ARTICLE 414 -417

G.R. No. L-30173 September 30, 1971

GAVINO A. TUMALAD and GENEROSA R. TUMALAD, plaintiffs
appellees, vs ALBERTA VICENCIO and EMILIANO SIMEON,
defendants-appellants.
Castillo & Suck for plaintiffs-appellees.
Jose Q. Calingo for defendants-appellants.
REYES, J.B.L., J.:
Case certified to this Court by the Court of Appeals (CA-G.R. No.
27824-R) for the reason that only questions of law are involved.
This case was originally commenced by defendants-appellants in the
municipal court of Manila in Civil Case No. 43073, for ejectment.
Having lost therein, defendants-appellants appealed to the court a
quo (Civil Case No. 30993) which also rendered a decision against
them, the dispositive portion of which follows:
WHEREFORE, the court hereby renders
judgment in favor of the plaintiffs and
against the defendants, ordering the latter to
pay jointly and severally the former a
monthly rent of P200.00 on the house,
subject-matter of this action, from March 27,
1956, to January 14, 1967, with interest at
the legal rate from April 18, 1956, the filing
of the complaint, until fully paid, plus
attorney's fees in the sum of P300.00 and to
pay the costs.
It appears on the records that on 1 September 1955 defendantsappellants executed a chattel mortgage in favor of plaintiffsappellees over their house of strong materials located at No. 550 Int.
3, Quezon Boulevard, Quiapo, Manila, over Lot Nos. 6-B and 7-B,
Block No. 2554, which were being rented from Madrigal & Company,
Inc. The mortgage was registered in the Registry of Deeds of Manila
on 2 September 1955. The herein mortgage was executed to
guarantee a loan of P4,800.00 received from plaintiffs-appellees,
payable within one year at 12% per annum. The mode of payment

was P150.00 monthly, starting September, 1955, up to July 1956,

and the lump sum of P3,150 was payable on or before August, 1956.
It was also agreed that default in the payment of any of the
amortizations, would cause the remaining unpaid balance to
becomeimmediately due and Payable and
the Chattel Mortgage will be enforceable in
accordance with the provisions of Special
Act No. 3135, and for this purpose, the
Sheriff of the City of Manila or any of his
deputies is hereby empowered and
authorized to sell all the Mortgagor's
property after the necessary publication in
order to settle the financial debts of
P4,800.00, plus 12% yearly interest, and
attorney's fees... 2
When defendants-appellants defaulted in paying, the mortgage was
extrajudicially foreclosed, and on 27 March 1956, the house was sold
at public auction pursuant to the said contract. As highest bidder,
plaintiffs-appellees were issued the corresponding certificate of sale.
3
Thereafter, on 18 April 1956, plaintiffs-appellant commenced Civil
Case No. 43073 in the municipal court of Manila, praying, among
other things, that the house be vacated and its possession
surrendered to them, and for defendants-appellants to pay rent of
P200.00 monthly from 27 March 1956 up to the time the possession
is surrendered. 4 On 21 September 1956, the municipal court
rendered its decision
... ordering the defendants to vacate the
premises described in the complaint;
ordering further to pay monthly the amount
of P200.00 from March 27, 1956, until such
(time that) the premises is (sic) completely
vacated; plus attorney's fees of P100.00 and
the costs of the suit. 5
Defendants-appellants, in their answers in both the municipal court
and court a quo impugned the legality of the chattel mortgage,
claiming that they are still the owners of the house; but they waived
the right to introduce evidence, oral or documentary. Instead, they
relied on their memoranda in support of their motion to dismiss,
predicated mainly on the grounds that: (a) the municipal court did not
have jurisdiction to try and decide the case because (1) the issue
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involved, is ownership, and (2) there was no allegation of prior

possession; and (b) failure to prove prior demand pursuant to
Section 2, Rule 72, of the Rules of Court. 6
During the pendency of the appeal to the Court of First Instance,
defendants-appellants failed to deposit the rent for November, 1956
within the first 10 days of December, 1956 as ordered in the decision
of the municipal court. As a result, the court granted plaintiffsappellees' motion for execution, and it was actually issued on 24
January 1957. However, the judgment regarding the surrender of
possession to plaintiffs-appellees could not be executed because the
subject house had been already demolished on 14 January 1957
pursuant to the order of the court in a separate civil case (No. 25816)
for ejectment against the present defendants for non-payment of
rentals on the land on which the house was constructed.
The motion of plaintiffs for dismissal of the appeal, execution of the
supersedeas bond and withdrawal of deposited rentals was denied
for the reason that the liability therefor was disclaimed and was still
being litigated, and under Section 8, Rule 72, rentals deposited had
to be held until final disposition of the appeal. 7
On 7 October 1957, the appellate court of First Instance rendered its
decision, the dispositive portion of which is quoted earlier. The said
decision was appealed by defendants to the Court of Appeals which,
in turn, certified the appeal to this Court. Plaintiffs-appellees failed to
file a brief and this appeal was submitted for decision without it.
Defendants-appellants submitted numerous assignments of error
which can be condensed into two questions, namely: .
(a) Whether the municipal court from which
the case originated had jurisdiction to
adjudicate the same;
(b) Whether the defendants are, under the
law, legally bound to pay rentals to the
plaintiffs during the period of one (1) year
provided by law for the redemption of the
extrajudicially foreclosed house.
We will consider these questions seriatim.

(a) Defendants-appellants mortgagors question the jurisdiction of the

municipal court from which the case originated, and consequently,
the appellate jurisdiction of the Court of First Instance a quo, on the
theory that the chattel mortgage is void ab initio; whence it would
follow that the extrajudicial foreclosure, and necessarily the
consequent auction sale, are also void. Thus, the ownership of the
house still remained with defendants-appellants who are entitled to
possession and not plaintiffs-appellees. Therefore, it is argued by
defendants-appellants, the issue of ownership will have to be
adjudicated first in order to determine possession. lt is contended
further that ownership being in issue, it is the Court of First Instance
which has jurisdiction and not the municipal court.
Defendants-appellants predicate their theory of nullity of the chattel
mortgage on two grounds, which are: (a) that, their signatures on the
chattel mortgage were obtained through fraud, deceit, or trickery;
and (b) that the subject matter of the mortgage is a house of strong
materials, and, being an immovable, it can only be the subject of a
real estate mortgage and not a chattel mortgage.
On the charge of fraud, deceit or trickery, the Court of First Instance
found defendants-appellants' contentions as not supported by
evidence and accordingly dismissed the charge, 8 confirming the
earlier finding of the municipal court that "the defense of ownership
as well as the allegations of fraud and deceit ... are mere
allegations." 9
It has been held in Supia and Batiaco vs. Quintero and Ayala 10 that
"the answer is a mere statement of the facts which the party filing it
expects to prove, but it is not evidence; 11 and further, that when the
question to be determined is one of title, the Court is given the
authority to proceed with the hearing of the cause until this fact is
clearly established. In the case of Sy vs. Dalman, 12 wherein the
defendant was also a successful bidder in an auction sale, it was
likewise held by this Court that in detainer cases the aim of
ownership "is a matter of defense and raises an issue of fact which
should be determined from the evidence at the trial." What
determines jurisdiction are the allegations or averments in the
complaint and the relief asked for. 13
Moreover, even granting that the charge is true, fraud or deceit does
not render a contract void ab initio, and can only be a ground for
rendering the contract voidable or annullable pursuant to Article 1390
of the New Civil Code, by a proper action in court. 14 There is nothing
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on record to show that the mortgage has been annulled. Neither is it

disclosed that steps were taken to nullify the same. Hence,
defendants-appellants' claim of ownership on the basis of a voidable
contract which has not been voided fails.
It is claimed in the alternative by defendants-appellants that even if
there was no fraud, deceit or trickery, the chattel mortgage was still
null and void ab initio because only personal properties can be
subject of a chattel mortgage. The rule about the status of buildings
as immovable property is stated in Lopez vs. Orosa, Jr. and Plaza
Theatre Inc., 15 cited in Associated Insurance Surety Co., Inc. vs. Iya,
et al. 16 to the effect that
... it is obvious that the inclusion of the
building, separate and distinct from the land,
in the enumeration of what may constitute
real properties (art. 415, New Civil Code)
could only mean one thing that a building
is by itself an immovable property
irrespective of whether or not said structure
and the land on which it is adhered to
belong to the same owner.
Certain deviations, however, have been allowed for various reasons.
In the case of Manarang and Manarang vs. Ofilada, 17 this Court
stated that "it is undeniable that the parties to a contract may by
agreement treat as personal property that which by nature would be
real property", citing Standard Oil Company of New York vs.
Jaramillo. 18 In the latter case, the mortgagor conveyed and
transferred to the mortgagee by way of mortgage "the following
described personal property." 19 The "personal property" consisted of
leasehold rights and a building. Again, in the case of Luna vs.
Encarnacion, 20 the subject of the contract designated as Chattel
Mortgage was a house of mixed materials, and this Court hold
therein that it was a valid Chattel mortgage because it was so
expressly designated and specifically that the property given as
security "is a house of mixed materials, which by its very nature is
considered personal property." In the later case of Navarro vs.
Pineda, 21 this Court stated that
The view that parties to a deed of chattel
mortgage may agree to consider a house as
personal property for the purposes of said
contract, "is good only insofar as the

contracting parties are concerned. It is

based, partly, upon the principle of estoppel"
(Evangelista vs. Alto Surety, No. L-11139, 23
April 1958). In a case, a mortgaged house
built on a rented land was held to be a
personal property, not only because the
deed of mortgage considered it as such, but
also because it did not form part of the land
(Evangelists vs. Abad, [CA]; 36 O.G. 2913),
for it is now settled that an object placed on
land by one who had only a temporary right
to the same, such as the lessee or
usufructuary, does not become immobilized
by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao
Sawmill Co., Inc. vs. Castillo, et al., 61 Phil.
709). Hence, if a house belonging to a
person stands on a rented land belonging to
another person, it may be mortgaged as a
personal property as so stipulated in the
document of mortgage. (Evangelista vs.
Abad, Supra.) It should be noted, however
that the principle is predicated on
statements by the owner declaring his
house to be a chattel, a conduct that may
conceivably estop him from subsequently
claiming otherwise. (Ladera vs. C.N.
Hodges, [CA] 48 O.G. 5374): 22
In the contract now before Us, the house on rented land is not only
expressly designated as Chattel Mortgage; it specifically provides
that "the mortgagor ... voluntarily CEDES, SELLS and TRANSFERS
by way of Chattel Mortgage 23 the property together with its leasehold
rights over the lot on which it is constructed and participation ..." 24
Although there is no specific statement referring to the subject house
as personal property, yet by ceding, selling or transferring a property
by way of chattel mortgage defendants-appellants could only have
meant to convey the house as chattel, or at least, intended to treat
the same as such, so that they should not now be allowed to make
an inconsistent stand by claiming otherwise. Moreover, the subject
house stood on a rented lot to which defendats-appellants merely
had a temporary right as lessee, and although this can not in itself
alone determine the status of the property, it does so when combined
with other factors to sustain the interpretation that the parties,
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particularly the mortgagors, intended to treat the house as

personalty. Finally unlike in the Iya cases, Lopez vs. Orosa, Jr. and
Plaza Theatre, Inc. 25 and Leung Yee vs. F. L. Strong Machinery and
Williamson, 26 wherein third persons assailed the validity of the
chattel mortgage, 27 it is the defendants-appellants themselves, as
debtors-mortgagors, who are attacking the validity of the chattel
mortgage in this case. The doctrine of estoppel therefore applies to
the herein defendants-appellants, having treated the subject house
as personalty.
(b) Turning to the question of possession and rentals of the premises
in question. The Court of First Instance noted in its decision that
nearly a year after the foreclosure sale the mortgaged house had
been demolished on 14 and 15 January 1957 by virtue of a decision
obtained by the lessor of the land on which the house stood. For this
reason, the said court limited itself to sentencing the erstwhile
mortgagors to pay plaintiffs a monthly rent of P200.00 from 27 March
1956 (when the chattel mortgage was foreclosed and the house
sold) until 14 January 1957 (when it was torn down by the Sheriff),
plus P300.00 attorney's fees.
Appellants mortgagors question this award, claiming that they were
entitled to remain in possession without any obligation to pay rent
during the one year redemption period after the foreclosure sale, i.e.,
until 27 March 1957. On this issue, We must rule for the appellants.
Chattel mortgages are covered and regulated by the Chattel
Mortgage Law, Act No. 1508. 28 Section 14 of this Act allows the
mortgagee to have the property mortgaged sold at public auction
through a public officer in almost the same manner as that allowed
by Act No. 3135, as amended by Act No. 4118, provided that the
requirements of the law relative to notice and registration are
complied with. 29 In the instant case, the parties specifically stipulated
that "the chattel mortgage will be enforceable in accordance with the
provisions of Special Act No. 3135 ... ." 30 (Emphasis supplied).
Section 6 of the Act referred to 31 provides that the debtor-mortgagor
(defendants-appellants herein) may, at any time within one year from
and after the date of the auction sale, redeem the property sold at
the extra judicial foreclosure sale. Section 7 of the same Act 32 allows
the purchaser of the property to obtain from the court the possession
during the period of redemption: but the same provision expressly
requires the filing of a petition with the proper Court of First Instance
and the furnishing of a bond. It is only upon filing of the proper

motion and the approval of the corresponding bond that the order for
a writ of possession issues as a matter of course. No discretion is left
to the court. 33 In the absence of such a compliance, as in the instant
case, the purchaser can not claim possession during the period of
redemption as a matter of right. In such a case, the governing
provision is Section 34, Rule 39, of the Revised Rules of Court 34
which also applies to properties purchased in extrajudicial
foreclosure proceedings. 35 Construing the said section, this Court
stated in the aforestated case of Reyes vs. Hamada.
In other words, before the expiration of the
1-year period within which the judgmentdebtor or mortgagor may redeem the
property, the purchaser thereof is not
entitled, as a matter of right, to possession
of the same. Thus, while it is true that the
Rules of Court allow the purchaser to
receive the rentals if the purchased property
is occupied by tenants, he is, nevertheless,
accountable to the judgment-debtor or
mortgagor as the case may be, for the
amount so received and the same will be
duly credited against the redemption price
when the said debtor or mortgagor effects
the redemption. Differently stated, the
rentals receivable from tenants, although
they may be collected by the purchaser
during the redemption period, do not belong
to the latter but still pertain to the debtor of
mortgagor. The rationale for the Rule, it
seems, is to secure for the benefit of the
debtor or mortgagor, the payment of the
redemption amount and the consequent
return to him of his properties sold at public
auction. (Emphasis supplied)
The Hamada case reiterates the previous ruling in Chan vs. Espe. 36
Since the defendants-appellants were occupying the house at the
time of the auction sale, they are entitled to remain in possession
during the period of redemption or within one year from and after 27
March 1956, the date of the auction sale, and to collect the rents or
profits during the said period.
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It will be noted further that in the case at bar the period of redemption
had not yet expired when action was instituted in the court of origin,
and that plaintiffs-appellees did not choose to take possession under
Section 7, Act No. 3135, as amended, which is the law selected by
the parties to govern the extrajudicial foreclosure of the chattel
mortgage. Neither was there an allegation to that effect. Since
plaintiffs-appellees' right to possess was not yet born at the filing of
the complaint, there could be no violation or breach thereof.
Wherefore, the original complaint stated no cause of action and was
prematurely filed. For this reason, the same should be ordered
dismissed, even if there was no assignment of error to that effect.
The Supreme Court is clothed with ample authority to review
palpable errors not assigned as such if it finds that their
consideration is necessary in arriving at a just decision of the cases.

On 18 April 1956, the Tumalads commenced case in the municipal court of Manila,
praying that the house be vacated and its possession surrendered to them, and for
Vicencio and Simeon to pay rent of P200.00 monthly up to the time the possession
is surrendered. The municipal court rendered its decision in favor of the Tumalads.
Defendant-appellants impugned the legality of the chattel mortgage claiming that
they are still the owner of the house but waived their rights to introduce evidence.
Nearly a year after the foreclosure sale the mortgaged house had been demolished
on 14 and 15 January 1957 by virtue of a decision obtained by the lessor of the land
on which the house stood for non-payment of rentals.
Issues:

37

1.
It follows that the court below erred in requiring the mortgagors to
pay rents for the year following the foreclosure sale, as well as
attorney's fees.
FOR THE FOREGOING REASONS, the decision appealed from is
reversed and another one entered, dismissing the complaint. With
costs against plaintiffs-appellees.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Castro, Fernando,
Teehankee, Barredo, Villamor and Makasiar, JJ., concur.
Case digestTumalad vs Vicencio41 SCRA 143
Facts:On 1 September 1955 Vicencio and Simeon, defendants-appellants, executed
a chattel mortgage in favor of the Tumalads, plaintiff-appellees over their house of
strong materials over a lot in Quiapo, which were being rented from Madrigal &
Company, Inc. The mortgage was executed to guarantee a loan of P4,800.00
received from the Tumalads, payable within one year at 12% per annum. The mode
of payment was P150.00 monthly, It was also agreed that default in the payment of
any of the amortizations would cause the remaining unpaid balance to become
immediately due and payable, the Chattel Mortgage enforceable, and the Sheriff of
Manila authorized to sell the Mortgagors property after necessary publication.
When Vicencio and Simeon defaulted in paying, the mortgage was extrajudicially
foreclosed, and on 27 March 1956, the house was sold at public auction pursuant to
the said contract. As highest bidder, the Tumalads were issued the corresponding
certificate of sale.

2.

WON the subject matter of the mortgage which is a house of strong

material can be subject of real estate mortgage or a chattel mortgage.
Whether or not the defendants are legally bound to pay rentals to the
plaintiffs during the period of 1 year provided by law for the redemption of
the extrajudicially foreclosed house.

Held:
The inclusion of the building separate and distinct from the land in the enumeration
of what may constitute real property, that the building is by itself an immovable
property. However deviations have been allowed for various reasons specially if it is
stipulated in the subject of contract. In the case at bar, although there is no specific
statement referring to the subject house as a personal property, yet by ceding,
selling or transferring a property by way of chattel mortgage, defendants-appellants
could only have meant to convey the house as a chattel.
Hence if a house belonging to a person stands on a rented land belonging to
another person, it may be mortgaged as a personal property as so stipulated in the
document of mortgage. It should be noted that the principle is predicated on
statements by the owner declaring his house to be chattel. Party in a chattel
mortgage cannot question the validity of the chattel mortgage entered into. The
doctrine of estoppels therefore applies to the defendant-appellants.
Since the defendant-appellants were occupying the house at the time the auction of
sale, they are entitled to remain in possession during the period of redemption or
within one year from the date of auction sale and to collect the rents or profits during
the said period.

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And since the plaintiff-appellees right to posses was not yet born at the filing of the
complaint, there could be no violation or breach thereof.
The Supreme Court reversed the decision appealed from and entered another
dismissing the complaint, with costs against plaintiffs-appellees.

2. G.R. No. L-11658

February 15, 1918

LEUNG YEE, plaintiff-appellant,

vs.
FRANK L. STRONG MACHINERY COMPANY and J. G.
WILLIAMSON, defendants-appellees.
Booram and Mahoney for appellant.
Williams, Ferrier and SyCip for appellees.
CARSON, J.:
The "Compaia Agricola Filipina" bought a considerable quantity of
rice-cleaning machinery company from the defendant machinery
company, and executed a chattel mortgage thereon to secure
payment of the purchase price. It included in the mortgage deed the
building of strong materials in which the machinery was installed,
without any reference to the land on which it stood. The
indebtedness secured by this instrument not having been paid when
it fell due, the mortgaged property was sold by the sheriff, in
pursuance of the terms of the mortgage instrument, and was bought
in by the machinery company. The mortgage was registered in the
chattel mortgage registry, and the sale of the property to the
machinery company in satisfaction of the mortgage was annotated in
the same registry on December 29, 1913.
A few weeks thereafter, on or about the 14th of January, 1914, the
"Compaia Agricola Filipina" executed a deed of sale of the land
upon which the building stood to the machinery company, but this
deed of sale, although executed in a public document, was not
registered. This deed makes no reference to the building erected on
the land and would appear to have been executed for the purpose of
curing any defects which might be found to exist in the machinery
company's title to the building under the sheriff's certificate of sale.

The machinery company went into possession of the building at or

about the time when this sale took place, that is to say, the month of
December, 1913, and it has continued in possession ever since.
At or about the time when the chattel mortgage was executed in
favor of the machinery company, the mortgagor, the "Compaia
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.
This action was instituted by the plaintiff to recover possession of the
building from the machinery company.
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.

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Should it be real property, it shall belong to the

person acquiring it who first recorded it in the
registry.
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.
The registry her referred to is of course the registry of real property,
and it must be apparent that the annotation or inscription of a deed of
sale of real property in a chattel mortgage registry cannot be given
the legal effect of an inscription in the registry of real property. By its
express terms, the Chattel Mortgage Law contemplates and makes
provision for mortgages of personal property; and the sole purpose
and object of the chattel mortgage registry is to provide for the
registry of "Chattel mortgages," that is to say, mortgages of personal
property executed in the manner and form prescribed in the statute.
The building of strong materials in which the rice-cleaning machinery
was installed by the "Compaia Agricola Filipina" was real property,
and the mere fact that the parties seem to have dealt with it separate
and apart from the land on which it stood in no wise changed its
character as real property. It follows that neither the original registry
in the chattel mortgage of the building and the machinery installed
therein, not the annotation in that registry of the sale of the
mortgaged property, had any effect whatever so far as the building
was concerned.
We conclude that the ruling in favor of the machinery company
cannot be sustained on the ground assigned by the trial judge. We
are of opinion, however, that the judgment must be sustained on the
ground that the agreed statement of facts in the court below
discloses that neither the purchase of the building by the plaintiff nor
his inscription of the sheriff's certificate of sale in his favor was made
in good faith, and that the machinery company must be held to be
the owner of the property under the third paragraph of the above
cited article of the code, it appearing that the company first took
possession of the property; and further, that the building and the land
were sold to the machinery company long prior to the date of the
sheriff's sale to the plaintiff.
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:
This rule is always to be understood on the basis of
the good faith mentioned in the first paragraph;
therefore, it having been found that the second
purchasers who record their purchase had
knowledge of the previous sale, the question is to be
decided in accordance with the following paragraph.
(Note 2, art. 1473, Civ. Code, Medina and Maranon
[1911] edition.)
Although article 1473, in its second paragraph,
provides that the title of conveyance of ownership of
the real property that is first recorded in the registry
shall have preference, this provision must always be
understood on the basis of the good faith mentioned
in the first paragraph; the legislator could not have
wished to strike it out and to sanction bad faith, just
to comply with a mere formality which, in given
cases, does not obtain even in real disputes
between third persons. (Note 2, art. 1473, Civ. Code,
issued by the publishers of the La Revista de los
Tribunales, 13th edition.)

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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
"Compaia 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.
But it appearing that he had full knowledge of the machinery
company's claim of ownership when he executed the indemnity bond
and bought in the property at the sheriff's sale, and it appearing
further that the machinery company's claim of ownership was well

founded, he cannot be said to have been an innocent purchaser for

value. He took the risk and must stand by the consequences; and it
is in this sense that we find that he was not a purchaser in good faith.
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.
Arellano, C.J., Johnson, Araullo, Street and Malcolm, JJ., concur.
Torres, Avancea and Fisher, JJ., took no part.
Page 8 of 404

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3.
G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all
surnamed OPOSA, minors, and represented by their parents
ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA,
minor, represented by her parents CALVIN and ROBERTA
SADIUA, CARLO, AMANDA SALUD and PATRISHA, all
surnamed FLORES, minors and represented by their parents
ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor,
represented by her parents SIGRID and DOLORES FORTUN,
GEORGE II and MA. CONCEPCION, all surnamed MISA, minors
and represented by their parents GEORGE and MYRA MISA,
BENJAMIN ALAN V. PESIGAN, minor, represented by his
parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO,
minor, represented by her parents JOSE and MARIA VIOLETA
ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented
by her parents FREDENIL and JANE CASTRO, JOHANNA
DESAMPARADO,
minor, represented by her parents JOSE and ANGELA
DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor,
represented by his parents GREGORIO II and CRISTINE
CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA.
ANGELA and MARIE GABRIELLE, all surnamed SAENZ,
minors, represented by their parents ROBERTO and AURORA
SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and
DAVID IAN, all surnamed KING, minors, represented by their
parents MARIO and HAYDEE KING, DAVID, FRANCISCO and
THERESE VICTORIA, all surnamed ENDRIGA, minors,
represented by their parents BALTAZAR and TERESITA
ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA,
minors, represented by their parents ANTONIO and MARICA
ABAYA, MARILIN, MARIO, JR. and MARIETTE, all surnamed
CARDAMA, minors, represented by their parents MARIO and
LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE
LYN, all surnamed OPOSA, minors and represented by their
parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH,
STEPHEN JOHN and ISAIAH JAMES, all surnamed QUIPIT,
minors, represented by their parents JOSE MAX and VILMI
QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and
FRANCISCO, all surnamed BIBAL, minors, represented by

their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE

PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his
capacity as the Secretary of the Department of Environment
and Natural Resources, and THE HONORABLE ERIBERTO U.
ROSARIO, Presiding Judge of the RTC, Makati, Branch 66,
respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of
Filipinos to a balanced and healthful ecology which the
petitioners dramatically associate with the twin concepts of
"inter-generational responsibility" and "inter-generational
justice." Specifically, it touches on the issue of whether the
said petitioners have a cause of action to "prevent the
misappropriation or impairment" of Philippine rainforests
and "arrest the unabated hemorrhage of the country's vital
life support systems and continued rape of Mother Earth."

The controversy has its genesis in Civil Case No. 90-77

which was filed before Branch 66 (Makati, Metro Manila) of
the Regional Trial Court (RTC), National Capital Judicial
Region. The principal plaintiffs therein, now the principal
petitioners, are all minors duly represented and joined by
their respective parents. Impleaded as an additional plaintiff
is the Philippine Ecological Network, Inc. (PENI), a domestic,
non-stock and non-profit corporation organized for the
purpose of, inter alia, engaging in concerted action geared
for the protection of our environment and natural resources.
The original defendant was the Honorable Fulgencio S.
Factoran, Jr., then Secretary of the Department of
Environment and Natural Resources (DENR). His substitution
in this petition by the new Secretary, the Honorable Angel C.
Page 9 of 404

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Alcala, was subsequently ordered upon proper motion by

the petitioners. 1 The complaint 2 was instituted as a
taxpayers' class suit 3 and alleges that the plaintiffs "are all
citizens of the Republic of the Philippines, taxpayers, and
entitled to the full benefit, use and enjoyment of the natural
resource treasure that is the country's virgin tropical
forests." The same was filed for themselves and others who
are equally concerned about the preservation of said
resource but are "so numerous that it is impracticable to
bring them all before the Court." The minors further
asseverate that they "represent their generation as well as
generations yet unborn." 4 Consequently, it is prayed for
that judgment be rendered:
. . . ordering defendant, his agents, representatives and
other persons acting in his behalf to
(1) Cancel all existing timber license agreements in the
country;
(2) Cease and desist from receiving, accepting, processing,
renewing or approving new timber license agreements.
and granting the plaintiffs ". . . such other reliefs just and
equitable under the premises." 5
The complaint starts off with the general averments that the
Philippine archipelago of 7,100 islands has a land area of
thirty million (30,000,000) hectares and is endowed with
rich, lush and verdant rainforests in which varied, rare and
unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool
which is irreplaceable; they are also the habitat of
indigenous Philippine cultures which have existed, endured
and flourished since time immemorial; scientific evidence
reveals that in order to maintain a balanced and healthful
ecology, the country's land area should be utilized on the
basis of a ratio of fifty-four per cent (54%) for forest cover
and forty-six per cent (46%) for agricultural, residential,
industrial, commercial and other uses; the distortion and
disturbance of this balance as a consequence of
deforestation have resulted in a host of environmental
tragedies, such as (a) water shortages resulting from drying
up of the water table, otherwise known as the "aquifer," as

well as of rivers, brooks and streams, (b) salinization of the

water table as a result of the intrusion therein of salt water,
incontrovertible examples of which may be found in the
island of Cebu and the Municipality of Bacoor, Cavite, (c)
massive erosion and the consequential loss of soil fertility
and agricultural productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic meters per
annum approximately the size of the entire island of
Catanduanes, (d) the endangering and extinction of the
country's unique, rare and varied flora and fauna, (e) the
disturbance and dislocation of cultural communities,
including the disappearance of the Filipino's indigenous
cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life
leading to a critical reduction in marine resource
productivity, (g) recurrent spells of drought as is presently
experienced by the entire country, (h) increasing velocity of
typhoon winds which result from the absence of
windbreakers, (i) the floodings of lowlands and agricultural
plains arising from the absence of the absorbent mechanism
of forests (j) the siltation and shortening of the lifespan of
multi-billion peso dams constructed and operated for the
purpose of supplying water for domestic uses, irrigation and
the generation of electric power, and (k) the reduction of the
earth's capacity to process carbon dioxide gases which has
led to perplexing and catastrophic climatic changes such as
the phenomenon of global warming, otherwise known as the
"greenhouse effect."

Plaintiffs further assert that the adverse and detrimental

consequences of continued and deforestation are so capable
of unquestionable demonstration that the same may be
submitted as a matter of judicial notice. This
notwithstanding, they expressed their intention to present
expert witnesses as well as documentary, photographic and
film evidence in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
Page 10 of 404

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8. Twenty-five (25) years ago, the Philippines had some

sixteen (16) million hectares of rainforests constituting
roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained
no more than 1.2 million hectares of said rainforests or four
per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000
hectares of virgin old-growth rainforests are left, barely 2.8%
of the entire land mass of the Philippine archipelago and
about 3.0 million hectares of immature and uneconomical
secondary growth forests.

11. Public records reveal that the defendant's, predecessors

have granted timber license agreements ('TLA's') to various
corporations to cut the aggregate area of 3.89 million
hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas
covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000
hectares per annum or 25 hectares per hour nighttime,
Saturdays, Sundays and holidays included the Philippines
will be bereft of forest resources after the end of this
ensuing decade, if not earlier.

use, benefit from and enjoy this rare and unique natural
resource treasure.
This act of defendant constitutes a misappropriation and/or
impairment of the natural resource property he holds in
trust for the benefit of plaintiff minors and succeeding
generations.
15. Plaintiffs have a clear and constitutional right to a
balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with
the defendant's office. On March 2, 1990, plaintiffs served
upon defendant a final demand to cancel all logging permits
in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto
attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the
existing TLA's to the continuing serious damage and
extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel
the TLA's is an act violative of the rights of plaintiffs,
especially plaintiff minors who may be left with a country
that is desertified (sic), bare, barren and devoid of the
wonderful flora, fauna and indigenous cultures which the
Philippines had been abundantly blessed with.

13. The adverse effects, disastrous consequences, serious

injury and irreparable damage of this continued trend of
deforestation to the plaintiff minor's generation and to
generations yet unborn are evident and incontrovertible. As
a matter of fact, the environmental damages enumerated in
paragraph 6 hereof are already being felt, experienced and
suffered by the generation of plaintiff adults.

19. Defendant's refusal to cancel the aforementioned TLA's

is manifestly contrary to the public policy enunciated in the
Philippine Environmental Policy which, in pertinent part,
states that it is the policy of the State

14. The continued allowance by defendant of TLA holders to

cut and deforest the remaining forest stands will work great
damage and irreparable injury to plaintiffs especially
plaintiff minors and their successors who may never see,

(b) to fulfill the social, economic and other requirements of

present and future generations of Filipinos and;

(a) to create, develop, maintain and improve conditions

under which man and nature can thrive in productive and
enjoyable harmony with each other;

Page 11 of 404
LAW ON PROPERTY

(c) to ensure the attainment of an environmental quality

that is conductive to a life of dignity and well-being. (P.D.
1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to cancel the
aforementioned TLA's is contradictory to the Constitutional
policy of the State to
a. effect "a more equitable distribution of opportunities,
income and wealth" and "make full and efficient use of
natural resources (sic)." (Section 1, Article XII of the
Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and
resources (sic)" (Section 14, Article XIV, id.);
d. "protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm
and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of
humankind the natural law and violative of plaintiffs'
right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in

law other than the instant action to arrest the unabated
hemorrhage of the country's vital life support systems and
continued rape of Mother Earth. 6
On 22 June 1990, the original defendant, Secretary Factoran,
Jr., filed a Motion to Dismiss the complaint based on two (2)
grounds, namely: (1) the plaintiffs have no cause of action
against him and (2) the issue raised by the plaintiffs is a
political question which properly pertains to the legislative
or executive branches of Government. In their 12 July 1990
Opposition to the Motion, the petitioners maintain that (1)
the complaint shows a clear and unmistakable cause of
action, (2) the motion is dilatory and (3) the action presents
a justiciable question as it involves the defendant's abuse of
discretion.

On 18 July 1991, respondent Judge issued an order granting

the aforementioned motion to dismiss. 7 In the said order,
not only was the defendant's claim that the complaint
states no cause of action against him and that it raises a
political question sustained, the respondent Judge further
ruled that the granting of the relief prayed for would result
in the impairment of contracts which is prohibited by the
fundamental law of the land.
Plaintiffs thus filed the instant special civil action for
certiorari under Rule 65 of the Revised Rules of Court and
ask this Court to rescind and set aside the dismissal order
on the ground that the respondent Judge gravely abused his
discretion in dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but have
also joined the latter in this case. 8
On 14 May 1992, We resolved to give due course to the
petition and required the parties to submit their respective
Memoranda after the Office of the Solicitor General (OSG)
filed a Comment in behalf of the respondents and the
petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and
unmistakably states a cause of action as it contains
sufficient allegations concerning their right to a sound
environment based on Articles 19, 20 and 21 of the Civil
Code (Human Relations), Section 4 of Executive Order (E.O.)
No. 192 creating the DENR, Section 3 of Presidential Decree
(P.D.) No. 1151 (Philippine Environmental Policy), Section 16,
Article II of the 1987 Constitution recognizing the right of the
people to a balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the concept of
man's inalienable right to self-preservation and selfperpetuation embodied in natural law. Petitioners likewise
rely on the respondent's correlative obligation per Section 4
of E.O. No. 192, to safeguard the people's right to a healthful
environment.
It is further claimed that the issue of the respondent
Secretary's alleged grave abuse of discretion in granting
Timber License Agreements (TLAs) to cover more areas for
logging than what is available involves a judicial question.
Page 12 of 404

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Anent the invocation by the respondent Judge of the

Constitution's non-impairment clause, petitioners maintain
that the same does not apply in this case because TLAs are
not contracts. They likewise submit that even if TLAs may be
considered protected by the said clause, it is well settled
that they may still be revoked by the State when the public
interest so requires.
On the other hand, the respondents aver that the petitioners
failed to allege in their complaint a specific legal right
violated by the respondent Secretary for which any relief is
provided by law. They see nothing in the complaint but
vague and nebulous allegations concerning an
"environmental right" which supposedly entitles the
petitioners to the "protection by the state in its capacity as
parens patriae." Such allegations, according to them, do not
reveal a valid cause of action. They then reiterate the theory
that the question of whether logging should be permitted in
the country is a political question which should be properly
addressed to the executive or legislative branches of
Government. They therefore assert that the petitioners'
resources is not to file an action to court, but to lobby before
Congress for the passage of a bill that would ban logging
totally.
As to the matter of the cancellation of the TLAs, respondents
submit that the same cannot be done by the State without
due process of law. Once issued, a TLA remains effective for
a certain period of time usually for twenty-five (25) years.
During its effectivity, the same can neither be revised nor
cancelled unless the holder has been found, after due notice
and hearing, to have violated the terms of the agreement or
other forestry laws and regulations. Petitioners' proposition
to have all the TLAs indiscriminately cancelled without the
requisite hearing would be violative of the requirements of
due process.
Before going any further, We must first focus on some
procedural matters. Petitioners instituted Civil Case No. 90777 as a class suit. The original defendant and the present
respondents did not take issue with this matter.
Nevertheless, We hereby rule that the said civil case is
indeed a class suit. The subject matter of the complaint is of
common and general interest not just to several, but to all

citizens of the Philippines. Consequently, since the parties

are so numerous, it, becomes impracticable, if not totally
impossible, to bring all of them before the court. We likewise
declare that the plaintiffs therein are numerous and
representative enough to ensure the full protection of all
concerned interests. Hence, all the requisites for the filing of
a valid class suit under Section 12, Rule 3 of the Revised
Rules of Court are present both in the said civil case and in
the instant petition, the latter being but an incident to the
former.
This case, however, has a special and novel element.
Petitioners minors assert that they represent their
generation as well as generations yet unborn. We find no
difficulty in ruling that they can, for themselves, for others
of their generation and for the succeeding generations, file a
class suit. Their personality to sue in behalf of the
succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a
balanced and healthful ecology is concerned. Such a right,
as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the
created world in its entirety. 9 Such rhythm and harmony
indispensably include, inter alia, the judicious disposition,
utilization, management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries, wildlife, offshore areas and other natural resources to the end that their
exploration, development and utilization be equitably
accessible to the present as well as future generations. 10
Needless to say, every generation has a responsibility to the
next to preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a little
differently, the minors' assertion of their right to a sound
environment constitutes, at the same time, the performance
of their obligation to ensure the protection of that right for
the generations to come.
The locus standi of the petitioners having thus been
addressed, We shall now proceed to the merits of the
petition.
After a careful perusal of the complaint in question and a
meticulous consideration and evaluation of the issues raised
Page 13 of 404

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and arguments adduced by the parties, We do not hesitate

to find for the petitioners and rule against the respondent
Judge's challenged order for having been issued with grave
abuse of discretion amounting to lack of jurisdiction. The
pertinent portions of the said order reads as follows:

for the first time in our nation's constitutional history, is

solemnly incorporated in the fundamental law. Section 16,
Article II of the 1987 Constitution explicitly provides:

xxx xxx xxx

Sec. 16. The State shall protect and advance the right of the
people to a balanced and healthful ecology in accord with
the rhythm and harmony of nature.

After a careful and circumspect evaluation of the Complaint,

the Court cannot help but agree with the defendant. For
although we believe that plaintiffs have but the noblest of all
intentions, it (sic) fell short of alleging, with sufficient
definiteness, a specific legal right they are seeking to
enforce and protect, or a specific legal wrong they are
seeking to prevent and redress (Sec. 1, Rule 2, RRC).
Furthermore, the Court notes that the Complaint is replete
with vague assumptions and vague conclusions based on
unverified data. In fine, plaintiffs fail to state a cause of
action in its Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter
before it, being impressed with political color and involving a
matter of public policy, may not be taken cognizance of by
this Court without doing violence to the sacred principle of
"Separation of Powers" of the three (3) co-equal branches of
the Government.
The Court is likewise of the impression that it cannot, no
matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist
from receiving, accepting, processing, renewing or
approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 11
We do not agree with the trial court's conclusions that the
plaintiffs failed to allege with sufficient definiteness a
specific legal right involved or a specific legal wrong
committed, and that the complaint is replete with vague
assumptions and conclusions based on unverified data. A
reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal
right the right to a balanced and healthful ecology which,

This right unites with the right to health which is provided

for in the preceding section of the same article:
Sec. 15. The State shall protect and promote the right to
health of the people and instill health consciousness among
them.
While the right to a balanced and healthful ecology is to be
found under the Declaration of Principles and State Policies
and not under the Bill of Rights, it does not follow that it is
less important than any of the civil and political rights
enumerated in the latter. Such a right belongs to a different
category of rights altogether for it concerns nothing less
than self-preservation and self-perpetuation aptly and
fittingly stressed by the petitioners the advancement of
which may even be said to predate all governments and
constitutions. As a matter of fact, these basic rights need
not even be written in the Constitution for they are assumed
to exist from the inception of humankind. If they are now
explicitly mentioned in the fundamental charter, it is
because of the well-founded fear of its framers that unless
the rights to a balanced and healthful ecology and to health
are mandated as state policies by the Constitution itself,
thereby highlighting their continuing importance and
imposing upon the state a solemn obligation to preserve the
first and protect and advance the second, the day would not
be too far when all else would be lost not only for the
present generation, but also for those to come
generations which stand to inherit nothing but parched
earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it
the correlative duty to refrain from impairing the
environment. During the debates on this right in one of the
plenary sessions of the 1986 Constitutional Commission, the
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LAW ON PROPERTY

following exchange transpired between Commissioner

Wilfrido Villacorta and Commissioner Adolfo Azcuna who
sponsored the section in question:

MR. VILLACORTA:
Does this section mandate the State to provide sanctions
against all forms of pollution air, water and noise
pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic)
environment necessarily carries with it the correlative duty
of not impairing the same and, therefore, sanctions may be
provided for impairment of environmental balance. 12
The said right implies, among many other things, the
judicious management and conservation of the country's
forests.
Without such forests, the ecological or environmental
balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and
healthful ecology and the right to health, as well as the
other related provisions of the Constitution concerning the
conservation, development and utilization of the country's
natural resources, 13 then President Corazon C. Aquino
promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of
which expressly mandates that the Department of
Environment and Natural Resources "shall be the primary
government agency responsible for the conservation,
management, development and proper use of the country's
environment and natural resources, specifically forest and
grazing lands, mineral, resources, including those in
reservation and watershed areas, and lands of the public
domain, as well as the licensing and regulation of all natural
resources as may be provided for by law in order to ensure
equitable sharing of the benefits derived therefrom for the
welfare of the present and future generations of Filipinos."
Section 3 thereof makes the following statement of policy:

Sec. 3. Declaration of Policy. It is hereby declared the

policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of
the country's forest, mineral, land, off-shore areas and other
natural resources, including the protection and
enhancement of the quality of the environment, and
equitable access of the different segments of the population
to the development and the use of the country's natural
resources, not only for the present generation but for future
generations as well. It is also the policy of the state to
recognize and apply a true value system including social
and environmental cost implications relative to their
utilization, development and conservation of our natural
resources.

This policy declaration is substantially re-stated it Title XIV,

Book IV of the Administrative Code of 1987, 15 specifically
in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. (1) The State shall ensure,
for the benefit of the Filipino people, the full exploration and
development as well as the judicious disposition, utilization,
management, renewal and conservation of the country's
forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources, consistent with the
necessity of maintaining a sound ecological balance and
protecting and enhancing the quality of the environment
and the objective of making the exploration, development
and utilization of such natural resources equitably accessible
to the different segments of the present as well as future
generations.
(2) The State shall likewise recognize and apply a true value
system that takes into account social and environmental
cost implications relative to the utilization, development and
conservation of our natural resources.
The above provision stresses "the necessity of maintaining a
sound ecological balance and protecting and enhancing the
quality of the environment." Section 2 of the same Title, on
the other hand, specifically speaks of the mandate of the
DENR; however, it makes particular reference to the fact of
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the agency's being subject to law and higher authority. Said

section provides:
Sec. 2. Mandate. (1) The Department of Environment and
Natural Resources shall be primarily responsible for the
implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge
of carrying out the State's constitutional mandate to control
and supervise the exploration, development, utilization, and
conservation of the country's natural resources. Both E.O.
NO. 192 and the Administrative Code of 1987 have set the
objectives which will serve as the bases for policy
formulation, and have defined the powers and functions of
the DENR.
It may, however, be recalled that even before the
ratification of the 1987 Constitution, specific statutes
already paid special attention to the "environmental right"
of the present and future generations. On 6 June 1977, P.D.
No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former
"declared a continuing policy of the State (a) to create,
develop, maintain and improve conditions under which man
and nature can thrive in productive and enjoyable harmony
with each other, (b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos,
and (c) to insure the attainment of an environmental quality
that is conducive to a life of dignity and well-being." 16 As
its goal, it speaks of the "responsibilities of each generation
as trustee and guardian of the environment for succeeding
generations." 17 The latter statute, on the other hand, gave
flesh to the said policy.
Thus, the right of the petitioners (and all those they
represent) to a balanced and healthful ecology is as clear as
the DENR's duty under its mandate and by virtue of its
powers and functions under E.O. No. 192 and the
Administrative Code of 1987 to protect and advance the
said right.
A denial or violation of that right by the other who has the
corelative duty or obligation to respect or protect the same
gives rise to a cause of action. Petitioners maintain that the
granting of the TLAs, which they claim was done with grave

abuse of discretion, violated their right to a balanced and

healthful ecology; hence, the full protection thereof requires
that no further TLAs should be renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal
right or rights of the other; and its essential elements are
legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation
of said legal right. 18
It is settled in this jurisdiction that in a motion to dismiss
based on the ground that the complaint fails to state a
cause of action, 19 the question submitted to the court for
resolution involves the sufficiency of the facts alleged in the
complaint itself. No other matter should be considered;
furthermore, the truth of falsity of the said allegations is
beside the point for the truth thereof is deemed
hypothetically admitted. The only issue to be resolved in
such a case is: admitting such alleged facts to be true, may
the court render a valid judgment in accordance with the
prayer in the complaint? 20 In Militante vs. Edrosolano, 21
this Court laid down the rule that the judiciary should
"exercise the utmost care and circumspection in passing
upon a motion to dismiss on the ground of the absence
thereof [cause of action] lest, by its failure to manifest a
correct appreciation of the facts alleged and deemed
hypothetically admitted, what the law grants or recognizes
is effectively nullified. If that happens, there is a blot on the
legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We

find the statements under the introductory affirmative
allegations, as well as the specific averments under the subheading CAUSE OF ACTION, to be adequate enough to show,
prima facie, the claimed violation of their rights. On the
basis thereof, they may thus be granted, wholly or partly,
the reliefs prayed for. It bears stressing, however, that
insofar as the cancellation of the TLAs is concerned, there is
the need to implead, as party defendants, the grantees
thereof for they are indispensable parties.
Page 16 of 404

LAW ON PROPERTY

The foregoing considered, Civil Case No. 90-777 be said to

raise a political question. Policy formulation or determination
by the executive or legislative branches of Government is
not squarely put in issue. What is principally involved is the
enforcement of a right vis-a-vis policies already formulated
and expressed in legislation. It must, nonetheless, be
emphasized that the political question doctrine is no longer,
the insurmountable obstacle to the exercise of judicial
power or the impenetrable shield that protects executive
and legislative actions from judicial inquiry or review. The
second paragraph of section 1, Article VIII of the Constitution
states that:

In the case now before us, the jurisdictional objection

becomes even less tenable and decisive. The reason is that,
even if we were to assume that the issue presented before
us was political in nature, we would still not be precluded
from revolving it under the expanded jurisdiction conferred
upon us that now covers, in proper cases, even the political
question. Article VII, Section 1, of the Constitution clearly
provides: . . .

Judicial power includes the duty of the courts of justice to

settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.

The Court is likewise of the impression that it cannot, no

matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist
from receiving, accepting, processing, renewing or
approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 24

Commenting on this provision in his book, Philippine Political

Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member
of this Court, says:
The first part of the authority represents the traditional
concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part of the
authority represents a broadening of judicial power to
enable the courts of justice to review what was before
forbidden territory, to wit, the discretion of the political
departments of the government.
As worded, the new provision vests in the judiciary, and
particularly the Supreme Court, the power to rule upon even
the wisdom of the decisions of the executive and the
legislature and to declare their acts invalid for lack or excess
of jurisdiction because tainted with grave abuse of
discretion. The catch, of course, is the meaning of "grave
abuse of discretion," which is a very elastic phrase that can
expand or contract according to the disposition of the
judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for
this Court, noted:

The last ground invoked by the trial court in dismissing the

complaint is the non-impairment of contracts clause found in
the Constitution. The court a quo declared that:

We are not persuaded at all; on the contrary, We are

amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary
did not, for obvious reasons, even invoke in his motion to
dismiss the non-impairment clause. If he had done so, he
would have acted with utmost infidelity to the Government
by providing undue and unwarranted benefits and
advantages to the timber license holders because he would
have forever bound the Government to strictly respect the
said licenses according to their terms and conditions
regardless of changes in policy and the demands of public
interest and welfare. He was aware that as correctly pointed
out by the petitioners, into every timber license must be
read Section 20 of the Forestry Reform Code (P.D. No. 705)
which provides:
. . . Provided, That when the national interest so requires,
the President may amend, modify, replace or rescind any
contract, concession, permit, licenses or any other form of
privilege granted herein . . .

Page 17 of 404
LAW ON PROPERTY

Needless to say, all licenses may thus be revoked or

rescinded by executive action. It is not a contract, property
or a property right protested by the due process clause of
the Constitution. In Tan vs. Director of Forestry, 25 this
Court held:
. . . A timber license is an instrument by which the State
regulates the utilization and disposition of forest resources
to the end that public welfare is promoted. A timber license
is not a contract within the purview of the due process
clause; it is only a license or privilege, which can be validly
withdrawn whenever dictated by public interest or public
welfare as in this case.
A license is merely a permit or privilege to do what
otherwise would be unlawful, and is not a contract between
the authority, federal, state, or municipal, granting it and
the person to whom it is granted; neither is it property or a
property right, nor does it create a vested right; nor is it
taxation (37 C.J. 168). Thus, this Court held that the granting
of license does not create irrevocable rights, neither is it
property or property rights (People vs. Ong Tin, 54 O.G.
7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co.,
Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are the
principal instruments by which the State regulates the
utilization and disposition of forest resources to the end that
public welfare is promoted. And it can hardly be gainsaid
that they merely evidence a privilege granted by the State
to qualified entities, and do not vest in the latter a
permanent or irrevocable right to the particular concession
area and the forest products therein. They may be validly
amended, modified, replaced or rescinded by the Chief
Executive when national interests so require. Thus, they are
not deemed contracts within the purview of the due process
of law clause [See Sections 3(ee) and 20 of Pres. Decree No.
705, as amended. Also, Tan v. Director of Forestry, G.R. No.
L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment
clause, which reads:

Sec. 10. No law impairing, the obligation of contracts shall

be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that the
same are contracts, the instant case does not involve a law
or even an executive issuance declaring the cancellation or
modification of existing timber licenses. Hence, the nonimpairment clause cannot as yet be invoked. Nevertheless,
granting further that a law has actually been passed
mandating cancellations or modifications, the same cannot
still be stigmatized as a violation of the non-impairment
clause. This is because by its very nature and purpose, such
as law could have only been passed in the exercise of the
police power of the state for the purpose of advancing the
right of the people to a balanced and healthful ecology,
promoting their health and enhancing the general welfare.
In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government,
is not meant to be absolute. The same is understood to be
subject to reasonable legislative regulation aimed at the
promotion of public health, moral, safety and welfare. In
other words, the constitutional guaranty of non-impairment
of obligations of contract is limited by the exercise of the
police power of the State, in the interest of public health,
safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New
York, 29 quoted in Philippine American Life Insurance Co.
vs. Auditor General, 30 to wit:
Under our form of government the use of property and the
making of contracts are normally matters of private and not
of public concern. The general rule is that both shall be free
of governmental interference. But neither property rights
nor contract rights are absolute; for government cannot
exist if the citizen may at will use his property to the
detriment of his fellows, or exercise his freedom of contract
to work them harm. Equally fundamental with the private
right is that of the public to regulate it in the common
interest.
Page 18 of 404

LAW ON PROPERTY

In short, the non-impairment clause must yield to the police

power of the state. 31

have therefore sought to clarify, basically to myself, what

the Court appears to be saying.

Finally, it is difficult to imagine, as the trial court did, how

the non-impairment clause could apply with respect to the
prayer to enjoin the respondent Secretary from receiving,
accepting, processing, renewing or approving new timber
licenses for, save in cases of renewal, no contract would
have as of yet existed in the other instances. Moreover, with
respect to renewal, the holder is not entitled to it as a
matter of right.

The Court explicitly states that petitioners have the locus

standi necessary to sustain the bringing and, maintenance
of this suit (Decision, pp. 11-12). Locus standi is not a
function of petitioners' claim that their suit is properly
regarded as a class suit. I understand locus standi to refer to
the legal interest which a plaintiff must have in the subject
matter of the suit. Because of the very broadness of the
concept of "class" here involved membership in this
"class" appears to embrace everyone living in the country
whether now or in the

WHEREFORE, being impressed with merit, the instant

Petition is hereby GRANTED, and the challenged Order of
respondent Judge of 18 July 1991 dismissing Civil Case No.
90-777 is hereby set aside. The petitioners may therefore
amend their complaint to implead as defendants the holders
or grantees of the questioned timber license agreements.

future it appears to me that everyone who may be

expected to benefit from the course of action petitioners
seek to require public respondents to take, is vested with
the necessary locus standi. The Court may be seen therefore
to be recognizing a beneficiaries' right of action in the field
of environmental protection, as against both the public
administrative agency directly concerned and the private
persons or entities operating in the field or sector of activity
involved. Whether such beneficiaries' right of action may be
found under any and all circumstances, or whether some
failure to act, in the first instance, on the part of the
governmental agency concerned must be shown ("prior
exhaustion of administrative remedies"), is not discussed in
the decision and presumably is left for future determination
in an appropriate case.

No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon,
Bellosillo, Melo and Quiason, JJ., concur.

Narvasa, C.J., Puno and Vitug, JJ., took no part.

Separate Opinions
FELICIANO, J., concurring
I join in the result reached by my distinguished brother in
the Court, Davide, Jr., J., in this case which, to my mind, is
one of the most important cases decided by this Court in the
last few years. The seminal principles laid down in this
decision are likely to influence profoundly the direction and
course of the protection and management of the
environment, which of course embraces the utilization of all
the natural resources in the territorial base of our polity. I

The Court has also declared that the complaint has alleged
and focused upon "one specific fundamental legal right
the right to a balanced and healthful ecology" (Decision, p.
14). There is no question that "the right to a balanced and
healthful ecology" is "fundamental" and that, accordingly, it
has been "constitutionalized." But although it is fundamental
in character, I suggest, with very great respect, that it
cannot be characterized as "specific," without doing
excessive violence to language. It is in fact very difficult to
fashion language more comprehensive in scope and
generalized in character than a right to "a balanced and
healthful ecology." The list of particular claims which can be
subsumed under this rubic appears to be entirely openended: prevention and control of emission of toxic fumes
Page 19 of 404

LAW ON PROPERTY

and smoke from factories and motor vehicles; of discharge

of oil, chemical effluents, garbage and raw sewage into
rivers, inland and coastal waters by vessels, oil rigs,
factories, mines and whole communities; of dumping of
organic and inorganic wastes on open land, streets and
thoroughfares; failure to rehabilitate land after strip-mining
or open-pit mining; kaingin or slash-and-burn farming;
destruction of fisheries, coral reefs and other living sea
resources through the use of dynamite or cyanide and other
chemicals; contamination of ground water resources; loss of
certain species of fauna and flora; and so on. The other
statements pointed out by the Court: Section 3, Executive
Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151,
dated 6 June 1977 all appear to be formulations of policy,
as general and abstract as the constitutional statements of
basic policy in Article II, Section 16 ("the right to a
balanced and healthful ecology") and 15 ("the right to
health").
P.D. No. 1152, also dated 6 June 1977, entitled "The
Philippine Environment Code," is, upon the other hand, a
compendious collection of more "specific environment
management policies" and "environment quality standards"
(fourth "Whereas" clause, Preamble) relating to an
extremely wide range of topics:
(a) air quality management;

(v) energy development;

(vi) conservation and utilization of surface and ground
water
(vii) mineral resources
Two (2) points are worth making in this connection. Firstly,
neither petitioners nor the Court has identified the particular
provision or provisions (if any) of the Philippine Environment
Code which give rise to a specific legal right which
petitioners are seeking to enforce. Secondly, the Philippine
Environment Code identifies with notable care the particular
government agency charged with the formulation and
implementation of guidelines and programs dealing with
each of the headings and sub-headings mentioned above.
The Philippine Environment Code does not, in other words,
appear to contemplate action on the part of private persons
who are beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of action
as anchored on a legal right comprised in the constitutional
statements above noted, the Court is in effect saying that
Section 15 (and Section 16) of Article II of the Constitution
are self-executing and judicially enforceable even in their
present form. The implications of this doctrine will have to
be explored in future cases; those implications are too large
and far-reaching in nature even to be hinted at here.

(b) water quality management;

(c) land use management;
(d) natural resources management and conservation
embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;

My suggestion is simply that petitioners must, before the

trial court, show a more specific legal right a right cast in
language of a significantly lower order of generality than
Article II (15) of the Constitution that is or may be
violated by the actions, or failures to act, imputed to the
public respondent by petitioners so that the trial court can
validly render judgment granting all or part of the relief
prayed for. To my mind, the Court should be understood as
simply saying that such a more specific legal right or rights
may well exist in our corpus of law, considering the general
policy principles found in the Constitution and the existence
of the Philippine Environment Code, and that the trial court
should have given petitioners an effective opportunity so to
Page 20 of 404

LAW ON PROPERTY

demonstrate, instead of aborting the proceedings on a

motion to dismiss.
It seems to me important that the legal right which is an
essential component of a cause of action be a specific,
operable legal right, rather than a constitutional or statutory
policy, for at least two (2) reasons. One is that unless the
legal right claimed to have been violated or disregarded is
given specification in operational terms, defendants may
well be unable to defend themselves intelligently and
effectively; in other words, there are due process
dimensions to this matter.
The second is a broader-gauge consideration where a
specific violation of law or applicable regulation is not
alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second
paragraph of Section 1 of Article VIII of the Constitution
which reads:
Section 1. . . .
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis supplied)
When substantive standards as general as "the right to a
balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a
grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to
propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area
of environmental protection and management, our courts
have no claim to special technical competence and
experience and professional qualification. Where no specific,
operable norms and standards are shown to exist, then the
policy making departments the legislative and executive
departments must be given a real and effective
opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should
intervene.

My learned brother Davide, Jr., J., rightly insists that the

timber companies, whose concession agreements or TLA's
petitioners demand public respondents should cancel, must
be impleaded in the proceedings below. It might be asked
that, if petitioners' entitlement to the relief demanded is not
dependent upon proof of breach by the timber companies of
one or more of the specific terms and conditions of their
concession agreements (and this, petitioners implicitly
assume), what will those companies litigate about? The
answer I suggest is that they may seek to dispute the
existence of the specific legal right petitioners should allege,
as well as the reality of the claimed factual nexus between
petitioners' specific legal rights and the claimed wrongful
acts or failures to act of public respondent administrative
agency. They may also controvert the appropriateness of the
remedy or remedies demanded by petitioners, under all the
circumstances which exist.
I vote to grant the Petition for Certiorari because the
protection of the environment, including the forest cover of
our territory, is of extreme importance for the country. The
doctrines set out in the Court's decision issued today should,
however, be subjected to closer examination.
# Separate Opinions
FELICIANO, J., concurring
I join in the result reached by my distinguished brother in
the Court, Davide, Jr., J., in this case which, to my mind, is
one of the most important cases decided by this Court in the
last few years. The seminal principles laid down in this
decision are likely to influence profoundly the direction and
course of the protection and management of the
environment, which of course embraces the utilization of all
the natural resources in the territorial base of our polity. I
have therefore sought to clarify, basically to myself, what
the Court appears to be saying.
The Court explicitly states that petitioners have the locus
standi necessary to sustain the bringing and, maintenance
of this suit (Decision, pp. 11-12). Locus standi is not a
function of petitioners' claim that their suit is properly
regarded as a class suit. I understand locus standi to refer to
the legal interest which a plaintiff must have in the subject
Page 21 of 404

LAW ON PROPERTY

matter of the suit. Because of the very broadness of the

concept of "class" here involved membership in this
"class" appears to embrace everyone living in the country
whether now or in the
future it appears to me that everyone who may be
expected to benefit from the course of action petitioners
seek to require public respondents to take, is vested with
the necessary locus standi. The Court may be seen therefore
to be recognizing a beneficiaries' right of action in the field
of environmental protection, as against both the public
administrative agency directly concerned and the private
persons or entities operating in the field or sector of activity
involved. Whether such beneficiaries' right of action may be
found under any and all circumstances, or whether some
failure to act, in the first instance, on the part of the
governmental agency concerned must be shown ("prior
exhaustion of administrative remedies"), is not discussed in
the decision and presumably is left for future determination
in an appropriate case.
The Court has also declared that the complaint has alleged
and focused upon "one specific fundamental legal right
the right to a balanced and healthful ecology" (Decision, p.
14). There is no question that "the right to a balanced and
healthful ecology" is "fundamental" and that, accordingly, it
has been "constitutionalized." But although it is fundamental
in character, I suggest, with very great respect, that it
cannot be characterized as "specific," without doing
excessive violence to language. It is in fact very difficult to
fashion language more comprehensive in scope and
generalized in character than a right to "a balanced and
healthful ecology." The list of particular claims which can be
subsumed under this rubic appears to be entirely openended: prevention and control of emission of toxic fumes
and smoke from factories and motor vehicles; of discharge
of oil, chemical effluents, garbage and raw sewage into
rivers, inland and coastal waters by vessels, oil rigs,
factories, mines and whole communities; of dumping of
organic and inorganic wastes on open land, streets and
thoroughfares; failure to rehabilitate land after strip-mining
or open-pit mining; kaingin or slash-and-burn farming;
destruction of fisheries, coral reefs and other living sea
resources through the use of dynamite or cyanide and other

chemicals; contamination of ground water resources; loss of

certain species of fauna and flora; and so on. The other
statements pointed out by the Court: Section 3, Executive
Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151,
dated 6 June 1977 all appear to be formulations of policy,
as general and abstract as the constitutional statements of
basic policy in Article II, Section 16 ("the right to a
balanced and healthful ecology") and 15 ("the right to
health").
P.D. No. 1152, also dated 6 June 1977, entitled "The
Philippine Environment Code," is, upon the other hand, a
compendious collection of more "specific environment
management policies" and "environment quality standards"
(fourth "Whereas" clause, Preamble) relating to an
extremely wide range of topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation
embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground
water
(vii) mineral resources
Two (2) points are worth making in this connection. Firstly,
neither petitioners nor the Court has identified the particular
provision or provisions (if any) of the Philippine Environment
Page 22 of 404

LAW ON PROPERTY

Code which give rise to a specific legal right which

petitioners are seeking to enforce. Secondly, the Philippine
Environment Code identifies with notable care the particular
government agency charged with the formulation and
implementation of guidelines and programs dealing with
each of the headings and sub-headings mentioned above.
The Philippine Environment Code does not, in other words,
appear to contemplate action on the part of private persons
who are beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of action
as anchored on a legal right comprised in the constitutional
statements above noted, the Court is in effect saying that
Section 15 (and Section 16) of Article II of the Constitution
are self-executing and judicially enforceable even in their
present form. The implications of this doctrine will have to
be explored in future cases; those implications are too large
and far-reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before the
trial court, show a more specific legal right a right cast in
language of a significantly lower order of generality than
Article II (15) of the Constitution that is or may be
violated by the actions, or failures to act, imputed to the
public respondent by petitioners so that the trial court can
validly render judgment granting all or part of the relief
prayed for. To my mind, the Court should be understood as
simply saying that such a more specific legal right or rights
may well exist in our corpus of law, considering the general
policy principles found in the Constitution and the existence
of the Philippine Environment Code, and that the trial court
should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a
motion to dismiss.
It seems to me important that the legal right which is an
essential component of a cause of action be a specific,
operable legal right, rather than a constitutional or statutory
policy, for at least two (2) reasons. One is that unless the
legal right claimed to have been violated or disregarded is
given specification in operational terms, defendants may
well be unable to defend themselves intelligently and
effectively; in other words, there are due process
dimensions to this matter.

The second is a broader-gauge consideration where a

specific violation of law or applicable regulation is not
alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second
paragraph of Section 1 of Article VIII of the Constitution
which reads:
Section 1. . . .
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis supplied)

When substantive standards as general as "the right to a

balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a
grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to
propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area
of environmental protection and management, our courts
have no claim to special technical competence and
experience and professional qualification. Where no specific,
operable norms and standards are shown to exist, then the
policy making departments the legislative and executive
departments must be given a real and effective
opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should
intervene.
My learned brother Davide, Jr., J., rightly insists that the
timber companies, whose concession agreements or TLA's
petitioners demand public respondents should cancel, must
be impleaded in the proceedings below. It might be asked
that, if petitioners' entitlement to the relief demanded is not
dependent upon proof of breach by the timber companies of
one or more of the specific terms and conditions of their
Page 23 of 404

LAW ON PROPERTY

concession agreements (and this, petitioners implicitly

assume), what will those companies litigate about? The
answer I suggest is that they may seek to dispute the
existence of the specific legal right petitioners should allege,
as well as the reality of the claimed factual nexus between
petitioners' specific legal rights and the claimed wrongful
acts or failures to act of public respondent administrative
agency. They may also controvert the appropriateness of the
remedy or remedies demanded by petitioners, under all the
circumstances which exist.
I vote to grant the Petition for Certiorari because the
protection of the environment, including the forest cover of
our territory, is of extreme importance for the country. The
doctrines set out in the Court's decision issued today should,
however, be subjected to closer examination.
4. G.R. No. L-20329

March 16, 1923

THE STANDARD OIL COMPANY OF NEW YORK, petitioner,

vs.
JOAQUIN JARAMILLO, as register of deeds of the City of
Manila, respondent.
Ross, Lawrence and Selph for petitioner.
City Fiscal Revilla and Assistant City Fiscal Rodas for
respondent.
STREET, J.:
This cause is before us upon demurrer interposed by the
respondent, Joaquin Jaramillo, register of deeds of the City of
Manila, to an original petition of the Standard Oil Company
of New York, seeking a peremptory mandamus to compel
the respondent to record in the proper register a document
purporting to be a chattel mortgage executed in the City of
Manila by Gervasia de la Rosa, Vda. de Vera, in favor of the
Standard Oil Company of New York.
It appears from the petition that on November 27, 1922,
Gervasia de la Rosa, Vda. de Vera, was the lessee of a parcel
of land situated in the City of Manila and owner of the house
of strong materials built thereon, upon which date she
executed a document in the form of a chattel mortgage,
purporting to convey to the petitioner by way of mortgage

both the leasehold interest in said lot and the building which
stands thereon.
The clauses in said document describing the property
intended to be thus mortgage are expressed in the following
words:
Now, therefore, the mortgagor hereby conveys and transfer
to the mortgage, by way of mortgage, the following
described personal property, situated in the City of Manila,
and now in possession of the mortgagor, to wit:
(1) All of the right, title, and interest of the mortgagor in and
to the contract of lease hereinabove referred to, and in and
to the premises the subject of the said lease;
(2) The building, property of the mortgagor, situated on the
aforesaid leased premises.
After said document had been duly acknowledge and
delivered, the petitioner caused the same to be presented to
the respondent, Joaquin Jaramillo, as register of deeds of the
City of Manila, for the purpose of having the same recorded
in the book of record of chattel mortgages. Upon
examination of the instrument, the respondent was of the
opinion that it was not a chattel mortgage, for the reason
that the interest therein mortgaged did not appear to be
personal property, within the meaning of the Chattel
Mortgage Law, and registration was refused on this ground
only.
We are of the opinion that the position taken by the
respondent is untenable; and it is his duty to accept the
proper fee and place the instrument on record. The duties of
a register of deeds in respect to the registration of chattel
mortgage are of a purely ministerial character; and no
provision of law can be cited which confers upon him any
judicial or quasi-judicial power to determine the nature of
any document of which registration is sought as a chattel
mortgage.
The original provisions touching this matter are contained in
section 15 of the Chattel Mortgage Law (Act No. 1508), as
amended by Act No. 2496; but these have been transferred
to section 198 of the Administrative Code, where they are
Page 24 of 404

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now found. There is nothing in any of these provisions

conferring upon the register of deeds any authority
whatever in respect to the "qualification," as the term is
used in Spanish law, of chattel mortgage. His duties in
respect to such instruments are ministerial only. The efficacy
of the act of recording a chattel mortgage consists in the
fact that it operates as constructive notice of the existence
of the contract, and the legal effects of the contract must be
discovered in the instrument itself in relation with the fact of
notice. Registration adds nothing to the instrument,
considered as a source of title, and affects nobody's rights
except as a specifies of notice.
Articles 334 and 335 of the Civil Code supply no absolute
criterion for discriminating between real property and
personal property for purpose of the application of the
Chattel Mortgage Law. Those articles state rules which,
considered as a general doctrine, are law in this jurisdiction;
but it must not be forgotten that under given conditions
property may have character different from that imputed to
it in said articles. It is undeniable that the parties to a
contract may by agreement treat as personal property that
which by nature would be real property; and it is a familiar
phenomenon to see things classed as real property for
purposes of taxation which on general principle might be
considered personal property. Other situations are
constantly arising, and from time to time are presented to
this court, in which the proper classification of one thing or
another as real or personal property may be said to be
doubtful.

The point submitted to us in this case was determined on

September 8, 1914, in an administrative ruling promulgated
by the Honorable James A. Ostrand, now a Justice of this
Court, but acting at that time in the capacity of Judge of the
fourth branch of the Court of First Instance of the Ninth
Judicial District, in the City of Manila; and little of value can
be here added to the observations contained in said ruling.
We accordingly quote therefrom as follows:
It is unnecessary here to determine whether or not the
property described in the document in question is real or

personal; the discussion may be confined to the point as to

whether a register of deeds has authority to deny the
registration of a document purporting to be a chattel
mortgage and executed in the manner and form prescribed
by the Chattel Mortgage Law.
Then, after quoting section 5 of the Chattel Mortgage Law
(Act No. 1508), his Honor continued:
Based principally upon the provisions of section quoted the
Attorney-General of the Philippine Islands, in an opinion
dated August 11, 1909, held that a register of deeds has no
authority to pass upon the capacity of the parties to a
chattel mortgage which is presented to him for record. A
fortiori a register of deeds can have no authority to pass
upon the character of the property sought to be
encumbered by a chattel mortgage. Of course, if the
mortgaged property is real instead of personal the chattel
mortgage would no doubt be held ineffective as against
third parties, but this is a question to be determined by the
courts of justice and not by the register of deeds.
In Leung Yee vs. Frank L. Strong Machinery Co. and
Williamson (37 Phil., 644), this court held that where the
interest conveyed is of the nature of real, property, the
placing of the document on record in the chattel mortgage
register is a futile act; but that decision is not decisive of the
question now before us, which has reference to the function
of the register of deeds in placing the document on record.
In the light of what has been said it becomes unnecessary
for us to pass upon the point whether the interests
conveyed in the instrument now in question are real or
personal; and we declare it to be the duty of the register of
deeds to accept the estimate placed upon the document by
the petitioner and to register it, upon payment of the proper
fee.

The demurrer is overruled; and unless within the period of

five days from the date of the notification hereof, the
respondent shall interpose a sufficient answer to the
petition, the writ of mandamus will be issued, as prayed, but
without costs. So ordered.
Page 25 of 404

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Araullo, C.J., Malcolm, Avancea, Ostrand, Johns, and

Romualdez, JJ., concur.
5. G.R. No. 106041 January 29, 1993
BENGUET CORPORATION, petitioner,
vs.
CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF
ASSESSMENT APPEALS OF ZAMBALES, PROVINCIAL
ASSESSOR OF ZAMBALES, PROVINCE OF ZAMBALES, and
MUNICIPALITY OF SAN MARCELINO, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles
for petitioner.
CRUZ, J.:
The realty tax assessment involved in this case amounts to
P11,319,304.00. It has been imposed on the petitioner's
tailings dam and the land thereunder over its protest.
The controversy arose in 1985 when the Provincial Assessor
of Zambales assessed the said properties as taxable
improvements. The assessment was appealed to the Board
of Assessment Appeals of the Province of Zambales. On
August 24, 1988, the appeal was dismissed mainly on the
ground of the petitioner's "failure to pay the realty taxes
that fell due during the pendency of the appeal."
The petitioner seasonably elevated the matter to the Central
Board of Assessment Appeals, 1 one of the herein
respondents. In its decision dated March 22, 1990, the Board
reversed the dismissal of the appeal but, on the merits,
agreed that "the tailings dam and the lands submerged
thereunder (were) subject to realty tax."
For purposes of taxation the dam is considered as real
property as it comes within the object mentioned in
paragraphs (a) and (b) of Article 415 of the New Civil Code.
It is a construction adhered to the soil which cannot be
separated or detached without breaking the material or
causing destruction on the land upon which it is attached.
The immovable nature of the dam as an improvement
determines its character as real property, hence taxable
under Section 38 of the Real Property Tax Code. (P.D. 464).

Although the dam is partly used as an anti-pollution device,

this Board cannot accede to the request for tax exemption in
the absence of a law authorizing the same.
xxx xxx xxx
We find the appraisal on the land submerged as a result of
the construction of the tailings dam, covered by Tax
Declaration Nos.
002-0260 and 002-0266, to be in accordance with the
Schedule of Market Values for Zambales which was reviewed
and allowed for use by the Ministry (Department) of Finance
in the 1981-1982 general revision. No serious attempt was
made by Petitioner-Appellant Benguet Corporation to
impugn its reasonableness, i.e., that the P50.00 per square
meter applied by Respondent-Appellee Provincial Assessor is
indeed excessive and unconscionable. Hence, we find no
cause to disturb the market value applied by Respondent
Appellee Provincial Assessor of Zambales on the properties
of Petitioner-Appellant Benguet Corporation covered by Tax
Declaration Nos. 002-0260 and 002-0266.
This petition for certiorari now seeks to reverse the above
ruling.
The principal contention of the petitioner is that the tailings
dam is not subject to realty tax because it is not an
"improvement" upon the land within the meaning of the
Real Property Tax Code. More particularly, it is claimed
(1) as regards the tailings dam as an "improvement":
(a) that the tailings dam has no value separate from and
independent of the mine; hence, by itself it cannot be
considered an improvement separately assessable;
(b) that it is an integral part of the mine;
(c) that at the end of the mining operation of the petitioner
corporation in the area, the tailings dam will benefit the
local community by serving as an irrigation facility;

Page 26 of 404
LAW ON PROPERTY

(d) that the building of the dam has stripped the property of
any commercial value as the property is submerged under
water wastes from the mine;
(e) that the tailings dam is an environmental pollution
control device for which petitioner must be commended
rather than penalized with a realty tax assessment;
(f) that the installation and utilization of the tailings dam as
a pollution control device is a requirement imposed by law;
(2) as regards the valuation of the tailings dam and the
submerged lands:
(a) that the subject properties have no market value as they
cannot be sold independently of the mine;
(b) that the valuation of the tailings dam should be based on
its incidental use by petitioner as a water reservoir and not
on the alleged cost of construction of the dam and the
annual build-up expense;
(c) that the "residual value formula" used by the Provincial
Assessor and adopted by respondent CBAA is arbitrary and
erroneous; and
(3) as regards the petitioner's liability for penalties for
non-declaration of the tailings dam and the submerged
lands for realty tax purposes:
(a) that where a tax is not paid in an honest belief that it is
not due, no penalty shall be collected in addition to the
basic tax;
(b) that no other mining companies in the Philippines
operating a tailings dam have been made to declare the
dam for realty tax purposes.
The petitioner does not dispute that the tailings dam may be
considered realty within the meaning of Article 415. It
insists, however, that the dam cannot be subjected to realty
tax as a separate and independent property because it does
not constitute an "assessable improvement" on the mine

although a considerable sum may have been spent in

constructing and maintaining it.
To support its theory, the petitioner cites the following
cases:
1. Municipality of Cotabato v. Santos (105 Phil. 963), where
this Court considered the dikes and gates constructed by
the taxpayer in connection with a fishpond operation as
integral parts of the fishpond.
2. Bislig Bay Lumber Co. v. Provincial Government of Surigao
(100 Phil. 303), involving a road constructed by the timber
concessionaire in the area, where this Court did not impose
a realty tax on the road primarily for two reasons:
In the first place, it cannot be disputed that the ownership of
the road that was constructed by appellee belongs to the
government by right of accession not only because it is
inherently incorporated or attached to the timber land . . .
but also because upon the expiration of the concession said
road would ultimately pass to the national government. . . .
In the second place, while the road was constructed by
appellee primarily for its use and benefit, the privilege is not
exclusive, for . . . appellee cannot prevent the use of
portions of the concession for homesteading purposes. It is
also duty bound to allow the free use of forest products
within the concession for the personal use of individuals
residing in or within the vicinity of the land. . . . In other
words, the government has practically reserved the rights to
use the road to promote its varied activities. Since, as above
shown, the road in question cannot be considered as an
improvement which belongs to appellee, although in part is
for its benefit, it is clear that the same cannot be the subject
of assessment within the meaning of Section 2 of C.A.
No. 470.
Apparently, the realty tax was not imposed not because the
road was an integral part of the lumber concession but
because the government had the right to use the road to
promote its varied activities.
3. Kendrick v. Twin Lakes Reservoir Co. (144 Pacific 884), an
American case, where it was declared that the reservoir dam
Page 27 of 404

LAW ON PROPERTY

went with and formed part of the reservoir and that the dam
would be "worthless and useless except in connection with
the outlet canal, and the water rights in the reservoir
represent and include whatever utility or value there is in
the dam and headgates."

4. Ontario Silver Mining Co. v. Hixon (164 Pacific 498), also

from the United States. This case involved drain tunnels
constructed by plaintiff when it expanded its mining
operations downward, resulting in a constantly increasing
flow of water in the said mine. It was held that:
Whatever value they have is connected with and in fact is
an integral part of the mine itself. Just as much so as any
shaft which descends into the earth or an underground
incline, tunnel, or drift would be which was used in
connection with the mine.
On the other hand, the Solicitor General argues that the
dam is an assessable improvement because it enhances the
value and utility of the mine. The primary function of the
dam is to receive, retain and hold the water coming from the
operations of the mine, and it also enables the petitioner to
impound water, which is then recycled for use in the plant.
There is also ample jurisprudence to support this view, thus:
. . . The said equipment and machinery, as appurtenances to
the gas station building or shed owned by Caltex (as to
which it is subject to realty tax) and which fixtures are
necessary to the operation of the gas station, for without
them the gas station would be useless and which have been
attached or affixed permanently to the gas station site or
embedded therein, are taxable improvements and
machinery within the meaning of the Assessment Law and
the Real Property Tax Code. (Caltex [Phil.] Inc. v. CBAA, 114
SCRA 296).
We hold that while the two storage tanks are not embedded
in the land, they may, nevertheless, be considered as
improvements on the land, enhancing its utility and
rendering it useful to the oil industry. It is undeniable that
the two tanks have been installed with some degree of

permanence as receptacles for the considerable quantities

of oil needed by MERALCO for its operations. (Manila Electric
Co. v. CBAA, 114 SCRA 273).
The pipeline system in question is indubitably a construction
adhering to the soil. It is attached to the land in such a way
that it cannot be separated therefrom without dismantling
the steel pipes which were welded to form the pipeline.
(MERALCO Securities Industrial Corp. v. CBAA, 114 SCRA
261).
The tax upon the dam was properly assessed to the plaintiff
as a tax upon real estate. (Flax-Pond Water Co. v. City of
Lynn, 16 N.E. 742).
The oil tanks are structures within the statute, that they are
designed and used by the owner as permanent
improvement of the free hold, and that for such reasons
they were properly assessed by the respondent taxing
district as improvements. (Standard Oil Co. of New Jersey v.
Atlantic City, 15 A 2d. 271)
The Real Property Tax Code does not carry a definition of
"real property" and simply says that the realty tax is
imposed on "real property, such as lands, buildings,
machinery and other improvements affixed or attached to
real property." In the absence of such a definition, we apply
Article 415 of the Civil Code, the pertinent portions of which
state:
Art. 415. The following are immovable property.
(1) Lands, buildings and constructions of all kinds adhered
to the soil;
xxx xxx xxx
(3) Everything attached to an immovable in a fixed manner,
in such a way that it cannot be separated therefrom without
breaking the material or deterioration of the object.
Section 2 of C.A. No. 470, otherwise known as the
Assessment Law, provides that the realty tax is due "on the
real property, including land, buildings, machinery and other
improvements" not specifically exempted in Section 3
Page 28 of 404

LAW ON PROPERTY

thereof. A reading of that section shows that the tailings

dam of the petitioner does not fall under any of the classes
of exempt real properties therein enumerated.
Is the tailings dam an improvement on the mine? Section
3(k) of the Real Property Tax Code defines improvement as
follows:
(k) Improvements is a valuable addition made to property
or an amelioration in its condition, amounting to more than
mere repairs or replacement of waste, costing labor or
capital and intended to enhance its value, beauty or utility
or to adopt it for new or further purposes.
The term has also been interpreted as "artificial alterations
of the physical condition of the ground that are reasonably
permanent in character." 2

Curiously, the petitioner, while vigorously arguing that the

tailings dam has no separate existence, just as vigorously
contends that at the end of the mining operation the tailings
dam will serve the local community as an irrigation facility,
thereby implying that it can exist independently of the mine.
From the definitions and the cases cited above, it would
appear that whether a structure constitutes an improvement
so as to partake of the status of realty would depend upon
the degree of permanence intended in its construction and
use. The expression "permanent" as applied to an
improvement does not imply that the improvement must be
used perpetually but only until the purpose to which the
principal realty is devoted has been accomplished. It is
sufficient that the improvement is intended to remain as
long as the land to which it is annexed is still used for the
said purpose.

The Court notes that in the Ontario case the plaintiff

admitted that the mine involved therein could not be
operated without the aid of the drain tunnels, which were
indispensable to the successful development and extraction
of the minerals therein. This is not true in the present case.

The Court is convinced that the subject dam falls within the
definition of an "improvement" because it is permanent in
character and it enhances both the value and utility of
petitioner's mine. Moreover, the immovable nature of the
dam defines its character as real property under Article 415
of the Civil Code and thus makes it taxable under Section 38
of the Real Property Tax Code.

Even without the tailings dam, the petitioner's mining

operation can still be carried out because the primary
function of the dam is merely to receive and retain the
wastes and water coming from the mine. There is no
allegation that the water coming from the dam is the sole
source of water for the mining operation so as to make the
dam an integral part of the mine. In fact, as a result of the
construction of the dam, the petitioner can now impound
and recycle water without having to spend for the building
of a water reservoir. And as the petitioner itself points out,
even if the petitioner's mine is shut down or ceases
operation, the dam may still be used for irrigation of the
surrounding areas, again unlike in the Ontario case.

The Court will also reject the contention that the appraisal at
P50.00 per square meter made by the Provincial Assessor is
excessive and that his use of the "residual value formula" is
arbitrary and erroneous.

As correctly observed by the CBAA, the Kendrick case is also

not applicable because it involved water reservoir dams
used for different purposes and for the benefit of the
surrounding areas. By contrast, the tailings dam in question
is being used exclusively for the benefit of the petitioner.

In sustaining this formula, the CBAA gave the following

justification:

Respondent Provincial Assessor explained the use of the

"residual value formula" as follows:
A 50% residual value is applied in the computation because,
while it is true that when slime fills the dike, it will then be
covered by another dike or stage, the stage covered is still
there and still exists and since only one face of the dike is
filled, 50% or the other face is unutilized.

Page 29 of 404
LAW ON PROPERTY

We find the appraisal on the land submerged as a result of

the construction of the tailings dam, covered by Tax
Declaration Nos.
002-0260 and 002-0266, to be in accordance with the
Schedule of Market Values for San Marcelino, Zambales,
which is fifty (50.00) pesos per square meter for third class
industrial land (TSN, page 17, July 5, 1989) and Schedule of
Market Values for Zambales which was reviewed and
allowed for use by the Ministry (Department) of Finance in
the 1981-1982 general revision. No serious attempt was
made by Petitioner-Appellant Benguet Corporation to
impugn its reasonableness, i.e, that the P50.00 per square
meter applied by Respondent-Appellee Provincial Assessor is
indeed excessive and unconscionable. Hence, we find no
cause to disturb the market value applied by RespondentAppellee Provincial Assessor of Zambales on the properties
of Petitioner-Appellant Benguet Corporation covered by Tax
Declaration Nos. 002-0260 and 002-0266.
It has been the long-standing policy of this Court to respect
the conclusions of quasi-judicial agencies like the CBAA,
which, because of the nature of its functions and its frequent
exercise thereof, has developed expertise in the resolution
of assessment problems. The only exception to this rule is
where it is clearly shown that the administrative body has
committed grave abuse of discretion calling for the
intervention of this Court in the exercise of its own powers of
review. There is no such showing in the case at bar.
We disagree, however, with the ruling of respondent CBAA
that it cannot take cognizance of the issue of the propriety
of the penalties imposed upon it, which was raised by the
petitioner for the first time only on appeal. The CBAA held
that this "is an entirely new matter that petitioner can take
up with the Provincial Assessor (and) can be the subject of
another protest before the Local Board or a negotiation with
the local sanggunian . . ., and in case of an adverse decision
by either the Local Board or the local sanggunian, (it can)
elevate the same to this Board for appropriate action."

There is no need for this time-wasting procedure. The Court

may resolve the issue in this petition instead of referring it

back to the local authorities. We have studied the facts and

circumstances of this case as above discussed and find that
the petitioner has acted in good faith in questioning the
assessment on the tailings dam and the land submerged
thereunder. It is clear that it has not done so for the purpose
of evading or delaying the payment of the questioned tax.
Hence, we hold that the petitioner is not subject to penalty
for its
non-declaration of the tailings dam and the submerged
lands for realty tax purposes.
WHEREFORE, the petition is DISMISSED for failure to show
that the questioned decision of respondent Central Board of
Assessment Appeals is tainted with grave abuse of
discretion except as to the imposition of penalties upon the
petitioner which is hereby SET ASIDE. Costs against the
petitioner. It is so ordered.
Narvasa, C.J., Gutierrez, Jr., Padilla, Bidin, Grio-Aquino,
Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo and
Campos, Jr., JJ., concur.
6. DAVAO SAWMILL CO. V. CASTILLO
61 PHIL. 709
Facts:
The Davao Saw Mill Co., Inc., is the holder of a lumber
concession from the Governmentof the Philippine Islands. It
has operated a sawmill in the
Sitio of Maa, barrio of Tigatu, municipality of Davao,
Province of Davao. However, the land upon which the
business was conducted belonged to another person. On the
land the sawmill company erected a building
which housed the machinery used by it. Some of the
implements thus used were clearly personal property, the
conflict concerning machines which were placed and
mounted on foundations of
cement. In the contract of lease between the sawmill
company and the owner of the land there appeared the
following provision:
That on the expiration of the period agreed upon, all the
improvements and buildings introduced and erected by the
Page 30 of 404

LAW ON PROPERTY

party of the second part shall pass to the exclusive

ownership of the party of the first part without any
obligation on its part to pay any amount for said
improvements and buildings; also, in the event the party of
the second part should leave or abandon the land leased
before the time herein stipulated, the
improvements and buildings shall likewise pass to the
ownership of the party of the first part as though the time
agreed upon had expired: Provided, however, That the
machineries and accessories are not included in the
improvements which will pass to the party of the first part
on the expiration or abandonment of the land leased.
The trial judge found that those properties were personal in
nature and as a consequenceabsolved the defendants from
the complaint.
Issue:
Whether or not the trial judge erred in finding that the
subject properties are personal in nature.
Held:
As connecting up with the facts, it should further be
explained that the Davao Saw MillCo., Inc., has on a number
of occasions treated the machinery as personal property by
executing
chattel mortgages in favor of third persons. One of such
persons is the appellee by assignment from the original
mortgages.
Article 334, paragraphs 1 and 5, of the Civil Code, is in
point. According to the Code, realproperty consists of
1. Land, buildings, roads and constructions of all kinds
adhering to the soil;
5. Machinery, liquid containers, instruments or implements
intended by the owner of any building or land for use in
connection with any industry or trade being carried on
therein and which are expressly adapted to meet the
requirements of such trade of industry. Appellant
emphasizes the first paragraph, and appellees the last
mentioned paragraph.
We entertain no doubt that the trial judge and appellees are
right in their appreciation of the legal doctrines flowing from
the facts. The judgment appealed from is hereby affirmed.
7. G.R. No. L-17870

MINDANAO BUS COMPANY, petitioner,

vs.
THE CITY ASSESSOR & TREASURER and the BOARD OF TAX
APPEALS of Cagayan de Oro City, respondents.
Binamira, Barria and Irabagon for petitioner.
Vicente E. Sabellina for respondents.
LABRADOR, J.:
This is a petition for the review of the decision of the
Court of Tax Appeals in C.T.A. Case No. 710 holding that the
petitioner Mindanao Bus Company is liable to the payment
of the realty tax on its maintenance and repair equipment
hereunder referred to.
Respondent City Assessor of Cagayan de Oro City
assessed at P4,400 petitioner's above-mentioned
equipment. Petitioner appealed the assessment to the
respondent Board of Tax Appeals on the ground that the
same are not realty. The Board of Tax Appeals of the City
sustained the city assessor, so petitioner herein filed with
the Court of Tax Appeals a petition for the review of the
assessment.
In the Court of Tax Appeals the parties submitted the
following stipulation of facts:
Petitioner and respondents, thru their respective
counsels agreed to the following stipulation of facts:
1. That petitioner is a public utility solely engaged in
transporting passengers and cargoes by motor trucks, over
its authorized lines in the Island of Mindanao, collecting
rates approved by the Public Service Commission;
2. That petitioner has its main office and shop at Cagayan
de Oro City. It maintains Branch Offices and/or stations at
Iligan City, Lanao; Pagadian, Zamboanga del Sur; Davao City
and Kibawe, Bukidnon Province;

September 29, 1962

Page 31 of 404

LAW ON PROPERTY

3. That the machineries sought to be assessed by the

respondent as real properties are the following:
(a) Hobart Electric Welder Machine, appearing in the
attached photograph, marked Annex "A";
(b) Storm Boring Machine, appearing in the attached
photograph, marked Annex "B";
(c) Lathe machine with motor, appearing in the attached
photograph, marked Annex "C";
(d) Black and Decker Grinder, appearing in the attached
photograph, marked Annex "D";
(e) PEMCO Hydraulic Press, appearing in the attached
photograph, marked Annex "E";
(f) Battery charger (Tungar charge machine) appearing in
the attached photograph, marked Annex "F"; and
(g) D-Engine Waukesha-M-Fuel, appearing in the attached
photograph, marked Annex "G".
4. That these machineries are sitting on cement or wooden
platforms as may be seen in the attached photographs
which form part of this agreed stipulation of facts;
5. That petitioner is the owner of the land where it maintains
and operates a garage for its TPU motor trucks; a repair
shop; blacksmith and carpentry shops, and with these
machineries which are placed therein, its TPU trucks are
made; body constructed; and same are repaired in a
condition to be serviceable in the TPU land transportation
business it operates;
6. That these machineries have never been or were never
used as industrial equipments to produce finished products
for sale, nor to repair machineries, parts and the like offered
to the general public indiscriminately for business or
commercial purposes for which petitioner has never
engaged in, to date.1awphl.nt

The Court of Tax Appeals having sustained the

respondent city assessor's ruling, and having denied a
motion for reconsideration, petitioner brought the case to
this Court assigning the following errors:
1. The Honorable Court of Tax Appeals erred in upholding
respondents' contention that the questioned assessments
are valid; and that said tools, equipments or machineries are
immovable taxable real properties.
2. The Tax Court erred in its interpretation of paragraph 5 of
Article 415 of the New Civil Code, and holding that pursuant
thereto the movable equipments are taxable realties, by
reason of their being intended or destined for use in an
industry.
3. The Court of Tax Appeals erred in denying petitioner's
contention that the respondent City Assessor's power to
assess and levy real estate taxes on machineries is further
restricted by section 31, paragraph (c) of Republic Act No.
521; and
4. The Tax Court erred in denying petitioner's motion for
reconsideration.
Respondents contend that said equipments, tho
movable, are immobilized by destination, in accordance with
paragraph 5 of Article 415 of the New Civil Code which
provides:
Art. 415. The following are immovable properties:
xxx

xxx

xxx

(5) Machinery, receptacles, instruments or implements

intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of
land, and which tend directly to meet the needs of the said
industry or works. (Emphasis ours.)
Note that the stipulation expressly states that the
equipment are placed on wooden or cement platforms. They
can be moved around and about in petitioner's repair shop.
Page 32 of 404

LAW ON PROPERTY

In the case of B. H. Berkenkotter vs. Cu Unjieng, 61 Phil.

663, the Supreme Court said:
Article 344 (Now Art. 415), paragraph (5) of the Civil
Code, gives the character of real property to "machinery,
liquid containers, instruments or implements intended by
the owner of any building or land for use in connection with
any industry or trade being carried on therein and which are
expressly adapted to meet the requirements of such trade
or industry."
If the installation of the machinery and equipment in
question in the central of the Mabalacat Sugar Co., Inc., in
lieu of the other of less capacity existing therein, for its
sugar and industry, converted them into real property by
reason of their purpose, it cannot be said that their
incorporation therewith was not permanent in character
because, as essential and principle elements of a sugar
central, without them the sugar central would be unable to
function or carry on the industrial purpose for which it was
established. Inasmuch as the central is permanent in
character, the necessary machinery and equipment installed
for carrying on the sugar industry for which it has been
established must necessarily be permanent. (Emphasis
ours.)
So that movable equipments to be immobilized in
contemplation of the law must first be "essential and
principal elements" of an industry or works without which
such industry or works would be "unable to function or carry
on the industrial purpose for which it was established." We
may here distinguish, therefore, those movable which
become immobilized by destination because they are
essential and principal elements in the industry for those
which may not be so considered immobilized because they
are merely incidental, not essential and principal. Thus, cash
registers, typewriters, etc., usually found and used in hotels,
restaurants, theaters, etc. are merely incidentals and are
not and should not be considered immobilized by
destination, for these businesses can continue or carry on
their functions without these equity comments. Airline
companies use forklifts, jeep-wagons, pressure pumps, IBM
machines, etc. which are incidentals, not essentials, and
thus retain their movable nature. On the other hand,

machineries of breweries used in the manufacture of liquor

and soft drinks, though movable in nature, are immobilized
because they are essential to said industries; but the
delivery trucks and adding machines which they usually own
and use and are found within their industrial compounds are
merely incidental and retain their movable nature.
Similarly, the tools and equipments in question in this
instant case are, by their nature, not essential and principle
municipal elements of petitioner's business of transporting
passengers and cargoes by motor trucks. They are merely
incidentals acquired as movables and used only for
expediency to facilitate and/or improve its service. Even
without such tools and equipments, its business may be
carried on, as petitioner has carried on, without such
equipments, before the war. The transportation business
could be carried on without the repair or service shop if its
rolling equipment is repaired or serviced in another shop
belonging to another.
The law that governs the determination of the
question at issue is as follows:
Art. 415. The following are immovable property:
xxx

xxx

xxx

(5) Machinery, receptacles, instruments or implements

intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of
land, and which tend directly to meet the needs of the said
industry or works; (Civil Code of the Phil.)
Aside from the element of essentiality the abovequoted provision also requires that the industry or works be
carried on in a building or on a piece of land. Thus in the
case of Berkenkotter vs. Cu Unjieng, supra, the "machinery,
liquid containers, and instruments or implements" are found
in a building constructed on the land. A sawmill would also
be installed in a building on land more or less permanently,
and the sawing is conducted in the land or building.
But in the case at bar the equipments in question are
destined only to repair or service the transportation
Page 33 of 404

LAW ON PROPERTY

business, which is not carried on in a building or

permanently on a piece of land, as demanded by the law.
Said equipments may not, therefore, be deemed real
property.
Resuming what we have set forth above, we hold that
the equipments in question are not absolutely essential to
the petitioner's transportation business, and petitioner's
business is not carried on in a building, tenement or on a
specified land, so said equipment may not be considered
real estate within the meaning of Article 415 (c) of the Civil
Code.
WHEREFORE, the decision subject of the petition for
review is hereby set aside and the equipment in question
declared not subject to assessment as real estate for the
purposes of the real estate tax. Without costs.
So ordered.
8. G.R. No. L-41643

July 31, 1935

B.H. BERKENKOTTER, plaintiff-appellant,

vs.
CU UNJIENG E HIJOS, YEK TONG LIN FIRE AND MARINE
INSURANCE COMPANY, MABALACAT SUGAR COMPANY and
THE PROVINCE SHERIFF OF PAMPANGA, defendantsappellees.
Briones and Martinez for appellant.
Araneta, Zaragoza and Araneta for appellees Cu Unjieng e
Hijos.
No appearance for the other appellees.
VILLA-REAL, J.:
This is an appeal taken by the plaintiff, B.H. Berkenkotter,
from the judgment of the Court of First Instance of Manila,
dismissing said plaintiff's complaint against Cu Unjiengs e
Hijos et al., with costs.
In support of his appeal, the appellant assigns six alleged
errors as committed by the trial court in its decision in

question which will be discussed in the course of this

decision.
The first question to be decided in this appeal, which is
raised in the first assignment of alleged error, is whether or
not the lower court erred in declaring that the additional
machinery and equipment, as improvement incorporated
with the central are subject to the mortgage deed executed
in favor of the defendants Cu Unjieng e Hijos.
It is admitted by the parties that on April 26, 1926, the
Mabalacat Sugar Co., Inc., owner of the sugar central
situated in Mabalacat, Pampanga, obtained from the
defendants, Cu Unjieng e Hijos, a loan secured by a first
mortgage constituted on two parcels and land "with all its
buildings, improvements, sugar-cane mill, steel railway,
telephone line, apparatus, utensils and whatever forms part
or is necessary complement of said sugar-cane mill, steel
railway, telephone line, now existing or that may in the
future exist is said lots."
On October 5, 1926, shortly after said mortgage had been
constituted, the Mabalacat Sugar Co., Inc., decided to
increase the capacity of its sugar central by buying
additional machinery and equipment, so that instead of
milling 150 tons daily, it could produce 250. The estimated
cost of said additional machinery and equipment was
approximately P100,000. In order to carry out this plan, B.A.
Green, president of said corporation, proposed to the
plaintiff, B.H. Berkenkotter, to advance the necessary
amount for the purchase of said machinery and equipment,
promising to reimburse him as soon as he could obtain an
additional loan from the mortgagees, the herein defendants
Cu Unjieng e Hijos. Having agreed to said proposition made
in a letter dated October 5, 1926 (Exhibit E), B.H.
Berkenkotter, on October 9th of the same year, delivered
the sum of P1,710 to B.A. Green, president of the Mabalacat
Sugar Co., Inc., the total amount supplied by him to said
B.A. Green having been P25,750. Furthermore, B.H.
Berkenkotter had a credit of P22,000 against said
corporation for unpaid salary. With the loan of P25,750 and
said credit of P22,000, the Mabalacat Sugar Co., Inc.,
purchased the additional machinery and equipment now in
litigation.
Page 34 of 404

LAW ON PROPERTY

On June 10, 1927, B.A. Green, president of the Mabalacat

Sugar Co., Inc., applied to Cu Unjieng e Hijos for an
additional loan of P75,000 offering as security the additional
machinery and equipment acquired by said B.A. Green and
installed in the sugar central after the execution of the
original mortgage deed, on April 27, 1927, together with
whatever additional equipment acquired with said loan. B.A.
Green failed to obtain said loan.
Article 1877 of the Civil Code provides as follows.
ART. 1877. A mortgage includes all natural accessions,
improvements, growing fruits, and rents not collected when
the obligation falls due, and the amount of any indemnities
paid or due the owner by the insurers of the mortgaged
property or by virtue of the exercise of the power of eminent
domain, with the declarations, amplifications, and
limitations established by law, whether the estate continues
in the possession of the person who mortgaged it or
whether it passes into the hands of a third person.
In the case of Bischoff vs. Pomar and Compaia General de
Tabacos (12 Phil., 690), cited with approval in the case of
Cea vs. Villanueva (18 Phil., 538), this court laid shown the
following doctrine:
1. REALTY; MORTGAGE OF REAL ESTATE INCLUDES
IMPROVEMENTS AND FIXTURES. It is a rule, established by
the Civil Code and also by the Mortgage Law, with which the
decisions of the courts of the United States are in accord,
that in a mortgage of real estate, the improvements on the
same are included; therefore, all objects permanently
attached to a mortgaged building or land, although they
may have been placed there after the mortgage was
constituted, are also included. (Arts. 110 and 111 of the
Mortgage Law, and 1877 of the Civil Code; decision of U.S.
Supreme Court in the matter of Royal Insurance Co. vs. R.
Miller, liquidator, and Amadeo [26 Sup. Ct. Rep., 46; 199
U.S., 353].)
2. ID.; ID.; INCLUSION OR EXCLUSION OF MACHINERY, ETC.
In order that it may be understood that the machinery and
other objects placed upon and used in connection with a

mortgaged estate are excluded from the mortgage, when it

was stated in the mortgage that the improvements,
buildings, and machinery that existed thereon were also
comprehended, it is indispensable that the exclusion thereof
be stipulated between the contracting parties.
The appellant contends that the installation of the
machinery and equipment claimed by him in the sugar
central of the Mabalacat Sugar Company, Inc., was not
permanent in character inasmuch as B.A. Green, in
proposing to him to advance the money for the purchase
thereof, made it appear in the letter, Exhibit E, that in case
B.A. Green should fail to obtain an additional loan from the
defendants Cu Unjieng e Hijos, said machinery and
equipment would become security therefor, said B.A. Green
binding himself not to mortgage nor encumber them to
anybody until said plaintiff be fully reimbursed for the
corporation's indebtedness to him.
Upon acquiring the machinery and equipment in question
with money obtained as loan from the plaintiff-appellant by
B.A. Green, as president of the Mabalacat Sugar Co., Inc.,
the latter became owner of said machinery and equipment,
otherwise B.A. Green, as such president, could not have
offered them to the plaintiff as security for the payment of
his credit.
Article 334, paragraph 5, of the Civil Code gives the
character of real property to "machinery, liquid containers,
instruments or implements intended by the owner of any
building or land for use in connection with any industry or
trade being carried on therein and which are expressly
adapted to meet the requirements of such trade or industry.
If the installation of the machinery and equipment in
question in the central of the Mabalacat Sugar Co., Inc., in
lieu of the other of less capacity existing therein, for its
sugar industry, converted them into real property by reason
of their purpose, it cannot be said that their incorporation
therewith was not permanent in character because, as
essential and principal elements of a sugar central, without
them the sugar central would be unable to function or carry
on the industrial purpose for which it was established.
Inasmuch as the central is permanent in character, the
Page 35 of 404

LAW ON PROPERTY

necessary machinery and equipment installed for carrying

on the sugar industry for which it has been established must
necessarily be permanent.

incorporation thereof with the mortgaged sugar central,

does not vest the creditor with ownership of said machinery
and equipment but simply with the right of redemption.

