.e., Lots 3, 3-B, 10, 11, 13, and
14, to Natividad.
Romeo further testified that, although the deeds of sale executed by his
parents in their favor stated that the sale was for a consideration, they
never really paid any amount for the supposed sale. The transfer was
made in this manner in order to avoid the payment of inheritance taxes.
[18] Romeo denied stealing Lot 3 from his sister but instead claimed that
the title to said lot was given to him by Natividad in 1981 after their
father died.
Natividad and Maximino, Jr. claimed that the Deed of Partition and
Distribution executed in 1962 was not really carried out. Instead, in
December of 1969, their parents offered to sell to them the six lots in
Quezon City, i.e., Lots 3, 3-B, 10, 11, 13 and 14. However, it was only
Natividad who bought the six properties because she was the only one
financially able to do so. Natividad said she sold Lots 13 and 14 to Ros-Alva
Marketing Corp.[19] and Lot 3-B to Maximino, Jr. for P175,000.00.[20]
Natividad admitted that Romeo and the latters wife were occupying Lot 3-
B at that time and that she did not tell the latter about the sale she had
made to Maximino, Jr.
Natividad said that she had the title to Lot 3 but it somehow got lost. She
could not get an original copy of the said title because the records of the
Registrar of Deeds had been destroyed by fire. She claimed she was
surprised to learn that Romeo was able to obtain a title to Lot 3 in his
name.
Natividad insisted that she paid the amount stated in the Deed of Absolute
Sale dated January 29, 1970. She alleged that their parents had sold
these properties to their children instead of merely giving the same to
them in order to impose on them the value of hardwork.
Natividad accused Romeo of filing this case to harass her after Romeo lost
in the action for recovery of possession (Civil Case No. Q-39018) which had
been brought against him by Maximino, Jr. It appears that before the case
filed by Romeo could be decided, the Court of Appeals rendered a decision
in CA-GR CV No. 12932 affirming the trial courts decision in favor of
Maximino, Jr.
On August 10, 1992, the trial court rendered a decision, the dispositive
portion of which states:
The defendants are hereby directed to pay to the plaintiff jointly and
severally the sum of P30,000 as and for attorneys fees. Likewise, the
third-party plaintiff is directed to pay the third-party defendants
attorneys fees of P20,000.
All other claims by one party against the other are dismissed.
SO ORDERED.[21]
On appeal to the Court of Appeals, the decision of the trial court was
modified in the sense that titles to Lot 3 (in the name of Romeo Nazareno)
and Lot 3-B (in the name of Maximino Nazareno, Jr.), as well as to Lots 10
and 11 were cancelled and ordered restored to the estate of Maximino
Nazareno, Sr. The dispositive portion of the decision dated May 29, 1998
reads:
WHEREFORE, the appeal is GRANTED. The decision and the order in
question are modified as follows:
1. The Deed of Absolute Sale dated 29 January 1970 and the Deed of
Absolute Sale dated 31 July 1982 are hereby declared null and void;
To begin with, the findings of fact of the Court of Appeals are conclusive
on the parties and carry even more weight when these coincide with the
factual findings of the trial court. This Court will not weigh the evidence
all over again unless there is a showing that the findings of the lower
court are totally devoid of support or are clearly erroneous so as to
constitute serious abuse of discretion.[25] The lone testimony of a witness,
if credible, is sufficient. In this case, the testimony of Romeo that no
consideration was ever paid for the sale of the six lots to Natividad was
found to be credible both by the trial court and by the Court of Appeals
and it has not been successfully rebutted by petitioners. We, therefore,
have no reason to overturn the findings by the two courts giving credence
to his testimony.
The fact that the deed of sale was notarized is not a guarantee of the
validity of its contents. As held in Suntay v. Court of Appeals:[26]
Though the notarization of the deed of sale in question vests in its favor
the presumption of regularity, it is not the intention nor the function of
the notary public to validate and make binding an instrument never, in the
first place, intended to have any binding legal effect upon the parties
thereto. The intention of the parties still and always is the primary
consideration in determining the true nature of a contract.
