HEIRS OF MACARIO MARIANO v. CITY OF NAGA
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| G.R. No. 197743 | March 12, 2018 |
PETITIONER: HEIRS OF JOSE MARIANO and HEIRS OF
ERLINDA MARIANO – VILLANUEVA
RESPONDENTS: CITY OF NAGA
SUMMARY: There is no valid donation of immovable if the
said donation was not made under a public instrument and thus
it cannot defeat any title or right, including the right to possess,
of another party who derives their own right from a title duly
registered under the Torrens system
DOCTRINE: An unlawful detainer case remains as such even
when the issue of ownership is cited as a defense by the
respondent. Although it is limited to resolving issues regarding
material or physical possession of the property the Court can
resolve the issue of ownership provisionally in order to settle
the issue of who has the right to possess the property this
however does not prejudice the filing of another action to settle
the issue of ownership.
FACTS: The City Heights Subdivision (Subdivision) in Naga
City signified to the City of Naga (City) its willingness to
allocate and thereafter donate a 2 hectares parcel of land for the
City Hall within the subdivision with the stipulation that the
Subdivion will be the one to construct the same. The City
however through its then municipal board asked for a bigger
space to which the Subdivision acquiesced thus granting the City
5 hectares which was owned by Don Macario Mariano
(Mariano) along with Jose Gimenez (Gimenez).
their assent to the agreement reached by the City and the
Subdivision. This then resulted to execution of a Deed of
Donation in favour of the City which was signed by the
representatives of the Subdivision and the then Mayor Imperial.
Due to this the City along with other offices and the public
market took possession of the property and started to build their
offices on the same property. Then the Bureau of Public Works
awarded the construction of the City Hall to a local contractor
named Sabaria. The Mayor along with the Subdivision then
promptly questioned the award made by the BPW. The BPW
office however reasoned that since the project will make use of
national funds the BPW can award the project to the person it
sees fit to perform the same. Having lost any recourse the Mayor
as well as the City then agreed to the award by the BPW. The
then Mayor then promised the Subdivision and the owners of the
land that the City will just buy the said property. The City
however failed to fulfill this promise thus even after the death of
Mariano the property remains unpaid.
After the death of Mariano the members of his family
then went on to litigation for the estate this then led to the
awarding of the property to Jose and Erlinda Mariano (Heirs) the
adopted son and daughter of Mariano. During the probate
proceedings after Mariano’s wife died the Court appointed
Danilo David Mariano (Danilo) as the administrator of the
estate. It was only then that they found out about the status of
the property. They then promptly sent a demand to the then
Mayor Robredo for the City to vacate and return the property.
When the City failed to comply with the demand they then filed
before the MTC a Case of Unlawful Detainer against the City to
which the MTC decided to dismiss the case due to lack of
jurisdiction because having given credence to the City’s claim
that there was a donation the MTC found that it is no longer a
Case of Unlawful Detainer. The City then appealed before the
RTC which overturned the decision of the MTC and ruled in
favour of the heirs. This then led to the City appealing before the
CA which partly granted its appeal when it limited the rent
payment to only half of what the Heirs were asking. Both then
filed an appeal before the CA which granted the appeal of the
City thus leading to our present case.
ISSUE/s: Whether or not this is covered under an unlawful
detainer case.
RULING: WHEREFORE, the petition is GRANTED. The
Court of Appeals' Amended Decision dated July 20, 2011 is SET
ASIDE. The Decision dated June 20, 2005 of the Regional
Trial Court, Branch 26 of Naga City in Civil Case No. RTC
2005-0030 is REINSTATED with MODIFICATION in that:
(a) petitioners shall be paid only half of the adjudged
monthly rental of P2, 500, 000; and (b) the award of
attorney's fees is reduced to P75, 000.
RATIO: A.) An unlawful detainer case remains as such even
when the issue of ownership is cited as a defense by the
respondent. Although it is limited to resolving issues regarding
material or physical possession of the property the Court can
resolve the issue of ownership provisionally in order to settle the
issue of who has the right to possess the property this however
does not prejudice the filing of another action to settle the issue
of ownership. In this case since the City raised the defense of
ownership, which does not exclude it from the purview of an
unlawful detainer, the Court can then look into the issue of
ownership to settle the issue.
B.) Generally the law honors any contract in whatever form it is
however this do not apply to certain contractual obligation
wherein the law requires a certain form to be followed. One such
provision is Art 749 of the Civil Code.
Art. 749. In order that the donation of an immovable may
be valid, it must be made in a public document,
specifying therein the property donated and the value of
the charges which the donee must satisfy.