Furthermore, the fact that B.A. Green bound himself to the

plaintiff B.H. Berkenkotter to hold said machinery and
equipment as security for the payment of the latter's credit
and to refrain from mortgaging or otherwise encumbering
them until Berkenkotter has been fully reimbursed therefor,
is not incompatible with the permanent character of the
incorporation of said machinery and equipment with the
sugar central of the Mabalacat Sugar Co., Inc., as nothing
could prevent B.A. Green from giving them as security at
least under a second mortgage.

Wherefore, finding no error in the appealed judgment, it is

affirmed in all its parts, with costs to the appellant. So
ordered.

As to the alleged sale of said machinery and equipment to

the plaintiff and appellant after they had been permanently
incorporated with sugar central of the Mabalacat Sugar Co.,
Inc., and while the mortgage constituted on said sugar
central to Cu Unjieng e Hijos remained in force, only the
right of redemption of the vendor Mabalacat Sugar Co., Inc.,
in the sugar central with which said machinery and
equipment had been incorporated, was transferred thereby,
subject to the right of the defendants Cu Unjieng e Hijos
under the first mortgage.
For the foregoing considerations, we are of the opinion and
so hold: (1) That the installation of a machinery and
equipment in a mortgaged sugar central, in lieu of another
of less capacity, for the purpose of carrying out the
industrial functions of the latter and increasing production,
constitutes a permanent improvement on said sugar central
and subjects said machinery and equipment to the
mortgage constituted thereon (article 1877, Civil Code); (2)
that the fact that the purchaser of the new machinery and
equipment has bound himself to the person supplying him
the purchase money to hold them as security for the
payment of the latter's credit, and to refrain from
mortgaging or otherwise encumbering them does not alter
the permanent character of the incorporation of said
machinery and equipment with the central; and (3) that the
sale of the machinery and equipment in question by the
purchaser who was supplied the purchase money, as a loan,
to the person who supplied the money, after the

DIGESTED VERSION BH Berkenkotter vs Cu Unjieng

61 Phil 663
Facts:
The Mabalacat Sugar Co., Inc., owner of the sugar central situated in Mabalacat,
Pampanga, obtained from Cu Unjieng e Hijos, a loan secured by a first mortgage
constituted on two parcels and land "with all its buildings, improvements, sugar-cane
mill, steel railway, telephone line, apparatus, utensils and whatever forms part or is
necessary complement of said sugar-cane mill, steel railway, telephone line, now
existing or that may in the future exist is said lots.
Shortly after said mortgage had been constituted, the Mabalacat Sugar Co., Inc.,
decided to increase the capacity of its sugar central by buying additional machinery
and equipment, so that instead of milling 150 tons daily, it could produce 250. The
estimated cost of said additional machinery and equipment was approximately
P100,000. In order to carry out this plan, A. Green, president of said corporation,
proposed to the plaintiff, B.H. Berkenkotter, to advance the necessary amount for
the purchase of said machinery and equipment.
The president of the Mabalacat Sugar Co., Inc., applied to Cu Unjieng e Hijos for an
additional loan of P75,000 offering as security the additional machinery and
equipment acquired by said B.A. Green and installed in the sugar central after the
execution of the original mortgage deed, on April 27, 1927, together with whatever
additional equipment acquired with said loan. B.A. Green failed to obtain said loan.
Issues:
Whether or not, the lower court erred in declaring that the additional machinery and
equipment as improvement can be permanently attached to a mortgage of the sugar
central.
Held:

Page 36 of 404
LAW ON PROPERTY

That the installation of a machinery and equipment in a mortgaged sugar central, in

lieu of another of less capacity, for the purpose of carrying out the industrial
functions of the latter and increasing production, constitutes a permanent
improvement on said sugar central and subjects said machinery and equipment to
the mortgage constituted thereon.

9. G.R. No. L-17898

October 31, 1962

PASTOR D. AGO, petitioner,

vs.
THE HON. COURT OF APPEALS, HON. MONTANO A. ORTIZ,
Judge of the Court of First Instance of Agusan, THE
PROVINCIAL SHERIFF OF SURIGAO and GRACE PARK
ENGINEERING, INC., respondents.
Jose M. Luison for petitioner.
Norberto J. Quisumbing for respondent Grace Park
Engineering, Inc.
The Provincial Fiscal of Surigao for respondent Sheriff of
Surigao.
LABRABOR, J.:
Appeal by certiorari to review the decision of respondent
Court of Appeals in CA-G.R. No. 26723-R entitled "Pastor D.
Ago vs. The Provincial Sheriff of Surigao, et al." which in part
reads:
In this case for certiorari and prohibition with preliminary
injunction, it appears from the records that the respondent
Judge of the Court of First Instance of Agusan rendered
judgment (Annex "A") in open court on January 28, 1959,
basing said judgment on a compromise agreement between
the parties.

reconsideration was denied by the court below in the order

of November 14, 1959.
Petitioner now contends that the respondent Judge
exceeded in his jurisdiction in rendering the execution
without valid and formal notice of the decision.
A compromise agreement is binding between the parties
and becomes the law between them. (Gonzales vs. Gonzales
G.R. No. L-1254, May 21, 1948, 81 Phil. 38; Martin vs.
Martin, G.R. No. L-12439, May 22, 1959) .
It is a general rule in this jurisdiction that a judgment based
on a compromise agreement is not appealable and is
immediately executory, unless a motion is filed on the
ground fraud, mistake or duress. (De los Reyes vs. Ugarte,
75 Phil. 505; Lapena vs. Morfe, G.R. No. L-10089, July 31,
1957)
Petitioner's claim that he was not notified or served notice of
the decision is untenable. The judgment on the compromise
agreement rendered by the court below dated January 28,
1959, was given in open court. This alone is a substantial
compliance as to notice. (De los Reyes vs. Ugarte, supra)
IN VIEW THEREOF, we believe that the lower court did not
exceed nor abuse its jurisdiction in ordering the execution of
the judgment. The petition for certiorari is hereby dismissed
and the writ of preliminary injunction heretofore dissolved,
with costs against the petitioner.
IT IS SO ORDERED.

On August 15, 1959, upon petition, the Court of First

Instance issued a writ of execution.

The facts of the case may be briefly stated as follows: In

1957, petitioner Pastor D. Ago bought sawmill machineries
and equipments from respondent Grace Park Engineer
domineering, Inc., executing a chattel mortgage over said
machineries and equipments to secure the payment of
balance of the price remaining unpaid of P32,000.00, which
petitioner agreed to pay on installment basis.

Petitioner's motion for reconsideration dated October 12,

1959 alleges that he, or his counsel, did not receive a formal
and valid notice of said decision, which motion for

Petitioner Ago defaulted in his payment and so, in 1958

respondent Grace Park Engineering, Inc. instituted extrajudicial foreclosure proceedings of the mortgage. To enjoin
Page 37 of 404

LAW ON PROPERTY

said foreclosure, petitioner herein instituted Special Civil

Case No. 53 in the Court of First Instance of Agusan. The
parties to the case arrived at a compromise agreement and
submitted the same in court in writing, signed by Pastor D.
Ago and the Grace Park Engineering, Inc. The Hon. Montano
A. Ortiz, Judge of the Court of First Instance of Agusan, then
presiding, dictated a decision in open court on January 28,
1959.
Petitioner continued to default in his payments as provided
in the judgment by compromise, so Grace Park Engineering,
Inc. filed with the lower court a motion for execution, which
was granted by the court on August 15, 1959. A writ of
execution, dated September 23, 1959, later followed.
The herein respondent, Provincial Sheriff of Surigao, acting
upon the writ of execution issued by the lower court, levied
upon and ordered the sale of the sawmill machineries and
equipments in question. These machineries and equipments
had been taken to and installed in a sawmill building located
in Lianga, Surigao del Sur, and owned by the Golden Pacific
Sawmill, Inc., to whom, petitioner alleges, he had sold them
on February 16, 1959 (a date after the decision of the lower
court but before levy by the Sheriff).
Having been advised by the sheriff that the public auction
sale was set for December 4, 1959, petitioner, on December
1, 1959, filed the petition for certiorari and prohibition with
preliminary injunction with respondent Court of Appeals,
alleging that a copy of the aforementioned judgment given
in open court on January 28, 1959 was served upon counsel
for petitioner only on September 25, 1959 (writ of execution
is dated September 23, 1959); that the order and writ of
execution having been issued by the lower court before
counsel for petitioner received a copy of the judgment, its
resultant last order that the "sheriff may now proceed with
the sale of the properties levied constituted a grave abuse
of discretion and was in excess of its jurisdiction; and that
the respondent Provincial Sheriff of Surigao was acting
illegally upon the allegedly void writ of execution by levying
the same upon the sawmill machineries and equipments
which have become real properties of the Golden Pacific
sawmill, Inc., and is about to proceed in selling the same
without prior publication of the notice of sale thereof in

some newspaper of general circulation as required by the

Rules of Court.
The Court of Appeals, on December 8, 1959, issued a writ of
preliminary injunction against the sheriff but it turned out
that the latter had already sold at public auction the
machineries in question, on December 4, 1959, as
scheduled. The respondent Grace Park Engineering, Inc. was
the only bidder for P15,000.00, although the certificate sale
was not yet executed. The Court of Appeals constructed the
sheriff to suspend the issuance of a certificate of sale of the
said sawmill machineries and equipment sold by him on
December 4, 1959 until the final decision of the case. On
November 9, 1960 the Court of Appeals rendered the
aforequoted decision.
Before this Court, petitioner alleges that the Court of
Appeals erred (1) in holding that the rendition of judgment
on compromise in open court on January 1959 was a
sufficient notice; and (2) in not resolving the other issues
raised before it, namely, (a) the legality of the public auction
sale made by the sheriff, and (b) the nature of the
machineries in question, whether they are movables or
immovables.
The Court of Appeals held that as a judgment was entered
by the court below in open court upon the submission of the
compromise agreement, the parties may be considered as
having been notified of said judgment and this fact
constitutes due notice of said judgment. This raises the
following legal question: Is the order dictated in open court
of the judgment of the court, and is the fact the petitioner
herein was present in open court was the judgment was
dictated, sufficient notice thereof? The provisions of the
Rules of Court decree otherwise. Section 1 of Rule 35
describes the manner in which judgment shall be rendered,
thus:
SECTION 1. How judgment rendered. All judgments
determining the merits of cases shall be in writing
personally and directly prepared by the judge, and signed by
him, stating clearly and distinctly the facts and the law on
which it is based, filed with the clerk of the court.
Page 38 of 404

LAW ON PROPERTY

The court of first instance being a court of record, in order

that a judgment may be considered as rendered, must not
only be in writing, signed by the judge, but it must also be
filed with the clerk of court. The mere pronouncement of the
judgment in open court with the stenographer taking note
thereof does not, therefore, constitute a rendition of the
judgment. It is the filing of the signed decision with the clerk
of court that constitutes rendition. While it is to be
presumed that the judgment that was dictated in open court
will be the judgment of the court, the court may still modify
said order as the same is being put into writing. And even if
the order or judgment has already been put into writing and
signed, while it has not yet been delivered to the clerk for
filing it is still subject to amendment or change by the judge.
It is only when the judgment signed by the judge is actually
filed with the clerk of court that it becomes a valid and
binding judgment. Prior thereto, it could still be subject to
amendment and change and may not, therefore, constitute
the real judgment of the court.
Regarding the notice of judgment, the mere fact that a party
heard the judge dictating the judgment in open court, is not
a valid notice of said judgment. If rendition thereof is
constituted by the filing with the clerk of court of a signed
copy (of the judgment), it is evident that the fact that a
party or an attorney heard the order or judgment being
dictated in court cannot be considered as notice of the real
judgment. No judgment can be notified to the parties unless
it has previously been rendered. The notice, therefore, that
a party has of a judgment that was being dictated is of no
effect because at the time no judgment has as yet been
signed by the judge and filed with the clerk.

court; it is necessary that he be served with a copy of the

signed judgment that has been filed with the clerk in order
that he may legally be considered as having been served
with the judgment.
For all the foregoing, the fact that the petitioner herein
heard the trial judge dictating the judgment in open court, is
not sufficient to constitute the service of judgement as
required by the above-quoted section 7 of Rule 2 the signed
judgment not having been served upon the petitioner, said
judgment could not be effective upon him (petitioner) who
had not received it. It follows as a consequence that the
issuance of the writ of execution null and void, having been
issued before petitioner her was served, personally or by
registered mail, a copy of the decision.
The second question raised in this appeal, which has been
passed upon by the Court of Appeals, concerns the validity
of the proceedings of the sheriff in selling the sawmill
machineries and equipments at public auction with a notice
of the sale having been previously published.
The record shows that after petitioner herein Pastor D. Ago
had purchased the sawmill machineries and equipments he
assigned the same to the Golden Pacific Sawmill, Inc. in
payment of his subscription to the shares of stock of said
corporation. Thereafter the sawmill machinery and
equipments were installed in a building and permanently
attached to the ground. By reason of such installment in a
building, the said sawmill machineries and equipment
became real estate properties in accordance with the
provision of Art. 415 (5) of the Civil Code, thus:

Besides, the Rules expressly require that final orders or

judgments be served personally or by registered mail.
Section 7 of Rule 27 provides as follows:

ART. 415. The following are immovable property:

SEC. 7. Service of final orders or judgments. Final orders

or judgments shall be served either personally or by
registered mail.

(5) Machinery, receptacles, instruments or implements

tended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of
land, and which tend directly to meet the needs of the said
industry or works;

In accordance with this provision, a party is not considered

as having been served with the judgment merely because
he heard the judgment dictating the said judgment in open

xxx

xxx

xxx

Page 39 of 404
LAW ON PROPERTY

This Court in interpreting a similar question raised before it

in the case of Berkenkotter vs. Cu Unjieng e Hijos, 61 Phil.
683, held that the installation of the machine and
equipment in the central of the Mabalacat Sugar Co., Inc. for
use in connection with the industry carried by the company,
converted the said machinery and equipment into real
estate by reason of their purpose. Paraphrasing language of
said decision we hold that by the installment of the sawmill
machineries in the building of the Gold Pacific Sawmill, Inc.,
for use in the sawing of logs carried on in said building, the
same became a necessary and permanent part of the
building or real estate on which the same was constructed,
converting the said machineries and equipments into real
estate within the meaning of Article 415(5) above-quoted of
the Civil Code of the Philippines.
Considering that the machineries and equipments in
question valued at more than P15,000.00 appear to have
been sold without the necessary advertisement of sale by
publication in a newspaper, as required in Sec. 16 of Rule 39
of the Rules of Court, which is as follows:
SEC. 16. Notice of sale of property on execution. Before
the sale of property on execution, notice thereof must be
given as follows:
xxx

xxx

xxx

(c) In case of real property, by posting a similar notice

particularly describing the property for twenty days in three
public places in the municipality or city where the property
is situated, and also where the property is to be sold, and, if
the assessed value of the property exceeds four hundred
pesos, by publishing a copy of the notice once a week, for
the same period, in some newspaper published or having
general circulation in the province, if there be one. If there
are newspapers published in the province in both the
English and Spanish languages, then a like publication for a
like period shall be made in one newspaper published in the
English language, and in one published in the Spanish
language.
the sale made by the sheriff must be declared null and void.

WHEREFORE, the decision of the Court of Appeals sought to

be reviewed is hereby set aside and We declare that the
issuance of the writ of execution in this case against the
sawmill machineries and equipments purchased by
petitioner Pastor D. Ago from the Grace Park Engineering,
Inc., as well as the sale of the same by the Sheriff of
Surigao, are null and void. Costs shall be against the
respondent Grace Park Engineering, Inc.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L.,
Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
Padilla, J., took no part.
10. G.R. No. L-58469 May 16, 1983
MAKATI LEASING and FINANCE CORPORATION, petitioner,
vs.
WEAREVER TEXTILE MILLS, INC., and HONORABLE COURT OF
APPEALS, respondents.
Loreto C. Baduan for petitioner.
Ramon D. Bagatsing & Assoc. (collaborating counsel) for
petitioner.
Jose V. Mancella for respondent.

DE CASTRO, J.:
Petition for review on certiorari of the decision of the Court
of Appeals (now Intermediate Appellate Court) promulgated
on August 27, 1981 in CA-G.R. No. SP-12731, setting aside
certain Orders later specified herein, of Judge Ricardo J.
Francisco, as Presiding Judge of the Court of First instance of
Rizal Branch VI, issued in Civil Case No. 36040, as wen as
the resolution dated September 22, 1981 of the said
appellate court, denying petitioner's motion for
reconsideration.
It appears that in order to obtain financial accommodations
from herein petitioner Makati Leasing and Finance
Corporation, the private respondent Wearever Textile Mills,
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LAW ON PROPERTY

Inc., discounted and assigned several receivables with the

former under a Receivable Purchase Agreement. To secure
the collection of the receivables assigned, private
respondent executed a Chattel Mortgage over certain raw
materials inventory as well as a machinery described as an
Artos Aero Dryer Stentering Range.
Upon private respondent's default, petitioner filed a petition
for extrajudicial foreclosure of the properties mortgage to it.
However, the Deputy Sheriff assigned to implement the
foreclosure failed to gain entry into private respondent's
premises and was not able to effect the seizure of the
aforedescribed machinery. Petitioner thereafter filed a
complaint for judicial foreclosure with the Court of First
Instance of Rizal, Branch VI, docketed as Civil Case No.
36040, the case before the lower court.
Acting on petitioner's application for replevin, the lower
court issued a writ of seizure, the enforcement of which was
however subsequently restrained upon private respondent's
filing of a motion for reconsideration. After several incidents,
the lower court finally issued on February 11, 1981, an order
lifting the restraining order for the enforcement of the writ of
seizure and an order to break open the premises of private
respondent to enforce said writ. The lower court reaffirmed
its stand upon private respondent's filing of a further motion
for reconsideration.
On July 13, 1981, the sheriff enforcing the seizure order,
repaired to the premises of private respondent and removed
the main drive motor of the subject machinery.
The Court of Appeals, in certiorari and prohibition
proceedings subsequently filed by herein private
respondent, set aside the Orders of the lower court and
ordered the return of the drive motor seized by the sheriff
pursuant to said Orders, after ruling that the machinery in
suit cannot be the subject of replevin, much less of a chattel
mortgage, because it is a real property pursuant to Article
415 of the new Civil Code, the same being attached to the
ground by means of bolts and the only way to remove it
from respondent's plant would be to drill out or destroy the
concrete floor, the reason why all that the sheriff could do to
enfore the writ was to take the main drive motor of said

machinery. The appellate court rejected petitioner's

argument that private respondent is estopped from claiming
that the machine is real property by constituting a chattel
mortgage thereon.
A motion for reconsideration of this decision of the Court of
Appeals having been denied, petitioner has brought the
case to this Court for review by writ of certiorari. It is
contended by private respondent, however, that the instant
petition was rendered moot and academic by petitioner's act
of returning the subject motor drive of respondent's
machinery after the Court of Appeals' decision was
promulgated.
The contention of private respondent is without merit. When
petitioner returned the subject motor drive, it made itself
unequivocably clear that said action was without prejudice
to a motion for reconsideration of the Court of Appeals
decision, as shown by the receipt duly signed by
respondent's representative. 1 Considering that petitioner
has reserved its right to question the propriety of the Court
of Appeals' decision, the contention of private respondent
that this petition has been mooted by such return may not
be sustained.
The next and the more crucial question to be resolved in this
Petition is whether the machinery in suit is real or personal
property from the point of view of the parties, with
petitioner arguing that it is a personality, while the
respondent claiming the contrary, and was sustained by the
appellate court, which accordingly held that the chattel
mortgage constituted thereon is null and void, as contended
by said respondent.
A similar, if not Identical issue was raised in Tumalad v.
Vicencio, 41 SCRA 143 where this Court, speaking through
Justice J.B.L. Reyes, ruled:
Although there is no specific statement referring to the
subject house as personal property, yet by ceding, selling or
transferring a property by way of chattel mortgage
defendants-appellants could only have meant to convey the
house as chattel, or at least, intended to treat the same as
such, so that they should not now be allowed to make an
Page 41 of 404

LAW ON PROPERTY

inconsistent stand by claiming otherwise. Moreover, the

subject house stood on a rented lot to which defendantsappellants merely had a temporary right as lessee, and
although this can not in itself alone determine the status of
the property, it does so when combined with other factors to
sustain the interpretation that the parties, particularly the
mortgagors, intended to treat the house as personality.
Finally, unlike in the Iya cases, Lopez vs. Orosa, Jr. & Plaza
Theatre, Inc. & Leung Yee vs. F.L. Strong Machinery &
Williamson, wherein third persons assailed the validity of the
chattel mortgage, it is the defendants-appellants
themselves, as debtors-mortgagors, who are attacking the
validity of the chattel mortgage in this case. The doctrine of
estoppel therefore applies to the herein defendantsappellants, having treated the subject house as personality.
Examining the records of the instant case, We find no logical
justification to exclude the rule out, as the appellate court
did, the present case from the application of the
abovequoted pronouncement. If a house of strong materials,
like what was involved in the above Tumalad case, may be
considered as personal property for purposes of executing a
chattel mortgage thereon as long as the parties to the
contract so agree and no innocent third party will be
prejudiced thereby, there is absolutely no reason why a
machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be
likewise treated as such. This is really because one who has
so agreed is estopped from denying the existence of the
chattel mortgage.
In rejecting petitioner's assertion on the applicability of the
Tumalad doctrine, the Court of Appeals lays stress on the
fact that the house involved therein was built on a land that
did not belong to the owner of such house. But the law
makes no distinction with respect to the ownership of the
land on which the house is built and We should not lay down
distinctions not contemplated by law.
It must be pointed out that the characterization of the
subject machinery as chattel by the private respondent is
indicative of intention and impresses upon the property the
character determined by the parties. As stated in Standard
Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable

that the parties to a contract may by agreement treat as

personal property that which by nature would be real
property, as long as no interest of third parties would be
prejudiced thereby.
Private respondent contends that estoppel cannot apply
against it because it had never represented nor agreed that
the machinery in suit be considered as personal property
but was merely required and dictated on by herein
petitioner to sign a printed form of chattel mortgage which
was in a blank form at the time of signing. This contention
lacks persuasiveness. As aptly pointed out by petitioner and
not denied by the respondent, the status of the subject
machinery as movable or immovable was never placed in
issue before the lower court and the Court of Appeals except
in a supplemental memorandum in support of the petition
filed in the appellate court. Moreover, even granting that the
charge is true, such fact alone does not render a contract
void ab initio, but can only be a ground for rendering said
contract voidable, or annullable pursuant to Article 1390 of
the new Civil Code, by a proper action in court. There is
nothing on record to show that the mortgage has been
annulled. Neither is it disclosed that steps were taken to
nullify the same. On the other hand, as pointed out by
petitioner and again not refuted by respondent, the latter
has indubitably benefited from said contract. Equity dictates
that one should not benefit at the expense of another.
Private respondent could not now therefore, be allowed to
impugn the efficacy of the chattel mortgage after it has
benefited therefrom,
From what has been said above, the error of the appellate
court in ruling that the questioned machinery is real, not
personal property, becomes very apparent. Moreover, the
case of Machinery and Engineering Supplies, Inc. v. CA, 96
Phil. 70, heavily relied upon by said court is not applicable to
the case at bar, the nature of the machinery and equipment
involved therein as real properties never having been
disputed nor in issue, and they were not the subject of a
Chattel Mortgage. Undoubtedly, the Tumalad case bears
more nearly perfect parity with the instant case to be the
more controlling jurisprudential authority.

Page 42 of 404
LAW ON PROPERTY

WHEREFORE, the questioned decision and resolution of the

Court of Appeals are hereby reversed and set aside, and the
Orders of the lower court are hereby reinstated, with costs
against the private respondent.
SO ORDERED.
Makasiar (Chairman), Aquino, Concepcion Jr., Guerrero and
Escolin JJ., concur.
Abad Santos, J., concurs in the result.
DIGESTED VERSION Makati Leasing v. Wearever Textiles
[G.R. No. L-58469. May 16, 1983.]
Second Division, de Castro (J): 5 concur, 1 concur in result
Facts: To obtain financial accommodations from Makati Leasing and
Finance Corporation, Wearever Textile Mills, discounted and assigned
several receivables with the former under a Receivable Purchase
Agreement. To secure the collection of the receivables assigned, Wearever
Textile executed a Chattel Mortgage over certain raw materials inventory as
well as a machinery described as an Artos Aero Dryer Stentering Range.
Upon Wearever's default, Makati Leasing filed a petition for extrajudicial
foreclosure of the properties mortgage to it. However, the Deputy Sheriff
assigned to implement the foreclosure failed to gain entry into Wearever's
premises and was not able to effect the seizure of the machinery. Makati
Leasing thereafter filed a complaint for judicial foreclosure with the CFI
Rizal (Branch VI, Civil Case 36040).
Acting on petitioner's application for replevin, the lower court issued a writ
of seizure, the enforcement of which was restrained upon Wearever's filing
of a motion for reconsideration. The lower court finally issued on 11
February 1981, an order lifting the restraining order for the enforcement of
the writ of seizure and an order to break open the premises of Wearever to
enforce said writ. The lower court reaffirmed its stand upon Wearever's
filing of a further motion for reconsideration. On 13 July 1981, the sheriff
enforcing the seizure order, repaired to the premises of Wearever and
removed the main drive motor of the subject machinery.

On 27 August 1981, the Court of Appeals, in certiorari and prohibition

proceedings filed by Wearever, set aside the Orders of the lower court and
ordered the return of the drive motor seized by the sheriff pursuant to said
Orders, after ruling that the machinery in suit cannot be the subject of
replevin, much less of a chattel mortgage, because it is a real property
pursuant to Article 415 of the new Civil Code. The appellate court also
rejected the argument that Wearever is estopped from claiming that the
machine is real property by constituting a chattel mortgage thereon. A
motion for reconsideration was filed by Makati Leasing, which was later
denied. Makati Leasing brought the case to the Supreme Court by review by
writ of certiorari.
The Supreme Court reversed and set aside the decision and resolution of the
Court of Appeals, and reinstated the orders of the lower court, with costs
against Wearever Textiles.
1. Case not moot and academic with the return of the seized motor
When the subject motor drive was returned, it was made unequivocably
clear that said action was without prejudice to a motion for reconsideration
of the Court of Appeals decision, as shown by the receipt duly signed by
Wearever's representative. Considering that Makati Leasing has reserved its
right to question the propriety of the CA' decision, the contention of
Wearever that the petition has been mooted by such return may not be
sustained.
2. Similar case; Estoppel applies to parties as having treated the house as
personalty
Although there is no specific statement referring to the subject house as
personal property, yet by ceding, selling or transferring a property by way
of chattel mortgage defendants-appellants could only have meant to convey
the house as chattel, or at least, intended to treat the same as such, so that
they should not now be allowed to make an inconsistent stand by claiming
otherwise. Unlike in the Iya cases, Lopez vs. Orosa, Jr. & Plaza Theatre,
Inc. & Leung Yee vs. F.L. Strong Machinery & Williamson, wherein third
persons assailed the validity of the chattel mortgage, it is the defendantsappellants themselves, as debtors mortgagors, who are attacking the validity
of the chattel mortgage in this case. The doctrine of estoppel therefore
applies to the herein defendants appellants, having treated the subject house
Page 43 of 404

LAW ON PROPERTY

as personalty" (Tumalad v. Vicencio). One who has so agreed is estopped

from denying the existence of the chattel mortgage.
3. Pronouncement on estoppel involving chattel mortgage applies to
machinery
There is no logical justification to exclude the rule out the present case from
the application of the pronouncement in Tumalad v. Vicencio. If a house of
strong materials may be considered as personal property for purposes of
executing a chattel mortgage thereon as long as the parties to the contract so
agree and no innocent third party will be prejudiced thereby, there is
absolutely no reason why a machinery, which is movable in its nature and
becomes immobilized only by destination or purpose, may not be likewise
treated as such.
4. Chattel mortgage treating real property as personal property valid, as long
as third parties are not prejudiced
The characterization of the subject machinery as chattel is indicative of
intention and impresses upon the property the character determined by the
parties. As stated in Standard Oil v. Jaramillo, , it is undeniable that the
parties to a contract may by agreement treat as personal property that which
by nature would be real property, as long as no interest of third parties
would be prejudiced thereby.
5. Equity prevents respondent to impugn the efficacy of the chattel
mortgage
Equity dictates that one should not benefit at the expense of another.
Weareverf could not be allowed to impugn the efficacy of the chattel
mortgage after it has benefited therefrom.
6. Machinery and Engineering Supplies v. CA not applicable; Tumalad case
more in parity with case
The case of Machinery and Engineering Supplies, Inc. v. CA, 96 Phil. 70,
heavily relied upon by the Court of Appeals, is not applicable to the present
case as the nature of the machinery and equipment involved therein as real
properties never having been disputed nor in issue, and they were not the
subject of a Chattel Mortgage. Undoubtedly, the Tumalad case bears more
nearly perfect parity with the present case to be the more controlling
jurisprudential authority.

11. Peoples Bank v. Dahican Lumber

[G.R. No. L-17500. May 16, 1967.]
En Banc, Dizon (J): 8 concur.
Facts: On 8 September 1948, Atlantic Gulf & Pacific Company of Manila
(ATLANTIC) sold and assigned all its right in the Dahican lumber
concession to Dahican Lumber Company (DALCO) for P500,000.00 of
which only the amount of $50,000.00 was paid. Thereafter, to develop the
concession, DALCO obtained various loans from the People's Bank
(P200,000.00, as of 13 July 1950). DALCO also obtained, through the
Bank, a loan of $250,000.00 from the Export-Import Bank of Washington
D.C. (through 5 promissory notes of $50,000.00 each, maturing on different
dates), executed by both DALCO and the Dahican American Lumber
Corporation (DAMCO), a foreign corporation and a stockholder of
DALCO, all payable to the BANK. As security, DALCO executed on 13
July 1950 a deed of mortgage covering live parcels of land situated in the
province of Camarines Norte, together with all the buildings and other
improvements existing thereon and all the personal properties of the
mortgagor located in its place of business in the municipalities of
Mambulao and Capalonga, Camarines Norte in favor of the BANK. On the
same date, DALCO executed a second mortgage on the same properties in
favor of ATLANTIC to secure payment of the unpaid balance of the sale
price of the lumber concession amounting to the sum of $450,000.00. Both
deeds contained a provision extending the mortgage lien to properties to be
subsequently acquired by the mortgagor. Both mortgages were registered in
the Office of the Register of Deeds of Camarines Norte. In addition thereto
DALCO and DAMCO pledged to the BANK 7,296 shares of stock of
DALCO and 9,286 shares of DAMCO to secure the same obligations. Upon
DALCO's and DAMCO's failure to pay the fifth promissory note upon its
maturity, the BANK paid the same to the Export-Import Bank of
Washington D.C. and the latter assigned to the former its credit and the first
mortgage securing it. Subsequently, the BANK gave DALCO and DAMCO
up to 1 April 1953 to pay the overdue promissory note.
After 13 July 1950, DALCO purchased various machineries, equipment,
spare parts and supplies in addition to, or in replacement of some of those
already owned and used by it. Pursuant to the provision of the mortgage
deeds quoted heretofore regarding "after acquired properties", the BANK
requested DALCO to submit complete lists of said properties but the latter
Page 44 of 404

LAW ON PROPERTY

failed to do so. In connection with these purchases, there appeared in the

books of DALCO the sum of P452,860.55 as due to Connell Bros.
Company (CONNEL) and the sum of P2,151,678.34 to DAMCO. On 16
December 1952, the Board of Directors of DALCO passed a resolution
agreeing to rescind the alleged sales of equipment, spare parts and supplies
by CONNELL and DAMCO to it. Thereafter, the corresponding agreements
of rescission of sale were executed.
On 23 January 1953, the BANK, in its own behalf and that of ATLANTIC,
demanded that the agreements be cancelled but CONNELL and DAMCO
refused to do so. As a result, on 12 February 1953, ATLANTIC and the
BANK, commenced foreclosure proceedings in the CFI Camarines Norte
against DALCO and DAMCO. Upon motion of the parties, the Court, on 30
September 1953, issued an order transferring the venue of the action to the
CFI Manila (Civil Case 20987). On 30 August 1958, upon motion of all the
parties, the Court ordered the sale of all the machineries, equipment and
supplies of DALCO, and the same were subsequently sold for a total
consideration of P175,000.00 which was deposited in court pending final
determination of the action. By a similar agreement one half (P87,500.00)
of this amount was considered as representing the proceeds obtained from
the sale of the "undebated properties" (those not claimed by DAMCO and
CONNELL), and the other half as representing those obtained from the sale
of the "after acquired properties".
After due trial, the Court, on 15 July 1960, rendered Judgment against
Dahican Lumber Co, ordering it to pay the bank, ATLANTIC, CONNEL
and DAMCO; and adjudicating the half of the sum realized from sale of the
properties unto the plaintiffs; and the other half to both the plaintiffs and
defendant DAMCO and CONNELL. The Court further ordered that the cost
of the receivership shall be borne by the Bank, Atlantic, Connell and
DAMCO. On the following day, the Court issued a supplementary decision
ordering the sale at public auction of lands object to the mortgages if
DALCO fails to pay the bank and Atlantic. Therafter, all the parties
appealed.
The Supreme Court modified the appealed judgment and affirmed in all
other respects. With costs.

1. On after acquired properties, stipulation is clear and valid

The stipulation in the Deed of Mortgage states that all property of every
nature, buildings, machinery, etc. taken in exchange or replacement by the
mortgagor "shall immediately be and become subject to the lien of this
mortgage in the same manner and to the same extent as if now included
therein". No clearer language could have been chosen. Further, such
stipulation is common is neither unlawful nor immoral, its obvious purpose
being to maintain, to the extent allowed by circumstances, the original value
of the properties given as security. It is only logical in all cases where the
properties given as collateral are perishable or subject to inevitable wear
and tear or were intended to be sold, or to be used (thus subject to wear and
tear); they shall be replaced with others to be thereafter acquired by the
mortgagor, such understanding either express or implied. If such properties
were of the nature already referred to, it would be poor judgment on the part
of the creditor who does not see to it that a similar provision is included in
the contract.
2. Registry of chattel mortgage as to affect third party does not apply to the
case
Though it is the law in this jurisdiction that, to affect third persons, a chattel
mortgage must be registered and must describe the mortgaged chattels or
personal properties sufficiently to enable the parties and any other person to
identify them, such law does not apply to the present case (?reason).
3. Whether old or new civil code to be used as guide irrelevant in this case
The mortgages in question were executed on 13 July 1950 with the old Civil
Code still in force. There can be no doubt that the provisions of said code
must govern their interpretation and the question of their validity. It
happens, however, that Articles 334 and 1877 of the old Civil Code are
substantially reproduced in Article 415 and 2127, respectively, of the new
Civil Code. It is, therefore, immaterial in this case whether we take the
former or the latter as guide in deciding the point under consideration.
4. Civil code does not define real property but enumerates them
Article 415 does not define real property but enumerates what are
considered as such, among them being machinery, receptacles, instruments
or replacements intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of land, and shall
tend directly to meet the needs of the said industry or works.
Page 45 of 404

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5. Chattels place in real properties mortgaged within the operation of Art

415 (5), and 2127 of the New Civil Code; Illustrative cases: Berkenkotter v.
Cu Unjieng and Cu Unjieng Hijos v. Mabalacat Sugar
The chattels, placed in the real properties mortgaged to plaintiffs, came
within the operation of Art. 415, paragraph 5 and Art. 2127 of the new Civil
Code. This is consistent with previous rulings of the court. (1) In
Berkenkotter vs. Cu Unjieng (61 Phil. 663), Article 334 [5] of the old Civil
Code gives the character of real property to machinery, liquid containers,
instruments or replacements intended by the owner of any building or land
for use in connection with any industry or trade being carried on therein and
which are expressly adapted to meet the requirements of such trade or
industry; and (2) In Cu Unjieng Hijos vs. Mabalacat Sugar Co. (58 Phil.
439), a mortgage constituted on a sugar central includes not only the land
on which it is built but also the buildings, machinery and accessories
installed at the time the mortgage was constituted as well as the buildings,
machinery and accessories belonging to the mortgagor, installed after the
constitution thereof.
6. After acquired properties immobilized; No need for second registration
as Chattel Mortgage in light of existing real estate mortgage
The "after acquired properties" were purchased in connection with, and for
use in the development of its lumber concession and that they were
purchased in addition to, or in replacement of those already existing in the
premises on 13 July 1950. In law, they must be deemed to have been
immobilized, with the result that the real estate mortgages involved therein,
which were registered as such, did not have to be registered a second time
as chattel mortgages in order to bind the "after acquired properties" and
affect third parties.
7. Davao Sawmill case not on all fours; Intent of parties relevant
The facts in the Davao Sawmill case are not on all fours with the current
case. In the former, Davao Sawmill had repeatedly treated the machinery
therein involved as personal property by executing chattel mortgages
thereon in favor of third parties, while in the present case the parties had
treated the "after acquired properties" as real properties by expressly and
unequivocally agreeing that they shall automatically become subject to the
lien of the real estate mortgages executed by them. In the Davao Sawmill
decision it was stated that the characterization of the property as chattels by
the appellant is indicative of intention and impresses upon the property the

character determined by the parties. In the present case, the characterization

of the "after acquired properties" as real property was made not only by one
but by both interested parties. There is, therefore, more reason to hold that
such consensus impresses upon the properties the character determined by
the parties who must now be held in estoppel to question it.
8. Valdez v. Central Altagracia relevant; Knowledge of suppliers of real
mortgage stipulations
Valdez vs. Central Altagracia Inc. (225 U.S. 58) was quoted in the Davao
Sawmill case, holding that machinery placed on property by a tenant does
not become immobilized, yet, when the tenant places it there pursuant to
contract that it shall belong to the owner, it then becomes immobilized as to
that tenant and even as against his assignees and creditors who had
sufficient notice of such stipulation. In the present case, the "after acquired
properties" are not disputed to be placed on and be used in the development
of its lumber concession, and agreed further that the same shall become
immediately subject to the lien constituted by the questioned mortgages.
DAMCO and CONNELL, having full notice of such stipulation, must be
deemed barred from denying that the properties in question had become
immobilized.
9. Connell and Damco not unpaid suppliers; They do not have superior
right to lien
DAMCO was a stockholder and CONNELL was not only a stockholder but
the general agent of DALCO. Further, the report of the auditors and its
annexes show that neither DAMCO nor CONNELL had supplied any of the
goods of which they respectively claimed to be the unpaid seller; that all
items were supplied by different parties. If DALCO still owes them any
amount in this connection, as financiers, they can not claim any right over
the "after acquired properties" superior to the lien constituted thereon by
virtue of the deeds of mortgage under foreclosure.
10. Defense of prematurity does not hold if debtor is insolvent
When the law permits the debtor to enjoy the benefits of the period
notwithstanding that he is insolvent by his giving a guaranty for the debt,
that must mean a new and efficient guaranty, must concede that the causes
of action for collection of the notes were not premature. In the present case,
plaintiffs, as a matter of grace, conceded an extension of time to pay up to 1
April 1953, months after the action to foreclose was filed 12 February 1953;
Page 46 of 404

LAW ON PROPERTY

without debate that DALCO was already insolvent at the date of the time of
filing.g
11. Proceeds from the sale of after acquired properties and the undebated
properties awarded exclusively to plaintiff
In view of the Courts opinion sustaining the validity of the mortgages in
relation thereto, that proceeds obtained from the sale of the "after acquired
properties" and the "undebated properties" should be awarded exclusively to
the plaintiffs in payment of the money obligations secured by the mortgages
under foreclosure.
12. Claims for damages supported
The law (Articles 1313 and 1314 of the New Civil Code) provides that
creditors are protected in cases of contracts intended to defraud them, and
that any third person who induces another to violate his contract shall be
liable for damages to the other contracting party. Similar liability is
demandable under Arts. 20 and 21 which may be given retroactive effect
(Arts. 2252-53) or under Arts. 1902 and 2176 of the Old Civil Code. In
the present case, the facts clearly show that DALCO and DAMCO, after
failing to pay the fifth promissory note upon its maturity, conspired jointly
with CONNELL to violate the provisions of the fourth paragraph of the
mortgages under foreclosure by attempting to defeat plaintiffs' mortgage
lien on the "after acquired properties".
13. Expenses of receivership considered; other damages cannot be
computed
Considering that the sale of the real properties subject to the mortgages
under foreclosure has not been effected, and considering further the lack of
evidence showing that the true value of all the properties already sold was
not realized because their sale was under stress, The true elements or factors
that should determine the amount of damages that plaintiffs are entitled to
recover from defendants are not present. However, all the expenses of the
Receivership, which was deemed necessary to safeguard the rights of the
plaintiffs, should be borne by all the defendants, jointly and severally, in the
same manner that all of them should pay to the plaintiffs, jointly and
severally, the attorney's fees awarded in the appealed judgment.

12.) Burgos v. Chief of Staff, AFP

[G.R. No. 64261. December 26, 1984.]
En Banc, Escolin (J): 10 concur, 1 took no part
Facts: On 7 December 1982, Judge Ernani Cruz-Pao, Executive Judge of
the then CFI Rizal [Quezon City], issued 2 search warrants where the
premises at 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS
Building, Quezon Avenue, Quezon City, business addresses of the
"Metropolitan Mail" and "We Forum" newspapers, respectively, were
searched, and office and printing machines, equipment, paraphernalia,
motor vehicles and other articles used in the printing, publication and
distribution of the said newspapers, as well as numerous papers, documents,
books and other written literature alleged to be in the possession and control
of Jose Burgos, Jr. publisher-editor of the "We Forum" newspaper, were
seized.
A petition for certiorari, prohibition and mandamus with preliminary
mandatory and prohibitory injunction was filed after 6 months following the
raid to question the validity of said search warrants, and to enjoin the Judge
Advocate General of the AFP, the city fiscal of Quezon City, et.al. from
using the articles seized as evidence in Criminal Case Q-022782 of the RTC
Quezon City (People v. Burgos). The prayer of preliminary prohibitory
injunction was rendered moot and academic when, on 7 July 1983, the
Solicitor General manifested that said articles would not be used until final
resolution of the legality of the seizure of said articles.
The Supreme Court declared the search warrants 20-82(a,b) issued on 7
December 1982 null and void, and granted the writ of mandatory injunction
for the return of the seized articles, such articles seized ordered released to
the petitioners; without costs.
1. Urgency of constitutional issue raised overrides procedural flaw; Failure
to file motion to quash
Petitioners, before impugning the validity of the warrants before the Court,
should have filed a motion to quash said warrants in the court that issued
them. But this procedural flaw notwithstanding, the Court take cognizance
of this petition in view of the seriousness and urgency of the constitutional
issues raised, not to mention the public interest generated by the search of
the "We Forum" offices, which was televised and widely publicized in all
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metropolitan dailies. The existence of this special circumstance justifies this

Court to exercise its inherent power to suspend its rules. In Vda. de
Ordoveza v. Raymundo, it was said that "it is always in the power of the
court [Supreme Court] to suspend its rules or to except a particular case
from its operation, whenever the purposes of justice require it . . . "
2. Laches defined
Laches is failure or negligence for an unreasonable and unexplained length
of time to do that which, by exercising due diligence, could or should have
been done earlier. It is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned or declined to assert it.
3. Extrajudicial effort negates presumption of abandonment of right to the
possession of property
Extrajudicial efforts exerted by petitioners negate the presumption that they
had abandoned their right to the possession of the seized property, thereby
refuting the charge of laches against them. Although the reason given by
petitioners may not be flattering to the judicial system, The Court finds no
ground to punish or chastise them for an error in judgment in pursuing other
remedies, relying on the so-called executive benevolence or largesse (e.g.
Letter of presidential friend Fiscal Flaminiano to Col. Balbino Diego, Chief
Intelligence and Legal Officer of the PSG).
4. Documents marked as evidence in criminal case do not affect issue on the
validity of the warrants
The documents seized lawfully belong to Jose Burgos, Jr. and he can do
whatever he pleases with them, within legal bounds; such as marking them
as evidence in the criminal case. The fact that he has used them as evidence
does not and cannot in any way affect the validity or invalidity of the search
warrants assailed in the petition.
5. Examination conducted
Petitioners objection that there is an alleged failure to conduct an
examination under oath or affirmation of the applicant and his witnesses, as
mandated by the Constitution as well as Sec. 4, Rule 126 of the Rules of
Court, may properly be considered moot and academic, as petitioners
themselves conceded during the hearing on 9 August 1983, that an

examination had indeed been conducted by the judge of Col. Abadilla and
his witnesses.
6. Defect on the address where items are to be seized is typographical error
Search Warrants No. 20-82[a] and No. 20-82[b] were used to search two
distinct places: No. 19, Road 3, Project 6, Quezon City and 784 Units C &
D, RMS Building, Quezon Avenue, Quezon City, respectively. Objection is
interposed to the execution of Search Warrant No. 20-82[b] at the latter
address on the ground that the two search warrants pinpointed only one
place where petitioner Jose Burgos, Jr. was allegedly keeping and
concealing the articles listed therein, i.e., No. 19, Road 3, Project 6, Quezon
City. The defect pointed out is obviously a typographical error. Precisely,
two search warrants were applied for and issued because the purpose and
intent were to search two distinct premises. It would be quite absurd and
illogical for respondent judge to have issued two warrants intended for one
and the same place.
7. Determination whether warrant describes premises to be search with
sufficient particularity
In the determination of whether a search warrant describes the premises to
be searched with sufficient particularity, the executing officer's prior
knowledge as to the place intended in the warrant is relevant. This would
seem to be especially true where the executing officer is the affiant on
whose affidavit the warrant had issued, and when he knows that the judge
who issued the warrant intended the building described in the affidavit. And
it has also been said that the executing officer may look to the affidavit in
the official court file to resolve an ambiguity in the warrant as to the place
to be searched.
8. Property seized need not be owned by person against whom the warrant
is directed
Section 2, Rule 126 of the Rules of Court, enumerates the personal
properties that may be seized under a search warrant, such as [a] Property
subject of the offense; [b] Property stolen or embezzled and other proceeds
or fruits of the offense; and [c] Property used or intended to be used as the
means of committing an offense. The rule does not require that the property
to be seized should be owned by the person against whom the search
warrant is directed. It may or may not be owned by him. Ownership is of no
consequence, and it is sufficient that the person against whom the warrant is
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directed has control or possession of the property sought to be seized was

alleged to have in relation to the articles and property seized under the
warrants.
9. Machineries remain to be movable property; owner should place the
machinery to be immovable
Under Article 415[5] of the Civil Code of the Philippines, "machinery,
receptables, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or
on a piece of land and which tend directly to meet the needs of the said
industry or works" are considered immovable property. In Davao Sawmill
Co. v. Castillo, it was said that machinery which is movable by nature
becomes immobilized when placed by the owner of the tenement, property
or plant, but not so when placed by a tenant, usufructuary, or any other
person having only a temporary right, unless such person acted as the agent
of the owner. In the present case, petitioners do not claim to be the owners
of the land and/or building on which the machineries were placed. The
machineries, while in fact bolted to the ground, remain movable property
susceptible to seizure under a search warrant.
10. Article IV, Section 3 of the 1973 Constitution; Finding of probable cause
required to issue warrant
Section 3 provides that no search warrant or warrant of arrest shall issue
except upon probable cause to be determined by the judge, or such other
responsible officer as may be authorized by law, after examination under
oath or affirmation of the complainant and the witnesses he may produce,
and particularly describing the place to be searched and the persons or
things to be seized. In the present case, a statement in the effect that the
petitioner "is in possession or has in his control printing equipment and
other paraphernalia, news publications and other documents which were
used and are all continuously being used as a means of committing the
offense of subversion punishable under PD 885, as amended" is a mere
conclusion of law and does not satisfy the requirements of probable cause.
Bereft of such particulars as would justify a finding of the existence of
probable cause, said allegation cannot serve as basis for the issuance of a
search warrant.
11. Probable cause for search defined; Application to searches against
newspaper publisher/editor

Probable cause for a search is defined as such facts and circumstances

which would lead a reasonably discreet and prudent man to believe that an
offense has been committed and that the objects sought in connection with
the offense are in the place sought to be searched. When the search warrant
applied for is directed against a newspaper publisher or editor in connection
with the publication of subversive materials, the application and/or its
supporting affidavits must contain a specification, stating with particularity
the alleged subversive material he has published or is intending to publish.
Mere generalization will not suffice.
12. Constitution requires personal knowledge of complainant / witnesses to
justify issuance of warrant
In mandating that "no warrant shall issue except upon probable cause to be
determined by the judge, after examination under oath or affirmation of the
complainant and the witnesses he may produce; the Constitution requires
no less than personal knowledge by the complainant or his witnesses of the
facts upon which the issuance of a search warrant may be justified. In
Alvarez v. CFI, it was ruled that "the oath required must refer to the truth of
the facts within the personal knowledge of the petitioner or his witnesses,
because the purpose thereof is to convince the committing magistrate, not
the individual making the affidavit and seeking the issuance of the warrant,
of the existence of probable cause."
13. General warrants invalid
In Standford v. State of Texas, the search warrant which authorized the
search for 'books, records, pamphlets, cards, receipts, lists, memoranda,
pictures, recordings and other written instruments concerning the
Communist Parties of Texas, and the operations of the Communist Party in
Texas," was declared void by the U.S. Supreme Court for being too general.
It is that it is not the policy of the government to suppress any newspaper or
publication that speaks with "the voice of non-conformity" but poses no
clear and imminent danger to state security.
14. Closure of publications in the nature of censorship abhorrent to the
freedom of the press
As a consequence of the search and seizure, these premises of the
Metropolitan Mail and We Forum were padlocked and sealed, with the
further result that the printing and publication of said newspapers were
discontinued. Such closure is in the nature of previous restraint or
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censorship abhorrent to the freedom of the press guaranteed under the

fundamental law, and constitutes a virtual denial of petitioners' freedom to
express themselves in print. Thus state of being is patently anathematic to a
democratic framework where a free, alert and even militant press is
essential for the political enlightenment and growth of the citizenry.
15. Machines not sequestered under PD 885; Lack of IRR, contrary claim
by Marcos and Romulo
Sequestration under Section 8 of PD 885, as amended, which authorizes
"the sequestration of the property of any person, natural or artificial,
engaged in subversive activities against the government and its duly
constituted authorities in accordance with implementing rules and
regulations as may be issued by the Secretary of National Defense" could
not validly be effected in view of the absence of any implementing rules
and regulations promulgated by the Minister of National Defense. Further,
no less than President Marcos himself denied the request of the military
authorities to sequester the property seized as reported in the 10 December
1982 issue of the Daily Express. This was confirmed by Foreign Minister
Carlos P. Romulo on 10 February 1982, reiterating Marcos claims, in his
letter to US Congressman Tony P. Hall.
Sergs Products v. PCI Leasing
[G.R. No. 137705. August 22, 2000.]
Third division, Panganiban (J): 3 concur
Facts: On 13 February 1998, PCI Leasing and Finance, Inc. filed a
complaint for sum of money, with an application for a writ of replevin
(Civil Case Q-98-33500). On 6 March 1998, upon an ex-parte application of
PCI Leasing, judge issued a writ of replevin directing its sheriff to seize and
deliver the machineries and equipment to PCI Leasing after 5 days and
upon the payment of the necessary expenses. On 24 March 1998, the sheriff
proceeded to petitioner's factory, seized one machinery with word that the
return for the other machineries. On 25 March 1998, petitioners filed a
motion for special protective order, invoking the power of the court to
control the conduct of its officers and amend and control its processes,
praying for a directive for the sheriff to defer enforcement of the writ of
replevin. On 6 April 1998, the sheriff again sought to enforce the writ of
seizure and take possession of the remaining properties. He was able to take

two more, but was prevented by the workers from taking the rest. On 7
April 1998, they went to the CA via an original action for certiorari.
Citing the Agreement of the parties, the appellate court held that the subject
machines were personal property, and that they had only been leased, not
owned, by petitioners; and ruled that the "words of the contract are clear
and leave no doubt upon the true intention of the contracting parties." It thus
affirmed the 18 February 1998 Order, and the 31 March 1998 Resolution of
the lower court, and lifted the preliminary injunction issued on 15 June
1998. A subsequent motion for reconsideration was denied on 26 February
1999. Hence, the petition for review on certiorari.
The Supreme Court denied the petition and affirmed the decision of the
Court of Appeals; with costs against petitioners.
1. Petition for review on certiorari is clearly under Rule 45
The petition need not expressly indicate if it is being filed under Rule 45 or
Rule 65 of the Rules of Court, as it is clear that the present recourse is under
Rule 45; the conclusion of such supported by the title of the Petition, which
is "Petition for Review on Certiorari."
2. Error in impleading the Judge as respondent not ground to dismiss the
case
While the judge should not have been impleaded as a respondent,
substantial justice requires that such lapse by itself should not warrant the
dismissal of the present Petition. The Court may deems it proper to remove,
motu proprio, the name of the Judge from the caption of the case.
3. Writ of replevin issued for recovery of personal property
Rule 60 of the Rules of Court provides that writs of replevin are issued for
the recovery of personal property only. Section 3 provides that upon the
filing of such affidavit and approval of the bonds the court shall issue an
order and the corresponding writ of replevin describing the personal
property alleged to be wrongfully detained and requiring the sheriff
forthwith to take such property into his custody.
4. Machinery immovable properties by incorporation
The machinery were essential and principal elements of their chocolatePage 50 of 404

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making industry. Hence, although each of them was movable or personal

property on its own, all of them have become "immobilized by destination
because they are essential and principal elements in the industry." The
machines are thus, real, not personal, property pursuant to Article 415 (5) of
the Civil Code.
5. Parties estopped when parties stipulated properties as personal; property
thus subject to writ of seizure
Contracting parties may validly stipulate that a real property be considered
as personal. After agreeing to such stipulation, they are consequently
estopped from claiming otherwise. Under the principle of estoppel, a party
to a contract is ordinarily precluded from denying the truth of any material
fact found therein. Thus, said machines are proper subjects of the Writ of
Seizure (compare Tumalad v. Vicencio).
6. Similar cases
In Trinidad v. Vicencio, the Court upheld the intention of the parties to treat
a house of strong materials as a personal property because it had been made
the subject of a chattel mortgage. Applying Tumalad, the Court in Makati
Leasing and Finance Corp. v. Wearever Textile Mills also held that the
machinery used in a factory and essential to the industry was a proper
subject of a writ of replevin because it was treated as personal property in a
contract.
7. Third parties acting in good faith not affected by stipulation to consider
real property as personal
The holding that the machines should be deemed personal property pursuant
to the Lease Agreement is good only insofar as the contracting parties are
concerned. Hence, while the parties are bound by the Agreement, third
persons acting in good faith are not affected by its stipulation characterizing
the subject machinery as personal. In the present case, however, there is no
showing that any specific third party would be adversely affected.
8. Title to property should be determined at trial; Remedies under Rule 60
either to post a counter-bond or to question the sufficiency of the plaintiffs
bond
The validity and the nature of the contract are the lis mota of the civil action
pending before the RTC. A resolution of the questions whether the
Agreement is a loan and not a lease, or whether the Agreement is invalid,

therefore, is effectively a resolution of the merits of the case. Hence, they

should be threshed out in the trial, not in the proceedings involving the
issuance of the Writ of Seizure. As held in La Tondea Distillers v. CA, the
Court explained that the policy under Rule 60 was that questions involving
title to the subject property should be determined in the trial. In that case,
the Court noted that the remedy of defendants under Rule 60 was either to
post a counter-bond or to question the sufficiency of the plaintiff's bond.
They were not allowed, however, to invoke the title to the subject property.
9. Title to property should be determined at trial; no place in a petition for
certiorari under Rule 65 or in a petition for review under Rule 45.
The questions whether the Agreement is a loan and not a lease, or whether
the Agreement is invalid require a determination of facts and a presentation
of evidence, both of which have no place in a petition for certiorari in the
CA under Rule 65 or in a petition for review in the Court under Rule 45.
10. Agreement presumed to be valid and binding
The Agreement must be presumed to be valid and binding as the law
between the parties; as there is nothing on record to show that it has been
nullified or annulled. In the present case, petitioners assailed it first only in
the RTC proceedings, which had ironically been instituted by respondent.
As in the Makati Leasing and Finance case, even granting that he charge is
true, such fact alone does not render a contract void ab initio, but can only
be a ground for rendering said contract voidable, or annullable pursuant to
Article 1390 of the new Civil Code, by a proper action in court.
11. Consequences cannot be blamed on the Court for the petitioners failure
to avail of remedies under Section 5, Rule 60 of the Rules of Court
Petitioners' arguments, that the seizure will lead to the unemployment of
their workers and nullify all efforts to rehabilitate the corporation, do not
preclude the implementation of the Writ. Law and jurisprudence support its
propriety. Such consequences should not be blamed on this Court, but on
the petitioners for failing to avail themselves of the remedy under Section 5
of Rule 60, which allows the filing of a counter-bond.
Caltex vs CBAA
114 SCRA 296
Facts:
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installations and appurtenant service facilities, together with all

other equipment designed for or essential to its manufacturing,
industrial or agricultural purposes.

This case is about the realty tax on machinery and equipment installed by Caltex
(Philippines) Inc. in its gas stations located on leased land.
The machines and equipment consists of underground tanks, elevated tank,
elevated water tanks, water tanks, gasoline pumps, computing pumps, water
pumps, car washer, car hoists, truck hoists, air compressors and tireflators.
The building or shed, the elevated water tank, the car hoist under a separate shed,
the air compressor, the underground gasoline tank, neon lights signboard, concrete
fence and pavement and the lot where they are all placed or erected, all of them
used in the pursuance of the gasoline service station business formed the entire
gasoline service-station.
The lessor of the land, where the gas station is located, does not become the owner
of the machines and equipment installed therein. Caltex retains the ownership
thereof during the term of the lease.
Issue:
Whether or not the pieces of gas station equipment and machinery enumerated are
subject to realty tax.
Held:
The Assessment Law provides that the realty tax is due "on real property, including
land, buildings, machinery, and other improvements".
SC hold that the said equipment and machinery, as appurtenances to the gas
station building or shed owned by Caltex (as to which it is subject to realty tax) and
which fixtures are necessary to the operation of the gas station, for without them the
gas station would be useless, and which have been attached or affixed permanently
to the gas station site or embedded therein, are taxable improvements and
machinery within the meaning of the Assessment Law and the Real Property Tax
Code.
Note:
Improvements is a valuable addition made to property or an amelioration in its
condition, amounting to more than mere repairs or replacement of
waste, costing labor or capital and intended to enhance its value,
beauty or utility or to adapt it for new or further purposes.
Machinery shall embrace machines, mechanical contrivances, instruments,
appliances and apparatus attached to the real estate. It includes
the physical facilities available for production, as well as the

G.R. No. L-15334

January 31, 1964

BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR and CITY

TREASURER OF QUEZON CITY, petitioners,
vs.
MANILA ELECTRIC COMPANY, respondent.
Assistant City Attorney Jaime R. Agloro for petitioners.
Ross, Selph and Carrascoso for respondent.
PAREDES, J.:
From the stipulation of facts and evidence adduced during
the hearing, the following appear:
On October 20, 1902, the Philippine Commission enacted
Act No. 484 which authorized the Municipal Board of Manila
to grant a franchise to construct, maintain and operate an
electric street railway and electric light, heat and power
system in the City of Manila and its suburbs to the person or
persons making the most favorable bid. Charles M. Swift was
awarded the said franchise on March 1903, the terms and
conditions of which were embodied in Ordinance No. 44
approved on March 24, 1903. Respondent Manila Electric Co.
(Meralco for short), became the transferee and owner of the
franchise.
Meralco's electric power is generated by its hydro-electric
plant located at Botocan Falls, Laguna and is transmitted to
the City of Manila by means of electric transmission wires,
running from the province of Laguna to the said City. These
electric transmission wires which carry high voltage current,
are fastened to insulators attached on steel towers
constructed by respondent at intervals, from its hydroelectric plant in the province of Laguna to the City of Manila.
The respondent Meralco has constructed 40 of these steel
towers within Quezon City, on land belonging to it. A
photograph of one of these steel towers is attached to the
petition for review, marked Annex A. Three steel towers
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were inspected by the lower court and parties and the

following were the descriptions given there of by said court:

the square metal frame supporting the legs were not

attached to any material or foundation.

The first steel tower is located in South Tatalon, Espaa

Extension, Quezon City. The findings were as follows: the
ground around one of the four posts was excavated to a
depth of about eight (8) feet, with an opening of about one
(1) meter in diameter, decreased to about a quarter of a
meter as it we deeper until it reached the bottom of the
post; at the bottom of the post were two parallel steel bars
attached to the leg means of bolts; the tower proper was
attached to the leg three bolts; with two cross metals to
prevent mobility; there was no concrete foundation but
there was adobe stone underneath; as the bottom of the
excavation was covered with water about three inches high,
it could not be determined with certainty to whether said
adobe stone was placed purposely or not, as the place
abounds with this kind of stone; and the tower carried five
high voltage wires without cover or any insulating materials.

On November 15, 1955, petitioner City Assessor of Quezon

City declared the aforesaid steel towers for real property tax
under Tax declaration Nos. 31992 and 15549. After denying
respondent's petition to cancel these declarations, an
appeal was taken by respondent to the Board of Assessment
Appeals of Quezon City, which required respondent to pay
the amount of P11,651.86 as real property tax on the said
steel towers for the years 1952 to 1956. Respondent paid
the amount under protest, and filed a petition for review in
the Court of Tax Appeals (CTA for short) which rendered a
decision on December 29, 1958, ordering the cancellation of
the said tax declarations and the petitioner City Treasurer of
Quezon City to refund to the respondent the sum of
P11,651.86. The motion for reconsideration having been
denied, on April 22, 1959, the instant petition for review was
filed.

The second tower inspected was located in Kamuning Road,

K-F, Quezon City, on land owned by the petitioner
approximate more than one kilometer from the first tower.
As in the first tower, the ground around one of the four legs
was excavate from seven to eight (8) feet deep and one and
a half (1-) meters wide. There being very little water at the
bottom, it was seen that there was no concrete foundation,
but there soft adobe beneath. The leg was likewise provided
with two parallel steel bars bolted to a square metal frame
also bolted to each corner. Like the first one, the second
tower is made up of metal rods joined together by means of
bolts, so that by unscrewing the bolts, the tower could be
dismantled and reassembled.

In upholding the cause of respondents, the CTA held that:

(1) the steel towers come within the term "poles" which are
declared exempt from taxes under part II paragraph 9 of
respondent's franchise; (2) the steel towers are personal
properties and are not subject to real property tax; and (3)
the City Treasurer of Quezon City is held responsible for the
refund of the amount paid. These are assigned as errors by
the petitioner in the brief.

The third tower examined is located along Kamias Road,

Quezon City. As in the first two towers given above, the
ground around the two legs of the third tower was
excavated to a depth about two or three inches beyond the
outside level of the steel bar foundation. It was found that
there was no concrete foundation. Like the two previous
ones, the bottom arrangement of the legs thereof were
found to be resting on soft adobe, which, probably due to
high humidity, looks like mud or clay. It was also found that

The tax exemption privilege of the petitioner is quoted

hereunder:
PAR 9. The grantee shall be liable to pay the same taxes
upon its real estate, buildings, plant (not including poles,
wires, transformers, and insulators), machinery and personal
property as other persons are or may be hereafter required
by law to pay ... Said percentage shall be due and payable
at the time stated in paragraph nineteen of Part One hereof,
... and shall be in lieu of all taxes and assessments of
whatsoever nature and by whatsoever authority upon the
privileges, earnings, income, franchise, and poles, wires,
transformers, and insulators of the grantee from which taxes
and assessments the grantee is hereby expressly exempted.
Page 53 of 404

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(Par. 9, Part Two, Act No. 484 Respondent's Franchise;

emphasis supplied.)
The word "pole" means "a long, comparatively slender
usually cylindrical piece of wood or timber, as typically the
stem of a small tree stripped of its branches; also by
extension, a similar typically cylindrical piece or object of
metal or the like". The term also refers to "an upright
standard to the top of which something is affixed or by
which something is supported; as a dovecote set on a pole;
telegraph poles; a tent pole; sometimes, specifically a
vessel's master (Webster's New International Dictionary 2nd
Ed., p. 1907.) Along the streets, in the City of Manila, may
be seen cylindrical metal poles, cubical concrete poles, and
poles of the PLDT Co. which are made of two steel bars
joined together by an interlacing metal rod. They are called
"poles" notwithstanding the fact that they are no made of
wood. It must be noted from paragraph 9, above quoted,
that the concept of the "poles" for which exemption is
granted, is not determined by their place or location, nor by
the character of the electric current it carries, nor the
material or form of which it is made, but the use to which
they are dedicated. In accordance with the definitions, pole
is not restricted to a long cylindrical piece of wood or metal,
but includes "upright standards to the top of which
something is affixed or by which something is supported. As
heretofore described, respondent's steel supports consists of
a framework of four steel bars or strips which are bound by
steel cross-arms atop of which are cross-arms supporting
five high voltage transmission wires (See Annex A) and their
sole function is to support or carry such wires.
The conclusion of the CTA that the steel supports in question
are embraced in the term "poles" is not a novelty. Several
courts of last resort in the United States have called these
steel supports "steel towers", and they denominated these
supports or towers, as electric poles. In their decisions the
words "towers" and "poles" were used interchangeably, and
it is well understood in that jurisdiction that a transmission
tower or pole means the same thing.
In a proceeding to condemn land for the use of electric
power wires, in which the law provided that wires shall be
constructed upon suitable poles, this term was construed to

mean either wood or metal poles and in view of the land

being subject to overflow, and the necessary carrying of
numerous wires and the distance between poles, the statute
was interpreted to include towers or poles. (Stemmons and
Dallas Light Co. (Tex) 212 S.W. 222, 224; 32-A Words and
Phrases, p. 365.)
The term "poles" was also used to denominate the steel
supports or towers used by an association used to convey
its electric power furnished to subscribers and members,
constructed for the purpose of fastening high voltage and
dangerous electric wires alongside public highways. The
steel supports or towers were made of iron or other metals
consisting of two pieces running from the ground up some
thirty feet high, being wider at the bottom than at the top,
the said two metal pieces being connected with criss-cross
iron running from the bottom to the top, constructed like
ladders and loaded with high voltage electricity. In form and
structure, they are like the steel towers in question. (Salt
River Valley Users' Ass'n v. Compton, 8 P. 2nd, 249-250.)
The term "poles" was used to denote the steel towers of an
electric company engaged in the generation of hydroelectric power generated from its plant to the Tower of
Oxford and City of Waterbury. These steel towers are about
15 feet square at the base and extended to a height of
about 35 feet to a point, and are embedded in the cement
foundations sunk in the earth, the top of which extends
above the surface of the soil in the tower of Oxford, and to
the towers are attached insulators, arms, and other
equipment capable of carrying wires for the transmission of
electric power (Connecticut Light and Power Co. v. Oxford,
101 Conn. 383, 126 Atl. p. 1).
In a case, the defendant admitted that the structure on
which a certain person met his death was built for the
purpose of supporting a transmission wire used for carrying
high-tension electric power, but claimed that the steel
towers on which it is carried were so large that their wire
took their structure out of the definition of a pole line. It was
held that in defining the word pole, one should not be
governed by the wire or material of the support used, but
was considering the danger from any elevated wire carrying
electric current, and that regardless of the size or material
Page 54 of 404

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wire of its individual members, any continuous series of

structures intended and used solely or primarily for the
purpose of supporting wires carrying electric currents is a
pole line (Inspiration Consolidation Cooper Co. v. Bryan 252
P. 1016).
It is evident, therefore, that the word "poles", as used in Act
No. 484 and incorporated in the petitioner's franchise,
should not be given a restrictive and narrow interpretation,
as to defeat the very object for which the franchise was
granted. The poles as contemplated thereon, should be
understood and taken as a part of the electric power system
of the respondent Meralco, for the conveyance of electric
current from the source thereof to its consumers. If the
respondent would be required to employ "wooden poles", or
"rounded poles" as it used to do fifty years back, then one
should admit that the Philippines is one century behind the
age of space. It should also be conceded by now that steel
towers, like the ones in question, for obvious reasons, can
better effectuate the purpose for which the respondent's
franchise was granted.
Granting for the purpose of argument that the steel
supports or towers in question are not embraced within the
term poles, the logical question posited is whether they
constitute real properties, so that they can be subject to a
real property tax. The tax law does not provide for a
definition of real property; but Article 415 of the Civil Code
does, by stating the following are immovable property:
(1) Land, buildings, roads, and constructions of all kinds
adhered to the soil;
xxx

xxx

xxx

(3) Everything attached to an immovable in a fixed manner,

in such a way that it cannot be separated therefrom without
breaking the material or deterioration of the object;
xxx

xxx

xxx

(5) Machinery, receptacles, instruments or implements

intended by the owner of the tenement for an industry or
works which may be carried in a building or on a piece of

land, and which tends directly to meet the needs of the said
industry or works;
xxx

xxx

xxx

The steel towers or supports in question, do not come within

the objects mentioned in paragraph 1, because they do not
constitute buildings or constructions adhered to the soil.
They are not construction analogous to buildings nor
adhering to the soil. As per description, given by the lower
court, they are removable and merely attached to a square
metal frame by means of bolts, which when unscrewed
could easily be dismantled and moved from place to place.
They can not be included under paragraph 3, as they are not
attached to an immovable in a fixed manner, and they can
be separated without breaking the material or causing
deterioration upon the object to which they are attached.
Each of these steel towers or supports consists of steel bars
or metal strips, joined together by means of bolts, which can
be disassembled by unscrewing the bolts and reassembled
by screwing the same. These steel towers or supports do not
also fall under paragraph 5, for they are not machineries,
receptacles, instruments or implements, and even if they
were, they are not intended for industry or works on the
land. Petitioner is not engaged in an industry or works in the
land in which the steel supports or towers are constructed.
It is finally contended that the CTA erred in ordering the City
Treasurer of Quezon City to refund the sum of P11,651.86,
despite the fact that Quezon City is not a party to the case.
It is argued that as the City Treasurer is not the real party in
interest, but Quezon City, which was not a party to the suit,
notwithstanding its capacity to sue and be sued, he should
not be ordered to effect the refund. This question has not
been raised in the court below, and, therefore, it cannot be
properly raised for the first time on appeal. The herein
petitioner is indulging in legal technicalities and niceties
which do not help him any; for factually, it was he (City
Treasurer) whom had insisted that respondent herein pay
the real estate taxes, which respondent paid under protest.
Having acted in his official capacity as City Treasurer of
Quezon City, he would surely know what to do, under the
circumstances.
Page 55 of 404

LAW ON PROPERTY

IN VIEW HEREOF, the decision appealed from is hereby

affirmed, with costs against the petitioners
DIGESTED VERSION:
Facts: On 20 October 1902, the Philippine Commission
enacted Act 484 which authorized the Municipal Board of
Manila to grant a franchise to construct, maintain and
operate an electric street railway and electric light, heat and
power system in the City of Manila and its suburbs to the
person or persons making the most favorable bid. Charles
M. Swift was awarded the said franchise on March 1903, the
terms and conditions of which were embodied in Ordinance
44 approved on 24 March 1903. Meralco became the
transferee and owner of the franchise. Meralcos electric
power is generated by its hydro-electric plant located at
Botocan Falls, Laguna and is transmitted to the City of
Manila by means of electric transmission wires, running from
the province of Laguna to the said City. These electric
transmission wires which carry high voltage current, are
fastened to insulators attached on steel towers constructed
by respondent at intervals, from its hydroelectric plant in the
province of Laguna to the City of Manila. Meralco has
constructed 40 of these steel towers within Quezon City, on
land belonging to it.
On 15 November 1955, City Assessor of Quezon City
declared the aforesaid steel towers for real property tax
under Tax Declaration 31992 and 15549. After denying
Meralcos petition to cancel these declarations an appeal
was taken by Meralco to the Board of Assessment Appeals of
Quezon City, which required Meralco to pay the amount of
P11,651.86 as real property tax on the said steel towers for
the years 1952 to 1956. Meralco paid the amount under
protest, and filed a petition for review in the Court of Tax
Appeals which rendered a decision on 29 December 1958,
ordering the cancellation of the said tax declarations and
the City Treasurer of Quezon City to refund to Meralco the
sum of P11,651.86. The motion for reconsideration having
been denied, on 22 April 1959, the petition for review was
filed.
Issue: Whether or not the steel towers of an electric
company constitute real property for the purposes of real
property tax.

Held: The steel towers of an electric company dont

constitute real property for the purposes of real property
tax.
Steel towers are not immovable property under paragraph
1, 3 and 5 of Article 415.
The steel towers or supports do not come within the objects
mentioned in paragraph 1, because they do not constitute
buildings or constructions adhered to the soil. They are not
constructions analogous to buildings nor adhering to the
soil. As per description, given by the lower court, they are
removable and merely attached to a square metal frame by
means of bolts, which when unscrewed could easily be
dismantled and moved from place to place.
They cannot be included under paragraph 3, as they are not
attached to an immovable in a fixed manner, and they can
be separated without breaking the material or causing
deterioration upon the object to which they are attached.
Each of these steel towers or supports consists of steel bars
or metal strips, joined together by means of bolts, which can
be disassembled by unscrewing the bolts and reassembled
by screwing the same.
These steel towers or supports do not also fall under
paragraph 5, for they are not machineries or receptacles,
instruments or implements, and even if they were, they are
not intended for industry or works on the land.
Petitioner is not engaged in an industry or works on the land
in which the steel supports or towers are constructed.
The Supreme Court affirmed the decision appealed from,
with costs against the petitioners.
G.R. No. L-47943 May 31, 1982
MANILA ELECTRIC COMPANY, petitioner,
vs.
CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF
ASSESSMENT APPEALS OF BATANGAS and PROVINCIAL
ASSESSOR OF BATANGAS, respondents.
Page 56 of 404

LAW ON PROPERTY

AQUINO, J.:
This case is about the imposition of the realty tax on two oil
storage tanks installed in 1969 by Manila Electric Company
on a lot in San Pascual, Batangas which it leased in 1968
from Caltex (Phil.), Inc. The tanks are within the Caltex
refinery compound. They have a total capacity of 566,000
barrels. They are used for storing fuel oil for Meralco's power
plants.
According to Meralco, the storage tanks are made of steel
plates welded and assembled on the spot. Their bottoms
rest on a foundation consisting of compacted earth as the
outermost layer, a sand pad as the intermediate layer and a
two-inch thick bituminous asphalt stratum as the top layer.
The bottom of each tank is in contact with the asphalt layer,
The steel sides of the tank are directly supported
underneath by a circular wall made of concrete, eighteen
inches thick, to prevent the tank from sliding. Hence,
according to Meralco, the tank is not attached to its
foundation. It is not anchored or welded to the concrete
circular wall. Its bottom plate is not attached to any part of
the foundation by bolts, screws or similar devices. The tank
merely sits on its foundation. Each empty tank can be
floated by flooding its dike-inclosed location with water four
feet deep. (pp. 29-30, Rollo.)
On the other hand, according to the hearing commissioners
of the Central Board of Assessment Appeals, the area where
the two tanks are located is enclosed with earthen dikes
with electric steel poles on top thereof and is divided into
two parts as the site of each tank. The foundation of the
tanks is elevated from the remaining area. On both sides of
the earthen dikes are two separate concrete steps leading to
the foundation of each tank.
Tank No. 2 is supported by a concrete foundation with an
asphalt lining about an inch thick. Pipelines were installed
on the sides of each tank and are connected to the pipelines
of the Manila Enterprises Industrial Corporation whose
buildings and pumping station are near Tank No. 2.

The Board concludes that while the tanks rest or sit on their
foundation, the foundation itself and the walls, dikes and
steps, which are integral parts of the tanks, are affixed to
the land while the pipelines are attached to the tanks. (pp.
60-61, Rollo.) In 1970, the municipal treasurer of Bauan,
Batangas, on the basis of an assessment made by the
provincial assessor, required Meralco to pay realty taxes on
the two tanks. For the five-year period from 1970 to 1974,
the tax and penalties amounted to P431,703.96 (p. 27,
Rollo). The Board required Meralco to pay the tax and
penalties as a condition for entertaining its appeal from the
adverse decision of the Batangas board of assessment
appeals.
The Central Board of Assessment Appeals (composed of
Acting Secretary of Finance Pedro M. Almanzor as chairman
and Secretary of Justice Vicente Abad Santos and Secretary
of Local Government and Community Development Jose
Roo as members) in its decision dated November 5, 1976
ruled that the tanks together with the foundation, walls,
dikes, steps, pipelines and other appurtenances constitute
taxable improvements.
Meralco received a copy of that decision on February 28,
1977. On the fifteenth day, it filed a motion for
reconsideration which the Board denied in its resolution of
November 25, 1977, a copy of which was received by
Meralco on February 28, 1978.
On March 15, 1978, Meralco filed this special civil action of
certiorari to annul the Board's decision and resolution. It
contends that the Board acted without jurisdiction and
committed a grave error of law in holding that its storage
tanks are taxable real property.
Meralco contends that the said oil storage tanks do not fall
within any of the kinds of real property enumerated in
article 415 of the Civil Code and, therefore, they cannot be
categorized as realty by nature, by incorporation, by
destination nor by analogy. Stress is laid on the fact that the
tanks are not attached to the land and that they were
placed on leased land, not on the land owned by Meralco.
Page 57 of 404

LAW ON PROPERTY

This is one of those highly controversial, borderline or

penumbral cases on the classification of property where
strong divergent opinions are inevitable. The issue raised by
Meralco has to be resolved in the light of the provisions of
the Assessment Law, Commonwealth Act No. 470, and the
Real Property Tax Code, Presidential Decree No. 464 which
took effect on June 1, 1974.
Section 2 of the Assessment Law provides that the realty tax
is due "on real property, including land, buildings,
machinery, and other improvements" not specifically
exempted in section 3 thereof. This provision is reproduced
with some modification in the Real Property Tax Code which
provides:
Sec. 38. Incidence of Real Property Tax. They shall be
levied, assessed and collected in all provinces, cities and
municipalities an annual ad valorem tax on real property,
such as land, buildings, machinery and other improvements
affixed or attached to real property not hereinafter
specifically exempted.
The Code contains the following definition in its section 3:
k) Improvements is a valuable addition made to property
or an amelioration in its condition, amounting to more than
mere repairs or replacement of waste, costing labor or
capital and intended to enhance its value, beauty or utility
or to adapt it for new or further purposes.
We hold that while the two storage tanks are not embedded
in the land, they may, nevertheless, be considered as
improvements on the land, enhancing its utility and
rendering it useful to the oil industry. It is undeniable that
the two tanks have been installed with some degree of
permanence as receptacles for the considerable quantities
of oil needed by Meralco for its operations.
Oil storage tanks were held to be taxable realty in Standard
Oil Co. of New Jersey vs. Atlantic City, 15 Atl. 2nd 271.
For purposes of taxation, the term "real property" may
include things which should generally be regarded as
personal property(84 C.J.S. 171, Note 8). It is a familiar

phenomenon to see things classed as real property for

purposes of taxation which on general principle might be
considered personal property (Standard Oil Co. of New York
vs. Jaramillo, 44 Phil. 630, 633).
The case of Board of Assessment Appeals vs. Manila Electric
Company, 119 Phil. 328, wherein Meralco's steel towers
were held not to be subject to realty tax, is not in point
because in that case the steel towers were regarded as
poles and under its franchise Meralco's poles are exempt
from taxation. Moreover, the steel towers were not attached
to any land or building. They were removable from their
metal frames.
Nor is there any parallelism between this case and
Mindanao Bus Co. vs. City Assessor, 116 Phil. 501, where the
tools and equipment in the repair, carpentry and blacksmith
shops of a transportation company were held not subject to
realty tax because they were personal property.
WHEREFORE, the petition is dismissed. The Board's
questioned decision and resolution are affirmed. No costs.
SO ORDERED.
G.R. No. L-11407

October 30, 1917

FAUSTO RUBISO and BONIFACIO GELITO, plaintiff-appellee,

vs.
FLORENTINO E. RIVERA, defendant-appellant.
Francisco Sevilla for appellant.
Salvador Q. Araullo for appellee.

TORRES, J.:
This appeal by bill of exceptions was filed by counsel
for Florentino E. Rivera against the judgment of September
6, 1915, in which the defendant and appellant was ordered
to place at the disposal of the plaintiff Fausto Rubiso the
Page 58 of 404

LAW ON PROPERTY

pilot boat in litigation. No special finding was made for

costs.
On April 10, 1915, counsel for plaintiff brought suit in
the Court of the First Instance of this city and alleged in the
complaint that his clients were the owners of the pilot boat
named Valentina, which had been in bad condition since the
year 1914 and, on the date of the complaint, was stranded
in the place called Tingloy, of the municipality of Bauan,
Batangas; that the defendant Florentino E. Rivera took
charge or possession of said vessel without the knowledge
or consent of the plaintiff and refused to deliver it to them,
under claim that he was the owner thereof; and that such
procedure on the defendant's part caused the plaintiffs to
suffer damages, not only because they could not proceed to
repair the vessel, but also because they were unable to
derive profit from the voyages for which said pilot boat was
customarily used; and that the net amount of such
uncollected profit was P1,750. The complaint terminated
with a petition that judgment be rendered by ordering the
defendant to deliver said pilot boat to the plaintiffs and
indemnify them in the amount aforementioned or in such
amount as should be proven at trial, and to pay the costs.
Counsel for the defendant entered a general and
specific denial of all the facts set forth in the complaint, with
the exception of those admitted in the special defense and
consisting in that said pilot boat belonged to the concern
named "Gelito and Co.," Bonifacio Gelito being a copartner
thereof to the extent of two-thirds, and the Chinaman Sy
Qui, to that of the one-third, of the value of said vessel; the
subsequently Bonifacio Gelito sold his share to his copartner
Sy Qui, as attested by the instrument Exhibit A, registered in
the office of the Collector of Customs and made a part of his
answer; that later said Chinaman, the absolute owner of the
vessel, sold it in turn to the defendant Rivera, according to
the public instrument, also attached to his answer as Exhibit
B; and that, for the reason, Rivera took possession of said
pilot boat Valentina, as its sole owner. He therefore
petitioned that the defendant be absolved from the
complaint, with the costs against the plaintiff.
After the hearing of the case and introduction of
documentary evidence, the judgment of September 6, 1915,

was rendered, from which counsel for the defendant

appealed and moved for a new trial. This motion was denied
and the appellant excepted.
The record shows it to have been fully proven that
Bonifacio Gelito sold his share in the pilot boat Valentina,
consisting of a two-thirds interest therein, to the Chinaman
Sy Qui, the coowner of the other one-third interest in said
vessel; wherefore this vendor is no longer entitled to
exercise any action whatever in respect to the boat in
question. Gelito was one of the partnership owners of the
Valentina, as in fact his name appears in the certificate of
protection issued by the Bureau of Customs, and the rights
he held are evidenced by the articles of partnership; but, the
whole ownership in the vessel having been consolidated in
behalf of the Chinaman Sy Qui, this latter, in the use of his
right as the sole owner of the Valentina, sold this boat to
Florentino E. Rivera for P2,500, on January 4, 1915, which
facts, are set forth in a deed ratified on the same date
before a notary. This document was registered in the Bureau
of Customs on March 17th of the same year.
On the 23d of January of that year, that is, after the
sale of the boat to the defendant Rivera, suit having been
brought in the justice of the peace court against the
Chinaman Sy Qui to enforce payment of a certain sum of
money, the latter's creditor Fausto Rubiso, the herein
plaintiff, acquired said vessel at a public auction sale and for
the sum of P55.45. The certificate of sale and adjudication of
the boat in question was issued by the sheriff on behalf of
Fausto Rubiso, in the office of the Collector of Customs, on
January 27 of the same year and was also entered in the
commercial registry on the 14th of March, following.
So that the pilot boat Valentina was twice sold: first
privately by its owner Sy Qui to the defendant Florentino E.
Rivera, on January 4, 1915, and afterwards by the sheriff at
public auction in conformity with the order contained in the
judgment rendered by the justice of the peace, court, on
January 23 of the same year, against the Chinaman Sy Qui
and in behalf of the plaintiff, Fausto Rubiso.

Page 59 of 404
LAW ON PROPERTY

It is undeniable that the defendant Rivera acquired by

purchase the pilot boat Valentina on a date prior to that of
the purchase and adjudication made at public auction, by
and on behalf of the plaintiff Rubiso; but it is no less true
that the sale of the vessel by Sy Qui to Florentino E. Rivera,
on January 4, 1915, was entered in the customs registry only
on March 17, 1915, while its sale at public auction to Fausto
Rubiso on the 23d of January of the same year, 1915, was
recorded in the office of the Collector of Customs on the
27th of the same month, and in the commercial registry on
the 4th of March, following; that is, the sale on behalf of the
defendant Rivera was prior to that made at public auction to
Rubiso, but the registration of this latter sale was prior by
many days to the sale made to the defendant.
Article 573 of the Code of Commerce provides, in its
first paragraph:
Merchant vessels constitute property which may be
acquired and transferred by any of the means recognized by
law. The acquisition of a vessel must be included in a written
instrument, which shall not produce any effect with regard
to third persons if not recorded in the commercial registry.
So that, pursuany to the above-quoted article,
inscription in the commercial registry was indispensable, in
order that said acquisition might affect, and produce
consequences with respect to third persons.
However, since the enactment of Act No. 1900, on
May 18, 1909, said article of the Code of Commerce was
amended, as appears by section 2 of that Act, here below
transcribed.
The documenting, registering, enrolling, and licensing
of vessels in accordance with the Customs Administrative
Act and customs rules and regulations shall be deemed to
be a registry of vessels within the meaning of the title two of
the Code of Commerce, unless otherwise provided in said
Customs Administrative Act or in said customs rules and
regulations, and the Insular Collector of Customs shall
perform the duties of commercial register concerning the
registering of vessels, as defined in title two of the Code of
Commerce.

The requisite of registration in the registry, of the

purchase of a vessel, is necessary and indispensable in
order that the purchaser's rights may be maintained against
a claim filed by a third person. Such registration is required
both by the Code of Commerce and by Act No. 1900. The
amendment solely consisted in charging the Insular
Collector of Customs, as at present, with the fulfillment of
the duties of the commercial register concerning the
registering of vessels; so that the registration of a bill of sale
of a vessel shall be made in the office of the insular
Collector of Customs, who, since May 18, 1909, has been
performing the duties of the commercial register in place of
this latter official.
In view of said legal provisions, it is undeniable that
the defendant Florentino E. Rivera's rights cannot prevail
over those acquired by Fausto Rubiso in the ownership of
the pilot boat Valentina, inasmuch as, though the latter's
acquisition of the vessel at public auction, on January 23,
1915, was subsequent to its purchase by the defendant
Rivera, nevertheless said sale at public auction was
antecedently recorded in the office of the Collector of
Customs, on January 27, and entered in the commercial
registry an unnecessary proceeding on March 4th;
while the private and voluntary purchase made by Rivera on
a prior date was not recorded in the office of the Collector of
Customs until many days afterwards, that is, not until March
17, 1915.
The legal rule set down in the Mercantile Code
subsists, inasmuch as the amendment solely refers to the
official who shall make the entry; but, with respect to the
rights of the two purchasers, whichever of them first
registered his acquisition of the vessel is the one entitled to
enjoy the protection of the law, which considers him the
absolute owner of the purchased boat, and this latter to be
free of all encumbrance and all claims by strangers for,
pursuant to article 582 of the said code, after the bill of the
judicial sale at auction has been executed and recorded in
the commercial registry, all the other liabilities of the vessel
in favor of the creditors shall be considered canceled.
1awphil.net
Page 60 of 404

LAW ON PROPERTY

The purchaser at public auction, Fausto Rubiso, who

was careful to record his acquisition, opportunely and on a
prior date, has, according to the law, a better right than the
defendant Rivera who subsequently recorded his purchase.
The latter is a third person, who was directly affected by the
registration which the plaintiff made of his acquisition.
Ships or vessels, whether moved by steam or by sail,
partake, to a certain extent, of the nature and conditions of
real property, on account of their value and importance in
the world commerce; and for this reason the provisions of
article 573 of the Code of Commerce are nearly identical
with those of article 1473 of the Civil Code.
With respect to the indemnity for losses and
damages, requested by the plaintiff, aside from the fact, as
shown by the evidence, that, subsequent to the date when
the judgment appealed from was rendered, the vessel in
question emerged unharmed from the place where it was
stranded, and was, at the time of the trial, anchored in the
port of Maricaban, the record certainly does not furnish any
positive evidence of the losses and damages alleged to have
been occasioned. On the other hand, it cannot be affirmed
that the defendant acted in bad faith specifically because he
acquired the vessel on a date prior to that of its acquisition
at public auction by the plaintiff Rubiso, who, for the reason
aforestated, is the true and sole owner of said pilot boat.
For the foregoing considerations, whereby the errors
assigned to the judgment appealed from are deemed to
have been refuted, it is our opinion that said judgment
should be, as it is hereby, affirmed, with costs against the
appellant. So ordered.
Sibal v. Valdez
[G.R. No. 26278. August 4, 1927.]
Second Division, Johnson (J): 5 concur
Facts: On 11 May 1923, the deputy-sheriff of the Province of Tarlac, by
virtue of a writ of execution in civil case 20203 of the CFI Manila
(Macondray & Co., Inc. vs. Leon Sibal), levied an attachment on Leon
Sibals 8 parcels of land for the sum of P4,273.93. 2 months later, or on 30
July 1923, Macondray & Co., Inc., bought said parcels of land, at the
auction held by the sheriff of the Province of Tarlac. Within 1 year from the

sale of said parcels of land, or on 24 September 1923, Sibal paid P2,000 to

Macondray for the account of the redemption price of said parcels of land,
without specifying which said amount was to be applied. The redemption
price of the parcels was reduced to P2,579.97 including interest.
On 29 April 1924, the deputy sheriff of the Province of Tarlac, by virtue of a
writ of execution in civil case 1301 of the Province of Pampanga (Emiliano
J. Valdez vs. Leon Sibal 1.), attached the personal property of Sibal located
in Tarlac, among which was included the sugar cane in question in the 7
parcels of land described in the complaint. He also attached Sibals real
property in Tarlac, including rights, interest and participation therein, which
consists of 11 parcels of land and a house and camarin situated in one of
said parcels. On 9-10 May 1924, the deputy sheriff sold at public auction
said personal properties to Emiliano J. Valdez, who paid therefor the sum of
P1,550, of which P600 was for the sugar cane. On 25 June 1924, 8 of the 11
parcels, including the camarin and the house were bought by Valdez at the
auction held by the sheriff for the sum of P12,200. The 3 remaining parcels
were released from attachment by virtue of claims presented by Cayugan
and Tizon. On the same date, Macondray sold and conveyed to Valdez for
P2,579.97 all of its rights and interest in the 8 parcels of land acquired by it
in connection with civil case 20203 of the CFI Manila.
On 14 December 1924, action was commenced in the CFI of the Province
of Tarlac. The plaintiff alleged that the deputy sheriff of Tarlac Province
attached and sold to Valdez the sugar cane planted by the plaintiff and his
tenants on 7 parcels of land, and that within 1 year from the date of the
attachment and sale the plaintiff ordered to redeem said sugar cane and
tendered to Valdez the amount sufficient to cover the price paid by the latter,
with taxes and interests, and that Valdez refused to accept the money and
return the sugar cane to the plaintiff. After hearing and on 28 April 1926, the
judge (Lukban) rendered judgment in favor of the defendant holding that
the sugar cane in question was personal property and, as such, was not
subject to redemption; among others. Hence, the appeal.
1. Paragraph 2, Article 334 of the Civil Code interpreted by the Tribunal
Supremo de Espana as that growing crops may be considered as personal
property
Sugar cane may come under the classification of real property as
"ungathered products" in paragraph 2 of article 334 of the Civil Code,
Page 61 of 404

LAW ON PROPERTY

which enumerates as real property as "Trees, plants, and ungathered

products, while they are annexed to the land or form an integral part of any
immovable property." That article, however, has received in recent years an
interpretation by the Tribunal Supremo de Espaa, which holds that, under
certain conditions, growing crops may be considered as personal property.
(Decision of March 18, 1904, vol. 97, Civil Jurisprudence of Spain.) Thus,
under Spanish authorities, pending fruits and ungathered products may be
sold and transferred as personal property. Also, the Supreme Court of Spain,
in a case of ejectment of a lessee of an agricultural land, held that the lessee
was entitled to gather the Products corresponding to the agricultural year
because said fruits did not go with the land but belonged separately to the
lessee. And further, under the Spanish Mortgage Law of 1909, as amended,
the mortgage of a piece of land does not include the fruits and products
existing thereon, unless the contract expressly provides otherwise.
2. Manresa admits growing crops as personal property
Manresa, the eminent commentator of the Spanish Civil Code, in discussing
section 334 of the Civil Code, in view of the recent decisions of the
Supreme Court of Spain, admits that growing crops are sometimes
considered and treated as personal property.
3. Paragraph 2, Article 344 of the Civil Code corresponds to Article 465 of
the Civil Code of Louisiana
Article 465 of the Civil Code of Louisiana, which corresponds to paragraph
2 of article 334 of the Civil Code, provides: "Standing crops and the fruits
of trees not gathered, and trees before they are cut down, are likewise
immovable, and are considered as part of the land to which they are
attached."
4. Louisiana jurisprudence: Growing crops mobilization by anticipation
Standing crops and the fruits of trees not gathered and trees before they are
cut down are considered as part of the land to which they are attached,' but
the immovability provided for is only one in abstracto and without reference
to rights on or to the crop acquired by others than the owners of the property
to which the crop is attached. The existence of a right on the growing crop
is a mobilization by anticipation, a gathering as it were in advance,
rendering the crop movable quoad the right acquired therein. Jurisprudence
recognizes the possible mobilization of the growing crop. (Citizens' Bank
vs. Wiltz, 31 La. Ann., 244; Porche vs. Bodin, 28 La. Ann., 761; Sandel vs.