Furthermore, Natividads title was clearly not an issue in the first case. In
other words, the title to the other five lots subject of the present deed of
sale was not in issue in that case. If the first case resolved anything, it
was the ownership of Maximino, Jr. over Lot 3-B alone.
Third. Petitioners allege that, as shown by several deeds of sale executed
by Maximino, Sr. and Aurea during their lifetime, the intention to dispose of
their real properties is clear. Consequently, they argue that the Deed of
Sale of January 29, 1970 should also be deemed valid.
This is a non-sequitur. The fact that other properties had allegedly been
sold by the spouses Maximino, Sr. and Aurea does not necessarily show
that the Deed of Sale made on January 29, 1970 is valid.
Romeo does not dispute that their parents had executed deeds of sale. The
question, however, is whether these sales were made for a consideration.
The trial court and the Court of Appeals found that the Nazareno spouses
transferred their properties to their children by fictitious sales in order to
avoid the payment of inheritance taxes.
Indeed, it was found both by the trial court and by the Court of Appeals
that Natividad had no means to pay for the six lots subject of the Deed
of Sale.
All these convince the Court that Natividad had no means to pay for all
the lots she purportedly purchased from her parents. What is more,
Romeos admission that he did not pay for the transfer to him of lots 3 and
25-L despite the considerations stated in the deed of sale is a declaration
against interest and must ring with resounding truth. The question is, why
should Natividad be treated any differently, i.e., with consideration for the
sale to her, when she is admittedly the closest to her parents and the one
staying with them and managing their affairs? It just seems without
reason. Anyway, the Court is convinced that the questioned Deed of Sale
dated January 29, 1970 (Exh. A or 1) is simulated for lack of consideration,
and therefore ineffective and void.[29]
The Deed of Absolute Sale dated January 29, 1970 is an indivisible contract
founded on an indivisible obligation. As such, it being indivisible, it can not
be annulled by only one of them. And since this suit was filed only by the
estate of Maximino A. Nazareno, Sr. without including the estate of Aurea
Poblete, the present suit must fail. The estate of Maximino A. Nazareno, Sr.
can not cause its annulment while its validity is sustained by the estate of
Aurea Poblete.[31]
In any case, if petitioners only point is that the estate of Maximino, Sr.
alone cannot contest the validity of the Deed of Sale because the estate
of Aurea has not yet been settled, the argument would nonetheless be
without merit. The validity of the contract can be questioned by anyone
affected by it.[33] A void contract is inexistent from the beginning. Hence,
even if the estate of Maximino, Sr. alone contests the validity of the sale,
the outcome of the suit will bind the estate of Aurea as if no sale took
place at all.
Nonetheless, it cannot be denied that Maximino, Sr. intended to give the six
Quezon City lots to Natividad. As Romeo testified, their parents executed
the Deed of Sale in favor of Natividad because the latter was the only
female and the only unmarried member of the family.[34] She was thus
entrusted with the real properties in behalf of her siblings. As she herself
admitted, she intended to convey Lots 10 and 11 to Jose in the event the
latter returned from abroad. There was thus an implied trust constituted
in her favor. Art. 1449 of the Civil Code states:
There being an implied trust, the lots in question are therefore subject to
collation in accordance with Art. 1061 which states:
Every compulsory heir, who succeeds with other compulsory heirs, must
bring into the mass of the estate any property or right which he may have
received from the decedent, during the lifetime of the latter, by way of
donation, or any other gratuitous title, in order that it may be computed in
the determination of the legitime of each heir, and in the account of the
partition.
SO ORDERED.
FIRST DIVISION
[G.R. No. 68166. February 12, 1997]
The applicant owns the property immediately adjoining the land sought to
be registered. His registered property is bounded on the east by the
Talisay River, on the west by the Bulacan River, and on the north by the
Manila Bay. The Talisay River and the Bulacan River flow down towards the
Manila Bay and act as boundaries of the applicant's registered land on the
east and on the west.