The acceptance may be made in the same deed of
donation or in a separate public document, but it shall
not take effect unless it is done during the lifetime of the
donor.
If the acceptance is made in a separate instrument, the
donor shall be notified thereof in an authentic form, and
this step shall be noted in both instruments.
This provision requires that donation or a deed of donation must
be a public document which under the case of Department of
Education, Culture and Sports (DECS) v. Del Rosario means
that it must be duly notarized and certified by the notary public,
acknowledging that he knows the parties therein, and by the
parties who acknowledges that the instrument is his free act and
deed. In this case there was a defect in the notary. This is because
while it contains a duly notarized acknowledgement the same
was not made by the donor (Mariano and Gimenez) and the
donee (City) rather it was made by the officials of the
Subdivision. Also Mayor Imperial only signed the document 4
days after it was notarized. With that being said the notary public
could not have performed his duty of acknowledging the identity
of the parties which renders the notary invalid making the
instrument a private one rather than public which the law
requires. Thus the City cannot derive its title or rights from the
same.
C.) Since the Deed of Donation appears to have been
unregistered the same cannot defeat the right to possess of the
Heirs who derives their right from the title of the registered
property under their predecessor in interest’s name. Settled is the
rule that “the certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of
the person whose name appears therein. It is conclusive evidence
as regards ownership of the land therein described, and the
titleholder is entitled to all the attributes of ownership of the
property, including possession.” In this case therefore the Heirs
have the better right to possess the property than the City.
D.) There is no automatic acquisition of open space in the
subdivision under the Subdivision regulations especially for
open spaces required for subdivisions. The City cannot claim
that they have the right over the said parcel of land under the
laws provision of open spaces for subdivision this is because the
law provides that such open spaces are non-buildable except if
used under the enumeration provided under the same which does
not cover the City Hall and the market. They cannot also claim
it to be an open space because under the approved subdivision
plan it was designated as the site for the City hall and market.
They also cannot claim it under the provisions for the public
roads given to the government because the same must be first be
offered and donated by the owner-developer and then
subsequently accepted by the government which is not the case
in this matter.
E.) The City cannot also demand that it be made to pay the just
compensation instead of being forced to relinquish the property.
It then relied on the case of Alfonso. The case however is of a
different factual milieu than that of the case at hand because the
Alfonso case is a case of the government exercising its power of
eminent domain which is not the case in our situation. The City
in this case took possession of the property under a donation
which is different from the forced taking under the power of
eminent domain.
F.) The City cannot also claim to be a builder on good faith
because that entails that the party claiming the said defense to be
innocent or unaware of any flaw in his title. In this case the City
was already aware of the flaw from the very start which makes
it a builder in bad faith. In such cases the law provides that:
Art. 449. He who builds, plants or sows in bad faith on
the land of another, loses what is built, planted or sown
without right of indemnity.
 Art. 450. The owner of the land on which anything has Rules of Court. The same is based on the current rental rate for
been built, planted or sown in bad faith may demand properties around the area. In this case the rental rate should be
the demolition of the work, or that the planting or Php 50.00/m2. This is because although it is the City hall that
sowing be removed, in order to replace things in their caused the high property value in the area the possession of the
former condition at the expense of the person who built, property is in bad faith and Section 17 partakes of the form of
planted or sowed; or he may compel the builder or actual damages. Thus it is the City that must adduce the evidence
planter to pay the price of the land, and the sower the that the amount is exorbitant failure to do so would mean that
proper rent. the same is correct. The CA however is correct in saying that the
Heirs is only entitled to ½ of the rent, this is because the said
Therefore the Heirs can appropriate the buildings for their own property is co-owned by the Gimenez and Mariano – the
without indemnifying the City for the same. predecessor in interest of the Heirs – which means that they are
only entitled to Mariano’s share over the rent.
G.) Laches and prescription cannot run as well this is because
the Heirs have not slept on their rights because they were only
able to gain knowledge of the property after the issue of the
estate, which was under litigation for some time, was settled in
which case they promptly made a demand to the City exercising
their right over the property and also even before the death of
Mariano he has already taken steps to settle the property. With
that being said laches cannot apply. Prescription also cannot
apply because under Sec. 44 of Act 496 prescription do not run
for properties registered under the Torrens system. In this case
the estate still owns the registered property as evidenced by their
title thereto which the City lacks therefore even if the City was
in possession of the property for 50 years already prescription
cannot run because the same is registered.

H.) The heirs have the right to restitution in the form of fair rental
value of the property as provided under Sec. 17 of Rule 70 of the