Douglass, 27 La. Ann., 629; Lewis vs. Klotz, 39 La. Ann., 267.; as cited in
Lumber Co. vs. Sheriff and Tax Collector [106 La., 418], c.f. Citizens Bank
v. Wiltz [31 La. Ann., 244])
5. Louisiana jurisprudence: Standing crops as immovable or movable based
on owned and leased premises; seizure by creditors
Standing crops are considered as immovable and as part of the land to
which they are attached, and the fruits of an immovable gathered or
produced while it is under seizure are considered as making part thereof,
and inure to the benefit of the person making the seizure. But the evident
meaning of these articles is, where the crops belong to the owner of the
plantation, they form part of the immovable, and where it is seized, the
fruits gathered or produced inure to the benefit of the seizing creditor. A
crop raised on leased premises in no sense forms part of the immovable. It
belongs to the lessee, and may be sold by him, whether it be gathered or
not, and it may be sold by his judgment creditors. (Porche vs. Bodin [28 La.
An., 761])
6. Louisiana jurisprudence: Law cannot be interpreted result in absurd
consequences
If crop necessarily forms part of the leased premises the result would be that
it could not be sold under execution separate and apart from the land. If a
lessee obtain supplies to make his crop, the factor's lien would not attach to
the crop as a separate thing belonging to his debtor, but the land belonging
to the lessor would be affected with the recorded privilege. The law cannot
be construed so as to result in such absurd consequences.
7. American jurisprudence: growing crops by yearly labor and cultivation
personal property
The settled doctrine followed in the State of California and other states in
connection with the attachment of property and execution of judgment is,
that growing crops raised by yearly labor and cultivation are considered
personal property. All annual crops which are raised by yearly manurance
and labor, and essentially owe their annual existence to cultivation by man,
may be levied on as personal property. Crops, whether growing or standing
in the field ready to be harvested, are, when produced by annual cultivation,
no part of the realty. They are, therefore, liable to voluntary transfer as
chattels. It is equally well settled that they may be seized and sold under
execution.
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8. Valid sale of a thing not yet in existence; thing must be owned by the
vendor
A valid sale may be made of a thing, which though not yet actually in
existence, is reasonably certain to come into existence as the natural
increment or usual incident of something already in existence, and then
belonging to the vendor, and the title will vest in the buyer the moment the
thing comes into existence. (Emerson vs. European Railway Co., 67 Me.,
387; Cutting vs. Packers Exchange, 21 Am. St. Rep., 63.) The thing sold,
however, must be specific and identified. They must be also owned at the
time by the vendor. (Hull vs. Hull, 48 Conn., 250 [40 Am. Rep., 165].)
9. Source of provisions on execution of judgment in Code of Civil
Procedure (Act 190); Growing crops are personal property
Section 450 and most of the other sections of the Code of Civil Procedure
relating to the execution of judgments were taken from the Code of Civil
Procedure of California. Section 450 of the Code of Civil Procedure
enumerates the property of a judgment debtor which may be subjected to
execution, and reads as "All goods, chattels, moneys, and other property,
both real and personal, shall be liable to execution." The Supreme Court of
California, under section 688 of the Code of Civil Procedure of that state, to
which the Code of Civil Procedure was pattered, has held, without
variation, that growing crops were personal property and subject to
execution.

products" as mentioned in said article of the Civil Code have the nature of
personal property; or that in the sense that, for the purposes of attachment
and execution, and for the purposes of the Chattel Mortgage Law,
"ungathered products" have the nature of personal property. In other words,
the phrase "personal property" should be understood to include "ungathered
products." In the case at bar, the sugar cane in question was personal
property and was not subject to redemption.
12. Absence from trial and failure to cross-examine lend weight to the
evidence presented by the other party
The absence of the plaintiff from the trial and his failure to cross-examine
the defendant have lent considerable weight to the evidence then presented
for the defense. The court has been inclined to to give more weight to the
evidence adduced by him than to the evidence adduced by the plaintiff, with
respect to the ownership of parcels of land.
13. Lack of evidence of bad faith in planting palay in questioned parcels
entitles plaintiff to of the crop
There being no evidence of bad faith on the plaintiffs part, in planting the
palay in the disputed parcels of land and harvested therefrom 190 cavans, he
is therefore entitled to one-half of the crop, or 95 cavans, not 190 cavans as
ordered by the lower court.
G.R. No. L-19527

10. Chattel Mortgage Law recognizes growing crops as personal property

Act 1508, the Chattel Mortgage Law, fully recognizes that growing crops
are personal property. Section 2 of said Act provides that "All personal
property shall be subject to mortgage, agreeably to the provisions of this
Act, and a mortgage executed in pursuance thereof shall be termed a chattel
mortgage." Section 7 in part provides that "If growing crops be mortgaged
the mortgage may contain an agreement stipulating that the mortgagor binds
himself properly to tend. care for and protect the crop while growing." The
above provisions of Act 1508 were enacted on the assumption that "growing
crops" are personal property.
11. Personal property includes ungathered products; Paragraph 2, Article
334 of the Civil Code modified by Act 190 and 1508
Paragraph 2 of article 334 of the Civil Code has been modified by section
450 of Act No. 190 and by Act No. 1508 in the sense that "ungathered

March 30, 1963

RICARDO PRESBITERO, in his capacity as Executor of the

Testate Estate of EPERIDION PRESBITERO, petitioner,
vs.
THE HON. JOSE F. FERNANDEZ, HELEN CARAM NAVA, and the
PROVINCIAL SHERIFF OF NEGROS OCCIDENTAL,
respondents.
San Juan, Africa and Benedicto and Hilado and Hilado for
petitioner.
Paredes, Poblador, Cruz and Nazareno and Manuel Soriano
for respondents.
REYES, J.B.L., J.:
Petition for a writ of certiorari against the Court of First
Instance of Negros Occidental.
Page 63 of 404

LAW ON PROPERTY

It appears that during the lifetime of Esperidion Presbitero,

judgment was rendered against him by the Court of Appeals
on October 14, 1959, in CA-G.R. No. 20879,
... to execute in favor of the plaintiff, within 30 days from the
time this judgment becomes final, a deed of reconveyance
of Lot No. 788 of the cadastral survey of Valladolid, free from
all liens and encumbrances, and another deed of
reconveyance of a 7-hectare portion of Lot No. 608 of the
same cadastral survey, also free from all liens and
encumbrances, or, upon failure to do so, to pay to the
plaintiff the value of each of the said properties, as may be
determined by the Court a quo upon evidence to be
presented by the parties before it. The defendant is further
adjudged to pay to the plaintiff the value of the products
received by him from the 5-hectare portion equivalent to 20
cavans of palay per hectare every year, or 125 cavans
yearly, at the rate of P10.00 per cavan, from 1951 until
possession of the said 5-hectare portion is finally delivered
to the plaintiff with legal interest thereon from the time the
complaint was filed; and to pay to the plaintiff the sum of
P1,000.00 by way of attorney's fees, plus costs.
This judgment, which became final, was a modification of a
decision of the Court of First Instance of Negros Occidental,
in its Civil Case No. 3492, entitled "Helen Caram Nava,
plaintiff, versus Esperidion Presbitero, defendant."
Thereafter, plaintiff's counsel, in a letter dated December 8,
1959, sought in vain to amicably settle the case through
petitioner's son, Ricardo Presbitero. When no response was
forthcoming, said counsel asked for, and the court a quo
ordered on June 9, 1960, the issuance of a partial writ of
execution for the sum of P12,250.00. On the following day,
June 10, 1960, said counsel, in another friendly letter,
reiterated his previous suggestion for an amicable
settlement, but the same produced no fruitful result.
Thereupon, on June 21, 1960, the sheriff levied upon and
garnished the sugar quotas allotted to plantation audit Nos.
26-237, 26-238, 26-239, 26-240 and 26-241 adhered to the
Ma-ao Mill District and "registered in the name of Esperidion
Presbitero as the original plantation-owner", furnishing
copies of the writ of execution and the notice of

garnishment to the manager of the Ma-ao Sugar Central

Company, Bago, Negros Occidental, and the Sugar Quota
Administration at Bacolod City, but without presenting for
registration copies thereof to the Register of Deeds.
Plaintiff Helen Caram Nava (herein respondent) then moved
the court, on June 22, 1960, to hear evidence on the market
value of the lots; and after some hearings, occasionally
protracted by postponements, the trial court, on
manifestation of defendant's willingness to cede the
properties in litigation, suspended the proceedings and
ordered him to segregate the portion of Lot 608 pertaining
to the plaintiff from the mass of properties belonging to the
defendant within a period to expire on August 24, 1960, and
to effect the final conveyance of the said portion of Lot 608
and the whole of Lot 788 free from any lien and
encumbrance whatsoever. Because of Presbitero's failure to
comply with this order within the time set forth by the court,
the plaintiff again moved on August 25, 1960 to declare the
market value of the lots in question to be P2,500.00 per
hectare, based on uncontradicted evidence previously
adduced. But the court, acting on a prayer of defendant
Presbitero, in an order dated August 27, 1960, granted him
twenty (20) days to finalize the survey of Lot 608, and
ordered him to execute a reconveyance of Lot 788 not later
than August 31, 1960. Defendant again defaulted; and so
plaintiff, on September 21, 1960, moved the court for
payment by the defendant of the sum of P35,000.00 for the
14 hectares of land at P2,500.00 to the hectare, and the
court, in its order dated September 24, 1960, gave the
defendant until October 15, 1960 either to pay the value of
the 14 hectares at the rate given or to deliver the clean
titles of the lots. On October 15, 1960, the defendant finally
delivered Certificate of Title No. T-28046 covering Lot 788,
but not the title covering Lot 608 because of an existing
encumbrance in favor of the Philippine National Bank. In
view thereof, Helen Caram Nava moved for, and secured on
October 19, 1960, a writ of execution for P17,500.00, and on
the day following wrote the sheriff to proceed with the
auction sale of the sugar quotas previously scheduled for
November 5, 1960. The sheriff issued the notice of auction
sale on October 20, 1960.

Page 64 of 404
LAW ON PROPERTY

On October 22, 1960, death overtook the defendant

Esperidion Presbitero.
Proceedings for the settlement of his estate were
commenced in Special Proceedings No. 2936 of the Court of
First Instance of Negros Occidental; and on November 4,
1960, the special administrator, Ricardo Presbitero, filed an
urgent motion, in Case No. 3492, to set aside the writs of
execution, and to order the sheriff to desist from holding the
auction sale on the grounds that the levy on the sugar
quotas was invalid because the notice thereof was not
registered with the Register of Deeds, as for real property,
and that the writs, being for sums of money, are
unenforceable since Esperidion Presbitero died on October
22, 1960, and, therefore, could only be enforced as a money
claim against his estate.
This urgent motion was heard on November 5, 1960, but the
auction sale proceeded on the same date, ending in the
plaintiff's putting up the highest bid for P34,970.11; thus,
the sheriff sold 21,640 piculs of sugar quota to her.
On November 10, 1960, plaintiff Nava filed her opposition to
Presbitero's urgent motion of November 4, 1960; the latter
filed on May 4, 1961 a supplement to his urgent motion; and
on May 8 and 23, 1961, the court continued hearings on the
motion, and ultimately denied it on November 18, 1961.
On January 11, 1962, plaintiff Nava also filed an urgent
motion to order the Ma-ao Sugar Central to register the
sugar quotas in her name and to deliver the rentals of these
quotas corresponding to the crop year 1960-61 and
succeeding years to her. The court granted this motion in its
order dated February 3, 1962. A motion for reconsideration
by Presbitero was denied in a subsequent order under date
of March 5, 1962. Wherefore, Presbitero instituted the
present proceedings for certiorari.
A preliminary restraining writ was thereafter issued by the
court against the respondents from implementing the
aforesaid orders of the respondent Judge, dated February 3,
1960 and March 5, 1962, respectively. The petition further
seeks the setting aside of the sheriff's certificate of sale of
the sugar quotas made out in favor of Helen Caram Nava,

and that she be directed to file the judgment credit in her

favor in Civil Case No. 3492 as a money claim in the
proceedings to settle the Estate of Esperidion Presbitero.
The petitioner denies having been personally served with
notice of the garnishment of the sugar quotas, but this
disclaimer cannot be seriously considered since it appears
that he was sent a copy of the notice through the chief of
police of Valladolid on June 21, 1960, as certified to by the
sheriff, and that he had actual knowledge of the
garnishment, as shown by his motion of November 4, 1960
to set aside the writs of execution and to order the sheriff to
desist from holding the auction sale.
Squarely at issue in this case is whether sugar quotas are
real (immovable) or personal properties. If they be realty,
then the levy upon them by the sheriff is null and void for
lack of compliance with the procedure prescribed in Section
14, Rule 39, in relation with Section 7, Rule 59, of the Rules
of Court requiring "the filing with the register of deeds a
copy of the orders together with a description of the
property . . . ."
In contending that sugar quotas are personal property, the
respondent, Helen Caram Nava, invoked the test formulated
by Manresa (3 Manresa, 6th Ed. 43), and opined that sugar
quotas can be carried from place to place without injury to
the land to which they are attached, and are not one of
those included in Article 415 of the Civil Code; and not being
thus included, they fall under the category of personal
properties:
ART. 416. The following are deemed to be personal property:
xxx

xxx

xxx

4. In general, all things which can be transported from place

to place without impairment of the real property to which
they are fixed.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this
Honorable Court, without prejudice to the parties adducing
Page 65 of 404

LAW ON PROPERTY

other evidence to prove their case not covered by this

stipulation of facts. 1wph1.t
Respondent likewise points to evidence she submitted that
sugar quotas are, in fact, transferred apart from the
plantations to which they are attached, without impairing,
destroying, or diminishing the potentiality of either quota or
plantation. She was sustained by the lower court when it
stated that "it is a matter of public knowledge and it is
universal practice in this province, whose principal industry
is sugar, to transfer by sale, lease, or otherwise, sugar quota
allocations from one plantation to any other" and that it is
"specious to insist that quotas are improvements attaching
to one plantation when in truth and in fact they are no
longer attached thereto for having been sold or leased away
to be used in another plantation". Respondent would add
weight to her argument by invoking the role that sugar
quotas play in our modern social and economic life, and
cites that the Sugar Office does not require any registration
with the Register of Deeds for the validity of the sale of
these quotas; and, in fact, those here in question were not
noted down in the certificate of title of the land to which
they pertain; and that Ricardo Presbitero had leased sugar
quotas independently of the land. The respondent cites
further that the U.S.-Philippine Trade Relations Act, approved
by the United States Congress in 1946, limiting the
production of unrefined sugar in the Philippines did not
allocate the quotas for said unrefined sugar among lands
planted to sugarcane but among "the sugar producing mills
and plantation OWNERS", and for this reason Section 3 of
Executive Order No. 873, issued by Governor General
Murphy, authorizes the lifting of sugar allotments from one
land to another by means only of notarized deeds.
While respondent's arguments are thought-provoking, they
cannot stand against the positive mandate of the pertinent
statute. The Sugar Limitation Law (Act 4166, as amended)
provides
SEC. 9. The allotment corresponding to each piece of land
under the provisions of this Act shall be deemed to be an
improvement attaching to the land entitled thereto ....
and Republic Act No. 1825 similarly provides

SEC. 4. The production allowance or quotas corresponding to

each piece of land under the provisions of this Act shall be
deemed to be an improvement attaching to the land entitled
thereto ....
And Executive Order No. 873 defines "plantation" as follows:
(a) The term 'plantation' means any specific area of land
under sole or undivided ownership to which is attached an
allotment of centrifugal sugar.
Thus, under express provisions of law, the sugar quota
allocations are accessories to land, and can not have
independent existence away from a plantation, although the
latter may vary. Indeed, this Court held in the case of
Abelarde vs. Lopez, 74 Phil. 344, that even if a contract of
sale of haciendas omitted "the right, title, interest,
participation, action (and) rent" which the grantors had or
might have in relation to the parcels of land sold, the sale
would include the quotas, it being provided in Section 9, Act
4166, that the allotment is deemed an improvement
attached to the land, and that at the time the contract of
sale was signed the land devoted to sugar were practically
of no use without the sugar allotment.
As an improvement attached to land, by express provision of
law, though not physically so united, the sugar quotas are
inseparable therefrom, just like servitudes and other real
rights over an immovable. Article 415 of the Civil Code, in
enumerating what are immovable properties, names
10. Contracts for public works, and servitudes and other real
rights over immovable property. (Emphasis supplied)
It is by law, therefore, that these properties are immovable
or real, Article 416 of the Civil Code being made to apply
only when the thing (res) sought to be classified is not
included in Article 415.
The fact that the Philippine Trade Act of 1946 (U.S. Public
Law 371-79th Congress) allows transfers of sugar quotas
does not militate against their immovability. Neither does
the fact that the Sugar Quota Office does not require
Page 66 of 404

LAW ON PROPERTY

registration of sales of quotas with the Register of Deeds for

their validity, nor the fact that allocation of unrefined sugar
quotas is not made among lands planted to sugarcane but
among "the sugar producing mills and plantation OWNERS",
since the lease or sale of quotas are voluntary transactions,
the regime of which, is not necessarily identical to
involuntary transfers or levies; and there cannot be a sugar
plantation owner without land to which the quota is
attached; and there can exist no quota without there being
first a corresponding plantation.
Since the levy is invalid for non-compliance with law, it is
impertinent to discuss the survival or non-survival of claims
after the death of the judgment debtor, gauged from the
moment of actual levy. Suffice it to state that, as the case
presently stands, the writs of execution are not in question,
but the levy on the quotas, and, because of its invalidity, the
levy amount to no levy at all. Neither is it necessary, or
desirable, to pass upon the conscionableness or
unconscionableness of the amount produced in the auction
sale as compared with the actual value of the quotas
inasmuch as the sale must necessarily be also illegal.
As to the remedial issue that the respondents have
presented: that certiorari does not lie in this case because
the petitioner had a remedy in the lower court to "suspend"
the auction sale, but did not avail thereof, it may be stated
that the latter's urgent motion of November 4, 1960, a day
before the scheduled sale (though unresolved by the court
on time), did ask for desistance from holding the sale.
WHEREFORE, the preliminary injunction heretofore granted
is hereby made permanent, and the sheriff's certificate of
sale of the sugar quotas in question declared null and void.
Costs against respondent Nava.
U.S. v. Carlos 21 Phil. 543
FACTS: The defendant used a jumper and was thus able to
divert the flow of electricity, causing loss to the Meralco of
over 2000 kilowatts of current. Accused of theft, his defense
was that electricity was an unknown force, not a fluid, and
being intangible, could not be the object of theft.

HELD: While electric current is not a fluid, still its

manifestations and effects like those of gas may be seen
and felt. The true test of what may be stolen is not whether
it is corporeal or incorporeal, but whether, being possessed
of value, a person other than the owner, may appropriate
the same. Electricity, like gas, is a valuable merchandise,
and may thus be stolen. (See also U.S. v. Tambunting, 41
Phil. 364).
A promissory note is personal property; the right to collect it
is also personal property; but a mortgage on real estate is
real property by analogy. (Par. 10, Art. 415; see also Hilado
v. Register of Deeds, 49 Phil. 542; Hongkong and Shanghai
Bank v. Aldecoa and Co., 30 Phil. 255).
Paragraph 10: Contracts for public works, and servitudes
and other real rights over immovable property.
(a) Compared with the Old Law Under the old Civil Code, the
words administrative concessions for public works were
used instead of contracts for public works.
(b) Rights
The properties referred to in paragraph 10 are not material
things but rights, which are necessarily intangible. (See 3
Manresa 11). The piece of paper on which the contract for
public works has been written is necessarily personal
property, but the contract itself, or rather, the right to the
contract, is real property. A servitude or easement is an
encumbrance imposed on an immovable for the benefi t of
another immovable belonging to another owner, or for the
benefi t of a person, group of persons, or a community (like
the easement of right of way). (Arts. 613-614). Other real
rights over real property include real mortgage (see
Hongkong and Shanghai Bank v. Aldecoa and Co., 30 Phil.
255), antichresis, possessory retention, usufruct and leases
of real property, when the leases have been registered in
the Registry of Property; or even if not registered, if their
duration is for more than a year. Upon the other hand, the
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LAW ON PROPERTY

usufruct of personal property or a lease of personal

property, should be considered personal property.
G.R. No. 73246 March 2, 1993
DIRECTOR OF LANDS AND DIRECTOR OF FOREST
DEVELOPMENT, petitioners,
vs.
INTERMEDIATE APPELLATE COURT AND J. ANTONIO
ARANETA, respondents.
The Solicitor General for petitioners.
Jimenez, Leynes & Associates for private respondent.

NOCON, J.:

The Director of Forest Development also entered its

opposition alleging that the land is within the unclassified
public land and, hence, inalienable. Other private parties
also filed their oppositions, but were subsequently
withdrawn.
In an amended application, Pacific Farms, Inc. filed a
manifestation-motion to change the applicant from Pacific
Farms, Inc. to J. Antonio Araneta. Despite the supposed
amendment, there was no republication.
Evidence presented by the applicant include the testimony
of Placido Orlando, fishery guard of Pacific Farms, Inc., who
said he has known the disputed land since he attained the
age of reason for some forty (40) years now; that when he
first came to know the property it was then owned by and in
the possession of Paulino Castelo, Juan Ambrosio and Julio
Castelo, and later on the whole island was bought by Atty.
Vicente Castelo who in turn sold it to J. Antonio Araneta.

For review before Us is the decision of the Court of Appeals

in the land registration case entitled J. Antonio Araneta v.
The Director of Lands and Director of Forest Development,
AC-G.R. CV. No. 00636, 1 affirming the lower court's
approval of the application for registration of a parcel of land
in favor of applicant therein, J. Antonio Araneta.

Deposition by oral examination of Araneta was also

presented, together with documents of sale, tax
declarations and receipts, and survey of property. Applicant,
however, failed to present the tracing cloth plan and instead
submitted to the court certified copies thereof.

Evidence show that the land involved is actually an island

known as Tambac Island in Lingayen Gulf. Situated in the
Municipality of Bani, Pangasinan, the area consists of
187,288 square meters, more or less. The initial application
for registration was filed for Pacific Farms, Inc. under the
provisions of the Land Registration Act, Act No. 496, as
amended.

While this case is pending here in Court, respondent filed an

Omnibus Motion for Substitution of private respondent. 3
Apparently, Antonio Araneta had assigned his rights to and
interest in Tambac Island to Amancio R. Garcia 4 who in turn
assigned his rights and interest in the same property to
Johnny A. Khonghun whose nationality was not alleged in
the pleadings.

The Republic of the Philippines, thru the Director of Lands

opposed the application alleging that the applicant, Pacific
Farms, Inc. does not possess a fee simple title to the land
nor did its predecessors possess the land for at least thirty
(30) years immediately preceding the filing of application.
The opposition likewise specifically alleged that the
applicant is a private corporation disqualified under the
(1973) new Philippine Constitution from acquiring alienable
lands of the public domain citing Section 11, Article 14. 2

On October 4, 1979, the trial court rendered a decision

adjudicating the subject property to J. Antonio Araneta. On
appeal to the then Intermediate Appellate Court, the
decision of the lower court was affirmed on December 12,
1985.
Petitioners raised the following errors:
I. The lower court erred in adjudicating the lands subject of
registration to applicant-appellee despite his failure to
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LAW ON PROPERTY

present the original tracing cloth plan the submission of

which is a statutory requirement of mandatory character.
II. The lower court erred in not denying registration in favor
of J. Antonio Araneta since the amendment of the
application was simply an attempt to avoid the application
of the constitutional provision disqualifying a private
corporation the Pacific Farms, Inc. in this case from
acquiring lands of public domain.
III. The lower court erred in not declaring the land known as
the "Tambac Island" not subject of registration it being an
island formed on the seas.
IV. The lower court erred in adjudicating the land to the
applicant under the provisions of Presidential Decree No.
1529, otherwise known as the Property Registration Decree,
despite absence of any specific invocation of this law in the
original and amended application.
V. The lower court erred in not granting the government's
motion for reconsideration at least to enable it to present
proof of the status of the land as within the unclassified
public forest, and hence beyond the court's jurisdiction to
adjudicate as private property.
VI. The lower court erred in not declaring that the applicant
has failed to overthrow the presumption that the land is a
portion of the public domain belonging to the Republic of the
Philippines.
From the foregoing it appears that the more important
issues are: 1) whether the presentation of the tracing cloth
plan is necessary; and 2) whether the land known as
"Tambac Island" can be subject to registration.
By mere consideration of the first assignment of error, We
can right away glean the merit of the petition.
Respondent claims that the tracing cloth plan is with the
files of the Land Registration Commission, and the only
evidence that can be presented to that fact is the request
for the issuance of a certified copy thereof and the certified
copy issued pursuant to the request. 5 Respondent further

argues that failure of the petitioners to object to the

presentation of the certified copy of the tracing cloth plan
was the basis of the trial court's denial of petitioner's motion
for reconsideration.
In a very recent decision of this Court, entitled The Director
of Lands v. The Honorable Intermediate Appellate Court and
Lino Anit, 6 We have ruled that the submission of the tracing
cloth plan is a mandatory requirement for registration.
Reiterating Our ruling in Director of Lands v. Reyes, 7 We
asserted that failure to submit in evidence the original
tracing cloth plan is fatal it being a statutory requirement of
mandatory character.
It is of no import that petitioner failed to object to the
presentation of the certified copy of the said plan. What is
required is the original tracing cloth plan of the land applied
for and objection to such requirement cannot be waived
either expressly or impliedly. 8 This case is no different from
the case of Director of Lands v. Reyes, supra wherein We
said that if the original tracing cloth plan was indeed with
the Land Registration Commission, there is no reason why
the applicant cannot easily retrieve the same and submit it
in evidence, it being an essential requirement for
registration.
As to the second assignment of error, We are inclined to
agree with petitioners that the amendment of the
application from the name of Pacific Farms Inc., as applicant,
to the name of J. Antonio Araneta Inc., was a mere attempt
to evade disqualification. Our Constitution, whether the
1973 9 or
1987, 10 prohibits private corporations or associations
from holding alienable lands of the public domain except by
lease. Apparently realizing such prohibition, respondent
amended its application to conform with the mandates of
the law.
However, We cannot go along with petitioners' position that
the absence of republication of an amended application for
registration is a jurisdictional flaw. We should distinguish.
Amendments to the application may be due to change in
parties or substantial change in the boundaries or increase
in the area of the land applied for.
Page 69 of 404

LAW ON PROPERTY

In the former case, neither the Land Registration Act, as

amended, nor Presidential Decree No. 1529, otherwise
known as the Property Registration Decree, requires
republication and registration may be allowed by the court
at any stage of the proceeding upon just and reasonable
terms. 11 On the other hand, republication is required if the
amendment is due to substantial change in the boundaries
or increase in the area of the land applied for.
As to the fourth assignment of error. We do not see any
relevant dispute in the lower court's application of
Presidential Decree No. 1529, instead of Act No. 496, in
adjudicating the land to the then applicant, assuming that
the land involved is registrable. Both laws are existing and
can stand together. P.D. 1529 was enacted to codify the
various laws relative to registration of property, in order to
facilitate effective implementation of said laws. 12
The third, fifth and sixth assignment of errors are likewise
meritorious and shall be discussed forthwith together.
Respondent asserts that contrary to the allegation of
petitioners, the reports of the District Land Officer of
Dagupan City, Land Inspector Perfecto Daroy and
Supervising Land Examiner Teodoro P. Nieva show that the
subject property is an unclassified public land, not forest
land. This claim is rather misleading. The report of
Supervising Land Examiner Nieva specifically states that the
"land is within the unclassified forest land" under the
administrative jurisdiction of the then Bureau of Forest
Development. 13 This was based on the reports of Land
Inspector Daroy and District Land Officer Feliciano Liggayu.
Lands of the public domain are classified under three main
categories, namely: Mineral, Forest and Disposable or
Alienable Lands. 14 Under the Commonwealth Constitution,
only agricultural lands were allowed to be alienated. Their
disposition was provided for under Commonwealth Act No.
141 (Secs. 6-7), which states that it is only the President,
upon the recommendation of the proper department head,
who has the authority to classify the lands of the public
domain into alienable or disposable, timber and mineral
lands. Mineral and Timber or forest lands are not subject to

private ownership unless they are first reclassified as

agricultural lands and so released for alienation. 15 In the
absence of such classification, the land remains as
unclassified land until released therefrom and rendered
open to disposition. Courts have no authority to do so. 16
This is in consonance with the Regalian doctrine that all
lands of the public domain belong to the State, and that the
State is the source of any asserted right to ownership in
land and charged with the conservation of such patrimony.
Under the Regalian Doctrine, all lands not otherwise
appearing to be clearly within private ownership are
presumed to belong to the State. Hence, a positive act of
the government is needed to declassify a forest land into
alienable or disposable land for agricultural or other
purposes. 17
The burden of proof in overcoming the presumption of state
ownership of the lands of the public domain is on the person
applying for registration that the land subject of the
application is alienable or disposable. 18
Unless the applicant succeeds in showing by convincing
evidence that the property involved was acquired by him or
his ancestors either by composition title from the Spanish
Government or by possessory information title, or any other
means for the proper acquisition of public lands, the
property must be held to be part of the public domain. The
applicant must present evidence and persuasive proof to
substantiate his claim. 19
In this particular case, respondent presented proof that as
early as 1921, the subject property has been declared for
tax purposes with receipts attached, in the names of
respondent's predecessors-in-interest. Nevertheless, in that
span of time there had been no attempt to register the
same either under Act 496 or under the Spanish Mortgage
Law. It is also rather intriguing that Vicente Castelo who
acquired almost 90% of the property from Alejo Ambrosia, et
al. on June 18, 1958 and from Julio Castelo on June 19, 1958
immediately sold the same to applicant J. Antonio Araneta
on 3 July 1958.

Page 70 of 404
LAW ON PROPERTY

According to the report of Land Investigator Daroy, the land

was declared for taxation purposes in the name of Vicente
Castelo only in 1958 and the purported old tax declarations
are not on file with the Provincial Assessor's Office.

of the Executive Department of the Government and not of

the Courts. In the absence of such classification, the land
remains unclassified until released therefrom and rendered
open to disposition. 24

In any case tax declarations and receipts are not conclusive

evidence of ownership or of the right to possess land when
not supported by evidence. 20 The fact that the disputed
property may have been declared for taxation purposes in
the names of the applicants or of their predecessors-ininterest way back in 1921 does not necessarily prove
ownership. They are merely indicia of a claim of ownership.
21

In fairness to respondent, the petitioners should seriously

consider the matter of the reclassification of the land in
question. The attempt of people to have disposable lands
they have been tilling for generations titled in their name
should not only be viewed with understanding attitude, but
as a matter of policy encouraged. 25

Respondent's contention that the BFD, LC Map No. 681,

certified on August 8, 1927 which was the basis of the report
and recommendation of the Land Examiner, is too
antiquated; that it cannot be conclusively relied upon and
was not even presented in evidence, is not well taken. As
We have said in the case of Director of Lands v. CA: 22
And the fact that BF Map LC No. 673 dated March 1, 1927
showing subject property to be within unclassified region
was not presented in evidence will not operate against the
State considering the stipulation between the parties and
under the well-settled rule that the State cannot be
estopped by the omission, mistake or error of its officials or
agents, if omission there was, in fact.
Respondent even admitted that Tambac Island is still an
unclassified public land as of 1927 and remains to be
unclassified.
Since the subject property is still unclassified, whatever
possession
the applicant may have had and however long, cannot
ripen into private ownership. 23 The conversion of subject
property does not automatically render the property as
alienable and disposable.
In effect what the courts a quo have done is to release the
subject property from the unclassified category, which is
beyond their competence and jurisdiction. We reiterate that
the classification of public lands is an exclusive prerogative

WHEREFORE, the petition is hereby GRANTED and the

decisions of the courts a quo are REVERSED.
SO ORDERED.
ARTICLE 420
G.R. No. 152115

January 26, 2005

NIMFA USERO, petitioner,

vs.
COURT OF APPEALS and SPS. HERMINIGILDO & CECILIA
POLINAR, respondents.
x--------------------------------x
G.R. No. 155055

January 26, 2005

LUTGARDA R. SAMELA, petitioner,

vs.
COURT OF APPEALS and SPS. HERMINIGILDO & CECILIA
POLINAR, respondents.
DECISION
CORONA, J.:
Before this Court are two consolidated petitions for review
on certiorari under Rule 45 of the Rules of Court. The first
petition, docketed as G.R. No. 152115, filed by Nimfa Usero,
assails the September 19, 2001 decision1 of the Court of
Appeals in CA-GR SP No. 64718. The second petition,
docketed as G.R. No. 155055, filed by Lutgarda R. Samela,
Page 71 of 404

LAW ON PROPERTY

assails the January 11, 2002 decision2 of the Court of

Appeals in CA-GR SP NO. 64181.
The undisputed facts follow.
Petitioners Lutgarda R. Samela and Nimfa Usero are the
owners respectively of lots 1 and 2, Block 5, Golden Acres
Subdivision, Barrio Almanza, Las Pias City.
Private respondent spouses Polinar are the registered
owners of a parcel of land at no. 18 Anahaw St., Pilar Village,
Las Pias City, behind the lots of petitioners Samela and
Usero.
Situated between the lots of the parties is a low-level strip of
land, with a stagnant body of water filled with floating water
lilies; abutting and perpendicular to the lot of petitioner
Samela, the lot of the Polinars and the low-level strip of land
is the perimeter wall of Pilar Village Subdivision.

In Civil Case No. 5242, petitioner Samela adduced in

evidence a copy of her Transfer Certificate of Title, plan of
consolidation, subdivision survey, the tax declaration in her
name, and affidavits of petitioner Usero and a certain Justino
Gamela whose property was located beside the perimeter
wall of Pilar Village.
The spouses Polinar, on the other hand, presented in
evidence their own TCT; a barangay certification as to the
existence of the creek; a certification from the district
engineer that the western portion of Pilar Village is bound by
a tributary of Talon Creek throughout its entire length;
boundary and index map of Pilar Village showing that the
village is surrounded by a creek and that the Polinar
property is situated at the edge of said creek; and pictures
of the subject strip of land filled with water lilies.
On March 22, 1999, the trial court rendered a decision in
favor of petitioner Samela:

Apparently, every time a storm or heavy rains occur, the

water in said strip of land rises and the strong current
passing through it causes considerable damage to the house
of respondent Polinars. Frustrated by their predicament,
private respondent spouses, on July 30, 1998, erected a
concrete wall on the bank of the low-level strip of land about
three meters from their house and rip-rapped the soil on
that portion of the strip of land.

WHEREFORE, the Court hereby renders judgment ordering

the defendants to vacate and remove at their expense the
improvements made on the subject lot; ordering the
defendants to pay the plaintiff P1,000.00 a month as
reasonable compensation for the use of the portion
encroached from the filing of the complaint until the same is
finally vacated; and to pay plaintiff P10,000.00 as
reasonable attorneys fees plus costs of suit.31vvphi1.nt

Claiming ownership of the subject strip of land, petitioners

Samela and Usero demanded that the spouses Apolinar stop
their construction but the spouses paid no heed, believing
the strip to be part of a creek. Nevertheless, for the sake of
peace, the Polinars offered to pay for the land being claimed
by petitioners Samela and Usero. However, the parties failed
to settle their differences.

In a parallel development, the Metropolitan Trial Court, in

Civil Case No. 5243, issued an order on February 29, 2000,
directing petitioner Usero and the Polinar spouses to
commission a professional geodetic engineer to conduct a
relocation survey and to submit the report to the trial court.

On November 9, 1998, petitioners filed separate complaints

for forcible entry against the Polinars at the Metropolitan
Trial Court of Las Pias City. The case filed by petitioner
Samela was docketed as Civil Case No. 5242, while that of
petitioner Usero was docketed as Civil Case No. 5243.

On April 24, 2000, Mariano Flotilde, a licensed geodetic

engineer, conducted a relocation survey of Useros property
covered by TCT No. T- 29545. The result of the said
relocation survey, as stated in his affidavit, was as follows:
1. That I executed a relocation survey of Lot 2, Block 5,
(LRC) PCS-4463 covered by TCT No. T-29545 registered in
the name of Nimfa O. Usero;
Page 72 of 404

LAW ON PROPERTY

2. That according to my survey, I found out that there is no

existing creek on the boundary of the said lot;
3. That based on the relocation plan surveyed by the
undersigned, attached herewith, appearing is the
encroachment on the above-mentioned lot by Spouses
Herminigildo and Cecilia Polinar with an area of FORTY
THREE (43) SQUARE METERS;
4. That this affidavit was made in compliance with Court
Order dated February 23, 2000 of Metropolitan Trial Court,
Las Pias City, Branch LXXIX.4
On August 25, 2000, the Metropolitan Trial Court decided in
favor of petitioner Usero:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants ordering them:
a) To vacate and remove at their expense the improvement
made on the subject lot;
b) To pay the plaintiff P1,000.00 a month as reasonable
compensation for the portion encroached from the time of
the filing of the complaint until the same is finally vacated;
c) To pay plaintiff P10,000.00 as reasonable attorneys fees
plus costs of suit.
SO ORDERED.5
The Polinar spouses appealed the decisions of the two
Municipal Trial Courts to the Regional Trial Court of Las Pias,
Branch 253 which heard the appeals separately.
On December 20, 2000, the Regional Trial Court, deciding
Civil Case No. 5242, reversed the decision of the trial court
and ordered the dismissal of the complaint. It confirmed the
existence of the creek between the northwestern portion of
the lot of petitioner Samela and the southwestern portion of
the lot of the spouses Polinar:
Finding the existence of a creek between the respective
properties of the parties, plaintiff-appellee cannot therefore

lay claim of lawful ownership of that portion because the

same forms part of public dominion.1a\^/phi1.net
Consequently, she cannot legally stop the defendantsappellants from rip-rapping the bank of the creek to protect
the latters property from soil erosion thereby avoiding
danger to their lives and damage to property.
Absent a lawful claim by the plaintiff-appellee over the
subject portion of that lot, defendants-appellants are not
duty bound to pay the former compensation for the use of
the same. As a result, they may maintain the said
improvements introduced thereon subject to existing laws,
rules and regulations and/or ordinances appurtenant
thereto.
WHEREFORE, premises considered, the Decision rendered
by Branch 79 of the Metropolitan Trial Court, Las Pias is
REVERSED. Accordingly, the instant complaint is DISMISSED.
SO ORDERED.6
On March 16, 2001, the Regional Trial Court, in Civil Case
No. 5243, also reversed the finding of the Municipal Trial
Court:
From the foregoing, defendants-appellants may maintain the
improvements introduced on the subject portion of the lot
subject to existing laws, rules and regulations and/or
ordinances pertaining thereto. Consequently, no
compensation may be awarded in favor of the plaintiffappellee.
WHEREFORE, premises considered, the above-mentioned
Decision rendered by Branch 79 of the Las Pias City
Metropolitan Trial Court is REVERSED. Accordingly, the
instant complaint is DISMISSED.
From the adverse decisions of the Regional Trial Court,
petitioners filed their respective petitions for review on
certiorari to the Court of Appeals. Petitioner Samelas case
was docketed as CA-G.R. SP 64181 while that of petitioner
Usero was docketed as CA-G.R. SP 64718.1awphi1.nt

Page 73 of 404
LAW ON PROPERTY

Both petitions failed in the CA. Thus the instant consolidated

petitions.
The pivotal issue in the case at bar is whether or not the
disputed strip of land, allegedly encroached upon by the
spouses Polinar, is the private property of petitioners or part
of the creek and therefore part of the public domain. Clearly
this an issue which calls for a review of facts already
determined by the Court of Appeals.
The jurisdiction of the Court in petitions for review on
certiorari under Rule 45 of the Rules of Court is limited to
reviewing only errors of law, not of fact, unless the factual
findings complained of are devoid of support by the
evidence on record or the assailed judgment is based on a
misapprehension of facts.7 This is obviously not the case
here.
A careful scrutiny of the records reveals that the assailed
decisions are founded on sufficient evidence. That the
subject strip of land is a creek is evidenced by: (1) a
barangay certification that a creek exists in the disputed
strip of land; (2) a certification from the Second Manila
Engineering District, NCR-DPWH, that the western portion of
Pilar Village where the subject strip of land is located is
bounded by a tributary of Talon Creek and (3) photographs
showing the abundance of water lilies in the subject strip of
land. The Court of Appeals was correct: the fact that water
lilies thrive in that strip of land can only mean that there is a
permanent stream of water or creek there.
In contrast, petitioners failed to present proof sufficient to
support their claim. Petitioners presented the TCTs of their
respective lots to prove that there is no creek between their
properties and that of the Polinars. However, an examination
of said TCTs reveals that the descriptions thereon are
incomplete. In petitioner Samelas TCT No. T-30088, there is
no boundary description relative to the northwest portion of
the property pertaining to the site of the creek. Likewise in
TCT No. T-22329-A of the spouses Polinar, the southeast
portion which pertains to the site of the creek has no
described boundary. Moreover the tax declaration presented
by petitioner is devoid of any entry on the "west boundary"
vis-a-vis the location of the creek. All the pieces of evidence

taken together, we can only conclude that the adjoining

portion of these boundaries is in fact a creek and belongs to
no one but the state.
Property is either of public dominion or of private
ownership.8 Concomitantly, Article 420 of the Civil Code
provides:
ART. 420. The following things are property of public
dominion:
(1) Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads, and others of similar character;
The phrase "others of similar character" includes a creek
which is a recess or an arm of a river. It is property
belonging to the public domain which is not susceptible to
private ownership.9 Being public water, a creek cannot be
registered under the Torrens System in the name of any
individual10 .
Accordingly, the Polinar spouses may utilize the rip-rapped
portion of the creek to prevent the erosion of their property.
WHEREFORE, the consolidated petitions are hereby denied.
The assailed decisions of the Court of Appeals in CA-G.R. SP
64181 and CA-G.R. SP 64718 are affirmed in toto.
G.R. No. 92161 March 18, 1991
SIMPLICIO BINALAY, PONCIANO GANNABAN, NICANOR
MACUTAY, DOMINGO ROSALES, GREGORIO ARGONZA,
EUSTAQUIO BAUA, FLORENTINO ROSALES, TEODORO
MABBORANG, PATRICIO MABBORANG and FULGENCIO MORA,
petitioners
vs.
GUILLERMO MANALO and COURT OF APPEALS, respondents.
Josefin De Alban Law Office for Petitioners.

FELICIANO, J.:p
Page 74 of 404

LAW ON PROPERTY

The late Judge Taccad originally owned a parcel of land

situated in Tumauini, Isabela having an estimated area of
twenty (20) hectares. The western portion of this land
bordering on the Cagayan River has an elevation lower than
that of the eastern portion which borders on the national
road. Through the years, the western portion would
periodically go under the waters of the Cagayan River as
those waters swelled with the coming of the rains. The
submerged portion, however, would re-appear during the
dry season from January to August. It would remain under
water for the rest of the year, that is, from September to
December during the rainy season.
The ownership of the landholding eventually moved from
one person to another. On 9 May 1959, respondent
Guillermo Manalo acquired 8.65 hectares thereof from
Faustina Taccad, daughter of Judge Juan Taccad. The land
sold was described in the Deed of Absolute Sale 1 as
follows:
. . . a parcel of agricultural land in Balug, Tumauini, Isabela,
containing an area of 8.6500 hectares, more or less;
bounded on the North by Francisco Forto on the East by
National Road; on South by Julian Tumolva and on the West
by Cagayan River; declared for taxation under Tax
Declaration No. 12681 in the name of Faustina Taccad, and
assessed at P 750.00. . . .
Later in 1964, respondent Manalo purchased another 1.80
hectares from Gregorio Taguba who had earlier acquired the
same from Judge Juan Taccad. The second purchase brought
the total acquisition of respondent Manalo to 10.45
hectares. The second piece of property was more
particularly described as follows:
. . . a piece of agricultural land consisting of tobacco land,
and containing an area of 18,000 square meters, more or
less, bounded on the North by Balug Creek; on the South, by
Faustina Taccad (now Guillermo R. Manalo); on the East, by a
Provincial Road; and on the West, by Cagayan River
assessed at P 440.00, as tax Declaration No. 3152. . . . 2

During the cadastral survey conducted at Balug, Tumauini,

Isabela on 21 October 1969, the two (2) parcels of land
belonging to respondent Manalo were surveyed and
consolidated into one lot, designated as Lot No. 307, Pls964. Lot 307 which contains 4.6489 hectares includes: (a)
the whole of the 1.80 hectares acquired from Gregorio
Taguba; and (b) 2.8489 hectares out of the 8.65 hectares
purchased from Faustina Taccad. As the survey was
conducted on a rainy month, a portion of the land bought
from Faustina Taccad then under water was left unsurveyed
and was not included in Lot 307.
The Sketch Plan 3 submitted during the trial of this case
and which was identified by respondent Manalo shows that
the Cagayan River running from south to north, forks at a
certain point to form two (2) branchesthe western and the
eastern branchesand then unites at the other end, further
north, to form a narrow strip of land. The eastern branch of
the river cuts through the land of respondent Manalo and is
inundated with water only during the rainy season. The bed
of the eastern branch is the submerged or the unsurveyed
portion of the land belonging to respondent Manalo. For
about eight (8) months of the year when the level of water
at the point where the Cagayan River forks is at its ordinary
depth, river water does not flow into the eastern branch.
While this condition persists, the eastern bed is dry and is
susceptible to cultivation.
Considering that water flowed through the eastern branch of
the Cagayan River when the cadastral survey was
conducted, the elongated strip of land formed by the
western and the eastern branches of the Cagayan River
looked very much like an island. This strip of land was
surveyed on 12 December 1969. 4 It was found to have a
total area of 22.7209 hectares and was designated as Lot
821 and Lot 822. The area of Lot 822 is 10.8122 hectares
while Lot 821 has an area of 11.9087 hectares. Lot 821 is
located directly opposite Lot 307 and is separated from the
latter only by the eastern branch of the Cagayan River
during the rainy season and, during the dry season, by the
exposed, dry river bed, being a portion of the land bought
from Faustina Taccad. Respondent Manalo claims that Lot
821 also belongs to him by way of accretion to the
submerged portion of the property to which it is adjacent.
Page 75 of 404

LAW ON PROPERTY

Petitioners who are in possession of Lot 821, upon the other

hand, insist that they own Lot 821. They occupy the outer
edges of Lot 821 along the river banks, i.e., the fertile
portions on which they plant tobacco and other agricultural
products. They also cultivate the western strip of the
unsurveyed portion during summer. 5 This situation
compelled respondent Manalo to file a case for forcible entry
against petitioners on 20 May 1969. The case was dismissed
by the Municipal Court of Tumauini, Isabela for failure of
both parties to appear. On 15 December 1972, respondent
Manalo again filed a case for forcible entry against
petitioners. The latter case was similarly dismissed for lack
of jurisdiction by the Municipal Court of Tumauini, Isabela.
On 24 July 1974, respondent Manalo filed a complaints 6
before the then Court of First Instance of Isabela, Branch 3
for quieting of title, possession and damages against
petitioners. He alleged ownership of the two (2) parcels of
land he bought separately from Faustina Taccad and
Gregorio Taguba for which reason he prayed that judgment
be entered ordering petitioners to vacate the western strip
of the unsurveyed portion. Respondent Manalo likewise
prayed that judgment be entered declaring him as owner of
Lot 821 on which he had laid his claim during the survey.
Petitioners filed their answer denying the material
allegations of the complaint. The case was then set for trial
for failure of the parties to reach an amicable agreement or
to enter into a stipulation of facts. 7 On 10 November 1982,
the trial court rendered a decision with the following
dispositive portion:

Tumauini Cadastre, and which is more particularly described

in paragraph 2-b of the Complaint;
3. That the defendants are being restrained from entering
the premises of the land in question, Lot No. 821, Pls-964 of
Tumauini Cadastre, and which is more particularly described
in paragraph 2-b of the Complaint; and
4. That there is no pronouncement as to attorney's fees and
costs.
SO ORDERED. 8
Petitioners appealed to the Court of Appeals which,
however, affirmed the decision of the trial court. They filed a
motion for reconsideration, without success.
While petitioners insist that Lot 821 is part of an island
surrounded by the two (2) branches of the Cagayan River,
the Court of Appeals found otherwise. The Court of Appeals
concurred with the finding of the trial court that Lot 821
cannot be considered separate and distinct from Lot 307
since the eastern branch of the Cagayan River substantially
dries up for the most part of the year such that when this
happens, Lot 821 becomes physically (i.e., by land)
connected with the dried up bed owned by respondent
Manalo. Both courts below in effect rejected the assertion of
petitioners that the depression on the earth's surface which
separates Lot 307 and Lot 821 is, during part of the year,
the bed of the eastern branch of the Cagayan River.

1. That plaintiff, Guillermo Manalo, is declared the lawful

owner of the land in question, Lot No. 821, Pls-964 of
Tumauini Cadastre, and which is more particularly described
in paragraph 2-b of the Complaint;

It is a familiar rule that the findings of facts of the trial court

are entitled to great respect, and that they carry even more
weight when affirmed by the Court of Appeals. 9 This is in
recognition of the peculiar advantage on the part of the trial
court of being able to observe first-hand the deportment of
the witnesses while testifying. Jurisprudence is likewise
settled that the Court of Appeals is the final arbiter of
questions of fact. 10 But whether a conclusion drawn from
such findings of facts is correct, is a question of law
cognizable by this Court. 11

2. That the defendants are hereby ordered to vacate the

premises of the land in question, Lot No. 821, Pls-964 of

In the instant case, the conclusion reached by both courts

below apparently collides with their findings that periodically

WHEREFORE, in the light of the foregoing premises, the

Court renders judgment against the defendants and in favor
of the plaintiff and orders:

Page 76 of 404
LAW ON PROPERTY

at the onset of and during the rainy season, river water

flows through the eastern bed of the Cagayan River. The
trial court held:
The Court believes that the land in controversy is of the
nature and character of alluvion (Accretion), for it appears
that during the dry season, the body of water separating the
same land in controversy (Lot No. 821, Pls-964) and the two
(2) parcels of land which the plaintiff purchased from
Gregorio Taguba and Justina Taccad Cayaba becomes a
marshy land and is only six (6) inches deep and twelve (12)
meters in width at its widest in the northern tip (Exhs. "W",
"W-l", "W-2", "W-3" and "W-4"), It has been held by our
Supreme Court that "the owner of the riparian land which
receives the gradual deposits of alluvion, does not have to
make an express act of possession. The law does not require
it, and the deposit created by the current of the water
becomes manifest" (Roxas vs. Tuazon, 6 Phil. 408). 12
The Court of Appeals adhered substantially to the conclusion
reached by the trial court, thus:
As found by the trial court, the disputed property is not an
island in the strict sense of the word since the eastern
portion of the said property claimed by appellants to be part
of the Cagayan River dries up during summer. Admittedly, it
is the action of the heavy rains which comes during rainy
season especially from September to November which
increases the water level of the Cagayan river. As the river
becomes swollen due to heavy rains, the lower portion of
the said strip of land located at its southernmost point would
be inundated with water. This is where the water of the
Cagayan river gains its entry. Consequently, if the water
level is high the whole strip of land would be under water.
In Government of the Philippine Islands vs. Colegio de San
Jose, it was held that
According to the foregoing definition of the words "ordinary"
and "extra-ordinary," the highest depth of the waters of
Laguna de Bay during the dry season is the ordinary one,
and the highest depth they attain during the extra-ordinary
one (sic); inasmuch as the former is the one which is
regular, common, natural, which occurs always or most of

the time during the year, while the latter is uncommon,

transcends the general rule, order and measure, and goes
beyond that which is the ordinary depth. If according to the
definition given by Article 74 of the Law of Waters quoted
above, the natural bed or basin of the lakes is the ground
covered by their waters when at their highest ordinary
depth, the natural bed or basin of Laguna de Bay is the
ground covered by its waters when at their highest depth
during the dry season, that is up to the northeastern
boundary of the two parcels of land in question.
We find the foregoing ruling to be analogous to the case at
bar. The highest ordinary level of the waters of the Cagayan
River is that attained during the dry season which is
confined only on the west side of Lot [821] and Lot [822].
This is the natural Cagayan river itself. The small residual of
water between Lot [821] and 307 is part of the small stream
already in existence when the whole of the late Judge Juan
Taccad's property was still susceptible to cultivation and
uneroded. 13
The Court is unable to agree with the Court of Appeals that
Government of the Philippine Islands vs. Colegio de San Jose
14 is applicable to the present case. That case involved
Laguna de Bay; since Laguna de Bay is a lake, the Court
applied the legal provisions governing the ownership and
use of lakes and their beds and shores, in order to
determine the character and ownership of the disputed
property. Specifically, the Court applied the definition of the
natural bed or basin of lakes found in Article 74 of the Law
of Waters of 3 August 1866. Upon the other hand, what is
involved in the instant case is the eastern bed of the
Cagayan River.
We believe and so hold that Article 70 of the Law of Waters
of 3 August 1866 is the law applicable to the case at bar:
Art. 70. The natural bed or channel of a creek or river is the
ground covered by its waters during the highest floods.
(Emphasis supplied)
We note that Article 70 defines the natural bed or channel of
a creek or river as the ground covered by its waters during
the highest floods. The highest floods in the eastern branch
Page 77 of 404

LAW ON PROPERTY

of the Cagayan River occur with the annual coming of the

rains as the river waters in their onward course cover the
entire depressed portion. Though the eastern bed
substantially dries up for the most part of the year (i.e., from
January to August), we cannot ignore the periodical swelling
of the waters ( i.e., from September to December) causing
the eastern bed to be covered with flowing river waters.
The conclusion of this Court that the depressed portion is a
river bed rests upon evidence of record. Firstly, respondent
Manalo admitted in open court that the entire area he
bought from Gregorio Taguba was included in Lot 307. 15 If
the 1.80 hectares purchased from Gregorio Taguba was
included in Lot 307, then the Cagayan River referred to as
the western boundary in the Deed of Sale transferring the
land from Gregorio Taguba to respondent Manalo as well as
the Deed of Sale signed by Faustina Taccad, must refer to
the dried up bed (during the dry months) or the eastern
branch of the river (during the rainy months). In the Sketch
Plan attached to the records of the case, Lot 307 is
separated from the western branch of the Cagayan River by
a large tract of land which includes not only Lot 821 but also
what this Court characterizes as the eastern branch of the
Cagayan River.
Secondly, the pictures identified by respondent Manalo
during his direct examination depict the depressed portion
as a river bed. The pictures, marked as Exhibits "W" to "W4", were taken in July 1973 or at a time when the eastern
bed becomes visible. 16 Thus, Exhibit "W-2" which
according to respondent Manalo was taken facing the east
and Exhibit "W-3" which was taken facing the west both
show that the visible, dried up portion has a markedly lower
elevation than Lot 307 and Lot 821. It has dike-like slopes on
both sides connecting it to Lot 307 and Lot 821 that are
vertical upward and very prominent. This topographic
feature is compatible with the fact that a huge volume of
water passes through the eastern bed regularly during the
rainy season. In addition, petitioner Ponciano Gannaban
testified that one had to go down what he called a "cliff"
from the surveyed portion of the land of respondent Manalo
to the depressed portion. The cliff, as related by petitioner
Gannaban, has a height of eight (8) meters. 17

The records do not show when the Cagayan River began to

carve its eastern channel on the surface of the earth.
However, Exhibit "E" 18 for the prosecution which was the
Declaration of Real Property standing in the name of
Faustina Taccad indicates that the eastern bed already
existed even before the sale to respondent Manalo. The
words "old bed" enclosed in parenthesesperhaps written
to make legitimate the claim of private ownership over the
submerged portionis an implied admission of the
existence of the river bed. In the Declaration of Real
Property made by respondent Manalo, the depressed portion
assumed the name Rio Muerte de Cagayan. Indeed, the
steep dike-like slopes on either side of the eastern bed could
have been formed only after a prolonged period of time.
Now, then, pursuant to Article 420 of the Civil Code,
respondent Manalo did not acquire private ownership of the
bed of the eastern branch of the river even if it was included
in the deeds of absolute sale executed by Gregorio Taguba
and Faustina Taccad in his favor. These vendors could not
have validly sold land that constituted property of public
dominion. Article 420 of the Civil Code states:
The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth. (Emphasis supplied)
Although Article 420 speaks only of rivers and banks,
"rivers" is a composite term which includes: (1) the running
waters, (2) the bed, and (3) the banks. 19 Manresa, in
commenting upon Article 339 of the Spanish Civil Code of
1889 from which Article 420 of the Philippine Civil Code was
taken, stressed the public ownership of river beds:
La naturaleza especial de los rios, en punto a su disfrute
general, hace que sea necesario considerar en su relacion
de dominio algo mas que sus aguas corrientes. En efecto en
todo rio es preciso distinguir 1. esta agua corriente; 2. el
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LAW ON PROPERTY

alveo o cauce, y 3. las riberas. Ahora bien: son estas dos

ultimas cosas siempre de dominio publico, como las aguas?
Realmente no puede imaginarse un rio sin alveo y sin ribera;
de suerte que al decir el Codigo civil que los rios son de
dominio publico, parece que debe ir implicito el dominio
publico de aquellos tres elementos que integran el rio. Por
otra parte, en cuanto a los alveos o cauces tenemos la
declaracion del art. 407, num 1, donde dice: son de
dominion publico . . . los rios y sus cauces naturales;
declaracion que concuerda con lo que dispone el art. 34 de
la ley de [Aguas], segun el cual, son de dominion publico: 1.
los alveos o cauces de los arroyos que no se hallen
comprendidos en el art. 33, y 2. los alveos o cauces
naturales de los rios en la extension que cubran sus aguas
en las mayores crecidas ordinarias. 20 (Emphasis supplied)
The claim of ownership of respondent Manalo over the
submerged portion is bereft of basis even if it were alleged
and proved that the Cagayan River first began to encroach
on his property after the purchase from Gregorio Taguba and
Faustina Taccad. Article 462 of the Civil Code would then
apply divesting, by operation of law, respondent Manalo of
private ownership over the new river bed. The intrusion of
the eastern branch of the Cagayan River into his landholding
obviously prejudiced respondent Manalo but this is a
common occurrence since estates bordering on rivers are
exposed to floods and other evils produced by the
destructive force of the waters. That loss is compensated
by, inter alia, the right of accretion acknowledged by Article
457 of the Civil Code. 21 It so happened that instead of
increasing the size of Lot 307, the eastern branch of the
Cagayan River had carved a channel on it.
We turn next to the issue of accretion. After examining the
records of the case, the Court considers that there was no
evidence to prove that Lot 821 is an increment to Lot 307
and the bed of the eastern branch of the river. Accretion as
a mode of acquiring property under Article 457 of the Civil
Code requires the concurrence of three (3) requisites: (a)
that the deposition of soil or sediment be gradual and
imperceptible; (b) that it be the result of the action of the
waters of the river (or sea); and (c) that the land where
accretion takes place is adjacent to the banks of rivers (or

the sea coast). 22 The Court notes that the parcels of land
bought by respondent Manalo border on the eastern branch
of the Cagayan River. Any accretion formed by this eastern
branch which respondent Manalo may claim must be
deposited on or attached to Lot 307. As it is, the claimed
accretion (Lot 821) lies on the bank of the river not adjacent
to Lot 307 but directly opposite Lot 307 across the river.
Assuming (arguendo only) that the Cagayan River referred
to in the Deeds of Sale transferring ownership of the land to
respondent Manalo is the western branch, the decision of
the Court of Appeals and of the trial court are bare of factual
findings to the effect that the land purchased by respondent
Manalo received alluvium from the action of the aver in a
slow and gradual manner. On the contrary, the decision of
the lower court made mention of several floods that caused
the land to reappear making it susceptible to cultivation. A
sudden and forceful action like that of flooding is hardly the
alluvial process contemplated under Article 457 of the Civil
Code. It is the slow and hardly perceptible accumulation of
soil deposits that the law grants to the riparian owner.
Besides, it is important to note that Lot 821 has an area of
11.91 hectares. Lot 821 is the northern portion of the strip of
land having a total area of 22.72 hectares. We find it difficult
to suppose that such a sizable area as Lot 821 resulted from
slow accretion to another lot of almost equal size. The total
landholding purchased by respondent Manalo is 10.45
hectares (8.65 hectares from Faustina Taccad and 1.80
hectares from Gregorio Taguba in 1959 and 1964,
respectively), in fact even smaller than Lot 821 which he
claims by way of accretion. The cadastral survey showing
that Lot 821 has an area of 11.91 hectares was conducted in
1969. If respondent Manalo's contention were accepted, it
would mean that in a span of only ten (10) years, he had
more than doubled his landholding by what the Court of
Appeals and the trial court considered as accretion. As
already noted, there are steep vertical dike-like slopes
separating the depressed portion or river bed and Lot 821
and Lot 307. This topography of the land, among other
things, precludes a reasonable conclusion that Lot 821 is an
increment to the depressed portion by reason of the slow
and constant action of the waters of either the western or
the eastern branches of the Cagayan River.
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LAW ON PROPERTY

We turn finally to the issue of ownership of Lot 821.

Respondent Manalo's claim over Lot 821 rests on accretion
coupled with alleged prior possession. He alleged that the
parcels of land he bought separately from Gregorio Taguba
and Faustina Taccad were formerly owned by Judge Juan
Taccad who was in possession thereof through his (Judge
Taccad's) tenants. When ownership was transferred to him,
respondent Manalo took over the cultivation of the property
and had it declared for taxation purposes in his name. When
petitioners forcibly entered into his property, he twice
instituted the appropriate action before the Municipal Trial
Court of Tumauini, Isabela. Against respondent Manalo's
allegation of prior possession, petitioners presented tax
declarations standing in their respective names. They
claimed lawful, peaceful and adverse possession of Lot 821
since 1955.
If respondent Manalo had proved prior possession, it was
limited physically to Lot 307 and the depressed portion or
the eastern river bed. The testimony of Dominga Malana
who was a tenant for Justina Taccad did not indicate that she
was also cultivating Lot 821. In fact, the complaints for
forcible entry lodged before the Municipal Trial Court of
Tumauini, Isabela pertained only to Lot 307 and the
depressed portion or river bed and not to Lot 821. In the
same manner, the tax declarations presented by petitioners
conflict with those of respondent Manalo. Under Article 477
of the Civil Code, the plaintiff in an action for quieting of title
must at least have equitable title to or interest in the real
property which is the subject matter of the action. The
evidence of record on this point is less than satisfactory and
the Court feels compelled to refrain from determining the
ownership and possession of Lot 821, adjudging neither
petitioners nor respondent Manalo as owner(s) thereof.
WHEREFORE, the Decision and Resolution of the Court of
Appeals in CA-GR CV No. 04892 are hereby SET ASIDE.
Respondent Manalo is hereby declared the owner of Lot 307.
The regularly submerged portion or the eastern bed of the
Cagayan River is hereby DECLARED to be property of public
dominion. The ownership of Lot 821 shall be determined in
an appropriate action that may be instituted by the
interested parties inter se. No pronouncement as to costs.

G.R. No. 52159 December 22, 1989

JOSE PILAPIL, petitioner,
vs.
HON. COURT OF APPEALS and ALATCO TRANSPORTATION
COMPANY, INC., respondents.
Martin Badong, Jr. for petitioner.
Eufronio K. Maristela for private respondent.

PADILLA, J.:
This is a petition to review on certiorari the decision*
rendered by the Court of Appeals dated 19 October 1979 in
CA-G.R. No. 57354-R entitled "Jose Pilapil, plaintiff-appellee
versus Alatco Transportation Co., Inc., defendant-appellant,"
which reversed and set aside the judgment of the Court of
First Instance of Camarines Sur in Civil Case No. 7230
ordering respondent transportation company to pay to
petitioner damages in the total sum of sixteen thousand
three hundred pesos (P 16,300.00).
The record discloses the following facts:
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded
respondent-defendant's bus bearing No. 409 at San Nicolas,
Iriga City on 16 September 1971 at about 6:00 P.M. While
said bus No. 409 was in due course negotiating the distance
between Iriga City and Naga City, upon reaching the vicinity
of the cemetery of the Municipality of Baao, Camarines Sur,
on the way to Naga City, an unidentified man, a bystander
along said national highway, hurled a stone at the left side
of the bus, which hit petitioner above his left eye. Private
respondent's personnel lost no time in bringing the
petitioner to the provincial hospital in Naga City where he
was confined and treated.
Considering that the sight of his left eye was impaired,
petitioner was taken to Dr. Malabanan of Iriga City where he
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LAW ON PROPERTY

was treated for another week. Since there was no

improvement in his left eye's vision, petitioner went to V.
Luna Hospital, Quezon City where he was treated by Dr.
Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and
sustained a permanent scar above the left eye.

in accord with law. Specifically, petitioner argues that the

nature of the business of a transportation company requires
the assumption of certain risks, and the stoning of the bus
by a stranger resulting in injury to petitioner-passenger is
one such risk from which the common carrier may not
exempt itself from liability.

Thereupon, petitioner instituted before the Court of First

Instance of Camarines Sur, Branch I an action for recovery
of damages sustained as a result of the stone-throwing
incident. After trial, the court a quo rendered judgment with
the following dispositive part:

We do not agree.

Wherefore, judgment is hereby entered:

1. Ordering defendant transportation company to pay
plaintiff Jose Pilapil the sum of P 10,000.00, Philippine
Currency, representing actual and material damages for
causing a permanent scar on the face and injuring the eyesight of the plaintiff;
2. Ordering further defendant transportation company to
pay the sum of P 5,000.00, Philippine Currency, to the
plaintiff as moral and exemplary damages;
3. Ordering furthermore, defendant transportation company
to reimburse plaintiff the sum of P 300.00 for his medical
expenses and attorney's fees in the sum of P 1,000.00,
Philippine Currency; and
4. To pay the costs.
SO ORDERED 1
From the judgment, private respondent appealed to the
Court of Appeals where the appeal was docketed as CA-G.R.
No. 57354R. On 19 October 1979, the Court of Appeals, in a
Special Division of Five, rendered judgment reversing and
setting aside the judgment of the court a quo.
Hence the present petition.
In seeking a reversal of the decision of the Court of Appeals,
petitioner contends that said court has decided the issue not

In consideration of the right granted to it by the public to

engage in the business of transporting passengers and
goods, a common carrier does not give its consent to
become an insurer of any and all risks to passengers and
goods. It merely undertakes to perform certain duties to the
public as the law imposes, and holds itself liable for any
breach thereof.
Under Article 1733 of the Civil Code, common carriers are
required to observe extraordinary diligence for the safety of
the passenger transported by them, according to all the
circumstances of each case. The requirement of
extraordinary diligence imposed upon common carriers is
restated in Article 1755: "A common carrier is bound to
carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances."
Further, in case of death of or injuries to passengers, the law
presumes said common carriers to be at fault or to have
acted negligently. 2
While the law requires the highest degree of diligence from
common carriers in the safe transport of their passengers
and creates a presumption of negligence against them, it
does not, however, make the carrier an insurer of the
absolute safety of its passengers. 3
Article 1755 of the Civil Code qualifies the duty of
extraordinary care, vigilance and precaution in the carriage
of passengers by common carriers to only such as human
care and foresight can provide. what constitutes compliance
with said duty is adjudged with due regard to all the
circumstances.

Page 81 of 404
LAW ON PROPERTY

Article 1756 of the Civil Code, in creating a presumption of

fault or negligence on the part of the common carrier when
its passenger is injured, merely relieves the latter, for the
time being, from introducing evidence to fasten the
negligence on the former, because the presumption stands
in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common
carrier had exercised extraordinary diligence as required by
law in the performance of its contractual obligation, or that
the injury suffered by the passenger was solely due to a
fortuitous event. 4
In fine, we can only infer from the law the intention of the
Code Commission and Congress to curb the recklessness of
drivers and operators of common carriers in the conduct of
their business.
Thus, it is clear that neither the law nor the nature of the
business of a transportation company makes it an insurer of
the passenger's safety, but that its liability for personal
injuries sustained by its passenger rests upon its negligence,
its failure to exercise the degree of diligence that the law
requires. 5
Petitioner contends that respondent common carrier failed
to rebut the presumption of negligence against it by proof
on its part that it exercised extraordinary diligence for the
safety of its passengers.
We do not agree.
First, as stated earlier, the presumption of fault or
negligence against the carrier is only a disputable
presumption. It gives in where contrary facts are established
proving either that the carrier had exercised the degree of
diligence required by law or the injury suffered by the
passenger was due to a fortuitous event. Where, as in the
instant case, the injury sustained by the petitioner was in no
way due to any defect in the means of transport or in the
method of transporting or to the negligent or willful acts of
private respondent's employees, and therefore involving no
issue of negligence in its duty to provide safe and suitable
cars as well as competent employees, with the injury arising
wholly from causes created by strangers over which the

carrier had no control or even knowledge or could not have

prevented, the presumption is rebutted and the carrier is not
and ought not to be held liable. To rule otherwise would
make the common carrier the insurer of the absolute safety
of its passengers which is not the intention of the
lawmakers.
Second, while as a general rule, common carriers are bound
to exercise extraordinary diligence in the safe transport of
their passengers, it would seem that this is not the standard
by which its liability is to be determined when intervening
acts of strangers is to be determined directly cause the
injury, while the contract of carriage Article 1763 governs:
Article 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented
or stopped the act or omission.
Clearly under the above provision, a tort committed by a
stranger which causes injury to a passenger does not accord
the latter a cause of action against the carrier. The
negligence for which a common carrier is held responsible is
the negligent omission by the carrier's employees to prevent
the tort from being committed when the same could have
been foreseen and prevented by them. Further, under the
same provision, it is to be noted that when the violation of
the contract is due to the willful acts of strangers, as in the
instant case, the degree of care essential to be exercised by
the common carrier for the protection of its passenger is
only that of a good father of a family.
Petitioner has charged respondent carrier of negligence on
the ground that the injury complained of could have been
prevented by the common carrier if something like meshwork grills had covered the windows of its bus.
We do not agree.
Although the suggested precaution could have prevented
the injury complained of, the rule of ordinary care and
prudence is not so exacting as to require one charged with
Page 82 of 404

LAW ON PROPERTY

its exercise to take doubtful or unreasonable precautions to

guard against unlawful acts of strangers. The carrier is not
charged with the duty of providing or maintaining vehicles
as to absolutely prevent any and all injuries to passengers.
Where the carrier uses cars of the most approved type, in
general use by others engaged in the same occupation, and
exercises a high degree of care in maintaining them in
suitable condition, the carrier cannot be charged with
negligence in this respect. 6
Finally, petitioner contends that it is to the greater interest
of the State if a carrier were made liable for such stonethrowing incidents rather than have the bus riding public
lose confidence in the transportation system.
Sad to say, we are not in a position to so hold; such a policy
would be better left to the consideration of Congress which
is empowered to enact laws to protect the public from the
increasing risks and dangers of lawlessness in society.
WHEREFORE, the judgment appealed from is hereby
AFFIRMED.
SO ORDERED.
G.R. No. L-6098

August 12, 1911

THE INSULAR GOVERNMENT, plaintiff-appellee,

vs.
ALDECOA AND COMPANY, defendant-appellant.
Emilio Pineda for appellant.
Attorney-General Villamor for appellee.
TORRES, J.:
On April 20, 1907, the Attorney-General filed a written
complaint in the Court of First Instance of Surigao against
the firm of Aldecoa & Co., alleging that the defendant, a
mercantile copartnership company organized under the laws
in force in these Islands and domiciled in this city of Manila
with a branch office in Surigao, continues to operate as such
mercantile copartnership company under the name of
Aldecoa & Co.,; that the said defendant, knowing that it had

no title or right whatever to two adjoining parcels of land,

which belong to the domain of the Government of the
United States and were placed under the administration and
control of the Government of these Islands, has been
occupying them illegally for the past seventeen years, more
or less, having constructed on the land a wharf, located
along the railroad, and built warehouses of light material for
the storage of coal all for its exclusive use and benefit;
that of the said two parcels of land, the parcel B has an area
of 11 centares, approximately, and the parcel A, 84
centares, more or less, and their situation, metes and
bounds, together with other details thereunto pertaining,
are set out in the judgment of the court; that these lands,
situated in Bilang-bilang, in the pueblo of Surigao and the
province of the same name, belonged to the late Spanish
Government in the Philippines and are now the property of
the Government of the United States and were placed under
the control of the Insular Government, which, by virtue of
the treaty of Paris, has succeeded the former in all its rights;
that, since the year 1901, the defendant has been
requested repeatedly by the Attorney-General, in
representation of the Insular Government, to recognize the
latter's right of dominion over the same and to deliver to it
the said property, and that, by reason of such demands,
Aldecoa & Co., on February 25, 1903, recognizing the Insular
Government's ownership, agreed to return the land, but that
later, after several delays, it concluded by persisting in its
attempt illegally to continue occupying the said land and
refused to return it to the Insular Government; wherefore
the Attorney-General asked the court to enter judgment
declaring the Insular Government to be the owner of the
land claimed, and to order that the plaintiff be placed in
possession of the same, together with the fruits collected by
the defendants since it took such possession, and those
awaiting collection, and to sentence the defendant to pay
the costs.
Counsel for the defendant, Aldecoa & Co., in liquidation,
answering the preceding complaint, set forth that it denied
each and all of the allegations of the complaint, with the
exception of those which it expressly admitted in its answer;
and that it admitted paragraph 2 of the complaint, that is,
the fact of the defendant's being a mercantile copartnership
company, organized under the laws in force in these Islands.
Page 83 of 404

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As a special defense, it alleged that it held and possessed,

as owner, and had full and absolute dominion over, the
lands claimed by the plaintiff in paragraph 1 of the
complaint. The defendant therefore prayed that judgment
be rendered in its favor, by absolving it from the complaint,
with the costs against the plaintiff, together with the other
relief solicited.
The provincial fiscal of Surigao presented a motion on
November 3, 1908, for the purpose of amending the
preceding complaint, with the permission of the court, by
inserting, between paragraphs 4 and 5 of the complaint, a
separate paragraph, as follows: "that Aldecoa and
Company's possession of the lands here in question, was in
fact interrupted during the years 1900, 1901, and 1902;"
but, in view of the ruling of the court by an order of
November 5, 1908, directing the plaintiff, within three days
to specify the facts that constituted the alleged interruption
of the defendant's possession of the lands in question, the
provincial fiscal presented, on the 6th of the same month, a
new written motion whereby be requested permission to
amend the previous complaint by inserting between the said
paragraphs 4 and 5 of the original complaint, a separate
paragraph, as follows. "That the municipality of Surigao, in
the year 1900, and through the mediation of Captain
Kendrick, removed the posts and wire which enclosed the
property here in question, the sole sign of possession that
the defendant then had to the said lands." Inasmuch as no
objection whatever was raised to the amendment
requested, the court granted the same by an order of
December 7, 1908.
The case came up for hearing on the 1st of December of
that year and, after the presentation of testimony by both
parties, the documents exhibited being attached to the
record, the court, on December 10, 1909, rendered
judgment and found that the land in question was public
land and belonged to the State, and ordered the defendant
to return it to the plaintiff might have the crops and the
buildings on the land, upon the payment of an indemnity
therefor, or might compel the defendant to pay him the
value of the land, as provided by article 361 of the Civil
Code. Counsel for the defendant excepted to this judgment,
and by a written motion of the 4th of January asked for a

rehearing of the case on the grounds that the said judgment

was unwarranted by the evidence and was contrary to law.
This motion was disallowed, exception thereto was taken by
the appellant and, the required bill of exceptions being filed,
in which was set out, at the request of the provincial fiscal,
the latter's exception to the order issued by the judge on
January 24, while in Cagayan, Province of Misamis, granting
an extension of time for the presentation of the bill of
exceptions, it was certified and transmitted to the clerk of
this court.
The demand of the representative of the Government is for
the recovery of possession of two united parcels of land,
belonging to the public use and domain, which are at
present occupied by the defendant Aldecoa & Co. The latter
claims to have the full and absolute ownership of the said
land and to have held it as owner since 1889, by virtue of a
verbal permit from the politico-military governor of Surigao.
From the proceedings had and by the testimony of a large
number of competent witnesses, one of whom was
introduced by the defendant party itself, it was clearly
proved that, in 1889, the land in litigation, as well as Bates
Avenue, was, during the extraordinary high tides, usually
covered by sea water that would extend to the other side of
the said avenue, as far as the warehouse of Aldecoa & Co.
that was erected there, and, at the ordinary low tides, as far
as the wall built along the shore by the aforesaid firm and
designated by the numbers 5, 6, and 7 in the plan, Exhibit A.
This plan, according to the agreement between the parties,
exactly represents the land in litigation.
It was likewise proved that nearly all the land in question
was low land and swampy in certain places, with aquatic
bushes growing upon it; that it had been gradually raised by
the action of the sea, which in its ebb and flow left sand and
other sediment on the low ground; that the retaining wall
erected to prevent the sea water from reaching the said
warehouse, that is on the opposite side of Bates Avenue,
contributed in a large measure toward raising the level of
the land; and that, furthermore, between the years 1889
and 1890, there were two piers on the said land, one named
Carloto, alongside of which the vessels used to lie that
called at Surigao during their voyages.
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It is, then, incontrovertible that the land in question is of the

public domain and belongs to the State, inasmuch as at the
present time it is partly shore land and in part, was such
formerly, and now is land formed by the action of the sea.
Treating of the sea coasts and shores as property of the
public use and domain, partida 3, title 28, law 3, says:
The things which belong in common to all the living
creatures of this world, are; The air, rain water, the sea and
its shores; for every living creature may use them, according
to its needs, etc.
Law 4 of the same title and partida says, among other
things:
And by the seashore is understood all that space of ground
covered by the waters of the sea, in their highest annual
tides, whether in winter or summer.
The Law of Waters of August 3, 1866, extended to these
Islands by the royal decree of the 8th of the same month
and year and, together with the decree ordering its
enforcement, issued by the Gobierno General on September
21, 1871, was published in the Official Gazette of the 24th of
the same month, which law was not substituted nor
repealed by that of June 13, 1879, promulgated in Spain and
not extended to these Islands, provides, in article 1, that:
The following are part of the national domain open to public
use:
xxx

xxx

xxx

2. The coast sea, that is, the maritime zone encircling the
coasts, to the full width recognized by international law. . . .
3. The shores. By the shore is understood that space
alternately covered and uncovered by the movement of the
tide. Its interior or terrestial limit is the line reached by the
highest equinoctial tides. Where the tides are not
appreciable, the shore begins on the land side at the line
reached by the sea during ordinary storms or tempests.

ART. 4. Lands added to the shores by accretions and

alluvium deposits caused by the action of the sea, form part
of the public domain. When they are no longer washed by
the waters of the sea, and are not necessary for the
purposes of public utility, or for the establishment of special
industries, or for the coast-guard service, the Government
shall declare them to be the property of the owners of the
estates adjacent thereto and as increment thereof.
ART. 5. Lands reclaimed from the sea in consequence of
works constructed by the State, or by the provinces,
pueblos, pr private persons, with proper permission, shall
become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of
authority.
ART. 17. The use of the shores also belongs to the public
under the police supervision of the civil authorities; all
persons may fish thereon, wash, bathe, embark and
disembark on pleasure trips, spread and dry clothes and
nets bathe cattle, remove sand, and collect stones, shells,
plants, shellfish, and other products of the sea, and do other
things of a like nature. these rights may be restricted by
virtue of the regulations necessary for the coast defense or
police supervision, or in the interest of public utility or
decency.
ART. 18. In no place on the coasts, shores, ports, or
entrances of rivers, nor on the islands referred to in article
3, shall new works of any kind whatever be constructed, nor
any building be erected, without proper permission, in
accordance with the provisions of this law and with those of
the law regarding ports.
On the supposition that Aldecoa & Co. commenced to
occupy the land and shore herein concerned, prior to the
enforcement of the Civil Code in these Islands, it is
unquestionable that the issue pending decision must be
determined in accordance with the provisions of the said
Law of Waters of August 3, 1866, inasmuch as the shores, as
well as the lands united thereto by the accretions and
alluvium deposits produced by the action of the sea, are of
the public use and domain.
Page 85 of 404

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Excluding the space occupied by Bates Avenue, that lies

between the defendant's buildings and the shore and the
lands added to the latter by the action of the sea in the sitio
called Bilang-bilang, all this said land, together with the
adjacent shore, belongs to the public domain and is
intended for public uses. So that the defendant, in
construction on the two aforementioned parcels of land a
retaining wall, a pier or wharf, a railway, and warehouses for
the storage of coal, for its exclusive use and benefit, did all
this without due and competent authority and has been
illegally occupying the land since 1901 by the
representative of the Insular Government, Aldecoa & Co., by
a letter of February 25, 1903, acknowledged that the land
belonged to the Government and consented to vacate it,
although it afterwards persisted in its claim that it was the
owner of the land and refused to vacate and place it at the
disposal of the Insular Government, whose representative, in
view of the defendant's changed attitude in the matter, was
forced to bring this action to recover its possession.
Aldecoa & Co. endeavored to prove that the land, consisting
of the two united parcels A and B, belonged to them in fee
simple, on account of their having begun to occupy it
through a verbal permit from the then politico-military
governor of Surigao. Although the record does not show the
nature of the permit obtained, yet it is inferred from the
document Exhibit C I that the said permit was a verbal
authorization to occupy the land on condition that the
defendant should later on prepare title deeds thereto, and
that this authorization was granted for the purpose of
furnishing facilities to, and benefiting the merchants of
Surigao, in view of the backward condition of things in those
regions at the time. It is certain, however, that Aldecoa &
Co. did not obtain or solicit permission from the Government
to establish themselves there and erect thereon their
buildings and works, nor did they endeavor to obtain any
title of ownership to the said land, as one of their witnesses,
Juan Y. Aldecoa, testified. Furthermore, in the said letter or
document Exhibit C I, the attorney then representing the
defendant prayed that in case of sale or total or partial lease
thereof Aldecoa & Co. should be given preference to any
other party, on account of the important improvements they
had made on the land.

It is true that, notwithstanding the fact that the lands which

become an adjacent part of the shores through the
accretions occasioned by the action of the sea, when they
are no longer covered by such waters, or are not necessary
for the purposes of public utility, for the establishment of
special industries, or for the coast-guard service, may be
declared by the Government to be the property of the
owners of the estates adjacent thereto; but the defendant
has not proven that it obtained for itself, in conformity with
the provisions of article 4 of the said Law of Waters, such
declaration of ownership, and competent authorization
obtained from the Insular Government is indispensible in
order that private person may construct works on the
seashore and thereby secure lands for his profit and benefit,
pursuant to article 5 of the same law, inasmuch as article 18
strictly prohibits the construction of any works or the
erection of any building at any place on the coasts and
shores, without proper authorization.
Aside from the verbal permission alleged, but not duly
proven, and leaving aside the fact that the same is not
admissible in official and administrative proceedings, it has
in no wise been proved that Aldecoa & Co. obtained from
the Insular Government any authorization whatever to erect
a retaining wall, to construct a pier and warehouses, and to
lay a railway wall, to construct a pier and warehouses, and
to lay a railway on the land in question, which belonged to
the state and was destined to public uses, as the defendant
must have very well known; nor could any right whatever be
created in its favor, and to the prejudice of the State, by its
having filled in, without the proper permission, the
aforementioned land for the purpose of raising the level
thereof.
The Civil Code, which went into effect in these Islands on
December 7, 1889, the twentieth day of its publication in
the Gaceta de Manila of the 17th of November of the same
year, confirms the provisions of the said Law of Waters,
since, in its article 339, it prescribes that:
Property of public ownership is

Page 86 of 404
LAW ON PROPERTY

1. That destined to the public use, such as roads, canals,

rivers, torrents, ports, and bridges constructed by the State,
and banks, shores, roadsteads, and that of a similar
character.
Article 341 of the same code provides:
Property of public ownership, when no longer devoted to
general uses or to the requirement of the defense of the
territory, shall become a part of the State property.
The shores and the lands reclaimed from the sea, while they
continue to be devoted to public uses and no grant
whatever has been made of any portion of them to private
persons, remain a part of the public domain and are for
public uses, and, until they are converted into patrimonial
property of the State, such lands, thrown up by the action of
the sea, and the shores adjacent thereto, are not
susceptible of prescription, inasmuch as, being dedicated to
the public uses, they are not subject of commerce among
men, in accordance with the provision of article 1936 of the
Civil Code.
The occupation or material possession of any land formed
upon the shore by accretions and alluvium deposits
occasioned by the sea, where the occupant or possessor is a
private person and holds without previous permission or
authorization from the Government, granted in due form,
although he may have had the intention to hold it for the
purpose of making it his own, is illegal possession on his
part and amounts to nothing more than a mere detainer of
the land, which is out of the sphere of the commerce of
men, as belonging to the public domain and being allotted
to public uses and for the use of all persons who live at the
place where it is situated.
The record does not disclose that Aldecoa & Co. had
obtained from the Spanish Government of the Philippines
the requisite authorization legally to occupy the said two
parcels of land of which they now claim to be the owners;
wherefore, the occupation or possession which the allege
they hold is a mere detainer that can merit from the law no
protection such as is afforded only to the person legally in
possession.

The politico-military governor of Surigao having had no

authority or power to grant the possession or ownership of
the said two parcels of land, could not have authorized their
occupancy under a title of ownership. At the most, he may
have, as alleged, verbally authorized the defendant to
construct a pier, to fill in with earth the passageway
necessary to enable the same to be reached from Bates
Avenue, to erect a retaining wall to prevent the sea water,
which used to inundate the said avenue, from flowing
inward as far as the defendant's warehouses, and to build
warehouses on the high land, raised by the action of the
water near the shore; but such verbal authorization, even
admitting that it was actually given, and the material
occupation enjoyed by the defendant during more than ten
years, have not created rights such as could legitimize a
detention to the prejudice of the public, and of the State
which represents the community, the sole entity entitled to
the use and enjoyment of the land and shore usurped, for
the very reason that such shores and lands belong to the
national domain, are intended for public uses and are not
susceptible of prescription, as they do not pertain to the
commerce of men.
The subject of this suit, as has been seen, is a tract of land
that is a continuation of the shore at the sitio of Bilangbilang and was formed on that shore by alluvium deposits
occasioned by the action of the waters of the sea, that is,
was land reclaimed from the sea, as fully proven by the
record in this case; therefore the present issue is identical
with that decided in the case of Ker & Co. vs. Cauden (6 Phil.
Rep., 732) relative to a tract of land formed by the action of
the sea and which has become a part of the so-called
Sangley Point, in the Province of Cavite, and consequently
the findings and doctrine established in that decision are
properly applicable to this action, as may be seen by a
perusal of that case.
The land in question, together with the shore of which it
forms a part, is not, considering its conditions, comprised
within the provisions of section 54 of Act No. 926, for the
reason that it can not be deemed to be agricultural public
lands, nor mangrove-swamp land, inasmuch as it is
unquestionable, as the record shows it to have been proven,
Page 87 of 404

LAW ON PROPERTY

that the disputed property is land which was reclaimed from

the sea through accretions produced by the action of the
water upon a high part of the shore, and is, therefore, land
intended for public uses. This classification loses none of its
force from the fact that a part of the land is swampy,
because this circumstance does not divest it of its true
character as land gained from the sea by accretion.
Mangrove-swamp land, which is generally situated inland at
a certain distance from the seashore, although it is usually
inundated by the waters of the sea, especially at high tide,
can not be confounded with the land formed by the action of
the sea and which forms the shore line thereof; and for this
reason, the decisions rendered in the cases of Montano vs.
Insular Government (12 Phil. Rep., 572), and Mapa vs.
Insular Government (10 Phil. Rep., 175), wherein due
consideration was given to the provisions of section 54 of
Act No. 926, have no application to the present action,
which solely concerns land formed by the action of the sea,
and the shore that is a part of it, both intended for public
uses, while the references made by the appellant party
apply to building lots, fisheries and nipa lands that were
inundated by sea water and which, though covered with a
good deal of water, could not be said to be navigable ways.
The land in question, on the contrary, together with its
adjacent shore, borders on water of great depth, the Pacific
Ocean, for, besides the pier constructed at the place by the
defendant and appellant, there were two others, and all
intended for the service of the steamships that plied the
high seas and were accustomed to enter the said port and
there anchor alongside of these piers.
Under no consideration could the land herein concerned,
together with the shore upon which it is formed, be classed
as agricultural land susceptible of appropriation, and as such
form the basis for the allegation of the possession of an
imperfect or prescriptive title thereto, because, as
aforestated, 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 a requisite which the defendant and
appellant was unable to prove for the purpose of legalizing
his possession.

However, on the supposition that the defendant, Aldecoa &

Co., began to occupy the said land and shore after first
obtaining verbal permission from a politico-military
governor, constructing thereon a pier, warehouse, and
retaining wall, it is right to hold, as did the lower court in his
judgment, that it acted in good faith, and under such a
supposition, the provisions of article 361 of the Civil Code
must be complied with.
For the foregoing reasons, in the course of the explanation
of which the errors attributed to the judgment appealed
from have been disposed of, it is our opinion that such
judgment should be fully affirmed, as it is in accordance with
the law. The costs shall be assessed against the appellant.
So ordered.
G.R. No. L-28379

March 27, 1929

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicantappellant,

vs.
CONSORCIA CABANGIS, ET AL., claimants-appellees.
Attorney-General Jaranilla for appellant.
Abad Santos, Camus & Delgado for appellees.
VILLA-REAL, J.:
The Government of the Philippine Islands appeals to this
court from the judgment of the Court of First Instance of
Manila in cadastral proceeding No. 373 of the Court of First
Instance of Manila, G. L. R. O. Cadastral Record No. 373,
adjudicating the title and decreeing the registration of lots
Nos. 36, 39 and 40, block 3055 of the cadastral survey of
the City of Manila in favor of Consuelo, Consorcia, Elvira and
Tomas, surnamed Cabangis, in equal parts, and dismissing
the claims presented by the Government of the Philippine
Islands and the City of Manila.
In support of its appeal, the appellant assigns the following
alleged errors as committed by the trial court in its
judgment, to wit:
Page 88 of 404

LAW ON PROPERTY

1. The lower court erred in not holding that the lots in

question are of the public domain, the same having been
gained from the sea (Manila Bay) by accession, by fillings
made by the Bureau of Public Works and by the construction
of the break-water (built by the Bureau of Navigation) near
the mouth of Vitas Estero.
2. The lower court erred in holding that the lots in question
formed part of the big parcel of land belonging to the
spouses Maximo Cabangis and Tita Andres, and in holding
that these spouses and their successors in interest have
been in continuous, public, peaceful and uninterrupted
possession of said lots up to the time this case came up.
3. The lower court erred in holding that said lots existed
before, but that due to the current of the Pasig River and to
the action of the big waves in Manila Bay during the southwest monsoons, the same disappeared.
4. The lower court erred in adjudicating the registration of
the lands in question in the name of the appellees, and in
denying the appellant's motion for a new trial.
A preponderance of the evidence in the record which may
properly be taken into consideration in deciding the case,
proves the following facts:
Lots 36, 39 and 40, block 3035 of cadastral proceeding No.
71 of the City of Manila, G. L. R. O. Record No. 373, were
formerly a part of a large parcel of land belonging to the
predecessor of the herein claimants and appellees. From the
year 1896 said land began to wear away, due to the action
of the waves of Manila Bay, until the year 1901 when the
said lots became completely submerged in water in ordinary
tides, and remained in such a state until 1912 when the
Government undertook the dredging of Vitas Estuary in
order to facilitate navigation, depositing all the sand and silt
taken from the bed of the estuary on the low lands which
were completely covered with water, surrounding that
belonging to the Philippine Manufacturing Company, thereby
slowly and gradually forming the lots, the subject matter of
this proceeding.

Up to the month of February, 1927 nobody had declared lot

39 for the purposes of taxation, and it was only in the year
1926 that Dr. Pedro Gil, in behalf of the claimants and
appellees, declared lot No. 40 for such purpose.
In view of the facts just stated, as proved by a
preponderance of the evidence, the question arises: Who
owns lots 36, 39 and 40 in question?
The claimants-appellees contend that inasmuch as the said
lots once formed a part of a large parcel of land belonging to
their predecessors, whom they succeeded, and their
immediate predecessor in interest, Tomas Cabangis, having
taken possession thereof as soon as they were reclaimed,
giving his permission to some fishermen to dry their fishing
nets and deposit their bancas thereon, said lots belong to
them.
Article 339, subsection 1, of the Civil Code, reads:
Article 339. Property of public ownership is
1. That devoted to public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State,
riverbanks, shorts, roadsteads, and that of a similar
character.
xxx

xxx

xxx

Article 1, case 3, of the Law of Waters of August 3, 1866,

provides as follows:
ARTICLE 1. The following are part of the national domain
open to public use:
xxx

xxx

xxx

3. The Shores. By the shore is understood that space

covered and uncovered by the movement of the tide. Its
interior or terrestrial limit is the line reached by the highest
equinoctial tides. Where the tides are not appreciable, the
shore begins on the land side at the line reached by the sea
during ordinary storms or tempests.
Page 89 of 404

LAW ON PROPERTY

In the case of Aragon vs. Insular Government (19 Phil., 223),

with reference to article 339 of the Civil Code just quoted,
this court said:
We should not be understood, by this decision, to hold that
in a case of gradual encroachment or erosion by the ebb
and flow of the tide, private property may not become
'property of public ownership,' as defined in article 339 of
the code, where it appears that the owner has to all intents
and purposes abandoned it and permitted it to be totally
destroyed, so as to become a part of the 'playa' (shore of
the seas), 'rada' (roadstead), or the like. . . .
In the Enciclopedia Juridica Espanola, volume XII, page 558,
we read the following:
With relative frequency the opposite phenomenon occurs;
that is, the sea advances and private properties are
permanently invaded by the waves, and in this case they
become part of the shore or beach. They then pass to the
public domain, but the owner thus dispossessed does not
retain any right to the natural products resulting from their
new nature; it is a de facto case of eminent domain, and not
subject to indemnity.
Now then , when said land was reclaimed, did the claimantsappellees or their predecessors recover it as their original
property?
As we have seen, the land belonging to the predecessors of
the herein claimants-appellees began to wear way in 1896,
owing to the gradual erosion caused by the ebb and flow of
the tide, until the year 1901, when the waters of Manila Bay
completely submerged a portion of it, included within lots
36, 39 and 40 here in question, remaining thus under water
until reclaimed as a result of certain work done by the
Government in 1912. According to the above-cited
authorities said portion of land, that is, lots 36, 39 and 40,
which was private property, became a part of the public
domain. The predecessors of the herein claimants-appellees
could have protected their land by building a retaining wall,
with the consent of competent authority, in 1896 when the
waters of the sea began to wear it away, in accordance with
the provisions of Article 29 of the aforecited Law of Waters

of August 3, 1866, and their failure to do so until 1901,

when a portion of the same became completely covered by
said waters, remaining thus submerged until 1912,
constitutes abandonment.
Now then: The lots under discussion having been reclaimed
from the seas as a result of certain work done by the
Government, to whom do they belong?
The answer to this question is found in article 5 of the
aforementioned Law of Waters, which is as follows:
ART. 5. Lands reclaimed from the sea in consequence of
works constructed by the State, or by the provinces, pueblos
or private persons, with proper permission, shall become the
property of the party constructing such works, unless
otherwise provided by the terms of the grant of authority.
The fact that from 1912 some fishermen had been drying
their fishing nets and depositing their bancas on lots 36, 39
and 40, by permission of Tomas Cabangis, does not confer
on the latter or his successors the ownership of said lots,
because, as they were converted into public land, no private
person could acquire title thereto except in the form and
manner established by the law.
In the case of Buzon vs. Insular Government and City of
Manila (13 Phil., 324), cited by the claimants-appellees, this
court, admitting the findings and holdings of the lower court,
said the following:
If we heed the parol evidence, we find that the seashore was
formerly about one hundred brazas distant from the land in
question; that, in the course of time, and by the removal of
a considerable quantity of sand from the shore at the back
of the land for the use of the street car company in filling in
Calle Cervantes, the sea water in ordinary tides now covers
part of the land described in the petition.
The fact that certain land, not the bed of a river or of the
sea, is covered by sea water during the period of ordinary
high tide, is not a reason established by any law to cause
the loss thereof, especially when, as in the present case, it
Page 90 of 404

LAW ON PROPERTY

becomes covered by water owing to circumstances entirely

independent of the will of the owner.

question were not excluded from the application presented

in said proceeding.