The land sought to be registered was formed at the northern tip of the
applicant's land. Applicant's registered property is bounded on the north by
the Manila Bay.
Before us is a petition for review of: (1) the decision[1] and (2) two
subsequent resolutions[2] of the Intermediate Appellate Court[3] (now the
Court of Appeals) in Land Registration Case No. N-84,[4] the application
over which was filed by private respondents' predecessor-in-interest,
Sinforoso Pascual, now deceased, before the Court of First Instance[5]
(now the Regional Trial Court) of Balanga, Bataan.
On the other hand, sometime in the early part of 1960, Sinforoso Pascual
filed an application to register and confirm his title to a parcel of land,
situated in Sibocon, Balanga, Bataan, described in Plan Psu-175181 and
said to have an area of 146,611 square meters. Pascual claimed that this
land is an accretion to his property, situated in Barrio Puerto Rivas,
Balanga, Bataan, and covered by Original Certificate of Title No. 6830. It is
bounded on the eastern side by the Talisay River, on the western side by
the Bulacan River, and on the northern side by the Manila Bay. The Talisay
River as well as the Bulacan River flow downstream and meet at the
Manila Bay thereby depositing sand and silt on Pascual's property resulting
in an accretion thereon. Sinforoso Pascual claimed the accretion as the
riparian owner.
During the pendency of the land registration case, that is, on November 6,
1960, Sinforoso Pascual filed a complaint for ejectment against Emiliano
Navarro, one Marcelo Lopez and their privies, alleged by Pascual to have
unlawfully claimed and possessed, through stealth, force and strategy, a
portion of the subject property covered by Plan Psu-175181. The
defendants in the case were alleged to have built a provisional dike
thereon: thus they have thereby deprived Pascual of the premises sought
to be registered. This, notwithstanding repeated demands for defendants to
vacate the property.
The case was decided adversely against Pascual. Thus, Pascual appealed to
the Court of First Instance (now Regional Trial Court) of Balanga, Bataan,
the appeal having been docketed as Civil Case No. 2873. Because of the
similarity of the parties and the subject matter, the appealed case for
ejectment was consolidated with the land registration case and was jointly
tried by the court a quo.
Subsequently, on August 26, 1962, Pascual died and was substituted by his
heirs, the herein private respondents.
On November 10, 1975, the court a quo rendered judgment finding the
subject property to be foreshore land and, being a part of the public
domain, it cannot be the subject of land registration proceedings.
(2) Denying the application of Sinforoso Pascual for land registration over
the land in question; and
(3) Directing said Sinforoso Pascual, through his heirs, as plaintiff in Civil
Case No. 2873 and as applicant in Land Registration Case No. N-84 to pay
costs in both instances."[6]
The heirs of Pascual appealed and, before the respondent appellate court,
assigned the following errors:
"1. The lower court erred in not finding the land in question as an
accretion by the action of the Talisay and Bulacan Rivers to the land
admittedly owned by applicants-appellants [private respondents].
2. The lower court erred in holding that the land in question is foreshore
land.
3. The lower court erred in not ordering the registration of the and is
controversy in favor of applicants-appellants [private respondents].
On appeal, the respondent court reversed the findings of the court a quo
and granted the petition for registration of the subject property but
excluding therefrom fifty (50) meters from corner 2 towards corner 1; and
fifty meters (50) meters from corner 5 towards corner 6 of the
Psu-175181.
xxx
This makes this case quite unique because while it is undisputed that the
subject land is immediately attached to appellants' [private respondents']
land and forms the tip thereof, at the same time, said land immediately
faces the Manila Bay which is part of the sea. We can understand
therefore the confusion this case might have caused the lower court,
faced as it was with the uneasy problem of deciding whether or not the
subject land was formed by the action of the two rivers or by the action
of the sea. Since the subject land is found at the shore of the Manila Bay
facing appellants' [private respondents'] land, it would be quite easy to
conclude that it is foreshore and therefore part of the patrimonial
property of the State as the lower court did in fact rule x x x .
xxx
It is however undisputed that appellants' [private respondents'] land lies
between these two rivers and it is precisely appellants' [private
respondents'] land which acts as a barricade preventing these two rivers
to meet. Thus, since the flow of the two rivers is downwards to the Manila
Bay the sediments of sand and silt are deposited at their mouths.