In the case of Director of Lands vs. Aguilar (G.R. No.

22034),1 also cited by the claimants-appellees, wherein the
Government adduced no evidence in support of its
contention, the lower court said in part:

It will be seen that in the case of Buzon vs. Insular

Government and City of Manila, cited above, the rise of the
waters of the sea that covered the lands there in dispute,
was due not to the action of the tide but to the fact that a
large quantity of sand was taken from the sea at the side of
said land in order to fill in Cervantes Street, and this court
properly held that because of this act, entirely independent
of the will of the owner of said land, the latter could not lose
the ownership thereof, and the mere fact that the waters of
the sea covered it as a result of said act, is not sufficient to
convert it into public land, especially, as the land was high
and appropriate for building purposes.

The contention of the claimants Cabangis is to the effect

that said lots are a part of the adjoining land adjudicated to
their deceased father, Don Tomas Cabangis, which, for over
fifty years had belonged to their deceased grandmother,
Tita Andres, and that, due to certain improvements made in
Manila Bay, the waters of the sea covered a large part of the
lots herein claimed.
The Government of the Philippine Islands also claims the
ownership of said lots, because, at ordinary high tide, they
are covered by the sea.
Upon petition of the parties, the lower court made an ocular
inspection of said lots on September 12, 1923, and on said
inspection found some light material houses built thereon,
and that on that occasion the waters of the sea did not
reach the aforesaid lots.
From the evidence adduced at the trial of this cause, it may
be inferred that Tita Andres, during her lifetime was the
owner of a rather large parcel of land which was adjudicated
by a decree to her son Tomas Cabangis; the lots now in
question are contiguous to that land and are covered by the
waters of the sea at extraordinary high tide; some 50 years
before the sea did not reach said strip of land, and on it
were constructed, for the most part, light material houses,
occupied by the tenants of Tita Andres, to whom they paid
rent. Upon her death, her son Tomas Cabangis succeeded to
the possession, and his children succeeded him, they being
the present claimants, Consuelo, Jesus, Tomas, and
Consorcia Cabangis.
The Government of the Philippine Islands did not adduce
any evidence in support of its contention, with the exception
of registry record No. 8147, to show that the lots here in

In the case of the Director of Lands vs. Aguilar also cited by

the claimants-appellees, the Insular Government did not
present any evidence in support of its contention, thus
leaving uncontradicted the evidence adduced by the
claimants Aguilar et al., as to the ownership, possession and
occupation of said lots.
In the instant case the evidence shows that from 1896, the
waves of Manila Bay had been gradually and constantly
washing away the sand that formed the lots here in
question, until 1901, when the sea water completely
covered them, and thus they remained until the year 1912.
In the latter year they were reclaimed from the sea by filling
in with sand and silt extracted from the bed of Vitas Estuary
when the Government dredged said estuary in order to
facilitate navigation. Neither the herein claimants-appellees
nor their predecessors did anything to prevent their
destruction.
In conclusion, then, we hold that the lots in question having
disappeared on account of the gradual erosion due to the
ebb and flow of the tide, and having remained in such a
state until they were reclaimed from the sea by the filling in
done by the Government, they are public land. (Aragon vs.
Insular Government, 19 Phil., 223; Francisco vs. Government
of the Philippine Islands, 28 Phil., 505).

Page 91 of 404
LAW ON PROPERTY

By virtue whereof, the judgment appealed from is reversed

and lots Nos. 36, 39 and 40 of cadastral proceeding No. 373
of the City of Manila are held to be public land belonging to
the Government of the United States under the
administration and control of the Government of the
Philippine Islands. So ordered.
ARTICLE 424
G.R. No. 97764 August 10, 1992
LEVY D. MACASIANO, Brigadier General/PNP Superintendent,
Metropolitan Traffic Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch
62, Regional Trial Court of Makati, Metro Manila,
MUNICIPALITY OF PARAAQUE, METRO MANILA, PALANYAG
KILUSANG BAYAN FOR SERVICE, respondents.

and/or municipal streets, roads and open spaces within

Metropolitan Manila as sites for flea market and/or vending
areas, under certain terms and conditions.
On July 20, 1990, the Metropolitan Manila Authority
approved Ordinance No. 86, s. 1990 of the municipal council
of respondent municipality subject to the following
conditions:
1. That the aforenamed streets are not used for vehicular
traffic, and that the majority of the residents do not oppose
the establishment of the flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea
market/vending area shall be marked distinctly, and that the
2 meters on both sides of the road shall be used by
pedestrians;

Ceferino, Padua Law Office for Palanyag Kilusang Bayan for

service.

3. That the time during which the vending area is to be used

shall be clearly designated;

Manuel de Guia for Municipality of Paraaque.

4. That the use of the vending areas shall be temporary and

shall be closed once the reclaimed areas are developed and
donated by the Public Estate Authority.

MEDIALDEA, J.:

On June 20, 1990, the municipal council of Paraaque issued

a resolution authorizing Paraaque Mayor Walfrido N. Ferrer
to enter into contract with any service cooperative for the
establishment, operation, maintenance and management of
flea markets and/or vending areas.

This is a petition for certiorari under Rule 65 of the Rules of

Court seeking the annulment of the decision of the Regional
Trial Court of Makati, Branch 62, which granted the writ of
preliminary injunction applied for by respondents
Municipality of Paraaque and Palanyag Kilusang Bayan for
Service (Palanyag for brevity) against petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed
Ordinance No. 86, Series of 1990 which authorized the
closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia
Extension and Opena Streets located at Baclaran,
Paraaque, Metro Manila and the establishment of a flea
market thereon. The said ordinance was approved by the
municipal council pursuant to MMC Ordinance No. 2, Series
of 1979, authorizing and regulating the use of certain city

On August 8, 1990, respondent municipality and respondent

Palanyag, a service cooperative, entered into an agreement
whereby the latter shall operate, maintain and manage the
flea market in the aforementioned streets with the
obligation to remit dues to the treasury of the municipal
government of Paraaque. Consequently, market stalls were
put up by respondent Palanyag on the said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano,
PNP Superintendent of the Metropolitan Traffic Command,
ordered the destruction and confiscation of stalls along G.G.
Cruz and J. Gabriel St. in Baclaran. These stalls were later
returned to respondent Palanyag.
Page 92 of 404

LAW ON PROPERTY

On October 16, 1990, petitioner Brig. General Macasiano

wrote a letter to respondent Palanyag giving the latter ten
(10) days to discontinue the flea market; otherwise, the
market stalls shall be dismantled.
Hence, on October 23, 1990, respondents municipality and
Palanyag filed with the trial court a joint petition for
prohibition and mandamus with damages and prayer for
preliminary injunction, to which the petitioner filed his
memorandum/opposition to the issuance of the writ of
preliminary injunction.
On October 24, 1990, the trial court issued a temporary
restraining order to enjoin petitioner from enforcing his
letter-order of October 16, 1990 pending the hearing on the
motion for writ of preliminary injunction.
On December 17, 1990, the trial court issued an order
upholding the validity of Ordinance No. 86 s. 1990 of the
Municipality' of Paraaque and enjoining petitioner Brig.
Gen. Macasiano from enforcing his letter-order against
respondent Palanyag.
Hence, this petition was filed by the petitioner thru the
Office of the Solicitor General alleging grave abuse of
discretion tantamount to lack or excess of jurisdiction on the
part of the trial judge in issuing the assailed order.
The sole issue to be resolved in this case is whether or not
an ordinance or resolution issued by the municipal council of
Paraaque authorizing the lease and use of public streets or
thoroughfares as sites for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that
municipal roads are used for public service and are therefore
public properties; that as such, they cannot be subject to
private appropriation or private contract by any person,
even by the respondent Municipality of Paraaque.
Petitioner submits that a property already dedicated to
public use cannot be used for another public purpose and
that absent a clear showing that the Municipality of
Paraaque has been granted by the legislature specific
authority to convert a property already in public use to

another public use, respondent municipality is, therefore,

bereft of any authority to close municipal roads for the
establishment of a flea market. Petitioner also submits that
assuming that the respondent municipality is authorized to
close streets, it failed to comply with the conditions set forth
by the Metropolitan Manila Authority for the approval of the
ordinance providing for the establishment of flea markets on
public streets. Lastly, petitioner contends that by allowing
the municipal streets to be used by market vendors the
municipal council of respondent municipality violated its
duty under the Local Government Code to promote the
general welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial
court ruled:
. . . that Chanter II Section 10 of the Local Government Code
is a statutory grant of power given to local government
units, the Municipality of Paraaque as such, is empowered
under that law to close its roads, streets or alley subject to
limitations stated therein (i.e., that it is in accordance with
existing laws and the provisions of this code).
xxx xxx xxx
The actuation of the respondent Brig. Gen. Levi Macasiano,
though apparently within its power is in fact an
encroachment of power legally vested to the municipality,
precisely because when the municipality enacted the
ordinance in question the authority of the respondent as
Police Superintendent ceases to be operative on the ground
that the streets covered by the ordinance ceases to be a
public thoroughfare. (pp. 33-34, Rollo)
We find the petition meritorious. In resolving the question of
whether the disputed municipal ordinance authorizing the
flea market on the public streets is valid, it is necessary to
examine the laws in force during the time the said ordinance
was enacted, namely, Batas Pambansa Blg. 337, otherwise
known as Local Government Code, in connection with
established principles embodied in the Civil Code an
property and settled jurisprudence on the matter.

Page 93 of 404
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The property of provinces, cities and municipalities is

divided into property for public use and patrimonial property
(Art. 423, Civil Code). As to what consists of property for
public use, Article 424 of Civil Code states:
Art. 424. Property for public use, in the provinces, cities and
municipalities, consists of the provincial roads, city streets,
the squares, fountains, public waters, promenades, and
public works for public service paid for by said provinces,
cities or municipalities.
All other property possessed by any of them is patrimonial
and shall be governed by this Code, without prejudice to the
provisions of special laws.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt.
Garcia Extension and Opena streets are local roads used for
public service and are therefore considered public properties
of respondent municipality. Properties of the local
government which are devoted to public service are deemed
public and are under the absolute control of Congress
(Province of Zamboanga del Norte v. City of Zamboanga, L24440, March 28, 1968, 22 SCRA 1334). Hence, local
governments have no authority whatsoever to control or
regulate the use of public properties unless specific
authority is vested upon them by Congress. One such
example of this authority given by Congress to the local
governments is the power to close roads as provided in
Section 10, Chapter II of the Local Government Code, which
states:
Sec. 10. Closure of roads. A local government unit may
likewise, through its head acting pursuant to a resolution of
its sangguniang and in accordance with existing law and the
provisions of this Code, close any barangay, municipal, city
or provincial road, street, alley, park or square. No such way
or place or any part of thereof shall be close without
indemnifying any person prejudiced thereby. A property thus
withdrawn from public use may be used or conveyed for any
purpose for which other real property belonging to the local
unit concerned might be lawfully used or conveyed.
(Emphasis ours).

However, the aforestated legal provision which gives

authority to local government units to close roads and other
similar public places should be read and interpreted in
accordance with basic principles already established by law.
These basic principles have the effect of limiting such
authority of the province, city or municipality to close a
public street or thoroughfare. Article 424 of the Civil Code
lays down the basic principle that properties of public
dominion devoted to public use and made available to the
public in general are outside the commerce of man and
cannot be disposed of or leased by the local government
unit to private persons. Aside from the requirement of due
process which should be complied with before closing a
road, street or park, the closure should be for the sole
purpose of withdrawing the road or other public property
from public use when circumstances show that such
property is no longer intended or necessary for public use or
public service. When it is already withdrawn from public use,
the property then becomes patrimonial property of the local
government unit concerned (Article 422, Civil Code; Cebu
Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L-40474,
August 29, 1975, 66 SCRA 481). It is only then that the
respondent municipality can "use or convey them for any
purpose for which other real property belonging to the local
unit concerned might be lawfully used or conveyed" in
accordance with the last sentence of Section 10, Chapter II
of Blg. 337, known as Local Government Code. In one case,
the City Council of Cebu, through a resolution, declared the
terminal road of M. Borces Street, Mabolo, Cebu City as an
abandoned road, the same not being included in the City
Development Plan. Thereafter, the City Council passes
another resolution authorizing the sale of the said
abandoned road through public bidding. We held therein
that the City of Cebu is empowered to close a city street and
to vacate or withdraw the same from public use. Such
withdrawn portion becomes patrimonial property which can
be the object of an ordinary contract (Cebu Oxygen and
Acetylene Co., Inc. v. Bercilles, et al., G.R. No.
L-40474, August 29, 1975, 66 SCRA 481). However, those
roads and streets which are available to the public in
general and ordinarily used for vehicular traffic are still
considered public property devoted to public use. In such
case, the local government has no power to use it for
another purpose or to dispose of or lease it to private
Page 94 of 404

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persons. This limitation on the authority of the local

government over public properties has been discussed and
settled by this Court en banc in "Francisco V. Dacanay,
petitioner v. Mayor Macaria Asistio, Jr., et al., respondents,
G.R. No. 93654, May 6, 1992." This Court ruled:
There is no doubt that the disputed areas from which the
private respondents' market stalls are sought to be evicted
are public streets, as found by the trial court in Civil Case
No. C-12921. A public street is property for public use hence
outside the commerce of man (Arts. 420, 424, Civil Code).
Being outside the commerce of man, it may not be the
subject of lease or others contract (Villanueva, et al. v.
Castaeda and Macalino, 15 SCRA 142 citing the
Municipality of Cavite v. Rojas, 30 SCRA 602; Espiritu v.
Municipal Council of Pozorrubio, 102 Phil. 869; And Muyot v.
De la Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the
right to occupy portions of the public street, the City
Government, contrary to law, has been leasing portions of
the streets to them. Such leases or licenses are null and
void for being contrary to law. The right of the public to use
the city streets may not be bargained away through
contract. The interests of a few should not prevail over the
good of the greater number in the community whose health,
peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to
protect.
The Executive Order issued by acting Mayor Robles
authorizing the use of Heroes del '96 Street as a vending
area for stallholders who were granted licenses by the city
government contravenes the general law that reserves city
streets and roads for public use. Mayor Robles' Executive
Order may not infringe upon the vested right of the public to
use city streets for the purpose they were intended to serve:
i.e., as arteries of travel for vehicles and pedestrians.
Even assuming, in gratia argumenti, that respondent
municipality has the authority to pass the disputed
ordinance, the same cannot be validly implemented
because it cannot be considered approved by the
Metropolitan Manila Authority due to non-compliance by

respondent municipality of the conditions imposed by the

former for the approval of the ordinance, to wit:
1. That the aforenamed streets are not used for vehicular
traffic, and that the majority of the residents do(es) not
oppose the establishment of the flea market/vending areas
thereon;
2. That the 2-meter middle road to be used as flea
market/vending area shall be marked distinctly, and that the
2 meters on both sides of the road shall be used by
pedestrians;
3. That the time during which the vending area is to be used
shall be clearly designated;
4. That the use of the vending areas shall be temporary and
shall be closed once the reclaimed areas are developed and
donated by the Public Estate Authority. (p. 38, Rollo)
Respondent municipality has not shown any iota of proof
that it has complied with the foregoing conditions precedent
to the approval of the ordinance. The allegations of
respondent municipality that the closed streets were not
used for vehicular traffic and that the majority of the
residents do not oppose the establishment of a flea market
on said streets are unsupported by any evidence that will
show that this first condition has been met. Likewise, the
designation by respondents of a time schedule during which
the flea market shall operate is absent.
Further, it is of public notice that the streets along Baclaran
area are congested with people, houses and traffic brought
about by the proliferation of vendors occupying the streets.
To license and allow the establishment of a flea market
along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension
and Opena streets in Baclaran would not help in solving the
problem of congestion. We take note of the other
observations of the Solicitor General when he said:
. . . There have been many instances of emergencies and
fires where ambulances and fire engines, instead of using
the roads for a more direct access to the fire area, have to
maneuver and look for other streets which are not occupied
Page 95 of 404

LAW ON PROPERTY

by stalls and vendors thereby losing valuable time which

could, otherwise, have been spent in saving properties and
lives.
Along G.G. Cruz Street is a hospital, the St. Rita Hospital.
However, its ambulances and the people rushing their
patients to the hospital cannot pass through G.G. Cruz
because of the stalls and the vendors. One can only imagine
the tragedy of losing a life just because of a few seconds
delay brought about by the inaccessibility of the streets
leading to the hospital.
The children, too, suffer. In view of the occupancy of the
roads by stalls and vendors, normal transportation flow is
disrupted and school children have to get off at a distance
still far from their schools and walk, rain or shine.
Indeed one can only imagine the garbage and litter left by
vendors on the streets at the end of the day. Needless to
say, these cause further pollution, sickness and
deterioration of health of the residents therein. (pp. 21-22,
Rollo)
Respondents do not refute the truth of the foregoing
findings and observations of petitioners. Instead,
respondents want this Court to focus its attention solely on
the argument that the use of public spaces for the
establishment of a flea market is well within the powers
granted by law to a local government which should not be
interfered with by the courts.
Verily, the powers of a local government unit are not
absolute. They are subject to limitations laid down by toe
Constitution and the laws such as our Civil Code. Moreover,
the exercise of such powers should be subservient to
paramount considerations of health and well-being of the
members of the community. Every local government unit
has the sworn obligation to enact measures that will
enhance the public health, safety and convenience,
maintain peace and order, and promote the general
prosperity of the inhabitants of the local units. Based on this
objective, the local government should refrain from acting
towards that which might prejudice or adversely affect the
general welfare.

As what we have said in the Dacanay case, the general

public have a legal right to demand the demolition of the
illegally constructed stalls in public roads and streets and
the officials of respondent municipality have the
corresponding duty arising from public office to clear the
city streets and restore them to their specific public
purpose.
The instant case as well as the Dacanay case, involves an
ordinance which is void and illegal for lack of basis and
authority in laws applicable during its time. However, at this
point, We find it worthy to note that Batas Pambansa Blg.
337, known as Local Government Lode, has already been
repealed by Republic Act No. 7160 known as Local
Government Code of 1991 which took effect on January 1,
1992. Section 5(d) of the new Code provides that rights and
obligations existing on the date of effectivity of the new
Code and arising out of contracts or any other source of
prestation involving a local government unit shall be
governed by the original terms and conditions of the said
contracts or the law in force at the time such rights were
vested.
ACCORDINGLY, the petition is GRANTED and the decision of
the respondent Regional Trial Court dated December 17,
1990 which granted the writ of preliminary injunction
enjoining petitioner as PNP Superintendent, Metropolitan
Traffic Command from enforcing the demolition of market
stalls along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia
Extension and Opena streets is hereby RESERVED and SET
ASIDE.
G.R. No. L-24440

March 28, 1968

THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiffappellee,

vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and
COMMISSIONER OF INTERNAL REVENUE, defendantsappellants.
Fortugaleza, Lood, Sarmiento, M. T. Yap & Associates for
plaintiff-appellee.
Page 96 of 404

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Office of the Solicitor General for defendants-appellants.

BENGZON, J.P., J.:
Prior to its incorporation as a chartered city, the
Municipality of Zamboanga used to be the provincial capital
of the then Zamboanga Province. On October 12, 1936,
Commonwealth Act 39 was approved converting the
Municipality of Zamboanga into Zamboanga City. Sec. 50 of
the Act also provided that
Buildings and properties which the province shall
abandon upon the transfer of the capital to another place
will be acquired and paid for by the City of Zamboanga at a
price to be fixed by the Auditor General.
The properties and buildings referred to consisted of
50 lots and some buildings constructed thereon, located in
the City of Zamboanga and covered individually by Torrens
certificates of title in the name of Zamboanga Province. As
far as can be gleaned from the records, 1 said properties
were being utilized as follows No. of Lots Use
1
................................................ Capitol Site
3
................................................ School Site
3
................................................ Hospital Site
3
................................................ Leprosarium
1
................................................ Curuan School
1
................................................ Trade School
2
................................................ Burleigh School
2
................................................ High School
Playground
9
................................................ Burleighs
1
................................................ Hydro-Electric Site
(Magay)
1
................................................ San Roque
23
................................................ vacant
It appears that in 1945, the capital of Zamboanga
Province was transferred to Dipolog. 2 Subsequently, or on
June 16, 1948, Republic Act 286 was approved creating the
municipality of Molave and making it the capital of
Zamboanga Province.

On May 26, 1949, the Appraisal Committee formed by

the Auditor General, pursuant to Commonwealth Act 39,
fixed the value of the properties and buildings in question
left by Zamboanga Province in Zamboanga City at
P1,294,244.00. 3
On June 6, 1952, Republic Act 711 was approved
dividing the province of Zamboanga into two (2):
Zamboanga del Norte and Zamboanga del Sur. As to how
the assets and obligations of the old province were to be
divided between the two new ones, Sec. 6 of that law
provided:
Upon the approval of this Act, the funds, assets and
other properties and the obligations of the province of
Zamboanga shall be divided equitably between the Province
of Zamboanga del Norte and the Province of Zamboanga del
Sur by the President of the Philippines, upon the
recommendation of the Auditor General.
Pursuant thereto, the Auditor General, on January 11,
1955, apportioned the assets and obligations of the defunct
Province of Zamboanga as follows: 54.39% for Zamboanga
del Norte and 45.61% for Zamboanga del Sur. Zamboanga
del Norte therefore became entitled to 54.39% of
P1,294,244.00, the total value of the lots and buildings in
question, or P704,220.05 payable by Zamboanga City.
On March 17, 1959, the Executive Secretary, by order
of the President, issued a ruling 4 holding that Zamboanga
del Norte had a vested right as owner (should be co-owner
pro-indiviso) of the properties mentioned in Sec. 50 of
Commonwealth Act 39, and is entitled to the price thereof,
payable by Zamboanga City. This ruling revoked the
previous Cabinet Resolution of July 13, 1951 conveying all
the said 50 lots and buildings thereon to Zamboanga City for
P1.00, effective as of 1945, when the provincial capital of
the then Zamboanga Province was transferred to Dipolog.
The Secretary of Finance then authorized the
Commissioner of Internal Revenue to deduct an amount
equal to 25% of the regular internal revenue allotment for
the City of Zamboanga for the quarter ending March 31,
1960, then for the quarter ending June 30, 1960, and again
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LAW ON PROPERTY

for the first quarter of the fiscal year 1960-1961. The

deductions, all aggregating P57,373.46, was credited to the
province of Zamboanga del Norte, in partial payment of the
P764,220.05 due it.
However, on June 17, 1961, Republic Act 3039 was
approved amending Sec. 50 of Commonwealth Act 39 by
providing that
All buildings, properties and assets belonging to the
former province of Zamboanga and located within the City
of Zamboanga are hereby transferred, free of charge, in
favor of the said City of Zamboanga. (Stressed for
emphasis).
Consequently, the Secretary of Finance, on July 12,
1961, ordered the Commissioner of Internal Revenue to stop
from effecting further payments to Zamboanga del Norte
and to return to Zamboanga City the sum of P57,373.46
taken from it out of the internal revenue allotment of
Zamboanga del Norte. Zamboanga City admits that since
the enactment of Republic Act 3039, P43,030.11 of the
P57,373.46 has already been returned to it.
This constrained plaintiff-appellee Zamboanga del
Norte to file on March 5, 1962, a complaint entitled
"Declaratory Relief with Preliminary Mandatory Injunction" in
the Court of First Instance of Zamboanga del Norte against
defendants-appellants Zamboanga City, the Secretary of
Finance and the Commissioner of Internal Revenue. It was
prayed that: (a) Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of property
without due process and just compensation; (b) Plaintiff's
rights and obligations under said law be declared; (c) The
Secretary of Finance and the Internal Revenue
Commissioner be enjoined from reimbursing the sum of
P57,373.46 to defendant City; and (d) The latter be ordered
to continue paying the balance of P704,220.05 in quarterly
installments of 25% of its internal revenue allotments.
On June 4, 1962, the lower court ordered the issuance
of preliminary injunction as prayed for. After defendants filed
their respective answers, trial was held. On August 12,

1963, judgment was rendered, the dispositive portion of

which reads:
WHEREFORE, judgment is hereby rendered declaring
Republic Act No. 3039 unconstitutional insofar as it deprives
plaintiff Zamboanga del Norte of its private properties,
consisting of 50 parcels of land and the improvements
thereon under certificates of title (Exhibits "A" to "A-49") in
the name of the defunct province of Zamboanga; ordering
defendant City of Zamboanga to pay to the plaintiff the sum
of P704,220.05 payment thereof to be deducted from its
regular quarterly internal revenue allotment equivalent to
25% thereof every quarter until said amount shall have
been fully paid; ordering defendant Secretary of Finance to
direct defendant Commissioner of Internal Revenue to
deduct 25% from the regular quarterly internal revenue
allotment for defendant City of Zamboanga and to remit the
same to plaintiff Zamboanga del Norte until said sum of
P704,220.05 shall have been fully paid; ordering plaintiff
Zamboanga del Norte to execute through its proper officials
the corresponding public instrument deeding to defendant
City of Zamboanga the 50 parcels of land and the
improvements thereon under the certificates of title
(Exhibits "A" to "A-49") upon payment by the latter of the
aforesaid sum of P704,220.05 in full; dismissing the
counterclaim of defendant City of Zamboanga; and
declaring permanent the preliminary mandatory injunction
issued on June 8, 1962, pursuant to the order of the Court
dated June 4, 1962. No costs are assessed against the
defendants.
It is SO ORDERED.
Subsequently, but prior to the perfection of
defendants' appeal, plaintiff province filed a motion to
reconsider praying that Zamboanga City be ordered instead
to pay the P704,220.05 in lump sum with 6% interest per
annum. Over defendants' opposition, the lower court
granted plaintiff province's motion.
The defendants then brought the case before Us on
appeal.

Page 98 of 404
LAW ON PROPERTY

Brushing aside the procedural point concerning the

property of declaratory relief filed in the lower court on the
assertion that the law had already been violated and that
plaintiff sought to give it coercive effect, since assuming the
same to be true, the Rules anyway authorize the conversion
of the proceedings to an ordinary action, 5 We proceed to
the more important and principal question of the validity of
Republic Act 3039.
The validity of the law ultimately depends on the
nature of the 50 lots and buildings thereon in question. For,
the matter involved here is the extent of legislative control
over the properties of a municipal corporation, of which a
province is one. The principle itself is simple: If the property
is owned by the municipality (meaning municipal
corporation) in its public and governmental capacity, the
property is public and Congress has absolute control over it.
But if the property is owned in its private or proprietary
capacity, then it is patrimonial and Congress has no
absolute control. The municipality cannot be deprived of it
without due process and payment of just compensation. 6
The capacity in which the property is held is, however,
dependent on the use to which it is intended and devoted.
Now, which of two norms, i.e., that of the Civil Code or that
obtaining under the law of Municipal Corporations, must be
used in classifying the properties in question?
The Civil Code classification is embodied in its Arts.
423 and 424 which provide:1wph1.t
ART. 423. The property of provinces, cities, and
municipalities is divided into property for public use and
patrimonial property.
ART. 424. Property for public use, in the provinces,
cities, and municipalities, consists of the provincial roads,
city streets, municipal streets, the squares, fountains, public
waters, promenades, and public works for public service
paid for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial
and shall be governed by this Code, without prejudice to the
provisions of special laws. (Stressed for emphasis).

Applying the above cited norm, all the properties in

question, except the two (2) lots used as High School
playgrounds, could be considered as patrimonial properties
of the former Zamboanga province. Even the capital site,
the hospital and leprosarium sites, and the school sites will
be considered patrimonial for they are not for public use.
They would fall under the phrase "public works for public
service" for it has been held that under the ejusdem generis
rule, such public works must be for free and indiscriminate
use by anyone, just like the preceding enumerated
properties in the first paragraph of Art 424. 7 The
playgrounds, however, would fit into this category.
This was the norm applied by the lower court. And it
cannot be said that its actuation was without jurisprudential
precedent for in Municipality of Catbalogan v. Director of
Lands, 8 and in Municipality of Tacloban v. Director of Lands,
9 it was held that the capitol site and the school sites in
municipalities constitute their patrimonial properties. This
result is understandable because, unlike in the classification
regarding State properties, properties for public service in
the municipalities are not classified as public. Assuming
then the Civil Code classification to be the chosen norm, the
lower court must be affirmed except with regard to the two
(2) lots used as playgrounds.
On the other hand, applying the norm obtaining under
the principles constituting the law of Municipal Corporations,
all those of the 50 properties in question which are devoted
to public service are deemed public; the rest remain
patrimonial. Under this norm, to be considered public, it is
enough that the property be held and, devoted for
governmental purposes like local administration, public
education, public health, etc. 10
Supporting jurisprudence are found in the following
cases: (1) HINUNANGAN V. DIRECTOR OF LANDS, 11 where it
was stated that "... where the municipality has occupied
lands distinctly for public purposes, such as for the
municipal court house, the public school, the public market,
or other necessary municipal building, we will, in the
absence of proof to the contrary, presume a grant from the
States in favor of the municipality; but, as indicated by the
Page 99 of 404

LAW ON PROPERTY

wording, that rule may be invoked only as to property which

is used distinctly for public purposes...." (2) VIUDA DE
TANTOCO V. MUNICIPAL COUNCIL OF ILOILO 12 held that
municipal properties necessary for governmental purposes
are public in nature. Thus, the auto trucks used by the
municipality for street sprinkling, the police patrol
automobile, police stations and concrete structures with the
corresponding lots used as markets were declared exempt
from execution and attachment since they were not
patrimonial properties. (3) MUNICIPALITY OF BATANGAS VS.
CANTOS 13 held squarely that a municipal lot which had
always been devoted to school purposes is one dedicated to
public use and is not patrimonial property of a municipality.
Following this classification, Republic Act 3039 is valid
insofar as it affects the lots used as capitol site, school sites
and its grounds, hospital and leprosarium sites and the high
school playground sites a total of 24 lots since these
were held by the former Zamboanga province in its
governmental capacity and therefore are subject to the
absolute control of Congress. Said lots considered as public
property are the following: TCT Number
Lot Number U s
e
2200 ......................................
4-B
......................................
Capitol Site
2816 ......................................
149
......................................
School Site
3281 ......................................
1224
......................................
Hospital Site
3282 ......................................
1226
......................................
Hospital Site
3283 ......................................
1225
......................................
Hospital Site
3748 ......................................
434-A-1
......................................
School Site
5406 ......................................
171
......................................
School Site
5564 ......................................
168
......................................
High School Play-ground
5567 ......................................
157 & 158
......................................
Trade School
5583 ......................................
167
......................................
High School Play-ground

6181

......................................
......................................
11942 ......................................
......................................
11943 ......................................
......................................
11944 ......................................
......................................
5557 ......................................
......................................
5562 ......................................
......................................
5565 ......................................
......................................
5570 ......................................
......................................
5571 ......................................
......................................
5572 ......................................
......................................
5573 ......................................
......................................
5585 ......................................
......................................
5586 ......................................
......................................
5587 ......................................
......................................

(O.C.T.)
Curuan School
926
Leprosarium
927
Leprosarium
925
Leprosarium
170
Burleigh School
180
Burleigh School
172-B
Burleigh
171-A
Burleigh
172-C
Burleigh
174
Burleigh
178
Burleigh
171-B
Burleigh
173
Burleigh
172-A
Burleigh

We noticed that the eight Burleigh lots above

described are adjoining each other and in turn are between
the two lots wherein the Burleigh schools are built, as per
records appearing herein and in the Bureau of Lands. Hence,
there is sufficient basis for holding that said eight lots
constitute the appurtenant grounds of the Burleigh schools,
and partake of the nature of the same.
Regarding the several buildings existing on the lots
above-mentioned, the records do not disclose whether they
were constructed at the expense of the former Province of
Zamboanga. Considering however the fact that said
buildings must have been erected even before 1936 when
Commonwealth Act 39 was enacted and the further fact that
Page 100 of 404

LAW ON PROPERTY

provinces then had no power to authorize construction of

buildings such as those in the case at bar at their own
expense, 14 it can be assumed that said buildings were
erected by the National Government, using national funds.
Hence, Congress could very well dispose of said buildings in
the same manner that it did with the lots in question.
But even assuming that provincial funds were used,
still the buildings constitute mere accessories to the lands,
which are public in nature, and so, they follow the nature of
said lands, i.e., public. Moreover, said buildings, though
located in the city, will not be for the exclusive use and
benefit of city residents for they could be availed of also by
the provincial residents. The province then and its
successors-in-interest are not really deprived of the
benefits thereof.
But Republic Act 3039 cannot be applied to deprive
Zamboanga del Norte of its share in the value of the rest of
the 26 remaining lots which are patrimonial properties since
they are not being utilized for distinctly, governmental
purposes. Said lots are:TCT NumberLot Number U s e
5577 ......................................
177
......................................
Mydro, Magay
13198 ......................................
127-0
......................................
San Roque
5569 ......................................
169
......................................
Burleigh 15
5558 ......................................
175
......................................
Vacant
5559 ......................................
188
......................................
"
5560 ......................................
183
......................................
"
5561 ......................................
186
......................................
"
5563 ......................................
191
......................................
"
5566 ......................................
176
......................................
"
5568 ......................................
179
......................................
"
5574 ......................................
196
......................................
"

5575
5576
5578
5579
5580
5581
5582
5584
5588
5589
5590
5591
5592
5593
7379

......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................

181-A
"
181-B
"
182
"
197
"
195
"
159-B
"
194
"
190
"
184
"
187
"
189
"
192
"
193
"
185
"
4147
"

Moreover, the fact that these 26 lots are registered

strengthens the proposition that they are truly private in
nature. On the other hand, that the 24 lots used for
governmental purposes are also registered is of no
significance since registration cannot convert public
property to private. 16
We are more inclined to uphold this latter view. The
controversy here is more along the domains of the Law of
Municipal Corporations State vs. Province than along
that of Civil Law. Moreover, this Court is not inclined to hold
that municipal property held and devoted to public service is
Page 101 of 404

LAW ON PROPERTY

in the same category as ordinary private property. The

consequences are dire. As ordinary private properties, they
can be levied upon and attached. They can even be
acquired thru adverse possession all these to the
detriment of the local community. Lastly, the classification of
properties other than those for public use in the
municipalities as patrimonial under Art. 424 of the Civil Code
is "... without prejudice to the provisions of special laws."
For purpose of this article, the principles, obtaining under
the Law of Municipal Corporations can be considered as
"special laws". Hence, the classification of municipal
property devoted for distinctly governmental purposes as
public should prevail over the Civil Code classification in this
particular case.
Defendants' claim that plaintiff and its predecessor-ininterest are "guilty of laches is without merit. Under
Commonwealth Act 39, Sec. 50, the cause of action in favor
of the defunct Zamboanga Province arose only in 1949 after
the Auditor General fixed the value of the properties in
question. While in 1951, the Cabinet resolved transfer said
properties practically for free to Zamboanga City, a
reconsideration thereof was seasonably sought. In 1952, the
old province was dissolved. As successor-in-interest to more
than half of the properties involved, Zamboanga del Norte
was able to get a reconsideration of the Cabinet Resolution
in 1959. In fact, partial payments were effected
subsequently and it was only after the passage of Republic
Act 3039 in 1961 that the present controversy arose.
Plaintiff brought suit in 1962. All the foregoing, negative
laches.
It results then that Zamboanga del Norte is still
entitled to collect from the City of Zamboanga the former's
54.39% share in the 26 properties which are patrimonial in
nature, said share to computed on the basis of the valuation
of said 26 properties as contained in Resolution No. 7, dated
March 26, 1949, of the Appraisal Committee formed by the
Auditor General.
Plaintiff's share, however, cannot be paid in lump
sum, except as to the P43,030.11 already returned to
defendant City. The return of said amount to defendant was
without legal basis. Republic Act 3039 took effect only on

June 17, 1961 after a partial payment of P57,373.46 had

already been made. Since the law did not provide for
retroactivity, it could not have validly affected a completed
act. Hence, the amount of P43,030.11 should be
immediately returned by defendant City to plaintiff province.
The remaining balance, if any, in the amount of plaintiff's
54.39% share in the 26 lots should then be paid by
defendant City in the same manner originally adopted by
the Secretary of Finance and the Commissioner of Internal
Revenue, and not in lump sum. Plaintiff's prayer, particularly
pars. 5 and 6, read together with pars. 10 and 11 of the first
cause of action recited in the complaint 17 clearly shows
that the relief sought was merely the continuance of the
quarterly payments from the internal revenue allotments of
defendant City. Art. 1169 of the Civil Code on reciprocal
obligations invoked by plaintiff to justify lump sum payment
is inapplicable since there has been so far in legal
contemplation no complete delivery of the lots in question.
The titles to the registered lots are not yet in the name of
defendant Zamboanga City.
WHEREFORE, the decision appealed from is hereby
set aside and another judgment is hereby entered as
follows:.
(1) Defendant Zamboanga City is hereby ordered to
return to plaintiff Zamboanga del Norte in lump sum the
amount of P43,030.11 which the former took back from the
latter out of the sum of P57,373.46 previously paid to the
latter; and
(2) Defendants are hereby ordered to effect payments
in favor of plaintiff of whatever balance remains of plaintiff's
54.39% share in the 26 patrimonial properties, after
deducting therefrom the sum of P57,373.46, on the basis of
Resolution No. 7 dated March 26, 1949 of the Appraisal
Committee formed by the Auditor General, by way of
quarterly payments from the allotments of defendant City,
in the manner originally adopted by the Secretary of Finance
and the Commissioner of Internal Revenue. No costs. So
ordered.
ARTICLE 428
G.R. No. 161028

January 31, 2005

Page 102 of 404

LAW ON PROPERTY

TERESITA V. IDOLOR, petitioner,

vs.
HON. COURT OF APPEALS, SPOUSES GUMERSINDO DE
GUZMAN and ILUMINADA DE GUZMAN and HON. JOSE G.
PINEDA, Presiding Judge of Regional Trial Court, National
Capital Judicial Region, Branch 220, Quezon City,
respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the September
1, 2003 decision1 of the Court of Appeals in CA-G.R. SP No.
72494 which reversed the May 27, 2002 order of the
Regional Trial Court of Quezon City, Branch 220, in Civil Case
No. Q-98-34728, denying respondent-spouses Motion for
Immediate Issuance of Writ of Possession.
Petitioner Teresita V. Idolor obtained a loan from respondentspouses Gumersindo and Iluminada De Guzman secured by
a real estate mortgage over a property covered by Transfer
Certificate of Title No. 25659.2
Upon default by petitioner in the payment of her obligation,
respondent-spouses instituted extra-judicial foreclosure
proceedings against the real estate mortgage. During the
auction sale, respondent-spouses emerged as the highest
bidder and were issued a Certificate of Sale.3
On June 25, 1998, petitioner filed with the Regional Trial
Court of Quezon City, Branch 220, a complaint for
annulment of the Certificate of Sale with prayer for the
issuance of a temporary restraining order and a writ of
preliminary injunction. The case was docketed as Civil Case
No. Q-98-34728.
The trial court issued a writ of preliminary injunction,
however, the Court of Appeals in a petition for certiorari filed
by respondent-spouses, annulled the same for having been
issued with grave abuse of discretion. We affirmed said
decision of the appellate court in Idolor v. Court of Appeals .
4

The ownership over the subject property having been

consolidated in their name, respondent-spouses De Guzman
moved for the issuance of a writ of possession with the
Regional Trial Court where the case for the annulment of the
Certificate of Sale was pending.5 On May 27, 2002, the trial
court denied the motion, ruling that the "the lifting of the
writ of preliminary injunction does not ipso facto entitle
defendant De Guzman to the issuance of a writ of
possession over the property in question. It only allows the
defendant Sheriff to issue a final deed of sale and
confirmation sale and the defendant De Guzman to
consolidate the ownership/title over the subject property in
his name."61awphi1.nt
In a petition for certiorari before the Court of Appeals, the
appellate court found that the trial court gravely abused its
discretion in denying the motion for the issuance of the "writ
of possession to the mortgagee or the winning bidder is a
ministerial function of the court and that the pendency of an
action questioning the validity of a mortgage cannot bar the
issuance of the writ of possession after title to the property
has been consolidated in the mortgagee."7 Hence, it
reversed and set aside the May 27, 2002 order of the trial
court.
The following issues are raised for our consideration:
A. WHETHER OR NOT THE COURT A QUO HAS JURISDICTION
ON THE MOTION OF THE MORTGAGEE TO APPLY FOR A WRIT
OF POSSESSION NOTWITHSTANDING NON-PAYMENT OF
DOCKET FEES;
B. WHETHER OR NOT THE MORTGAGEE, BY MERE MOTION,
NOT BY A PETITION, MAY APPLY FOR A WRIT OF POSSESSION
IN THE SAME CASE FOR ANNULMENT OF THE SHERIFFS
CERTIFICATE OF SALE OF WHICH HE IS A DEFENDANT.8
A writ of possession is an order whereby the sheriff is
commanded to place a person in possession of a real or
personal property.9 It may be issued under the following
instances: (1) land registration proceedings under Sec. 17 of
Act 496; (2) judicial foreclosure, provided the debtor is in
possession of the mortgaged realty and no third person, not
Page 103 of 404

LAW ON PROPERTY

a party to the foreclosure suit, had intervened; and (3)

extrajudicial foreclosure of a real estate mortgage under
Sec. 7 of Act 3135 as amended by Act 4118,10 to which the
present case falls.
Section 7, Act 3135, as amended by Act 4118, provides:
SECTION 7. In any sale made under the provisions of this
Act, the purchaser may petition the Court of First Instance of
the province or place where the property or any part thereof
is situated, to give him possession thereof during the
redemption period, furnishing bond in an amount equivalent
to the use of the property for a period of twelve months, to
indemnify the debtor in case it be shown that the sale was
made without violating the mortgage or without complying
with the requirements of this Act. Such petition shall be
made under oath and filed in form of an ex parte motion in
the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property
registered under the Mortgage Law or under section one
hundred and ninety-four of the Administrative Code, or of
any other real property encumbered with a mortgage duly
registered in the office of any register of deeds in
accordance with any existing law, and in each case the clerk
of the court shall, upon the filing of such petition, collect the
fees specified in paragraph eleven of section one hundred
and fourteen of Act Numbered Four hundred and ninety-six,
as amended by Act Numbered Twenty-eight hundred and
sixty-six, and the court shall, upon approval of the bond,
order that a writ of possession issue, addressed to the
sheriff of the province in which the property is situated, who
shall execute said order immediately.
Under the provision cited above, the purchaser in a
foreclosure sale may apply for a writ of possession during
the redemption period by filing for that purpose an ex parte
motion under oath, in the corresponding registration or
cadastral proceeding in the case of a property with torrens
title. Upon the filing of such motion and the approval of the
corresponding bond, the court is expressly directed to issue
the writ.11
Upon the expiration of the redemption period, the right of
the purchaser to the possession of the foreclosed property

becomes absolute. The basis of this right to possession is

the purchasers ownership of the property. Mere filing of an
ex parte motion for the issuance of the writ of possession
would suffice, and the bond required is no longer necessary,
since possession becomes an absolute right of the
purchaser as the confirmed owner.12
In this case, respondent-spouses acquired an absolute right
over the property upon the failure of petitioner to exercise
her right of redemption and upon the consolidation of the
title in their name.
The pendency of the case for the annulment of the
Certificate of Sale is not a bar to the issuance of the writ of
possession. Upon the filing of the motion, the trial court has
no discretion to deny the same, thus:
This Court has consistently held that the duty of the trial
court to grant a writ of possession is ministerial. Such writ
issues as a matter of course upon the filing of the proper
motion and the approval of the corresponding bond. No
discretion is left to the trial court. Any question regarding
the regularity and validity of the sale, as well as the
consequent cancellation of the writ, is to be determined in a
subsequent proceeding as outlined in Section 8 of Act 3135.
Such question cannot be raised to oppose the issuance of
the writ, since the proceeding is ex parte. The recourse is
available even before the expiration of the redemption
period provided by law and the Rules of Court.13
The judge to whom an application for writ of possession is
filed need not look into the validity of the mortgage or the
manner of its foreclosure. As a rule, after the consolidation
of title in the buyers name, for failure of the mortgagor to
redeem, the writ of possession becomes a matter of right.
Its issuance to a purchaser in an extrajudicial foreclosure is
merely a ministerial function. As such, the court neither
exercises its official discretion nor judgment.14 Any question
regarding the validity of the mortgage or its foreclosure
cannot be a legal ground for refusing the issuance of a writ
of possession. Regardless of whether or not there is a
pending suit for annulment of the mortgage or the
foreclosure itself, the purchaser is entitled to a writ of
Page 104 of 404

LAW ON PROPERTY

possession, without prejudice of course to the eventual

outcome of said case.15
Contrary to petitioners assertion, the Regional Trial Court of
Quezon City has jurisdiction to act on respondents motion
for writ of possession. Section 7, Act 3135, as amended, is
clear that in any sale made under its provisions, "the
purchaser may petition the Court of the province or place
where the property or any part thereof is situated" Since
the property subject of this controversy is in Quezon City,
then the citys Regional Trial Court should rightly take
cognizance of the case.
The Court of Appeals correctly observed:
Thus, it is clear under the aforesaid law that the RTC of the
place where the property is situated has the appropriate
authority to issue the writ of possession and, specifically in
the instant case, it is the RTC of Quezon City. And when
jurisdiction pertains to the RTC of Quezon City, it includes all
branches thereof including the court a quo where a related
proceeding is being conducted.16
Further, in Bacalso, et al. v. Ramolete, et al.,17 we held:
The various branches of the Court of First Instance of
Cebu under the Fourteenth Judicial District, are a coordinate
and co-equal courts, and the totality of which is only one
Court of First Instance. The jurisdiction is vested in the court,
not in the judges. And when a case is filed in one branch,
jurisdiction over the case does not attach to the branch or
judge alone, to the exclusion of the other branches. Trial
may be held or proceedings continue by and before another
branch or judge. It is for this reason that Section 57 of the
Judiciary Act expressly grants to the Secretary of Justice, the
administrative right or power to apportion the cases among
the different branches, both for the convenience of the
parties and for the coordination of the work by the different
branches of the same court. The apportionment and
distribution of cases does not involve a grant or limitation of
jurisdiction; the jurisdiction attaches and continues to be
vested in the Court of First Instance of the province, and the
trials may be held by any branch or judge of the court.

Necessarily, therefore, Branch 220 of the Regional Trial

Court of Quezon City has jurisdiction over respondentspouses application for writ of possession over a property in
Quezon City.
The Court of Appeals properly debunked petitioners claim
that the Regional Trial Court acquired no jurisdiction over the
case due to alleged non-payment of docket fees by the
respondent. This allegation, having been raised for the first
time on appeal, should be disallowed. Besides, the fees
mentioned in Section 7, Act 3135 in relation to Section 114,
Act 496, pertain to fees payable upon registration of land
titles, and not to court or docket fees, as erroneously
claimed by petitioner.
An ex-parte petition for issuance of possessory writ under
Section 7 of Act No. 3135 is not, strictly speaking, a "judicial
process". Even if the same may be considered a judicial
proceeding for the enforcement of ones right of possession
as purchaser in a foreclosure sale, it is not an ordinary suit
filed in court, by which one party "sues another for the
enforcement or protection of a right, or the prevention or
redress of a wrong."18 It is a non-litigious proceeding and
summary in nature as well. As such, the rigid and technical
application of the rules on legal fees may be relaxed in order
to avoid manifest injustice to the respondent. After all, rules
of procedure are used to help secure and not override
substantial justice. Even the Rules of Court mandates a
liberal construction in order to promote their objective of
securing a just, speedy and inexpensive disposition of every
action and proceeding. Since rules of procedure are mere
tools designed to facilitate the attainment of justice, their
strict and rigid application which would result in
technicalities that tend to frustrate rather than promote
substantial justice must always be avoided.191awphi1.nt
This rule is applicable in the present case. Although
respondent- spouses have been declared as the highest
bidder and despite having consolidated the title in their
name, they still failed to take possession of the property
through numerous legal maneuverings of the petitioner. A
simple ex parte application for the issuance of a writ of
possession has become a litigious and protracted
proceeding.
Page 105 of 404

LAW ON PROPERTY

Thus, if we strictly apply the Rules, justice long been denied

to respondent would be effectively defeated.l^vvphi1.net At
any rate, should there be fees and costs relative to the
issuance and implementation of the writ of possession, the
same may be assessed and collected from the respondentspouses De Guzman.
WHEREFORE, in view of the foregoing, the petition for
review on certiorari is DENIED and the decision of the Court
of Appeals in CA-G.R. SP No. 72494 is AFFIRMED. The
Regional Trial Court of Quezon City, Branch 220 is ordered to
issue a writ of possession in favor of respondent-spouses
Gumersindo and Iluminada De Guzman
ARTICLE 431
G.R. No. 74761 November 6, 1990
NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO,
petitioners,
vs.
INTERMEDIATE APPELLATE COURT (First Civil Cases Division)
and MISSIONARIES OF OUR LADY OF LA SALETTE, INC.,
respondents.
Lope E. Adriano for petitioners.
Padilla Law Office for private respondent.

FERNAN, C.J.:
The pivotal issue in this petition for certiorari, prohibition
and mandamus is whether a corporation, which has built
through its agents, waterpaths, water conductors and
contrivances within its land, thereby causing inundation and
damage to an adjacent land, can be held civilly liable for
damages under Articles 2176 and 2177 of the Civil Code on
quasi-delicts such that the resulting civil case can proceed
independently of the criminal case.
The antecedent facts are as follows:

Petitioner spouses Emmanuel and Natividad Andamo are the

owners of a parcel of land situated in Biga (Biluso) Silang,
Cavite which is adjacent to that of private respondent,
Missionaries of Our Lady of La Salette, Inc., a religious
corporation.
Within the land of respondent corporation, waterpaths and
contrivances, including an artificial lake, were constructed,
which allegedly inundated and eroded petitioners' land,
caused a young man to drown, damaged petitioners' crops
and plants, washed away costly fences, endangered the
lives of petitioners and their laborers during rainy and
stormy seasons, and exposed plants and other
improvements to destruction.
In July 1982, petitioners instituted a criminal action,
docketed as Criminal Case No. TG-907-82, before the
Regional Trial Court of Cavite, Branch 4 (Tagaytay City),
against Efren Musngi, Orlando Sapuay and Rutillo Mallillin,
officers and directors of herein respondent corporation, for
destruction by means of inundation under Article 324 of the
Revised Penal Code.
Subsequently, on February 22, 1983, petitioners filed
another action against respondent corporation, this time a
civil case, docketed as Civil Case No. TG-748, for damages
with prayer for the issuance of a writ of preliminary
injunction before the same court. 1
On March 11, 1983, respondent corporation filed its answer
to the complaint and opposition to the issuance of a writ of
preliminary injunction. Hearings were conducted including
ocular inspections on the land. However, on April 26, 1984,
the trial court, acting on respondent corporation's motion to
dismiss or suspend the civil action, issued an order
suspending further hearings in Civil Case No, TG-748 until
after judgment in the related Criminal Case No. TG-907-82.
Resolving respondent corporation's motion to dismiss filed
on June 22, 1984, the trial court issued on August 27, 1984
the disputed order dismissing Civil Case No. TG-748 for lack
of jurisdiction, as the criminal case which was instituted
ahead of the civil case was still unresolved. Said order was
anchored on the provision of Section 3 (a), Rule III of the
Page 106 of 404

LAW ON PROPERTY

Rules of Court which provides that "criminal and civil actions

arising from the same offense may be instituted separately,
but after the criminal action has been commenced the civil
action cannot be instituted until final judgment has been
rendered in the criminal action." 2
Petitioners appealed from that order to the Intermediate
Appellate Court. 3
On February 17, 1986, respondent Appellate Court, First Civil
Cases Division, promulgated a decision 4 affirming the
questioned order of the trial court. 5 A motion for
reconsideration filed by petitioners was denied by the
Appellate Court in its resolution dated May 19, 1986. 6
Directly at issue is the propriety of the dismissal of Civil
Case No. TG-748 in accordance with Section 3 (a) of Rule
111 of the Rules of Court. Petitioners contend that the trial
court and the Appellate Court erred in dismissing Civil Case
No. TG-748 since it is predicated on a quasi-delict.
Petitioners have raised a valid point.
It is axiomatic that the nature of an action filed in court is
determined by the facts alleged in the complaint as
constituting the cause of action. 7 The purpose of an action
or suit and the law to govern it, including the period of
prescription, is to be determined not by the claim of the
party filing the action, made in his argument or brief, but
rather by the complaint itself, its allegations and prayer for
relief. 8 The nature of an action is not necessarily
determined or controlled by its title or heading but the body
of the pleading or complaint itself. To avoid possible denial
of substantial justice due to legal technicalities, pleadings as
well as remedial laws should be liberally construed so that
the litigants may have ample opportunity to prove their
respective claims. 9
Quoted hereunder are the pertinent portions of petitioners'
complaint in Civil Case No. TG-748:
4) That within defendant's land, likewise located at Biga
(Biluso), Silang, Cavite, adjacent on the right side of the
aforesaid land of plaintiffs, defendant constructed
waterpaths starting from the middle-right portion thereof

leading to a big hole or opening, also constructed by

defendant, thru the lower portion of its concrete hollowblocks fence situated on the right side of its cemented gate
fronting the provincial highway, and connected by
defendant to a man height inter-connected cement culverts
which were also constructed and lain by defendant crosswise beneath the tip of the said cemented gate, the left-end
of the said inter-connected culverts again connected by
defendant to a big hole or opening thru the lower portion of
the same concrete hollowblocks fence on the left side of the
said cemented gate, which hole or opening is likewise
connected by defendant to the cemented mouth of a big
canal, also constructed by defendant, which runs northward
towards a big hole or opening which was also built by
defendant thru the lower portion of its concrete hollowblocks fence which separates the land of plaintiffs from that
of defendant (and which serves as the exit-point of the
floodwater coming from the land of defendant, and at the
same time, the entrance-point of the same floodwater to the
land of plaintiffs, year after year, during rainy or stormy
seasons.
5) That moreover, on the middle-left portion of its land just
beside the land of plaintiffs, defendant also constructed an
artificial lake, the base of which is soil, which utilizes the
water being channeled thereto from its water system thru
inter-connected galvanized iron pipes (No. 2) and
complimented by rain water during rainy or stormy seasons,
so much so that the water below it seeps into, and the
excess water above it inundates, portions of the adjoining
land of plaintiffs.
6) That as a result of the inundation brought about by
defendant's aforementioned water conductors, contrivances
and manipulators, a young man was drowned to death,
while herein plaintiffs suffered and will continue to suffer, as
follows:
a) Portions of the land of plaintiffs were eroded and
converted to deep, wide and long canals, such that the
same can no longer be planted to any crop or plant.
b) Costly fences constructed by plaintiffs were, on several
occasions, washed away.
Page 107 of 404

LAW ON PROPERTY

c) During rainy and stormy seasons the lives of plaintiffs and

their laborers are always in danger.
d) Plants and other improvements on other portions of the
land of plaintiffs are exposed to destruction. ... 10
A careful examination of the aforequoted complaint shows
that the civil action is one under Articles 2176 and 2177 of
the Civil Code on quasi-delicts. All the elements of a quasidelict are present, to wit: (a) damages suffered by the
plaintiff, (b) fault or negligence of the defendant, or some
other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or
negligence of the defendant and the damages incurred by
the plaintiff. 11
Clearly, from petitioner's complaint, the waterpaths and
contrivances built by respondent corporation are alleged to
have inundated the land of petitioners. There is therefore,
an assertion of a causal connection between the act of
building these waterpaths and the damage sustained by
petitioners. Such action if proven constitutes fault or
negligence which may be the basis for the recovery of
damages.
In the case of Samson vs. Dionisio, 12 the Court applied
Article 1902, now Article 2176 of the Civil Code and held
that "any person who without due authority constructs a
bank or dike, stopping the flow or communication between a
creek or a lake and a river, thereby causing loss and
damages to a third party who, like the rest of the residents,
is entitled to the use and enjoyment of the stream or lake,
shall be liable to the payment of an indemnity for loss and
damages to the injured party.
While the property involved in the cited case belonged to
the public domain and the property subject of the instant
case is privately owned, the fact remains that petitioners'
complaint sufficiently alleges that petitioners have sustained
and will continue to sustain damage due to the waterpaths
and contrivances built by respondent corporation. Indeed,
the recitals of the complaint, the alleged presence of
damage to the petitioners, the act or omission of respondent

corporation supposedly constituting fault or negligence, and

the causal connection between the act and the damage,
with no pre-existing contractual obligation between the
parties make a clear case of a quasi delict or culpa
aquiliana.
It must be stressed that the use of one's property is not
without limitations. Article 431 of the Civil Code provides
that "the owner of a thing cannot make use thereof in such
a manner as to injure the rights of a third person." SIC
UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining
landowners have mutual and reciprocal duties which require
that each must use his own land in a reasonable manner so
as not to infringe upon the rights and interests of others.
Although we recognize the right of an owner to build
structures on his land, such structures must be so
constructed and maintained using all reasonable care so
that they cannot be dangerous to adjoining landowners and
can withstand the usual and expected forces of nature. If
the structures cause injury or damage to an adjoining
landowner or a third person, the latter can claim
indemnification for the injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a
person for damage caused by his act or omission
constituting fault or negligence, thus:
Article 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of
this chapter.
Article 2176, whenever it refers to "fault or negligence",
covers not only acts "not punishable by law" but also acts
criminal in character, whether intentional and voluntary or
negligent. Consequently, a separate civil action lies against
the offender in a criminal act, whether or not he is criminally
prosecuted and found guilty or acquitted, provided that the
offended party is not allowed, (if the tortfeasor is actually
charged also criminally), to recover damages on both
scores, and would be entitled in such eventuality only to the
Page 108 of 404

LAW ON PROPERTY

bigger award of the two, assuming the awards made in the

two cases vary. 13
The distinctness of quasi-delicta is shown in Article 2177 of
the Civil Code, which states:
Article 2177. Responsibility for fault or negligence under the
preceding article is entirely separate and distinct from the
civil liability arising from negligence under the Penal Code.
But the plaintiff cannot recover damages twice for the same
act or omission of the defendant.
According to the Report of the Code Commission "the
foregoing provision though at first sight startling, is not so
novel or extraordinary when we consider the exact nature of
criminal and civil negligence. The former is a violation of the
criminal law, while the latter is a distinct and independent
negligence, which is a "culpa aquiliana" or quasi-delict, of
ancient origin, having always had its own foundation and
individuality, separate from criminal negligence. Such
distinction between criminal negligence and "culpa extracontractual" or "cuasi-delito" has been sustained by
decisions of the Supreme Court of Spain ... 14
In the case of Castillo vs. Court of Appeals, 15 this Court
held that a quasi-delict or culpa aquiliana is a separate legal
institution under the Civil Code with a substantivity all its
own, and individuality that is entirely apart and independent
from a delict or crime a distinction exists between the
civil liability arising from a crime and the responsibility for
quasi-delicts or culpa extra-contractual. The same
negligence causing damages may produce civil liability
arising from a crime under the Penal Code, or create an
action for quasi-delicts or culpa extra-contractual under the
Civil Code. Therefore, the acquittal or conviction in the
criminal case is entirely irrelevant in the civil case, unless, of
course, in the event of an acquittal where the court has
declared that the fact from which the civil action arose did
not exist, in which case the extinction of the criminal liability
would carry with it the extinction of the civil liability.
In Azucena vs. Potenciano, 16 the Court declared that in
quasi-delicts, "(t)he civil action is entirely independent of
the criminal case according to Articles 33 and 2177 of the

Civil Code. There can be no logical conclusion than this, for

to subordinate the civil action contemplated in the said
articles to the result of the criminal prosecution whether it
be conviction or acquittal would render meaningless the
independent character of the civil action and the clear
injunction in Article 31, that his action may proceed
independently of the criminal proceedings and regardless of
the result of the latter."
WHEREFORE, the assailed decision dated February 17, 1986
of the then Intermediate Appellate Court affirming the order
of dismissal of the Regional Trial Court of Cavite, Branch 18
(Tagaytay City) dated August 17, 1984 is hereby REVERSED
and SET ASIDE. The trial court is ordered to reinstate Civil
Case No. TG-748 entitled "Natividad V. Andamo and
Emmanuel R. Andamo vs. Missionaries of Our Lady of La
Salette Inc." and to proceed with the hearing of the case
with dispatch. This decision is immediately executory. Costs
against respondent corporation.
ARTICLE 448
G.R. No. L-175

April 30, 1946

DAMIAN IGNACIO, FRANCISCO IGNACIO and LUIS IGNACIO,

petitioners,
vs.
ELIAS HILARIO and his wife DIONISIA DRES, and FELIPE
NATIVIDAD, Judge of First Instance of Pangasinan,
respondents.
Leoncio R. Esliza for petitioners.
Mauricio M. Monta for respondents.
MORAN, C.J.:
This is a petition for certiorari arising from a case in the
Court of First Instance of Pangasinan between the herein
respondents Elias Hilario and his wife Dionisia Dres as
plaintiffs, and the herein petitioners Damian, Francisco and
Luis, surnamed Ignacio, as defendants, concerning the
ownership of a parcel of land, partly rice-land and partly
residential. After the trial of the case, the lower court,
presided over by Hon. Alfonso Felix, rendered judgment
holding plaintiffs as the legal owners of the whole property
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but conceding to defendants the ownership of the houses

and granaries built by them on the residential portion with
the rights of a possessor in good faith, in accordance with
article 361 of the Civil Code. The dispositive part of the
decision, hub of this controversy, follows:
Wherefore, judgment is hereby rendered declaring:
(1) That the plaintiffs are the owners of the whole property
described in transfer certificate of title No. 12872 (Exhibit A)
issued in their name, and entitled to the possession of the
same;
(2) That the defendants are entitled to hold the position of
the residential lot until after they are paid the actual market
value of their houses and granaries erected thereon, unless
the plaintiffs prefer to sell them said residential lot, in which
case defendants shall pay the plaintiffs the proportionate
value of said residential lot taking as a basis the price paid
for the whole land according to Exhibit B; and
(3) That upon defendant's failure to purchase the residential
lot in question, said defendants shall remove their houses
and granaries after this decision becomes final and within
the period of sixty (60) days from the date that the court is
informed in writing of the attitude of the parties in this
respect.
No pronouncement is made as to damages and costs.
Once this decision becomes final, the plaintiffs and
defendants may appear again before this court for the
purpose of determining their respective rights under article
361 of the Civil Code, if they cannot come to an extrajudicial settlement with regard to said rights.
Subsequently, in a motion filed in the same Court of First
Instance but now presided over by the herein respondent
Judge Hon. Felipe Natividad, the plaintiffs prayed for an
order of execution alleging that since they chose neither to
pay defendants for the buildings nor to sell to them the
residential lot, said defendants should be ordered to remove
the structure at their own expense and to restore plaintiffs
in the possession of said lot. Defendants objected to this

motion which, after hearing, was granted by Judge

Natividad. Hence, this petition by defendants praying for (a)
a restraint and annulment of the order of execution issued
by Judge Natividad; (b) an order to compel plaintiffs to pay
them the sum of P2,000 for the buildings, or sell to them the
residential lot for P45; or (c), a rehearing of the case for a
determination of the rights of the parties upon failure of
extra-judicial settlement.
The judgment rendered by Judge Felix is founded on articles
361 and 453 of the Civil Code which are as follows:
ART. 361. The owner of land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the work, sowing or planting, after
the payment of the indemnity stated in articles 453 and
454, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent.
ART. 453. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain
the thing until such expenses are made good to him.
Useful expenses shall be refunded to the possessor in good
faith with the same right of retention, the person who has
defeated him in the possession having the option of
refunding the amount of the expenses or paying the
increase in value which the thing may have acquired in
consequence thereof.
The owner of the building erected in good faith on a land
owned by another, is entitled to retain the possession of the
land until he is paid the value of his building, under article
453. The owner of the land, upon the other hand, has the
option, under article 361, either to pay for the building or to
sell his land to the owner of the building. But he cannot, as
respondents here did, refuse both to pay for the building
and to sell the land and compel the owner of the building to
remove it from the land where it is erected. He is entitled to
such remotion only when, after having chosen to sell his
land, the other party fails to pay for the same. But this is not
the case before us.

Page 110 of 404

LAW ON PROPERTY

We hold, therefore, that the order of Judge Natividad

compelling defendants-petitioners to remove their buildings
from the land belonging to plaintiffs-respondents only
because the latter chose neither to pay for such buildings
not to sell the land, is null and void, for it amends
substantially the judgment sought to be executed and is,
furthermore, offensive to articles 361 and 453 of the Civil
Code.
There is, however, in the decision of Judge Felix a question
of procedure which calls for the clarification, to avoid
uncertainty and delay in the disposition of cases. In that
decision, the rights of both parties are well defined under
articles 361 and 453 of the Civil Code, but it fails to
determine the value of the buildings and of the lot where
they are erected as well as the periods of time within which
the option may be exercised and payment should be made,
these particulars having been left for determination
apparently after the judgment has become final. This
procedure is erroneous, for after the judgment has become
final, no additions can be made thereto and nothing can be
done therewith except its execution. And execution cannot
be had, the sheriff being ignorant as to how, for how much,
and within what time may the option be exercised, and
certainly no authority is vested in him to settle these
matters which involve exercise of judicial discretion. Thus
the judgment rendered by Judge Felix has never become
final, it having left matters to be settled for its completion in
a subsequent proceeding, matters which remained unsettled
up to the time the petition is filed in the instant case.
For all the foregoing, the writ of execution issued by Judge
Natividad is hereby set aside and the lower court ordered to
hold a hearing in the principal case wherein it must
determine the prices of the buildings and of the residential
lot where they are erected, as well as the period of time
within which the plaintiffs-respondents may exercise their
option either to pay for the buildings or to sell their land,
and, in the last instance, the period of time within which the
defendants-petitioners may pay for the land, all these
periods to be counted from the date the judgment becomes
executory or unappealable. After such hearing, the court
shall render a final judgment according to the evidence
presented by the parties.

The costs shall be paid by plaintiffs-respondents.

G.R. No. L-8139

October 24, 1955

BELEN UY TAYAG and JESUS B. TAYAG, petitioners,

vs.
ROSARIO YUSECO, JOAQUIN C. YUSECO and THE COURT OF
APPEALS, respondents.
Pelaez and Jalandoni for petitioners.
Yuseco, Abdon, Yuseco and Narvasa for respondents.
MONTEMAYOR, J.:
This is an appeal by certiorari by petitioners Belen Uy Tayag
and her husband Jesus B. Tayag from the decision of the
Court of Appeals of April 23, 1954, affirming the decision of
the Court of First Instance of Manila. The facts in this case as
may be gathered from the records and as found by the
Court of Appeals may be briefly stated as follows. In and
prior to the year 1930 Atty. Joaquin C. Yuseco had been
rendering professional services to Maria Lim, owner of lots
11-A and 11-B, block 2251 of the Government Subdivision
known as Hacienda de San Lazaro covered by transfer
certificates of title Nos. 36400 and 36401 of the Register of
Deeds of Manila. To show her appreciation of the service
rendered to her Maria offered the two lots to Atty. Yuseco
and his wife Rosario Yuseco for them to build on, and
accepting the offer, the Yusecos built a house and an annex
for servants quarters on the two lots which improvements at
present may be reasonably valued at P50,000. Although
Atty. Yuseco claims that the two lots were donated to him,
he could exhibit no evidence of said donation and the
certificates of title already mentioned remained in the name
of Maria. There is reason to believe that at least during her
lifetime and while she remained owner of the two lots, it was
her desire to have the Yusecos occupy the land free. But to
go through the formalities and to legalize the possession of
the two lots, after the house and the annex were built, there
was executed a lease contract to the effect that the lease
was to run for a period of five years, with a rental of P120 a
year; that the owner of the lots was to pay all land taxes,
and that failure to pay the rent when due would be sufficient
Page 111 of 404

LAW ON PROPERTY

cause for the recission of the contract. This agreement was

noted on the certificates of title.
On November 29, 1945, a few days before her death, Maria
sold the two lots to her daughter Belen Uy married to Jesus
B. Tayag for and in consideration of the sum of P4,000. The
new owners in 1946 asked the Yusecos to remove their
houses from the land because Belen and her husband
planned to build their own house on the two lots, or else pay
a monthly rent of P120. Because of the failure of the Yusecos
to comply with the demand, Belen assisted by her husband
filed an action of ejectment in the Municipal Court of Manila
which later rendered judgment for the plaintiffs and against
the defendants "for the restitution of the premises described
in the complaint and for the recovery of a monthly rental of
P100 from November 30, 1945, up to the date of restitution,
and for cost." On appeal by the defendants to the Court of
First Instance of Manila, the latter rendered judgment, the
dispositive part of which reads as follows:
Wherefore judgment is hereby rendered declaring the
plaintiff, Belen Uy Tayag, to be entitled to the possession of
the two parcels of land described in the complaint upon
payment by her to the defendants of the sum of P50,000,
which is the value of the two houses they had built thereon;
but in the event said plaintiff shall not be in a position to pay
said amount within 90 days from the date this decision shall
become final, the defendants are hereby declared to be
entitled to purchase the two parcels of land in question for
the sum P10,000, within 90 days from the date the
defendants shall have failed to buy the house. In the
meantime, the two parcels of land without any obligation
thereof. No pronouncement is hereby made as to costs.
On appeal by the plaintiffs to the Court of Appeals said court
found that the Yusecos were builders in good faith under
article 448 of the new Civil Code; and that as such builders
in good faith, they cannot be required to remove their house
and the annex unless they were paid the value thereof. The
Court of Appeals further approved P50,000 and P10,000 as
the reasonable values of the house and the two lots,
respectively, as found by the Court of First Instance and that
the Yusecos as builders in good faith will begin to pay rent
only when the plaintiffs as owners of the land are unable or

choose not to exercise their right to purchase the land, but

in the present case, neither partly has expressed his
willingness or inability to exercise the right corresponding to
him under article 448 of the new Civil Code, hence the
payment of rent is not in order. The Court of Appeals
affirmed the decision of the Court of First Instance.
Appellants Belen and her husband Jesus Tayag filed the
present petition for review of the decision of the Court of
Appeals, and in their brief assign the following errors:
I
The Court of Appeals committed a grave error of law when it
decided an issue foreign to that raised in an ejectment case,
for in so doing it acted without jurisdiction over the subject
matter.
II
Granting, arguendo, that there was jurisdiction to determine
an issue other than that raised in an ejectment case, the
Court of Appeals committed a grave error of law in holding
that the rights of Belen Uy Tayag and Jesus B. Tayag, owners
of the land, and those of Rosario Yuseco and Joaquin C.
Yuseco, owner of the building, should be resolved in
accordance with the provisions of Article 448 (formerly
Article 361) of the Civil Code of the Philippines.
III
Granting, further, for the sake of argument only, that Article
448 of the Civil Code of the Philippines should govern the
rights of the parties herein, the Court of Appeals gravely
abused its discretion and committed a serious error of law
when it affirmed the judgment of the trial court which, in
effect, compels the owner of the land to sell it to the owner
of the building.
IV
The Court of Appeals gravely erred in holding that the
petitioners Belen Uy Tayag and Jesus B. Tayag shall be
entitled to the possession of the land described in the
Page 112 of 404

LAW ON PROPERTY

complaint upon payment of the sum of P50,000 but in the

event that they are not in a position to pay said amount
within 90 days from the date the decision shall have
become final, the respondents Rosario Yuseco and Joaquin C.
Yuseco shall be entitled to purchase the land in question for
the sum of P10,000.
Petitioners claim that the Court of First Instance and the
Court of Appeals lacked jurisdiction to decide the case as
they did for the reason that the only issue involved in an
ejectment case is actual possession and that under Rule 72,
section 6, the only judgment that may be rendered in such a
case is for the defendant to recover costs in the event that
the court find that the complaint is not true, or if it finds the
complaint to be true to render judgment for the plaintiff for
the restitution of the premises, for the sum justly due as
arrears of rent or as reasonable compensation for the use
and occupation of the premises, and for costs. But according
to petitioners, in spite of this legal provision both courts
went further and applied the provision of article 448 of the
new Civil Code.
In theory, and speaking of ordinary ejectment cases,
petitioners may be right; that is to say, if the lessee or
occupant has not built anything on the premises, payment
of rent would be a valid and satisfactory solution of the
problem; but where the occupant has built on the land,
especially where said building is substantial and valuable,
the courts even in ejectment cases are bound to take
cognizance of said fact and when they find that the
construction or planting had been effected in good faith,
instead of dismissing the complaint and suggesting to the
parties to observe and follow the provisions of article 361 or
article 448 of the old and the new Civil Code of the
Philippines, respectively, and if they cannot agree, to file a
new action, not only to enforce or defend the respective
rights of the parties but to assess the value of the land and
of the improvement as well, the courts in order to avoid
multiplicity of actions and to administer practical and
speedy justice may, as was done in this case, apply the
provisions of the Civil Code relative to builders specially
since there is no question as to the ownership of the land as
shown by the certificates of title, and the ownership of the
buildings.

Petitioners insist that the relation between them and the

respondents is that of lessor and lessee and in support of
their contention they point to the contract of lease between
Maria Lim and the Yusecos executed in 1930. As already
stated, the Court of Appeals found respondents to be
builders in good faith and that finding is conclusive. In
connection with said finding, we are of the opinion that the
Yusecos in the mistaken belief that the two lots were being
given to them free constructed the improvements in
question, and that as already stated, the execution and
registration of the contract of lease was a mere formality to
legalize the occupation of the lots. Despite the belief of the
Yusecos about the lots being donated to them, there is every
reason to believe that what Maria Lim intended was to keep
the title to the land but allow the Yusecos to occupy the
same free, at least as long as she kept said title. This
arrangement would appear to have been known to Belen,
Maria's daughter, when the two lots were transferred to her
a few days before Maria died, because as observed by the
Court of Appeals although the Yusecos had paid no rent
since the year 1930 when they constructed the two
buildings, Belen in 1946, one year after the land was
transferred to her, demanded rents not for the period of 15
or 16 years but only from 1946. This action of hers neither
supports nor strengthens her theory that the Yusecos since
1930 were mere lessees and continued to be such after
Belen acquired the lots in question.
It will be remembered that the construction in good faith
was effected in 1930 and that good faith of the builders may
be considered as ended in 1946 when the demand for rent
was made. It is, therefore, clear that Art. 361 of the old Civil
Code instead of article 448 of the new Civil Code is
applicable for the reason that the new Civil Code did not go
into effect until 1950. Article 361 of the old Civil Code reads
as follows:
Art. 361. The owner of land on which anything has been
built, sown, or planted in good faith, shall be entitled to
appropriate the things so built, sown or planted, upon
paying the compensation mentioned in Article 453 and 454,
or to compel the person who has built or planted to pay him
Page 113 of 404

LAW ON PROPERTY

the value of the land, and the person who sowed thereon to
pay the proper rent therefor.
The above-quoted legal provision is clear and it is now up to
the parties, particularly the petitioners to act and make their
choice. Since the Court of Appeals has found that neither
party has expressed its desire or willingness to do the thing
or things which by law they are authorized or compelled to
perform, the courts cannot disturb their present status and
naturally, payment of rent by respondent for the present, is
not in order.
Petitioners question the correctness of the amount of
P50,000 fixed by the trial court and approved by the Court
of Appeals, as the value of the improvements, claiming that
under article 546 of the new Civil Code (taken from article
453 of the old Civil Code) they (petitioners) as owners of the
land have the option of either refunding the amount spent
for the construction of the two buildings, said to be only
P18,000 or "paying him the increase in value which the
thing has acquired by reason thereof." The contention of
petitioners is well taken.
Affirming the decision of the Court of Appeals in so far as it
finds and declares respondents to be possessors in good
faith, let this case be remanded to the trial court for further
proceedings, particularly to give an opportunity to plaintiffspetitioners to exercise their choice and option; and for
purposes of said choice and option the trial court will admit
evidence and make a finding as to the amount of the useful
expenditures or "the increase in value which the thing has
acquired by reason thereof", under article 453 of the old
Civil Code, to be refunded or paid by the petitioners should
they choose to appropriate the buildings; "the value of the
land" under article 361 of the same Code, to be paid by the
defendants-respondents in case plaintiffs-petitioner elect to
compel them to buy the land. No costs.
G.R. No. L-14043

April 16, 1959

BELEN UY TAYAG, ET AL., petitioners,

vs.
ROSARIO YUSECO, ET AL., and HON. ANTONIO CAIZARES,
ETC., respondents.

Uy, Artiaga and Zaragosa for petitioners.

Yuseco, Abdon and Yuseco for respondents.
MONTEMAYOR, J.:
This is a long drawn out litigation that has lasted many
years; in its first phase, it has involved a long decision by
the Court of Appeals and a resolution of this Tribunal
dismissing a petition for certiorari to review said last
decision of the Court of Appeals. The third phase of the
litigation is the present petition for mandamus to compel
the lower court to approve the record on appeal filed by
petitioners, wherein they tried to appeal the order of
execution of the trial court to implement the last decision of
the Court of Appeals.
For a clear and comprehensive of the first part of the history
of this case, as well as the issues involved therein and the
determination thereof, we can do no better than reproduce a
pertinent portion of the well written second decision of the
Court of Appeals, penned by Justice Felipe Natividad, based
in part on our aforementioned decision in the first phase of
the litigation:
This case is once more before this Court on the appeal taken
by the plaintiff from an order of the Court of First Instance of
Manila fixing the value of the two buildings involved therein
at P50,000 and providing that the plaintiffs, should pay that
amount to the defendants if they desire to appropriate said
buildings.
The records disclose that prior to the year 1930 defendant
Joaquin C. Yuseco, an attorney-at-law, had been rendering
without compensation professional services to Maria Lim. To
show her appreciation of such services, Maria Lim offered to
Joaquin C. Yuseco, for them to build a house thereon, Lots
11-A and 11-B, Block 2215, of the Hacienda de San Lazaro,
registered in her name under Transfer Certificate of Nos.
3640 and 36401, Office of the Register of Deeds of the City
of Manila. The Yuseco accepted the offer, and in the middle
part of that year they built a dwelling house and an annex
for garage and servant quarters on said lots. To legalize the
possession of said lots by the Yuseco, Maria Lim and the
Page 114 of 404

LAW ON PROPERTY

Yuseco executed a contract of lease them, which was to run

for a period of five years, with a yearly rental of P120.
On November 29, 1945, a few days before her death, Maria
Lim sold the two lots above referred to her daughter,
plaintiff Belen Uy Tayag, married to Jesus B. Tayag, for the
sum of P4,000. In the year 1946, the Tayags asked the
Yusecos to remove their house from the lots, or else pay to
them a monthly rent of P120 thereof. The latter refused.
Because of this attitude of the Yusecos, the Tayags brought
against the latter in the Municipal Court of the City of Manila
an action of ejection for the restitution of the lots to them
and the recovery of a monthly rental of P500 from
November 30, 1945, up to the date of the restitution.
Judgment was rendered in that court in favor of the
plaintiffs. The defendants appealed.
The case was duly tried in the Court of First Instance of
Manila. After such trial, that court rendered judgment
adjudicating to the plaintiff Belen Uy Tayag the possession of
the two lots involved in the action, with right to appropriate
the two buildings existing thereon upon payment to the
defendants of their value which it assessed fail to pay this
amount within 90 days after the right decision shall have
become final, the defendants shall have the right to
purchase said lots for the sum of P10,000 to be paid within
90 days from the date the plaintiffs shall have failed to buy
the buildings. From this judgment, the plaintiffs appealed.
The Court of Appeals, finding that the defendants were
possessors of the lots in good faith, affirmed the judgment
of the Court of first Instance of Manila. Not satisfied with this
judgment, the plaintiffs appealed therefrom by certiorari to
the Supreme Court. The latter, after due hearing, rendered
judgment, the dispositive part of which reads as follows:
Affirming the decisions of the Court of Appeals in so far as it
finds and declares respondents to be possessor in good
faith, let this case be remanded to the trial court for further
proceedings, particularly to give an opportunity to plaintiffspetitioners to exercise their choice and option; and for
purpose of said choice and option the trial court will admit
evidence and make a finding as to the amount of the useful
expenditures or "the increase in value which the things has

acquired by reason thereof", under Art. 453 of the old Civil

Code, to be refunded or paid by the petitioners should they
choose to appropriate the buildings; "the value of the land"
under Art. 361 of the same Code, to be paid by the
defendants-respondents in the case plaintiffs-petitioners
elect to compel them to buy the land.
Upon the case being remanded to the Court of First
Instance, of Manila, the latter, in consonance with the
Directive of the Supreme Court, issued on July 11, 1956, an
order requiring the plaintiffs to make their choice in writing
within 10 days whether they would purchase the buildings
erected on the lots, or allow the defendants to buy said lots,
and set the case for hearing on August 3, 1956, for the
reception of the evidence of the parties regarding the value
of said lots and buildings. Complying with this order, on July
20, 1956, the plaintiffs, through counsel, filed a
manifestation stating that
they are willing to sell the lot involved in this case, but that
they are willing to appropriate the building erected thereon
if its value is as it should be and is properly and fairly
determined pursuant to, and in accordance with the
evidence and the law.
On August 3, 1956, when the case was called for hearing,
the trial court, in open court, issued the following order:
"Considering that choice made by the plaintiffs, the Court is
of the opinion that the next step now is to adduce evidence
in connection with the value of the buildings erected on the
land pursuant to the dispositive part of the decision of the
Supreme Court. And the Court believes that under the
circumstances since the defendants will be the sellers, they
have the burden of proving the value of the buildings which
belong to them, giving the plaintiffs opportunity to offer
their own evidence as rebuttal. That is the ruling of the
Court."
The plaintiffs asked for a reconsideration of this order, and
for the issuance of another allowing them to adduce
evidence on the value of the buildings as well as the lots.
This motion was denied.
Page 115 of 404

LAW ON PROPERTY

The case was finally heard in the Court of First Instance of

Manila on August 23 and 24, 1956. Evidence of the plaintiffs
tends to show that the value of the two buildings erected on
the lots in question cannot be more than P40,000. That of
the defendants, on the other hand, establishes that the
value of the chalet erected on the lots was from P45,000 to
P50,000, and of the garage and dwelling house, from P5,000
to P6,000. Upon the evidence thus submitted, the trial court,
in its order of August 28, 1956, fixed the reasonable value of
the two buildings on the lots at P50,000, and ordered that
the amount should be paid by the plaintiffs to the
defendants if they desire to appropriate said buildings. This
is the order appealed from.
Appellants concede that the fact that the appellees were
possessors in good faith of the lots in question is res
judicata between the parties. They contend, however, first,
that the trial court erred in limiting the reception of the
evidence to the value of the buildings erected on the lots in
question, instead of admitting evidence to the value of the
buildings; and, second, that the trial court erred in assessing
at P50,000 the value of the two buildings on said lots.
1. Appellants contend under the first proposition that the
decision of the Supreme Court of October 24, 1955,
affirming the finding of the Court of Appeals that the
appellees were possessors of the lots in question in good
faith and ordering the remand of the case to the court of
origin, contemplates the reception of evidence as to the
values of both said lots and the buildings existing thereon
irrespective of the choice and option the appellants may
exercise in the premises, and, consequently, the trial court,
in limiting the reception of evidence on the value of the
buildings, failed to fully implement the instructions of the
Supreme Court.
"We do not share appellants' view. The pertinent part of the
decision of the Supreme court of October 24, 1955, reads as
follows:
". . . and for purposes for said choice and option the trial
court will admit evidence and make a finding as to the
amount of the useful expenditures or "the increase in value
which the thing has acquired by reason thereof", under Art.

453 of the old Civil Code, to be refunded or paid by the

petitioners should they choose to appropriate the buildings;
"the value of the land" under Art. 361 of the same Code, to
be paid by the defendants-respondents in case plaintiffspetitioners elect to compel them to buy the land.
It will be noted that the directive made in the above decision
is in alternative. The clause having reference to the
admission of evidence regarding the value of the buildings is
separated by a semi-colon from the clause referring to the
value of the lots on which said buildings are ]erected; and
the first clause ends with the phrase to be refunded or paid
to the petitioners should they choose to appropriate the
buildings', while the second clause terminates with the
phrase "to be paid by the defendants respondents in case
plaintiffs-petitioners elect to compel them to buy the land."
It would seem clear, therefore, from the language of the
decision that evidence as to the value of said buildings
should be admitted only if the appellants choose to
appropriate the buildings, and that, in case the appellants
should elect to compel the appellees to buy the lots, then
the evidence concerning the value of said lots must be
admitted. This, in our opinion, is the most sensible
construction that could be given to the decision above
referred to. Any other construction would bring about
unnecessary confusion in the evidence, to say nothing of the
valuable time of Court that will necessarily be wasted. For, it
stands to reason, that if the appellants chose not to sell the
lots to the appellees and to appropriate the buildings, which
cannot be ordered removed by the builders, the thing in
order would be the reception of evidence having reference
to the value of said buildings only. Evidence as to the value
of the lots would be superflous, impertinent and immaterial.
This was what the trial court did. We, therefore, find the
action of the trial court complained of in accordance with
law. . . .
Under the second decision of the court of Appeals, the value
of the two buildings in question fixed by the trial court at
P50,000 was reduced to P47,500. With that modification, the
decision of the trial court was affirmed. As already stated,
petitioners herein filed with us a petition for certiorari to
review said decision of the Court of Appeals, but we missed
Page 116 of 404

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said petition for lack of merit. In other words, we found said

decision to be correct.
When said decision finally reached the trial court, the latter
issued the corresponding writ of execution to collect from
petitioners the sum of P47,500 for the buildings in litigation.
Petitioners protested the writ of execution, claiming that it
varied the terms of the final decision, and upon the denial of
their petition for reconsideration, tried to appeal therefrom
by preparing the corresponding record on appeal. The trial
court refused to approve the record on appeal, saying that
the order for the writ of execution issued by it was fully in
accordance with the terms of the decision. Hence, the
present petition for mandamus to compel the trial court to
elevate the case to us on appeal.
We are satisfied that the trial court acted correctly in
ordering the writ of execution to issue. The main contention
of herein petitioners is that they still retain the right of
option, that is to say, to make a choice of either buying the
house or compelling the owners thereof to buy the land; and
that furthermore, even if they already had made that choice
nevertheless, they cannot be compelled to pay the price
fixed by the courts for the purchase of the said house,
because of their inability to pay the said price. We find both
arguments untenable. The question of whether petitioners
had finally made their choice, namely, to buy houses
because they were unwilling to sell the land, was directly in
issue before the Court of Appeals which definitely decided
that petitioners had made their choice not to sell their land
but to buy the houses built thereon. As we have already
said, by our refusal to review said decision of the Court of
Appeals, we agreed with the said Court on its stand on this
point; consequently, the trial court was fully warranted in
limiting the presentation of the evidence to the value of said
houses, not of the land.
As regards the alleged inability fixed by the courts at
P47,500, claimed by them to be a good reason for not
compelling them to buy the buildings, we cannot sanction
said theory. Otherwise, were that claim or contention to be
sustained, and if petitioners were allowed to change their
mind, repudiate their choice made in court not to sell the
land but to buy the buildings, and then compel the owners

of the houses, respondents herein, instead to buy land, then

what if respondents also claimed inability to pay the price of
the land, claiming that it is also a good and valid reason for
not compelling them, to make the purchase? How would this
litigation end, if it ever would end?
We hold that once a party, in conformity with a court
decision, has made his choice, and is accordingly ordered to
comply with the same by buying the building erected on his
land and pay the value thereof fixed by the courts, that the
duty is converted into a money obligation which can be
enforced by execution, regardless of the unwillingness and
alleged inability of the party concerned to pay and alleged
inability of the party concerned to pay the amount. Here
there is a final decision of the petitioners to buy the houses
and pay the value thereof. If petitioners were ready, willing
and able to pay the amount, there would be no need for
execution. It is precisely because they are unwilling and
allegedly unready and unable to pay the sum, that
execution issues. That is part of the judicial machinery of
due process in action, and we find nothing wrong in it.
As to the alleged absence in the order of execution for the
homeowners to make the transfer of the houses to the
petitioners, that is to be understood, that upon payment of
the price of the houses, the respondents herein will make
and execute the corresponding deed of transfer.
In view of the foregoing, the petition for mandamus is
hereby denied, with costs. The writ of preliminary injunction
heretofore issued is hereby ordered dissolved.
G.R. No. L-12486

August 31, 1960

LEONOR GRANA and JULIETA TORRALBA, petitioners,

vs.
THE COURT OF APPEALS, AURORA BONGATO and JARDENIO
SANCHEZ, respondents.
Tranquilino O. Calo, Jr. for petitioners.
E.D. Mercado, J.V. Ong and J.T. Gonzales for respondents.
GUTIERREZ DAVID, J.:
Page 117 of 404

LAW ON PROPERTY

This is a petition to review on certiorari a decision of the

Court of Appeals.

question is part of the adjoining land, Lot No. 310, which

belonged to their predecessor in interest.

Leonor Grana and Julieta Torralba, defendants below and

herein petitioners, were on April 13, 1951 sued by Aurora
Bongato and Jardenio Sanchez, respondents herein, before
the Court of First Instance of Agusan, for the recovery of 87
square meters of residential land. After trial, the court
rendered judgment declaring the plaintiffs, herein
respondents, owners of the land in controversy and ordering
petitioners to vacate and deliver it to said respondents and
to pay a monthly rental of P10.00 from the filing of the
complaint until they actually vacate the same, plus
attorney's fees and costs. The decision, on appeal, having
been affirmed by the Court of Appeals with the only
modification of disallowing the award for attorney's fees,
petitioners brought the case to this Court through the
present petition for review.

Petitioners' stand is untenable. No proof was presented to

show that the first survey was erroneous or that it included
part of the contigous land of petitioners' predecessor in
interest as part of the lot now covered by Original Certificate
of Title No. RO-72 (138). Note that the difference in area
between the land covered by said title and Lot No. 311 of
the resurvey plan is 65 square meters while the area of the
land in dispute if 87 square meters. And what is more, the
alleged sketch plan of the resurvey was not presented in
evidence.

The record discloses that sometime in 1909 a cadastral

survey of Butuan, Agusan, was made by the Bureau of
Lands. In that survey, the parcel of land here in question
was included as part of the lot belonging to Gregorio
Bongato and Clara Botcon for which Original Certificate of
Title No. RO-72 (138) was issued in their favor on February
12, 1923. On November 25, 1933, this lot was purchased by
the spouses Marcos Bongato and Eusebia More, and upon
their death, the land was inherited by the respondents
Aurora Bongato and Jardenio Sanchez, the former being the
daughter of Marcos Bongato by his first marriage while the
latter is the son of Eusebia More also by her first marriage.
Petitioners claim that the lands in Butuan were subsequently
resurveyed due to conflicts and overlapping of boundaries.
In that resurvey (TS-65 Butuan Cadastre), Gregorio
Bongato's lot, according to petitioners, was identified as Lot
No. 311 and that of Isidaria Trillo, their predecessor in
interest, as Lot No. 310. Citing the fact that Original
Certificate of Title No. RO-72 (138) covers 295 square
meters of land, while the sketch plan of the second
cadastral survey of Butuan shows that Lot No. 311 has only
230 square meters, petitioners maintain that it is the latter
area properly belongs to respondents and that the land in

Upon the other hand, it is not disputed that the land in

question is part of the lot covered by the Torrens title issued
way back in 1923 in the name of respondents' predecessor
in interest. Said title has not been contested up to the
present, and, therefore, has become inconvertible evidence
of the ownership of the land covered by it. Well settled is the
rule that a Torrens certificate of title becomes conclusive
and indefeasible after the lapse of the period within which it
may be impugned (Reyes, et al. vs. Borbon, et al., 50 Phil.,
791; Yumul vs. Rivera, et al., 64 Phil., 13).
Petitioners' contention that the Court of Appeals erred in not
granting their motion for new trial on the ground of newly
discovered evidence, likewise, cannot be sustained. The new
evidence sought to be introduced was the sketch plan of the
second survey, which, with the employment of reasonable
diligence would have easily been discovered and produced
at the trial. Anyway, even if presented at the result of the
case. If a subsequent certificate of title cannot be permitted
to prevail over a previous Torrens title (Reyes, et al, vs.
Borbon, et al., supra) with more reason should a resurvey
plan not to be allowed to alter or modify such title so as to
make the area of the land therein described agree with that
given in the plan. (See Government of the Philippines vs.
Arias, 36 Phil., 195).
Although without any legal and valid claim over the land in
question, petitioners, however, were found by the Court of
Appeals to have constructed a portion of their house
thereon in good faith. Under Article 361 of the old Civil Code
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(Article 448 of the new), the owner of the land on which

anything has been built in good faith shall have the right to
appropriate as his own faith shall have the right to
appropriate as his own the building, after payment to the
builder of necessary and useful expenses, and in the proper
case, expenses for pure luxury or mere pleasure, or to
oblige the builder to pay the price of the land. Respondents,
as owners of the land, have therefore the choice of either
appropriating the portion of petitioners' house which is on
their land upon payment of the proper indemnity to
petitioners, or selling to petitioners that part of their land on
which stands the improvement. It may here be pointed out
that it would be impractical for respondents to choose to
exercise the first alternative, i.e., buy that portion of the
house standing on their land, for in that event the whole
building might be rendered useless. The more workable
solution, it would seem, is for respondents to sell to
petitioners that part of their land on which was constructed
a portion of the latter's house. If petitioners are unwilling or
unable to buy, then they must vacate the land and must pay
rentals until they do so. Of course, respondents cannot
oblige petitioners to buy the land if its value is considerably
more than that of the aforementioned portion of the house.
If such be the case, then petitioners must pay reasonable
rent. The parties must come to an agreement as to the
conditions of the lease, and should they fail to do so, then
the court shall fix the same. (Article 361, old Civil Code;
Article 448 of the new).
In this connection, the appellate court erred in ordering
petitioners to pay monthly rentals of P10.00 from the date of
filing of the complaint until they actually vacate said land. A
builder in good faith may not be required to pay rentals. He
has a right to retain the land on which he has built in good
faith until he is reimbursed the expenses incurred by him.
(Miranda vs. Fadullon, et al., 97 Phil., 801; 51 Off. Gaz.,
6226, see also Martinez vs. Baganus, 28 Phil., 500; De
Guzman vs. De la Fuente, 55 Phil., 501; Kasilag vs.
Rodriguez, Off. Gaz., Supp., August 16, 1941, p. 247).
Petitioners further contend that he complaint should have
been dismissed for nonjoinder of an indispensable party, it
being alleged that their mother Maria Cupin, who owns the
land in question as part of her Lot No. 310, has not been

made a party defendant in the case. This contention, which

was not raised in the trial court, deserves scant
consideration. Petitioners clearly asserted ownership over
the land in dispute as well as over Lot No. 310 in their
answer to the complaint. They are consequently estopped
from alleging otherwise.
As to petitioners' assertion that they should have been
awarded damages alleged to have been suffered by them in
their counterclaim, suffice it to say that petitioners failed to
prove that they suffered any damage at all by reason of the
filing of the complaint. Indeed, in the light of the view we
have taken of the case, they could not have substantiated
their claim for damages.
In view of the foregoing, the appealed decision is modified in
the sense that respondents are hereby directed to exercise
within 30 days from this decision their option to either buy
the portion of the petitioners' house on their land or sell to
said petitioners the portion of their land and petitioners are
unwilling or unable to buy, then they must vacate the same
and must pay reasonable rent of P10.00 monthly from the
time respondents made their choice up to the time they
actually vacate the premises. But if the value of the eland is
considerably more than the value of the improvement, then
petitioners may elect to rent the land, in which case the
parties shall agree upon the terms of a lease. Should they
disagree, the court of origin is hereby instructed to
intervene and fix the terms thereof. Petitioners shall pay
reasonable rent of P10.00 monthly up to the time the parties
agree on the terms of the lease or until the curt fixes such
terms.
So ordered without pronouncement as to costs.
G.R. No. L-57348 May 16, 1985
FRANCISCO DEPRA, plaintiff-appellee,
vs.
AGUSTIN DUMLAO, defendant-appellant.
Roberto D. Dineros for plaintiff-appellee.
Veil D. Hechanova for defendant-appellant.
Page 119 of 404

LAW ON PROPERTY

MELENCIO-HERRERA, J.:
This is an appeal from the Order of the former Court of First
Instance of Iloilo to the then Court of Appeals, which the
latter certified to this instance as involving pure questions of
law
Plaintiff-appellee, Francisco Depra, is the owner of a parcel
of land registered under Transfer Certificate of Title No.
T3087, known as Lot No. 685, situated in the municipality of
Dumangas, Iloilo, with an area of approximately 8,870
square meters. Agustin Dumlao, defendant-appellant, owns
an adjoining lot, designated as Lot No. 683, with an
approximate area of 231 sq. ms.
Sometime in 1972, when DUMLAO constructed his house on
his lot, the kitchen thereof had encroached on an area of
thirty four (34) square meters of DEPRA's property, After the
encroachment was discovered in a relocation survey of
DEPRA's lot made on November 2,1972, his mother, Beatriz
Depra after writing a demand letter asking DUMLAO to move
back from his encroachment, filed an action for Unlawful
Detainer on February 6,1973 against DUMLAO in the
Municipal Court of of Dumangas, docketed as Civil Case No
1, Said complaint was later amended to include DEPRA as a
party plain. plaintiff.
After trial, the Municipal Court found that DUMLAO was a
builder in good faith, and applying Article 448 of the Civil
Code, rendered judgment on September 29, 1973, the
dispositive portion of which reads:
Ordering that a forced lease is created between the parties
with the plaintiffs, as lessors, and the defendants as lessees,
over the disputed portion with an area of thirty four (34)
square meters, the rent to be paid is five (P5.00) pesos a
month, payable by the lessee to the lessors within the first
five (5) days of the month the rent is due; and the lease
shall commence on the day that this decision shall have
become final.

From the foregoing judgment, neither party appeal so that,

ff it were a valid judgment, it would have ordinarily lapsed
into finality, but even then, DEPRA did not accept payment
of rentals so that DUMLAO deposited such rentals with the
Municipal Court.
On July 15,1974, DEPRA filed a Complaint for Quieting of
Title against DUMLAO before the then Court of First Instance
of Iloilo, Branch IV (Trial Court), involving the very same 34
square meters, which was the bone of contention in the
Municipal Court. DUMLAO, in his Answer, admitted the
encroachment but alleged, in the main, that the present suit
is barred by res judicata by virtue of the Decision of the
Municipal Court, which had become final and executory.
After the case had been set for pre-trial, the parties
submitted a Joint Motion for Judgment based on the
Stipulation of Facts attached thereto. Premised thereon, the
Trial Court on October 31, 1974, issued the assailed Order,
decreeing:
WHEREFORE, the Court finds and so holds that the thirty
four (34) square meters subject of this litigation is part and
parcel of Lot 685 of the Cadastral Survey of Dumangas of
which the plaintiff is owner as evidenced by Transfer
Certificate of Title No. 3087 and such plaintiff is entitled to
possess the same.
Without pronouncement as to costs.
SO ORDERED.
Rebutting the argument of res judicata relied upon by
DUMLAO, DEPRA claims that the Decision of the Municipal
Court was null and void ab initio because its jurisdiction is
limited to the sole issue of possession, whereas decisions
affecting lease, which is an encumbrance on real property,
may only be rendered by Courts of First Instance.
Addressing out selves to the issue of validity of the Decision
of the Municipal Court, we hold the same to be null and void.
The judgment in a detainer case is effective in respect of
possession only (Sec. 7, Rule 70, Rules of Court). 1 The
Municipal Court over-stepped its bounds when it imposed
Page 120 of 404

LAW ON PROPERTY

upon the parties a situation of "forced lease", which like

"forced co-ownership" is not favored in law. Furthermore, a
lease is an interest in real property, jurisdiction over which
belongs to Courts of First Instance (now Regional Trial
Courts) (Sec. 44(b), Judiciary Act of 1948; 2 Sec. 19 (2)
Batas Pambansa Blg. 129). 3 Since the Municipal Court,
acted without jurisdiction, its Decision was null and void and
cannot operate as res judicata to the subject complaint for
Queting of Title. Besides, even if the Decision were valid, the
rule on res judicata would not apply due to difference in
cause of action. In the Municipal Court, the cause of action
was the deprivation of possession, while in the action to
quiet title, the cause of action was based on ownership.
Furthermore, Sec. 7, Rule 70 of the Rules of Court explicitly
provides that judgment in a detainer case "shall not bar an
action between the same parties respecting title to the land.
" 4
Conceded in the Stipulation of Facts between the parties is
that DUMLAO was a builder in good faith. Thus,
8. That the subject matter in the unlawful detainer case,
Civil Case No. 1, before the Municipal Court of Dumangas,
Iloilo involves the same subject matter in the present case,
the Thirty-four (34) square meters portion of land and built
thereon in good faith is a portion of defendant's kitchen and
has been in the possession of the defendant since 1952
continuously up to the present; ... (Emphasis ours)
Consistent with the principle that our Court system, like any
other, must be a dispute resolving mechanism, we accord
legal effect to the agreement of the parties, within the
context of their mutual concession and stipulation. They
have, thereby, chosen a legal formula to resolve their
dispute to appeal ply to DUMLAO the rights of a "builder in
good faith" and to DEPRA those of a "landowner in good
faith" as prescribed in Article 448. Hence, we shall refrain
from further examining whether the factual situations of
DUMLAO and DEPRA conform to the juridical positions
respectively defined by law, for a "builder in good faith"
under Article 448, a "possessor in good faith" under Article
526 and a "landowner in good faith' under Article 448.

In regards to builders in good faith, Article 448 of the Civil

Code provides:
ART. 448. The owner of the land on which anything has been
built sown or planted in good faith,
shall have the right
to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in articles 546
and 548, or
to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof
(Paragraphing supplied)
Pursuant to the foregoing provision, DEPRA has the option
either to pay for the encroaching part of DUMLAO's kitchen,
or to sell the encroached 34 square meters of his lot to
DUMLAO. He cannot refuse to pay for the encroaching part
of the building, and to sell the encroached part of his land,
5 as he had manifested before the Municipal Court. But that
manifestation is not binding because it was made in a void
proceeding.
However, the good faith of DUMLAO is part of the Stipulation
of Facts in the Court of First Instance. It was thus error for
the Trial Court to have ruled that DEPRA is "entitled to
possession," without more, of the disputed portion implying
thereby that he is entitled to have the kitchen removed. He
is entitled to such removal only when, after having chosen
to sell his encroached land, DUMLAO fails to pay for the
same. 6 In this case, DUMLAO had expressed his willingness
to pay for the land, but DEPRA refused to sell.

Page 121 of 404

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The owner of the building erected in good faith on a land

owned by another, is entitled to retain the possession of the
land until he is paid the value of his building, under article
453 (now Article 546). The owner of the land, upon the other
hand, has the option, under article 361 (now Article 448),
either to pay for the building or to sell his land to the owner
of the building. But he cannot as respondents here did
refuse both to pay for the building and to sell the land and
compel the owner of the building to remove it from the land
where it erected. He is entitled to such remotion only when,
after having chosen to sell his land. the other party fails to
pay for the same (italics ours).
We hold, therefore, that the order of Judge Natividad
compelling defendants-petitioners to remove their buildings
from the land belonging to plaintiffs-respondents only
because the latter chose neither to pay for such buildings
nor to sell the land, is null and void, for it amends
substantially the judgment sought to be executed and is.
furthermore, offensive to articles 361 (now Article 448) and
453 (now Article 546) of the Civil Code. (Ignacio vs. Hilario,
76 Phil. 605, 608[1946]).
A word anent the philosophy behind Article 448 of the Civil
rode.
The original provision was found in Article 361 of the
Spanish Civil Code; which provided:
ART. 361. The owner of land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the work, sowing or planting, after
the payment of the indemnity stated in Articles 453 and
454, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent.
As will be seen, the Article favors the owner of the land, by
giving him one of the two options mentioned in the Article.
Some commentators have questioned the preference in
favor of the owner of the land, but Manresa's opinion is that
the Article is just and fair.
. . . es justa la facultad que el codigo da al dueno del suelo
en el articulo 361, en el caso de edificacion o plantacion?

Algunos comentaristas la conceptuan injusta, y como un

extraordinario privilegio en favor de la propiedad territorial.
Entienden que impone el Codigo una pena al poseedor de
buena fe y como advierte uno de los comentaristas aludidos
'no se ve claro el por que de tal pena . . . al obligar al que
obro de buena fe a quedarse con el edificio o plantacion,
previo el pago del terreno que ocupa, porque si bien es
verdad que cuando edifico o planto demostro con este
hecho, que queria para si el edificio o plantio tambien lo es
que el que edifico o planto de buena fe lo hizo en la erronea
inteligencia de creerse dueno del terreno Posible es que, de
saber lo contrario, y de tener noticia de que habia que
comprar y pagar el terreno, no se hubiera decidido a plantar
ni a edificar. La ley obligandole a hacerlo fuerza su voluntad,
y la fuerza por un hecho inocente de que no debe ser
responsable'. Asi podra suceder pero la realidad es que con
ese hecho voluntario, aunque sea inocente, se ha
enriquecido torticeramente con perjuicio de otro a quien es
justo indemnizarle,
En nuestra opinion, el Codigo ha resuelto el conflicto de la
manera mas justa y equitativa y respetando en lo possible el
principio que para la accesion se establece en el art. 358. 7
Our own Code Commission must have taken account of the
objections to Article 361 of the Spanish Civil Code. Hence,
the Commission provided a modification thereof, and Article
448 of our Code has been made to provide:
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.

Page 122 of 404

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Additional benefits were extended to the builder but the

landowner retained his options.
The fairness of the rules in Article 448 has also been
explained as follows:
Where the builder, planter or sower has acted in good faith,
a conflict of rights arises between the owners, and it
becomes necessary to protect the owner of the
improvements without causing injustice to the owner of the
land. In view of the impracticability of creating a state of
forced co-ownership, the law has provided a just solution by
giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity, or to
oblige the builder or planter to pay for the land and the
sower to pay for 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). 8
WHEREFORE, the judgment of the trial Court is hereby set
aside, and this case is hereby ordered remanded to the
Regional Trial Court of Iloilo for further proceedings
consistent with Articles 448 and 546 of the Civil Code, as
follows:
1. The trial Court shall determine
a) the present fair price of DEPRA's 34 square meter area of
land;
b) the amount of the expenses spent by DUMLAO for the
building of the kitchen;
c) the increase in value ("plus value") which the said area of
34 square meters may have acquired by reason thereof, and
d) whether the value of said area of land is considerably
more than that of the kitchen built thereon.

2. After said amounts shall have been determined by

competent evidence, the Regional, Trial Court shall render
judgment, as follows:
a) The trial Court shall grant DEPRA a period of fifteen (15)
days within which to exercise his option under the law
(Article 448, Civil Code), whether to appropriate the kitchen
as his own by paying to DUMLAO either the amount of tile
expenses spent by DUMLAO f or the building of the kitchen,
or the increase in value ("plus value") which the said area of
34 square meters may have acquired by reason thereof, or
to oblige DUMLAO to pay the price of said area. The
amounts to be respectively paid by DUMLAO and DEPRA, in
accordance with the option thus exercised by written notice
of the other party and to the Court, shall be paid by the
obligor within fifteen (15) days from such notice of the
option by tendering the amount to the Court in favor of the
party entitled to receive it;
b) The trial Court shall further order that if DEPRA exercises
the option to oblige DUMLAO to pay the price of the land but
the latter rejects such purchase because, as found by the
trial Court, the value of the land is considerably more than
that of the kitchen, DUMLAO shall give written notice of such
rejection to DEPRA and to the Court within fifteen (15) days
from notice of DEPRA's option to sell the land. In that event,
the parties shall be given a period of fifteen (15) days from
such notice of rejection within which to agree upon the
terms of the lease, and give the Court formal written notice
of such agreement and its provisos. If no agreement is
reached by the parties, the trial Court, within fifteen (15)
days from and after the termination of the said period fixed
for negotiation, shall then fix the terms of the lease,
provided that the monthly rental to be fixed by the Court
shall not be less than Ten Pesos (P10.00) per month, payable
within the first five (5) days of each calendar month. The
period for the forced lease shall not be more than two (2)
years, counted from the finality of the judgment, considering
the long period of time since 1952 that DUMLAO has
occupied the subject area. The rental thus fixed shall be
increased by ten percent (10%) for the second year of the
forced lease. DUMLAO shall not make any further
constructions or improvements on the kitchen. Upon
expiration of the two-year period, or upon default by
Page 123 of 404

LAW ON PROPERTY

DUMLAO in the payment of rentals for two (2) consecutive

months, DEPRA shall be entitled to terminate the forced
lease, to recover his land, and to have the kitchen removed
by DUMLAO or at the latter's expense. The rentals herein
provided shall be tendered by DUMLAO to the Court for
payment to DEPRA, and such tender shall constitute
evidence of whether or not compliance was made within the
period fixed by the Court.
c) In any event, DUMLAO shall pay DEPRA an amount
computed at Ten Pesos (P10.00) per month as reasonable
compensation for the occupancy of DEPRA's land for the
period counted from 1952, the year DUMLAO occupied the
subject area, up to the commencement date of the forced
lease referred to in the preceding paragraph;
d) The periods to be fixed by the trial Court in its Precision
shall be inextendible, 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,
ARTICLE 493
G.R. No. L-14429

June 30, 1962

RAMON MERCADO, BASILIA MERCADO joined by her

husband,
FRANCISCO RONQUILLO, plaintiffs-appellants,
vs.
PIO D. LIWANAG, defendant-appellee.
Patricio D. Senador and Ricardo D. Galano for plaintiffsappellants.
D. B. Melliza and D. M. Gangoso for defendant-appellee.
MAKALINTAL, J.:
The present appeal, taken by the plaintiff from the decision
of the Court of First Instance of Rizal (Quezon City), is before
us on a certification by the Court of Appeals, the questions

involved being purely legal. The case was submitted to the

trial court upon the following stipulation of facts:
1. That the complaint filed by the plaintiffs against the
defendant seeks to annul a Deed of Sale on the ground of
fraud and on the provisions of Article 493 of the Civil Code.
2. That on July 14, 1956, in the City of Manila, Philippines,
the plaintiff Ramon Mercado and the defendant Pio D.
Liwanag executed a Deed of Sale, photostat copy of which is
attached hereto marked as Annex "A" and forming an
integral hereof, covering a divided half and described in
meter and bounds, or an area of 2,196 square meters at
P7.00 per square meter or for a total amount of P15,372.00,
of a parcel of land situated at Kangkong, Quezon City,
covered Transfer Certificate of Title No. 20805 of the
Register of Deeds for the province of Rizal, now Quezon City:
3. That the said T.C.T. No. 20805 containing an area of 4,392
square meters, is issued in the name of the plaintiffs Ramon
Mercado and Basilia Mercado as co-owners PRO-INDIVISO,
and the sale was without the knowledge and consent of
plaintiff Basilia Mercado;
4. That out of the total area of 4,392 square meters, an area
consisting of 391 square meters was expropriated by the
National Power Corporation sometime in December 1953 at
a price of P10.00 per square meter, Civil Case No. Q-829
(Eminent Domain) of the Court of First Instance of Rizal,
Quezon City Branch, entitled "National Power Corporation,
plaintiff, versus Brigido Almodoban, et als., defendants," but
this fact of expropriation came to the knowledge of the
defendant Pio D. Liwanag upon the registration of the Deed
of Sale Annex "A". .
5. That pursuant to the Deed of Sale Annex "A" T.C.T. No.
32757 was issued in the name of Pio Liwanag and Basilia
photostat copy of which is hereto attached and marked as
Annex "B".
6. That defendant submits the receipt signed by plaintiff
Ramon Mercado dated July 14, 1956 photostat copy of which
is attached hereto and marked as Annex "C" and promissory
note of the same date for P10,000.00, photostat copy of
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which is attached hereto and marked is Annex "D" which are

both self-explanatory, but plaintiff Ramon Mercado disclaims
payment and receipt of such check and promissory note, the
check being uncashed and is still in the possession of Atty.
Eugenio de Garcia;
7. That plaintiffs and defendant respectfully submit for
resolution of this Honorable Court the issue of whether or
not the Deed of Sale Annex "A" court be annulled based in
the foregoing facts in relation to Article 493 of the Civil
Code, setting aside all other issues in the pleadings.
Upon the issue thus presented the trial court held that under
Article 493 of the Civil Code the sale in question was valid
and so dismissed the complaint, without costs. This ruling is
now assailed as erroneous.
Article 493 provides:
Each co-owner shall have the full ownership of his part and
of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be alloted to him in the
division upon the termination of the co-ownership.

I hereby sell, transfer and convey absolutely and irrevocably

unto said Pio D. Liwanag, his heirs, successors, and assigns
my rights, title and interest on my chosen portion of the
above described property which consist of one-half of
aforesaid ownership bounded on the West by Pacifico
Gahudo, on the North by Hacienda de Piedad and on the
South by Circumferential Road, consisting of 50 meters more
or less frontal length along Circumferential Road, and with a
total area of 2,196 square meters as indicated in Co-owners
Transfer Certificate of Title No. 20805.
Nevertheless, upon registration of the sale and cancellation
of transfer certificate of title No. 20805 in the names of the
previous co-owners, the new transfer certificate that was
issued (No. 32757) did not reproduce the description in the
instrument but carried the names of appellee Pio D. Liwanag
and Basilia Mercado as "co-owners pro-indiviso." There is no
suggestion by any of the parties that this new certificate of
title is invalid, irregular or inaccurate. There is no prayer
that it be canceled. As far as Basilia Mercado is concerned
she retains in all their integrity her rights as co-owner which
she had before the sale, and consequently, she has no
cause to complain. Much less has Ramon Mercado, for it was
he who was responsible for whatever indicia there may be in
the deed of sale that a determinate portion of the property
was being sold, as shown by the second paragraph thereof,
quoted without contradiction in appellee's brief as follows:

Appellants except to the application of this provision in this

case for the reason that in the deed of sale sought to be
annulled the vendor disposed of a divided and determinate
half of the land under co-ownership. The argument, as far as
it goes, seems to be tenable. What a co-owner may dispose
of under Article 493 is only his undivided aliquot share,
which shall be limited to the portion which may be allotted
to him upon the termination of the co-ownership. He has no
right to divide the property into parts and then convey one
part by metes and bounds. Lopez vs. Ilustre, 5 Phil. 567;
Gonzales, et al. vs. Itchon, et al., 47 O.G. 6290; Manresa,
Vol. 3, 7th ed. p. 630.

That the aforesaid Transfer Certificate of Title was originally

in my name, but was split into two equal parts by virtue of
my desire to donate to my sister-in-law Juana Gregorio an
equal half thereof with the understanding that I as donor
would have the absolute power to choose from the property
owned in common that part which I would like to segregate
for myself or my heir and assigns.

The pertinent recitals in the disputed deed of sale read:

The title is the final and conclusive repository of the rights of

the new co-owners. The question of whether or not the deed
of sale should be annulled must be considered in

And of course appellee himself not only does not challenge

the new certificate of title, wherein he appears as co-owner
of an undivided one-half share, but precisely relies upon it
for his defense in this action.

Page 125 of 404

LAW ON PROPERTY

conjunction with the title issued pursuant thereto. Since,

according to this title, what appellee acquired by virtue of
the sale is only an undivided half-share of the property,
which under the law the vendor Ramon Mercado had the
absolute right to dispose of, the trial court committed no
error in dismissing the action. The end-result of the
transaction is in accordance with Article 493 of the Civil
Code.1wph1.t
The other point raised by appellants refers to the statement
in the dispositive portion of the decision appealed from that
"the stipulation with regards to the deed of sale based on
the ground of fraud is insufficient for all purposes and
besides, no proof showing the allegation of such fraud exists
in the accord." It is contended that the trial court erred in
making such statement, the same being contrary to the
stipulation in which the parties expressly eliminated the
issue of fraud. From the entire context of the decision,
however, it can be gathered that the case was not decided
on the basis of the said issue. In any event, even if the court
did err in considering the question of fraud in spite of the
stipulation, the error is not a prejudicial one. As far as the
dismissal of the actions concerned, it makes no difference
whether fraud has not been proven or fraud has been
abandoned as an issue by express agreement.
WHEREFORE, the decision appealed from is affirmed, with
costs against appellants in this instance.
G.R. No. L-20136

June 23, 1965

IN RE: PETITION FOR ISSUANCE OF SEPARATE CERTIFICATE

OF TITLE.
JOSE A. SANTOS Y Diaz, petitioner-appellant,
vs.
ANATOLIO BUENCONSEJO, ET AL., respondents-appellees.
Segundo C. Mastrili for petitioner-appellant.
Manuel Calleja Rafael S. Lucila and Jose T. Rubio for
respondents-appellees.
CONCEPCION, J.:

Petitioner Jose A. Santos y Diaz seeks the reversal of an

order of the Court of First Instance of Albay, denying his
petition, filed in Cadastral Case No. M-2197, LRC Cad. Rec.
No. 1035, for the cancellation of original certificate of title
No. RO-3848 (25322), issued in the name of Anatolio
Buenconsejo, Lorenzo Bon and Santiago Bon, and covering
Lot No. 1917 of the Cadastral Survey of Tabaco, Albay, and
the issuance in lieu thereof, of a separate transfer certificate
of title in his name, covering part of said Lot No. 1917,
namely Lot No. 1917-A of Subdivision Plan PSD-63379.
The main facts are not disputed. They are set forth in the
order appealed from, from which we quote:
It appears that the aforementioned Lot No. 1917 covered by
Original Certificate of Title No. RO-3848 (25322) was
originally owned in common by Anatolio Buenconsejo to the
extent of undivided portion and Lorenzo Bon and Santiago
Bon to the extent of the other (Exh. B); that Anatolio
Buenconsejo's rights, interests and participation over the
portion abovementioned were on January 3, 1961 and by a
Certificate of Sale executed by the Provincial Sheriff of
Albay, transferred and conveyed to Atty. Tecla San Andres
Ziga, awardee in the corresponding auction sale conducted
by said Sheriff in connection with the execution of the
decision of the Juvenile Delinquency and Domestic Relations
Court in Civil Case No. 25267, entitled "Yolanda
Buenconsejo, et al. vs. Anatolio Buenconsejo"; that on
December 26, 1961 and by a certificate of redemption
issued by the Provincial Sheriff of Albay, the rights, interest,
claim and/or or participation which Atty. Tecla San Andres
Ziga may have acquired over the property in question by
reason of the aforementioned auction sale award, were
transferred and conveyed to the herein petitioner in his
capacity as Attorney-in-fact of the children of Anatolio
Buenconsejo, namely, Anastacio Buenconsejo, Elena
Buenconsejo and Azucena Buenconsejo (Exh. C).
It would appear, also, that petitioner Santos had redeemed
the aforementioned share of Anatolio Buenconsejo, upon the
authority of a special power of attorney executed in his
favor by the children of Anatolio Buenconsejo; that relying
upon this power of attorney and redemption made by him,
Santos now claims to have acquired the share of Anatolio
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LAW ON PROPERTY

Buenconsejo in the aforementioned Lot No. 1917; that as

the alleged present owner of said share, Santos caused a
subdivision plan of said Lot No. 1917 to be made, in which
the portion he claims as his share thereof has been marked
as Lot No. 1917-A; and that he wants said subdivision at No.
1917-A to be segregated from Lot No. 1917 and a certificate
of title issued in his name exclusively for said subdivision Lot
No. 1917-A.
As correctly held by the lower court, petitioner's claim is
clearly untenable, for: (1) said special power of attorney
authorized him to act on behalf of the children of Anatolio
Buenconsejo, and, hence, it could not have possibly vested
in him any property right in his own name; (2) the children
of Anatolio Buenconsejo had no authority to execute said
power of attorney, because their father is still alive and, in
fact, he and his wife opposed the petition of Santos; (3) in
consequence of said power of attorney (if valid) and
redemption, Santos could have acquired no more than the
share pro indiviso of Anatolio Buenconsejo in Lot No. 1917,
so that petitioner cannot without the conformity of the
other co-owners (Lorenzo and Santiago Bon), or a judicial
decree of partition issued pursuant to the provisions of Rule
69 of the new Rules of Court (Rule 71 of the old Rules of
Court) which have not been followed By Santos
adjudicate to himself in fee simple a determinate portion of
said Lot No. 1917, as his share therein, to the exclusion of
the other co-owners.
Inasmuch as the appeal is patently devoid of merit, the
order appealed from is hereby affirmed, with treble cost
against petitioner-appellant Jose A. Santos y Diaz. It is so
ordered.
G.R. No. L-24419

July 15, 1968

LEONORA ESTOQUE, plaintiff-appellant,

vs.
ELENA M. PAJIMULA, assisted by her husband CIRIACO
PAJIMULA, defendants-appellees.
Jesus P. Mapanao for plaintiff-appellant.
Vergara and Dayot for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal from an order of the Court of First Instance of
La Union, in its Civil Case No. 1990, granting a motion to
dismiss the complaint for legal redemption by a co-owner
(retracto legal de comuneros) on account of failure to state
a cause of action.
The basic facts and issues are stated in the decision
appealed from, as follows:
Plaintiff based her complaint for legal redemption on a claim
that she is a co-owner of Lot No. 802, for having purchased
1/3 portion thereof, containing an area of 640 square meters
as evidenced by a deed of sale, Annex "A", which was
executed on October 28, 1951 by Crispina Perez de
Aquitania, one of the co-owners, in her favor.
On the other hand, the defendant, who on December 30,
1959 acquired the other 2/3 portion of Lot No. 802 from
Crispina Aquitania and her children, claimed that the
plaintiff bought the 1/3 southeastern portion, which is
definitely identified and segregated, hence there existed no
co-ownership at the time and after said plaintiff bought the
aforesaid portion, upon which right of legal redemption can
be exercised or taken advantage of.
From the complaint, it would appear that Lot No. 802 of the
Cadastral survey of Rosario, covered by original certificate
of title No. RO-2720 (N.A.) was originally owned by the late
spouses, Rosendo Perez and Fortunata Bernal, who were
survived by her children, namely, Crispina Perez, Lorenzo
Perez and Ricardo Perez. Ricardo Perez is also now dead. On
October 28, 1951, Crispina P. Vda. de Aquitania sold her
right and participation in Lot No. 802 consisting of 1/3
portion with an area of 640 square meters to Leonora
Estoque (Annex A of the complaint). On October 29, 1951,
Lorenzo Perez, Crispina Perez and Emilia P. Posadas, widow
of her deceased husband, Ricardo Perez for herself and in
behalf of her minor children, Gumersindo, Raquel, Emilio
and Ricardo, Jr., executed a deed of extrajudicial settlement
wherein Lorenzo Perez, Emilia P. Posadas and her minor
children assigned all their right, interest and participation in
Lot No. 802 to Crispina Perez (Annex B of the complaint). On
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December 30, 1959, Crispina Perez and her children Rosita

Aquitania Belmonte, Remedios Aquitania Misa, Manuel
Aquitania, Sergio Aquitania and Aurora Aquitania sold to
Elena Pajimula, the remaining 2/3 western portion of Lot No.
802 with an area of 958 square meters (Annex C of the
complaint).
The action of the plaintiff is premised on the claim of coownership. From the deed of sale executed in favor of the
plaintiff, it can be seen that the 1/3 portion sold to plaintiff is
definitely identified as the 1/3 portion located on the
southeastern part of Lot No. 802 and specifically bounded
on the north by De Guzman Street, on the east by Posadas
Street, on the south by Perez Street, and on the west by
remaining portion of the same lot, which contained an area
of 640 square meters. And in the deed of sale executed by
Crispina Perez and her children in favor of defendant Elena
Pajimula over the remaining 2/3 portion of Lot No. 802, said
portion is identified as the western portion of Lot No. 802
which is bounded on the north by De Guzman Street, on the
east by properties of Leonarda Estoque, on the south by the
national road and on the west by Lots Nos. 799 and 801,
containing an area of 598 square meters.
The appellant's stand is that the deed in her favor was
inoperative to convey the southeastern third of Lot 802 of
the Rosario Cadastre notwithstanding the description in the
deed itself, for the reason that the vendor, being a mere coowner, had no right to sell any definite portion of the land
held in common but could only transmit her undivided
share, since the specific portion corresponding to the selling
co-owner is not known until partition takes place (Lopez vs.
Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From
this premise, the appellant argues that the sale in her favor,
although describing a definite area, should be construed as
having conveyed only the undivided 1/3 interest in Lot 802
owned at the time by the vendor, Crispina Perez Vda. de
Aquitania. Wherefore, when the next day said vendor
acquired the 2/3 interest of her two other co-owners, Lot
802 became the common property of appellant and Crispina
Perez. Therefore, appellant argues, when Crispina sold the
rest of the property to appellee Pajimula spouses, the former
was selling an undivided 2/3 that appellant, as co-owner,

was entitled to redeem, pursuant to Article 1620 of the New

Civil Code.
ART. 1620. A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners or
of any of them, are sold to a third person. If the price of the
alienation is grossly excessive the redemptioner shall pay
only a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.
The lower court, upon motion of defendant, dismissed the
complaint, holding that the deeds of sale show that the lot
acquired by plaintiff Estoque was different from that of the
defendants Pajimula; hence they never became co-owners,
and the alleged right of legal redemption was not proper.
Estoque appealed.
We find no error in the order of dismissal, for the facts
pleaded negate the claim that appellant Estoque ever
became a co-owner of appellees Pajimula.
(1) The deed of sale to Estoque (Annex A of the complaint)
clearly specifies the object sold as the southeastern third
portion of Lot 802 of the Rosario Cadastre, with an area of
840 square meters, more or less. Granting that the seller,
Crispina Perez Vda. de Aquitania could not have sold this
particular portion of the lot owned in common by her and
her two brothers, Lorenzo and Ricardo Perez, by no means
does it follow that she intended to sell to appellant Estoque
her 1/3 undivided interest in the lot forementioned. There is
nothing in the deed of sale to justify such inference. That
the seller could have validly sold her one-third undivided
interest to appellant is no proof that she did choose to sell
the same. Ab posse ad actu non valet illatio.
(2) While on the date of the sale to Estoque (Annex A) said
contract may have been ineffective, for lack of power in the
vendor to sell the specific portion described in the deed, the
transaction was validated and became fully effective when
the next day (October 29, 1951) the vendor, Crispina Perez,
acquired the entire interest of her remaining co-owners
Page 128 of 404

LAW ON PROPERTY

(Annex B) and thereby became the sole owner of Lot No.

802 of the Rosario Cadastral survey (Llacer vs. Muoz, 12
Phil. 328). Article 1434 of the Civil Code of the Philippines
clearly prescribes that .
When a person who is not the owner of a thing sells or
alienates and delivers it, and later the seller or grantor
acquires title thereto, such title passes by operation of law
to the buyer or grantee."
Pursuant to this rule, appellant Estoque became the actual
owner of the southeastern third of lot 802 on October 29,
1951. Wherefore, she never acquired an undivided interest
in lot 802. And when eight years later Crispina Perez sold to
the appellees Pajimula the western two-thirds of the same
lot, appellant did not acquire a right to redeem the property
thus sold, since their respective portions were distinct and
separate.
IN VIEW OF THE FOREGOING, the appealed order of
dismissal is affirmed. Costs against appellant Estoque.
G.R. No. 122047

October 12, 2000

SPOUSES SERAFIN SI AND ANITA BONODE SI, petitioners,

vs.
COURT OF APPEALS, SPOUSES JOSE ARMADA and REMEDIOS
ALMANZOR (deceased, and substituted by heirs: Cynthia
Armada, Danilo Armada and Vicente Armada) respondents.

"WHEREFORE, in view of the foregoing, the decision

appealed from is hereby REVERSED, and a new one is
rendered:
1) Annulling and declaring as invalid the registration of the
Deed of Absolute Sale dated March 27, 1979 executed by
Cresenciana V. Alejo in favor of Anita Bonode Si.
2) Ordering the Register of Deeds of Pasay City to annul and
cancel Transfer Certificate of Title No. 24751, issued in the
name of Anita Bonode Si, married to Serafin D. Si., Jose R.
Armada, married to Remedios Almanzor and Dr. Severo R.
Armada Jr., single.
3) Ordering the Register of Deeds of Pasay City to
reconstitute and revive Transfer Certificate of Title No.
16007 in the names of Jose, Crisostomo and Severo, Jr.
4) That plaintiffs be allowed to repurchase or redeem the
share corresponding to the share of Crisostomo Armada
within thirty (30) days from notice in writing by Crisostomo
Armada.
5) The defendants-appellees are jointly and severally
ordered to pay the plaintiffs-appellants the sum of
P10,000.00 as moral damages.

DECISION

6) The defendants-appellees are jointly and severally

ordered to pay the plaintiff-appellants the sum of
P10,000.00 as attorney's fees and litigation expenses and
costs of suit.

QUISUMBING, J.:

SO ORDERED."3

This petition for certiorari under Rule 45 assails the

Decision1 dated March 25, 1994, of the Court of Appeals
and its Resolutions2 dated March 24, 1995 and September
6, 1995 in CA-G.R. CV No. 30727. The Court of Appeals
reversed the decision of the Regional Trial Court of Pasig
City, Branch 113, and nullified the sale of the subject lot by
the spouses Crisostomo and Cresenciana Armada to spouses
Serafin and Anita Si. The dispositive portion of the
respondent court's decision reads:

The factual background of the case is as follows:

The 340 square meters of land, situated in San Jose District,
Pasay City, the property in dispute, originally belonged to
Escolastica, wife of Severo Armada, Sr. This was covered by
Transfer Certificate of Title (TCT) No. (17345) 2460. During
the lifetime of the spouses, the property was transferred to
their children and the Registry of Deeds, Pasay City, issued
TCT No. 16007 in the names of the three sons, as follows :
"DR. CRISOSTOMO R. ARMADA, married to Cresenciana V.
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Alejo, 113.34 Square Meters; JOSE R. ARMADA, married to

Remedios Almanzor, 113.33 Square Meters; and DR.
SEVERO R. ARMADA, Jr., single, all of legal age, Filipinos."4
Annotated also in the title is the total cancellation of said
title "... by virtue of the Deed of Sale, (P.E. 77952/T-24751),
dated March 28, 1979, executed by CRESENCIANA V. ALEJO,
as attorney-in-fact of CRISOSTOMO R. ARMADA, conveying
113.34 square meters of the property herein, in favor of
ANITA BONODE SI, married to Serafin D. Si, for the sum of
P75,000.00, issuing in lieu thereof Transfer Certificate of
Title No. 24751, Reg. Book T-102. (Doc. No. 17, Page No. 5,
Book No. 253 of Notary Public of Pasay City, Manila, Julian
Florentino)."5

conveyed to each son in metes and bounds. Petitioners

contend that since the property was already three distinct
parcels of land, there was no longer co-ownership among
the brothers. Hence, Jose and Severo, Jr. had no right of
redemption when Crisostomo sold his share to the spouses
Si. Petitioners point out that it was only because the Armada
brothers failed to submit the necessary subdivision plan to
the Office of the Register of Deeds in Pasay City that
separate titles were not issued and TCT No. 16007 was
issued and registered in the names of Jose, Crisostomo, and
Severo, Jr.

On April 15, 1980, herein spouses Jose Armada and

Remedios Almanzor, filed a complaint for Annulment of
Deed of Sale and Reconveyance of Title with Damages,
against herein petitioners Anita and Serafin Si and Conrado
Isada, brother-in-law of Cresenciana. Isada brokered the
sale.

"IN VIEW OF ALL THE FOREGOING, the complaint is hereby

DISMISSED. With costs against the plaintiffs."7

The complaint alleged that Conrado Isada sold Crisostomo's

share by making it appear that Cresenciana, the attorney-infact of her husband, is a Filipino citizen, residing with Isada
at No. 13-4th Camarilla Street, Murphy, Cubao, Quezon City.
By this time, Crisostomo and Cresenciana had migrated and
were already citizens of the United States of America. It also
stated that when petitioners registered the deed of absolute
sale they inserted the phrase "... and that the co-owners are
not interested in buying the same in spite of notice to
them.", and that petitioners knew of the misrepresentations
of Conrado. Further, the complaint alleged that the other
owners, Jose and Severo, Jr., had no written notice of the
sale; and that all upon learning of the sale to the spouses Si,
private respondents filed a complaint for annulment of sale
and reconveyance of title with damages, claiming they had
a right of redemption.
Petitioners, on the other hand, alleged that on October 2,
1954, Escolastica, with the consent of her husband executed
three separate deeds of sale (Exhibits 1, 2, and 3)6
conveying 113.34 square meters of the property to Severo,
and 113.33 square meters each to Crisostomo and Jose. The
three deeds of sale particularly described the portion

After trial on the merits, the court ruled for petitioners:

Private respondents appealed to the Court of Appeals. On

March 25, 1994, the appellate court issued the decision now
assailed by petitioners. In reversing the decision of the trial
court and ruling for private respondents, the Court of
Appeals found that:
"A careful examination of TCT No. 16007 (Exh. 'A') shows
that the portion sold by virtue of the Deeds of Sale (Exh. 1,
2, & 3) to the Armada brothers do not appear in the said
title, neither does it indicate the particular area sold.
Moreover, no evidence was presented to show that the
Register of Deeds issued TCT No. 16007 (Exh. 'A') on the
basis of the said deeds of Sale. In fact, TCT No. 16007 (Exh.
'A') shows that the lot is co-owned by Jose, Crisostomo and
Severo, Jr. in the proportion of 113.33, 113.34 and 113.33
sq. m. respectively.
Furthermore, the evidence on record shows that the Deed of
Absolute Sale (Exh. 'B'), executed by Cresencia Armada in
favor of defendants Si, stated that the portion sold was the
'undivided one hundred thirteen & 34/100 (113.34) square
meters' of the parcel of land covered by TCT NO. 16007 of
the Registry of Deeds for Pasay City, which means that what
was sold to defendants are still undetermined and
unidentifiable, as the area sold remains a portion of the
whole.
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LAW ON PROPERTY

Moreover, plaintiff Remedi[o]s Armada testified that on

March 27, 1979, Crisostomo Armada, thru his attorney-infact and co-defendant, Cresenciana Alejo, sold his undivided
113.34 share to defendants, Sps. Si as evidenced by a Deed
of Absolute Sale (Exh. 'B'), and presented for registration
with the Register of Deeds (Exh. 'B-1') without notifying
plaintiffs of the sale (TSN, pp. 6-8, December 20, 1988).
Instead, it appears that the phrase 'and that the co-owners
are not interested in buying the same inspite of notice to
them', was inserted in the Deed of Sale (Exh. 'B').
xxx
Otherwise stated, the sale by a (sic) co-owner of his share in
the undivided property is not invalid, but shall not be
recorded in the Registry Property, unless accompanied by an
affidavit of the Vendor that he has given written notice
thereof to all possible redemptioners."8
On August 29, 1994, petitioners' counsel on record, Atty.
Roberto B. Yam received a copy of the CA decision. On
October 14, 1994, he filed a motion for reconsideration, but
it was denied by the Court of Appeals on November 21,
1994, for being filed out of time.
On December 5, 1994, petitioners filed their motion for new
trial under Section 1, Rule 53 of the Revised Rules of Court.9
Petitioners presented new evidence, TCT No. (17345) 2460,
registered in the name of Escolastica de la Rosa, married to
Severo Armada, Sr., with annotation at the back stating that
the cancellation was by virtue of three deeds of sale in favor
of Escolastica's sons. On March 24, 1995, respondent court
denied the motion, reasoning that when the motion was
filed, the reglementary period had lapsed and the decision
had become final and executory. Petitioners' motion for
reconsideration of said resolution was denied.
Hence, the present petition, alleging that:
"1. Respondent Court of Appeals committed a reversible
error in ruling that a co-ownership still existed.

"2. Respondent Court of Appeals committed a reversible

error in denying the Motion for Reconsideration of its
Decision of 25 March 1994 on purely technical grounds.
"3. Respondent Court of Appeals committed a reversible
error in denying the Motion for New Trial.
"4. Respondent Court of Appeals committed a reversible
error in ordering petitioners to pay moral damages,
attorney's fees, litigation expenses and the costs of the
suit."10
In essence, this Court is asked to resolve: (1) whether
respondent court erred in denying petitioners' motion for
reconsideration and/or the Motion for New Trial; (2) whether
private respondents are co-owners who are legally entitled
to redeem the lot under Article 1623 of the Civil Code;11
and (3) whether the award of moral damages, attorney's
fees and costs of suit is correct.
The pivotal issue is whether private respondents may claim
the right of redemption under Art. 1623 of the Civil Code.
The trial court found that the disputed land was not part of
an undivided estate. It held that the three deeds of absolute
sale12 technically described the portion sold to each son.
The portions belonging to the three sons were separately
declared for taxation purposes with the Assessor's Office of
Pasay City on September 21, 1970.13 Jose's testimony that
the land was undivided was contradicted by his wife when
she said they had been receiving rent from the property
specifically allotted to Jose.14 More significantly, on January
9, 1995, the Registry of Deeds of Pasay City cancelled TCT
24751 and issued three new titles as follows: (1) TCT
13459415 in favor of Severo Armada, Jr.; (2) TCT 13459516
under the name of Anita Bonode Si, married to Serafin Si;
and (3) TCT 13459617 owned by Jose Armada, married to
Remedios Almanzor. All these are on record.
However, the Court of Appeals' decision contradicted the
trial court's findings.18
In instances when the findings of fact of the Court of
Appeals are at variance with those of the trial court, or when
the inference drawn by the Court of Appeals from the facts
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is manifestly mistaken, this Court will not hesitate to review

the evidence in order to arrive at the correct factual
conclusion.19 This we have done in this case. It is our
considered view now, that the trial court is correct when it
found that:
"Rightfully, as early as October 2, 1954, the lot in question
had already been partitioned when their parents executed
three (3) deed of sales (sic) in favor of Jose, Crisostomo and
Severo, all surnamed Armada (Exh. 1, 2, & 3), which
documents purports to have been registered with the
Register of Deeds of Pasay City, on September 18, 1970,
and as a consequence TCT No. 16007 (Exh. A) was issued.
Notably, every portion conveyed and transferred to the
three sons was definitely described and segregated and with
the corresponding technical description (sic). In short, this is
what we call extrajudicial partition. Moreover, every portion
belonging to the three sons has been declared for taxation
purposes with the Assessor's Office of Pasay City on
September 21, 1970. These are the unblinkable facts that
the portion sold to defendant spouses Si by defendants
Crisostomo Armada and Cresenciana Armada was concretely
determined and identifiable. The fact that the three portions
are embraced in one certificate of title does not make said
portions less determinable or identifiable or distinguishable,
one from the other, nor that dominion over each portion less
exclusive, in their respective owners. Hence, no right of
redemption among co-owners exists."20 (citation omitted)
". . . [T]he herein plaintiffs cannot deny the fact that they
did not have knowledge about the impending sale of this
portion. The truth of the matter is that they were properly
notified. Reacting to such knowledge and notification they
wrote defendant Dr. Crisostomo Armada on February 22,
1979, a portion of said letter is revealing: 'Well you are the
king of yourselves, and you can sell your share of
Levereza."21 (emphasis omitted)
After the physical division of the lot among the brothers, the
community ownership terminated, and the right of
preemption or redemption for each brother was no longer
available.22

Under Art. 484 of the Civil Code,23 there is co-ownership

whenever the ownership of an undivided thing or right
belongs to different persons. There is no co-ownership when
the different portions owned by different people are already
concretely determined and separately identifiable, even if
not yet technically described.24 This situation makes
inapplicable the provision on the right of redemption of a coowner in the Civil Code, as follows:
"Art. 1623. The right of legal pre-emption or redemption
shall not be exercised except within thirty days from the
notice in writing by the prospective vendor, or by the
vendor, as the case may be. The deed of sale shall not be
recorded in the Registry of Property, unless accompanied by
an affidavit of the vendor that he has given written notice
thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of
adjoining owners."
Moreover, we note that private respondent Jose Armada was
well informed of the impending sale of Crisostomo's share in
the land. In a letter dated February 22, 1979, Jose told his
brother Crisostomo: "Well you are the king of yourselves,
and you can sell your share of Leveriza."25 Co-owners with
actual notice of the sale are not entitled to written notice. A
written notice is a formal requisite to make certain that the
co-owners have actual notice of the sale to enable them to
exercise their right of redemption within the limited period
of thirty days. But where the co-owners had actual notice of
the sale at the time thereof and/or afterwards, a written
notice of a fact already known to them, would be
superfluous. The statute does not demand what is
unnecessary.26
Considering that respondent Court of Appeals erred in
holding that herein private respondent could redeem the lot
bought by petitioners, the issue of whether the appellate
court erred in denying petitioners' motions for
reconsideration and new trial need not be delved
into.1wphi1 The same is true with respect to the
questioned award of damages and attorney's fees.
Petitioners filed their complaint in good faith and as
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repeatedly held, we cannot put a premium on the right to

litigate.
WHEREFORE, the petition is GRANTED, the Decision of the
Court of Appeals dated March 25, 1994 and its Resolutions
dated March 24, 1995 and September 6, 1995 in CA-G.R. CV
No. 30727 are ANNULLED and SET ASIDE. Civil Case No.
8023-P is DISMISSED for lack of merit. The decision of the
Regional Trial Court of Pasay City, Branch 113, promulgated
on August 29, 1989, is REINSTATED.
SO ORDERED.
G.R. No. 78178 April 15, 1988
DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINOYBANEZ, NILDA PAULINO-TOLENTINO, and SABINA BAILON,
petitioners,
vs.
THE HONORABLE COURT OF APPEALS and CELESTINO
AFABLE, respondents.
Veronico E. Rubio for petitioners.
Mario G. Fortes for private-respondent.

CORTES, J.:
The fate of petitioners' claim over a parcel of land rests
ultimately on a determination of whether or not said
petitioners are chargeable with such laches as may
effectively bar their present action.
The petitioners herein filed a case for recovery of property
and damages with notice of lis pendens on March 13, 1981
against the defendant and herein private respondent,
Celestino Afable. The parcel of land involved in this case,
with an area of 48,849 square meters, is covered by Original
Certificate of Title No. 1771 issued on June 12, 1931, in the
names of Rosalia, Gaudencio, Sabina Bernabe, Nenita and
Delia, all surnamed Bailon, as co-owners, each with a 1/6
share. Gaudencio and Nenita are now dead, the latter being

represented in this case by her children. Luz, Emma and

Nilda. Bernabe went to China in 1931 and had not been
heard from since then [Decision of the Court of Appeals,
Rollo, p. 39].
It appears that on August 23, 1948, Rosalia Bailon and
Gaudencio Bailon sold a portion of the said land consisting
of 16,283 square meters to Donato Delgado. On May 13,
1949, Rosalia Bailon alone sold the remainder of the land
consisting of 32,566 square meters to Ponciana V. Aresgado
de Lanuza. On the same date, Lanuza acquired from
Delgado the 16,283 square meters of land which the latter
had earlier acquired from Rosalia and Gaudencio. On
December 3, 1975, John Lanuza, acting under a special
power of attorney given by his wife, Ponciana V. Aresgado de
Lanuza, sold the two parcels of land to Celestino Afable, Sr.
In all these transfers, it was stated in the deeds of sale that
the land was not registered under the provisions of Act No.
496 when the fact is that it is. It appears that said land had
been successively declared for taxation first, in the name of
Ciriaca Dellamas, mother of the registered co-owners, then
in the name of Rosalia Bailon in 1924, then in that of Donato
Delgado in 1936, then in Ponciana de Lanuza's name in
1962 and finally in the name of Celestino Afable, Sr. in 1983.
In his answer to the complaint filed by the herein
petitioners, Afable claimed that he had acquired the land in
question through prescription and contended that the
petitioners were guilty of laches.He later filed a third-party
complaint against Rosalia Bailon for damages allegedly
suffered as a result of the sale to him of the land.
After trial, the lower court rendered a decision:
1. Finding and declaring Celestino Afable, a co-owner of the
land described in paragraph III of the complaint having
validly bought the two-sixth (2/6) respective undivided
shares of Rosalia Bailon and Gaudencio Bailon;
2. Finding and declaring the following as pro-indiviso coowners, having 1/6 share each, of the property described in
paragraph III of the complaint, to wit:
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a. Sabina Bailon
b. Bernabe Bailon
c. Heirs of Nenita Bailon-Paulino
d. Delia Bailon-Casilao;
3. Ordering the segregation of the undivided interests in the
property in order to terminate co-ownership to be conducted
by any Geodetic Engineer selected by the parties to
delineate the specific part of each of the co-owners.
4. Ordering the defendant to restore the possession of the
plaintiffs respective shares as well as all attributes of
absolute dominion;
5. Ordering the defendant to pay the following:
a. P5,000.00 as damages;
b. P2,000.00 as attorney's fees and;
c. to pay the costs.
[Decision of the Trial Court, Rollo, p. 37-38].
On appeal, the respondent Court of Appeals affirmed the
decision of the lower court insofar as it held that prescription
does not he against plaintiffs-appellees because they are coowners of the original vendors. However, the appellate court
declared that, although registered property cannot be lost
by prescription, nevertheless, an action to recover it may be
barred by laches, citing the ruling in Mejia de Lucaz v.
Gamponia [100 Phil. 277 (1956)]. Accordingly, it held the
petitioners guilty of laches and dismissed their complaint.
Hence, this petition for review on certiorari of the decision of
the Court of Appeals.
The principal issue to be resolved in this case concerns the
applicability of the equitable doctrine of laches. Initially
though, a determination of the effect of a sale by one or
more co-owners of the entire property held in common

without the consent of all the co-owners and of the

appropriate remedy of the aggrieved co-owners is required.
The rights of a co-owner of a certain property are clearly
specified in Article 493 of the Civil Code.Thus:
Art. 493. Each co-owner shall have the full ownership of his
part and of the acts and benefits pertaining thereto, and he
may therefore alienate assign or mortgage it and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation
or mortgage, with respect to the co-owners, shall be limited
to the portion which may be allotted to him in the division
upon the termination of the co-ownership. [Emphasis
supplied.]
As early as 1923, this Court has ruled that even if a coowner sells the whole property as his, the sale will affect
only his own share but not those of the other co-owners who
did not consent to the sale [Punsalan v. Boon Liat 44 Phil.
320 (1923)]. This is because under the aforementioned
codal provision, the sale or other disposition affects only his
undivided share and the transferee gets only what would
correspond to his grantor in the partition of the thing owned
in common.[Ramirez v. Bautista, 14 Phil. 528 (1909)].
Consequently, by virtue of the sales made by Rosalia and
Gaudencio Bailon which are valid with respect to their
proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino
Afable, the said Afable thereby became a co-owner of the
disputed parcel of land as correctly held by the lower court
since the sales produced the effect of substituting the
buyers in the enjoyment thereof [Mainit v. Bandoy, 14 Phil.
730 (1910)].
From the foregoing, it may be deduced that since a coowner is entitled to sell his undivided share, a sale of the
entire property by one co-owner without the consent of the
other co-owners is not null and void. However, only the
rights of the co-owner-seller are transferred, thereby making
the buyer a co-owner of the property.
The proper action in cases like this is not for the nullification
of the sale or for the recovery of possession of the thing
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owned in common from the third person who substituted the

co-owner or co-owners who alienated their shares, but the
DIVISION of the common property as if it continued to
remain in the possession of the co-owners who possessed
and administered it [Mainit v. Bandoy, supra.]
Thus, it is now settled that the appropriate recourse of coowners in cases where their consent were not secured in a
sale of the entire property as well as in a sale merely of the
undivided shares of some of the co-owners is an action. for
PARTITION under Rule 69 of the Revised Rules of Court.
Neither recovery of possession nor restitution can be
granted since the defendant buyers are legitimate
proprietors and possessors in joint ownership of the
common property claimed [Ramirez v. Bautista, supra].
As to the action for petition, neither prescription nor laches
can be invoked.
In the light of the attendant circumstances, defendantappellee's defense of prescription is a vain proposition.
Pursuant to Article 494 of the Civil Code, '(n)o co-owner shall
be obliged to remain in the co-ownership. Such co-owner
may demand at anytime the partition of the thing owned in
common, insofar as his share is concerned.' [Emphasis
supplied.] In Budiong v. Bondoc [G.R. No. L-27702,
September 9, 1977, 79 SCRA 241, this Court has interpreted
said provision of law to mean that the action for partition is
imprescriptible or cannot be barred by prescription. For
Article 494 of the Civil Code explicitly declares: "No
prescription shall lie in favor of a co-owner or co- heir so
long as he expressly or impliedly recognizes the coownership."
Furthermore, the disputed parcel of land being registered
under the Torrens System, the express provision of Act No.
496 that '(n)o title to registered land in derogation to that of
the registered owner shall be acquired by prescription or
adverse possession' is squarely applicable. Consequently,
prescription will not lie in favor of Afable as against the
petitioners who remain the registered owners of the
disputed parcel of land.

It is argued however, that as to the petitioners Emma, Luz

and Nelda who are not the registered co-owners but merely
represented their deceased mother, the late Nenita Bailon,
prescription lies.Respondents bolster their argument by
citing a decision of this Court in Pasion v. Pasion [G.R.No. L15757, May 31, 1961, 2 SCRA 486, 489] holding that "the
imprescriptibility of a Torrens title can only be invoked by
the person in whose name the title is registered" and that
'one who is not the registered owner of a parcel of land
cannot invoke imprescriptibility of action to claim the same.'
Reliance on the aforesaid Pasion case is futile. The ruling
therein applies only against transferees other than direct
issues or heirs or to complete strangers. The rational is
clear:
If prescription is unavailing against the registered owner, it
must be equally unavailing against the latter's hereditary
successors, because they merely step into the shoes of the
decedent by operation of law (New Civil Code, Article 777;
Old Civil Code, Article 657), the title or right undergoing no
change by its transmission mortis causa [Atus, et al., v.
Nunez, et al., 97 Phil. 762, 764].
The latest pronouncement of this Court in Umbay v. Alecha
[G. R. No. 67284, March 18, 1985, 135 SCRA 427, 429],
which was promulgated subsequent to the Pasion case
reiterated the Atus doctrine. Thus:
Prescription is unavailing not only against the registered
owner but also against his hereditary successors, because
they merely step into the shoes of the decedent by
operation of law and are merely the continuation of the
personality of their predecessor-in-interest. [Barcelona v.
Barcelona, 100 Phil. 251, 257].
Laches is likewise unavailing as a shield against the action
of herein petitioners.
Well-stated in this jurisdiction are the four basic elements of
laches, namely: (1) conduct on the part of the defendant or
of one under whom he claims, giving rise to the situation of
which complaint is made and for which the complainant
seeks a remedy; (2) delay in asserting the corporations
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complainant's rights, the complainant having had

knowledge or notice of the defendant's conduct and having
been afforded an opportunity to institute suit; (3) lack of
knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his
suit; and, (4) injury or prejudice to the defendant in the
event relief is accorded to the complainant, or the suit is not
held to be barred [Go China Gun, et al. v. Co Cho et al., 96
Phil. 622 (1955)].
While the first and last elements are present in this case,
the second and third elements are missing.
The second element speaks of delay in asserting the
complainant's rights. However, the mere fact of delay is
insufficient to constitute, laches. It is required that (1)
complainant must have had knowledge of the conduct of
defendant or of one under whom he claims and (2) he must
have been afforded an opportunity to institute suit. This
court has pointed out that laches is not concerned with the
mere lapse of time. Thus:
Laches has been defined as the failure or neglect, for an
unreasonable length of time to do that which by exercising
due diligence could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable
time warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.
Tijam, et al., v. Sibonghanoy, G.R. No. L-21450, April 25,
1968, 23 SCRA 29,35; Tendo v. Zamacoma, G.R. No. L63048, August 7, 1985, 138 SCRA 78, 90].
The doctrine of "laches" or of "stale demands" is based upon
grounds of public policy which requires for the peace of
society, the discouragement of stale claims and unlike the
statute of limitations, is not a mere question of time but is
principally a question of inequity or unfairness of permitting
a right or claim to be enforced or asserted," [Tijam v.
Sibonghanoy, supra, p. 35]. [Emphasis supplied.]
It must be noted that while there was delay in asserting
petitioners' rights, such delay was not attended with any
knowledge of the sale nor with any opportunity to bring suit.
In the first place, petitioners had no notice of the sale made

by their eldest sister. It is undisputed that the petitioner coowners had entrusted the care and management of the
parcel of land to Rosalia Bailon who was the oldest among
them [TSN, July 27, 1983, p. 14]. In fact, Nicanor Lee, a son
of Rosalia, who was presented as a witness by the plaintiffspetitioners, testified on cross-examination that his mother
was only the administrator of the land as she is the eldest
and her brothers and sisters were away [TSN, October 5,
1983, p. 15]. Indeed, when Delia Bailon-Casilao left
Sorsogon in 1942 after she got married, it was only in 1983
that she returned. Sabina on the other hand, is said to be
living in Zamboanga while Bernabe who left for China in
1931 has not been heard from since then. Consequently,
when Rosalia, from whom the private respondent derived his
title, made the disputed sales covering the entire property,
the herein petitioners were unaware thereof.
In the second place, they were not afforded an opportunity
to bring suit inasmuch as until 1981, they were kept in the
dark about the transactions entered into by their sister. It
was only when Delia Bailon-Casilao returned to Sorsogon in
1981 that she found out about the sales and immediately,
she and her co-petitioners filed the present action for
recovery of property. The appellate court thus erred in
holding that 'the petitioners did nothing to show interest in
the land." For the administration of the parcel of land was
entrusted to the oldest co-owner who was then in
possession thereof precisely because the other co-owners
cannot attend to such a task as they reside outside of
Sorsogon where the land is situated. Her co-owners also
allowed her to appropriate the entire produce for herself
because it was not even enough for her daily consumption
[TSN, October 5, 1983, pp. 17-18]. And since petitioner was
the one receiving the produce, it is but natural that she was
the one to take charge of paying the real estate taxes. Now,
if knowledge of the sale by Rosalia was conveyed to the
petitioners only later, they cannot be faulted for the acts of
their co-owner who failed to live up to the trust and
confidence expected of her. In view of the lack of knowledge
by the petitioners of the conduct of Rosalia in selling the
land without their consent in 1975 and the absence of any
opportunity to institute the proper action until 1981, laches
may not be asserted against the petitioners.
Page 136 of 404

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The third element of laches is likewise absent. There was no

lack of knowledge or notice on the part of the defendant
that the complainants would assert the right on which they
base the suit. On the contrary, private respondent is guilty
of bad faith in purchasing the property as he knew that the
property was co-owned by six persons and yet, there were
only two signatories to the deeds of sale and no special
authorization to self was granted to the two sellers by the
other co-owners.
Even as the land here was misrepresented in the deeds of
sale as "unregistered," the truth was that Afable already had
notice that the land was titled in the name of six persons by
virtue of the Certificate of Title which was already in his
possession even before the sale. Such fact is apparent from
his testimony before the court a quo:
COURT:
Q: From whom did you get the certificate of Title?
A: When it was mortgaged by Ponciana Aresgado.
Q: It was mortgaged to you before you bought it?
A: Yes, Your Honor. (TSN, March 5, 1984, p. 12) When crossexamined, he stated:
Q: Mr. Witness, the original Certificate of Title was given to
you in the year 1974, was it not?
A: 1975.
Q: In 1975, you already discovered that the title was in the
name of several persons, is it not?
A: Yes, sir.
Q: When you discovered that it is in the name of several
persons, you filed a case in court for authority to cancel the
title to be transferred in your name, is it not?
A: Yes, sir.

Q: And that was denied by the Court of First Instance of

Sorsogon because there was ordinary one signatory to the
deed of sale instead of six, was it not?
A: Not one but two signatories.
[Decision of the Regional Trial Court of Sorsogon, Rollo, p.
35]
Such actual knowledge of the existence of other co-owners
in whose names the lot subject of the sale was registered
should have prompted a searching inquiry by Afable
considering the well- known rule in this jurisdiction that:
... a person dealing with a registered land has a right to rely
upon the face of the Torrens certificate of title and to
dispense with the need of inquiring further, except when the
party concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautions man
to make such inquiry. [Gonzales v. IAC and Rural Bank of
Pavia, Inc., G.R. No. 69622, January 29, 1988).
Moreover, the undisputed fact is that petitioners are
relatives of his wife. As a genuine gesture of good faith, he
should have contacted the petitioners who were still listed
as co-owners in the certificate of title which was already in
his possession even before the sale. In failing to exercise
even a minimum degree of ordinary prudence required by
the situation, he is deemed to have bought the lot at his
own risk. Hence any prejudice or injury that may be
occasioned to him by such sale must be borne by him.
Indeed, aware of the flaws impairing his title, Afable went to
the herein petitioner Delia Bailon-Casilao, asking the latter
to sign a document obviously to cure the flaw [TSN, July 27,
1983, p.6]. Later, he even filed a petition in the Court of First
Instance to register the title in his name which was denied
as aforesaid.
It may be gleaned from the foregoing examination of the
facts that Celestino Afable is not a buyer in good faith.
Laches being an equitable defense, he who invokes it must
come to the court with clean hands.
Page 137 of 404

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WHEREFORE, the petition for certiorari is hereby GRANTED,

the challenged decision of the Court of Appeals is SET
ASIDE, and the decision of the trial court is REINSTATED.
SO ORDERED.
G.R. No. 108228

February 1, 2001

SPOUSES MANUEL and SALVACION DEL CAMPO, petitioners,

vs.
HON. COURT OF APPEALS and HEIRS OF JOSE REGALADO,
SR., respondents.
QUISUMBING, J.:
This is a petition for review on certiorari of a decision of the
Court of Appeals which affirmed the judgment of the
Regional Trial Court of Roxas City, Branch 15 in Civil Case
No. V-5369, ordering the dismissal of the action for
repartition, resurvey and reconveyance filed by petitioners.
Pure questions of law are raised in this appeal as the
following factual antecedents are undisputed:
Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and
Julita, all surnamed Bornales, were the original co-owners of
Lot 162 of the Cadastral Survey of Pontevedra, Capiz under
Original Certificate of Title No. 18047. As appearing therein,
the lot, which consisted of a total area of 27,179 square
meters was divided in aliquot shares among the eight (8)
co-owners as follows:
Salome Bornales
4/16
Consorcia Bornales
4/16
Alfredo Bornales
2/16
Maria Bornales
2/16
Jose Bornales

1/16
Quirico Bornales
1/16
Rosalia Bornales
1/16
Julita Bornales
1/16
On July 14, 1940, Salome sold part of her 4/16 share in Lot
162 for P200.00 to Soledad Daynolo. In the Deed of Absolute
Sale signed by Salome and two other co-owners, Consorcia
and Alfredo, the portion of Lot 162 sold to Soledad was
described as having more or less the following
measurements:
63-1/2 meters from point "9" to "10", 35 meters from point
"10" to point "11", 30 meters from point "11" to a certain
point parallel to a line drawn from points "9" to "10"; and
then from this "Certain Point" to point "9" and as shown in
the accompanying sketch, and made an integral part of this
deed, to SOLEDAD DAYNOLO, her heirs and assigns.1
Thereafter, Soledad Daynolo immediately took possession of
the land described above and built a house thereon. A few
years later, Soledad and her husband, Simplicio Distajo,
mortgaged the subject portion of Lot 162 as security for a
P400.00 debt to Jose Regalado, Sr. This transaction was
evidenced by a Deed of Mortgage2 dated May 1, 1947.
On April 14, 1948, three of the eight co-owners of Lot 162,
specifically, Salome, Consorcia and Alfredo, sold 24,993
square meters of said lot to Jose Regalado, Sr.
On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo
who had since died, paid the mortgage debt and redeemed
the mortgaged portion of Lot 162 from Jose Regalado, Sr.
The latter, in turn, executed a Deed of Discharge of
Mortgage3 in favor of Soledads heirs, namely: Simplicio
Distajo, Rafael Distajo and Teresita Distajo-Regalado. On
same date, the said heirs sold the redeemed portion of Lot
Page 138 of 404

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162 for P1,500.00 to herein petitioners, the spouses Manuel

Del Campo and Salvacion Quiachon.1wphi1.nt
Meanwhile, Jose Regalado, Sr. caused the reconstitution of
Original Certificate of Title No. 18047. The reconstituted OCT
No. RO-4541 initially reflected the shares of the original coowners in Lot 162. However, title was transferred later to
Jose Regalado, Sr. who subdivided the entire property into
smaller lots, each covered by a respective title in his name.
One of these small lots is Lot No. 162-C-6 with an area of
11,732 square meters which was registered on February 24,
1977 under TCT No. 14566.
In 1987, petitioners Manuel and Salvacion del Campo
brought this complaint for "repartition, resurvey and
reconveyance" against the heirs of the now deceased Jose
Regalado, Sr. Petitioners claimed that they owned an area of
1,544 square meters located within Lot 162-C-6 which was
erroneously included in TCT No. 14566 in the name of
Regalado. Petitioners alleged that they occupied the
disputed area as residential dwelling ever since they
purchased the property from the Distajos way back in 1951.
They also declared the land for taxation purposes and paid
the corresponding taxes.
On April 1, 1987, summons were served on Regalados
widow, Josefina Buenvenida, and two of her children,
Rosemarie and Antonio. Josefina and Rosemarie were
declared in default on May 10, 1989 because only Antonio
filed an answer to the complaint.
During trial, petitioners presented the Deed of Absolute
Sale4 executed between Soledad Daynolo and Salome
Bornales as well as the Deed of Mortgage5 and Deed of
Discharge6 signed by Jose Regalado, Sr. The Deed of
Absolute Sale7 showing the purchase by the Del Campos of
the property from the Distajos was likewise given in
evidence.
Despite the filing of an answer, Antonio failed to present any
evidence to refute the claim of petitioners. Thus, after
considering Antonio to have waived his opportunity to
present evidence, the trial court deemed the case submitted
for decision.

On November 20, 1990, the trial court rendered judgment

dismissing the complaint. It held that while Salome could
alienate her pro-indiviso share in Lot 162, she could not
validly sell an undivided part thereof by meters and bounds
to Soledad, from whom petitioners derived their title. The
trial court also reasoned that petitioners could not have a
better right to the property even if they were in physical
possession of the same and declared the property for
taxation purposes, because mere possession cannot defeat
the right of the Regalados who had a Torrens title over the
land.
On appeal, the Court of Appeals affirmed the trial courts
judgment, with no pronouncement as to costs.8
Petitioners now seek relief from this Court and maintain
that:
I.
THE FACT THAT THE SALE OF THE SUBJECT PORTION
CONSTITUTES A SALE OF A CONCRETE OR DEFINITE
PORTION OF LAND OWNED IN COMMON DOES NOT
ABSOLUTELY DEPRIVE HEREIN PETITIONERS OF ANY RIGHT
OR TITLE THERETO;
II.
IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL
ESTOPPED FROM DENYING THE RIGHT AND TITLE OF HEREIN
PETITIONERS.9
In resolving petitioners appeal, we must answer the
following questions: Would the sale by a co-owner of a
physical portion of an undivided property held in common
be valid? Is respondent estopped from denying petitioners
right and title over the disputed area? Under the facts and
circumstances duly established by the evidence, are
petitioners entitled to repartition, resurvey and
reconveyance of the property in question?
On the first issue, it seems plain to us that the trial court
concluded that petitioners could not have acquired
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ownership of the subject land which originally formed part of

Lot 162, on the ground that their alleged right springs from
a void sale transaction between Salome and Soledad. The
mere fact that Salome purportedly transferred a definite
portion of the co-owned lot by metes and bounds to
Soledad, however, does not per se render the sale a nullity.
This much is evident under Article 49310 of the Civil Code
and pertinent jurisprudence on the matter. More particularly
in Lopez vs. Vda. De Cuaycong, et. al.11 which we find
relevant, the Court, speaking through Mr. Justice Bocobo,
held that:
The fact that the agreement in question purported to sell
a concrete portion of the hacienda does not render the sale
void, for it is a well-established principle that the binding
force of a contract must be recognized as far as it is legally
possible to do so. "Quando res non valet ut ago, valeat
quantum valere potest." (When a thing is of no force as I do
it, it shall have as much force as it can have.)12
Applying this principle to the instant case, there can be no
doubt that the transaction entered into by Salome and
Soledad could be legally recognized in its entirety since the
object of the sale did not even exceed the ideal shares held
by the former in the co-ownership. As a matter of fact, the
deed of sale executed between the parties expressly
stipulated that the portion of Lot 162 sold to Soledad would
be taken from Salomes 4/16 undivided interest in said lot,
which the latter could validly transfer in whole or in part
even without the consent of the other co-owners. Salomes
right to sell part of her undivided interest in the co-owned
property is absolute in accordance with the well-settled
doctrine that a co-owner has full ownership of his proindiviso share and has the right to alienate, assign or
mortgage it, and substitute another person in its
enjoyment13 Since Salomes clear intention was to sell
merely part of her aliquot share in Lot 162, in our view no
valid objection can be made against it and the sale can be
given effect to the full extent.
We are not unaware of the principle that a co-owner cannot
rightfully dispose of a particular portion of a co-owned
property prior to partition among all the co-owners.
However, this should not signify that the vendee does not

acquire anything at all in case a physically segregated area

of the co-owned lot is in fact sold to him. Since the coowner/vendors undivided interest could properly be the
object of the contract of sale between the parties, what the
vendee obtains by virtue of such a sale are the same rights
as the vendor had as co-owner, in an ideal share equivalent
to the consideration given under their transaction. In other
words, the vendee steps into the shoes of the vendor as coowner and acquires a proportionate abstract share in the
property held in common.
Resultantly, Soledad became a co-owner of Lot 162 as of the
year 1940 when the sale was made in her favor. It follows
that Salome, Consorcia and Alfredo could not have sold the
entire Lot 162 to Jose Regalado, Sr. on April 14, 1948
because at that time, the ideal shares held by the three coowners/vendors were equivalent to only 10/16 of the
undivided property less the aliquot share previously sold by
Salome to Soledad. Based on the principle that "no one can
give what he does not have,"14 Salome, Consorcia and
Alfredo could not legally sell the shares pertaining to
Soledad since a co-owner cannot alienate more than his
share in the co-ownership. We have ruled many times that
even if a co-owner sells the whole property as his, the sale
will affect only his own share but not those of the other coowners who did not consent to the sale. Since a co-owner is
entitled to sell his undivided share, a sale of the entire
property by one co-owner will only transfer the rights of said
co-owner to the buyer, thereby making the buyer a coowner of the property.15
In this case, Regalado merely became a new co-owner of Lot
162 to the extent of the shares which Salome, Consorcia and
Alfredo could validly convey. Soledad retained her rights as
co-owner and could validly transfer her share to petitioners
in 1951. The logical effect on the second disposition is to
substitute petitioners in the rights of Soledad as co-owner of
the land. Needless to say, these rights are preserved
notwithstanding the issuance of TCT No. 14566 in
Regalados name in 1977.
Be that as it may, we find that the area subject matter of
this petition had already been effectively segregated from
the mother lot even before title was issued in favor of
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Regalado. It must be noted that 26 years had lapsed from

the time petitioners bought and took possession of the
property in 1951 until Regalado procured the issuance of
TCT No. 14566. Additionally, the intervening years between
the date of petitioners purchase of the property and 1987
when petitioners filed the instant complaint, comprise all of
36 years. However, at no instance during this time did
respondents or Regalado, for that matter, question
petitioners right over the land in dispute. In the case of Vda.
De Cabrera vs. Court of Appeals,16 we had occasion to hold
that where the transferees of an undivided portion of the
land allowed a co-owner of the property to occupy a definite
portion thereof and had not disturbed the same for a period
too long to be ignored, the possessor is in a better condition
or right than said transferees. (Potior est condition
possidentis). Such undisturbed possession had the effect of
a partial partition of the co-owner property which entitles
the possessor to the definite portion which he occupies.
Conformably, petitioners are entitled to the disputed land,
having enjoyed uninterrupted possession thereof for a total
of 49 years up to the present.
The lower courts reliance on the doctrine that mere
possession cannot defeat the right of a holder of a
registered Torrens title over property is misplaced,
considering that petitioners were deprived of their dominical
rights over the said lot through fraud and with evident bad
faith on the part of Regalado. Failure and intentional
omission to disclose the fact of actual physical possession
by another person during registration proceedings
constitutes actual fraud. Likewise, it is fraud to knowingly
omit or conceal a fact, upon which benefit is obtained to the
prejudice of a third person.17 In this case, we are convinced
that Regalado knew of the fact that he did not have a title to
the entire lot and could not, therefore, have validly
registered the same in his name alone because he was
aware of petitioners possession of the subject portion as
well as the sale between Salome and Soledad.
That Regalado had notice of the fact that the disputed
portion of Lot 162 was under claim of ownership by
petitioners and the latters predecessor is beyond question.
Records show that the particular area subject of this case
was mortgaged by Soledad and her husband to Jose

Regalado, Sr. as early as May 1, 1947 or one year prior to

the alienation of the whole lot in favor of the latter. Regalado
never questioned the ownership of the lot given by Soledad
as security for the P400.00 debt and he must have at least
known that Soledad bought the subject portion from Salome
since he could not have reasonably accepted the lot as
security for the mortgage debt if such were not the case. By
accepting the said portion of Lot 162 as security for the
mortgage obligation, Regalado had in fact recognized
Soledads ownership of this definite portion of Lot 162.
Regalado could not have been ignorant of the fact that the
disputed portion is being claimed by Soledad and
subsequently, by petitioners, since Regalado even executed
a Release of Mortgage on May 4, 1951, three years after the
entire property was supposedly sold to him. It would
certainly be illogical for any mortgagee to accept property
as security, purchase the mortgaged property and,
thereafter, claim the very same property as his own while
the mortgage was still subsisting.
Consequently, respondents are estopped from asserting that
they own the subject land in view of the Deed of Mortgage
and Discharge of Mortgage executed between Regalado and
petitioners predecessor-in-interest. As petitioners correctly
contend, respondents are barred from making this assertion
under the equitable principle of estoppel by deed, whereby
a party to a deed and his privies are precluded from
asserting as against the other and his privies any right or
title in derogation of the deed, or from denying the truth of
any material fact asserted in it.18 A perusal of the
documents evidencing the mortgage would readily reveal
that Soledad, as mortgagor, had declared herself absolute
owner of the piece of land now being litigated. This
declaration of fact was accepted by Regalado as mortgagee
and accordingly, his heirs cannot now be permitted to deny
it.
Although Regalados certificate of title became indefeasible
after the lapse of one year from the date of the decree of
registration, the attendance of fraud in its issuance created
an implied trust in favor of petitioners and gave them the
right to seek reconveyance of the parcel wrongfully obtained
by the former. An action for reconveyance based on an
implied trust ordinarily prescribes in ten years. But when the
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LAW ON PROPERTY

right of the true and real owner is recognized, expressly or

implicitly such as when he remains undisturbed in his
possession, the said action is imprescriptible, it being in the
nature of a suit for quieting of title.19 Having established by
clear and convincing evidence that they are the legal
owners of the litigated portion included in TCT NO. 14566, it
is only proper that reconveyance of the property be ordered
in favor of petitioners. The alleged incontrovertibility of
Regalados title cannot be successfully invoked by
respondents because certificates of title merely confirm or
record title already existing and cannot be used to protect a
usurper from the true owner or be used as a shield for the
commission of fraud.20
WHEREFORE, the petition is GRANTED. The assailed decision
of the Court of Appeals in CA-G.R. CV No. 30438 is
REVERSED and SET ASIDE. The parties are directed to cause
a SURVEY for exact determination of their respective
portions in Lot 162-C-6. Transfer Certificate of Title No.
14566 is declared CANCELLED and the Register of Deeds of
Capiz is ordered to ISSUE a new title in accordance with said
survey, upon finality of this decision.
Costs against respondents.1wphi1.nt
SO ORDERED.
G.R. No. 102037 July 17, 1996
MELANIO IMPERIAL, petitioner,
vs.
HON. COURT OF APPEALS and GUILLERMO SOLLEZA, ET.AL.,
respondents.

PANGANIBAN, J.:p
Where an heir who owns one-half undivided share of the
area of two lots sells one of the lots without giving to his coheir the latter's share of the proceeds, may be the latter lay
exclusive claim to the remaining lot as his own?

This Court answers the question in resolving the instant

petition, which seeks to set aside the Decision 1 in CA-G.R.
CV No. 22557 promulgated September 13, 1990 by the
respondent Court, 2 reversing/modifying the judgment of
the trial court.
The Antecedent Facts
The facts as found by the respondent Court are as follows:
. . . Lot No. 1052, with an area of 4,630 square meters; and
Lot No. 1091, with an are of 4,633 square meters both
situated in Barangay Culapi, Lucban, Quezon, were originally
owned by Maria Cuvinar Imperial who died on June 12, 1979.
Maria Cuvinar Imperial was survived by her two children:
Adela and defendant, Melanio. Adela died on May 4, 1986
and is survived by plaintiffs Guillermo Solleza, the husband,
and, children Ernest, Rosa(,) Victoria, Virgilio and Guillermo,
Jr., all surnamed Solleza.
On May 1, 1979, Adela and defendant Melanio agreed to
register lots No. 1091 and 1052 in the name of Melanio in
order to expedite the titling of the said parcels of land. For
this purpose, Adela executed a document captioned
"Kasulatan ng Pagtalikod Sa Karapatan" dated May 1, 1979.
(Exh. B) whereby she waived her rights over lots No. 1091
and 1052. On the same date, defendant Melanio, in turn,
executed by Adela was a simulated one in order to expedite
the registration of the lots in his name.
By virtue of the document of waiver (Exh. B), defendant
Melanio was able to obtain OCT No. P-27941 for lot No.
1052; and OCT No. P-26596 for lot No. 1091, in his name.
Aside from Exhibit C, defendant Melanio executed another
document entitled "Sa Sino Mang Dapat Makatalastas Nito"
(Exh. E) wherein he acknowledged the one-half share of his
sister Adela in lot Nos. 1091 and 1052 and that Adela is also
entitled to one-half share in the proceeds of the sale of
subdivision lots in the said lots.
On May 4, 1985, defendant Melanio sold lot No. 1052
covered by OCT No. 27941 in favor of spouses Efren Rosas
and Leticia Cabisuelas (Exh. B-1 and H) for the sum of
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LAW ON PROPERTY

P20,000.00. The sale was discovered by plaintiff Rosa

Solleza, when she paid the realty taxes for the two parcels
of land at the Lucban Treasurer's office. Rosa Solleza wanted
to confront defendant Melanio Imperial relative to the sale
but could not find the latter. Attempts were made to
amicably settle the problem between uncle and nephews
and nieces, but to not avail. Thus, plaintiffs filed this case,
wherein defendant Melanio without giving any share of the
proceeds, to Adela Imperial, lot No. 1091 should be
reconveyed or returned to Adela Imperial and/or the estates
of Adela Imperial.
After trial on the merits, the Regional Trial Court of Lucena
City, Branch 60 3, rendered its decision, the dispositive
portion of which reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
(a) Ordering Melanio Imperial to pay the plaintiffs the sum of
P10,000.00 plus 16% interest thereon commencing on May
4, 1985 until fully paid;
(b) Ordering Melanio Imperial to pay the plaintiffs the sum of
P7,500.00 attorney's fee and litigation expenses;
(c) Ordering Melanio Imperial to pay the plaintiff(s) the sum
of P5,000.00 as exemplary damages; and
(d) Declaring Melanio Imperial as the true and rightful owner
of Lot No. 1091. (Original Records, pp. 131-132)
Plaintiffs (private respondents) and defendant (petitioner
herein) interposed separate appeals with the respondent
Court, which upheld herein private respondents and
affirmed the findings of the trial court that "the document
(Exh. B) executed by Adela Imperial, (was) simulated."
Respondent Court quoted the trial court thus:
Defendant Melanio argues that he is the owner of Lot No.
1052 by way of a waiver of the right executed by Adela in a
document captioned as "Pagtalikod sa Karapatan" (Exh. B).
Examination of the evidence, however, shows that said
document (Exh. B) was a simulated contract as may be seen
in another document also executed by Adela and Melanio

entitled "Pagwalang Bisa sa Pagtalikod sa Karapatan" (see

Exhibit C).
The appellate Court noted that the purpose of the simulated
document was to facilitate the registration of the two lots in
the name of herein petitioner Melanio, who however
breached the trust reposed upon him by his sister Adela.
The respondent Court agreed that "(beyond doubt,
therefore, lot Nos. 1052 and 1091 were owned in common
by defendant-appellee Melanio and Adela Imperial, mother
of plaintiffs-appellants." The respondent Court also ruled
that, contrary to the claim of herein petitioner and
contrary to the finding of the trial court Adela Imperial
never sold her 1/2 share of lot 1091 to herein petitioner.
Thus, when herein petitioner Melanio appropriated for
himself the entire proceeds from the sale of lot 1052, he was
"deemed to have waived his share in lot 1091 in favor of
Adela Imperial and/or her heirs . . . Lot No. 1091 should now
be solely owned by (the herein private respondents)",
otherwise "Melanio would be enriching himself at the
expense of his sister, Adela" and/or her heirs. Thus, the
respondent Court ruled:
WHEREFORE, the appealed decision is REVERSED and SET
ASIDE, and judgment is hereby rendered in favor of
plaintiffs:
1. Declaring lot No. 1091, covered by Original Certificate of
Title No. P-26596, is owned by plaintiffs as heirs of Adela
Imperial;
2. Ordering the cancellation of Original Certificate of Title
No. P-26596 in the name of defendant Melanio Imperial and
in lieu thereof, another title be issued in the name of
plaintiffs as the heirs of Adela Imperial;
3. Ordering Melanio Imperial to pay plaintiffs the sum of
P10,000.00 as moral damages and the sum of P5,000.00 as
exemplary damages;
4. Ordering Melanio Imperial to pay plaintiff the sum of
P10,000.00 as litigation expenses and attorney's fees.
The Issues
Page 143 of 404

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On appeal, petitioner alleged the following generalities:

1. The respondent Court of Appeals abused its discretion in
deciding this case not in accordance with the evidence on
record, amounting to excess in jurisdiction, thereby
departing from the accepted and usual course of judicial
proceedings.
2. The respondent Court of Appeals decided questions of
substance in a way not in accord with law or with the
applicable decisions of the Supreme Court and the petitioner
have (sic) no other plain, speedy and adequate remedy in
the course of law.
Simply put, petitioner challenges the findings of fact of the
respondent Court that he appropriated for himself the entire
proceeds from the sale of Lot 1052 and failed to give onehalf of the proceeds to Adela Imperial or her heirs, the
private respondents in this appeal. Petitioner, on the
strength of the reversed findings of the trial court, claims
that he had already paid Adela Imperial the amounts of
"P4,575.00 on June 16, 1979; P200.00 on November 8, 1979
and another P200.00 on May 7, 1980 as shown in Exhibits
'4', '4-A' and '4-B'." He further alleges that the sum of these
amount represent one-half () of the price of Lot No. 1091
during the time the sale was transacted. And if Lot 1091
would be solely owned by the private respondents to the
exclusion of himself, he would be deprived of his share of
the inheritance which would be unjust and contrary to law. 4
The Court's Ruling
Petitioner would like this Court to re-appreciate and reevaluate the evidence all over again and make findings
contrary to those of the respondent Court. Generally
speaking, factual findings of the Court of Appeals are final
and conclusive on the Supreme Court. 5 In this particular
case, we see no cogent or sufficient reason to depart from
the above rule absent any clear showing that the findings
complained of are totally devoid of support in the record, or
that they are so glaringly erroneous as to constitute serious
abuse of discretion. Such findings must stand, for this Court

is not expected or required to examine or contrast the oral

and documentary evidence submitted by the parties. 6
The disputed portion of the Decision reads thus:
However, the trial court said that Adela Imperial "sold her
share to Melanio on lot No. 1091." This conclusion was
based on three receipts (Exhs. 4, 4-A and 4-B) which show
that on June 16, 1989, November 8, 1979, and May 7, 1980,
defendant-appellee Melanio Imperial paid to Adela Imperial
the amounts of P4,575.00, P200.00, respectively. The court
a quo erred. The last receipts is dated May 7, 1980 (Exh. 4B). Adela Imperial died on May 4, 1986, six years thereafter.
No deed of sale was executed by Adela Imperial in favor of
defendant-appellee Melanio Imperial ceding lot 1091.
Furthermore, the receipts do not show it is in payment of
Adela Imperial's one-half share of the lot. If this was the
intention of the parties, then the purchase price and the
balance after each payment should have been reflected in
the receipts. The only logical conclusion is that the amounts
remitted by defendant-appellee Melanio were the shares
Adela Imperial for the sale of subdivision lots in lot NO.
1091. This is so since the document executed by defendantappellee Melanio Imperial entitled "Sa Sino Mang Dapat
Makatalastas Nito" (Exh. E) states in part:
". . . aking pinatutunay na bukod sa ang aking kapatid na si
Adela Imperial ay may 1/2 bahagi sa naulit na mga lupain na
nababanggit sa naulit na documento, ay 1/2 rin siya sa lahat
ng maaring mapagbilhan ng mga lote ng naulit na
pangagari matapos na ito ay mapalagyan ng subdivision."
which in English means: "I hereby attest that aside from the
share of my sister Adela Imperial in the lots mentioned in
the aforementioned documents, she will also receive
share in the proceeds of the sale in the said lots, after they
are subdivided."
Therefore, Adela Imperial never sold her 1/2 share of lot
1091 to defendant Melanio Imperial, contrary to the finding
of the court a quo.

Page 144 of 404

LAW ON PROPERTY

Still, in order to satisfy ourselves, we examined the three

receipts aforesaid, which are critical to petitioner's
contention, and we agree with respondent Court that the
amounts mentioned therein as having been paid by herein
petitioner to Adela Imperial were not intended to be part of
the purchase price of Lot 1091. The three receipts bear the
following contents:
1. Receipt dated June 16, 1979:
Tinanggap ko sa aking kapatid na si Melanio Imperial ang
halagang Four Thousand Five Hundred seventy five
P4,575.00 bilang kabahagi ng lote no. 1091 sa Lucban,
Quezon.
Received by
(sgd.)
Adela Imperial
2. Receipt dated November 8, 1979:
(sgd.) Adela Imperial
Received from Brother Melanio Imperial the sum of Two
Hundred P200.00 as partial for lot 1091.
3. Receipt dated May 7, 1980:
Tinanggap ko kay Melanio Imperial ang halagang dalawang
daang P200. bilang kabahagi sa lote 1091.
Received by
(sgd.)
Adela I. Solleza
It is clear to this Court that the amounts covered by the
receipts, considered in relation to the agreement between
petitioner and Adela Imperial Solleza entitled "Sa Sino Mang
Dapat Makatalastas Nito", constituted the latter's share in
the proceeds of the sales of subdivision lots which were part
of Lot No. 1091. 7 For if the sale of Lot 1091 to the petitioner
was what was indeed intended by the parties, then it is most

unusual and surprising as the Court of Appeals correctly

observed that the petitioner did not ask for the execution
of a Deed of Sale ceding to him the share of Adela in Lot No.
1091 within the period of six (6) years from the date of the
last receipt, considering that Adela died on May 4, 1986.
Only when he was sued for annulment of OCT No. 26596
covering Lot No. 1091 did he raise as a defense the
allegation that he had already acquired the share of this
sister in said lot.
Inasmuch as the terms of the agreement between Adela and
Melanio provide for one-half undivided share for petitioner
over Lots 1091 and 1052, and the petitioner in effect waived
his rights over one-half of the remaining Lot 1091 when he
sold and appropriated solely as his own the entire proceeds
from the sale of Lot 1052, law 8 and equity dictate that Lot
1091 9 should now belong to the estate of the late Adela
Imperial Solleza, represented by her heirs, private
respondents in this case. 10
On the other hand, the award of moral and exemplary
damages is appropriate in this case, for the petitioner acted
in bad faith 11 and breached the trust reposed in him by
virtue of his contract with his late sister. This was clearly
manifested when he sold Lot 1052 without informing Adela
or her heirs and giving a share of the sales proceeds to
them. Additionally, he even avoided talking to private
respondent Rosa Solleza (now Arquiza) when she tried to
ask why he sold Lot 1052 in spite of the co-ownership
existing with between her mother and the petitioner over
said Lot. 12 Additionally, attorney's fees are also
recoverable when exemplary damages are awarded. 13
WHEREFORE, premises considered, the herein petition is
hereby DENIED for lack of merit, no reversible error having
been committed by respondent Court. The assailed Decision
is AFFIRMED in toto. No costs.
SO ORDERED.
ARTICLE 494
G.R. No. 72694 December 1, 1987
Page 145 of 404

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AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO TAINO,

SOLEDAD TAINO, JOVENCIO TAINO, SAMSON TAINO, NOE
TAINO, SOCORRO TAINO and CLEOFAS TAINO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (Second Civil Cases
Division), ALEJANDRA PANSACOLA, LEONILA ENCALLADO,
VEDASTO ENCALLADO, JOSE YEPES, et al., respondents.

For this purpose, this case is hereby remanded to the Court

of origin so that a final partition shall be made in accordance
with Sections 2, 3, et. seq., Rule 69 of the Rules of Court.
Let a copy of this decision be furnished to the Register of
Deeds for the Province of Quezon.
The facts of the case are taken from the decision of the
Appellate Court (Rollo, p. 39) as follows:

PARAS, J.:
This is a petition for review on certiorari by way of appeal
from: (a) the decision of respondent Court of Appeals
(Intermediate Appellate Court) * promulgated on May 17,
1985 in AC-G.R. CV No. 70460, entitled "Alejandra
Pansacola, et al. vs. Domen Villabona del Banco, et al."
which reversed and set aside the judgment ** of the trial
court; and (b) its resolution ** of October 15, 1985 in the
same case, denying petitioners' motion for reconsideration
of the aforementioned decision and their supplement to
motion for reconsideration.
The dispositive portion of the questioned decision (Rollo, p.
97) reads, as follows:
ACCORDINGLY, the decision appealed from is hereby SET
ASIDE insofar as it dismisses the complaint, and another one
entered
(1) Declaring plaintiffs-appellants and defendants-appellees,
in their respective capacities as described in par. V of the
complaint, as co-owners of the property in dispute, but
subject to the four-part pro-indiviso division already made
by said property;
(2) Ordering the cancellation of all certificates of title that
may have been issued to any of the parties hereto; and
(3) Ordering the complete and final partition of the subject
property in conformity with law.

In a document executed in the Municipality of San Rafael,

Bulacan, on February 11, 1859, three brothers, Benedicto
Pansacola, Jose Pansacola and Manuel Pansacola (known as
Fr. Manuel Pena) entered into an agreement which provided,
among others:
(1) That they will purchase from the Spanish Government
the lands comprising the Island of Cagbalite which is located
within the boundaries of the Municipality of Mauban,
Province of Tayabas (now Quezon) and has an approximate
area of 1,600 hectares;
(2) That the lands shall be considered after the purchase as
their common property;
(3) That the co-ownership includes Domingo Arce and
Baldomera Angulo, minors at that time represented by their
father, Manuel Pansacola (Fr. Manuel Pena) who will
contribute for them in the proposed purchase of the
Cagbalite Island;
(4) That whatever benefits may be derived from the Island
shall be shared equally by the co-owners in the following
proportion: Benedicto Pansacola-1/4 share; Jose Pansacola1/4 share; and, Domingo Arce and Baldomera Angulo-2/4
shares which shall be placed under the care of their father,
Manuel Pansacola (Fr. Manuel Pena).
On August 14, 1866, co-owners entered into the actual
possession and enjoyment of the Island purchased by them
from the Spanish Government. On April 11, 1868 they
agreed to modify the terms and conditions of the agreement
entered into by them on February 11, 1859. The new
agreement provided for a new sharing and distribution of
Page 146 of 404

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the lands, comprising the Island of Cagbalite and whatever

benefits may be derived therefrom, as follows:
(a) The first one-fourth (1/4) portion shall belong to Don
Benedicto Pansacola;
(b) The second one-fourth (1/4) portion shall belong to Don
Jose Pansacola;
(c) The third one-fourth(1/4) portion shall henceforth belong
to the children of their deceased brother, Don Eustaquio
Pansacola, namely: Don Mariano Pansacola,- Maria
Pansacola and Don Hipolito Pansacola;
(d) The fourth and last one-fourth (1/4) portion shall belong
to their nephews and nieces (1) Domingo Arce, (2)
Baldomera Angulo, (3) Marcelina Flores, (4) Francisca Flores,
(5) Candelaria dela Cruz, and (6) Gervasio Pansacola who,
being all minors, are still under the care of their brother,
Manuel Pansacola (Fr. Manuel Pena). The latter is the real
father of said minors.
About one hundred years later, on November 18, 1968,
private respondents brought a special action for partition in
the Court of First Instance of Quezon, under the provisions of
Rule 69 of the Rules of Court, including as parties the heirs
and successors-in-interest of the co-owners of the Cagbalite
Island in the second contract of co-ownership dated April 11,
1968. In their answer some of the defendants, petitioners
herein, interposed such defenses as prescription, res
judicata, exclusive ownership, estoppel and laches.
After trial on the merits, the trial court rendered a decision
*** dated November 6, 1981 dismissing the complaint, the
dispositive portion of which reads as follows:
WHEREFORE, and in the fight of all the foregoing this Court
finds and so holds that the Cagbalite Island has already
been partitioned into four (4) parts among the original coowners or their successors-in-interest.
Judgment is therefore rendered for the defendants against
the plaintiffs dismissing the complaint in the above entitled
case.

Considering that the cross claims filed in the above entitled

civil case are not compulsory cross claims and in order that
they may be litigated individually the same are hereby
dismissed without prejudice.
IT IS SO ORDERED.
The motion for reconsideration filed by the plaintiffs, private
respondents herein, was denied by the trial court in an order
dated February 25, 1982 (Record on Appeal, p. 241).
On appeal, respondent Court reversed and set aside the
decision of the lower court (Rollo, p. 117). It also denied the
motion for reconsideration and the supplement to motion for
reconsideration filed by private respondents, in its resolution
dated October 15, 1983 (Rollo, p. 86).
Instant petition was filed with the Court on December 5,
1985 (Rollo, p. 12). Petitioners Josefina Pansacola, et al.
having filed a separate petition (G.R. No. 72620) on the
same subject matter and issues raised in the instant
'petition, the counsel for private respondents filed a
consolidated comment on the separate petitions for review
on February 24, 1986 with the First Division of the Court
(Rollo, p. 119). It appears that counsel for petitioners also
filed a consolidated reply to the consolidated comment of
private respondents as required by the Second Division of
the Court (Rollo, p. 151). However, petitioners filed a
separate reply in the instant case on February 18,1987
(Rollo, p. 168)as required by the Court in a Resolution of the
Second Division dated November 24, 1986 (Rollo, p. 160).
On May 19, 1987, private respondents in the instant petition
filed a manifestation praying for the denial of the instant
petition in the same manner that G.R. No. 72620 was denied
by the Court in its Resolution dated July 23, 1986 (Rollo, p.
151). Their rejoinder to the reply of petitioners was filed on
May 25,1987 (Rollo, p. 179).
On June 8, 1987, the Court resolved to give due course to
the petition (Rollo, p. 192). The memorandum of private
respondents was mailed on July 18, 1987 and received in
the Court on July 29, 1987 (Rollo, p. 112); the memorandum
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for petitioners was mailed on August 18, 1987 and received

in the Court on September 7, 1987 (Rollo, p. 177).
The sole issue to be resolved by the Court is the question of
whether or not Cagbalite Island is still undivided property
owned in common by the heirs and successors-in-interest of
the brothers, Benedicto, Jose and Manuel Pansacola.
The Pansacola brothers purchased the Island in 1859 as
common property and agreed on how they would share in
the benefits to be derived from the Island. On April 11,
1868, they modified the terms and conditions of the
agreement so as to include in the co-ownership of the island
the children of their deceased brothers Eustaquio and the
other children of Manuel Pansacola (Fr. Manuel Pena) who
were committed in the agreement of February 11, 1859. The
new agreement provided for a new sharing proportion and
distribution of the Island among the co-owners.
On January 20, 1907, the representative of the heirs of all
the original owners of Cagbalite Island entered into an
agreement to partition the Island, supplemented by another
agreement dated April 18, 1908. The contract dated January
20, 1907 provides as follows:
Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga
quinatawan ng mga ibang co-herederos na hindi caharap, sa
pulong na ito, sa nasa naming lahat na magcaroon na ng
catahimikan ang aming-aming cabahagui sa Pulong
Kagbalete sumacatuid upang mapagtoos ang hangahan ng
apat na sapul na pagcacabahagui nitong manang ito,
pagcacausap na naming lahat at maihanay at mapagtalonan
ang saysay ng isa't isa, ay cusa naming pinagcasunduan at
pinasiya ang nangasosonod:
Una: Ang malaquing calupaan, alis ang lahat na pacatan ay
babahaguin alinsunod sa pagcabaki na guinawa sa croquis
na niyari ng practico agrimensor Don Jose Garcia.
Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng
Pait ay pagaapatin ding sinlaqui ayon sa dating
pagkakabaki.