It is, therefore, difficult to see how the Manila Bay could have been the
cause of the deposit thereat for in the natural course of things, the waves
of the sea eat the land on the shore, as they suge [sic] inland. It would
not therefore add anything to the land but instead subtract from it due to
the action of the waves and the wind. It is then more logical to believe
that the two rivers flowing towards the bay emptied their cargo of sand,
silt and clay at their mouths, thus causing appellants' [private respondents']
land to accumulate therein.
However, our distinguished colleage [sic], Mr. Justice Serrano, do [sic] not
seem to accept this theory and stated that the subject land arose only
when x x x Pascual planted 'palapat' and 'bakawan' trees thereat to serve
as a boundary or strainer. But we do not see how this act of planting
trees by Pascual would explain how the land mass came into being. Much
less will it prove that the same came from the sea. Following Mr. Justice
Serrano's argument that it were the few trees that acted as strainers or
blocks, then the land that grew would have stopped at the place where
the said trees were planted. But this is not so because the land mass went
far beyond the boundary, or where the trees were planted.
In view of the above, the opposition hereto filed by the government should
be withdrawn, except for the portion recommended by the land
investigator in his report dated May 2, 1960, to be excluded and
considered foreshore. x x x'
Because of this report, no less than the Solicitor General representing the
Bureau of Lands withdrew his opposition dated March 25, 1960, and limited
'the same to the northern portion of the land applied for, compromising a
strip 50 meters wide along the Manila Bay, which should be declared
public land as part of the foreshore' x x x.[8]
The disputed property was brought forth by both the withdrawal of the
waters of Manila Bay and the accretion formed on the exposed foreshore
land by the action of the sea which brought soil and sand sediments in
turn trapped by the palapat and bakawan trees planted thereon by
petitioner Sulpicio Pascual in 1948.
Anchoring their claim of ownership on Article 457 of the Civil Code, private
respondents vigorously argue that the disputed 14-hectare land is an
accretion caused by the joint action of the Talisay and Bulacan Rivers
which run their course on the eastern and western boundaries,
respectively, of private respondents' own tract of land.
First, the title of private respondents' own tract of land reveals its
northeastern boundary to be Manila Bay. Private respondents' land,
therefore, used to adjoin, border or front the Manila Bay and not any of
the two rivers whose torrential action, private respondents insist, is to
account for the accretion on their land. In fact, one of the private
respondents, Sulpicio Pascual, testified in open court that the waves of
Manila Bay used to hit the disputed land being part of the bay's foreshore
but, after he had planted palapat and bakawan trees thereon in 1948, the
land began to rise.[16]
Moreover, there is no dispute as to the location of: (a) the disputed land;
(b) private respondents' own tract of land; (c) the Manila Bay; and, (d) the
Talisay and Bulacan Rivers. Private respondents' own land lies between the
Talisay and Bulacan Rivers; in front of their land on the northern side lies
now the disputed land where before 1948, there lay the Manila Bay. If
the accretion were to be attributed to the action of either or both of the
Talisay and Bulacan Rivers, the alluvium should have been deposited on
either or both of the eastern and western boundaries of private
respondents' own tract of land, not on the northern portion thereof which
is adjacent to the Manila Bay. Clearly lacking, thus, is the third requisite
of accretion, which is, that the alluvium is deposited on the portion of
claimant's land which is adjacent to the river bank.