Icatlo: Cung magawa na ang tunay na piano at icapit na sa

lupa, paglalagay ng nadarapat na mojon, ang masacupan ng
guhit, sumacatuid ang caingin at pananim ng isa na
nasacupan ng pucto na noocol sa iba, ay mapapasulit sa
dapat mag-ari, na pagbabayaran nito ang nagtanim sa
halagang:- bawat caponong niog na nabunga, P 1.00 'un
peso); cung ang bias ay abot sa isang vara, P 0.50; cung
bagong tanim o locloc P 0. 50 ang capono.
Icapat: Ang lahat na pacatan ay bacod na pagaapatin at
bawat bahagui ay noocol sa isat-isa sa apat na sanga ng
paganacang nagmana.
Icalima: Upang ang naipatanim ng bawat isa ay matama sa
canya ng mailagan ang hirap ng loob ng nagatikha; ay
pagtotolong-tolongan ng lahat naiba na mahusay ang
dalawang partes na magcalapit na mapa ayong tumama,
hangang may pagluluaran, sa nagsikap at maoyanam,
maidaco sa lugar na walang cailangang pagusapan.
Icanim: Ang casulatang ito, cung mapermahan na na
magcacaharap sampong ng mga ibang co-herederos na
notipicahan nitong lahat na pinagcasundoan ay mahahabilin
sa camay ng agrimensor, Amadeo Pansacola, upang
canyang mapanusugan ang maipaganap ang dito'y naootos.
Na sa catunayan at catibayan ng lahat na nalalagda dito, sa
pag galang at pag ganap dito sa paingacaisahan ay
pumirma sampo ng mga sacsing caharap at catanto
ngayong fecha ayon sa itaas.
The contract dated April 18, 1908 provides as follows:
Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng
lahat na firmantes nito ay pinagcaisahan itong
nangasosonod:
Una Pinagtitibay ang mga pinagcasundoan sa itaas noong
20 ng Enero ng 1907, liban na lamang sa mga pangcat na
una at icapat at tongcol doon pinasiya naming bahaguinin
ng halohalo at paparejo ang calupaan at pacatan.
Ycalawa Sa pagsucat ng agrimensor na si Amadeo at
paggawa ng piano at descripcion ay pagbabayaran siya ng
Page 148 of 404

LAW ON PROPERTY

sa bawat isa naoocol sa halagang isang piso sa bawat

hectares.
Icatlo Ang counting pucto sa 'Mayanibulong' na may
caingin ni G. Isidro Altamarino, asawa ni Restitute ay
tutumbasan naman cay G. Norberto Pansacola sa lugar ng
Dapo calapit ng Pinangalo ng gasing sucat.
Icapat Sa inilahad na piano ay pinasiya nang itoloy at
upang maca pagparehistro ang isa't isa ay pinagcaisahang
magcacagastos na parepareho para sa tablang pangmohon
at ibat iba pang cagastusan.
Sa catunayan at catibayan ay cami, pumirma. (Record on
Appeal, p. 224)
There is nothing in all four agreements that suggests that
actual or physical partition of the Island had really been
made by either the original owners or their heirs or
successors-in-interest. The agreement entered into in 1859
simply provides for the sharing of whatever benefits can be
derived from the island. The agreement, in fact, states that
the Island to be purchased shall be considered as their
common property. In the second agreement entered in 1868
the co-owners agreed not only on the sharing proportion of
the benefits derived from the Island but also on the
distribution of the Island each of the brothers was allocated
a 1/4 portion of the Island with the children of the deceased
brother, Eustaquio Pansacola allocated a 1/4 portion and the
children of Manuel Pansacola (Fr. Manuel Pena) also
allocated a 1/4 portion of the Island. With the distribution
agreed upon each of the co-owner is a co-owner of the
whole, and in this sense, over the whole he exercises the
right of dominion, but he is at the same time the sole owner
of a portion, in the instant case, a 1/4 portion (for each
group of co-owners) of the Island which is truly abstract,
because until physical division is effected such portion is
merely an Ideal share, not concretely determined (3
Manresa, Codigo Civil, 3rd Ed., page 486, cited in Lopez vs.
Cuaycong, 74 Phil. 601; De la Cruz vs. Cruz, 32 SCRA 307
[1970]; Felices vs. Colegado, 35 SCRA 173 [1970],; Dultra
vs. CFl 70 SCRA 465 [1976]; Gatchalian vs. Arlegui, 75 SCRA
234 [1977].)

In the agreement of January 20, 1907, the heirs that were

represented agreed on how the Island was to be partitioned.
The agreement of April 18, 1908 which supplements that of
January 20, 1907 reveals that as of the signing of the 1908
agreement no actual partition of the Island had as yet been
done. The second and fourth paragraphs of the agreement
speaks of a survey yet to be conducted by a certain Amadeo
and a plan and description yet to be made. Virgilio
Pansacola, a son of the surveyor named Amadeo who is
referred to in the contract dated April 18, 1908 as the
surveyor to whom the task of surveying Cagbalite Island
pursuant to said agreement was entrusted, however,
testified that said contracts were never implemented
because nobody defrayed the expenses for surveying the
same (Record on Appeal, p. 225).
Petitioners invoke res judicata to bar this action for partition
in view of the decision of the Court in G.R. No. 21033,
"Domingo Arce vs. Maria Villabona, et al.," 21034, "Domingo
Arce vs. Francisco Pansacola, et al.," and 21035, "Domingo
Arce vs. Emiliano Pansacola, et al." promulgated on February
20, 1958 (Rollo, p. 141) and Brief for Defendants-Appellees,
p. 87 Appendix 1), wherein the Court said:
Considering the facts that he waited for a period of nearly
23 years after the return from his deportation before taking
any positive action to recover his pretended right in the
property in question, gives great credit, in our opinion, to
the declaration of the witnesses for the defense (a) that the
original parcel of land was partitioned as they claim, and (b)
that the plaintiff had disposed of all the right and interest
which he had in the portion which had been given to him.
The issue in the aforementioned case which were tried
together is not whether there has already been a partition of
the Cagbalite Island. The actions were brought by the
plaintiff to recover possession of three distinct parcels of
land, together with damages. In fact the word partition was
used in the metaphysical or Ideal sense (not in its physical
sense).
Commenting on the above ruling of the Court in connection
with the instant case, the respondent Court said:
Page 149 of 404

LAW ON PROPERTY

Concededly, the Supreme Court decision in G.R. Nos. 2103335 (Exh. X) did use or employ the word "partition." A careful
reading of the said decision will, however, reveal, and we so
hold, that the employment or use of the word "partition"
therein was made not in its technical and legal meaning or
sense adverted to above, but, rather in its Ideal, abstract
and spiritual sense, this is (at) once evident from the bare
statement in said decision to the effect that the property
was divided into four parts, without any reference to the
specific parts of the property that may have been
adjudicated to each owner. There being no such reference in
the decision and in the judgment affirmed therein to the
adjudication of specific and definite portions of the property
to each co-owner, there is a clear and logical inference that
there was indeed no adjudication of specific and definite
portions of the property made to each co-owner.
It must be admitted that the word "partition" is not
infrequently used both in popular and technical parlance
(Fule vs. Fule, 52 Phil. 750 [1929]). For purposes of the
aforementioned case, evidently the Court used the word
"partition" to refer to the distribution of the Cagbalite Island
agreed upon by the original owners and in the later
agreements, by the heirs and their subsequent successorsin-interest. There need not be a physical partition; a
distribution of the Island even in a state of indiviso or was
sufficient in order that a co-owner may validly sell his
portion of the co-owned property. The sale of part of a
particular lot thus co-owned by one co-owner was within his
right pro-indiviso is valid in its entirety (Pamplona vs.
Moreto, 96 SCRA 775 [1980]) but he may not convey a
physical portion with boundaries of the land owned in
common (Mercado vs. Liwanag, 5 SCRA 472 [1962]).
Definitely, there was no physical partition of the Island in
1859. Neither could there have been one in 1894 because
the manner of subdividing the Island was only provided for
in the later agreements entered into by the heirs in 1907
and 1908. There was a distribution of the Island in 1868 as
agreed upon by the original co-owners in their agreement of
April 11, 1868. Any agreement entered into by the parties in
1894 could be no more than another agreement as to the
distribution of the Island among the heirs of the original coowners and the preparation of a tentative plan by a practical
surveyor, a Mr. Jose Garcia, mentioned in the first paragraph

of the 1907 agreement, preparatory to the preparation of

the real plan to be prepared by the surveyor Amadeo,
mentioned in the agreement of April 18, 1908.
What is important in the Court's ruling in the three
aforementioned cases is that, the fact that there was a
distribution of the Island among the co-owners made the
sale of Domingo Arce of the portion allocated to him though
pro-indiviso, valid. He thus disposed of all his rights and
interests in the portion given to him.
It is not disputed that some of the private respondents and
some of the petitioners at the time the action for partition
was filed in the trial court have been in actual possession
and enjoyment of several portions of the property in
question (Rollo, p. 148). This does not provide any proof that
the Island in question has already been actually partitioned
and co-ownership terminated. A co-owner cannot, without
the conformity of the other co-owners or a judicial decree of
partition issued pursuant to the provision of Rule 69 of the
Rules of Court (Rule 71 of the Old Rules), adjudicate to
himself in fee simple a determinate portion of the lot owned
in common, as his share therein, to the exclusion of other
co-owners (Santos, Jr. vs. Buenconsejo, 14 SCRA 407 [1965];
Carvajal vs. Court of Appeals, 112 SCRA 237 [1982]). It is a
basic principle in the law of co-ownership both under the
present Civil Code as in the Code of 1889 that no individual
co- owner can claim any definite portion thereof (Diversified
Credit Corporation vs. Rosada 26 SCRA 470 [1968]). lt is
therefore of no moment that some of the co-owners have
succeeded in securing cadastral titles in their names to
some portions of the Island occupied by them (Rollo, p. 10).
It is not enough that the co-owners agree to subdivide the
property. They must have a subdivision plan drawn in
accordance with which they take actual and exclusive
possession of their respective portions in the plan and titles
issued to each of them accordingly (Caro vs. Court of
Appeals, 113 SCRA 10 [1982]). The mechanics of actual
partition should follow the procedure laid down in Rule 69 of
the Rules of Court. Maganon vs. Montejo, 146 SCRA 282
[1986]).

Page 150 of 404

LAW ON PROPERTY

Neither can such actual possession and enjoyment of some

portions of the Island by some of the petitioners herein be
considered a repudiation of the co-ownership. It is
undisputed that the Cagbalite Island was purchased by the
original co-owners as a common property and it has not
been proven that the Island had been partitioned among
them or among their heirs. While there is co-ownership, a
co-owner's possession of his share is co-possession which is
linked to the possession of the other co-owners (Gatchalian
vs. Arlegui, 75 SCRA 234 [1977]).

MARIA BICARME assisted by her husband JOSE BALUBAR,

petitioner,
vs.
COURT OF APPEALS and CRISTINA BICARME, respondents.

Furthermore, no prescription shall run in favor of a co-owner

against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership (Valdez vs. Olonga,
51 SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Coowners cannot acquire by prescription the share of the other
co-owners, absent a clear repudiation of the co-ownership
clearly communicated to the other co-owners (Mariano vs.
De Vega, 148 SCRA 342 [1987]).

MEDIALDEA, J.:

An action for partition does not prescribe. Article 403 of the

Old Civil Code, now Article 497, provides that the assignees
of the co-owners may take part in the partition of the
common property, and Article 400 of the Old Code, now
Article 494 provides that each co-owner may demand at any
time the partition of the common property, a provision
which implies that the action to demand partition is
imprescriptible or cannot be barred by laches (Budlong vs.
Pondoc, 79 SCRA 24 [1977]). An action for partition does not
lie except when the co-ownership is properly repudiated by
the co- owner (Jardin vs. Hollasco, 117 SCRA 532 [1982]).
On July 23, 1986, the Court through its Second Division
denied the petition for the review of G.R. No. 72620, the
petition for review on certiorari separately filed by Josefina
Pansacola (Rollo, p. 151).
PREMISES CONSIDERED, the instant petition is likewise
DENIED for lack of merit.
SO ORDERED.
G.R. No. L-51914 June 6, 1990

Paterno Aquiao for petitioner.

Demetrio V. Pre for private respondent.

This petition seeks to set aside the appealed decision of the

lower court 1 as affirmed by the appellate court on August
28, 1979, directing the amicable partition of two parcels of
land between Cristina Bicarme (private respondent) and her
aunt Maria Bicarme (petitioner), as well as the Resolution,
dated October 5, 1979, denying petitioner's motion for
reconsideration.
The affirmed decision of the lower court, rendered on
December 22, 1975, disposes as follows:
(a) That Maria Bicarme and Cristina Bicarme are the only
surviving co-heirs and co-owners and entitled in equal
shares over the parcel of land in litigation and described
under paragraph 3 of the complaint;
(b) That the alleged deeds of Sale executed by Maria
Bicarme covering and affecting the two parcels of land in
suit are declared null and void in so far (sic) as they affect
and/or cover the one-half undivided share and inheritance of
plaintiff Cristina Bicarme;
(c) Maria Bicarme is ordered to account and/or pay the value
corresponding to the one-half () undivided shares of
Cristina Bicarme in the yearly fruits of the land and to
commence from the filing of this complaint; that is seventy
five bundles of palay valued at P375.00 with legal interest
fully paid;
(d) That the parties are hereby ordered within (15) days
from receipt of this decision to amicably agree upon a
Page 151 of 404

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written partition and to submit the same for approval,

parties shall appoint a Commissioner to effect and carry out
effectively the partition of the 2 parcels of land in equal
parts between the plaintiff and the defendant;
(e) Defendant and her hirelings and representatives are
forever ordered to refrain from molesting the Commissioner
in the discharge of his duty to partition said two (2) parcels
of land in suit;
(f) And, Defendant to pay Attorney's fee and cost of this suit.
SO ORDERED. (pp. 40-41, Record on Appeal)
Petitioner-defendant Maria Bicarme appealed.
The Court of Appeals affirmed the decision; hence, this
petition.
The main issue in this case dwells on ownership rights over
the litigated parcels of land.
As established by the trial court, Sps. Juan Bicarme and
Florencia Bidaya were the original co-owners of two parcels
of land described as follows:
1. Cornland in Palao, Bangued, Abra, bounded on the NorthHill, on the East-Brono Barbers, on the South-Casimiro Palos,
and on the West-Clemente Baldozan, of about 8,721 sq. m.,
assessed at P400.00 under Tax Dee. No. 7764;
2. Riceland in Palao, Bangued, Abra, bounded on the NorthMacario Bolos, East- Roberto Bicarme, South-Juliana
Baldozan, and West-Telesporo, about 1,539 sq. m., assessed
at P 60.00, under Tax Dec. No. 7765;
.... (P. 10, Record on Appeal)
The spouses died intestate and were survived by three
children-Victorina Bicarme, Sebastian Bicarme and Maria
Bicarme. Sebastian Bicarme died when he was a little boy
and without any issue. Later, Victorina Bicarme died
intestate, survived by her only daughter, Cristina Bicarme.

Cristina claims that upon the death of her grandparents,

Sps. Juan and Florencia, her mother Victorina and her aunt,
Maria, became co-owners or co-heirs of the litigated parcels
of land. Upon the death of her mother, Victorina, Cristina
became co-heirs with Maria, having inherited the share and
interest of her mother corresponding to one-half of the two
parcels of land.
Cristina instituted this action for partition, because her aunt,
Maria, refused to share with her the yearly fruits of the
disputed parcels of land. Maria, however, maintains that
"she acquired these two parcels of land in 1925 (cornland)
and 1926 (riceland) from the deceased spouses Placido
Bidaya and Margarita Bose and since then until the present,
had been in open, public, peaceful, continuous, adverse
possession and enjoyment and in the concept of absolute
owner thereof Maria further claims that Cristina, her niece,
never shared or contributed to the payment of taxes of said
two parcels of land; and, finally, that Cristina Bicarme was
presumed already dead" (p. 35, Record on Appeal).
In ruling Maria and Cristina to be co-heirs, the trial court
relied on a provision separately stated in three deeds of sale
executed by Maria as follows:
That I am the sole and absolute owner over the above
described cornland having acquired the same by inheritance
from my late father Juan Bicarme;" (See Exhibits '4', '5', '6',
and '7' or Exhibits 'A-1,' 'B-1,' 'C-1', and 'D-1'; (p. 37, Record
on Appeal, emphasis supplied)
The trial court stated that the provision was in the nature of
a trust provision in favor of Cristina as a co-owner/co-heir.
We agree. By admitting that the cornland is inherited
property, Maria, in effect, recognized Cristina's lights thereto
as a co-heir/co-owner. As the trial court theorized:
xxx xxx xxx
(6) That Victorina Bicarme and Maria Bicarme never
partitioned even orally the two parcels of lands which were
then owned in common by them;
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LAW ON PROPERTY

(7) . That even after the death of Victorina Bicarme, the land
in suit remained undivided and were therefore in the
possession of Maria Bicarme because her niece Cristina
Bicarme went to Manila and now married and presently
residing at No. 22, 11th Avenue, Grace Park, Caloocan City.
(8) That without the knowledge and consent of Cristina
Bicarme who was then of legal age, her aunt Maria Bicarme
executed on April 27, 1973 a Deed of absolute Sale (Exhibit
'A') in favor of Marina Pizarro who acquired portion No. 3 of
the cornland; on the same date she also executed another
Deed of Sale (Exhibit 'B') in favor of Saturnino Pacopia, who
acquired portion No. 2 of the cornland; and, in June 16, 1965
again Maria Bicarme executed a third Deed of Sale (Exhibit
'C') in favor of Casimira Pacopia, who acquired portion No. 1
of the cornland;
(9) That these three (3) separated (sic) Deeds of Sale all
executed by Maria Bicarme over the cornland have a
respective total area of 740 square meters, more or less, for
portion No. 3; 1,836 square meters, more or less for portion
No. 2; and 1,265 square meters, more or less for portion No.
1, or a total area of 3,481 square meters more or less;
(10) That in these three separate Deeds of Sale, Maria
Bicarme expressly provided the aforesaid trust provision.
(pp. 36-37, Record on Appeal, emphasis ours)
Despite admission during the hearing on the Identity of the
land in question (see p. 21, Record on Appeal), Maria's
counsel, on appeal, re-emphasized her original claim that
the two parcels of land in her possession were acquired from
the Sps. Placido Biduya and Margarita Bose. However, the
private document relative to the purchase, was not
produced at the trial, allegedly because "they were placed in
a trunk in their house which were burned during the
Japanese Occupation." In 1945, Maria sold the riceland. No
written evidence was submitted. For all legal intents
therefore, the riceland remained inherited property. The
Identity of the cornland as inherited property can no longer
be disputed, in view of Maria's admission in the deeds of
sale she had executed, containing the trust provisions.

Having established Cristina's co-ownership rights, Maria

nonetheless insists that Cristina's rights are barred by
prescription under Secs. 40 and 41 of Act 190 (Code of Civil
Procedure, Article 1116, Civil Code) then the applicable law,
where the longest period of both acquisitive and extinctive
prescription was only ten years (Diaz v. Garricho, 103 Phil.
261, 266). In the present case, Cristina, it is alleged,
asserted her claims 34 years after her right of action
accrued, as follows:
... After Cristina left barrio Palao at the age of eleven (11),
she never returned until she was twenty two (22) years old
and married (pp. 32-34, tsn., Nov. 4, 1974). Upon her return
her grandmother Florencia Bidaya was already dead (p. 33,
Id). At that time, Cristina claimed her hereditary share in the
lands in question but her demands were ignored and
repudiated by her aunt Maria, Cristina admitted that ever
since the Japanese occupation when she was already of age,
her aunt Maria refused to recognize her rights to said lands
(pp. 41-42, Id.). From that moment when Maria ignored and
repudiated Cristina's hereditary rights, Cristina's right of
action already accrued and the period of prescription began
to run.
The instant action was filed only in 1974 (p. 1, Record on
Appeal), or some 34 years after it accrued. If she had any
rights at all, Cristina slept on her rights. The present action
is unquestionably barred by prescription. (pp. 27-28,
Appellants' Brief)
Against Maria's claims of acquisitive prescription, the lower
court ruled that Maria was as trustee with respect to
Cristina's share. As such, prescription, as a mode of
acquiring title, could not apply:
A co-owner is a trustee for the other co-owner. No one of the
co-owners may acquire exclusive ownership of the common
property thru prescription for possession by one trustee
alone is not deemed adverse to the rest (Castrillo vs. Court
of Appeals, 10 SCRA 549; Custodio vs. Casiano, 9 SCRA 841
and, Pascual vs. Meneses, 20 SCRA 219). (p. 6, Rollo)

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While We agree with the trial court that Maria and Cristina
are co-heirs, and that with respect to them prescription, as a
mode of acquisition, cannot apply, We hasten to elaborate
on certain aspects, which need clarification.
It is correct to say that possession by one co-owner (trustee)
is not deemed adverse to the others. In this sense, an action
to compel partition will lie at any time and does not
prescribe. It is, however, not legally correct to say that by
virtue of the imprescriptibility of an action for partition,
prescription as a mode of acquiring title, can never be
invoked, or in the present case, that Maria, as a co-owner
can never acquire the property by prescription.
An action for partition implies that the thing is still owned in
common. If a co-owner or co-heir holds the property in
exclusive adverse possession as owner, asserting sole and
exclusive dominion for the required period, he can acquire
sole title to it as against the co-heirs or co-owners. The
imprescriptibility of an action for partition cannot thus be
invoked when one of the co-owners has possessed the
property as exclusive owner, and for a period sufficient to
acquire it by prescription. From the moment one of the coowners claims that he is the absolute and exclusive owner of
the properties and denies the others any share therein, the
question involved is no longer one of partition, but of
ownership. (A. Tolentino, Civil Code of the Phil., Ann., Vol. II,
pp. 192-193; Bargayo v. Comumot, 40 Phil. 856, at p. 870).
In this sense, the trial court erred in saying that there can be
no prescription (as a mode of acquiring title) in favor of a coowner/trustee.
Having clarified this issue, the main question to be resolved
is whether or not Maria has been in possession of the lands
in question under the conditions required by Section 41 of
the Code of Civil Procedure, as to uphold acquisitive
prescription in her favor.
One of the conditions imposed by said section is that the
possession must be adverse against the whole world. In
order that a possession may be deemed adverse to the
cestui que trust, or the other co-owner the following must
concur:

... (1) that he has performed unequivocal acts of repudiation

amounting to an ouster of the cestui que trust or other coowner, (2) that such positive acts of repudiation have been
made known to the cestui que trust or other co-owners, and
(3) that the evidence thereon must be clear and convincing.
(A. Tolentino, Civil Code of the Phils., Ann., Vol. 11, p. 193)
In the present case, Maria Bicarme disclaims the coownership by denying that subject properties are the
inherited properties. Other than the tax declarations in her
name, there is no written evidence that these were
acquired/purchased from Sps. Placido Biduya and Margarita
Bose. Payment of land taxes does not constitute sufficient
repudiation of the co-ownership, as it is not an act adverse
to Cristina's rights. Moreover, Cristina, being a minor, until
she claimed her rights, was not even aware thereof. Neither
did Maria make known her repudiation to Cristina, because
all along, Maria presumed her to be dead. Her refusal to
share with Cristina the yearly profits stemmed from
Cristina's failure to share in the yearly taxes. Acquisitive
prescription cannot therefore apply in this case:
Acts which are adverse to strangers may not be sufficiently
adverse to the co- owners. A mere silent possession by a coowner, his receipt of rents, fruits or profits from the
property, the erection of buildings and fences and the
planting of trees thereon, and the payment of land taxes,
cannot serve as proof of exclusive ownership, if it is not
borne out by clear, complete and conclusive evidence that
he exercised acts of possession which unequivocally
constituted an ouster or deprivation of the rights of the
other co-owners. (Mangyan v. Ilan, 28 O.G. 62; Laguna v.
Levantino, 40 O.G. (14th Suppl.) 136, cited in A. Tolentino,
Civil Code of the Philippines, Ann., Vol. II, pp. 193- 194)
Additionally, it follows that neither can the doctrine on
laches apply, for absent acquisitive prescription, (i.e., where
it has not been shown that the possession of the claimant
has been adverse and exclusive and opposed to the right of
the others) the case is not one of ownership, in which case,
the doctrine on imprescriptibility of an action for partition
will apply. Cristina's right to partition wig therefore prosper.

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Finally, We eliminate the award on attorney's fees in the

absence of any specific allegation thereon in her complaint,
or that the same is covered by any of the eleven (11)
exceptions enumerated in Art. 2208 of the New Civil Code.
Even if We were to concede exercise of judicial discretion in
the award of attorney's fees under Art. 2208, par. 11, this
provision "demands a factual, legal or equitable justification.
Without such justification, the award is a conclusion without
a premise, its basis being improperly left to speculation and
conjecture." (Mirasol v. De la Cruz, G.R. L-32552, July 31,
1978; 84 SCRA 337.) Likewise, "the matter of attorney's fees
cannot be touched once and only in the dispositive portion
of the decision. The text itself must expressly state the
reason why attorney's fees are being awarded" (ibid). In the
present case, the matter of such fees was touched but once
and appears only in the dispositive portion of the decision.
ACCORDINGLY, the petition for review is DENIED and the
appealed decision as affirmed by the Court of Appeals is
hereby AFFIRMED with the modification that the award on
attorney's fees is eliminated. Costs against petitioner. This
decision is immediately executory.
SO ORDERED.
G.R. No. L-39299 October 18, 1988
ISAAC, SEVERINO, MARIA, TELESFORA, FELISA, SERAPIO,
SIMEON and MACARIA all surnamed PANGAN, petitioners,
vs.
COURT OF APPEALS and TEODORA GARCIA, respondents.
Magtanggol C. Gunigundo for petitioners.
David C. Canta for private respondent.

CRUZ, J.:
The property in question is a parcel of land with an area of
635 square meters and situated in San Pascual, Obando,
Bulacan. 1 It was originally owned by Leon Hilario and is
now being disputed between the herein petitioners, who are

his great grandchildren by his daughter Silvestra, and the

private respondent, Teodora Garcia, who is his
granddaughter by his daughter Catalina. 2
In 1964, the petitioners filed an application for the
registration of the land in their names by virtue of their
continuous and exclusive possession thereof since 1895, by
themselves and their father and grandfather before them.
After proper notices by publication and posting as required,
the trial court issued an order of general default, there being
no opposition to the application, and proceeded to hear the
evidence of the applicants ex-parte. On the basis thereof,
the application was approved on March 31, 1966.
On June 8, 1966, the herein private respondent filed a
petition to set aside the said decision, which the trial Court
granted, 3 admitting at the same time her opposition to the
application and setting the case for reception of her
evidence. This evidence sought to show that the land was
inherited by Leon Hilario's three children, but the son,
Felicisimo, waived his right thereto and thereby made his
two sisters, Silvestra and Catalina, its exclusive co-owners.
As Catalina's daughter, she was entitled to one-half of the
property, the other half going to Silvestra's heirs, the
petitioners herein and the latter's
grandchildren. 4
On September 13, 1968, the trial judge issued an order
dismissing the opposition and reinstating his original order
of March 31,1966. 5 His reason was that whatever rights
Teodora might have had over the property had been
forfeited by extinctive prescription because she had left the
land in 1942 and had not since then asserted any claim
thereto until 1966.
On appeal to the respondent court, 6 this decision was
reversed on the ground that the appellees had not clearly
proved that they had acquired the property by prescription.
Hence, the appellant was entitled to one-half of the property
as heir, conformably to her opposition in the court a quo.
Their motion for reconsideration having been denied, they
have now come to this Court in a petition for review by
certiorari under Rule 45 of the Rules of Court.
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The petitioners' position is that the respondent court erred

in holding that the private respondent was entitled to onehalf of the land, which she had not lost by extinctive
prescription because it was held by them in trust for her.
They also insist that the appealed decision completely
disregarded the factual findings of the trial court that they
had acquired the whole land by virtue of their long,
continued and adverse possession thereof, which should bar
any claim by Teodora to her supposed part ownership.
It is stressed at the outset that the appellate court is not
necessarily bound by the factual findings of the trial court
simply because the latter had the opportunity to observe
the witnesses directly and assess their credibility by their
deportment. While this may be a conceded advantage of the
trial judge, the appellate court may still reverse his findings
of fact if they are not based on the evidence submitted or
have been reached without considering the other matters of
record that might have dictated a different conclusion. The
Court of Appeals precisely is vested with jurisdiction to
review questions of fact as decided by the lower court. It
would be evading this responsibility if it should merely adopt
the findings in the decision under review on the convenient
justification that the trial judge had the opportunity, which it
did not have, of gauging the reliability of the witnesses firsthand.
When, therefore, the respondent court accepted the private
respondent's allegation that the land was inherited by the
parties from their common ancestor, Leon Hilario, such a
finding, based on the record and not rejected but even
assumed by the trial court, did not, in our view, constitute
grave abuse of discretion. And when, on the strength of this
finding, it then held that an implied trust was created
between the petitioners who were in possession of the land,
and Teodora Garcia, their aunt and co-heir, that too, as we
see it, is not an arbitrary assumption.
In fact, the Court feels this is the more plausible relationship
between the parties, compared to the version offered by the
petitioners, who claim they acquired the property from their
grandfather through their father, who apparently acquired it
from his mother, Leon Hilario's daughter. It does not appear
that they have pre-empted the other heirs to the property

through any other mode of acquisition, like sale or some

similar exclusive transaction. They have not submitted any
evidence of how they acquired the land from their great
grandfather, confining themselves to the assertion that they
have continued his original possession, presumably as heirs
of their father, who inherited from his mother Silvestra, who
was the daughter of Hilario. If this be their theory, then they
unavoidably must recognize Teodora Garcia's own claim to
the subject property as she too was an heir, being the
daughter of Catalina, who was also a daughter of Hilario.
The trial court said, however, that assuming Teodora had the
right to the disputed property, the same was forfeited by her
through extinctive prescription by failure to assert it in time.
In its original decision, it affirmed the petitioners' claim that
they had acquired ownership over the whole property by
their adverse possession thereof for more than thirty years
in concept of owner. Teodora Garcia apparently did not
challenge such ownership and so by her inaction forever lost
the right to do so.
The respondent court, rejecting this contention, held that
the petitioners' possession was not for their benefit alone
but also in favor of Teodora, who was a co-heir with them
and therefore also a co-owner of the property. In other
words, their possession, while adverse to the rest of the
world, was not against Teodora herself, whose share they
held in implied trust for her as a co-owner of the land, and
whose fruits their father shared with her occasionally, or at
least promised her she would get eventually. The Court
believes that this, too, is not an arbitrary conclusion.
To support their claim of exclusive ownership of the entire
land, the petitioners stress that the property was declared
for taxation purposes in the name of Tomas Pangan, their
father, in 1948 and another tax declaration was issued, also
in his name, in 1965. Moreover, real estate taxes were paid
by them from 1908 to 1914, 1930 to 1932, 1956 to 1957,
and 1960 to 1965, whereas Teodora Garcia, by her own
admission, never paid any tax at all on the disputed land. 7
Tax declarations are indicia but not conclusive proof of
ownership. 8 If the property was declared in the name of To
as Pangan only, it could be that this was done only for
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reasons of convenience, more so if it was understood, as the

private respondent did, that he was declaring the property
not only for himself but for herself also as the other coowner. As for the admitted fact that Teodora Garcia never
actually paid the real estate taxes, the explanation she gave
was that she assumed her share of such taxes was being
paid from her share in the fruits of her portion of the land,
which she said she was not getting regularly, much less in
full. We hold that this explanation is also plausible enough.
But for all this, there is still the question of whether or not
Teodora Garcia, by her failure to assert her right, allowed the
statutory period to lapse, thus enabling the petitioners to
perfect their claim of ownership by acquisitive prescription
and so exclude her from her share in the subject property.
It is a settled rule that possession by one co-owner will not
be regarded as adverse to the other co-owners but in fact as
beneficial to all of them. 9 Hence, as long as his coownership is recognized, an action to compel partition will
not prescribe and may be filed at any time against the
actual possessor by any of the other co-owners. 10
However, if the co-owner actually holding the property
asserts exclusive dominion over it against the other coowners, the corollary of the rule is that he can acquire sole
title to it after the lapse of the prescribed prescriptive
period. From that moment, the question involved will be one
of ownership and no longer mere partition. 11
According to the petitioners, there was such repudiation
which was admitted by the private respondent herself
Testifying for herself at the hearing on her opposition in the
registration proceedings, she declared:
ATTY. CANLAS:
Q: After the death of Tomas Pangan, did you ask the heirs of
Tomas Pangan of your alleged share in the property in
question?
A: Yes, sir.
Q: What did they tell you?

A: They said that I have no right to a share and they won't

give me my share.
Q: How many years ago did you ask from them?
A: Immediately after the death of their father.
Q: That was some 20 years ago?
A: I do not know how many years ago.
Q: And during all that span of more than 20 years ago you
did not file any action to recover your share on the land in
question?
A: No sir, it was only this time . 12
For title to prescribe in favor of the co-owner, however,
there must be a clear showing that he has repudiated the
claims of the other co-owners and that they have been
categorically advised of the exclusive claim he is making to
the property in question. It is only when such unequivocal
notice has been given that the period of prescription will
begin to run against the other co-owners and ultimately
divest them of their own title if they do not seasonably
defend it. 13
Adverse possession requires the concurrence of the
following circumstances:
1. That the trustee has performed unequivocal acts
amounting to an ouster of the cestui que trust;
2. That such positive acts of repudiation had been made
known to the cestui que trust; and
3. That the evidence thereon should be clear and
conclusive. 14
On the basis of the evidence presented by the parties, the
Court is not convinced that the above requirements have
been satisfied. Although there are admittedly some
precedents to the contrary, it would appear that the weight
of authority requires a categorical and final rejection of the
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co-owners' claim, usually manifested by a formal legal

action, to make the prescriptive period start to run against
the claimant. Thus
Filing by a trustee of an action in court against the trustor to
quiet title to property, or for recovery of ownership thereof,
held in possession by the former, may constitute an act of
repudiation of the trust reposed on him by the latter. 15
The issuance of the certificate of title would constitute an
open and clear repudiation of any trust, and the lapse of
more than 20 years, open and adverse possession as owner
would certainly suffice to vest title by prescription. 16
An action for the reconveyance of land based on implied or
constructive trust prescribes within 10 years. And it is from
the date of the issuance of such title that the effective
assertion of adverse title for purposes of the statute of
limitation is counted. 17
The prescriptive period may only be counted from the time
petitioners repudiated the trust relation in 1956 upon the
filing of the complaint for recovery of possession against
private respondents so that the counterclaim of the private
respondents contained in their amended answer wherein
they asserted absolute ownership of the disputed realty by
reason of the continuous and adverse possession of the
same is well within the 10-year prescriptive period. 18
There is clear repudiation of a trust when one who is an
apparent administrator of property causes the cancellation
of the title thereto in the name of the apparent beneficiaries
and gets a new certificate of title in his own name. 19
It is only when the defendants, alleged co-owners of the
property in question, executed a deed of partition and on
the strength thereof obtained the cancellation of the title in
the name of their predecessor and the issuance of a new
one wherein they appear as the new owners of a definite
area each, thereby in effect denying or repudiating the
ownership of one of the plaintiffs over his alleged share in
the entire lot, that the statute of limitations started to run
for the purposes of the action instituted by the latter

seeking a declaration of the existence of the co-ownership

and of their rights thereunder. 20
The established evidence clearly shows that the subject land
was inherited by the petitioners and the private respondent
as co-heirs of their common ancestor, Leon Hilario, whose
possession they continued to acquire prescriptive title over
the property. That possession was originally in the name of
all the heirs, including Teodora Garcia, who in fact had been
assured by Tomas Pangan, the petitioners' father, that she
would get the share to which she was entitled. The
petitioners have not proved that their possession excluded
their co-owner and aunt or that they derived their title from
a separate conveyance to them of the property by Leon
Hilario. Parenthetically, such a conveyance, if it existed,
would be questionable as it might have deprived Leon's
other children of their legitime. In any case, the petitioners
appear to have arrogated the entire property to themselves
upon their father's death sometime in 1942 or at the latest
in 1965 when they sought to register the land in their names
to the exclusion of Teodora Garcia. The question is, Did such
an act begin the period of extinctive prescription against the
private respondent?
Manifestly, the petitioners have acted in bad faith in denying
their aunt and co-heir her legal share to the property they
had all inherited from Leon Hilario through their respective
parents. This is regrettable as Teodora Garcia is their
father's first cousin who apparently trusted him and, indeed,
relied on his promise that her share would be protected.
Tomas Pangan presumably was sincere in this assurance,
but it was unfortunately not honored by his children upon
his death for they soon dismissed out of hand Teodora
Garcia's claim to the subject property.
In cases where there is a clear showing of imposition and
improper motives, the courts must be vigilant in the
protection of the rights of the exploited. 21 So said the
respondent court, and we agree, We note that the private
respondent "is a poor and ignorant 62-year old widow" *
whose misplaced trust in her nephews and nieces is being
used now precisely to defeat her claim to the share that she
believes is rightfully hers. It is a sorry spectacle, indeed, to
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see her own close kin longing up on her, so to speak, to

deprive her of her small heritage, and in her old age at that.
With all this in mind, we affirm the finding of the respondent
court that there was no adequate notice by the petitioners
to the private respondent of the rejection of her claim to her
share in the subject property. Noticeably absent here is a
categorical assertion by the petitioners of their exclusive
right to the entire property that barred her own claim of
ownership of one-half thereof nor is there any explanation
as to why they said she had no right to a share. If this
trusting woman did not immediately take legal action to
protect her rights, it was simply because of forbearance
toward her nephews and nieces, let alone the fact that there
was really no cases belli as yet that required her to act
decisively. That legal provocation arose only when the
petitioners commenced the registration proceedings in
1965, and it was from that time she was required to act, as
she did, to protect her interests.
In an earlier case 22 we stressed that this Court is not only
a court of law but also of justice. Faced with a choice
between a decision that will serve justice and another that
will deny it because of a too strict interpretation of the law,
we must resolve in favor of the former, for the ultimate end
of the law is justice. Bonus judex secundum aequum at
bonum judicat stricto juri praefert. 23 This is a wise maxim
we will follow here in ruling for the deprived and ignorant
old widow.
WHEREFORE, the petition is DENIED and the challenged
decision AFFIRMED in full, with costs against the petitioners.
It is so ordered.
Narvasa, Grio-Aquino and Medialdea, JJ., concur.
Separate Opinions
GANCAYCO, J., dissenting:
As private respondent admitted that petitioners verbally
repudiated her claim as co-owner of the property, it was
effectively an unequivocal notice amounting to an ouster of
the cestui que trust and the period of prescription began to

run since then. It is not required that such a repudiation

should be through a formal legal action. I, therefore vote to
grant the petition by reversing and setting aside the
decision of respondent court and its resoluttion denying the
motion for reconsideration thereof, and reinstating the order
of March 31, 1966 of the trial court.

Separate Opinions
GANCAYCO, J., dissenting:
As private respondent admitted that petitioners verbally
repudiated her claim as co-owner of the property, it was
effectively an unequivocal notice amounting to an ouster of
the cestui que trust and the period of prescription began to
run since then. It is not required that such a repudiation
should be through a formal legal action. I, therefore vote to
grant the petition by reversing and setting aside the
decision of respondent court and its resoluttion denying the
motion for reconsideration thereof, and reinstating the order
of March 31, 1966 of the trial court.
G.R. No. 136803

June 16, 2000

EUSTAQUIO MALLILIN, JR., petitioner,

vs.
MA. ELVIRA CASTILLO, respondent.
MENDOZA, J.:
This is a petition for review of the amended decision1 of the
Court of Appeals dated May 7, 1998 in CA G.R. CV No. 48443
granting respondent's motion for reconsideration of its
decision dated November 7, 1996, and of the resolution
dated December 21, 1998 denying petitioner's motion for
reconsideration.
The factual and procedural antecedents are as follows:
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On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a

complaint2 for "Partition and/or Payment of Co-Ownership
Share, Accounting and Damages" against respondent Ma.
Elvira Castillo. The complaint, docketed as Civil Case No. 93656 at the Regional Trial Court in Makati City, alleged that
petitioner and respondent, both married and with children,
but separated from their respective spouses, cohabited after
a brief courtship sometime in 1979 while their respective
marriages still subsisted. During their union, they set up the
Superfreight Customs Brokerage Corporation, with petitioner
as president and chairman of the board of directors, and
respondent as vice-president and treasurer. The business
flourished and petitioner and respondent acquired real and
personal properties which were registered solely in
respondent's name. In 1992, due to irreconcilable
differences, the couple separated. Petitioner demanded from
respondent his share in the subject properties, but
respondent refused alleging that said properties had been
registered solely in her name.
In her Amended Answer,3 respondent admitted that she
engaged in the customs brokerage business with petitioner
but alleged that the Superfreight Customs Brokerage
Corporation was organized with other individuals and duly
registered with the Securities and Exchange Commission in
1987. She denied that she and petitioner lived as husband
and wife because the fact was that they were still legally
married to their respective spouses. She claimed to be the
exclusive owner of all real personal properties involved in
petitioner's action for partition on the ground that they were
acquired entirely out of her own money and registered
solely in her name.
On November 25, 1994, respondent filed a Motion for
Summary Judgment,4 in accordance with Rule 34 of the
Rules of Court.5 She contended that summary judgment
was proper, because the issues raised in the pleadings were
sham and not genuine, to wit:
A.
The main issue is Can plaintiff validly claim the partition
and/or payment of co-ownership share, accounting and
damages, considering that plaintiff and defendant are

admittedly both married to their respective spouses under

still valid and subsisting marriages, even assuming as
claimed by plaintiff, that they lived together as husband and
wife without benefit of marriage? In other words, can the
parties be considered as co-owners of the properties, under
the law, considering the present status of the parties as
both married and incapable of marrying each other, even
assuming that they lived together as husband and wife (?)
B.
As a collateral issue, can the plaintiff be considered as an
unregistered co-owner of the real properties under the
Transfer Certificates of Title duly registered solely in the
name of defendant Ma. Elvira Castillo? This issue is also true
as far as the motor vehicles in question are concerned which
are also registered in the name of defendant.6
On the first point, respondent contended that even if she
and petitioner actually cohabited, petitioner could not
validly claim a part of the subject real and personal
properties because Art. 144 of the Civil Code, which
provides that the rules on co-ownership shall govern the
properties acquired by a man and a woman living together
as husband and wife but not married, or under a marriage
which is void ab initio, applies only if the parties are not in
any way incapacitated to contract marriage.7 In the parties'
case, their union suffered the legal impediment of a prior
subsisting marriage. Thus, the question of fact being raised
by petitioner, i.e., whether they lived together as husband
and wife, was irrelevant as no co-ownership could exist
between them.
As to the second issue, respondent maintained that
petitioner cannot be considered an unregistered co-owner of
the subject properties on the ground that, since titles to the
land are solely in her name, to grant petitioner's prayer
would be to allow a collateral attack on the validity of such
titles.
Petitioner opposed respondent's Motion for Summary
Judgment.8 He contended that the case presented genuine
factual issues and that Art. 144 of the Civil Code had been
repealed by the Family Code which now allows, under Art.
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148, a limited co-ownership even though a man and a

woman living together are not capacitated to marry each
other. Petitioner also asserted that an implied trust was
constituted when he and respondent agreed to register the
properties solely in the latter's name although the same
were acquired out of the profits made from their brokerage
business. Petitioner invoked the following provisions of the
Civil Code:
Art. 1452. If two or more persons agree to purchase
property and by common consent the legal title is taken in
the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion to
the interest of each.
Art. 1453. When the property is conveyed to a person in
reliance upon his declared intention to hold it for, or transfer
it to another grantor, there is an implied trust in favor of the
person whose benefit is contemplated.
On January 30, 1995, the trial court rendered its decision9
granting respondent's motion for summary judgment. It
ruled that an examination of the pleadings shows that the
issues involved were purely legal. The trial court also
sustained respondent's contention that petitioner's action
for partition amounted to a collateral attack on the validity
of the certificates of title covering the subject properties. It
held that even if the parties really had cohabited, the action
for partition could not be allowed because an action for
partition among co-owners ceases to be so and becomes
one for title if the defendant, as in the present case, alleges
exclusive ownership of the properties in question. For these
reasons, the trial court dismissed Civil Case No. 93-656.
On appeals, the Court of Appeals on November 7, 1996,
ordered the case remanded to the court of origin for trial on
the merits. It cited the decision in Roque v. Intermediate
Appellate Court 10 to the effect that an action for partition is
at once an action for declaration of co-ownership and for
segregation and conveyance of a determinate portion of the
properties involved. If the defendant asserts exclusive title
over the property, the action for partition should not be
dismissed. Rather, the court should resolve the case and if

the plaintiff is unable to sustain his claimed status as a coowner, the court should dismiss the action, not because the
wrong remedy was availed of, but because no basis exists
for requiring the defendant to submit to partition. Resolving
the issue whether petitioner's action for partition was a
collateral attack on the validity of the certificates of title, the
Court of Appeals held that since petitioner sought to compel
respondent to execute documents necessary to effect
transfer of what he claimed was his share, petitioner was
not actually attacking the validity of the titles but in fact,
recognized their validity. Finally, the appellate court upheld
petitioner's position that Art. 144 of the Civil Code had been
repealed by Art. 148 of the Family Code.
Respondent moved for reconsideration of the decision of
Court of Appeals. On May 7, 1998, nearly two years after its
first decision, the Court of Appeals granted respondent's
motion and reconsidered its prior decision. In its decision
now challenged in the present petition, it held
Prefatorily, and to better clarify the controversy on whether
this suit is a collateral attack on the titles in issue, it must be
underscored that plaintiff-appellant alleged in his complaint
that all the nine (9) titles are registered in the name of
defendant-appellee, Ma. Elvira T. Castillo, except one which
appears in the name of Eloisa Castillo (see par. 9,
Complaint). However, a verification of the annexes of such
initiatory pleading shows some discrepancies, to wit:
1. TCT No. 149046 (Annex A) = Elvira T. Castillo, single
2. TCT No. 168208 (Annex B) = do
3. TCT No. 37046 (Annex C) = do
4. TCT No. 37047 (Annex D) = do
5. TCT No. 37048 (Annex E) = do
6. TCT No. 30368 (Annex F) = Steelhaus Realty & Dev. Corp.
7. TCT No. 30369 (Annex G) = do
8. TCT No. 30371 (Annex F) = do
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9. TCT No. (92323) 67881 (Annex I) = Eloisa Castillo

In this action, plaintiff-appellant seeks to be declared as 1/2
co-owner of the real properties covered by the above listed
titles and eventually for their partition [par. (a), Prayer; p. 4
Records]. Notably, in order to achieve such prayer for a joint
co-ownership declaration, it is unavoidable that the
individual titles involved be altered, changed, cancelled or
modified to include therein the name of the appellee as a
registered 1/2 co-owner. Yet, no cause of action or even a
prayer is contained filed. Manifestly, absent any cause or
prayer for the alteration, cancellation, modification or
changing of the titles involved, the desired declaration of coownership and eventual partition will utterly be an indirect
or collateral attack on the subject titled in this suit.
It is here that We fell into error, such that, if not rectified will
surely lead to a procedural lapse and a possible injustice.
Well settled is the rules that a certificate of title cannot be
altered, modified or cancelled except in a direct proceeding
in accordance with law.
In this jurisdiction, the remedy of the landowner whose
property has been wrongfully or erroneously registered in
another name is, after one year from the date of the decree,
not to set aside the decree, but respecting it as
incontrovertible and no longer open to review, to bring an
action for reconveyance or, if the property had passed into
the hands of an innocent purchaser for value, for damages.
Verily, plaintiff-appellant should have first pursued such
remedy or any other relief directly attacking the subject
titles before instituting the present partition suit. Apropos,
the case at bench appears to have been prematurely filed.
Lastly, to grant the partition prayed for by the appellant will
in effect rule and decide against the properties registered in
the names of Steelhouse Realty and Development
Corporation and Eloisa Castillo, who are not parties in the
case. To allow this to happen will surely result to injustice
and denial of due process of law. . . . 11

Petitioner moved for reconsideration but his motion was

denied by the Court of Appeals in its resolution dated
December 21, 1998. Hence this petition.
Petitioner contends that: (1) the Court of Appeals, in its first
decision of November 7, 1996, was correct in applying the
Roque ruling and in rejecting respondent's claim that she
was the sole owner of the subject properties and that the
partition suit was a collateral attack on the titles; (2) the
Court of Appeals correctly rules in its first decision that Art.
148 of the Family Code governs the co-ownership between
the parties, hence, the complaint for partition is proper; (3)
with respect to the properties registered in the name of
Steelhouse Realty, respondent admitted ownership thereof
and, at the very least, these properties could simply be
excluded and the partition limited to the remaining real and
personal properties; and (4) the Court of Appeals erred in
not holding that under the Civil Code, there is an implied
trust in his favor. 12
The issue in this case is really whether summary judgment,
in accordance with Rule 35 of the Rules of Court, is proper.
We rule in the negative.
First. Rule 35, 3 of the Rules of Court provides that
summary judgment is proper only when, based on the
pleadings, depositions, and admissions on file, and after
summary hearing, it is shown that except as to the amount
of damages, there is no veritable issue regarding any
material fact in the action and the movant is entitled to
judgment as a matter of law. 1 Conversely, where the
pleadings tender a genuine issue, i.e., an issue of fact the
resolution of which calls for the presentation of evidence, as
distinguished from an issue which is sham, fictitious,
contrived, set-up in bad faith, or patently unsubstantial,
summary judgment is not proper. 14
In the present case, we are convinced that genuine issues
exist. Petitioner anchors his claim of co-ownership on two
factual grounds: first, that said properties were acquired by
him and respondent during their union from 1979 to 1992
from profits derived from their brokerage business; and
second, that said properties were registered solely in
respondent's name only because they agreed to that
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arrangement, thereby giving rise to an implied trust in

accordance with Art. 1452 and Art. 1453 of the Civil Code.
These allegations are denied by respondent. She denies that
she and petitioner lived together as husband and wife. She
also claims that the properties in question were acquired
solely by her with her own money and resources. With such
conflicting positions, the only way to ascertain the truth is
obviously through the presentation of evidence by the
parties.
The trial court ruled that it is immaterial whether the parties
actually lived together as husband and wife because Art.
144 of the Civil Code can not be made to apply to them as
they were both incapacitated to marry each other. Hence, it
was impossible for a co-ownership to exist between them.
We disagree.
Art. 144 of the Civil Code provides:
When a man and a woman live together as husband and
wife, but they are not married, or their marriage is void from
the beginning, the property acquired by either or both of
them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership.
This provision of the Civil Code, applies only to cases in
which a man and a woman live together as husband and
wife without the benefit of marriage provided they are not
incapacitated or are without impediment to marry each
other, 15 or in which the marriage is void ab initio, provided
it is not bigamous. Art. 144, therefore, does not cover
parties living in an adulterous relationship. However, Art.
148 of the Family Code now provides for a limited coownership in cases where the parties in union are
incapacitated to marry each other. It states:
In cases of cohabitation not falling under the preceding
article, 16 only the properties acquired by both of the
parties through their actual joint contribution of money,
property or industry shall be owned by them in common in
proportion to their respective contributions. In the absence
of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The same

rule and presumption shall apply to joint deposits of money

and evidences of credits.
If one of the parties is validly married to another, his or her
share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in the
manner provided in the last paragraph of the preceding
article.
The foregoing rules on forfeiture shall likewise apply even if
both parties are in bad faith.
It was error for the trial court to rule that, because the
parties in this case were not capacitated to marry each
other at the time that they were alleged to have been living
together, they could not have owned properties in common.
The Family Code, in addition to providing that a coownership exists between a man and a woman who live
together as husband and wife without the benefit of
marriage, likewise provides that, if the parties are
incapacitated to marry each other, properties acquired by
them through their joint contribution of money, property or
industry shall be owned by them in common in proportion to
their contributions which, in the absence of proof to the
contrary, is presumed to be equal. There is thus coownership eventhough the couple are not capacitated to
marry each other.
In this case, there may be a co-ownership between the
parties herein. Consequently, whether petitioner and
respondent cohabited and whether the properties involved
in the case are part of the alleged co-ownership are genuine
and material. All but one of the properties involved were
alleged to have been acquired after the Family Code took
effect on August 3, 1988. With respect to the property
acquired before the Family Code took effect if it is shown
that it was really acquired under the regime of the Civil
Code, then it should be excluded.
Petitioner also alleged in paragraph 7 of his complaint that:

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Due to the effective management, hardwork and enterprise

of plaintiff assisted by defendant, their customs brokerage
business grew and out of the profits therefrom, the parties
acquired real and personal properties which were, upon
agreement of the parties, listed and registered in
defendant's name with plaintiff as the unregistered coowner of all said properties. 17
On the basis of this, he contends that an implied trust
existed pursuant to Art. 1452 of the Civil Code which
provides that "(I)f two or more persons agree to purchase
property and by common consent the legal title is taken in
the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion to
the interest of each." We do not think this is correct. The
legal relation of the parties is already specifically covered by
Art. 148 of the Family Code under which all the properties
acquired by the parties out of their actual joint contributions
of money, property or industry shall constitute a coownership. Co-ownership is a form of trust and every coowner is a trustee for the other. 18 The provisions of Art.
1452 and Art. 1453 of the Civil Code, then are no longer
material since a trust relation already inheres in a coownership which is governed under Title III, Book II of the
Civil Code.
Second. The trial court likewise dismissed petitioner's action
on the ground that the same amounted to a collateral attack
on the certificates of title involved. As already noted, at first,
the Court of Appeals ruled that petitioner's action does not
challenge the validity of respondent's titles. However, on
reconsideration, it reversed itself and affirmed the trial
court. It noted that petitioner's complaint failed to include a
prayer for the alteration, cancellation, modification, or
changing of the titles involved. Absent such prayer, the
appellate court ruled that a declaration of co-ownership and
eventual partition would involve an indirect or collateral
attack on the titles. We disagree.
A torrens title, as a rule, is conclusive and indefeasible.
Proceeding from this, P.D. No. 1529, 19 48 provides that a
certificate of title shall not be subject to collateral attack
and can not be altered, modified, or canceled except in a
direct proceeding. When is an action an attack on a title? It

is when the object of the action or proceeding is to nullify

the title, and thus challenge the judgment pursuant to which
the title was decreed. The attack is direct when the object of
an action or proceeding is to annul or set aside such
judgment, or enjoin its enforcement. On the other hand, the
attack is indirect or collateral when, in an action to obtain a
different relief, an attack on the judgment is nevertheless
made as an incident thereof. 20
In his complaint for partition, consistent with our ruling in
Roque regarding the nature of an action for partition,
petitioner seeks first, a declaration that he is a co-owner of
the subject properties; and second, the conveyance of his
lawful shares. He does not attack respondent's titles.
Petitioner alleges no fraud, mistake, or any other irregularity
that would justify a review of the registration decree in
respondent's favor. His theory is that although the subject
properties were registered solely in respondent's name, but
since by agreement between them as well as under the
Family Code, he is co-owner of these properties and as such
is entitled to the conveyance of his shares. On the premise
that he is a co-owner, he can validly seek the partition of the
properties in co-ownership and the conveyance to him of his
share.
Thus, in Guevara v. Guevara, 21 in which a parcel of land
bequeathed in a last will and testament was registered in
the name of only one of the heirs, with the understanding
that he would deliver to the others their shares after the
debts of the original owner had been paid, this Court ruled
that notwithstanding the registration of the land in the name
of only one of the heirs, the other heirs can claim their
shares in "such action, judicial or extrajudicial, as may be
necessary to partition the estate of the testator." 22
Third. The Court of Appeals also reversed its first decision on
the ground that to order partition will, in effect, rule and
decide against Steelhouse Realty Development Corporation
and Eloisa Castillo, both strangers to the present case, as to
the properties registered in their names. This reasoning,
however, ignores the fact that the majority of the properties
involved in the present case are registered in respondent's
name, over which petitioner claims rights as a co-owner.
Besides, other than the real properties, petitioner also seeks
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partition of a substantial amount of personal properties

consisting of motor vehicles and several pieces of jewelry.
By dismissing petitioner's complaint for partition on grounds
of due process and equity, the appellate court unwittingly
denied petitioner his right to prove ownership over the
claimed real and personal properties. The dismissal of
petitioner's complaint is unjustified since both ends may be
amply served by simply excluding from the action for
partition the properties registered in the name of Steelhouse
Realty and Eloisa Castillo.
WHEREFORE, the amended decision of the Court of Appeals,
dated May 7, 1998, is REVERSED and the case is REMANDED
to the Regional Trial Court, Branch 59, Makati City for further
proceedings on the merits.
G.R. No. L-44546 January 29, 1988
RUSTICO ADILLE, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO,
TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO and
SANTIAGO ASEJO, respondents.

SARMIENTO, J.:
In issue herein are property and property rights, a familiar
subject of controversy and a wellspring of enormous conflict
that has led not only to protracted legal entanglements but
to even more bitter consequences, like strained
relationships and even the forfeiture of lives. It is a question
that likewise reflects a tragic commentary on prevailing
social and cultural values and institutions, where, as one
observer notes, wealth and its accumulation are the basis of
self-fulfillment and where property is held as sacred as life
itself. "It is in the defense of his property," says this modern
thinker, that one "will mobilize his deepest protective
devices, and anybody that threatens his possessions will
arouse his most passionate enmity." 1
The task of this Court, however, is not to judge the wisdom
of values; the burden of reconstructing the social order is

shouldered by the political leadership-and the people

themselves.
The parties have come to this Court for relief and
accordingly, our responsibility is to give them that relief
pursuant to the decree of law.
The antecedent facts are quoted from the decision 2
appealed from:
xxx xxx xxx
... [T]he land in question Lot 14694 of Cadastral Survey of
Albay located in Legaspi City with an area of some 11,325
sq. m. originally belonged to one Felisa Alzul as her own
private property; she married twice in her lifetime; the first,
with one Bernabe Adille, with whom she had as an only
child, herein defendant Rustico Adille; in her second
marriage with one Procopio Asejo, her children were herein
plaintiffs, now, sometime in 1939, said Felisa sold the
property in pacto de retro to certain 3rd persons, period of
repurchase being 3 years, but she died in 1942 without
being able to redeem and after her death, but during the
period of redemption, herein defendant repurchased, by
himself alone, and after that, he executed a deed of extrajudicial partition representing himself to be the only heir and
child of his mother Felisa with the consequence that he was
able to secure title in his name alone also, so that OCT. No.
21137 in the name of his mother was transferred to his
name, that was in 1955; that was why after some efforts of
compromise had failed, his half-brothers and sisters, herein
plaintiffs, filed present case for partition with accounting on
the position that he was only a trustee on an implied trust
when he redeemed,-and this is the evidence, but as it also
turned out that one of plaintiffs, Emeteria Asejo was
occupying a portion, defendant counterclaimed for her to
vacate that,
Well then, after hearing the evidence, trial Judge sustained
defendant in his position that he was and became absolute
owner, he was not a trustee, and therefore, dismissed case
and also condemned plaintiff occupant, Emeteria to vacate;
it is because of this that plaintiffs have come here and
contend that trial court erred in:
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I. ... declaring the defendant absolute owner of the property;

II. ... not ordering the partition of the property; and
III. ... ordering one of the plaintiffs who is in possession of
the portion of the property to vacate the land, p. 1
Appellant's brief.
which can be reduced to simple question of whether or not
on the basis of evidence and law, judgment appealed from
should be maintained. 3
xxx xxx xxx
The respondent Court of appeals reversed the trial Court, 4
and ruled for the plaintiffs-appellants, the private
respondents herein. The petitioner now appeals, by way of
certiorari, from the Court's decision.
We required the private respondents to file a comment and
thereafter, having given due course to the petition, directed
the parties to file their briefs. Only the petitioner, however,
filed a brief, and the private respondents having failed to file
one, we declared the case submitted for decision.
The petition raises a purely legal issue: May a co-owner
acquire exclusive ownership over the property held in
common?
Essentially, it is the petitioner's contention that the property
subject of dispute devolved upon him upon the failure of his
co-heirs to join him in its redemption within the period
required by law. He relies on the provisions of Article 1515 of
the old Civil Article 1613 of the present Code, giving the
vendee a retro the right to demand redemption of the entire
property.
There is no merit in this petition.
The right of repurchase may be exercised by a co-owner
with aspect to his share alone. 5 While the records show
that the petitioner redeemed the property in its entirety,
shouldering the expenses therefor, that did not make him

the owner of all of it. In other words, it did not put to end the
existing state of co-ownership.
Necessary expenses may be incurred by one co-owner,
subject to his right to collect reimbursement from the
remaining co-owners. 6 There is no doubt that redemption
of property entails a necessary expense. Under the Civil
Code:
ART. 488. Each co-owner shall have a right to compel the
other co-owners to contribute to the expenses of
preservation of the thing or right owned in common and to
the taxes. Any one of the latter may exempt himself from
this obligation by renouncing so much of his undivided
interest as may be equivalent to his share of the expenses
and taxes. No such waiver shall be made if it is prejudicial to
the co-ownership.
The result is that the property remains to be in a condition
of co-ownership. While a vendee a retro, under Article 1613
of the Code, "may not be compelled to consent to a partial
redemption," the redemption by one co-heir or co-owner of
the property in its totality does not vest in him ownership
over it. Failure on the part of all the co-owners to redeem it
entitles the vendee a retro to retain the property and
consolidate title thereto in his name. 7 But the provision
does not give to the redeeming co-owner the right to the
entire property. It does not provide for a mode of
terminating a co-ownership.
Neither does the fact that the petitioner had succeeded in
securing title over the parcel in his name terminate the
existing co-ownership. While his half-brothers and sisters
are, as we said, liable to him for reimbursement as and for
their shares in redemption expenses, he cannot claim
exclusive right to the property owned in common.
Registration of property is not a means of acquiring
ownership. It operates as a mere notice of existing title, that
is, if there is one.
The petitioner must then be said to be a trustee of the
property on behalf of the private respondents. The Civil
Code states:
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ART. 1456. If property is acquired through mistake or fraud,

the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from
whom the property comes.
We agree with the respondent Court of Appeals that fraud
attended the registration of the property. The petitioner's
pretension that he was the sole heir to the land in the
affidavit of extrajudicial settlement he executed preliminary
to the registration thereof betrays a clear effort on his part
to defraud his brothers and sisters and to exercise sole
dominion over the property. The aforequoted provision
therefore applies.
It is the view of the respondent Court that the petitioner, in
taking over the property, did so either on behalf of his coheirs, in which event, he had constituted himself a
negotiorum gestor under Article 2144 of the Civil Code, or
for his exclusive benefit, in which case, he is guilty of fraud,
and must act as trustee, the private respondents being the
beneficiaries, under the Article 1456. The evidence, of
course, points to the second alternative the petitioner
having asserted claims of exclusive ownership over the
property and having acted in fraud of his co-heirs. He cannot
therefore be said to have assume the mere management of
the property abandoned by his co-heirs, the situation Article
2144 of the Code contemplates. In any case, as the
respondent Court itself affirms, the result would be the same
whether it is one or the other. The petitioner would remain
liable to the Private respondents, his co-heirs.
This Court is not unaware of the well-established principle
that prescription bars any demand on property (owned in
common) held by another (co-owner) following the required
number of years. In that event, the party in possession
acquires title to the property and the state of co-ownership
is ended . 8 In the case at bar, the property was registered
in 1955 by the petitioner, solely in his name, while the claim
of the private respondents was presented in 1974. Has
prescription then, set in?
We hold in the negative. Prescription, as a mode of
terminating a relation of co-ownership, must have been
preceded by repudiation (of the co-ownership). The act of

repudiation, in turn is subject to certain conditions: (1) a coowner repudiates the co-ownership; (2) such an act of
repudiation is clearly made known to the other co-owners;
(3) the evidence thereon is clear and conclusive, and (4) he
has been in possession through open, continuous, exclusive,
and notorious possession of the property for the period
required by law. 9
The instant case shows that the petitioner had not complied
with these requisites. We are not convinced that he had
repudiated the co-ownership; on the contrary, he had
deliberately kept the private respondents in the dark by
feigning sole heirship over the estate under dispute. He
cannot therefore be said to have "made known" his efforts
to deny the co-ownership. Moreover, one of the private
respondents, Emeteria Asejo, is occupying a portion of the
land up to the present, yet, the petitioner has not taken
pains to eject her therefrom. As a matter of fact, he sought
to recover possession of that portion Emeteria is occupying
only as a counterclaim, and only after the private
respondents had first sought judicial relief.
It is true that registration under the Torrens system is
constructive notice of title, 10 but it has likewise been our
holding that the Torrens title does not furnish a shield for
fraud. 11 It is therefore no argument to say that the act of
registration is equivalent to notice of repudiation, assuming
there was one, notwithstanding the long-standing rule that
registration operates as a universal notice of title.
For the same reason, we cannot dismiss the private
respondents' claims commenced in 1974 over the estate
registered in 1955. While actions to enforce a constructive
trust prescribes in ten years, 12 reckoned from the date of
the registration of the property, 13 we, as we said, are not
prepared to count the period from such a date in this case.
We note the petitioner's sub rosa efforts to get hold of the
property exclusively for himself beginning with his
fraudulent misrepresentation in his unilateral affidavit of
extrajudicial settlement that he is "the only heir and child of
his mother Feliza with the consequence that he was able to
secure title in his name also." 14 Accordingly, we hold that
the right of the private respondents commenced from the
time they actually discovered the petitioner's act of
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defraudation. 15 According to the respondent Court of

Appeals, they "came to know [of it] apparently only during
the progress of the litigation." 16 Hence, prescription is not
a bar.
Moreover, and as a rule, prescription is an affirmative
defense that must be pleaded either in a motion to dismiss
or in the answer otherwise it is deemed waived, 17 and
here, the petitioner never raised that defense. 18 There are
recognized exceptions to this rule, but the petitioner has not
shown why they apply.
WHEREFORE, there being no reversible error committed by
the respondent Court of Appeals, the petition is DENIED. The
Decision sought to be reviewed is hereby AFFIRMED in toto.
No pronouncement as to costs.
G.R. No. L-46296 September 24, 1991
EPITACIO DELIMA, PACLANO DELIMA, FIDEL DELIMA,
VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS,
OLIMPIO BACUS and PURIFICACION BACUS, petitioners,
vs.
HON. COURT OF APPEALS, GALILEO DELIMA (deceased),
substituted by his legal heirs, namely: FLAVIANA VDA. DE
DELIMA, LILY D. ARIAS, HELEN NIADAS, ANTONIO DELIMA,
DIONISIO DELIMA, IRENEA DELIMA, ESTER DELIMA AND FELY
DELIMA, respondents.
Gabriel J. Canete for petitioners.
Emilio Lumontad, Jr. for private respondents.

The antecedent facts of the case as found both by the

respondent appellate court and by the trial court are as
follows:
During his lifetime, Lino Delima acquired Lot No. 7758 of the
Talisay-Minglanilla Friar Lands Estate in Cebu by sale on
installments from the government. Lino Delima later died in
1921 leaving as his only heirs three brothers and a sister
namely: Eulalio Delima, Juanita Delima, Galileo Delima and
Vicente Delima. After his death, TCT No. 2744 of the
property in question was issued on August 3, 1953 in the
name of the Legal Heirs of Lino Delima, deceased,
represented by Galileo Delima.
On September 22, 1953, Galileo Delima, now substituted by
respondents, executed an affidavit of "Extra-judicial
Declaration of Heirs." Based on this affidavit, TCT No. 2744
was cancelled and TCT No. 3009 was issued on February
4,1954 in the name of Galileo Delima alone to the exclusion
of the other heirs.
Galileo Delima declared the lot in his name for taxation
purposes and paid the taxes thereon from 1954 to 1965.
On February 29, 1968, petitioners, who are the surviving
heirs of Eulalio and Juanita Delima, filed with the Court of
First Instance of Cebu (now Regional Trial Court) an action
for reconveyance and/or partition of property and for the
annulment of TCT No. 3009 with damages against their
uncles Galileo Delima and Vicente Delima,. Vicente Delima
was joined as party defendant by the petitioners for his
refusal to join the latter in their action.
On January 16, 1970, the trial court rendered a decision in
favor of petitioners, the dispositive portion of which states:

MEDIALDEA, J.:p
This is a petition for review on certiorari of the decision of
the Court of Appeals reversing the trial court's judgment
which declared as null and void the certificate of title in the
name of respondents' predecessor and which ordered the
partition of the disputed lot among the parties as co-owners.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the

following are the declared owners of Lot No. 7758 of the
Talisay-Minglanilla Friar Lands Estate presently covered by
transfer Certificate of Title No. 3009, each sharing a proindiviso share of one-fourth;
1) Vicente Delima (one-fourth)
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2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio

Bacus and Purificacion Bacus (on-fourth);
3) Heirs of Eulalio Delima, namely Epitacio, Pagano, Fidel,
Virgilio and Galileo Jr., all surnamed Delima (one-fourth); and
4) The Heirs of Galileo Delima, namely Flaviana Vda. de
Delima, Lily D. Arias, Helen Niadas and Dionisio, Antonio,
Eotu Irenea, and Fely, all surnamed Delima (one-fourth).
Transfer Certificate of Title No. 3009 is declared null and
void and the Register of Deeds of Cebu is ordered to cancel
the same and issue in lieu thereof another title with the
above heirs as pro-indiviso owners.
After the payment of taxes paid by Galileo Delima since
1958, the heirs of Galileo Delima are ordered to turn a over
to the other heirs their respective shares of the fruits of the
lot in question computed at P170.00 per year up to the
present time with legal (interest).
Within sixty (60) days from receipt of this decision the
parties are ordered to petition the lot in question and the
defendants are directed to immediately turn over possession
of the shares here awarded to the respective heirs.
Defendants are condemned to pay the costs of the suit.
The counterclaim is dismissed.
SO ORDERED. (pp. 54-55, Rollo)
Not satisfied with the decision, respondents appealed to the
Court of Appeals. On May 19, 1977, respondent appellate
court reversed the trial court's decision and upheld the
claim of Galileo Delima that all the other brothers and sister
of Lino Delima, namely Eulalio, Juanita and Vicente, had
already relinquished and waived their rights to the property
in his favor, considering that he (Galileo Delima) alone paid
the remaining balance of the purchase price of the lot and
the realty taxes thereon (p. 26, Rollo).
Hence, this petition was filed with the petitioners alleging
that the Court of Appeals erred:

1) In not holding that the right of a co-heir to demand

partition of inheritance is imprescriptible. If it does, the
defenses of prescription and laches have already been
waived.
2) In disregarding the evidence of the petitioners.(p.13,
Rollo)
The issue to be resolved in the instant case is whether or
not petitioners' action for partition is already barred by the
statutory period provided by law which shall enable Galileo
Delima to perfect his claim of ownership by acquisitive
prescription to the exclusion of petitioners from their shares
in the disputed property. Article 494 of the Civil Code
expressly provides:
Art. 494. No co-owner shall be obliged to remain in the coownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share
is concerned.
Nevertheless, an agreement to keep the thing undivided for
a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which
shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by
law.
No prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership.
As a rule, possession by a co-owner will not be presumed to
be adverse to the others, but will be held to benefit all. It is
understood that the co-owner or co-heir who is in
possession of an inheritance pro-indiviso for himself and in
representation of his co-owners or co-heirs, if, as such
owner, he administers or takes care of the rest thereof with
the obligation of delivering it to his co-owners or co-heirs, is
under the same situation as a depository, a lessee or a
Page 169 of 404

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trustee (Bargayo v. Camumot, 40 Phil, 857; Segura v.

Segura, No. L-29320, September 19, 1988, 165 SCRA 368).
Thus, an action to compel partition may be filed at any time
by any of the co-owners against the actual possessor. In
other words, no prescription shall run in favor of a co-owner
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership (Del Blanco v.
Intermediate Appellate Court, No. 72694, December 1,
1987, 156 SCRA 55).
However, from the moment one of the co-owners claims
that he is the absolute and exclusive owner of the properties
and denies the others any share therein, the question
involved is no longer one of partition but of ownership (De
Castro v. Echarri, 20 Phil. 23; Bargayo v. Camumot, supra;
De los Santos v. Santa Teresa, 44 Phil. 811). In such case,
the imprescriptibility of the action for partition can no longer
be invoked or applied when one of the co-owners has
adversely possessed the property as exclusive owner for a
period sufficient to vest ownership by prescription.
It is settled that possession by a co-owner or co-heir is that
of a trustee. In order that such possession is considered
adverse to the cestui que trust amounting to a repudiation
of the co-ownership, the following elements must concur: 1)
that the trustee has performed unequivocal acts amounting
to an ouster of the cestui que trust; 2) that such positive
acts of repudiation had been made known to the cestui que
trust; and 3) that the evidence thereon should be clear and
conclusive (Valdez v. Olorga, No. L-22571, May 25, 1973, 51
SCRA 71; Pangan v. Court of Appeals, No. L-39299, October
18, 1988, 166 SCRA 375).
We have held that when a co-owner of the property in
question executed a deed of partition and on the strength
thereof obtained the cancellation of the title in the name of
their predecessor and the issuance of a new one wherein he
appears as the new owner of the property, thereby in effect
denying or repudiating the ownership of the other co-owners
over their shares, the statute of limitations started to run for
the purposes of the action instituted by the latter seeking a
declaration of the existence of the co-ownership and of their
rights thereunder (Castillo v. Court of Appeals, No. L-18046,
March 31, 1964, 10 SCRA 549). Since an action for

reconveyance of land based on implied or constructive trust

prescribes after ten (10) years, it is from the date of the
issuance of such title that the effective assertion of adverse
title for purposes of the statute of limitations is counted
(Jaramil v. Court of Appeals, No. L-31858, August 31, 1977,
78 SCRA 420).
Evidence shows that TCT No. 2744 in the name of the legal
heirs of Lino Delima, represented by Galileo Delima, was
cancelled by virtue of an affidavit executed by Galileo
Delima and that on February 4, 1954, Galileo Delima
obtained the issuance of a new title in Ms name numbered
TCT No. 3009 to the exclusion of his co-heirs. The issuance
of this new title constituted an open and clear repudiation of
the trust or co-ownership, and the lapse of ten (10) years of
adverse possession by Galileo Delima from February 4, 1954
was sufficient to vest title in him by prescription. As the
certificate of title was notice to the whole world of his
exclusive title to the land, such rejection was binding on the
other heirs and started as against them the period of
prescription. Hence, when petitioners filed their action for
reconveyance and/or to compel partition on February 29,
1968, such action was already barred by prescription.
Whatever claims the other co-heirs could have validly
asserted before can no longer be invoked by them at this
time.
ACCORDINGLY, the petition is hereby DENIED and the
assailed decision of the Court of Appeals dated May 19,
1977 is AFFIRMED.
G.R. No. L-57062 January 24, 1992
MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners,
vs.
HON. COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN
MARIATEGUI and PAULINA MARIATEGUI, respondents.
Montesa, Albon & Associates for petitioners.
Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs
of the late Maria del Rosario Mariategui.
Tinga, Fuentes & Tagle Firm for private respondents.
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BIDIN, J.:
This is a petition for review on certiorari of the decision * of
the Court of Appeals dated December 24, 1980 in CA-G.R.
No. 61841, entitled "Jacinto Mariategui, et al. v. Maria del
Rosario Mariategui, et al.," reversing the judgment of the
then Court of First Instance of Rizal, Branch VIII ** at Pasig,
Metro Manila.
The undisputed facts are as follows:
Lupo Mariategui died without a will on June 26, 1953 (Brief
for respondents, Rollo, pp. 116; 8). During his lifetime, Lupo
Mariategui contracted three (3) marriages. With his first
wife, Eusebia Montellano, who died on November 8, 1904,
he begot four (4) children, namely: Baldomera, Maria del
Rosario, Urbana and Ireneo. Baldomera died and was
survived by her children named Antero, Rufina, Catalino,
Maria, Gerardo, Virginia and Federico, all surnamed Espina.
Ireneo also died and left a son named Ruperto. With his
second wife, Flaviana Montellano, he begot a daughter
named Cresenciana who was born on May 8, 1910 (Rollo,
Annex "A", p. 36).
Lupo Mariategui and Felipa Velasco (Lupo's third wife) got
married sometime in 1930. They had three children, namely:
Jacinto, born on July 3, 1929, Julian, born on February 16,
1931 and Paulina, born on April 19, 1938. Felipa Velasco
Mariategui died in 1941 (Rollo, Ibid).
At the time of his death, Lupo Mariategui left certain
properties which he acquired when he was still unmarried
(Brief for respondents, Rollo, pp. 116; 4). These properties
are described in the complaint as Lots Nos. 163, 66, 1346
and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39).
On December 2, 1967, Lupo's descendants by his first and
second marriages, namely, Maria del Rosario, Urbana,
Ruperto, Cresencia, all surnamed Mariategui and Antero,
Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all
surnamed Espina, executed a deed of extrajudicial partition

whereby they adjudicated unto themselves Lot No. 163 of

the Muntinglupa Estate. Thereafter, Lot No. 163 was the
subject of a voluntary registration proceedings filed by the
adjudicatees under Act No. 496, and the land registration
court issued a decree ordering the registration of the lot.
Thus, on April 1, 1971, OCT No. 8828 was issued in the
name of the above-mentioned heirs. Subsequently, the
registered owners caused the subdivision of the said lot into
Lots Nos. 163-A to 163-H, for which separate transfer
certificates of title were issued to the respective parties
(Rollo, ibid).
On April 23, 1973, Lupo's children by his third marriage with
Felipa Velasco (Jacinto, Julian and Paulina) filed with the
lower court an amended complaint claiming that Lot No. 163
together with Lots Nos. 669, 1346 and 154 were owned by
their common father, Lupo Mariategui, and that, with the
adjudication of Lot No. 163 to their co-heirs, they (children
of the third marriage) were deprived of their respective
shares in the lots. Plaintiffs pray for partition of the estate of
their deceased father and annulment of the deed of
extrajudicial partition dated December 2, 1967 (Petition,
Rollo, p. 10). Cresencia Mariategui Abas, Flaviana Mariategui
Cabrera and Isabel Santos were impleaded in the complaint
as unwilling defendants as they would not like to join the
suit as plaintiffs although they acknowledged the status and
rights of the plaintiffs and agreed to the partition of the
parcels of land as well as the accounting of their fruits (Ibid.,
Rollo, p. 8; Record on Appeal, p. 4).
The defendants (now petitioners) filed an answer with
counterclaim (Amended Record on Appeal, p. 13).
Thereafter, they filed a motion to dismiss on the grounds of
lack of cause of action and prescription. They specifically
contended that the complaint was one for recognition of
natural children. On August 14, 1974, the motion to dismiss
was denied by the trial court, in an order the dispositive
portion of which reads:
It is therefore the opinion of the Court that Articles 278 and
285 of the Civil Code cited by counsel for the defendants are
of erroneous application to this case. The motion to dismiss
is therefore denied for lack of merit.
Page 171 of 404

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SO ORDERED. (Ibid, p. 37).

However, on February 16, 1977, the complaint as well as
petitioners' counterclaim were dismissed by the trial court,
in its decision stating thus:
The plaintiffs' right to inherit depends upon the
acknowledgment or recognition of their continuous
enjoyment and possession of status of children of their
supposed father. The evidence fails to sustain either
premise, and it is clear that this action cannot be sustained.
(Ibid, Rollo, pp. 67-68)
The plaintiffs elevated the case to the Court of Appeals on
the ground that the trial court committed an error ". . . in
not finding that the parents of the appellants, Lupo
Mariategui and Felipa Velasco (were) lawfully married, and in
holding (that) they (appellants) are not legitimate children of
their said parents, thereby divesting them of their
inheritance . . . " (Rollo, pp. 14-15).
On December 24, 1980, the Court of Appeals rendered a
decision declaring all the children and descendants of Lupo
Mariategui, including appellants Jacinto, Julian and Paulina
(children of the third marriage) as entitled to equal shares in
the estate of Lupo Mariategui; directing the adjudicatees in
the extrajudicial partition of real properties who eventually
acquired transfer certificates of title thereto, to execute
deeds of reconveyance in favor, and for the shares, of
Jacinto, Julian and Paulina provided rights of innocent third
persons are not prejudiced otherwise the said adjudicatees
shall reimburse the said heirs the fair market value of their
shares; and directing all the parties to submit to the lower
court a project of partition in the net estate of Lupo
Mariategui after payment of taxes, other government
charges and outstanding legal obligations.

to demand the partition of the estate of Lupo Mariategui,

and (b) whether or not the private respondents, who
belatedly filed the action for recognition, were able to prove
their successional rights over said estate. The resolution of
these issues hinges, however, on the resolution of the
preliminary matter, i.e., the nature of the complaint filed by
the private respondents.
The complaint alleged, among other things, that "plaintiffs
are the children of the deceased spouses Lupo Mariategui . .
. and Felipa Velasco"; that "during his lifetime, Lupo
Mariategui had repeatedly acknowledged and confirmed
plaintiffs as his children and the latter, in turn, have
continuously enjoyed such status since their birth"; and "on
the basis of their relationship to the deceased Lupo
Mariategui and in accordance with the law on intestate
succession, plaintiffs are entitled to inherit shares in the
foregoing estate (Record on Appeal, pp. 5 & 6). It prayed,
among others, that plaintiffs be declared as children and
heirs of Lupo Mariategui and adjudication in favor of
plaintiffs their lawful shares in the estate of the decedent
(Ibid, p. 10).
A perusal of the entire allegations of the complaint,
however, shows that the action is principally one of
partition. The allegation with respect to the status of the
private respondents was raised only collaterally to assert
their rights in the estate of the deceased. Hence, the Court
of Appeals correctly adopted the settled rule that the nature
of an action filed in court is determined by the facts alleged
in the complaint constituting the cause of action (Republic
vs. Estenzo, 158 SCRA 282 [1988]).

The defendants-appellees filed a motion for reconsideration

of said decision but it was denied for lack of merit. Hence,
this petition which was given due course by the court on
December 7, 1981.

It has been held that, if the relief demanded is not the

proper one which may be granted under the law, it does not
characterize or determine the nature of plaintiffs' action,
and the relief to which plaintiff is entitled based on the facts
alleged by him in his complaint, although it is not the relief
demanded, is what determines the nature of the action (1
Moran, p. 127, 1979 ed., citing Baguioro vs. Barrios, et al.,
77 Phil. 120).

The petitioners submit to the Court the following issues: (a)

whether or not prescription barred private respondents' right

With respect to the legal basis of private respondents'

demand for partition of the estate of Lupo Mariategui, the
Page 172 of 404

LAW ON PROPERTY

Court of Appeals aptly held that the private respondents are

legitimate children of the deceased.
Lupo Mariategui and Felipa Velasco were alleged to have
been lawfully married in or about 1930. This fact is based on
the declaration communicated by Lupo Mariategui to Jacinto
who testified that "when (his) father was still living, he was
able to mention to (him) that he and (his) mother were able
to get married before a Justice of the Peace of Taguig, Rizal."
The spouses deported themselves as husband and wife, and
were known in the community to be such. Although no
marriage certificate was introduced to this effect, no
evidence was likewise offered to controvert these facts.
Moreover, the mere fact that no record of the marriage
exists does not invalidate the marriage, provided all
requisites for its validity are present (People vs. Borromeo,
133 SCRA 106 [1984]).
Under these circumstances, a marriage may be presumed to
have taken place between Lupo and Felipa. The laws
presume that a man and a woman, deporting themselves as
husband and wife, have entered into a lawful contract of
marriage; that a child born in lawful wedlock, there being no
divorce, absolute or from bed and board is legitimate; and
that things have happened according to the ordinary course
of nature and the ordinary habits of life (Section 5 (z), (bb),
(cc), Rule 131, Rules of Court; Corpus v. Corpus, 85 SCRA
567 [1978]; Saurnaba v. Workmen's Compensation, 85 SCRA
502 [1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA
230 [1985]; Reyes v. Court of Appeals, 135 SCRA 439
[1985]).
Courts look upon the presumption of marriage with great
favor as it is founded on the following rationale:
The basis of human society throughout the civilized world is
that of marriage. Marriage in this jurisdiction is not only a
civil contract, but it is a new relation, an institution in the
maintenance of which the public is deeply interested.
Consequently, every intendment of the law leans toward
legalizing matrimony. Persons dwelling together in apparent
matrimony are presumed, in the absence of any
counterpresumption or evidence special to that case, to be
in fact married. The reason is that such is the common order

of society and if the parties were not what they thus hold
themselves out as being, they would be living in the
constant violation of decency and of
law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922]
quoted in Alavado vs. City Government of Tacloban, 139
SCRA 230 [1985]).
So much so that once a man and a woman have lived as
husband and wife and such relationship is not denied nor
contradicted, the presumption of their being married must
be admitted as a fact (Alavado v. City Gov't. of Tacloban,
supra).
The Civil Code provides for the manner under which
legitimate filiation may be proven. However, considering the
effectivity of the Family Code of the Philippines, the case at
bar must be decided under a new if not entirely dissimilar
set of rules because the parties have been overtaken by
events, to use the popular phrase (Uyguangco vs. Court of
Appeals, G.R. No. 76873, October 26, 1989). Thus, under
Title VI of the Family Code, there are only two classes of
children legitimate and illegitimate. The fine distinctions
among various types of illegitimate children have been
eliminated (Castro vs. Court of Appeals, 173 SCRA 656
[1989]).
Article 172 of the said Code provides that the filiation of
legitimate children may be established by the record of birth
appearing in the civil register or a final judgment or by the
open and continuous possession of the status of a legitimate
child.
Evidence on record proves the legitimate filiation of the
private respondents. Jacinto's birth certificate is a record of
birth referred to in the said article. Again, no evidence which
tends to disprove facts contained therein was adduced
before the lower court. In the case of the two other private
respondents, Julian and Paulina, they may not have
presented in evidence any of the documents required by
Article 172 but they continuously enjoyed the status of
children of Lupo Mariategui in the same manner as their
brother Jacinto.

Page 173 of 404

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While the trial court found Jacinto's testimonies to be

inconsequential and lacking in substance as to certain dates
and names of relatives with whom their family resided,
these are but minor details. The nagging fact is that for a
considerable length of time and despite the death of Felipa
in 1941, the private respondents and Lupo lived together
until Lupo's death in 1953. It should be noted that even the
trial court mentioned in its decision the admission made in
the affidavit of Cresenciana Mariategui Abas, one of the
petitioners herein, that " . . . Jacinto, Julian and Paulina
Mariategui ay pawang mga kapatid ko sa
ama . . ." (Exh. M, Record on Appeal, pp. 65-66).
In view of the foregoing, there can be no other conclusion
than that private respondents are legitimate children and
heirs of Lupo Mariategui and therefore, the time limitation
prescribed in Article 285 for filing an action for recognition is
inapplicable to this case. Corollarily, prescription does not
run against private respondents with respect to the filing of
the action for partition so long as the heirs for whose benefit
prescription is invoked, have not expressly or impliedly
repudiated the co-ownership. In other words, prescription of
an action for partition does not lie except when the coownership is properly repudiated by the co-owner (Del
Banco vs. Intermediate Appellate Court, 156 SCRA 55 [1987]
citing Jardin vs. Hollasco, 117 SCRA 532 [1982]).
Otherwise stated, a co-owner cannot acquire by prescription
the share of the other co-owners absent a clear repudiation
of co-ownership duly communicated to the other co-owners
(Mariano vs. De Vega, 148 SCRA 342 [1987]). Furthermore,
an action to demand partition is imprescriptible and cannot
be barred by laches (Del Banco vs. IAC, 156 SCRA 55
[1987]). On the other hand, an action for partition may be
seen to be at once an action for declaration of co-ownership
and for segregation and conveyance of a determinate
portion of the property involved (Roque vs. IAC, 165 SCRA
118 [1988]).
Petitioners contend that they have repudiated the coownership when they executed the extrajudicial partition
excluding the private respondents and registered the
properties in their own names (Petition, p. 16; Rollo, p. 20).

However, no valid repudiation was made by petitioners to

the prejudice of private respondents. Assuming petitioners'
registration of the subject lot in 1971 was an act of
repudiation of the co-ownership, prescription had not yet set
in when private respondents filed in 1973 the present action
for partition (Ceniza vs. C.A., 181 SCRA 552 [1990]).
In their complaint, private respondents averred that in spite
of their demands, petitioners, except the unwilling
defendants in the lower court, failed and refused to
acknowledge and convey their lawful shares in the estate of
their father (Record on Appeal, p. 6). This allegation, though
denied by the petitioners in their answer (Ibid, p. 14), was
never successfully refuted by them. Put differently, in spite
of petitioners' undisputed knowledge of their relationship to
private respondents who are therefore their co-heirs,
petitioners fraudulently withheld private respondent's share
in the estate of Lupo Mariategui. According to respondent
Jacinto, since 1962, he had been inquiring from petitioner
Maria del Rosario about their (respondents) share in the
property left by their deceased father and had been assured
by the latter (Maria del Rosario) not to worry because they
will get some shares. As a matter of fact, sometime in 1969,
Jacinto constructed a house where he now resides on Lot No.
163 without any complaint from petitioners.
Petitioners' registration of the properties in their names in
1971 did not operate as a valid repudiation of the coownership. In Adille vs. Court of Appeals (157 SCRA 455,
461-462 [1988]), the Court held:
Prescription, as a mode of terminating a relation of coownership, must have been preceded by repudiation (of the
co-ownership). The act of repudiation, in turn, is subject to
certain conditions: (1) a co-owner repudiates the coownership; (2) such an act of repudiation is clearly made
known to the other co-owners; (3) the evidence thereon is
clear and conclusive; and (4) he has been in possession
through open, continuous, exclusive, and notorious
possession of the property for the period required by law.
xxx xxx xxx

Page 174 of 404

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It is true that registration under the Torrens system is

constructive notice of title, but it has likewise been our
holding that the Torrens title does not furnish shield for
fraud. It is therefore no argument to say that the act of
registration is equivalent to notice of repudiation, assuming
there was one, notwithstanding the long-standing rule that
registration operates as a universal notice of title.
Inasmuch as petitioners registered the properties in their
names in fraud of their co-heirs prescription can only be
deemed to have commenced from the time private
respondents discovered the petitioners' act of defraudation
(Adille vs. Court of Appeals, supra). Hence, prescription
definitely may not be invoked by petitioners because private
respondents commenced the instant action barely two
months after learning that petitioners had registered in their
names the lots involved.
WHEREFORE, the petition is DENIED and the assailed
decision of the Court of Appeals dated December 24, 1980 is
Affirmed.
SO ORDERED.
Gutierrez, Jr., Feliciano, Davide, Jr. and Romero, JJ., concur.
Article 497
G.R. No. 149313

January 22, 2008

JULITA ROMBAUA PANGANIBAN, PAQUITO ROMBAUA,

RUPERTO ROMBAUA, TERESITA ROMBAUA TELAJE and
LEONOR ROMBAUA OPIANA, petitioners,
vs.
JULITA S. OAMIL, respondent.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review on certiorari are the
Decision1 of the Court of Appeals dated March 2, 2001 in
CA-G.R. CV No. 57557, which affirmed in toto the Order
dated October 23, 1997 of the Regional Trial Court of

Olongapo City, Branch 73, and the Resolution2 dated July

10, 2001 denying the motion for reconsideration.
The facts as culled from the records are as follows:
On April 26, 1993 Julita Oamil, herein respondent, filed a
complaint for specific performance with damages3 with the
Regional Trial Court of Olongapo City, praying that Partenio
Rombaua (Partenio) be ordered to execute a final deed of
sale over the parcel of land which was the subject of a prior
"Agreement to Sell" executed by and between them on May
17, 1990. The property which is alleged to be covered by the
said "Agreement to Sell" consists of 204.5 square meters of
land located at #11 21st St., East Bajac-Bajac, Olongapo
City, and is claimed by respondent Oamil to be Partenios
conjugal share in a parcel of commercial land (the subject
property) with an aggregate area of 409 square meters
acquired by Partenio and his deceased first wife Juliana4
during their marriage.
There are two portions of the subject property in contention:
one consisting of 204.5 square meters facing 21st Street
(the 21st St. portion), and another consisting of 204.5
square meters facing Canda Street (the Canda St. portion).
Petitioners and their father Partenio are acknowledged coowners of the subject property to the following extent: onehalf to Partenio as his conjugal share, and one-sixth each of
the remaining half to petitioners and Partenio as the
surviving heirs of Juliana.
For failure to file an answer, Partenio was declared in
default, and respondent presented her evidence ex parte.
On December 26, 1993, the trial court promulgated its
Decision,5 the dispositive portion of which reads as follows:
WHEREFORE, viewed from all the foregoing, judgment is
hereby rendered as follows:
(1) The defendant is hereby ordered to execute a deed of
absolute sale over the portion (front) of the realty subject
matter of this case in favor of the plaintiff and to surrender
the possession thereof to the plaintiff. Failure of the
defendant to do so, then the City Assessor of Olongapo is
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LAW ON PROPERTY

hereby directed to effect the transfer of all rights/interest on

the one-half (1/2) front portion of the said realty in the name
of the plaintiff, upon the finality of this decision;
(2) Plaintiff, however, is ordered to pay the amount of EIGHT
THOUSAND PESOS (P8,000.00) representing the balance of
the interests due on the amount of P200,000.00, delinquent
for one (1) year computed at 12% per annum;
(3) Defendant is, likewise, hereby ordered to pay the plaintiff
attorneys fees in the amount of TEN THOUSAND PESOS
(P10,000.00).
Let a copy of this Decision be furnished the City Assessor of
Olongapo City.
SO ORDERED.6
Note that the trial court did not specify which portion of the
property the 21st St. portion or the Canda St. portion
should be deeded to respondent as buyer of Partenios
conjugal share.
Partenio failed to appeal, and the decision became final and
executory on February 4, 1994. Entry of judgment was made
on February 8, 1994, and a writ of execution was issued on
February 15, 1994 and served upon Partenio on February 21,
1994. The writ was served as well upon the City Assessor of
Olongapo City, who caused the transfer of the Tax
Declaration covering the 21st St. portion in respondents
name.
In June 1994, petitioners filed a verified petition for relief
from the decision of the trial court, grounded on the
following: 1) that Partenios conjugal share in the property,
and that of petitioners as well, are being litigated in a
judicial partition proceeding7 (the partition case) which is
pending with the Court of Appeals, hence the trial court may
not yet render a decision disposing of a definite area of the
subject property in respondents favor; and, (2) that
petitioners were unjustly deprived of the opportunity to
protect and defend their interest in court because,
notwithstanding that they are indispensable parties to the

case (being co-owners of the subject property), they were

not impleaded in Civil Case No. 140-0-93.
In lieu of a hearing, the parties were directed to submit their
respective position papers. Respondent, meanwhile, moved
to dismiss the petition, claiming that the stated grounds for
relief are not included in the enumeration under Section 2,
Rule 38 of the Rules of Court. Petitioners opposed the
motion.
In an Order dated January 13, 1995, the trial court denied
the petition for relief because the decision in Civil Case No.
140-0-93 had become final and executory. It held that only
indispensable parties to the case may participate in the
proceedings thereof, and since petitioners may not be
considered as indispensable parties because the subject
matter of the proceedings involves Partenios conjugal share
in the property, they are precluded from filing a petition for
relief from the courts judgment.
Petitioners moved for reconsideration insisting that they are
indispensable parties in Civil Case No. 140-0-93 because as
co-owners of the subject property by virtue of succession to
the rights of their deceased mother, they possess an
interest that must be protected. Instead of resolving the
motion, the trial court, with the concurrence of the
petitioners and the respondent, deferred the proceedings, to
await the result of a pending appeal with the Court of
Appeals of the decision in Special Civil Action No. 340-0-86,8
the partition case, where the trial court, in its decision,
awarded specifically the Canda St. portion to Partenio as his
conjugal share.
In the meantime, or sometime in 1995, a Motion for leave of
court to file a Complaint in Intervention was filed by Sotero
Gan (Gan), who claims to be the actual and rightful owner of
Partenios conjugal share. Gan claims to have purchased
Partenios conjugal share in the property, and in return, the
latter on November 29, 1990 executed a deed of waiver and
quitclaim of his possessory rights. Gan likewise claims that
the tax declaration covering the portion of the property had
been transferred in his name. He thus seeks the dismissal of
Civil Case No. 140-0-93 and the reinstatement of his name
Page 176 of 404

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on the tax declaration which by then had been placed in

respondents name.
The parties submitted their respective oppositions to Gans
motion, the core of their argument being that with the
finality of the decision in the case, intervention was no
longer proper, and that Gans cause of action, if any, should
be litigated in a separate proceeding.
The trial court, in an Order dated January 22, 1996, denied
Gans motion for intervention for being filed out of time,
considering that the decision of the court had become final
and executory in February 1994. Gan moved for
reconsideration which was opposed by respondent, citing,
among others, an Order dated April 18, 1994 issued by the
Department of Environment and Natural Resources (CENRO
of Olongapo) which includes a finding that Gan had
transferred his rights and interest in the subject property to
one Chua Young Bing.
In another Order dated October 23, 1997,9 the trial court
denied Gans motion for reconsideration, as well as the
petitioners motion for reconsideration of the January 13,
1995 order denying the petition for relief. In said order, the
court made reference to the decision in Special Civil Action
No. 340-0-86, which by then had become final and
executory.10 The trial court likewise substantially modified
its Decision dated December 26, 1993, by awarding
specifically the 21st St. portion of the property to Partenio as
his conjugal share, despite the pronouncement in Special
Civil Action No. 340-0-86 which awards the Canda St. portion
to him.
From the foregoing October 23, 1997 order, the petitioners
and Gan interposed their separate appeals to the Court of
Appeals. Meanwhile, respondent filed a motion for execution
pending appeal, which was denied on the ground that there
exist no special or compelling reasons to allow it.
On March 2, 2001, the appellate court rendered the herein
assailed Decision, which affirmed in toto the appealed
October 23, 1997 Order of the trial court.

The appellate court sustained the trial courts ruling that

Partenios conjugal share in the subject property consists of
the 21st St. portion, thereby disregarding the prior final and
executory decision in Special Civil Action No. 340-0-86 which
declares that Partenio is entitled to the Canda St. portion.
The appellate court based the award of the 21st St. portion
to respondent on the ground that petitioners have always
acknowledged their father Partenios "acts of ownership"
over the 21st St. portion, thus signifying their consent and
thereby barring them from questioning the award.
Respondents moved for reconsideration but it was denied.
Petitioners are now before us via the present petition,
raising the sole issue of whether petitioners can intervene in
the proceedings in Civil Case
No. 140-0-93 in order to protect their rights as co-owners of
the subject property.
We resolve to GRANT the petition.
Under a co-ownership, the ownership of an undivided thing
or right belongs to different persons. During the existence of
the co-ownership, no individual can claim title to any
definite portion of the community property until the partition
thereof; and prior to the partition, all that the co-owner has
is an ideal or abstract quota or proportionate share in the
entire land or thing.11 Before partition in a co-ownership,
every co-owner has the absolute ownership of his undivided
interest in the common property. The co-owner is free to
alienate, assign or mortgage this undivided interest, except
as to purely personal rights. The effect of any such transfer
is limited to the portion which may be awarded to him upon
the partition of the property.12
Under Article 497 of the Civil Code, in the event of a division
or partition of property owned in common, assignees of one
or more of the co-owners may take part in the division of the
thing owned in common and object to its being effected
without their concurrence. But they cannot impugn any
partition already executed, unless there has been fraud, or
in case it was made notwithstanding a formal opposition
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LAW ON PROPERTY

presented to prevent it, without prejudice to the right of the

debtor or assignor to maintain its validity.
The decision in Special Civil Action No. 340-0-86, which is an
action for judicial partition of the subject property,
determines what Partenio, and ultimately, respondent, as his
successor-in-interest, is entitled to in Civil Case No. 140-093. As Partenios successor-in-interest to the property,
respondent could not acquire any superior right in the
property than what Partenio is entitled to or could transfer
or alienate after partition. In a contract of sale of co-owned
property, what the vendee obtains by virtue of such a sale
are the same rights as the vendor had as co-owner, and the
vendee merely steps into the shoes of the vendor as coowner.13
As early as May 17, 1990, when respondent and Partenio
executed the "Agreement to Sell", the former knew that the
property she was purchasing was conjugal property owned
in common by Partenio and the heirs of his deceased
wife.14 And while Civil Case No. 140-0-93 (the specific
performance case) was pending, respondent was apprised of
the pendency of Special Civil Action No. 340-0-86 (the
partition case). Yet, respondent did not intervene, nor did
she take part, nor enter any formal opposition as assignee
of Partenios conjugal share in the property in said
partition proceedings. She did not exercise the rights
granted her under Article 497 of the Civil Code. Instead,
when the court in Civil Case No. 140-0-93 decided to
suspend the proceedings and hold the same in abeyance
while the appeal in Special Civil Action No. 340-0-86
remained unresolved, the respondent unconditionally
agreed to its temporary abatement. In other words, she
chose to sit back and await the resolution thereof.
Consequently, when the decision in Special Civil Action No.
340-0-86 became final and executory without the
respondent having questioned the same in any manner
whatsoever, by appeal or otherwise, the division of property
decreed therein may no longer be impugned by her.
Thus said, the trial court in Civil Case No. 140-0-93 could not
award the 21st St. portion to Partenio, since the court in
Special Civil Action No. 340-0-86 specifically awarded the

Canda St. portion to him. The decision in Special Civil Action

No. 340-0-86, which became final and executory, should put
an end to the co-ownership between Partenio and the
respondents, and the award made to each co-owner of
specific portions of the property as their share in the coownership should be respected.
Since the issue of each of the co-owners specific portion in
the aggregate property has been laid to rest in Special Civil
Action No. 340-0-86, the final and executory decision in said
proceeding should be conclusive on the issue of which
specific portion of the property became the subject matter
of the sale between Partenio and the respondent; that is,
that Partenio, as declared owner of the Canda St. portion,
could have transferred to respondent only that part of the
property and not the 21st St. portion. Although Partenio was
free to sell or transfer his undivided interest to the
respondent, the effect of such transfer is limited to the
portion which may be awarded to him upon the partition of
the property.
It was likewise error for the appellate court to have
considered the alleged acts of ownership exercised upon the
21st St. portion by Partenio as weighing heavily against the
decreed partition in Special Civil Action No. 340-0-86. The
determination of this issue is beyond the ambit of the trial
court in Civil Case No. 140-0-93. As far as it was concerned,
it could only award to the respondent, if proper, whatever
specific portion Partenio is found to be entitled to in the
event of a partition, in accordance with Article 493 of the
Civil Code and the procedure outlined in the Rules of Court.
It could not, in an ordinary proceeding for specific
performance with damages, subject the property to a partial
division or partition without the knowledge and participation
of the other co-owners, and while a special civil action for
partition was simultaneously pending in another court.
The court in Civil Case No. 140-0-93 is not a partition court
but one litigating an ordinary civil case, and all evidence of
alleged acts of ownership by one co-owner should have
been presented in the partition case, there to be threshed
out in order that the partition court may arrive at a just
division of the property owned in common; it is not for the
trial court in the specific performance case to properly
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LAW ON PROPERTY

appreciate. Being a court trying an ordinary civil suit, the

court in Civil Case No. 140-0-93 had no jurisdiction to act as
a partition court. Trial courts trying an ordinary action
cannot resolve to perform acts pertaining to a special
proceeding because it is subject to specific prescribed
rules.15
That the trial court suspended the proceedings in Civil Case
No. 140-0-93 to make way for the resolution of Special Civil
Action No. 340-0-86 was an indication that it intended to
abide by whatever would be decreed in the latter case. For,
understandably, the resolution of Special Civil Action No.
340-0-86 will settle the issue in Civil Case No. 140-0-93 with
respect to which specific portion of the property constitutes
the subject matter of the specific performance suit and
which would, in any case, be adjudicated to either of the two
the defendant co-owner and seller Partenio or the plaintiff
buyer Oamil, the herein respondent. Yet in the end, the trial
court ultimately disregarded what had been finally
adjudicated and settled in Special Civil Action No. 340-0-86,
and instead it took a position that was entirely diametrically
opposed to it.
It was likewise irregular for the respondent to have obtained
a certificate of title over specific property which has not
been partitioned, especially where she concedes awareness
of the existing co-ownership which has not been terminated,
and recognizes her status as mere successor-in-interest to
Partenio. The spring may not rise higher than its source.
In sum, the trial court and the Court of Appeals, by
disregarding the final and executory judgment in Special
Civil Action No. 340-0-86, certainly ignored the principle of
conclusiveness of judgments, which states that
[A] fact or question which was in issue in a former suit and
was there judicially passed upon and determined by a court
of competent jurisdiction, is conclusively settled by the
judgment therein as far as the parties to that action and
persons in privity with them are concerned and cannot be
again litigated in any future action between such parties or
their privies, in the same court or any other court of
concurrent jurisdiction on either the same or different cause
of action, while the judgment remains unreversed by proper

authority. It has been held that in order that a judgment in

one action can be conclusive as to a particular matter in
another action between the same parties or their privies, it
is essential that the issue be identical. If a particular point or
question is in issue in the second action, and the judgment
will depend on the determination of that particular point or
question, a former judgment between the same parties or
their privies will be final and conclusive in the second if that
same point or question was in issue and adjudicated in the
first suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]).
Identity of cause of action is not required but merely identity
of issues.16
The ruling in Special Civil Action No. 340-0-86 that the
Canda St. portion shall go to Partenio became the law of
the case and continues to be binding between the parties as
well as their successors-in-interest, the decision in said case
having become final and executory. Hence, the binding
effect and enforceability of that dictum can no longer be
relitigated anew in Civil Case No. 140-0-93 since said issue
had been resolved and finally laid to rest in the partition
case, by conclusiveness of judgment, if not by the principle
of res judicata. It may not be reversed, modified or altered
in any manner by any court.
As a result of the trial courts refusal to abide by the
decision in Special Civil Action No. 340-0-86, the rights of
the petitioners have been unnecessarily transgressed,
thereby giving them the right to seek relief in court in order
to annul the October 23, 1997 Order of the trial court which
substantially and wrongly modified its original decision in
Civil Case No. 140-0-93. It was clear mistake for the trial
court to have gone against the final and executory decision
in Special Civil Action No. 340-0-86 and its original decision,
which does not award a definite portion of the disputed
property to Partenio, precisely because, as a court litigating
an ordinary civil suit, it is not authorized to partition the
subject property but only to determine the rights and
obligations of the parties in respect to Partenios undivided
share in the commonly owned property. As a result of this
mistake, the petitioners are entitled to relief.
Finally, with respect to Gans intervention, we affirm the
appellate courts finding that the same is no longer proper
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LAW ON PROPERTY

considering that the decision in Civil Case No. 140-0-93 had

become final and executory. Gan moved to intervene only in
1995, when the decision became final and executory in
February 1994. Certainly, intervention, being merely
collateral or ancillary to the principal action, may no longer
be allowed in a case already terminated by final
judgment.17 Moreover, since Gan did not appeal the herein
assailed decision of the appellate court, then the same, as
against him, has become final and executory.
WHEREFORE, the petition is GRANTED. The Decision of the
Court of Appeals dated March 2, 2001 in CA-G.R. CV No.
57557 and the Resolution dated July 10, 2001 are REVERSED
and SET ASIDE, with the exception that the denial of the
intervenor Sotero Gans motion for intervention is
AFFIRMED.
The Order dated October 23, 1997 of the Regional Trial
Court of Olongapo City in Civil Case No. 140-0-93 is hereby
DECLARED of no effect. In all other respects, the Decision of
the trial court in Civil Case No. 140-0-93 dated December
26, 1993 is AFFIRMED. The said court is moreover ORDERED
to abide by the pronouncement in Special Civil Action No.
340-0-86 with respect to Partenio Rombauas conjugal share
in the disputed property.
G.R. No. 164110

February 12, 2008

LEONOR B. CRUZ, petitioner,

vs.
TEOFILA M. CATAPANG, respondent.
DECISION
QUISUMBING, J.:
This petition for review seeks the reversal of the Decision1
dated September 16, 2003 and the Resolution2 dated June
11, 2004 of the Court of Appeals in CA-G.R. SP No. 69250.
The Court of Appeals reversed the Decision3 dated October
22, 2001 of the Regional Trial Court (RTC), Branch 86, Taal,
Batangas, which had earlier affirmed the Decision4 dated
September 20, 1999 of the 7th Municipal Circuit Trial Court
(MCTC) of Taal, Batangas ordering respondent to vacate and

deliver possession of a portion of the lot co-owned by

petitioner, Luz Cruz and Norma Maligaya.
The antecedent facts of the case are as follows.
Petitioner Leonor B. Cruz, Luz Cruz and Norma Maligaya are
the co-owners of a parcel of land covering an area of 1,435
square meters located at Barangay Mahabang Ludlod, Taal,
Batangas.5 With the consent of Norma Maligaya, one of the
aforementioned co-owners, respondent Teofila M. Catapang
built a house on a lot adjacent to the abovementioned
parcel of land sometime in 1992. The house intruded,
however, on a portion of the co-owned property.6
In the first week of September 1995, petitioner Leonor B.
Cruz visited the property and was surprised to see a part of
respondents house intruding unto a portion of the co-owned
property. She then made several demands upon respondent
to demolish the intruding structure and to vacate the portion
encroaching on their property. The respondent, however,
refused and disregarded her demands.7
On January 25, 1996, the petitioner filed a complaint8 for
forcible entry against respondent before the 7th MCTC of
Taal, Batangas. The MCTC decided in favor of petitioner,
ruling that consent of only one of the co-owners is not
sufficient to justify defendants construction of the house
and possession of the portion of the lot in question.9 The
dispositive portion of the MCTC decision reads:
WHEREFORE, judgment is hereby rendered ordering the
defendant or any person acting in her behalf to vacate and
deliver the possession of the area illegally occupied to the
plaintiff; ordering the defendant to pay plaintiff reasonable
attorneys fees of P10,000.00, plus costs of suit.
SO ORDERED.10
On appeal, the RTC, Branch 86, Taal, Batangas, affirmed the
MCTCs ruling in a Decision dated October 22, 2001, the
dispositive portion of which states:
Wherefore, premises considered, the decision [appealed]
from is hereby affirmed in toto.
Page 180 of 404

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SO ORDERED.11
After her motion for reconsideration was denied by the RTC,
respondent filed a petition for review with the Court of
Appeals, which reversed the RTCs decision. The Court of
Appeals held that there is no cause of action for forcible
entry in this case because respondents entry into the
property, considering the consent given by co-owner Norma
Maligaya, cannot be characterized as one made through
strategy or stealth which gives rise to a cause of action for
forcible entry.12 The Court of Appeals decision further held
that petitioners remedy is not an action for ejectment but
an entirely different recourse with the appropriate forum.
The Court of Appeals disposed, thus:
WHEREFORE, premises considered, the instant Petition is
hereby GRANTED. The challenged Decision dated 22
October 2001 as well as the Order dated 07 January 2002 of
the Regional Trial Court of Taal, Batangas, Branch 86, are
hereby REVERSED and SET ASIDE and, in lieu thereof,
another is entered DISMISSING the complaint for forcible
entry docketed as Civil Case No. 71-T.
SO ORDERED.13
After petitioners motion for reconsideration was denied by
the Court of Appeals in a Resolution dated June 11, 2004,
she filed the instant petition.
Raised before us for consideration are the following issues:
I.
WHETHER OR NOT THE KNOWLEDGE AND CONSENT OF COOWNER NORMA MALIGAYA IS A VALID LICENSE FOR THE
RESPONDENT TO ERECT THE BUNGALOW HOUSE ON THE
PREMISES OWNED PRO-INDIVISO SANS CONSENT FROM THE
PETITIONER AND OTHE[R] CO-OWNER[.]
II.
WHETHER OR NOT RESPONDENT, BY HER ACTS, HAS
ACQUIRED EXCLUSIVE OWNERSHIP OVER THE PORTION OF

THE LOT SUBJECT OF THE PREMISES PURSUANT TO THE

CONSENT GRANTED UNTO HER BY CO-OWNER NORMA
MALIGAYA TO THE EXCLUSION OF THE PETITIONER AND THE
OTHER CO-OWNER.14
III.
. . . WHETHER OR NOT RESPONDENT IN FACT OBTAINED
POSSESSION OF THE PROPERTY IN QUESTION BY MEANS OF
SIMPLE STRATEGY.15
Petitioner prays in her petition that we effectively reverse
the Court of Appeals decision.
Simply put, the main issue before us is whether consent
given by a co-owner of a parcel of land to a person to
construct a house on the co-owned property warrants the
dismissal of a forcible entry case filed by another co-owner
against that person.
In her memorandum,16 petitioner contends that the consent
and knowledge of co-owner Norma Maligaya cannot defeat
the action for forcible entry since it is a basic principle in the
law of co-ownership that no individual co-owner can claim
title to any definite portion of the land or thing owned in
common until partition.
On the other hand, respondent in her memorandum17
counters that the complaint for forcible entry cannot prosper
because her entry into the property was not through
strategy or stealth due to the consent of one of the coowners. She further argues that since Norma Maligaya is
residing in the house she built, the issue is not just
possession de facto but also one of possession de jure since
it involves rights of co-owners to enjoy the property.
As to the issue of whether or not the consent of one coowner will warrant the dismissal of a forcible entry case filed
by another co-owner against the person who was given the
consent to construct a house on the co-owned property, we
have held that a co-owner cannot devote common property
to his or her exclusive use to the prejudice of the coownership.18 In our view, a co-owner cannot give valid
consent to another to build a house on the co-owned
Page 181 of 404

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property, which is an act tantamount to devoting the

property to his or her exclusive use.
Furthermore, Articles 486 and 491 of the Civil Code provide:
Art. 486. Each co-owner may use the thing owned in
common, provided he does so in accordance with the
purpose for which it is intended and in such a way as not to
injure the interest of the co-ownership or prevent the other
co-owners from using it according to their rights. The
purpose of the co-ownership may be changed by
agreement, express or implied.
Art. 491. None of the co-owners shall, without the consent of
the others, make alterations in the thing owned in common,
even though benefits for all would result therefrom.
However, if the withholding of the consent by one or more of
the co-owners is clearly prejudicial to the common interest,
the courts may afford adequate relief.
Article 486 states each co-owner may use the thing owned
in common provided he does so in accordance with the
purpose for which it is intended and in such a way as not to
injure the interest of the co-ownership or prevent the other
co-owners from using it according to their rights. Giving
consent to a third person to construct a house on the coowned property will injure the interest of the co-ownership
and prevent other co-owners from using the property in
accordance with their rights.
Under Article 491, none of the co-owners shall, without the
consent of the others, make alterations in the thing owned
in common. It necessarily follows that none of the co-owners
can, without the consent of the other co-owners, validly
consent to the making of an alteration by another person,
such as respondent, in the thing owned in common.
Alterations include any act of strict dominion or ownership
and any encumbrance or disposition has been held implicitly
to be an act of alteration.19 The construction of a house on
the co-owned property is an act of dominion. Therefore, it is
an alteration falling under Article 491 of the Civil Code.
There being no consent from all co-owners, respondent had
no right to construct her house on the co-owned property.

Consent of only one co-owner will not warrant the dismissal

of the complaint for forcible entry filed against the builder.
The consent given by Norma Maligaya in the absence of the
consent of petitioner and Luz Cruz did not vest upon
respondent any right to enter into the co-owned property.
Her entry into the property still falls under the classification
"through strategy or stealth."
The Court of Appeals held that there is no forcible entry
because respondents entry into the property was not
through strategy or stealth due to the consent given to her
by one of the co-owners. We cannot give our imprimatur to
this sweeping conclusion. Respondents entry into the
property without the permission of petitioner could appear
to be a secret and clandestine act done in connivance with
co-owner Norma Maligaya whom respondent allowed to stay
in her house. Entry into the land effected clandestinely
without the knowledge of the other co-owners could be
categorized as possession by stealth.20 Moreover,
respondents act of getting only the consent of one coowner, her sister Norma Maligaya, and allowing the latter to
stay in the constructed house, can in fact be considered as a
strategy which she utilized in order to enter into the coowned property. As such, respondents acts constitute
forcible entry.
Petitioners filing of a complaint for forcible entry, in our
view, was within the one-year period for filing the complaint.
The one-year period within which to bring an action for
forcible entry is generally counted from the date of actual
entry to the land. However, when entry is made through
stealth, then the one-year period is counted from the time
the petitioner learned about it.21 Although respondent
constructed her house in 1992, it was only in September
1995 that petitioner learned of it when she visited the
property. Accordingly, she then made demands on
respondent to vacate the premises. Failing to get a favorable
response, petitioner filed the complaint on January 25, 1996,
which is within the one-year period from the time petitioner
learned of the construction.
WHEREFORE, the petition is GRANTED. The Decision dated
September 16, 2003 and the Resolution dated June 11, 2004
of the Court of Appeals in CA-G.R. SP No. 69250 are
Page 182 of 404

LAW ON PROPERTY

REVERSED and SET ASIDE. The Decision dated October 22,

2001 of the Regional Trial Court, Branch 86, Taal, Batangas
is REINSTATED. Costs against respondent.

REPUBLIC ACT NO. 4726 June 18, 1966

part or parts of floors) in a building or buildings and such

accessories as may be appended thereto.
(c) "Project" means the entire parcel of real property divided
or to be divided in condominiums, including all structures
thereon,
(d) "Common areas" means the entire project excepting all
units separately granted or held or reserved.

AN ACT TO DEFINE CONDOMINIUM, ESTABLISH

REQUIREMENTS FOR ITS CREATION, AND GOVERN ITS
INCIDENTS.

(e) "To divide" real property means to divide the ownership

thereof or other interest therein by conveying one or more
condominiums therein but less than the whole thereof.

Sec. 1. The short title of this Act shall be "The Condominium

Act".

Sec. 4. The provisions of this Act shall apply to property

divided or to be divided into condominiums only if there
shall be recorded in the Register of Deeds of the province or
city in which the property lies and duly annotated in the
corresponding certificate of title of the land, if the latter had
been patented or registered under either the Land
Registration or Cadastral Acts, an enabling or master deed
which shall contain, among others, the following:

Sec. 2. A condominium is an interest in real property

consisting of separate interest in a unit in a residential,
industrial or commercial building and an undivided interest
in common, directly or indirectly, in the land on which it is
located and in other common areas of the building. A
condominium may include, in addition, a separate interest in
other portions of such real property. Title to the common
areas, including the land, or the appurtenant interests in
such areas, may be held by a corporation specially formed
for the purpose (hereinafter known as the "condominium
corporation") in which the holders of separate interest shall
automatically be members or shareholders, to the exclusion
of others, in proportion to the appurtenant interest of their
respective units in the common areas.
The real right in condominium may be ownership or any
other interest in real property recognized by law, on
property in the Civil Code and other pertinent laws.
Sec. 3. As used in this Act, unless the context otherwise
requires:

(a) Description of the land on which the building or buildings

and improvements are or are to be located;
(b) Description of the building or buildings, stating the
number of stories and basements, the number of units and
their accessories, if any;
(c) Description of the common areas and facilities;
(d) A statement of the exact nature of the interest acquired
or to be acquired by the purchaser in the separate units and
in the common areas of the condominium project. Where
title to or the appurtenant interests in the common areas is
or is to be held by a condominium corporation, a statement
to this effect shall be included;

(a) "Condominium" means a condominium as defined in the

next preceding section.

(e) Statement of the purposes for which the building or

buildings and each of the units are intended or restricted as
to use;

(b) "Unit" means a part of the condominium project intended

for any type of independent use or ownership, including one
or more rooms or spaces located in one or more floors (or

(f) A certificate of the registered owner of the property, if he

is other than those executing the master deed, as well as of
Page 183 of 404

LAW ON PROPERTY

all registered holders of any lien or encumbrance on the

property, that they consent to the registration of the deed;
(g) The following plans shall be appended to the deed as
integral parts thereof:
(1) A survey plan of the land included in the project, unless
a survey plan of the same property had previously bee filed
in said office;
(2) A diagrammatic floor plan of the building or buildings in
the project, in sufficient detail to identify each unit, its
relative location and approximate dimensions;
(h) Any reasonable restriction not contrary to law, morals or
public policy regarding the right of any condominium owner
to alienate or dispose of his condominium.
The enabling or master deed may be amended or revoked
upon registration of an instrument executed by the
registered owner or owners of the property and consented
to by all registered holders of any lien or encumbrance on
the land or building or portion thereof. The term "registered
owner" shall include the registered owners of condominiums
in the project. Until registration of a revocation, the
provisions of this Act shall continue to apply to such
property.

Sec. 5. Any transfer or conveyance of a unit or an

apartment, office or store or other space therein, shall
include the transfer or conveyance of the undivided
interests in the common areas or, in a proper case, the
membership or shareholdings in the condominium
corporation: Provided, however, That where the common
areas in the condominium project are owned by the owners
of separate units as co-owners thereof, no condominium
unit therein shall be conveyed or transferred to persons
other than Filipino citizens, or corporations at least sixty
percent of the capital stock of which belong to Filipino
citizens, except in cases of hereditary succession. Where the
common areas in a condominium project are held by a
corporation, no transfer or conveyance of a unit shall be
valid if the concomitant transfer of the appurtenant

membership or stockholding in the corporation will cause

the alien interest in such corporation to exceed the limits
imposed by existing laws.
Sec. 6. Unless otherwise expressly provided in the enabling
or master deed or the declaration of restrictions, the
incidents of a condominium grant are as follows:
(a) The boundary of the unit granted are the interior
surfaces of the perimeter walls, floors, ceilings, windows and
doors thereof. The following are not part of the unit bearing
walls, columns, floors, roofs, foundations and other common
structural elements of the building; lobbies, stairways,
hallways, and other areas of common use, elevator
equipment and shafts, central heating, central refrigeration
and central air-conditioning equipment, reservoirs, tanks,
pumps and other central services and facilities, pipes, ducts,
flues, chutes, conduits, wires and other utility installations,
wherever located, except the outlets thereof when located
within the unit.
(b) There shall pass with the unit, as an appurtenance
thereof, an exclusive easement for the use of the air space
encompassed by the boundaries of the unit as it exists at
any particular time and as the unit may lawfully be altered
or reconstructed from time to time. Such easement shall be
automatically terminated in any air space upon destruction
of the unit as to render it untenantable.
(c) Unless otherwise, provided, the common areas are held
in common by the holders of units, in equal shares, one for
each unit.
(d) A non-exclusive easement for ingress, egress and
support through the common areas is appurtenant to each
unit and the common areas are subject to such easements.
(e) Each condominium owner shall have the exclusive right
to paint, repaint, tile, wax, paper or otherwise refinish and
decorate the inner surfaces of the walls, ceilings, floors,
windows and doors bounding his own unit.

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(f) Each condominium owner shall have the exclusive right

to mortgage, pledge or encumber his condominium and to
have the same appraised independently of the other
condominiums but any obligation incurred by such
condominium owner is personal to him.
(g) Each condominium owner has also the absolute right to
sell or dispose of his condominium unless the master deed
contains a requirement that the property be first offered to
the condominium owners within a reasonable period of time
before the same is offered to outside parties;
Sec. 7. Except as provided in the following section, the
common areas shall remain undivided, and there shall be no
judicial partition thereof.
Sec. 8. Where several persons own condominiums in a
condominium project, an action may be brought by one or
more such persons for partition thereof by sale of the entire
project, as if the owners of all of the condominiums in such
project were co-owners of the entire project in the same
proportion as their interests in the common areas: Provided,
however, That a partition shall be made only upon a
showing:
(a) That three years after damage or destruction to the
project which renders material part thereof unit for its use
prior thereto, the project has not been rebuilt or repaired
substantially to its state prior to its damage or destruction,
or
(b) That damage or destruction to the project has rendered
one-half or more of the units therein untenantable and that
condominium owners holding in aggregate more than thirty
percent interest in the common areas are opposed to repair
or restoration of the project; or
(c) That the project has been in existence in excess of fifty
years, that it is obsolete and uneconomic, and that
condominium owners holding in aggregate more than fifty
percent interest in the common areas are opposed to repair
or restoration or remodeling or modernizing of the project;
or

(d) That the project or a material part thereof has been

condemned or expropriated and that the project is no longer
viable, or that the condominium owners holding in
aggregate more than seventy percent interest in the
common areas are opposed to continuation of the
condominium regime after expropriation or condemnation of
a material portion thereof; or
(e) That the conditions for such partition by sale set forth in
the declaration of restrictions, duly registered in accordance
with the terms of this Act, have been met.
Sec. 9. The owner of a project shall, prior to the conveyance
of any condominium therein, register a declaration of
restrictions relating to such project, which restrictions shall
constitute a lien upon each condominium in the project, and
shall insure to and bind all condominium owners in the
project. Such liens, unless otherwise provided, may be
enforced by any condominium owner in the project or by the
management body of such project. The Register of Deeds
shall enter and annotate the declaration of restrictions upon
the certificate of title covering the land included within the
project, if the land is patented or registered under the Land
Registration or Cadastral Acts.
The declaration of restrictions shall provide for the
management of the project by anyone of the following
management bodies: a condominium corporation, an
association of the condominium owners, a board of
governors elected by condominium owners, or a
management agent elected by the owners or by the board
named in the declaration. It shall also provide for voting
majorities quorums, notices, meeting date, and other rules
governing such body or bodies.
Such declaration of restrictions, among other things, may
also provide:
(a) As to any such management body;
(1) For the powers thereof, including power to enforce the
provisions of the declarations of restrictions;
(2) For maintenance of insurance policies, insuring
condominium owners against loss by fire, casualty, liability,
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workmen's compensation and other insurable risks, and for

bonding of the members of any management body;

(unless otherwise provided) to its owners fractional interest

in any common areas;

(3) Provisions for maintenance, utility, gardening and other

services benefiting the common areas, for the employment
of personnel necessary for the operation of the building, and
legal, accounting and other professional and technical
services;

(e) For the subordination of the liens securing such

assessments to other liens either generally or specifically
described;

(4) For purchase of materials, supplies and the like needed

by the common areas;
(5) For payment of taxes and special assessments which
would be a lien upon the entire project or common areas,
and for discharge of any lien or encumbrance levied against
the entire project or the common areas;
(6) For reconstruction of any portion or portions of any
damage to or destruction of the project;
(7) The manner for delegation of its powers;
(8) For entry by its officers and agents into any unit when
necessary in connection with the maintenance or
construction for which such body is responsible;

(9) For a power of attorney to the management body to sell

the entire project for the benefit of all of the owners thereof
when partition of the project may be authorized under
Section 8 of this Act, which said power shall be binding upon
all of the condominium owners regardless of whether they
assume the obligations of the restrictions or not.
(b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less than a
majority in interest of the owners is obtained.
(c) For independent audit of the accounts of the
management body;
(d) For reasonable assessments to meet authorized
expenditures, each condominium unit to be assessed
separately for its share of such expenses in proportion

(f) For conditions, other than those provided for in Sections

eight and thirteen of this Act, upon which partition of the
project and dissolution of the condominium corporation may
be made. Such right to partition or dissolution may be
conditioned upon failure of the condominium owners to
rebuild within a certain period or upon specified inadequacy
of insurance proceeds, or upon specified percentage of
damage to the building, or upon a decision of an arbitrator,
or upon any other reasonable condition.
Sec. 10. Whenever the common areas in a condominium
project are held by a condominium corporation, such
corporation shall constitute the management body of the
project. The corporate purposes of such a corporation shall
be limited to the holding of the common areas, either in
ownership or any other interest in real property recognized
by law, to the management of the project, and to such other
purposes as may be necessary, incidental or convenient to
the accomplishment of said purposes. The articles of
incorporation or by-laws of the corporation shall not contain
any provision contrary to or inconsistent with the provisions
of this Act, the enabling or master deed, or the declaration
of restrictions of the project. Membership in a condominium
corporation, regardless of whether it is a stock or non-stock
corporation, shall not be transferable separately from the
condominium unit of which it is an appurtenance. When a
member or stockholder ceases to own a unit in the project in
which the condominium corporation owns or holds the
common areas, he shall automatically cease to be a
member or stockholder of the condominium corporation.

Sec. 11. The term of a condominium corporation shall be coterminus with the duration of the condominium project, the
provisions of the Corporation Law to the contrary
notwithstanding.
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Sec. 12. In case of involuntary dissolution of a condominium

corporation for any of the causes provided by law, the
common areas owned or held by the corporation shall, by
way of liquidation, be transferred pro-indiviso and in
proportion to their interest in the corporation to the
members or stockholders thereof, subject to the superior
rights of the corporation creditors. Such transfer or
conveyance shall be deemed to be a full liquidation of the
interest of such members or stockholders in the corporation.
After such transfer or conveyance, the provisions of this Act
governing undivided co-ownership of, or undivided interest
in, the common areas in condominium projects shall fully
apply.
Sec. 13. Until the enabling or the master deed of the project
in which the condominium corporation owns or holds the
common area is revoked, the corporation shall not be
voluntarily dissolved through an action for dissolution under
Rule 104 of the Rules of Court except upon a showing:
(a) That three years after damage or destruction to the
project in which the corporation owns or holds the common
areas, which damage or destruction renders a material part
thereof unfit for its use prior thereto, the project has not
been rebuilt or repaired substantially to its state prior to its
damage or destruction; or
(b) That damage or destruction to the project has rendered
one-half or more of the units therein untenantable and that
more than thirty percent of the members of the corporation,
if non-stock, or the shareholders representing more than
thirty percent of the capital stock entitled to vote, if a stock
corporation, are opposed to the repair or reconstruction of
the project, or
(c) That the project has been in existence in excess of fifty
years, that it is obsolete and uneconomical, and that more
than fifty percent of the members of the corporation, if nonstock, or the stockholders representing more than fifty
percent of the capital stock entitled to vote, if a stock
corporation, are opposed to the repair or restoration or
remodeling or modernizing of the project; or

(d) That the project or a material part thereof has been

condemned or expropriated and that the project is no longer
viable, or that the members holding in aggregate more than
seventy percent interest in the corporation, if non-stock, or
the stockholders representing more than seventy percent of
the capital stock entitled to vote, if a stock corporation, are
opposed to the continuation of the condominium regime
after expropriation or condemnation of a material portion
thereof; or
(e) That the conditions for such a dissolution set forth in the
declaration of restrictions of the project in which the
corporation owns of holds the common areas, have been
met.
Sec. 14. The condominium corporation may also be
dissolved by the affirmative vote of all the stockholders or
members thereof at a general or special meeting duly called
for the purpose: Provided, That all the requirements of
Section sixty-two of the Corporation Law are complied with.
Sec. 15. Unless otherwise provided for in the declaration of
restrictions upon voluntary dissolution of a condominium
corporation in accordance with the provisions of Sections
thirteen and fourteen of this Act, the corporation shall be
deemed to hold a power of attorney from all the members or
stockholders to sell and dispose of their separate interests in
the project and liquidation of the corporation shall be
effected by a sale of the entire project as if the corporation
owned the whole thereof, subject to the rights of the
corporate and of individual condominium creditors.
Sec. 16. A condominium corporation shall not, during its
existence, sell, exchange, lease or otherwise dispose of the
common areas owned or held by it in the condominium
project unless authorized by the affirmative vote of all the
stockholders or members.
Sec. 17. Any provision of the Corporation Law to the
contrary notwithstanding, the by-laws of a condominium
corporation shall provide that a stockholder or member shall
not be entitled to demand payment of his shares or interest
in those cases where such right is granted under the
Corporation Law unless he consents to sell his separate
interest in the project to the corporation or to any purchaser
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of the corporation's choice who shall also buy from the

corporation the dissenting member or stockholder's interest.
In case of disagreement as to price, the procedure set forth
in the appropriate provision of the Corporation Law for
valuation of shares shall be followed. The corporation shall
have two years within which to pay for the shares or furnish
a purchaser of its choice from the time of award. All
expenses incurred in the liquidation of the interest of the
dissenting member or stockholder shall be borne by him.
Sec. 18. Upon registration of an instrument conveying a
condominium, the Register of Deeds shall, upon payment of
the proper fees, enter and annotate the conveyance on the
certificate of title covering the land included within the
project and the transferee shall be entitled to the issuance
of a "condominium owner's" copy of the pertinent portion of
such certificate of title. Said "condominium owner's" copy
need not reproduce the ownership status or series of
transactions in force or annotated with respect to other
condominiums in the project. A copy of the description of
the land, a brief description of the condominium conveyed,
name and personal circumstances of the condominium
owner would be sufficient for purposes of the "condominium
owner's" copy of the certificate of title. No conveyance of
condominiums or part thereof, subsequent to the original
conveyance thereof from the owner of the project, shall be
registered unless accompanied by a certificate of the
management body of the project that such conveyance is in
accordance with the provisions of the declaration of
restrictions of such project.

In cases of condominium projects registered under the

provisions of the Spanish Mortgage Law or Act 3344, as
amended, the registration of the deed of conveyance of a
condominium shall be sufficient if the Register of Deeds
shall keep the original or signed copy thereof, together with
the certificate of the management body of the project, and
return a copy of the deed of conveyance to the
condominium owner duly acknowledge and stamped by the
Register of Deeds in the same manner as in the case of
registration of conveyances of real property under said laws.

Sec. 19. Where the enabling or master deed provides that

the land included within a condominium project are to be
owned in common by the condominium owners therein, the
Register of Deeds may, at the request of all the
condominium owners and upon surrender of all their
"condominium owner's" copies, cancel the certificates of
title of the property and issue a new one in the name of said
condominium owners as pro-indiviso co-owners thereof.
Sec. 20. An assessment upon any condominium made in
accordance with a duly registered declaration of restrictions
shall be an obligation of the owner thereof at the time the
assessment is made. The amount of any such assessment
plus any other charges thereon, such as interest, costs
(including attorney's fees) and penalties, as such may be
provided for in the declaration of restrictions, shall be and
become a lien upon the condominium assessed when the
management body causes a notice of assessment to be
registered with the Register of Deeds of the city or province
where such condominium project is located. The notice shall
state the amount of such assessment and such other
charges thereon a may be authorized by the declaration of
restrictions, a description of the condominium, unit against
which same has been assessed, and the name of the
registered owner thereof. Such notice shall be signed by an
authorized representative of the management body or as
otherwise provided in the declaration of restrictions. Upon
payment of said assessment and charges or other
satisfaction thereof, the management body shall cause to be
registered a release of the lien.
Such lien shall be superior to all other liens registered
subsequent to the registration of said notice of assessment
except real property tax liens and except that the
declaration of restrictions may provide for the subordination
thereof to any other liens and encumbrances.
Such liens may be enforced in the same manner provided
for by law for the judicial or extra-judicial foreclosure of
mortgages of real property. Unless otherwise provided for in
the declaration of restrictions, the management body shall
have power to bid at foreclosure sale. The condominium
owner shall have the same right of redemption as in cases
of judicial or extra-judicial foreclosure of mortgages.
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Sec. 21. No labor performed or services or materials

furnished with the consent of or at the request of a
condominium owner or his agent or his contractor or
subcontractor, shall be the basis of a lien against the
condominium of any other condominium owner, unless such
other owners have expressly consented to or requested the
performance of such labor or furnishing of such materials or
services. Such express consent shall be deemed to have
been given by the owner of any condominium in the case of
emergency repairs of his condominium unit. Labor
performed or services or materials furnished for the
common areas, if duly authorized by the management body
provided for in a declaration of restrictions governing the
property, shall be deemed to be performed or furnished with
the express consent of each condominium owner. The owner
of any condominium may remove his condominium from a
lien against two or more condominiums or any part thereof
by payment to the holder of the lien of the fraction of the
total sum secured by such lien which is attributable to his
condominium unit.
Sec. 22. Unless otherwise provided for by the declaration of
restrictions, the management body, provided for herein,
may acquire and hold, for the benefit of the condominium
owners, tangible and intangible personal property and may
dispose of the same by sale or otherwise; and the beneficial
interest in such personal property shall be owned by the
condominium owners in the same proportion as their
respective interests in the common areas. A transfer of a
condominium shall transfer to the transferee ownership of
the transferor's beneficial interest in such personal property.
Sec. 23. Where, in an action for partition of a condominium
project or for the dissolution of condominium corporation on
the ground that the project or a material part thereof has
been condemned or expropriated, the Court finds that the
conditions provided for in this Act or in the declaration of
restrictions have not been met, the Court may decree a
reorganization of the project, declaring which portion or
portions of the project shall continue as a condominium
project, the owners thereof, and the respective rights of said
remaining owners and the just compensation, if any, that a

condominium owner may be entitled to due to deprivation of

his property. Upon receipt of a copy of the decree, the
Register of Deeds shall enter and annotate the same on the
pertinent certificate of title.
Sec. 24. Any deed, declaration or plan for a condominium
project shall be liberally construed to facilitate the operation
of the project, and its provisions shall be presumed to be
independent and severable.
Sec. 25. Whenever real property has been divided into
condominiums, each condominium separately owned shall
be separately assessed, for purposes of real property
taxation and other tax purposes to the owners thereof and
the tax on each such condominium shall constitute a lien
solely thereon.
Sec. 26. All Acts or parts of Acts in conflict or inconsistent
with this Act are hereby amended insofar as condominium
and its incidents are concerned.
Sec. 27. This Act shall take effect upon its approval.
Approved: June 18, 1966
Republic Act No. 7899
AN ACT AMENDING SECTION FOUR AND SECTION
SIXTEEN OF THE REPUBLIC ACT NUMBERED FOUR
THOUSAND SEVEN HYNDRED TWENTY-SIX,
OTHERWISE KNOWN AS THE CONDOMINIUM ACT
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress assembled:
SECTION 1. Section 4, last paragraph of Republic Act
No. 4726 is hereby amended as follows:
SECTION 4. x x x
The enabling or master deed may be amended or revoked
upon registration of an instrument executed by a simple
majority of the registered owners of the property: Provided,
That in a condominium project exclusively for either
residential or commercial use, simple majority shall be on a
per unit of ownership basis and that in the case of mixed
use, simple majority shall be on a floor area of ownership
basis: Provided, further, That prior notifications to all
registered owners are done: and Provided, finally, That any
amendment or revocation already decided by a simple
majority of all registered owners shall be submitted to the
Housing and Land Use Regulatory Board and the
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city/municipal engineer for approval before it can be

registered. Until registration of a revocation, the provisions
of this Act shall continue to apply to such property.
SECTION 2. Section 16 of the same Act is hereby
amended to read as follows:
SEC. 16. A condominium corporation shall not,
during its existence, sell, exchange, lease or otherwise
dispose of the common areas owned or held by it in the
condominium project unless authorized by the affirmative
vote of a simple majority of the register owners: Provided,
that prior notifications to all registered owners are done: and
Provided, further, That the condominium corporation may
expand or integrate the project with another upon the
affirmative vote of a simple majority of the registered
owners, subject only to the final approval of the Housing and
Land Use Regulatory Board.
SECTION 3. Effectivity This Act shall take effect
fifteen (15 days after its complete publication in at least two
(2) national newspapers of general circulation.
Approved,
(Sgd.) EDGARDO J. ANGARA (Sgd.) JOSE DE VENECIA,
JR.
President of the Senate Speaker of the House of
Representatives

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This Act which is a consolidation of the House Bill No. 12384

and Senate Bill No. 2042 was finally passed by the House of
Representatives and the Senate on February 15, 1995.
(Sgd) EDGARDO E. TUMANGAN (Sgd) CAMILO L. SABIO
Secretary of the Senate Secretary General
House of Representatives
Approved: February 23, 1995
(Sgd) FIDEL V. RAMOS
President of the Philippines

Article 1. This Code shall be known as The Water Code of the

Philippines.

PRESIDENTIAL DECREE No. 1067 December 31, 1976

(b) To define the extent of the rights and obligations of

water users and owners including the protection and
regulation of such rights;

A DECREE INSTITUTING A WATER CODE, THEREBY REVISING

AND CONSOLIDATING THE LAWS GOVERNING THE
OWNERSHIP, APPROPRIATION, UTILIZATION, EXPLOITATION,
DEVELOPMENT, CONSERVATION AND PROTECTION OF
WATER RESOURCES
WHEREAS, Article XIV, Section 8 of the New Constitution of
the Philippines provides, inter alia, that all waters of the
Philippines belong to the State;

Article 2. The objectives of this Code are:

(a) To establish the basic principles and framework relating
to the appropriation, control and conservation of water
resources to achieve the optimum development and rational
utilization of these resources;

(c) To adopt a basic law governing the ownership,

appropriation, utilization, exploitation, development,
conservation and protection of water resources and rights to
land related thereto; and
(d) To identify the administrative agencies which will enforce
this Code.

WHEREAS, existing water legislations are piece-meal and

inadequate to cope with increasing scarcity of water and
changing patterns of water use;

Article 3. The underlying principles of this code are:

WHEREAS, there is a need for a Water Code based on

rational concepts or integrated and multipurpose
management of water resources and sufficiently flexible to
adequately meet future developments;

(b) All waters that belong to the State can not be the subject
to acquisitive prescription.

WHEREAS, water is vital to national development and it has

become increasingly necessary for government to intervene
actively in improving the management of water resources;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers in me vested by the
Constitution, do hereby order and decree the enactment of
the water Code of the Philippines of 1976, as follows:
CHAPTER I
DECLARATION OF OBJECTIVES AND PRINCIPLES

(a) All waters belong to the State.

(c) The State may allow the use or development of waters

by administrative concession.
(d) The utilization, exploitation, development, conservation
and protection of water resources shall be subject to the
control and regulation of the government through the
National Water Resources Council, hereinafter referred to as
the Council.
(e) Preference in the use and development of waters shall
consider current usages and be responsive to the changing
needs of the country.
Article 4. Waters, as used in this Code, refers to water under
the grounds, water above the ground, water in the
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atmosphere and the waters of the sea within the territorial

jurisdiction of the Philippines.
CHAPTER II
OWNERSHIP OF WATERS
Article 5. The following belong to the State:
(a) Rivers and their natural beds;
(b) Continuous or intermittent waters of springs and brooks
running in their natural beds and the beds themselves;
(c) Natural lakes and lagoons;
(d) All other categories of surface waters such as water
flowing over lands, water from rainfall whether natural, or
artificial, and water from agriculture runoff, seepage and
drainage;
(e) Atmospheric water;
(f) Subterranean or ground waters; and,
(g) Seawater.
Article 6. The following waters found on private lands belong
to the State:

Article 7. Subject to the provisions of this Code, any person

who captures or collects water by means of cisterns, tanks,
or pools shall have exclusive control over such water and
the right to dispose of the same.
Article 8. Water legally appropriated shall be subject to the
control of the appropriator from the moment it reaches the
appropriator's canal or aqueduct leading to the place where
the water will be used or stored and, thereafter, so long as it
is being beneficially used for the purposes for which it was
appropriated.
CHAPTER III
APPROPRIATION OF WATERS
Article 9. Waters may be appropriated and used in
accordance with the provisions of this Code.
Appropriation of water, as used in this Code, is the
acquisition of rights over the use of waters or the taking or
diverting of waters from a natural source in the manner and
for any purpose allowed by law.
Article 10. Water may be appropriated for the following
purposes:
(a) Domestic

(a) Continuous or intermittent waters rising on such lands;

(b) Municipal

(b) Lakes and lagoons naturally occuring on such lands;

(c) Irrigation

(c) Rain water falling on such lands;

(d) Power generation

(d) Subterranean or ground waters; and,

(e) Fisheries

(e) Water in swamps and marshes.

(f) Livestock raising

The owner of the land where the water is found may use the
same for domestic purposes without securing a permit,
provided that such use shall be registered, when required by
the Council. The Council, however, may regulate such when
there is wastage, or in times of emergency.

(g) Industrial
(h) Recreational, and
(i) Other purposes
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Use of water for domestic purposes is the utilization of water

for drinking, washing, bathing, cooking or other household
needs, home gardens, and watering of lawns or domestic
animals.
Use of water for municipal purposes is the utilization of
water for supplying the water requirements of the
community.
Use of water for irrigation is the utilization of water for
producing agricultural crops.
Use of water for power generation is the utilization of water
for producing electrical or mechanical power.
Use of water for fisheries is the utilization of water for the
propagation and culture of fish as a commercial enterprise.
Use of water for livestock raising is the utilization of water
for large herds or flocks of animals raised as a commercial
enterprise.
Use of water for industrial purposes is the utilization of
water in factories, industrial plants and mines, including the
use of water as an ingredient of a finished product.
Use of water for recreational purposes is the utilization of
water for swimming pools, bath houses, boating, water
skiing, golf courses and other similar facilities in resorts and
other places of recreation.
Article 11. The State, for reasons of public policy, may
declare waters not previously appropriated, in whole or in
part, exempt from appropriation for any or all purposes and,
thereupon, such waters may not be appropriated for those
purposes.
Article 12. Waters appropriated for a particular purpose may
be applied for another purpose only upon prior approval of
the Council and on condition that the new use does not
unduly prejudice the rights of other permittees, or require
an increase in the volume of water.

Article 13. Except as otherwise herein provided, no person,

including government instrumentalities or governmentowned or controlled corporations, shall appropriate water
without a water right, which shall be evidenced by a
document known as a water permit.
Water right is the privilege granted by the government to
appropriate and use water.
Article 14. Subject to the provisions of this Code concerning
the control, protection, conservation, and regulation of the
appropriation and use of waters, any person may
appropriate or use natural bodies of water without securing
a water permit for any of the following:
(a) Appropriation of water by means of handcarried
receptacles; and
(b) Bathing or washing, watering or dipping of domestic or
farm animals, and navigation of watercrafts or
transportation of logs and other objects by flotation.
Article 15. Only citizens of the Philippines, of legal age, as
well as juridical persons, who are duly qualified by law to
exploit and develop water resources, may apply for water
permits.
Article 16. Any person who desires to obtain a water permit
shall file an application with the Council who shall make
known said application to the public for any protests.
In determining whether to grant or deny an application, the
Council shall consider the following: protests filed, if any;
prior permits granted; the availability of water; the water
supply needed for beneficial use; possible adverse effects;
land-use economics; and other relevant factors.
Upon approval of an application, a water permit shall be
issued and recorded.
Article 17. The right to the use of water is deemed acquired
as of the date of filing of the application for a water permit
in case of approved permits, or as of the date of actual use
in a case where no permit is required.
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Article 18. All water permits granted shall be subject to

conditions of beneficial use, adequate standards of design
and construction, and such other terms and conditions as
may be imposed by the Council.
Such permits shall specify the maximum amount of water
which may be diverted or withdrawn, the maximum rate of
diversion or withdrawal, the time or times during the year
when water may be diverted or withdrawn, the points or
points of diversion or location of wells, the place of use, the
purposes of which water may be used and such other
requirements the Council deems desirable.
Article 19. Water rights may be leaded or transferred in
whole or in part to another person with prior approval of the
Council, after due notice and hearing.
Article 20. The measure and limit of appropriation of water
shall be beneficial use.
Beneficial use of water is the utilization of water in the right
amount during the period that the water is needed for
producing the benefits for which the water is appropriated.
Article 21. Standards of beneficial use shall be prescribed by
the council for the appropriator of water for different
purposes and conditions, and the use of waters which are
appropriated shall be measured and controlled in
accordance therewith.
Excepting for domestic use, every appropriator of water
shall maintain water control and measuring devices, and
keep records of water withdrawal. When required by the
Council, all appropriators of water shall furnish information
on water use.
Article 22. Between two or more appropriators of water from
the same sources of supply, priority in time of appropriation
shall give the better right, except that in times of
emergency the use of water for domestic and municipal
purposes shall have a better right over all other uses;
Provided, the where water shortage is recurrent and the
appropriator for municipal use has a lower priority in time of

appropriation, then it shall be his duty to find an alternative

source of supply in accordance with conditions prescribed by
the Council.
Article 23. Priorities may be altered on grounds of greater
beneficial use, multi-purpose use, and other similar grounds
after due notice and hearing, subject to payment of
compensation is proper cases.
Article 24. A water right shall be exercised in such a manner
that the rights of third persons or of other appropriators are
not prejudiced thereby.
Article 25. A holder of water permit may demand the
establishment of easements necessary for the construction
and maintenance of the works and facilities needed for the
beneficial use of the waters to be appropriated subject to
the requirements of just compensation and to the following
conditions:
(a) That he is the owner, lessee, mortgagee or one having
real right over the land upon which he proposes to use
water; and
(b) That the proposed easement is the most convenient and
the least onerous to the servient estate.
Easements relating to the appropriation and use of waters
may be modified by agreement of the contracting parties
provided the same is not contrary to law or prejudicial to
third persons.
Article 26. Where water shortage is recurrent, the use of the
water pursuant to a permit may, in the interest of equitable
distribution of the benefits among legal appropriators,
reduce after due notice and hearing.
Article 27. Water users shall bear the diminution of any
water supply due to natural causes or force majeure.
Article 28. Water permits shall continue to be valid as long
as water is beneficially used; however, it maybe suspended
on the grounds of non-compliance with approved plans and
specifications or schedules of water distribution; use of
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water for a purpose other than that for which it was granted;
non-payment of water charges; wastage; failure to keep
records of water diversion, when required; and violation of
any term or condition of any permit or rules and regulations
promulgated by the Council.

Control area is an area of land where subterranean or

ground water and surface water are so interrelated that
withdrawal and use in one similarly affects the other. The
boundary of a control area may be altered from time to
time, as circumstances warrant.

Temporary permits may be issued for the appropriation and

use of water for short periods under special circumstances.

Article 33. Water contained in open canals, aqueducts or

reservoirs of private persons may be used by any person for
domestic purpose or for watering plants as long as the water
is withdrawn by manual methods without checking the
stream or damaging the canal, aqueduct or reservoir;
Provided, That this right may be restricted by the owner
should it result in loss or injury to him.

Article 29. Water permits may be revoked after due notice

and hearing on grounds of non-use; gross violation of the
conditions imposed in the permit; unauthorized sale of
water; willful failure or refusal to comply with rules and
regulations of any lawful order; pollution, public nuisance or
acts detrimental to public health and safety; when the
appropriator is found to be disqualified under the law to
exploit and develop natural resources of the Philippines;
when, in the case, of irrigation, the land is converted to nonagricultural purposes; and other similar grounds.
Article 30. All water permits are subject to modification or
cancellation by the council, after due notice and hearing, in
favor of a project of greater beneficial use or for multipurpose development, and a water permittee who suffers
thereby shall be duly compensated by the entity or person
in whose favor the cancellation was made.
CHAPTER IV
UTILIZATION OF WATERS
Article 31. Preference in the development of water resources
shall consider security of the State, multiple use, beneficial
effects, adverse effects and costs of development.
Article 32. The utilization of subterranean or ground water
shall be coordinated with that of surface waters such as
rivers, streams, springs and lakes, so that a superior right in
one not adversely affected by an inferior right in the other.
For this purpose the Council shall promulgate rules and
regulations and declare the existence of control areas for
the coordinated development, protection, and utilization of
subterranean or ground water and surface waters.

Article 34. A water permittee or appropriator may use any

watercourse to convey water to another point in the
watercourse for the purpose stated in a permit and such
water may be diverted or recaptured at that point by said
permittee in the same amount less allowance for normal
losses in transit.
Article 35. Works for the storage, diversion, distribution and
utilization of water resources shall contain adequate
provision for the prevention and control of diseases that
may be induced or spread by such works when required by
the Council.
Article 36. When the reuse of waste water is feasible, it shall
be limited as much as possible, to such uses other than
direct human consumption. No person or agency shall
distribute such water for public consumption until it is
demonstrated that such consumption will not adversely
affect the health and safety of the public.
Article 37. In the construction and operation of hydraulic
works, due consideration shall be given to the preservation
of scenic places and historical relics and, in addition to the
provisions of existing laws, no works that would required the
destruction or removal of such places or relics shall be
undertaken without showing that the distribution or removal
is necessary and unaviodable.
Article 38. Authority for the construction of dams, bridges
and other structures across of which may interfere with the
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flow of navigable or flotable waterways shall first be secured

from the Department of Public Works, Transportation and
Communications.
Article 39. Except in cases of emergency to save life or
property, the construction or repair of the following works
shall be undertaken only after the plans and specifications
therefor, as may be required by the Council, are approved
by the proper government agency; dams for the diversion or
storage of water; structures for the use of water power,
installations for the utilization of subterranean or ground
water and other structures for utilization of water resources.
Article 40. No excavation for the purpose of emission of a
hot spring or for the enlargement of the existing opening
thereof shall be made without prior permit.
Any person or agency who intends to develop a hot spring
for human consumption must first obtain a permit from the
Department of Health.
Article 41. No person shall develop a stream, lake, or spring
for recreational purposes without first securing a permit
from the Council.
Article 42. Unless-otherwise ordered by the President of the
Philippines and only in time of national calamity or
emergency, no person shall induce or restrain rainfall by any
method such as cloud seeding without a permit from the
proper government emergency.
Article 43. No person shall raise or lower the water level of a
river stream, lake, lagoon, or marsh nor drain the same
without a permit.
Article 44. Drainage systems shall be so constructed that
their outlets are rivers, lakes, the sea, natural bodies of
water, or such other water course as may be approved by
the proper government agency.
Article 45. When a drainage channel is constructed by a
number of persons for their common benefit, the cost of

construction and maintenance of the channel shall be borne

by each in proportion to the benefits drived.
Article 46. When artificial means are employed to drain
water from higher to lower land, the owner of the higher
land shall select the routes and methods of drainage that
will cause the minimum damage to the lower lands, subject
to the requirements of just compensation.
Article 47. When the use, conveyance or storage of waters
results in damage to another, the person responsible for the
damage shall pay compensation.
Article 48. When a water resources project interferes with
the access of landowner to a portion of his property or with
the conveyance of irrigation or drainage water, the person
or agency constructing the project shall bear the cost of
construction and maintenance of the bridges, flumes and
other structures necessary for maintaining access, irrigation,
or drainage, in addition to paying compensation for land and
incidental damages.
Article 49. Any person having an easement for an aqueduct
may enter upon the servient land for the purpose of
cleaning, repairing or replacing the aqueduct or the removal
of obstructions therefrom.
Article 50. Lower estates are obliged to receive the waters
which naturally and without the intervention of man flow
from the higher estate, as well as the stone or earth which
they carry with them.
The owner of the lower estate can not construct works which
will impede this natural flow, unless he provides an
alternative method of drainage; neither can the owner of the
higher estate make works which will increase this natural
flow.
Article 51. The banks of rivers and streams and the shores
of the seas and lakes throughout their entire length and
within a zone of three (3) meters in urban areas, twenty (20)
meters in agricultural areas and forty (40) meters in forest
areas, along their margins are subject to the easement of
public use in the interest of recreation, navigation, floatage,
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fishing and salvage. No person shall be allowed to stay in

this zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build structures
of any kind.
Article 52. The establishment, extent, form, and conditions
of easements of water not expressly determined by the
provisions of this Code shall be governed by the provisions
of the Civil Code.
CHAPTER V
CONTROL OF WATERS
Article 53. To promote the best interest and the coordinated
protection of flood plain lands, the Secretary of Public Works,
Transportation and Communications may declare flood
control areas and promulgate guidelines for governing flood
plain management plans in these areas.
Article 54. In declared flood control areas, rules and
regulations may be promulgated to prohibit or control
activities that may damage or cause deterioration or lakes
and dikes, obstruct the flow of water, change the natural
flow of the river, increase flood losses or aggravate flood
problems.
Article 55. The government may construct necessary flood
control structures in declared flood control areas, and for
this purpose it shall have a legal easement as wide as may
be needed along and adjacent to the river bank and outside
of the bed or channel of the river.
Article 56. River beds, sand bars and tidal flats may not be
cultivated except upon prior permission from the Secretary
of the Department of Public Works, Transportation and
Communication and such permission shall not be granted
where such cultivation obstructs the flow of water or
increase flood levels so as to cause damage to other areas.
Article 57. Any person may erect levees or revetments to
protect his property from flood, encroachment by the river
or change in the course of the river, provided that such
constructions does not cause damage to the property of
another.

Article 58. When a river or stream suddenly changes its

course to traverse private lands, the owners of the affected
lands may not compel the government to restore the river to
its former bed; nor can they restrain the government from
taking steps to revert the river or stream to its former
course. The owners of the land thus affected are not entitled
to compensation for any damage sustained thereby.
However, the former owners of the new bed shall be the
owners of the abandoned bed in proportion to the area lost
by each.
The owners of the affected lands may undertake to return
the river or stream to its old bed at their own expense;
Provided, That a permit therefor is secured from the
Secretary of Public Works, Transportation and
Communication and work pertaining thereto are
commenced within two years from the change in the course
of the river or stream.
Article 59. Rivers, lakes and lagoons may, upon the
recommendation of the Philippines Coast Guard, be declared
navigable either in whole or in part.
Article 60. The rafting of logs and other objects on rivers and
lakes which are flotable may be controlled or prohibited
during designated season of the year with due regard to the
needs of irrigation and domestic water supply and other
uses of water.
Article 61. The impounding of water in ponds or reservoirs
may be prohibited by the Council upon consultation with the
Department of Health if it is dangerous to public health, or it
may order that such pond or reservoir be drained if such is
necessary for the protection of public health.
Article 62. Waters of a stream may be stored in a reservoir
by a permittee in such amount as will not prejudice the right
of any permittee downstream. Whoever operates the
reservoir shall, when required, release water for minimum
stream flow.

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All reservoir operations shall be subject to rules and

regulations issued by the Council or any proper government
agency.
Article 63. The operator of a dam for the storage of water
may be required to employ an engineer possessing
qualifications prescribed for the proper operations,
maintenance and administration of the dam.
Article 64. The Council shall approve the manner, location,
depth, and spacing in which borings for subterranean or
ground water may be made, determine the requirements for
the registration of every boring or alteration to existing
borings as well as other control measures for the
exploitation of subterranean or ground water resources, and
in coordination with the Professional Regulation Commission
prescribe the qualifications of those who would drill such
borings.
No person shall drill a well without prior permission from the
Council.
Article 65. Water from one river basin may be transferred to
another river basin only with approval of the Council. In
considering any request for such transfer, the Council shall
take into account the full costs of the transfer, the benefits
that would accrue to the basin of origin without the transfer,
the benefits would accrue to the receiving basin on account
of the transfer, alternative schemes for supplying water to
the receiving basin, and other relevant factors.
CHAPTER VI
CONSERVATION AND PROTECTION OF WATERS AND
WATERSHEDS AND RELATED LAND RESOURCES
Article 66. After due notice and hearing when warranted by
circumstances, minimum stream flows for rivers and
streams, and minimum water levels for lakes may be
established by the Council under such conditions as may be
necessary for the protection of the environment, control of
pollution, navigation, prevention of salt damage, and
general public use.

Article 67. Any watershed or any area of land adjacent to

any surface water or overlying any ground water may
declared by the Department of Natural Resources as
protected area Rules and regulations may be promulgated
by such Department to prohibit or control such activities by
the owners or occupants thereof within the protected area
which may damage or cause the deterioration of the surface
water or ground water or interfere with the investigation,
use, control, protection, management or administration of
such waters.
Article 68. It shall be the duty of any person in control of a
well to prevent the water from flowing on the surface of the
land, or into any surface water, or any porous stratum under
neath the surface without being beneficially used.
Article 69. It shall be the duty of any person in control of a
well containing water with minerals or other substances
injurious to man, animals, agriculture, and vegetation to
prevent such waters from flowing on the surface of the land
or into any surface water or into any other aquifer or porous
stratum.
Article 70. No person shall utilize an existing well or pond or
spread waters for recharging substerranean or ground water
supplies without prior permission of the Council.
Article 71. To promote better water conservation and usage
for irrigation purposes, the merger of irrigation associations
and the appropriation of waters by associations instead of
by individuals shall be encouraged.
No water permit shall be granted to an individual when his
water requirement can be supplied through an irrigation
association.
Article 72. In the consideration of a proposed water resource
project, due regard shall be given to ecological changes
resulting from the construction of the project in order to
balance the needs of development and the protection of the
environment.
Article 73. The conservation of fish and wildlife shall receive
proper consideration and shall be coordinated with other
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features of water resources development programs to insure

that fish and wildlife values receive equal attention with
other project purposes.
Article 74. Swamps and marshes which are owned by the
State and which primary value for waterfowl propagation or
other wildlife purposes may be reserved and protected from
drainage operation and development.
Article 75. No person shall, without prior permission from
the National Pollution Control Commission, build any works
that may produce dangerous or noxious substances or
perform any act which may result in the introduction of
sewage, industrial waste, or any pollutant into any source of
water supply.
Water pollution is the impairment of the quality of water
beyond a certain standard. This standard may vary
according to the use of the water and shall be set by the
National Pollution Control Commission.
Article 76. The establishment of cemeteries and waste
disposal areas that may affect the source of a water supply
or a reservoir for domestic or municipal use shall be subject
to the rules and regulations promulgated by the Department
of Health.
Article 77. Tailings from mining operations and sediments
from placer mining shall not be dumped into rivers and
waterways without prior permission from the Council upon
recommendation by the National Pollution Control
Commission.
Article 78. The application of agricultural fertilizers and
pesticides may be prohibited or regulated by the National
Pollution Control Commission in the areas where such
application may cause pollution of a source of water supply.
CHAPTER VII
ADMINISTRATION OF WATERS AND ENFORCEMENT OF THE
PROVISIONS OF THIS CODE
Article 79. The Administration and enforcement of the
provisions of this Code, including the granting of permits

and the imposition of penalties for administrative violations

hereof, are hereby vested in the Council, and except in
regard to those functions which under this Code are
specifically conferred upon other agencies of the
government, the Council is hereby empowered to make all
decisions and determinations provided for in this Code.
Article 80. The Council may deputize any official or agency
of the government to perform any of its specific functions or
activities.
Article 81. The Council shall provide a continuing program
for data collection, research and manpower development
needed for the appropriation, utilization, exploitation,
conservation, and protection of the water resources of the
country.
Article 82. In the implementation of the provisions of this
code, the Council shall promulgate the necessary rules and
regulations which may provide for penalties consisting of a
fine not exceeding One Thousand Pesos (P1,000.00) and/or
suspension or revocation of the water permit or other right
to the use of water. Violations of such rules and regulations
may be administratively dealt with by the Council.
Such rules and regulations prescribed by any government
agency that pertain to the utilization, exploitation,
development, control, conservation, or protection of water
resources shall, if the Council so requires, be subject to its
approval.
Article 83. The Council is hereby authorized to impose and
collect reasonable fees or charges for water resources
development from water appropriators, except when it is for
purely domestic purposes.
Article 84. The Council and other agencies authorized to
enforce this Code are empowered to enter upon private
lands, with previous notice to the owner, for the purpose of
conducting surveys and hydrologic investigations, and to
perform such other acts as are necessary in carrying out
their functions including the power to exercise the right of
eminent domain.
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Article 85. No program or project involving the

appropriation, utilization, exploitation, development, control,
conservation, or protection of water resources may be
undertaken without prior approval of the Council, except
those which the Council may, in its discretion, exempt.

Article 88. The Council shall have original jurisdiction over

all disputes to relating to appropriation, utilization,
exploitation, development, control, conservation and
protection of waters within the meaning and context of the
provisions of this Code.

The Council may require consultation with the public prior to

the implementation of certain water resources development
projects.

The decisions of the Council on water rights controversies

shall be immediately executory and the enforcement thereof
may be suspended only when a bond, in a amount fixed by
the Council to answer for damages occasioned by the
suspension or stay of execution, shall have been filed by the
appealing party, unless the suspension is virtue of an order
of a competent court.

Article 86. When plans and specifications of a hydraulic

structure are submitted for approval, the government
agency whose functions embrace the type of project for
which the structure is intended, shall review the plans and
specifications and recommended to the Council proper
action thereon and the latter shall approve the same only
when they are inconformity with the requirements of this
Code and the rules and regulations promulgated by the
Council. Notwithstanding such approval, neither the
engineer who drew up the plans and specifications of the
hydraulic structure, nor the constructor who built it, shall be
relieved of his liability for damages in case of failure thereof
by reason of defect in plans and specifications, or failure due
to defect in construction, within ten (10) years from the
completion of the structure.
Any action recover such damages must be brought within
five (5) years following such failure.
Article 87. The Council or its duly authorized
representatives, in the exercise of its power to investigate
and decide cases brought to its cognizance, shall have the
power to administer oaths, compel the attendance of
witnesses by subpoena and the production of relevant
documents by subpoena duces tecum.
Non-compliance of violation of such orders or subpoena and
subpoena duces tecum shall be punished in the same
manner as indirect contempt of an inferior court upon
application by the aggrieved party with the proper Court of
First Instance in accordance with the provisions of Rules 71
of the Rules of the Court.

All dispute shall be decided within sixty (60) days after the
parties submit the same for decision or resolution.
The Council shall have the power to issue writs of execution
and enforce its decisions with the assistance of local or
national police agencies.
Article 89. The decisions of the Council on water rights
controversies may be appealed to the Court of First Instance
of the province where the subject matter of the controversy
is situated within fifteen (15) days from the date the party
appealing receives a copy of the decision, on any of the
following grounds; (1) grave abuse of discretion; (2)
question of law; and (3) questions of fact and law.
CHAPTER VIII
PENAL PROVISIONS
Article 90. The following acts shall be penalized by
suspension or revocation of the violator's water permit or
other right to the use of water and/or a fine of not exceeding
One Thousand Pesos (P1,000.00), in the discretion of the
Council:
(a)Appropriation of subterranean or ground water for
domestic use by an overlying landowner without registration
required by the Council.
(b) Non-observance of any standard of beneficial use of
water.
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(c) Failure of the appropriator to keep a record of water

withdrawal, when required.
(d) Failure to comply with any of the terms or conditions in a
water permit or a water rights grant.
(e) Unauthorized use of water for a purpose other than that
for which a right or permit was granted.
(f) Construction or repair of any hydraulic work or structure
without duly approved plans and specifications, when
required.
(g) Failure to install a regulating and measuring device for
the control of the volume of water appropriated, when
required.
(h) Unauthorized sale, lease, or transfer of water and/or
water rights.
(i) Failure to provide adequate facilities to prevent or control
diseases when required by the Council in the construction of
any work for the storage, diversion, distribution and
utilization of water.
(j) Drilling of a well without permission of the Council.
(k) Utilization of an existing well or ponding or spreading of
water for recharging subterranean or ground water supplies
without permission of the Council.
(l) Violation of or non-compliance with any order, rules, or
regulations of the Council.
(m) Illegal taking or diversion of water in an open canal,
aqueduct or reservoir.
(n) Malicious destruction of hydraulic works or structure
valued at not exceeding P5,000.00.
Article 91. A. A fine of not exceeding Three Thousand Pesos
(P3,000.00) or imprisonment for not more than three (3)
years, or both such fine and imprisonment, in the discretion

of the Court, shall be imposed upon any person who

commits any of the following acts:
1. Appropriation of water without a water permit, unless
such person is expressly exempted from securing a permit
by the provisions of this Code.
2. Unauthorized obstruction of an irrigation canal.
3. Cultivation of a river bed, sand bar or tidal flat without
permission.
4. Malicious destruction of hydraulic works or structure
valued at not exceeding Twenty-Five Thousand Pesos
(P25,000.00).
B. A fine exceeding Three Thousand Pesos P3,000.00) but
not more than Six Thousand Pesos P6,000.00) or
imprisonment exceeding three (3) years but not more than
six (6) years, or both such fine and imprisonment in the
discretion of the Court, shall be imposed on any person who
commits any of the following acts:
1. Distribution for public consumption of water which
adversely affects the health and safety of the public.
2. Excavation or enlargement of the opening of a hot spring
without permission.
3. Unauthorized obstruction of a river or waterway, or
occupancy of a river bank or seashore without permission.
4. Establishment of a cemetery or a waste disposal area
near a source of water supply or reservoir for domestic
municipal use without permission.
5. Constructing, without prior permission of the government
agency concerned, works that produce dangerous or
noxious substances, or performing acts that result in the
introduction of sewage, industrial waste, or any substance
that pollutes a source of water supply.
6. Dumping mine tailings and sediments into rivers of
waterways without permission.
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7. Malicious destruction of hydraulic works or structure

valued more than Twenty-Five Thousand Pesos (P25,000.00)
but at not exceeding One Hundred Thousand Peso
(100,000.00).
C. A fine exceeding Six Thousand Pesos (P6,000.00) but not
more than Ten Thousand Pesos (P10,000.00) or
imprisonment exceeding six (6) years but not more than
twelve (12) years, or both such fine and imprisonment, in
the discretion of the Court, shall be imposed upon any
person who commits any of the following acts:
1. Misrepresentation of citizenship in order to qualify for
water permit.
2. Malicious destruction of a hydraulic works or structure,
valued at more than One Hundred Thousand Pesos
(P100,000.00).

exceeding Three Thousand Pesos (P3,000.00) but not more

than Six Thousand Pesos (P6,000.00) or an imprisonment
exceeding three (3) years but not more than six (6) years, or
both such fine and imprisonment, shall prescribe in seven
(7) years; and those punishable by a fine exceeding Six
Thousand Pesos (P6,000.00) but not more than Ten
Thousand Pesos (P10,000.00) or an imprisonment exceeding
six (6) years but not more than twelve (12) years, or both
such fine and imprisonment, shall prescribe in ten (10)
years.
CHAPTER IX
TRANSITORY AND FINAL PROVISIONS
Article 95. Within two (2) years from the promulgation of this
Code, all claims for a right to use water existing on or before
December 31, 1974 shall be registered with the Council
which shall confirm said rights in accordance with the
provisions of this Code, and shall set their respective
priorities.

Article 92. If the offense is committed by a corporation,

trust, firm, partnership, association or any other juridical
person, the penalty shall be imposed upon the President,
General Manager, and other guilty officer or officers of such
corporation, trust firm, partnership, association or entity,
without prejudice to the filing of a civil action against said
juridical person. If the offender is an alien, he shall be
deported after serving his sentence, without further
proceedings.

When priority in time of appropriation from a certain source

of supply cannot be determined, the order of preference in
the use of the waters shall be as follows:

After final judgment of conviction, the Court upon petition of

the prosecution attorney in the same proceedings, and after
due hearing, may, when the public interest so requires,
order suspension of or dissolution of such corporation, trust,
firm, partnership, association or juridical person.

(d) Fisheries

Article 93. All actions for offenses punishable under Article

91 of this Code shall be brought before the proper court.

(g) Other uses.

Article 94. Actions for offenses punishable under this Code

by a fine of not more than Three Thousand Pesos
(P3,000.00) or by an imprisonment of not more than three
(3) years, or both such fine and imprisonment, shall
prescribe in five (5) years; those punishable by a fine

(a) Domestic and municipal use

(b) Irrigation
(c) Power generation

(e) Livestock raising

(f) Industrial use, and

Any claim not registered within said period shall be

considered waived and the use of the water deemed
abandoned, and the water shall thereupon be available for
disposition as unappropriated waters in accordance with the
provisions of this Code.
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Article 96. No vested or acquired right to the use of water

can arise from acts or omissions which are against the law
or which infringe upon the rights of others.
Article 97. Acts and contract under the regime of old laws, if
they are valid in accordance therewith, shall be respected,
subject to the limitations established in this Code. Any
modification or extension of these acts and contracts after
the promulgation of this Code, shall be subject to the
provisions hereof.
Article 98. Interim rules and regulations promulgated by the
Council shall continue to have binding force and effect,
when not in conflict with the provisions of this Code.
Article 99. If any provision or part of this Code, or the
application thereof to any person or circumstance, is
declared unconstitutional or invalid for any reason, the other
provisions or parts therein shall not be affected.
Article 100. The following laws, parts and/or provisions of
laws are hereby repealed:
(a) The provisions of the Spanish Law on Waters of August 3,
1866, the Civil Code of Spain of 1889 and the Civil Code of
the Philippines (R.A. 386) on ownership of waters,
easements relating to waters, use of public waters and
acquisitive prescription on the use of waters, which are
inconsistent with the provisions of this Code;
(b) The provisions of R.A. 6395, otherwise known as the
Revised Charter of National Power Corporation, particularly
section 3, paragraph (f), and section 12, insofar as they
relate to the appropriation of waters and the grant thereof;

Article 101. This Code shall take effect upon its

promulgation.
Done in the City of Manila, this 31st day of December,
Nineteen Hundred and Seventy-Six
Amendments
PRESIDENTIAL DECREE No. 1399
AMENDING CERTAIN SECTIONS OF PRESIDENTIAL DECREE
NO. 1067-A DATED JANUARY 1, 1977, ENTITLED "CREATING
THE PHILIPPINE AMUSEMENTS AND GAMING CORPORATION,
DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS
THEREFOR AND FOR OTHER PURPOSES," AND PRESIDENTIAL
DECREE NO. 1067-B DATED JANUARY 1, 1977, ENTITLED,
"GRANTING THE PHILIPPINE AMUSEMENTS AND GAMING
CORPORATION A FRANCHISE TO ESTABLISH, OPERATE, AND
MAINTAIN GAMBLING CASINOS ON LAND OR WATER WITHIN
THE TERRITORIAL JURISDICTION OF THE REPUBLIC OF THE
PHILIPPINES."
WHEREAS, it is now the desire of the government to fully
develop and exploit casino operations as a source of
revenue to finance important infra-structure and socio- civic
projects;
WHEREAS, to achieve this goal, after the successful
experiment conducted in the Floating Casino, "PHILIPPINE
TOURIST I" during the year 1977, there is now the need to
expand the areas of operations outside the Metropolitan
Manila Area:

(c) The provisions of Act No. 2152, as amended, otherwise

known as the Irrigation Act, section 3, paragraphs (k) and
(m) of P.D. No. 813, R.A. 2056; Section 90, C.A. 137; and,

WHEREAS, it is now the intention of the government to

allocate and appropriate revenues generated from this
newly developed source to fund priority infrastructure
and/or socio-civic projects throughout the Philippines, as
may be directed and authorize by the Office of the
President;

(d) All Decree, Laws, Acts, parts of Acts, rules of Court,

executive orders, and administrative regulations which are
contrary to or inconsistent with the provisions of this Code.

WHEREAS, to attain this objective, certain amendments

have to be made to Presidential Decrees Nos. 1067-A and
1067-B;

Page 203 of 404

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NOW, THEREFORE, I, FERDINAND E. MARCOS, President of

the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and decree the following:
Section 1. Section 5 of Presidential Decree No. 1067-A dated
January 1, 1977, is hereby amended to read as follows:
"Sec. 5. Board of Directors. The Corporation shall be
governed and its activities be directed, controlled and
managed by a Board of Directors that shall be composed of
five (5) members, namely: The Chairman of the National
Development Corporation, who shall act as Chairman; (2)
Government Corporate Counsel; (3) Office of the Executive
Assistant, Office of the President, or their respective
representatives; and two other members to be appointed by
the President of the Philippines from the private sector."
Section 2. Section 3 of Presidential Decree No. 1067-B is
hereby amended to read as follows:
"Section 3. SPECIAL CONDITION OF FRANCHISE. Sixty (60%)
per cent of the aggregate gross earnings derived by the
Franchise Holder from this Franchise shall be immediately
set aside and allocated to fund the following infrastructure
and socio-civic projects within the Metropolitan Manila Area;
(a) Flood Control.
(b) Sewerage and Sewerage.
(c) Nutritional Programs.
(d) Population Control.
(d) 'Tulungan ng Bayan' Centers.
(e) Beautification.
In addition to the priority infra-structure and socio-civic
projects within the Metropolitan Manila Areas specifically
enumerated above, the 60% share of the government in the
aggregate gross earnings derived by the Franchise Holder
from this Franchise may now be appropriated and allocated
to fund and finance any infra-structure and/or socio-civic

projects throughout the Philippines as may be directed and

authorized by the Office of the President."
Section 3. Section 4 of Presidential Decree No. 1067-B is
hereby amended to read as follows:
Section 4. EXEMPTIONS.
1. Duties, taxes and other imposts on importations. All
importations of equipment, vehicles, automobiles, boats,
ships, barges, aircraft and such other gambling
paraphernalia, including accessories or related facilities, for
the sole and exclusive use of the casinos, the proper and
efficient management and administration thereof, and such
other clubs, recreation or amusement places to be
established under and by virtue of this Franchise shall be
exempt from the payment of duties, taxes and other
imposts, including all kinds of fees, levies, or charges of any
kind or nature.
Vessels and/or accessory ferry boats imported or to be
imported by any corporation having existing contractual
arrangements with the Franchise, for the sole and exclusive
use of the casino or to be used to service the operations and
requirements of the casino, shall likewise be totally exempt
from the payment of all taxes, duties and other imposts,
including all kinds of fees, levies, assessments or charges of
any kind or nature, whether National or local.
2. Income and other taxes.
(a) Franchise Holder: No tax of any kind or form, income or
otherwise, as well as fees, charges, or levies of whatever
nature, shall be assessed and collected under the Franchise
from the Franchise Holder; nor shall any form of tax or
charge attach in any way to the earnings of the Franchise
Holder, except a Franchise Tax of five (5%) percent of the
gross revenue or earnings derived by the Franchise Holder
from its operation under this Franchise. Such tax shall be
due and payable quarterly to the National Government and
shall be in lieu of all taxes, levies, fees or assessments of
any kind, nature or description, levied, established, or
collected by any municipal, provincial or National authority.
Page 204 of 404

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(b) Others: The exemption herein granted for earnings

derived from the operations conducted under the franchise,
specifically from the payment of any tax, income or
otherwise, as well as any form of charges, fees or levies,
shall insure to the benefit of and extend to corporation/s,
association/s, agency/ies, or individual/s with whom the
Franchisee has any contractual relationship in connection
with the operations of the casino/s authorized to the
conducted under the franchise and to those receiving
compensation or other remuneration from the Franchise
Holder as a result of essential facilities furnished and/or
technical services rendered to the Franchise Holder.

with the operations of the casino/s to purchase, receive,

exchange, and disburse foreign exchange, subject to the
following terms and conditions;

3. Dividend Income. In the event the Franchise should

declare a cash dividend, that portion of the dividend income
corresponding to the participation of the private sector,
shall, as an incentive to the beneficiaries, be subject only to
a final flat income rate of ten (10%) percent in lieu of the
regular income tax rates. The dividend income shall not in
such case be considered as part of beneficiaries' taxable
income. Provided, However, That such dividend income shall
be totally exempted from income or other form of taxes if
invested within six (6) months from the date the dividend
income is received, in the following:

(c) Franchise shall provide an office at the casino/s

exclusively for the employees of the designated bank, agent
of the Central Bank, where the Franchise shall maintain a
dollar account which will be utilized exclusively for the
above purpose and the casino dollar treasury employees;

(a) Operation of the casino/s or investments in any affiliate

activity that will ultimately redound to the benefit of the
Franchisee-corporation; or any other corporation with whom
Franchisee has any existing arrangements in connection
with or related to the operations of the casino/s;
(b) Government bonds, securities, treasury notes or
government debentures;
(c) BOI-registered or export-oriented corporation/s;
(d) Any productive enterprise, or
(e) In payment of government or other form of indebtedness
guaranteed by the government through any of its financing
or banking institutions.
4. Utilization of foreign currencies. The Franchisee shall have
the right and authority, solely and exclusively in connection

(a) A specific area in the casino/s or gaming pit shall be put

up solely and exclusively for players and patrons utilizing
foreign currencies;
(b) Franchise shall appoint and designate a duly and
accredited commercial bank, agent of the Central Bank, to
handle, administer and manage the use of foreign
currencies in the casino/s;

(d) Only persons with foreign passports, or certificates of

identity (for Hongkong patrons only), duly issued by the
government or country of their residence will be allowed to
play in the foreign exchange gamin it.
(e) Only foreign exchange prescribed to form part of the
Philippine International Reserve and the following foreign
exchange currencies; Australian Dollar, Singapore Dollar,
Hongkong Dollar, shall be used in this gaming pit;
(f) The disbursements, administration, management and
recording of foreign exchange currencies use in the casino/s
shall be carried out in accordance with existing foreign
exchange regulations; and periodical reports of transactions
in such foreign exchange currencies by the Franchise shall
be duly recorded and reported to the Central Bank thru the
designated Agent Bank.
(g) The Franchisee shall issue the necessary rules and
regulations for the guidance and information of players
qualified to participate in the foreign exchange gaming pit,
in order to make certain that the terms and conditions as
above setforth are strictly copied with."

Page 205 of 404

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Section 4. Section 5, Par. (1) of Presidential Decree No.

1067-B is hereby amended to read as follows:
"Sec. 5. OTHER CONDITIONS.
1. Place. The Franchise Holder shall conduct the gambling
activities or games or chance on land or water within the
territorial jurisdiction of the Republic of the Philippines.
When conducted on water, the Franchise Holder shall have
the right to dock the floating casino/s in any part of the
Philippines where vessels/boats are authorized to dock
under the Customs and Maritime Laws."
Section 5. This Decree shall take effect immediately.
Done in the City of Manila, this 2nd day of June, in the year
of Our Lord, nineteen hundred and seventy-eight.
PRESIDENTIAL DECREE No. 1632
AMENDING SECTIONS THREE AND FOUR OF PRESIDENTIAL
DECREE NO. 1067-B DATED JANUARY 1, 1977, ENTITLED
"GRANTING THE PHILIPPINE AMUSEMENTS AND GAMING
CORPORATION A FRANCHISE TO ESTABLISH, OPERATE, AND
MAINTAIN GAMBLING CASINOS ON LAND OR WATER WITHIN
THE TERRITORIAL JURISDICTION OF THE REPUBLIC OF THE
PHILIPPINES AS AMENDED BY PRESIDENTIAL DECREE NO.
1399 DATED JUNE 2, 1978
I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do
hereby order and decree the following:
Section 1. Section 3 of Presidential Decree No. 1067-B as
amended by Presidential Decree No. 1399, is hereby further
amended to read as follows:
"If the host area is Metro Manila, sixty percent (60%) shall
be set aside and allocated to fund the following
infrastructure and socio-civic projects within the
Metropolitan Manila Area:
(a) Flood Control

(b) Sewerage and Sewage

(c) Nutritional Programs
(d) Population Control
(e) "Tulungan ng Bayan" Centers
(f) Beautification
Provided, however, That as may be directed and authorized
by the President, all or part of the said 60% share of the
government may be appropriated and allocated to fund and
finance any infrastructure and/or socio-civic projects
throughout the Philippines: Provided, further, That if the host
area is a city or municipality other than Metro-Manila, said
sixty (60%) share of the government shall be allotted to the
host city or municipality (other than Metro Manila) and to
the province, as follows: fifty per centum (50%) to the
province, and fifty per centum (50%) to the host city or host
municipality, as the case may be: Provided, furthermore,
That in Regions 9 and 12 the sharing of the 60%
appertaining to the government shall be as follows: thirty
per centum (30%) to the province, forty-five per centum
(45%) to municipalities and cities, as the case may be, and
twenty-five per centum (25%) to the regional governments."
Section 2. Paragraph (2) of Section 4 of Presidential Decree
No. 1067-B as amended, is hereby further amended to read
as follows:
"Sec. 4. EXEMPTIONS.
"(2) Income and other taxes.
"(a) Franchise Holder: In consideration of the franchise and
rights hereby granted, the Franchise Holder shall pay to the
National Government a franchise tax of five per centum
(5%) of its gross revenue or earnings from the operation of
its franchise, such tax to be paid in the same manner as
provided in Section 267 of the National Internal Revenue
Code, and shall be in lieu of any and all taxes of any kind
and nature of description levied, established or collected by
Page 206 of 404

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any authority whatsoever, whether Municipal, City, Province

or National."
Section 3. This Decree shall take effect immediately.
Done in the City of Manila, this 13th day of August, in the
year of Our Lord, nineteen hundred and seventy-nine.
ARTICLE 519
G.R. No. 146527

January 31, 2005

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
MANNA PROPERTIES, INC., Represented by its President,
JOSE TANYAO, respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 seeking to set aside the Court
of Appeals Decision2 dated 20 December 2000. The Court
of Appeals affirmed the Decision of the Regional Trial Court,
Branch 26, San Fernando, La Union ("trial court") dated 21
February 1996 in Land Registration Case No. N-2352 ("LRC
No. N-2352") approving the application of respondent Manna
Properties, Inc. ("Manna Properties") for the registration in
its name of a parcel of land located in Barangay
Pagdaraoan, San Fernando, La Union.
Antecedent Facts
As culled by the Court of Appeals from the evidence, the
facts of the case are as follows:
On September 29, 1994, applicant-appellee filed an
Application for the registration of title of two (2) parcels of
land, specifically:
a) Lot No. 9515, Cad. 539-D of As-013314-001434; and

b) Lot No. 1006, Cad. 539-D of As-013314-001434, located

in Barangay Pagdaraoan, San Fernando, La Union measuring
around 1,480 square meters.
Initial hearing was set on February 16, 1995 by the court a
quo.
Copies of the application, postal money orders for
publication purposes and record were forwarded to the Land
Registration Authority by the Court a quo on October 7,
1994.
However, per Report dated November 21, 1994 of the Land
Registration Authority, the full names and complete postal
addresses of all adjoining lot owners were not stated for
notification purposes. As a result thereto, per Order dated
December 5, 1994, the applicant was directed to submit the
names and complete postal addresses of the adjoining
owners of Lots 9514 and 9516. On December 14, 1994, the
applicant filed its compliance, which was forwarded to the
Land Registration Authority on December 22, 1994 together
with the notice of the Initial Hearing, which was reset to
April 13, 1995.
On January 31, 1995, the Land Registration Authority
requested for the resetting of the initial hearing since April
13, 1995 fell on Holy Thursday, a non-working day to a date
consistent with LRC Circular No. 353 or ninety (90) days
from date of the Order to allow reasonable time for possible
mail delays and to enable them to cause the timely
publication of the notice in the Official Gazette.
The initial hearing was, accordingly, reset to April 20, 1995
by the court a quo.
On March 14, 1995, the court a quo received a letter dated
March 6, 1995 from the LRA with the information that the
notice can no longer be published in the Official Gazette for
lack of material time since the National Printing Office
required submission of the printing materials 75 days before
the date of the hearing. It was again requested that the
initial hearing be moved to a date consistent with LRC
Circular No. 353.
Page 207 of 404

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Per Order dated March 15, 1995, the initial hearing was
reset to July 18, 1995.
The Opposition to the application stated, among others, that
the applicant is a private corporation disqualified under the
new Philippine Constitution to hold alienable lands of public
domain.
Per Certificate of Publication issued by the LRA and the
National Printing Office, the Notice of Initial Hearing was
published in the June 12, 1995 issue of the Official Gazette
officially released on June 19, 1995. The same notice was
published in the July 12, 1995 issue of the The Ilocos Herald.
Applicant-appellee presented its president Jose [Tanyao],
who testified on the acquisition of the subject property as
well as Manuel Sobrepea, co-owner of the subject property,
who testified on the possession of the applicant-appellees
predecessors-in-interest.
The [documentary] evidence presented were:
1. Plan AS-013314-001434 of Lots No. 9515 and 1006;
2. Technical Description of Lot No. 9515;
3. Technical Description of Lot No. 1006;
4. Certificate in lieu of Lost Surveyors Certificate;
5. Certificate of Latest Assessment;
6. Notice of Initial Hearing;
7. Certificate of Publication of the Notice of Initial Hearing by
the LRA;
8. Certificate of Publication of the Notice of Initial Hearing by
the National Printing Office;
9. Certificate of Publication of the Notice of Initial Hearing by
the Circulation Manager of the Ilocos Herald;

11. Whole Issue of the Ilocos Herald dated July 12, 1995;
12. Page 3 of Ilocos Herald dated January 12, 1995;
13. Sheriffs Return of Posting;
14. Certificate of Notification of all adjoining owners of the
Notice of Initial Hearing on July 18, 1995.
Thereafter, the court a quo rendered a Decision dated
February 21, 1996 granting the application. (sic)3
The Office of the Solicitor General, appearing on behalf of
petitioner Republic of the Philippines ("petitioner"), promptly
appealed the trial courts decision to the Court of Appeals.
On 20 December 2000, the Court of Appeals dismissed
petitioners appeal.
Hence, this petition.
The Regional Trial Courts Ruling
The trial court found that Manna Properties has
substantiated by clear and competent evidence all its
allegations in the application for original land registration.
The Land Registration Authority ("LRA") did not present any
evidence in opposition to the application. The trial court
ruled in this wise:
WHEREFORE, premises considered, the Court hereby
approves the application, and orders that the parcels of land
identified as Lots 9515 and 1006 of Cad. 5[3]9-D San
Fernando Cadastre with a total area of One Thousand Four
Hundred Eighty (1,480) square meters, situated in Barangay
Pagdaraoan, San Fernando, La Union and embraced in Plan
AS-1331434 (Exh. "A" and the technical description
described in Exhibit "B" and "B-1") shall be registered in
accordance with Presidential Decree No. 1529, otherwise
known as the Property Registration Decree in the name of
the applicant Manna Properties, Inc., represented by its
President Jose [Tanyao], Filipino citizen, of legal age, married
to Marry [Tanyao] with residence and postal address at

10. Clipping of the Notice of Initial Hearing;

Page 208 of 404
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Jackivi Enterprises, Pagdaraoan, San Fernando, La Union,

pursuant to the provisions of Presidential Decree No. 1529.4
The Court of Appeals Ruling
The Court of Appeals upheld the trial courts ruling and
dismissed petitioners argument that the applicant failed to
comply with the jurisdictional requirements of Presidential
Decree No. 15295 ("PD 1529"). The Court of Appeals pointed
out that the 90-day period for setting the initial hearing
under Section 23 of PD 1529 is merely directory and that it
is the publication of the notice of hearing itself that confers
jurisdiction. The Court of Appeals stated that the records of
the case reveal that the testimony of Manuel Sobrepea was
not the sole basis for the trial courts finding that Manna
Propertiess predecessors-in-interest had been in possession
of the land in question as early as 1953. The Court of
Appeals added that while tax declarations are not conclusive
proof of ownership, they are "the best indicia" of possession.
The Issues
Petitioner raises the following issues for resolution:
1. WHETHER MANNA PROPERTIES FAILED TO COMPLY WITH
THE JURISDICTIONAL REQUIREMENTS FOR ORIGINAL
REGISTRATION; and
2. WHETHER MANNA PROPERTIES HAS SUFFICIENTLY
PROVEN POSSESSION OF THE PROPERTY FOR THE
REQUISITE PERIOD.
The Ruling of the Court
On Whether Manna Properties Failed to Comply with the
Jurisdictional Requirements for Original Registration
Petitioner contends that PD 1529 sets a 90-day maximum
period between the court order setting the initial hearing
date and the hearing itself. Petitioner points out that in this
case, the trial court issued the order setting the date of the
initial hearing on 15 March 1995, but the trial court set the
hearing date itself on 18 July 1995. Considering that there
are 125 days in between the two dates, petitioner argues

that the trial court exceeded the 90-day period set by PD

1529. Thus, petitioner concludes "the applicant [Manna
Properties] failed to comply with the jurisdictional
requirements for original registration."
The petitioner is mistaken.
The pertinent portion of Section 23 of PD 1529 reads:
Sec. 23. Notice of initial hearing, publication etc. The court
shall, within five days from filing of the application, issue an
order setting the date and hour of initial hearing which shall
not be earlier than forty-five days nor later than ninety days
from the date of the order.
xxx
The duty and the power to set the hearing date lies with the
land registration court. After an applicant has filed his
application, the law requires the issuance of a court order
setting the initial hearing date. The notice of initial hearing
is a court document. The notice of initial hearing is signed
by the judge and copy of the notice is mailed by the clerk of
court to the LRA. This involves a process to which the party
applicant absolutely has no participation.
Petitioner is correct that in land registration cases, the
applicant must strictly comply with the jurisdictional
requirements. In this case, the applicant complied with the
jurisdictional requirements.
The facts reveal that Manna Properties was not at fault why
the hearing date was set beyond the 90-day maximum
period. The records show that the Docket Division of the LRA
repeatedly requested the trial court to reset the initial
hearing date because of printing problems with the National
Printing Office, which could affect the timely publication of
the notice of hearing in the Official Gazette. Indeed, nothing
in the records indicates that Manna Properties failed to
perform the acts required of it by law.
We have held that "a party to an action has no control over
the Administrator or the Clerk of Court acting as a land
court; he has no right to meddle unduly with the business of
Page 209 of 404

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such official in the performance of his duties."6 A party

cannot intervene in matters within the exclusive power of
the trial court. No fault is attributable to such party if the
trial court errs on matters within its sole power. It is unfair to
punish an applicant for an act or omission over which the
applicant has neither responsibility nor control, especially if
the applicant has complied with all the requirements of the
law.
Petitioner limited itself to assailing the lapse of time
between the issuance of the order setting the date of initial
hearing and the date of the initial hearing itself. Petitioner
does not raise any other issue with respect to the sufficiency
of the application. Petitioner does not also question the
sufficiency of the publication of the required notice of
hearing. Consequently, petitioner does not dispute the real
jurisdictional issue involved in land registration cases
compliance with the publication requirement under PD 1529.
As the records show, the notice of hearing was published
both in the Official Gazette and a newspaper of general
circulation well ahead of the date of hearing. This complies
with the legal requirement of serving the entire world with
sufficient notice of the registration proceedings.
On Whether Manna Properties Sufficiently Established
Possession of the Land For the Period Required by Law
Petitioner asserts that Manna Properties has failed to prove
its possession of the land for the period of time required by
law. Petitioner alleges that the trial court and the Court of
Appeals based their findings solely on their evaluation of the
tax declarations presented by Manna Properties.
The jurisdiction of this Court under Rule 45 of the 1997
Rules of Civil Procedure is limited to the review and revision
of errors of law.7 This Court is not bound to analyze and
weigh evidence already considered in prior proceedings.
Absent any of the established grounds for exception, this
Court is bound by the findings of fact of the trial and
appellate courts.
The issue of whether Manna Properties has presented
sufficient proof of the required possession, under a bona fide
claim of ownership, raises a question of fact.8 It invites an

evaluation of the evidentiary record. Petitioner invites us to

re-evaluate the evidence and substitute our judgment for
that of the trial and appellate courts. Generally, Rule 45
does not allow this. Matters of proof and evidence are
beyond the power of this Court to review under a Rule 45
petition, except in the presence of some meritorious
circumstances.9 We find one such circumstance in this case.
The evidence on record does not support the conclusions of
both the trial court and the Court of Appeals.
Petitioner claimed in its opposition to the application of
Manna Properties that, as a private corporation, Manna
Properties is disqualified from holding alienable lands of the
public domain, except by lease. Petitioner cites the
constitutional prohibition in Section 3 of Article XII in the
1987 Constitution. Petitioner also claims that the land in
question is still part of the public domain.
On the other hand, Manna Properties claims that it has
established that the land in question has been in the open
and exclusive possession of its predecessors-in-interest
since the 1940s. Thus, the land was already private land
when Manna Properties acquired it from its predecessors-ininterest.
The governing law is Commonwealth Act No. 141 ("CA 141")
otherwise known as the "Public Land Act." Section 48(b) of
the said law, as amended by Presidential Decree No. 1073,
provides:
(b) Those who by themselves or through their predecessorsin-interest have been in open, continuous, exclusive, and
notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition of
ownership, since June 12, 1945 or earlier, immediately
preceding the filing of the application for confirmation of
title except when prevented by war or force majeure. These
shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this
chapter. (Emphasis supplied)
Lands that fall under Section 48 of CA 141 are effectively
segregated from the public domain by virtue of acquisitive
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prescription. We have held that open, exclusive and

undisputed possession of alienable public land for the period
prescribed by CA 141 ipso jure converts such land into
private land.10 Judicial confirmation in such cases is only a
formality that merely confirms the earlier conversion of the
land into private land, the conversion having occurred in law
from the moment the required period of possession became
complete.11
Under CA 141, the reckoning point is June 12, 1945. If the
predecessors-in-interest of Manna Properties have been in
possession of the land in question since this date, or earlier,
Manna Properties may rightfully apply for confirmation of
title to the land. Following our ruling in Director of Lands v.
IAC,12 Manna Properties, a private corporation, may apply
for judicial confirmation of the land without need of a
separate confirmation proceeding for its predecessors-ininterest first.
We rule, however, that the land in question has not become
private land and remains part of the public domain.
Under the Regalian doctrine, the State is the source of any
asserted right to ownership of land. This is premised on the
basic doctrine that all lands not otherwise appearing to be
clearly within private ownership are presumed to belong to
the State.13 Any applicant for confirmation of imperfect title
bears the burden of proving that he is qualified to have the
land titled in his name.14 Although Section 48 of CA 141
gives rise to a right that is only subject to formal
recognition, it is still incumbent upon any claimant to first
prove open, continuous and adverse possession for the
requisite period of time.15 It is only when the applicant
complies with this condition that he may invoke the rights
given by CA 141.
The evidence submitted by Manna Properties to prove the
required length of possession consists of the testimony of
one of its predecessors-in-interest, Manuel Sobrepea
("Manuel"),16 transferees affidavits, and several tax
declarations covering the land in question.
We have ruled that while a tax declaration by itself is not
sufficient to prove ownership, it may serve as sufficient

basis for inferring possession.17 However, the tax

declarations presented by Manna Properties do not serve to
prove their cause. Although Manna Properties claimed
during trial that they were presenting the tax declaration
proving possession since 12 June 1945,18 a scrutiny of the
tax declaration reveals that it is not the tax declaration
Manna Properties claimed it to be. Exhibit Q-16 was in fact a
substitute tax declaration allegedly issued on 28 November
1950. The annotation at the back of this tax declaration
indicates that it was issued to replace the 1945 tax
declaration covering the land in question. A substitute is not
enough.
The 1945 tax declaration must be presented considering
that the date, 12 June 1945, is material to this case. CA 141
specifically fixes the date to 12 June 1945 or earlier. A tax
declaration simply stating that it replaces a previous tax
declaration issued in 1945 does not meet this standard. It is
unascertainable whether the 1945 tax declaration was
issued on, before or after 12 June 1945. Tax declarations are
issued any time of the year. A tax declaration issued in 1945
may have been issued in December 1945. Unless the date
and month of issuance in 1945 is stated, compliance with
the reckoning date in CA 141 cannot be established.
There is another reason why the application for registration
of Manna Properties must fail. The tax declaration allegedly
executed in 1950 and marked as Exhibit Q-16 bears several
irregularities. A small annotation found at the bottom of the
back page of Exhibit Q-16 states it cancels a previous tax
declaration. Beyond stating that the cancelled tax
declaration was issued in 1945, Exhibit Q-16 does not
provide any of the required information that will enable this
Court or any interested party to check whether the original
1945 tax declaration ever existed.19 The blanks left by
Exhibit Q-16 render any attempt to trace the original tax
declaration futile. Moreover, on its face Exhibit Q-16 lacks
any indication that it is only a substitute or reconstituted tax
declaration. The net effect is an attempt to pass off Exhibit
Q-16 as the original tax declaration.
The form used to prepare the tax declaration marked as
Exhibit Q-16 states that it was "FILED UNDER SECTION 202
OF R.A. 7160." Republic Act No. 7160 is the Local
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LAW ON PROPERTY

Government Code of 1991. The sworn undertaking by the

Deputy Assessor who allegedly prepared the tax declaration
reads, "Subscribed and sworn before me this 28 (sic) day of
Nov. 1950" This means that the tax declaration was issued
more than forty (40) years before the form used came into
existence. Manna Properties gave no explanation why its tax
declaration used a form that did not exist at the time of the
alleged issuance of the tax declaration. The totality of these
circumstances leads this Court to conclude that Exhibit Q-16
was fabricated for the sole purpose of making it appear that
Manna Properties predecessors-in-interest have been in
possession of the land in question since 12 June 1945.