'Bay. An opening into the land where the water is shut in on all sides
except at the entrance; an inlet of the sea; an arm of the sea, distinct
from a river, a bending or curbing of the shore of the sea or of a lake.' 7
C.J. 1013-1014."[17]
The disputed land, thus, is an accretion not on a river bank but on a sea
bank, or on what used to be the foreshore of Manila Bay which adjoined
private respindents' own tract of land on the northern side. As such, the
applicable law is not Article 457 of the Civil Code but Article 4 of the
Spanish Law of Waters of 1866.
The process by which the disputed land was formed, is not difficult to
discern from the facts of the case. As the trial court correctly observed:
"A perusal of the survey plan x x x of the land subject matter of these
cases shows that on the eastern side, the property is bounded by Talisay
River, on the western side by Bulacan River, on the southern side by Lot
1436 and on the northern side by Manila Bay. It is not correct to state
that the Talisay and Bulacan Rivers meet a certain portion because the
two rivers both flow towards Manila Bay. The Talisay River is straight while
the Bulacan River is a little bit meandering and there is no portion where
the two rivers meet before they end up at Manila Bay. The land which is
adjacent to the property belonging to Pascual cannot be considered an
accretion [caused by the action of the two rivers].
The conclusion formed by the trial court on the basis of the foregoing
observation is that the disputed land is part of the foreshore of Manila
Bay and therefore, part of the public domain. The respondent appellate
court, however, perceived the fact that petitioners' own land lies between
the Talisay and Bulacan Rivers, to be basis to conclude that the disputed
land must be an accretion formed by the action of the two rivers because
private respondents' own land acted as a barricade preventing the two
rivers to meet and that the current of the two rivers carried sediments
of sand and silt downwards to the Manila Bay which accumulated somehow
to a 14-hectare land. These conclusions, however, are fatally incongruous in
the light of the one undisputed critical fact: the accretion was deposited,
not on either the eastern or western portion of private respondents' land
where a river each runs, but on the northern portion of petitioners' land
which adjoins the Manila Bay. Worse, such conclusions are further eroded
of their practical logic and consonance with natural experience in the light
of Sulpicio Pascual's admission as to having planted palapat and bakawan
trees on the northern boundary of their own land. In amplification of this,
plainly more reasonable and valid are Justice Mariano Serrano's
observations in his dissenting opinion when he stated that:
x x x it is established that before 1948 sea water from the Manila Bay at
high tide could reach as far as the dike of appellants' fishpond within their
titled property, which dike now separates this titled property from the
land in question. Even in 1948 when appellants had already planted palapat
and bakawan trees in the land involved, inasmuch as these trees were yet
small, the waves of the sea could still reach the dike. This must be so
because in x x x the survey plan of the titled property approved in 1918,
said titled land was bounded on the north by Manila Bay. So Manila Bay
was adjacent to it on the north. It was only after the planting of the
aforesaid trees in 1948 that the land in question began to rise or to get
higher in elevation.
In the light of the aforecited vintage but still valid law, unequivocal is the
public nature of the disputed land in this controversy, the same being an
accretion on a sea bank which, for all legal purposes, the foreshore of
Manila Bay is. As part of the public domain, the herein disputed land is
intended for public uses, and "so long as the land in litigation belongs to
the national domain and is reserved for public uses, it is not capable of
being appropriated by any private person, except through express
authorization granted in due form by a competent authority."[25] Only the
executive and possibly the legislative departments have the right and the
power to make the declaration that the lands so gained by action of the
sea is no longer necessary for purposes of public utility or for the cause
of establishment of special industries or for coast guard services.[26]
Petitioners utterly fail to show that either the executive or legislative
department has already declared the disputed land as qualified, under
Article 4 of the Spanish Law of Waters of 1866, to be the property of
private respondents as owners of the estates adjacent thereto.
The decision of the Court of First Instance (now the Regional Trial Court),
Branch 1, Balanga, Bataan, is hereby ORDERED REINSTATED.
Costs against private respondents.