9515 and 1006 of Cad. 539-D, with a total area of One

Thousand Four Hundred Eighty (1,480) square meters
situated in Barangay Pagdaraoan, San Fernando, La Union,
is DENIED.

The earliest of the "un-cancelled" tax declarations presented

by Manna Properties is dated 1950. This is clearly
insufficient to prove possession of the land since 12 June
1945. The same can be said of the transferees affidavit,
which was dated 1955. Manna Properties reliance on
Manuels testimony is similarly misplaced. Not only is such
evidence insufficient and self-serving on its own but, Manuel
did not also specifically testify that he, or his parents or
predecessors-in-interest were in possession of the land since
12 June 1945 or earlier.l^vvphi1.net The only clear assertion
of possession made by Manuel was that his family used to
plant rice on that piece of land.20

DECISION

Other than the mentioned pieces of evidence, Manna

Properties did not present sufficient proof that its
predecessors-in-interest have been in open, continuous and
adverse possession of the land in question since 12 June
1945. At best, Manna Properties can only prove possession
since 1952. Manna Properties relied on shaky secondary
evidence like the testimony of Manuel and substitute tax
declarations. We have previously cautioned against the
reliance on such secondary evidence in cases involving the
confirmation of an imperfect title over public land.21 Manna
Properties evidence hardly constitutes the "well-nigh
incontrovertible" evidence necessary to acquire title through
adverse occupation under CA 141.22
WHEREFORE, we GRANT the instant petition. We REVERSE
the Decision of the Court of Appeals dated 20 December
2000 in CA-G.R. CV No. 52562. The Application for
Registration filed by Manna Properties, Inc. over Lots No.

ARTICLE 531
G.R. No. 144882

February 04, 2005

LUISA BRIONES-VASQUEZ, petitioner,

vs.
COURT OF APPEALS and HEIRS OF MARIA MENDOZA VDA. DE
OCAMPO, respondents.

AZCUNA, J.:
This is a petition for certiorari under Rule 65 of the Rules of
Civil Procedure, assailing the Resolution of the Court of
Appeals in CA-G.R. CV No. 39025, dated June 9, 2000, which
denied petitioners motion for clarificatory judgment and the
Resolution of the Court of Appeals, dated August 3, 2000,
which denied the motion for reconsideration.
Under an agreement denominated as a pacto de retro sale,
Maria Mendoza Vda. De Ocampo acquired a parcel of land
from Luisa Briones. The latter thereunder reserved the right
to repurchase the parcel of land up to December 31, 1970.1
Maria Mendoza Vda. De Ocampo passed away on May 27,
1979.2 On June 14, 1990, Hipolita Ocampo Paulite and
Eusebio Mendoza Ocampo, the heirs of Maria Mendoza Vda.
De Ocampo, filed a petition for consolidation of ownership,
alleging that the seller was not able to exercise her privilege
to redeem the property on or before December 31, 1970.3
The Regional Trial Court (RTC) of Pili, Camarines Sur, Branch
32 rendered a Decision4 on January 30, 1992 as follows:
WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. declaring that exh. "A " is a true pacto de retro sale;
Page 212 of 404

LAW ON PROPERTY

2. declaring that the defendant can still redeem the property

within 30 days from the finality of this judgment, subject to
the provisions of Art. 1616 of the New Civil Code;
3. No costs.
SO ORDERED.5
Plaintiffs therein -- herein private respondents -- appealed
the RTC Decision to the Court of Appeals.6 On June 29,
1995, the Court of Appeals promulgated a Decision7 and
disposed of the case in the following manner:

of the said writ, but instead plaintiff said that he is not

interested to implement such writ;
That the 60-day period within which the said writ should be
implemented has already expired.
WHEREFORE, the original copy of the Writ of Execution is
hereby returned unserved.
Cadlan, Pili, Camarines Sur July 8, 1997
For the Clerk of Court VI and

THE FOREGOING CONSIDERED, the contested decision is

hereby set aside; and declaring the 1970 sale with right of
repurchase, Exhibit "A," as one of an equitable mortgage.

Ex-Officio Provincial Sheriff

SO ORDERED.8

(signed)

Respondents filed a motion for reconsideration which the

Court of Appeals denied through a Resolution,9 dated
December 15, 1995. The Court of Appeals Decision became
final and executory and entry of judgment was made on July
17, 1996.10

EDDIE M. ROSERO

Subsequently, at the RTC, both petitioner and respondents

filed their respective motions for a writ of execution. The
RTC issued a writ of execution. However, the writ was
returned unserved per sheriffs return which reads as
follows:
Respectfully returned to this Court thru the Clerk of Court VI,
RTC, Pili, Camarines Sur the herein attached original copy of
the Writ of Execution issued in the above-entitled case with
the following information, to wit:
That the plaintiffs [herein private respondents] were
informed that the writ of execution was already issued for
implementation and that they should pay the necessary
sheriffs and kilometrage fees;
That [one of] the plaintiff[s] came to the Office of the Clerk
of Court VI but did not deposit any amount for the
kilometrage fee and for the expenses in the implementation

by:

Sheriff IV11
Petitioner thereafter filed a motion for an alias writ of
execution. This was granted by the RTC:12
ALIAS WRIT OF EXECUTION
T O : The Sheriff or any person authorized
to serve process, RTC, Br. 32, Pili, C.s.
THRU : THE CLERK OF COURT VI and EX-OFFICIO
PROVINCIAL SHERIFF
Regional Trial Court
Pili, Camarines Sur
GREETINGS:
WHEREAS, on January 20, 1992, a decision was rendered by
this Court, the dispositive portion of which reads as follows:
Page 213 of 404

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"WHEREFORE, premises considered, judgment is hereby

rendered as follows:
1. declaring that Exh. "A" is a true pacto de retro sale;
2. declaring that the defendant can still redeem the property
within 30 days from the finality of this judgment, subject to
the provisions of Art. 1616 of the New Civil Code.
3. No costs."
WHEREAS, in an order of this Court dated June 16, 1992, the
notice of appeal filed by counsel for the defendant has been
granted and the Clerk of Court V of this Court transmitted
the entire records of the case to the Court of Appeals,
Manila;
WHEREAS, on June 29, 1995, a decision was rendered by the
Court of Appeals, Manila, the dispositive portion of which
reads as follows:
"THE FOREGOING CONSIDERED, the contested decision is
hereby set aside; and declaring the 1970 sale with right of
repurchase, "Exh. "A" as one of an equitable mortgage."

"The motion for issuance of alias writ of execution filed by

counsel for the defendant, Atty. Lucille Fe R. MaggayPrincipe, is hereby granted.
Consequently, the Clerk of Court of this Court is directed to
issue alias writ of execution."
WHEREFORE, you the Provincial Sheriff of Camarines Sur or
his lawful deputy is hereby commanded to effect the
satisfaction of the above-quoted decision of the Honorable
Court of Appeals, Manila. Return this writ to this Court within
sixty (60) days from your receipt hereof.
WITNESS THE HON. NILO A. MALANYAON, Judge of this
Court, this 21st day of July, 1997, at Cadlan, Pili, Camarines
Sur.
(Sgd.) LALAINE P. MONSERATE
Officer-In-Charge
Legal Researcher II
The Sheriff was unable to effect the satisfaction of the alias
writ as stated in the sheriffs report, which is worded thus:

WHEREAS, on March 5, 1997, the Hon. Nilo A. Malanyaon,

Presiding Judge of this Court issued an order granting the
issuance of a writ of execution, hereunder quoted as follows:

This is to report on the status of the implementation of the

Alias Writ of Execution issued in the above-entitled case, to
wit:

"It appearing that the decision of the Court of Appeals had

become final and executory, and an entry of final judgment
had already been issued by the Honorable Court of Appeals,
let a writ of execution issue."

That on August 6, 1997 the plaintiff[s] represented by Sps.

Policarpio Paulite and Hipolita Ocampo and Eusebio M.
Ocampo personally received copy of the Alias Writ of
Execution but they refused to sign on the original copy of
the said writ, together with the letter of advise informing
them to withdraw at any time the amount deposited to the
Office of the Clerk of Court VI, RTC, Pili, Camarines Sur by
defendant Luisa Briones so that the mortgage may now be
deemed released or cancelled.

WHEREAS, on July 10, 1997, Sheriff Eddie M. Rosero

submitted his return:
"WHEREFORE, the original copy of the Writ of execution is
hereby returned unserved."
WHEREAS, on July 18, 1997, the Hon. Nilo A. Malanyaon
issued an Order:

That until this time the said plaintiff[s] failed and or did not
bother to withdraw the said amount deposited by defendant
Luisa Briones despite letter of advice and the alias writ of
execution having been personally received by them.
Page 214 of 404

LAW ON PROPERTY

Cadlan, Pili, Camarines Sur September 9, 1997.

For the Clerk of Court and
Ex-Officio Sheriff
by:
(signed)
EDDIE M. ROSERO
Sheriff IV13
Unable to effect the execution of the Court of Appeals
decision, petitioner filed with the RTC an omnibus motion,
dated May 25, 1999, praying:
WHEREFORE, it is respectfully prayed that an order issue:
a) Declaring the equitable mortgage, Exhibit "A",
discharged;
b) Directing the issuance of a Writ of Possession against the
plaintiffs for the delivery of possession of the land in
question to the defendant.14
The RTC denied the omnibus motion in an Order dated
November 16, 1999, which states:
Acting on the omnibus motion of plaintiff dated 25 May 1999
and the opposition thereto of defendant, and considering
that the decision of the Court of Appeals referring the
decision of this Court has become final and executory,
hence, this Court can no longer alter, modify or add
anything thereto, the prayers set forth in the omnibus
motion is, as it is, hereby denied.
SO ORDERED.15
Petitioner filed a motion for reconsideration16 of the above
Order, which was denied by the RTC in an Order dated
February 23, 2000.17

Petitioner then filed a motion for clarificatory judgment,

dated April 5, 2000, with the Court of Appeals.18 The motion
was denied in a Resolution, dated June 9, 2000, which reads
as follows:
The only issues that reached Us, through an appeal, was
whether the 1970 Sale with Right of Repurchase was
actually an equitable mortgage. We ruled, it was,
necessarily there is nothing to clarify.
If it is a matter however whether the prevailing party should
be entitled to a right to repossess the property, then the
remedy is not with Us, but with the Court below.
For lack of merit, the Motion for Clarificatory Judgment is
hereby DENIED.
SO ORDERED.19
Petitioner filed a motion for reconsideration of the above
Resolution. The Court of Appeals denied the same in a
Resolution dated August 3, 2000.20
Petitioner now comes to this Court raising the following
issues:
PETITIONER SUBMITS THAT THE PUBLIC RESPONDENT
ACTED ARBITRARILY, WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN ISSUING THE
FOLLOWING RESOLUTIONS:
A) RESOLUTION DATED JUNE 9, 2000, DENYING
PETITIONERS MOTION FOR CLARIFICATORY JUDGMENT.
B) RESOLUTION DATED AUGUST 3, 2000, DENYING
PETITIONERS MOTION FOR RECONSIDERATION.21
The sole issue is whether or not the Court of Appeals acted
with grave abuse of discretion amounting to lack of
jurisdiction in refusing to grant petitioners motion for
clarificatory judgment.

Page 215 of 404

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It must be noted, as narrated above, that the Decision of the

Court of Appeals had already become final and executory at
the time that the motion for clarificatory judgment was filed.
With regards to final judgments, this Court has pronounced
that:
nothing is more settled in the law than that when a final
judgment becomes executory, it thereby becomes
immutable and unalterable. The judgment may no longer be
modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of
fact or law, and regardless of whether the modification is
attempted to be made by the Court rendering it or by the
highest Court of the land. The only recognized exceptions
are the correction of clerical errors or the making of socalled nunc pro tunc entries which cause no prejudice to any
party, and, of course, where the judgment is void.22
As a general rule, therefore, final and executory judgments
are immutable and unalterable except under the three
exceptions named above: a) clerical errors; b) nunc pro tunc
entries which cause no prejudice to any party; and c) void
judgments.
In the present case, petitioner claims the second exception,
i.e., that her motion for clarificatory judgment is for the
purpose of obtaining a nunc pro tunc amendment of the
final and executory Decision of the Court of Appeals.
Nunc pro tunc judgments have been defined and
characterized by this Court in the following manner:
The office of a judgment nunc pro tunc is to record some act
of the court done at a former time which was not then
carried into the record, and the power of a court to make
such entries is restricted to placing upon the record
evidence of judicial action which has been actually taken. It
may be used to make the record speak the truth, but not to
make it speak what it did not speak but ought to have
spoken. If the court has not rendered a judgment that it
might or should have rendered, or if it has rendered an
imperfect or improper judgment, it has no power to remedy
these errors or omissions by ordering the entry nunc pro
tunc of a proper judgment. Hence a court in entering a

judgment nunc pro tunc has no power to construe what the

judgment means, but only to enter of record such judgment
as had been formerly rendered, but which had not been
entered of record as rendered. In all cases the exercise of
the power to enter judgments nunc pro tunc presupposes
the actual rendition of a judgment, and a mere right to a
judgment will not furnish the basis for such an entry. (15 R.
C. L., pp. 622-623.)

The object of a judgment nunc pro tunc is not the rendering

of a new judgment and the ascertainment and
determination of new rights, but is one placing in proper
form on the record, the judgment that had been previously
rendered, to make it speak the truth, so as to make it show
what the judicial action really was, not to correct judicial
errors, such as to render a judgment which the court ought
to have rendered, in place of the one it did erroneously
render, nor to supply nonaction by the court, however
erroneous the judgment may have been. (Wilmerding vs.
Corbin Banking Co., 28 South., 640, 641; 126 Ala., 268.)
A nunc pro tunc entry in practice is an entry made now of
something which was actually previously done, to have
effect as of the former date. Its office is not to supply
omitted action by the court, but to supply an omission in the
record of action really had, but omitted through
inadvertence or mistake. (Perkins vs. Haywood, 31 N. E.,
670, 672.)

It is competent for the court to make an entry nunc pro tunc

after the term at which the transaction occurred, even
though the rights of third persons may be affected. But
entries nunc pro tunc will not be ordered except where this
can be done without injustice to either party, and as a nunc
pro tunc order is to supply on the record something which
has actually occurred, it cannot supply omitted action by the
court . . . (15 C. J., pp. 972-973.)23
From the above characterization of a nunc pro tunc
judgment it is clear that the judgment petitioner sought
Page 216 of 404

LAW ON PROPERTY

through the motion for clarificatory judgment is outside its

scope. Petitioners did not allege that the Court of Appeals
actually took judicial action and that such action was not
included in the Court of Appeals Decision by inadvertence.
A nunc pro tunc judgment cannot correct judicial error nor
supply nonaction by the court.24
Since the judgment sought through the motion for
clarificatory judgment is not a nunc pro tunc one, the
general rule regarding final and executory decisions applies.
In this case, no motion for reconsideration having been filed
after the Court of Appeals rendered its decision on June 29,
1995 and an entry of judgment having been made on July
17, 1996, the same became final and executory and, hence,
is no longer susceptible to amendment. It, therefore, follows
that the Court of Appeals did not act arbitrarily nor with
grave abuse of discretion amounting to lack of jurisdiction
when it issued the aforementioned Resolution denying
petitioners motion for clarificatory judgment and the
Resolution denying petitioners motion for reconsideration.
Nevertheless, for purposes of guiding the parties in the
execution of the aforesaid Decision of the CA, without
altering the same, the following should be noted:
The Court of Appeals pronounced in its Decision that the
contract between the parties is an equitable mortgage.
Since the contract is characterized as a mortgage, the
provisions of the Civil Code governing mortgages apply.
Article 2088 of the Civil Code states:
The creditor cannot appropriate the things given by way of
pledge or mortgage, or dispose of them. Any stipulation to
the contrary is null and void.
This Court has interpreted this provision in the following
manner:
The essence of pacto commissorio, which is prohibited by
Article 2088 of the Civil Code, is that ownership of the
security will pass to the creditor by the mere default of the
debtor (Guerrero v. Yigo, et al., 96 Phil. 37, 41-42; Puig v.
Sellner, et al., 45 Phil. 286, 287 88) 25

The only right of a mortgagee in case of non-payment of

a debt secured by mortgage would be to foreclose the
mortgage and have the encumbered property sold to satisfy
the outstanding indebtedness. The mortgagors default does
not operate to vest in the mortgagee the ownership of the
encumbered property, for any such effect is against public
policy, as enunciated by the Civil Code 26
Applying the principle of pactum commissorium specifically
to equitable mortgages, in Montevergin v. CA,27 the Court
enunciated that the consolidation of ownership in the person
of the mortgagee in equity, merely upon failure of the
mortgagor in equity to pay the obligation, would amount to
a pactum commissorium. The Court further articulated that
an action for consolidation of ownership is an inappropriate
remedy on the part of the mortgagee in equity. The only
proper remedy is to cause the foreclosure of the mortgage
in equity. And if the mortgagee in equity desires to obtain
title to the mortgaged property, the mortgagee in equity
may buy it at the foreclosure sale.
The private respondents do not appear to have caused the
foreclosure of the mortgage much less have they purchased
the property at a foreclosure sale. Petitioner, therefore,
retains ownership of the subject property. The right of
ownership necessarily includes the right to possess,
particularly where, as in this case, there appears to have
been no availment of the remedy of foreclosure of the
mortgage on the ground of default or non-payment of the
obligation in question.
WHEREFORE, the petition for certiorari is DISMISSED. The
parties are directed to proceed upon the basis of the final
Decision of the Court of Appeals, dated June 29, 1995, in CAG.R. CV No. 39025, that the contract in question was an
equitable mortgage and not a sale.
No costs.
ARTICLE 536
y 24, 1997
The Incompetent, CARMEN CAIZA, represented by her legal
guardian, AMPARO EVANGELISTA, petitioner,
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LAW ON PROPERTY

vs.
COURT OF APPEALS (SPECIAL FIRST DIVISION), PEDRO
ESTRADA and his wife, LEONORA ESTRADA, respondents.

(were) enriching themselves at the expense of the

incompetent, because, while they . . (were) saving money
by not paying any rent for the house, the incompetent . .
(was) losing much money as her house could not be rented
by others." Also alleged was that the complaint was "filed
within one (1) year from the date of of first letter of demand
dated February 3, 1990."

NARVASA, C.J.:

In their Answer with Counterclaim, the defendants declared

that they had been living in Caiza's house since the 1960's;
that in consideration of their faithful service they had been
considered by Caiza as her own family, and the latter had
in fact executed a holographic will on September 4, 1988 by
which she "bequeathed" to the Estradas the house and lot in
question.

On November 20, 1989, being then ninety-four (94) years of

age, Carmen Caiza, a spinster, a retired pharmacist, and
former professor of the College of Chemistry and Pharmacy
of the University of the Philippines, was declared
incompetent by judgment 1 of the Regional Trial Court of
Quezon City, Branch 107, 2 in a guardianship proceeding
instituted by her niece, Amparo A. Evangelista. 3 She was so
adjudged because of her advanced age and physical
infirmities which included cataracts in both eyes and senile
dementia. Amparo A. Evangelista was appointed legal
guardian of her person and estate.
Caiza was the owner of a house and lot at No. 61 Tobias
St., Quezon City. On September 17, 1990, her guardian
Amparo Evangelista commenced a suit in the Metropolitan
Trial Court (MetroTC) of Quezon City (Branch 35) to eject the
spouses Pedro and Leonora Estrada from said premises. 4
The complaint was later amended to identify the
incompetent Caiza as plaintiff, suing through her legal
guardian, Amparo Evangelista.
The amended Complaint 5 pertinently alleged that plaintiff
Caiza was the absolute owner of the property in question,
covered by TCT No. 27147; that out of kindness, she had
allowed the Estrada Spouses, their children, grandchildren
and sons-in-law to temporarily reside in her house, rent-free;
that Caiza already had urgent need of the house on
account of her advanced age and failing health, "so funds
could be raised to meet her expenses for support,
maintenance and medical treatment;" that through her
guardian, Caiza had asked the Estradas verbally and in
writing to vacate the house but they had refused to do so;
and that "by the defendants' act of unlawfully depriving
plaintiff of the possession of the house in question, they . .

Judgment was rendered by the MetroTC on April 13, 1992 in

Caiza's favor, 6 the Estradas being ordered to vacate the
premises and pay Caiza P5,000.00 by way of attorney's
fees.
But on appeal, 8 the decision was reversed by the Quezon
City Regional Trial Court, Branch 96. 9 By judgment rendered
on October 21, 1992, 10 the RTC held that the "action by
which the issue of defendants' possession should be
resolved is accion publiciana, the obtaining factual and legal
situation . . demanding adjudication by such plenary action
for recovery of possession cognizable in the first instance by
the Regional Trial Court."
Caiza sought to have the Court of Appeals reverse the
decision of October 21, 1992, but failed in that attempt. In a
decision 11 promulgated on June 2, 1993, the Appellate
Court 12 affirmed the RTC's judgment in toto. It ruled that
(a) the proper remedy for Caiza was indeed an accion
publiciana in the RTC, not an accion interdictal in the
MetroTC, since the "defendants have not been in the subject
premises as mere tenants or occupants by tolerance, they
have been there as a sort of adopted family of Carmen
Caiza," as evidenced by what purports to be the
holographic will of the plaintiff; and (b) while "said will,
unless and until it has passed probate by the proper court,
could not be the basis of defendants' claim to the property, .
. it is indicative of intent and desire on the part of Carmen
Page 218 of 404

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Caiza that defendants are to remain and are to continue in

their occupancy and possession, so much so that Caiza's
supervening incompetency can not be said to have vested
in her guardian the right or authority to drive the defendants
out." 13
Through her guardian, Caiza came to this Court praying for
reversal of the Appellate Court's judgment. She contends in
the main that the latter erred in (a) holding that she should
have pursued an accion publiciana, and not an accion
interdictal; and in (b) giving much weight to "a xerox copy of
an alleged holographic will, which is irrelevant to this case."
14
In the responsive pleading filed by them on this Court's
requirement, 15 the Estradas insist that the case against
them was really not one of unlawful detainer; they argue
that since possession of the house had not been obtained by
them by any "contract, express or implied," as contemplated
by Section 1, Rule 70 of the Rules of Court, their occupancy
of the premises could not be deemed one "terminable upon
mere demand (and hence never became unlawful) within
the context of the law." Neither could the suit against them
be deemed one of forcible entry, they add, because they
had been occupying the property with the prior consent of
the "real owner," Carmen Caiza, which "occupancy can
even ripen into full ownership once the holographic will of
petitioner Carmen Caiza is admitted to probate." They
conclude, on those postulates, that it is beyond the power of
Caiza's legal guardian to oust them from the disputed
premises.
Carmen Caiza died on March 19, 1994, 16 and her heirs
the aforementioned guardian, Amparo Evangelista, and
Ramon C. Nevado, her niece and nephew, respectively
were by this Court's leave, substituted for her. 17
Three issues have to be resolved: (a) whether or not an
ejectment action is the appropriate judicial remedy for
recovery of possession of the property in dispute; (b)
assuming desahucio to be proper, whether or not
Evangelista, as Caiza's legal guardian had authority to
bring said action; and (c) assuming an affirmative answer to

both questions, whether or not Evangelista may continue to

represent Caiza after the latter's death.
I
It is axiomatic that what determines the nature of an action
as well as which court has jurisdiction over it, are the
allegations of the complaint and the character of the relief
sought. 18 An inquiry into the averments of the amended
complaint in the Court of origin is thus in order. 19
The amended Complaint alleges: 20
6. That the plaintiff Carmen Caiza, is the sole and absolute
owner of a house and lot at No. 61 Scout Tobias, Quezon
City, which property is now the subject of this complaint;
xxx xxx xxx
9. That the defendants, their children, grandchildren and
sons-in-law, were allowed to live temporarily in the house of
plaintiff Carmen Caiza, for free, out of her kindness;
10. That the plaintiff, through her legal guardian, has duly
notified the defendants, for them to vacate the said house,
but the two (2) letters of demand were ignored and the
defendants refused to vacate the same. . .
11. That the plaintiff, represented by her legal guardian,
Amparo Evangelista, made another demand on the
defendants for them to vacate the premises, before
Barangay Captain Angelina A. Diaz of Barangay Laging
Handa, Quezon City, but after two (2) conferences, the
result was negative and no settlement was reached. A
photocopy of the Certification to File Action dated July 4,
1990, issued by said Barangay Captain is attached, marked
Annex "D" and made an integral part hereof;
12. That the plaintiff has given the defendants more than
thirty (30) days to vacate the house, but they still refused to
vacate the premises, and they are up to this time residing in
the said place;

Page 219 of 404

LAW ON PROPERTY

13. That this complaint is filed within one (1) year from the
date of first letter of demand dated February 3, 1990 (Annex
"B") sent by the plaintiff to the defendants, by her legal
guardian Amparo Evangelista;
14. By the defendants' act of unlawfully depriving the
plaintiff of the possession of the house in question, they are
enriching themselves at the expense of the incompetent
plaintiff because, while they are saving money by not paying
any rent for the house, the plaintiff is losing much money as
her house could not be rented by others;
15. That the plaintiff's health is failing and she needs the
house urgently, so that funds could be raised to meet her
expenses for her support, maintenance and medical
treatment;
16. That because of defendants' refusal to vacate the house
at No. 61 Scout Tobias, Quezon City, the plaintiff, through
her legal guardian, was compelled to go to court for justice,
and she has to spend P10,000.00 as attorney's fees.
Its prayer 21 is quoted below:
WHEREFORE, in the interest of justice and the rule of law,
plaintiff, Carmen Caiza, represented by her legal guardian,
Amparo Evangelista, respectfully prays to this Honorable
Court, to render judgment in favor of plaintiff and against
the defendants as follows:
1. To order the defendants, their children, grandchildren,
sons-in-law and other persons claiming under them, to
vacate the house and premises at No. 6 1 Scout Tobias,
Quezon City, so that its possession can be restored to the
plaintiff Carmen Caiza; and
2. To pay attorney's fees in the amount of P10,000.00;
3. To pay the costs of the suit.
In essence, the amended complaint states:

1) that the Estradas were occupying Caiza's house by

tolerance having been "allowed to live temporarily . .
(therein) for free, out of . . (Caiza's) kindness;"
2) that Caiza needed the house "urgently" because her
"health . . (was) failing and she . . (needed) funds . . to meet
her expenses for her support, maintenance and medical
treatment;"
3) that through her general guardian, Caiza requested the
Estradas several times, orally and in writing, to give back
possession of the house;
4) that the Estradas refused and continue to refuse to give
back the house to Caiza, to her continuing prejudice; and
5) that the action was filed within one (1) year from the last
demand to vacate.
Undoubtedly, a cause of action for desahucio has been
adequately set out. It is settled that in an action for unlawful
detainer, it suffices to allege that the defendant is unlawfully
withholding possession from the plaintiff is deemed
sufficient, 22 and a complaint for unlawful detainer is
sufficient if it alleges that the withholding of possession or
the refusal to vacate is unlawful without necessarily
employing the terminology of the law. 23
The Estradas' first proffered defense derives from a literal
construction of Section 1, Rule 70 of the Rules of Court
which inter alia authorizes the institution of an unlawful
detainer suit when "the possession of any land or building is
unlawfully withheld after the expiration or termination of the
right to hold possession, by virtue of any contract, express
or implied." They contend that since they did not acquire
possession of the property in question "by virtue of any
contract, express or implied" they having been, to repeat,
"allowed to live temporarily . . (therein) for free, out of . .
(Caiza's) kindness" in no sense could there be an
"expiration or termination of . . (their) right to hold
possession, by virtue of any contract, express or implied."
Nor would an action for forcible entry lie against them, since
there is no claim that they had "deprived (Caiza) of the
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possession of . . (her property) by force, intimidation, threat,

strategy, or stealth.
The argument is arrant sophistry. Caiza's act of allowing
the Estradas to occupy her house, rent-free, did not create a
permanent and indefeasible right of possession in the
latter's favor. Common sense, and the most rudimentary
sense of fairness clearly require that that act of liberality be
implicitly, but no less certainly, accompanied by the
necessary burden on the Estradas of returning the house to
Caiza upon her demand. More than once has this Court
adjudged that a person who occupies the land of another at
the latter's tolerance or permission without any contract
between them is necessarily bound by an implied promise
that he will vacate upon demand, failing which a summary
action for ejectment is the proper remedy against him. 24
The situation is not much different from that of a tenant
whose lease expires but who continues in occupancy by
tolerance of the owner, in which case there is deemed to be
an unlawful deprivation or withholding of possession as of
the date of the demand to vacate. 25 In other words, one
whose stay is merely tolerated becomes a deforciant
illegally occupying the land or property the moment he is
required to leave. 26 Thus, in Asset Privatization Trust vs.
Court of Appeals, 27 where a company, having lawfully
obtained possession of a plant upon its undertaking to buy
the same, refused to return it after failing to fulfill its
promise of payment despite demands, this Court held that
"(a)fter demand and its repudiation, . . (its) continuing
possession . . became illegal and the complaint for unlawful
detainer filed by the
. . (plant's owner) was its proper remedy.
It may not be amiss to point out in this connection that
where there had been more than one demand to vacate, the
one-year period for filing the complaint for unlawful detainer
must be reckoned from the date of the last demand, 28 the
reason being that the lessor has the option to waive his right
of action based on previous demands and let the lessee
remain meanwhile in the premises. 29 Now, the complaint
filed by Caiza's guardian alleges that the same was "filed
within one (1) year from the date of the first letter of
demand dated February 3, 1990." Although this averment is
not in accord with law because there is in fact a second

letter of demand to vacate, dated February 27, 1990, the

mistake is inconsequential, since the complaint was actually
filed on September 17, 1990, well within one year from the
second (last) written demand to vacate.
The Estradas' possession of the house stemmed from the
owner's express permission. That permission was
subsequently withdrawn by the owner, as was her right; and
it is immaterial that the withdrawal was made through her
judicial guardian, the latter being indisputably clothed with
authority to do so. Nor is it of any consequence that Carmen
Caiza had executed a will bequeathing the disputed
property to the Estradas; that circumstance did not give
them the right to stay in the premises after demand to
vacate on the theory that they might in future become
owners thereof, that right of ownership being at best
inchoate, no transfer of ownership being possible unless and
until the will is duly probated.
Thus, at the time of the institution of the action of
desahucio, the Estradas had no legal right to the property,
whether as possessors by tolerance or sufferance, or as
owners. They could not claim the right of possession by
sufferance; that had been legally ended. They could not
assert any right of possession flowing from their ownership
of the house; their status as owners is dependent on the
probate of the holographic will by which the property had
allegedly been bequeathed to them an event which still
has to take place; in other words, prior to the probate of the
will, any assertion of possession by them would be
premature and inefficacious.
In any case, the only issue that could legitimately be raised
under the circumstances was that involving the Estradas'
possession by tolerance, i.e., possession de facto, not de
jure. It is therefore incorrect to postulate that the proper
remedy for Caiza is not ejectment but accion publiciana, a
plenary action in the RTC or an action that is one for
recovery of the right to possession de jure.
II
The Estradas insist that the devise of the house to them by
Caiza clearly denotes her intention that they remain in
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possession thereof, and legally incapacitated her judicial

guardian, Amparo Evangelista, from evicting them
therefrom, since their ouster would be inconsistent with the
ward's will.
A will is essentially ambulatory; at any time prior to the
testator's death, it may be changed or revoked; 30 and until
admitted to probate, it has no effect whatever and no right
can be claimed thereunder, the law being quite explicit: "No
will shall pass either real or personal property unless it is
proved and allowed in accordance with the Rules of Court"
(ART. 838, id.). 31 An owner's intention to confer title in the
future to persons possessing property by his tolerance, is
not inconsistent with the former's taking back possession in
the meantime for any reason deemed sufficient. And that in
this case there was sufficient cause for the owner's
resumption of possession is apparent: she needed to
generate income from the house on account of the physical
infirmities afflicting her, arising from her extreme age.
Amparo Evangelista was appointed by a competent court
the general guardian of both the person and the estate of
her aunt, Carmen Caiza. Her Letters of Guardianship 32
dated December 19, 1989 clearly installed her as the
"guardian over the person and properties of the
incompetent CARMEN CANIZA with full authority to take
possession of the property of said incompetent in any
province or provinces in which it may be situated and to
perform all other acts necessary for the management of her
properties . . " 33 By that appointment, it became
Evangelista's duty to care for her aunt's person, to attend to
her physical and spiritual needs, to assure her well-being,
with right to custody of her person in preference to relatives
and friends. 34 It also became her right and duty to get
possession of, and exercise control over, Caiza's property,
both real and personal, it being recognized principle that the
ward has no right to possession or control of his property
during her incompetency. 35 That right to manage the
ward's estate carries with it the right to take possession
thereof and recover it from anyone who retains it, 36 and
bring and defend such actions as may be needful for this
purpose. 37

Actually, in bringing the action of desahucio, Evangelista

was merely discharging the duty to attend to "the
comfortable and suitable maintenance of the ward"
explicitly imposed on her by Section 4, Rule 96 of the Rules
of Court, viz.:
Sec. 4. Estate to be managed frugally, and proceeds applied
to maintenance of ward. A guardian must manage the
estate of his ward frugally and without waste, and apply the
income and profits thereof, so far as maybe necessary, to
the comfortable and suitable maintenance of the ward and
his family, if there be any; and if such income and profits be
insufficient for that purpose, the guardian may sell or
encumber the real estate, upon being authorized by order to
do so, and apply to such of the proceeds as may be
necessary to such maintenance.
Finally, it may be pointed out in relation to the Estradas's
defenses in the ejectment action, that as the law now
stands, even when, in forcible entry and unlawful detainer
cases, the defendant raises the question of ownership in his
pleadings and the question of possession cannot be resolved
without deciding the issue of ownership, the Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts nevertheless have the undoubted competence to
resolve "the issue of ownership . . only to determine the
issue of possession." 38
III
As already stated, Carmen Caiza passed away during the
pendency of this appeal. The Estradas thereupon moved to
dismiss the petition, arguing that Caiza's death
automatically terminated the guardianship, Amaparo
Evangelista lost all authority as her judicial guardian, and
ceased to have legal personality to represent her in the
present appeal. The motion is without merit.
While it is indeed well-established rule that the relationship
of guardian and ward is necessarily terminated by the death
of either the guardian or the ward, 39 the rule affords no
advantage to the Estradas. Amparo Evangelista, as niece of
Carmen Caiza, is one of the latter's only two (2) surviving
heirs, the other being Caiza's nephew, Ramon C. Nevado.
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On their motion and by Resolution of this Court 40 of June

20, 1994, they were in fact substituted as parties in the
appeal at bar in place of the deceased, in accordance with
Section 17, Rule 3 of the Rules of Court, viz.: 41
Sec. 18. Death of a party. After a party dies and the claim
is not thereby extinguished, the court shall order, upon
proper notice, the legal representative of the deceased to
appear and be substituted for the deceased within a period
of thirty (30) days, or within such time as may be granted. If
the legal representative fails to appear within said time, the
court may order the opposing party to procure the
appointment of a legal representative of the deceased
within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of
the interest of the deceased. The court charges involved in
procuring such appointment, if defrayed by the opposing
party, may be recovered as costs. The heirs of the deceased
may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator
and the court may appoint guardian ad litem for the minor
heirs.
To be sure, an ejectment case survives the death of a party.
Caiza's demise did not extinguish the desahucio suit
instituted by her through her guardian. 42 That action, not
being a purely personal one, survived her death; her heirs
have taken her place and now represent her interests in the
appeal at bar.
WHEREFORE, the petition is GRANTED. The Decision of the
Court of Appeals promulgated on June 2, 1993 affirming
the Regional Trial Court's judgment and dismissing
petitioner's petition for certiorari is REVERSED and SET
ASIDE, and the Decision dated April 13, 1992 of the
Metropolitan Trial Court of Quezon City, Branch 35, in Civil
Case No. 3410 is REINSTATED and AFFIRMED. Costs against
private respondents.
G.R. No. L-9989

March 13, 1918

EDUARDO CUAYCONG, ET AL., plaintiffs-appellees,

vs.
RAMONA BENEDICTO, ET AL., defendants-appellants.

Ruperto Montinola and Aurelio Montinola for appellants.

No appearance for appellees.
FISHER, J.:
The issues in this case relate to the right of plaintiffs to
make use of two roads existing on the Hacienda Toreno, a
tract of land in the municipality of Victorias, Negros
Occidental, the property of the defendants, Blasa Benedicto
and Ramona Benedicto. One of these roads is referred to in
the proceedings as the Nanca-Victorias road and the other
as the Dacuman Toreno road. The Court of First Instance
held that those of the plaintiffs who claimed to be entitled to
make use of the Dacuman Toreno road had failed to
establish the asserted right, and dismissed the action as to
them. From this decision they appealed to this court but,
their brief not having been filed within the time prescribed
by the rules, their appeal was dismissed, on motion of
defendants, by resolution dated February 14, 1916.
Consequently, the issues presented on this appeal are
limited to those which relate to the rights of the parties with
respect to the Nanca-Victorias road, and the determination
of the correctness of the decision of the court concerning
that part of the controversy submitted to its decision.
The allegations in the complaint with respect to the NancaVictorias road are that the appellees, Eduardo Cuaycong,
Lino Cuaycong, and Eulalio Dolor, are the owners of a group
of haciendas situated between the southern boundary of the
Hacienda Toreno and the barrio of Nanca, of the municipality
of Seravia, and that the appellees Silverio Ginoo, Gervasio
Ascalon, and Juan Ledesma, are the lessees of part of said
haciendas; that more than twenty years the appellees and
their predecessors in interest have made use of the NancaVictorias road, which crosses the Hacienda Toreno, openly,
publicly, and continiously, with the knowledge of the owners
of the said hacienda, for the purpose of conveying the
products of their haciendas to the town of Victorias and to
the landing place there situated, and for the purpose of
transporting supplies from those points to their haciendas,
making use of the said road by means of carts, carabaos,
and other usual means of transportation; that there is no
outlet to a public road from the hacienda occupied by these
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plaintiffs, the only road and way by which the products of

the plaintiffs' property can be taken to the town of Victorias
and to the landing place there being across the Hacienda
Toreno by the road marked on the plan attached to the
complaint; that on the fifteenth day of November, 1912, the
defendants closed the road in question at the point at which
it crosses the Hacienda Toreno, and refused to permit
plaintiffs to continue using it; that plaintiffs were about to
commence to grind their crop of sugar cane, and that, if
prevented from transporting their sugar across the Hacienda
Toreno to their point of embarkation, would suffer damages
difficult to estimate. Upon these averments of fact the
plaintiffs prayed for a judgment that they are entitled to use
the road in question as they have been using it in the past,
and that a perpetual injunction be issued against plaintiffs
restraining them from impending such use. Upon the filing
of the complaint, plaintiffs moved the court to issue a
preliminary injunction restraining defendants from
interfering with the use of the road during the pendency of
the suit, which motion was granted by the court.
Defendants in their answer put in issue all the special
averments of the complaint, as above set forth, and by way
of counterclaim and special defense, averred that the road
crossing the Hacienda Toreno, over which plaintiffs claim the
right of passage, is the private property of defendants; and,
further, that they have not refused plaintiffs permission to
pass over this road but have required them to pay toll for
the privilege of doing so. Defendants also claimed damages
for the use of the road by plaintiffs during the pendency of
the suit, alleging that the preliminary injunction had been
improvidently issued upon false statements contained in the
verified complaint filed by plaintiffs.
The case was tried in July, 1913. The court on December 8,
1913, rendered judgment, dismissing the complaint with
respect to the plaintiffs Felix Suarez, Probo Jereza, Enrique
Azcona, and Melecio Pido, these being the plaintiffs who
claimed the right to use the Dacuman Toreno road. With
respect to the Nanca-Victorias road, the court held that it
was a public highway over which the public had acquired a
right of use by immemorial prescription, and ordered the
issuance of a perpetual injunction against plaintiffs,

restraining them from interfering in any manner with the

use of the said road.
The conclusion of the court with respect to the facts
affecting the Nanca-Victorias road are as follows:
Turning to a consideration of the evidence relative to the
Nanca-Victorias road we find incontestable proof that it has
been in existence for at least forty years. That the
hacenderos located in the southwestern section of Victorias
and the public generally passed over it freely and that it was
used for all purposes of transportation of farm produce,
animals, etc. and by pedestrians as well as carromatas and
other conveyances without break or interruption until two or
three years ago when the defendants announced that the
road was private and that those who wished to pass over it
with sugar carts would be obliged to pay a toll of ten
centavos all other vehicles, it appears, were permitted to
pass free charge. This arrangement seems to have existed
during the years of 1911 and 1912 and part of 1913, the
money being collected apparently from some hacenderos
and not from others. There is some reason to believe from
the evidence presented by defendants themselves that the
practice of making these payments to hacienda 'Toreno'
originated in an attempt to raise a fund for the repair of the
road. There is no evidence that any other hacenderos
between Nanca and Victorias or any other person made any
attempt to close the road or to collect toll. On the contrary
the road appears to have been repaired by the hacenderos
when it needed repairing and everyone used it on equal
terms until the defendants in 1910 or 1911 interposed the
objection that the road in dispute was private. This we think
is a fair deduction from the evidence and although it is
asserted that toll was collected at an earlier date by the late
Leon Montinola, brother of the defendant Ruperto Montinola,
there is no tangible evidence that this was so and that toll
has been paid only during the years of 1911, 1912, and part
of 1913.
The question presented by the assignment of error are in
effect:
(a) Is the Nanca-Victorias road at the point at which it
traverses the Hacienda Toreno a public highway or not?
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LAW ON PROPERTY

(b) If it be held that the road in question is not a public

highway, have plaintiffs proven their acquisition of an
easement of way over the Hacienda Toreno at the point
traversed by the road in question?
The trial judge, in holding that the road in question is public,
bases in conclusion upon the fact, which he deems to have
been proven, that the road has been in existence "from time
immemorial," and had been "continiously used as a public
road . . . and open to public as such for thirty or forty years .
. . until . . . the defendants undertook to claim it as private
and to collect toll for the passage of carts." (Bill of
Exceptions, p. 56.) There is no doubt that for the past thirty
or forty years a road has existed between the former site of
the town of Victorias and the barrio of Nanca, of the
municipality of Seravia, and that this road crosses
defendants' hacienda. It is also true that during this period
the plaintiffs and their predecessors in the ownership of the
hacienda now held by them have made use of this road for
the purpose of going and coming from their haciendas to the
town of Victorias; but the question is whether this use was
limited to the plaintiffs, and their tenants and employees, or
whether it was, as held by the lower court, a use enjoyed by
the public in general. Plaintiffs produced only two witnesses,
Segundo de Leon (stet. notes, pp. 21-22) and Eduardo
Cuaycong, (stet. notes, pp. 27-33) to testify as regards the
use of the Nanca-Victorias road. Several other witnesses
testified on behalf of plaintiffs, but their testimony relates to
the Dacuman Toreno road, which is not involved in this
appeal. We have carefully read the testimony of the
witnesses Leon and Cuaycong, given upon their direct and
cross examination, but we have been unable to find that
either of them has testified that the road in question was
ever used by the public in general. These witnesses testified
with regard to the use of the road by the present and former
owners and occupants of the estates of Bacayan, Esperanza,
Alcaigan, Pusot, and Dolores for the transportation of the
products of these estates to the town of Victorias, and of
supplies and agricultural implements from Victorias to the
haciendas, but neither of them testified expressly that any
other use had been made of said road. Nevertheless, it may
be reasonably inferred from the testimony of these
witnesses that all persons having occasion to travel between

Victorias and the haciendas of Bacayan, Esperanza,

Alacaigan, Pusot, and Dolores, whether or not they were
owners, tenants, or employees of said estates, made use of
the road now in dispute, crossing the Hacienda Toreno, and
to this limited extent it may be said that the public made
use of the road, but there is nothing in the evidence to
indicate that the so called public use extended beyond
this.
Apart from the fact that there is no direct evidence to
support the finding of the court concerning the general
public use of the road in dispute, the record contains data
strongly tending to show that when the complaint was filed
plaintiffs did not contend that the road was a public
highway, but merely contended that they had acquired by
prescription an easement of way across the Hacienda
Toreno. For example, the action is entitled an "action
concerning a right of away." (Bill of Exceptions, pp. 64 and
65.) It is not averred in the complaint that the road in
question was used by the public. On the contrary, it is
averred that it was used by the plaintiffs and their
predecessors. The averment in paragraph 8 of the complaint
that the plaintiffs have no other "outlet to a public road"
than that which they have been accustomed to used by
going across the defendants' hacienda for the purpose of
going to the town of Victorias also shows that when they
commenced this action they had in mind the provisions of
articles 564, et seq. of the Civil Code, which relate to the
method of establishing the compulsory easement of way.
The owners of an existing easement, as well as those whose
properties are adjacent with a public road, have no occasion
to invoke these provisions of the Code, which relate to the
creation of new rights, and not the enforcement of rights
already in existence.
It is true in the opening statement made to the court,
counsel for plaintiffs, who was not the same attorney by
whom the complaint was signed, stated that plaintiffs
contend that the road in question is public, but as no
evidence was introduced tending to establish this contention
concerning the Nanca Victorias road, counsel for
defendants had no occasion to object upon the ground that
such testimony was not relevant to the averments of the
complaint. No evidence was taken to indicate that at any
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LAW ON PROPERTY

time since the road in question has been in existence any

part of the expense of its upkeep has been defrayed by the
general government, the province, or the municipality. The
trial judge said upon this subject:
It is true that whatever repairs were made on the road were
made irregularly. The municipality of Victorias had no funds
to devote to the construction and repair of roads, and the
upkeep of the road depending entirely therefore on the
initiative of the persons who used it, was attended to only at
such times as repairs were absolutely necessary. (Bill of
Exceptions, p. 49.)
The court also held that it appears from the government
grant issued in 1885 to the original owner of the hacienda
adjacent to the Hacienda Toreno on its western boundary,
that the Nanca-Victorias road at that time separated that
estate from the Jalbuena Hacienda, and that these facts
constitute "circumstantial evidence that the road was in
existence in 1885." We have examined the document to
which the court refers, and we agree that the road in
question existed in 1885; but we do not believe that the
document in question proves that the road was public
highway.
Another circumstance established by the evidence, and
which is some importance in the determination of this issue,
is that although the defendants closed the Nanca-Victorias
road in the month of February, 1911, and since that time
have collected toll from persons passing over it with carts
loaded with sugar, including those belonging to several of
the plaintiffs, nothing was done by them to prevent the
continuation of this restriction until December, 1912, when
this action was commenced. It is natural to assume that if
plaintiffs had considered that the road in question was
public, they would have protested immediately against the
action of the defendants, and would have either
commenced a civil action, as they subsequently did, or
would have brought about a prosecution under section 16 of
Act No. 1511.
Upon the evidence taken and admissions contained in the
pleadings and those made during the course of the trial we
consider that the following findings are warranted:

1. The town of Victorias has always been the shipping point

of the products of the Hacienda Toreno, and of the
haciendas of appellees, as well as the place from which
supplies were brought to those properties.
2. For thirty or forty years before the commencement of the
suit a wagon road, herein called the Nanca-Victorias road,
has been in existence, connecting the haciendas of
appellees with the town of Victorias, and this road traverses
the property of defendants. Since the removal of the town of
Victorias to a new site the Nanca-Victorias road has been
used by appellees in travelling between their properties and
the provincial road which crosses the Hacienda Toreno from
east to west.
3. No public funds have at any time been expended on the
construction or upkeep of the Nanca-Victorias road, but from
time to time work has been done on it by the laborers
employed by the present and former owners of the
Hacienda Toreno and the haciendas owned by the appellees
and their predecessors in title.
4. The Nanca-Victorias wagon road, including that part of it
which crosses the Hacienda Toreno, has for thirty-five or
forty years been used by the appellees and their
predecessors in title for the transportation, by the usual
means, of the products of their estates to their shipping
points in or near the town of Victorias, and the
transportation to their estates of all supplies required by
them, and has been used by all persons having occasion to
travel to and from all or any of the estates now owned by
the appellees.
5. The use of the Nanca-Victorias road in the manner and by
the person above mentioned was permitted without
objection by the owners of the Hacienda Toreno until the
year 1911, when they closed it, and began charging a toll of
5 centavos for each cart which passed over the road,
including carts belonging to the appellants, until restrained
from continuing to do so by the preliminary injunction
granted in this case.

Page 226 of 404

LAW ON PROPERTY

6. The Nanca-Victorias road constitutes the only outlet from

the estates of appellants to the nearest public road which is
the provincial road which crosses the Hacienda Toreno from
east to west.

(b) If the Nanca-Victoria road, or that part of it which crosses

the Hacienda Toreno, is not a public highway, is it subject to
a private easement of way in favor of the appellees?

expense whatever in its upkeep or construction. The Civil

Code defines as public roads those which are constructed by
the State (art. 339), and as provincial and town roads those
"the expense of which is borne by such towns or provinces."
(Civil Code, art. 344.) While it is not contended that this
definition is exclusive, it does show that during the Spanish
regime, under normal conditions, roads which were public
were maintained at the public expense, and that the fact
that at no time was any expense incurred by the
Government with respect to the road here in question tends
strongly to support the contention of the defendants that it
is private way.

The defendants are the owners of the Hacienda Toreno

under a Torrens title issued in accordance with the Land
Registration Act, conferring to them its absolute ownership,
subject only to the limitations of paragraph four of section
39 of said Act. It is admitted that there is no annotation on
the certificate of title regarding the road here in question,
either as a "public road" or as a "private way established by
law," and, therefore, the questions presented by this appeal
are to be determined precisely as they would be had the
Hacienda Toreno not been brought under the operation of
the Land Registration Act. The plaintiffs being the owners of
the property in question, the presumption of law is that it is
free from any lien or encumbrance whatever, and the
burden therefore rests upon plaintiffs to establish the
contrary. As this court said in case of Fabie vs. Lichauco and
the children of Francisco L. Roxas (11 Phil. Rep., 14):

During the Spanish regime the law required each able to

bodied citizen not within one of the exempted classes to
work a certain number of days in each year, his labor to be
devoted to "services of general utility" to the municipality of
his residence. (Royal Decree of July 11, 1883, art. 5.) Under
this Decree and the Regulations for its enforcement (Berriz,
vol. 11, 258) the greater part of the work on the public road
of the Islands was accomplished. Had the road here in
question been a public way, it is reasonable to assume that
the polistas of the town of Victorias would have been
employed in maintaining it. It is most significant that no
mention is made in the testimony of the plaintiffs' witnesses
of any work of this character having been done on the road
at any time, particularly in view of the fact that their
attention was drawn to this point. (Stet. note, pp. 8, 10, 11,
12, 13 and 14.)

It is settled of law that a property is assumed to be free from

all encumbrance unless the contrary is proved.

The evidence shows that the repairs were made by the

owners of the estates benefited by the road, and by their
laborers, as a pure voluntary act for their own convenience
and interest. There being no evidence of a direct grant to
the government of the land occupied by the road in question
or that any Government funds or labor were expended upon
it, the question presents itself whether the use to which the
road has been put was such as to justify the conclusion of
the lower court that it has become public property. There
being no evidence that the original use of the road by
plaintiffs' predecessors was based upon any grant of the fee
to the road or of an easement of way, or that it began under
the assertion of a right on their part, the presumption must

Upon these facts the questions of law to be decided are:

(a) Is the Nanca-Victorias road a public highway?

There is admittedly no evidence to show that the land

occupied by the road here in question was any time
conveyed to the general government or any of its political
subdivisions by the present or any of the former owners of
the Hacienda Toreno. There is no evidence, even remotely,
tending to show that the road existed prior to the time when
the property now known as the Hacienda Toreno passed
from the State into private ownership. The record fails to
disclose any evidence whatever tending to show that the
Government has at any time asserted any right or title in or
to the land occupied by the road, or that it has incurred any

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be that the origin of the use was the mere tolerance or

license of the owners of the estates affected.
This being so, has that merely permissive use been
converted into a title vested in the public at large, or in the
plaintiffs by reason of their ownership of the land
beneficially affected by the use?
Had it been shown that the road had been maintained at the
public expense, with the acquiescence of the owners of the
estates crossed by it, this would indicate such adverse
possession by the government as in course of time would
ripen into title or warrant the presumption of a grant or of a
dedication. But in this case there is no such evidence, and
the claims of plaintiffs, whether regarded as members of the
public asserting a right to use the road as such, or as
persons claiming a private easement of way over the land of
another must be regarded as resting upon the mere fact of
user.
If the owner of a tract of land, to accommodate his
neighbors or the public in general, permits them to cross his
property, it is reasonable to suppose that it is not his
intention, in so doing, to divest himself of the ownership of
the land so used, or to establish an easement upon it and
that the persons to whom such permission, tacit or express,
is granted, do not regard their privilege of use as being
based upon an essentially revocable license. If the use
continues for a long period of time, no change being made
in the relations of the parties by any express or implied
agreement, does the owner of the property affected lose his
right of revocation? Or, putting the same question in
another form, does the mere permissive use ripen into title
by prescription?
It is a fundamental principle of the law in this jurisdiction
concerning the possession of real property that such
possession is not affected by acts of a possessory character
which are "merely tolerated" by the possessor, or which are
due to his license (Civil Code, arts. 444 and 1942). This
principle is applicable not only with respect to the
prescription of the dominium as a whole, but to the
prescription of right in rem. In the case of Cortes vs. Palanca
Yu Tibo (2 Phil. Rep., 24, 38), the Court said:

The provision of article 1942 of the Civil Code to the effect

that acts which are merely tolerated produce no effect with
respect to possession is applicable as much to the
prescription of real rights as to the prescription of the fee, it
being a glaring and self-evident error to affirm the contrary,
as does the appellant in his motion papers. Possession is the
fundamental basis of the prescription. Without it no kind of
prescription is possible, not even the extraordinary.
Consequently, if acts of mere tolerance produce no effect
with respect to possession, as that article provides, in
conformity with article 444 of the same Code, it is evident
that they can produce no effect with respect to prescription,
whether ordinary or extraordinary. This is true whether the
prescriptive acquisition be of a fee or of real rights, for the
same reason holds in one and the other case; that is, that
there has been no true possession in the legal sense of the
word. (See also Ayala de Roxas vs. Maglonso, 8 Phil Rep.,
745; Municipality of Nueva Caceres vs. Director of Lands and
Roman Catholic Bishop of Nueva Caceres, 24 Phil. Rep.,
485.)
Possession, under the Civil Code, to constitute the
foundation of a prescriptive right, must be possession under
claim of title (en concepto de dueno), or use the common
law equivalent of the term, it must be adverse. Acts of a
possessory character performed by one who holds by mere
tolerance of the owner are clearly not en concepto de
dueo, and such possessory acts, no matter how long so
continued, do not start the running of the period of
prescription.
A similar question was presented in the case of the Roman
Catholic Archbishop of Manila vs. Roxas (22 Phil. Rep., 450),
in which case it appeared that Roxas, the owner of the
Hacienda de San Pedro Macati, claimed a right of way across
the property of the church to Calle Tejeron, a public street of
the town of San Pedro Macati. The proof showed that the
road in question had been used by the tenants of the
Hacienda de San Pedro Macati for the passage of carts in
coming and leaving the hacienda "from time immemorial,"
and further that the road had been used for time out of
mind, not only by the tenants of the hacienda but by many
other people in going and coming from a church half-way
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between the boundary line of the hacienda and Calle

Tejeron. The court held that the facts did not give rise to a
prescriptive right of easement in favor of the owner of the
hacienda, upon the ground that such use "is to be regarded
as permissive and under an implied license, and not
adverse. Such a use is not inconsistent with the only use
which the proprietor thought fit to make of the land, and
until the appellee thinks proper to inclose it, such use is not
adverse and will not preclude it from enclosing the land
when other views of its interest render it proper to do so.
And though an adjacent proprietor may make such use of
the open land more frequently than another, yet the same
rule will apply unless there be some decisive act indicating a
separate and exclusive use under a claim of right. A
different doctrine would have a tendency to destroy all
neighborhood accommodations in the way of travel; for if it
were once understood that a man, by allowing his neighbor
to pass through his farm without objection over the passway which he used himself, would thereby, after the lapse of
time, confer a right on such neighbor to require the passway to be kept open for his benefit and enjoyment, a
prohibition against all such travel would immediately
ensue."
The decisions of the supreme court of Louisiana, a State
whose jurisdiction is based, as is our own, upon the Roman
Law, and whose Civil Code is taken, as is our own,. very
largely from the Code of Napoleon, are particularly
persuasive in matters of this character. In the case of Torres
vs. Fargoust (37 La. Ann., 497), cited by appellants in their
brief, in which the issues were very similar to those of the
present case, the court held that
The mere fact that for thirty or forty years the public was
permitted to pass over this ground would not of itself
constitute the place a locus publicus . . . dedication must be
shown by evidence so conclusive as to exclude all idea of
private ownership; . . . such dedication cannot be inferred
from ere user alone; . . . no one is presumed to give away
his property. The burden is on him who avers a divestiture of
ownership to prove it clearly.
We are, therefore, of the opinion, and so hold, that upon the
facts established by the evidence it does not appear that

the road in question is a public road or way. We are also of

the opinion that plaintiffs have failed to show that they have
acquired by prescription a private right of passage over the
lands of defendants. The supreme court of Spain has
decided that under the law in force before the enactment of
the Civil Code, the easement of way was discontinous, and
that while such an easement might be acquired by
prescription, it must be used in good faith, in the belief of
the existence of the right, and such user must have been
continuous from time immemorial. (Judgment of December
15, 1882.) In the appealed decision the court below says
that the plaintiffs and their predecessors made use of the
road in question "from time immemorial," but there is no
evidence whatever in the record to sup[port this finding,
although it is true that the evidence shows the existence of
the road and its use by the plaintiffs and their predecessors
for thirty-five or forty years. Speaking of the evidence
required under the present Code of Civil Procedure to show
immemorial use of an easement, this court said in the case
of Ayal de Roxas vs. Case (8 Phil. Rep., 197, 198):
Third Partida in title 31, law 15 . . . says that discontinues
servitudes . . . must be proved by usage or a term so long
that men can not remember its commencement. . . . In
many judgments the supreme court of Spain has refused to
accept proof of any definite number of years as a
satisfaction of this requirement of the law. . . . We are of the
opinion that in order to establish a right of prescription [title
of prescription based upon use from time immemorial]
something more required than memory of living witnesses.
Whether this something should be the declaration of
persons long dead, repeated by those who testify, as
exacted by the Spanish law, or should be the common
reputation of ownership recognized by the Code of
Procedure, it is unnecessary for us to decide. On either
theory the appellant has failed in his proof . . . .
The same thing may be said in this case. Witnesses have
testified that they have known the road for a certain period
of years, beginning at a time prior to the enactment of the
Civil Code, but no evidence has been made to prove
immemorial use by either of the means of proof mentioned
in this decision cited, nor is immemorial user averred in the
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LAW ON PROPERTY

complaint as the basis of the right. It is evident, therefore,

that no vested right by user from time immemorial had been
acquired by plaintiffs at the time the Civil Code took effect.
Under that Code (art 539) no discontinuous easement could
be acquired by prescription in any event. Assuming, without
deciding, that this rule has been changed by the provisions
of the present Code of Civil Procedure relating to
prescription, and that since its enactment discontinuous
easement may be required by prescription, it is clear that
this would not avail plaintiffs. The Code of Civil Procedure
went into effect on October 1, 1901. The term of
prescription for the acquisition of rights in real estate is fixed
by the Code (sec. 41) at ten years. The evidence shows that
in February, 1911, before the expiration of the term of ten
years since the time the Code of Civil Procedure took effect,
the defendants interrupted the use of the road by the
plaintiffs by constructing and maintaining a toll gate on it
and collecting toll from persons making use of it with carts
and continued to do so until they were enjoined by the
granting of the preliminary injunction by the trial court in
December, 1912. Our conclusion is, therefore, that the
plaintiffs have not acquired by prescription a right to an
easement of way over the defendant's property; that their
use of the Nanca-Victorias road across the Hacienda Toreno
was due merely to the tacit license and tolerance of the
defendants and their predecessors in title; that license was
essentially revokable; and that, therefore, the defendants
were within their rights when they closed the road in 1911.
While in the allegations from the plaintiffs' complaint it
might be inferred that it was their purpose to seek to impose
upon the defendants the easement to which arts. 564 et
seq. of the Civil Code relate, that purpose was evidently
abandoned, and the case was tried upon a wholly different
theory. Proof was offered to show that the right of passage
across defendants' land is necessary to enable plaintiffs to
get their products to market, but there was no offer on their
part to pay defendants the indemnity required by section
564.
For the reasons stated the judgment of the court below is
reversed, the injunction issued against defendants is
allowed on this appeal.
G.R. No. L-57259 October 13, 1983

ANGEL P. PERAN, petitioner,

vs.
THE HONORABLE PRESIDING JUDGE, BRANCH II, COURT OF
FIRST INSTANCE OF SORSOGON, 10th JUDICIAL DISTRICT,
RAMON ESPERA and ENCARNACION EVASCO, as privaterespondents, respondents.
Irene P. Escandor for petitioner.
Esteban Escalante, Jr. for private respondents.

MELENCIO-HERRERA, J.:
The decision of the then Court of First Instance of Sorsogon,
Branch II, Gubat, Sorsogon, rendered in the exercise of its
appellate jurisdiction, dismissing Civil Case No. 1277,
entitled "Angel P. Peran vs. Encarnacion Evasco, et al.", for
Forcible Entry and Illegal Detainer, is being assailed in this
Petition for Review on certiorari on a question of law. Said
Decision reversed the judgment of the 2nd Municipal Circuit
Court of Bulusan-Barcelona, Sorsogon, for Forcible Entry &
Illegal Detainer.
The antecedent facts follow:
The property in question, an unregistered residential land,
with an area of 1,225 square meters more or less, situated
at Tagdon Barcelona, Sorsogon, was originally owned by Jose
Evasco. On December 29, 1950, Jose Evasco executed a
"Reparticion Ex-trajudicial" whereby he partitioned his
properties among his five heirs. 1 Subject property was one
of those alloted to his son, Alejandro Evasco, who had it
surveyed in 1956 (Exhibits "I" and "I-1") who had it declared
in his name under Tax Declaration No. 1900. The other heirs
received their own shares, one of them, the deceased
Anacleto Evasco, one of whose children was listed as
Encarnacion, possibly, the principal private respondent
herein.
Alejandro Evasco sold his property to Jose E. Torella on
December 31, 1972, 2 who declared it for taxation purposes
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under Tax Declaration No. 5157. 3 On July 10, 1977, Jose E.

Torella, in turn, sold the land to Jose Enriquez Sabater, 4
and the latter also declared the property in his name under
Tax Declaration No. 7127. 5 Petitioner Angel P. Peran
acquired the land by purchase from Jose Enriquez Sabater
on December 27, 1978, 6 and subsequently declared it, too,
in his name under Tax Declaration No. 7310. 7 The sale was
duly recorded in the Register of Deeds' Office of the
province of Sorsogon on January 3, 1979 in accordance with
the provisions of Sec. 194 of the Revised Administrative
Code as amended by Act No. 3344.
Sometime in January 1979, petitioner personally asked
private respondents, Encarnacion Evasco and her commonlaw husband Ramon Espera, whose house is erected on a
440 square meter portion (44 sq, ms. according to
petitioner) of the lot in question, to remove the same and
vacate the premises. Respondents refused, and
consequently, a confrontation between the parties was had
before the, Municipal Mayor of Barcelona and later before
the Municipal Judge of Bulusan-Barcelona to settle the
dispute, but to no avail.
On February 8, 1979, petitioner filed a complaint for Forcible
Entry and Illegal Detainer against private respondents
before the 2nd Municipal Circuit Court of Bulusan-Barcelona,
seeking the ejectment of the latter from the portion in
question contending that respondents are mere squatters
thereon; that they had prevented plaintiff from entering the
property and deprived him of possession; and that they
were tolerating persons in getting soil and bringing about a
gradual erosion of the land to his extreme prejudice.
Private respondents answered denying the material
allegations of the Complaint, and alleging that they are the
lawful possessors for more than twenty (20) years of the
said portion, which formerly belonged to Jose Evasco,
grandfather of Encarnacion Evasco and that petitioner has
no right to eject them therefrom.
On September 1, 1979, the 2nd Municipal Circuit Court of
Bulusan-Barcelona rendered its Decision ordering private
respondents to vacate the lot in question, return its
possession to petitioner, reimburse him attorney's fees of

P300.00 and litigation expenses, and to pay the costs.

Reconsideration of the said decision filed by private
respondents was denied by said Court on November 12,
1979. Private respondents appealed to respondent Court of
First Instance of Sorsogon, Branch II.
Respondent Court reversed the Municipal Circuit Court and
dismissed the case on March 28, 1980, ruling that said Court
had no jurisdiction over the case as the same was filed only
on February 4, (8), 1979, which was well beyond the oneyear-period of limitation, the cause of action having accrued
from the sale of the property by Alejandro Evasco to Jose E.
Torella on December 31, 1972; and that since the only issue
in an illegal detainer case is physical possession, "whoever
has prior possession, no matter in what character, is
protected by law."
Reconsideration of the said Decision sought by petitioner
was denied by respondent Court.
Petitioner appealed said judgment directly to this Tribunal on
a question of law, raising as the lone issue:
... whether the respondent court was in error when for
purposes of determining the jurisdiction of the 2nd Municipal
Circuit Court of Bulusan-Barcelona, to try Civil Case No.
1227, for Illegal Detainer:
(a) it reckoned the counting of one-year period within which
to file the action from the sale of the property in question by
Alejandro Evasco to Jose Torella on December 31, 1972 and
not from the date of demand made by the petitioner upon
the respondents; and
(b) by assuming that "prior possession in whatever
character is protected by law.
We rule for petitioner.
Private respondents admit that the land in question was
originally owned by Jose Evasco. The tax declarations
covering their house clearly state "house built on land
owned by Jose Evasco under Tax No. 1599". 8 Since the
land had been partitioned to Alejandro Evasco by his father,
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Jose Evasco, respondent Encarnacion can lay no claim to the

property even as a grand-daughter of Jose Evasco.
Respondents may have been in possession of the portion
they occupy prior to petitioner but they have not proved
their title thereto, nor their right to possess the same. As the
2nd Municipal Circuit Court of Bulusan-Barcelona found, no
concrete evidence was introduced by respondents on this
point. Moreover, it is noteworthy that the validity of the
"Reparticion Extrajudicial" whereby said lot was adjudicated
to Alejandro Evasco by his father Jose Evasco, predecessorsin-interest of petitioner, had never been challenged.
If at all, private respondents' possession of their portion of
the property was by mere tolerance of petitioner's
predecessors-in-interest, which, however, does not vest in
them a right which they can assert against petitioner.
Possession by tolerance is lawful but this becomes illegal
when, upon demand to vacate by the owner, the possessor
refuses to comply with such demand. 9 A possessor by
tolerance is necessarily bound by an implied promise to
vacate upon demand, failing which a summary action for
ejectment is the proper remedy against him. 10 It is not
necessary that there be a formal agreement or contract of
lease before an unlawful detainer suit may be filed against a
possessor by tolerance. 11 Neither is prior physical
possession of the property by petitioner an indispensable
requisite. 12 The ruling of respondent Court, therefore, that
"since the only issue in forcible entry and illegal detainer
action is the physical possession of real property
possession de facto and n t possession de jurewhoever
has prior possession, no matter in what character, is
protected by law," is erroneous under the factual milieu
herein,
A Forcible Entry and Unlawful Detainer action must be
brought within one year from the unlawful deprivation or
withholding of possession. 13 The one-year-period of
limitation commences from the time of demand to vacate,
and when several demands are made, the same is counted
from the last letter of demand. 14 Demand may either be
personal or in writing. 15 The demand to vacate having
been made by petitioner in January 1979, and the ejectment
suit having been instituted on February 8, 1979, the 2nd

Municipal Circuit Court of Bulusan-Barcelona acted well

within its jurisdiction in taking cognizance of the case.
WHEREFORE, the assailed Decision of respondent Court of
First Instance of Sorsogon, Branch II, in Civil Case No.1227,
is SET ASIDE, and the Decision of the 2nd Municipal Circuit
Court of Bulusan-Barcelona is hereby reinstated,
Costs against private respondents.
ARTICLE 559
G.R. No. L-18536

March 31, 1965

JOSE B. AZNAR, plaintiff-appellant,

vs.
RAFAEL YAPDIANGCO, defendant-appellee;
TEODORO SANTOS, intervenor-appellee.
Florentino M. Guanlao for plaintiff-appellant.
Rafael Yapdiangco in his own behalf as defendant-appellee.
Lorenzo Sumulong, R. B. Hilao and B. S. Felipe for
intervenor-appellee.
REGALA, J.:
This is an appeal, on purely legal questions, from a decision
of the Court of First Instance of Quezon City, Branch IV,
declaring the intervenor-appellee, Teodoro Santos, entitled
to the possession of the car in dispute.
The records before this Court disclose that sometime in May,
1959, Teodoro Santos advertised in two metropolitan papers
the sale of his FORD FAIRLANE 500. In the afternoon of May
28, 1959, a certain L. De Dios, claiming to be a nephew of
Vicente Marella, went to the Santos residence to answer the
ad. However, Teodoro Santos was out during this call and
only the latter's son, Irineo Santos, received and talked with
De Dios. The latter told the young Santos that he had come
in behalf of his uncle, Vicente Marella, who was interested to
buy the advertised car.
On being informed of the above, Teodoro Santos instructed
his son to see the said Vicente Marella the following day at
his given address: 1642 Crisostomo Street, Sampaloc,
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Manila. And so, in the morning of May 29, 1959, Irineo

Santos went to the above address. At this meeting, Marella
agreed to buy the car for P14,700.00 on the understanding
that the price would be paid only after the car had been
registered in his name.

for L. De Dios and he was told that no such name lived or

was even known therein. Whereupon, Irineo Santos rushed
to 1642 Crisostomo to see Marella. He found the house
closed and Marella gone. Finally, he reported the matter to
his father who promptly advised the police authorities.

Irineo Santos then fetched his father who, together with L.

De Dios, went to the office of a certain Atty. Jose Padolina
where the deed of the sale for the car was executed in
Marella's favor. The parties to the contract thereafter
proceeded to the Motor Vehicles Office in Quezon City where
the registration of the car in Marella's name was effected.
Up to this stage of the transaction, the purchased price had
not been paid.

That very same day, or on the afternoon of May 29, 1959

Vicente Marella was able to sell the car in question to the
plaintiff-appellant herein, Jose B. Aznar, for P15,000.00.
Insofar as the above incidents are concerned, we are bound
by the factual finding of the trial court that Jose B. Aznar
acquired the said car from Vicente Marella in good faith, for
a valuable consideration and without notice of the defect
appertaining to the vendor's title.

From the Motor Vehicles Office, Teodoro Santos returned to

his house. He gave the registration papers and a copy of the
deed of sale to his son, Irineo, and instructed him not to part
with them until Marella shall have given the full payment for
the car. Irineo Santos and L. De Dios then proceeded to
1642 Crisostomo Street, Sampaloc, Manila where the former
demanded the payment from Vicente Marella. Marella said
that the amount he had on hand then was short by some
P2,000.00 and begged off to be allowed to secure the
shortage from a sister supposedly living somewhere on
Azcarraga Street, also in Manila. Thereafter, he ordered L.
De Dios to go to the said sister and suggested that Irineo
Santos go with him. At the same time, he requested the
registration papers and the deed of sale from Irineo Santos
on the pretext that he would like to show them to his lawyer.
Trusting the good faith of Marella, Irineo handed over the
same to the latter and thereupon, in the company of L. De
Dios and another unidentified person, proceeded to the
alleged house of Marella's sister.

While the car in question was thus in the possession of Jose

B. Aznar and while he was attending to its registration in his
name, agents of the Philippine Constabulary seized and
confiscated the same in consequence of the report to them
by Teodoro Santos that the said car was unlawfully taken
from him.

At a place on Azcarraga, Irineo Santos and L. De Dios

alighted from the car and entered a house while their
unidentified companion remained in the car. Once inside, L.
De Dios asked Irineo Santos to wait at the sala while he
went inside a room. That was the last that Irineo saw of him.
For, after a considerable length of time waiting in vain for De
Dios to return, Irineo went down to discover that neither the
car nor their unidentified companion was there anymore.
Going back to the house, he inquired from a woman he saw

In due time, Jose B. Aznar filed a complaint for replevin

against Captain Rafael Yapdiangco, the head of the
Philippine Constabulary unit which seized the car in question
Claiming ownership of the vehicle, he prayed for its delivery
to him. In the course of the litigation, however, Teodoro
Santos moved and was allowed to intervene by the lower
court.
At the end of the trial, the lower court rendered a decision
awarding the disputed motor vehicle to the intervenorappellee, Teodoro Santos. In brief, it ruled that Teodoro
Santos had been unlawfully deprived of his personal
property by Vicente Marella, from whom the plaintiffappellant traced his right. Consequently, although the
plaintiff-appellant acquired the car in good faith and for a
valuable consideration from Vicente Marella, the said
decision concluded, still the intervenor-appellee was entitled
to its recovery on the mandate of Article 559 of the New
Civil Code which provides:
ART. 559. The possession of movable property acquired in
good faith is equivalent to title. Nevertheless, one who lost
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any movable or has been unlawfully deprived thereof, may

recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has
been unlawfully deprived, has acquired it in good faith at a
public sale, the owner cannot obtain its return without
reimbursing the price paid therefor.
From this decision, Jose B. Aznar appeals.
The issue at bar is one and simple, to wit: Between Teodoro
Santos and the plaintiff-appellant, Jose B. Aznar, who has a
better right to the possession of the disputed automobile?
We find for the intervenor-appellee, Teodoro Santos.
The plaintiff-appellant accepts that the car in question
originally belonged to and was owned by the intervenorappellee, Teodoro Santos, and that the latter was unlawfully
deprived of the same by Vicente Marella. However, the
appellant contends that upon the facts of this case, the
applicable provision of the Civil Code is Article 1506 and not
Article 559 as was held by the decision under review. Article
1506 provides:
ART. 1506. Where the seller of goods has a voidable title
thereto, but his, title has not been voided at the time of the
sale, the buyer acquires a good title to the goods, provided
he buys them in good faith, for value, and without notice of
the seller's defect of title.
The contention is clearly unmeritorious. Under the
aforequoted provision, it is essential that the seller should
have a voidable title at least. It is very clearly inapplicable
where, as in this case, the seller had no title at all.
Vicente Marella did not have any title to the property under
litigation because the same was never delivered to him. He
sought ownership or acquisition of it by virtue of the
contract. Vicente Marella could have acquired ownership or
title to the subject matter thereof only by the delivery or
tradition of the car to him.

Under Article 712 of the Civil Code, "ownership and other

real rights over property are acquired and transmitted by
law, by donation, by testate and intestate succession, and in
consequence of certain contracts, by tradition." As
interpreted by this Court in a host of cases, by this
provision, ownership is not transferred by contract merely
but by tradition or delivery. Contracts only constitute titles
or rights to the transfer or acquisition of ownership, while
delivery or tradition is the mode of accomplishing the same
(Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez and Co. v.
International Bank, 37 Phil. 631, Fidelity and Deposit Co. v.
Wilson, 8 Phil. 51; Kuenzle & Streiff v. Wacke & Chandler, 14
Phil. 610; Easton v. Diaz Co., 32 Phil. 180).
For the legal acquisition and transfer of ownership and other
property rights, the thing transferred must be delivered,
inasmuch as, according to settled jurisprudence, the
tradition of the thing is a necessary and indispensable
requisite in the acquisition of said ownership by virtue of
contract. (Walter Laston v. E. Diaz & Co. & the Provincial
Sheriff of Albay, supra.)
So long as property is not delivered, the ownership over it is
not transferred by contract merely but by delivery. Contracts
only constitute titles or rights to the transfer or acquisition
of ownership, while delivery or tradition is the method of
accomplishing the same, the title and the method of
acquiring it being different in our law. (Gonzales v. Roxas, 16
Phil. 51)
In the case on hand, the car in question was never delivered
to the vendee by the vendor as to complete or consummate
the transfer of ownership by virtue of the contract. It should
be recalled that while there was indeed a contract of sale
between Vicente Marella and Teodoro Santos, the former, as
vendee, took possession of the subject matter thereof by
stealing the same while it was in the custody of the latter's
son.
There is no adequate evidence on record as to whether
Irineo Santos voluntarily delivered the key to the car to the
unidentified person who went with him and L. De Dios to the
place on Azcarraga where a sister of Marella allegedly lived.
But even if Irineo Santos did, it was not the delivery
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LAW ON PROPERTY

contemplated by Article 712 of the Civil Code. For then, it

would be indisputable that he turned it over to the
unidentified companion only so that he may drive Irineo
Santos and De Dios to the said place on Azcarraga and not
to vest the title to the said vehicle to him as agent of
Vicente Marella. Article 712 above contemplates that the act
be coupled with the intent of delivering the thing. (10
Manresa 132)
The lower court was correct in applying Article 559 of the
Civil Code to the case at bar, for under it, the rule is to the
effect that if the owner has lost a thing, or if he has been
unlawfully deprived of it, he has a right to recover it, not
only from the finder, thief or robber, but also from third
persons who may have acquired it in good faith from such
finder, thief or robber. The said article establishes two
exceptions to the general rule of irrevindicability, to wit,
when the owner (1) has lost the thing, or (2) has been
unlawfully deprived thereof. In these cases, the possessor
cannot retain the thing as against the owner, who may
recover it without paying any indemnity, except when the
possessor acquired it in a public sale. (Del Rosario v. Lucena,
8 Phil. 535; Varela v. Finnick, 9 Phil. 482; Varela v. Matute, 9
Phil. 479; Arenas v. Raymundo, 19 Phil. 46. Tolentino, id.,
Vol. II, p. 261.)
In the case of Cruz v. Pahati, et al., 52 O.G. 3053 this Court
has already ruled
that
Under Article 559 of the new Civil Code, a person illegally
deprived of any movable may recover it from the person in
possession of the same and the only defense the latter may
have is if he has acquired it in good faith at a public sale, in
which case, the owner cannot obtain its return without
reimbursing the price paid therefor. In the present case,
plaintiff has been illegally deprived of his car through the
ingenious scheme of defendant B to enable the latter to
dispose of it as if he were the owner thereof. Plaintiff,
therefore, can still recover possession of the car even if it is
in the possession of a third party who had acquired it in
good faith from defendant B. The maxim that "no man can
transfer to another a better title than he had himself"

obtains in the civil as well as in the common law. (U.S. v.

Sotelo, 28 Phil. 147)
Finally, the plaintiff-appellant here contends that inasmuch
as it was the intervenor-appellee who had caused the fraud
to be perpetrated by his misplaced confidence on Vicente
Marella, he, the intervenor-appellee, should be made to
suffer the consequences arising therefrom, following the
equitable principle to that effect. Suffice it to say in this
regard that the right of the owner to recover personal
property acquired in good faith by another, is based on his
being dispossessed without his consent. The common law
principle that where one of two innocent persons must
suffer by a fraud perpetrated by another, the law imposes
the loss upon the party who, by his misplaced confidence,
has enabled the fraud to be committed, cannot be applied in
a case which is covered by an express provision of the new
Civil Code, specifically Article 559. Between a common law
principle and a statutory provision, the latter must prevail in
this jurisdiction. (Cruz v. Pahati, supra)
UPON ALL THE FOREGOING, the instant appeal is hereby
dismissed and the decision of the lower court affirmed in
full. Costs against the appellant
G.R. No. L-30817 September 29, 1972
DOMINADOR DIZON, doing business under the firm name
"Pawnshop of Dominador Dizon", petitioner,
vs.
LOURDES G. SUNTAY, respondent.
Andres T. Velarde for petitioner.
Rafael G. Suntay for respondent.

FERNANDO, J.:p
In essence there is nothing novel in this petition for review
of a decision of the Court of Appeals affirming a lower court
judgment sustaining the right of an owner of a diamond
Page 235 of 404

LAW ON PROPERTY

ring, respondent Lourdes G. Suntay, as against the claim of

petitioner Dominador Dizon, who owns and operates a
pawnshop. The diamond ring was turned over to a certain
Clarita R. Sison, for sale on commission, along with other
pieces of jewelry of respondent Suntay. It was then pledged
to petitioner. Since what was done was violative of the terms
of the agency, there was an attempt on her part to recover
possession thereof from petitioner, who refused. She had to
file an action then for its recovery. She was successful, as
noted above, both in the lower court and thereafter in the
Court of Appeals. She prevailed as she had in her favor the
protection accorded by Article 559 of the Civil
Code. 1 The matter was then elevated to us by petitioner.
Ordinarily, our discretion would have been exercised against
giving due course to such petition for review. The vigorous
plea however, grounded on estoppel, by his counsel, Atty.
Andres T. Velarde, persuaded us to act otherwise. After a
careful perusal of the respective contentions of the parties,
we fail to perceive any sufficient justification for a departure
from the literal language of the applicable codal provision as
uniformly interpreted by this Court in a number of decisions.
The invocation of estoppel is therefore unavailing. We affirm.
The statement of the case as well as the controlling facts
may be found in the Court of Appeals decision penned by
Justice Perez. Thus: "Plaintiff is the owner of a three-carat
diamond ring valued at P5,500.00. On June 13, 1962, the
plaintiff and Clarita R. Sison entered into a transaction
wherein the plaintiff's ring was delivered to Clarita R. Sison
for sale on commission. Upon receiving the ring, Clarita R.
Sison executed and delivered to the plaintiff the receipt ... .
The plaintiff had already previously known Clarita R. Sison
as the latter is a close friend of the plaintiff's cousin and
they had frequently met each other at the place of the
plaintiff's said cousin. In fact, about one year before their
transaction of June 13, 1962 took place, Clarita R. Sison
received a piece of jewelry from the plaintiff to be sold for
P500.00, and when it was sold, Clarita R. Sison gave the
price to the plaintiff. After the lapse of a considerable time
without Clarita R. Sison having returned to the plaintiff the
latter's ring, the plaintiff made demands on Clarita R. Sison
for the return of her ring but the latter could not comply with
the demands because, without the knowledge of the
plaintiff, on June 15, 1962 or three days after the ring above-

mentioned was received by Clarita R. Sison from the

plaintiff, said ring was pledged by Melia Sison, niece of the
husband of Clarita R. Sison, evidently in connivance with the
latter, with the defendant's pawnshop for P2,600.00 ... ." 2
Then came this portion of the decision under review: "Since
the plaintiff insistently demanded from Clarita R. Sison the
return of her ring, the latter finally delivered to the former
the pawnshop ticket ... which is the receipt of the pledge
with the defendant's pawnshop of the plaintiff's ring. When
the plaintiff found out that Clarita R. Sison pledged, she took
steps to file a case of estafa against the latter with the
fiscal's office. Subsequently thereafter, the plaintiff, through
her lawyer, wrote a letter ... dated September 22, 1962, to
the defendant asking for the delivery to the plaintiff of her
ring pledged with defendant's pawnshop under pawnshop
receipt serial-B No. 65606, dated June 15, 1962 ... . Since
the defendant refused to return the ring, the plaintiff filed
the present action with the Court of First Instance of Manila
for the recovery of said ring, with P500.00 as attorney's fees
and costs. The plaintiff asked for the provisional remedy of
replevin by the delivery of the ring to her, upon her filing the
requisite bond, pending the final determination of the
action. The lower court issued the writ of replevin prayed for
by plaintiff and the latter was able to take possession of the
ring during the pendency of the action upon her filing the
requisite bond." 3 It was then noted that the lower court
rendered judgment declaring that plaintiff, now respondent
Suntay, had the right to the possession of the ring in
question. Petitioner Dizon, as defendant, sought to have the
judgment reversed by the Court of Appeals. It did him no
good. The decision of May 19, 1969, now on review, affirmed
the decision of the lower court.
In the light of the facts as thus found by the Court of
Appeals, well-nigh conclusive on use, with the applicable law
being what it is, this petition for review cannot prosper. To
repeat, the decision of the Court of Appeals stands.
1. There is a fairly recent restatement of the force and effect
of the governing codal norm in De Gracia v. Court of
Appeals. 4 Thus: "The controlling provision is Article 559 of
the Civil Code. It reads thus: 'The possession of movable
property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been
Page 236 of 404

LAW ON PROPERTY

unlawfully deprived thereof may recover it from the person

in possession of the same. If the possessor of a movable lost
of which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.'
Respondent Angelina D. Guevara, having been unlawfully
deprived of the diamond ring in question, was entitled to
recover it from petitioner Consuelo S. de Garcia who was
found in possession of the same. The only exception the law
allows is when there is acquisition in good faith of the
possessor at a public sale, in which case the owner cannot
obtain its return without reimbursing the price. As
authoritatively interpreted in Cruz v. Pahati, the right of the
owner cannot be defeated even by proof that there was
good faith in the acquisition by the possessor. There is a
reiteration of this principle in Aznar v. Yapdiangco. Thus:
'Suffice it to say in this regard that the right of the owner to
recover personal property acquired in good faith by another,
is based on his being dispossessed without his consent. The
common law principle that were one of two innocent
persons must suffer by a fraud perpetrated by another, the
law imposes the loss upon the party who, by his misplaced
confidence, has enabled the fraud to be committed, cannot
be applied in a case which is covered by an express
provision of the new Civil Code, specifically Article 559.
Between a common law principle and a statutory provision,
the latter must prevail in this jurisdiction." " 5
2. It must have been a recognition of the compulsion
exerted by the above authoritative precedents that must
have caused petitioner to invoke the principle of estoppel.
There is clearly a misapprehension. Such a contention is
devoid of any persuasive force.
Estoppel as known to the Rules of Court 6 and prior to that
to the Court of Civil Procedure, 7 has its roots in equity.
Good faith is its basis. 8 It is a response to the demands of
moral right and natural justice. 9 For estoppel to exist
though, it is indispensable that there be a declaration, act or
omission by the party who is sought to be bound. Nor is this
all. It is equally a requisite that he, who would claim the
benefits of such a principle, must have altered his position,
having been so intentionally and deliberately led to comport
himself thus, by what was declared or what was done or

failed to be done. If thereafter a litigation arises, the former

would not be allowed to disown such act, declaration or
omission. The principle comes into full play. It may
successfully be relied upon. A court is to see to it then that
there is no turning back on one's word or a repudiation of
one's act. So it has been from our earliest decisions. As
Justice Mapa pointed out in the first case, a 1905 decision,
Rodriguez v. Martinez, 10 a party should not be permitted
"to go against his own acts to the prejudice of [another].
Such a holding would be contrary to the most rudimentary
principles of justice and law." 11 He is not, in the language
of Justice Torres, in Irlanda v. Pitargue, 12 promulgated in
1912, "allowed to gainsay [his] own acts or deny rights
which [he had] previously recognized." 13 Some of the later
cases are to the effect that an unqualified and unconditional
acceptance of an agreement forecloses a claim for interest
not therein provided. 14 Equally so the circumstance that
about a month after the date of the conveyance, one of the
parties informed the other of his being a minor, according to
Chief Justice Paras, "is of no moment, because [the former's]
previous misrepresentation had already estopped him from
disavowing the contract. 15 It is easily understandable why,
under the circumstances disclosed, estoppel is a frail reed to
hang on to. There was clearly the absence of an act or
omission, as a result of which a position had been assumed
by petitioner, who if such elements were not lacking, could
not thereafter in law be prejudiced by his belief in what had
been misrepresented to him. 16 As was put by Justice
Labrador, "a person claimed to be estopped must have
knowledge of the fact that his voluntary acts would deprive
him of some rights because said voluntary acts are
inconsistent with said rights." 17 To recapitulate, there is
this pronouncement not so long ago, from the pen of Justice
Makalintal, who reaffirmed that estoppel "has its origin in
equity and, being based on moral right and natural justice,
finds applicability wherever and whenever the special
circumstances of a case so demand." 18
How then can petitioner in all seriousness assert that his
appeal finds support in the doctrine of estoppel? Neither the
promptings of equity nor the mandates of moral right and
natural justice come to his rescue. He is engaged in a
business where presumably ordinary prudence would
manifest itself to ascertain whether or not an individual who
Page 237 of 404

LAW ON PROPERTY

is offering a jewelry by way of a pledge is entitled to do so. If

no such care be taken, perhaps because of the difficulty of
resisting opportunity for profit, he should be the last to
complain if thereafter the right of the true owner of such
jewelry should be recognized. The law for this sound reason
accords the latter protection. So it has always been since
Varela v.
Finnick, 19 a 1907 decision. According to Justice Torres: "In
the present case not only has the ownership and the origin
of the jewels misappropriated been unquestionably proven
but also that the accused, acting fraudulently and in bad
faith, disposed of them and pledged them contrary to
agreement, with no right of ownership, and to the prejudice
of the injured party, who was thereby illegally deprived of
said jewels; therefore, in accordance with the provisions of
article 464, the owner has an absolute right to recover the
jewels from the possession of whosoever holds them, ... ."
20 There have been many other decisions to the same
effect since then. At least nine may be cited. 21 Nor could
any other outcome be expected, considering the civil code
provisions both in the former Spanish legislation 22 and in
the present Code. 23 Petitioner ought to have been on his
guard before accepting the pledge in question. Evidently
there was no such precaution availed of. He therefore, has
only himself to blame for the fix he is now in. It would be to
stretch the concept of estoppel to the breaking point if his
contention were to prevail. Moreover, there should have
been a realization on his part that courts are not likely to be
impressed with a cry of distress emanating from one who is
in a business authorized to impose a higher rate of interest
precisely due to the greater risk assumed by him. A
predicament of this nature then does not suffice to call for
less than undeviating adherence to the literal terms of a
codal provision. Moreover, while the activity he is engaged
in is no doubt legal, it is not to be lost sight of that it thrives
on taking advantage of the necessities precisely of that
element of our population whose lives are blighted by
extreme poverty. From whatever angle the question is
viewed then, estoppel certainly cannot be justly invoked.
WHEREFORE, the decision of the Court of Appeals of May 19,
1969 is affirmed, with costs against petitioner.

Concepcion, C.J., Zaldivar, Makasiar, Antonio and Esguerra,

JJ., concur.
Makalintal and Barredo, JJ., took no part.
Castro, J., reserves his vote.

Separate Opinions

TEEHANKEE, J., concurring:

I concur in the main opinion of Mr. Justice Fernando, tracing
and confirming the long settled and uniform jurisprudence
since 1905 based on the express statutory provision of
article 559 of our Civil Code (formerly article 464 of the old
Civil Code) that the owner "who has lost any movable or has
been unlawfully deprived thereof may recover it from the
person in possession of the same," the only exception
expressly provided in the codal article being that "if the
possessor of a movable lost of which the owner has been
unlawfully deprived, has acquired it in good faith at a public
sale, the owner cannot obtain its return without reimbursing
the price paid therefor." 1
Senator Tolentino's submittal in his commentaries on the
Civil Code "that the better view is to consider 'unlawfully
deprived' as limited to unlawful taking, such as theft or
robbery, and should not include disposition through abuse of
confidence. Thus, if the owner has entrusted personal
property to a bailee, such as for transportation, pledge, loan
or deposit, without transmitting ownership, and the latter
alienates it to a third person who acquires it in good faith,
the owner cannot recover it from such third person, "is, as
he himself admits, based on the express provision of the
French Code which allows the true owner of personal
Page 238 of 404

LAW ON PROPERTY

property to recover it from the possessor in good faith

without reimbursement only "if it has been stolen from him."
He concedes likewise that "our Code, following the Spanish
code, uses broader language than that used in the French
code" since our Code provides that the owner who has
been "unlawfully deprived" of personal property may
recover it from the possessor without reimbursement, with
the sole exception where the possessor acquired the article
in good faith at a public sale. 2
He thus concedes finally that "(T)here are writers who
believe that the phrase 'unlawfully deprived' in our Code
does not have the same meaning as stolen in the French
code; that it is used in the general sense, and is not used in
the specific sense of deprivation by robbery or theft. Under
this view, it extends to all cases where there has been no
valid transmission of ownership, including the case where
the proprietor has entrusted the thing to a borrower,
depositary, or lessee who has sold the same. It is believed
that the owner in such case is undoubtedly unlawfully
deprived of his property, and may recover the same from a
possessor in good faith" (citing De Buen: 2-II Colin &
Capitant 1008; 1 Bonet
234) 3 and cites the long unbroken line of decisions of the
Court of Appeals and of this Court upholding the import of
the broader language of the codal article in question.
Indeed, if our legislature had intended to narrow the scope
of the term "unlawfully deprived" to "stolen" as advocated
by Tolentino, it certainly would have adopted and used such
a narrower term rather than the broad language of article
464 of the old Spanish Civil Code with its long-established
and accepted meaning in accordance with our
jurisprudence.
Petitioner's contentions at bar had long been disposed of in
the Court's 1911 decision of Arenas vs. Raymundo, 4 per Mr.
Justice Florentino Torres, reiterating the doctrine of the
earlier cases and holding that
Even supposing that the defendant Raymundo had acted in
good faith in accepting the pledge of the jewelry in
litigation, even then he would not be entitled to retain it
until the owner thereof reimburse him for the amount

loaned to the embezzler, since the said owner of the

jewelry, the plaintiff, did not make any contract with the
pledgee, that would obligate him to pay the amount loaned
to Perello, and the trial record does not disclose any
evidence, even circumstantial, that the plaintiff Arenas
consented to or had knowledge of the pledging of her
jewelry in the pawnshop of the defendant.
For this reason, and because Concepcion Perello was not the
legitimate owner of the jewelry which she pledged to the
defendant Raymundo, for a certain sum that she received
from the latter as a loan, the contract of pledge entered into
by both, is of course, null and void, and, consequently the
jewelry so pawned can not serve as security for the
payment of the sum loaned, nor can the latter be collected
out of the value of the said jewelry.
Article 1857 of the Civil Code prescribes as one of the
essential requisites of the contracts of pledge and of
mortgage, that the thing pledged or mortgaged must belong
to the person who pledges or mortgages it. This essential
requisite for the contract of pledge between Perello and the
defendant being absent as the former was not the owner of
the jewelry given in pledge, the contract is as devoid of
value and force as if it had not been made, and as it was
executed with marked violation of an express provision of
the law, it can not confer upon the defendant any rights in
the pledged jewelry, nor impose any obligation toward him
on the part of the owner thereof, since the latter was
deprived of her possession by means of the illegal pledging
of the said jewelry, a criminal act.
Between the supposed good faith of the defendant
Raymundo and the undisputed good faith of the plaintiff
Arenas, the owner of the jewelry, neither law nor justice
permit that the latter, after being the victim of
embezzlement, should have to choose one of the two
extremes of a dilemma, both of which, without legal ground
or reason, are injurious and prejudicial to her interests and
rights, that is, she must either lose her jewelry or pay a
large sum received by the embezzler as a loan from the
defendant, when the plaintiff Arenas is not related to the
latter by any legal or contractual bond out of which legal
obligations arise.
Page 239 of 404

LAW ON PROPERTY

xxx xxx xxx

The business of pawnshops, in exchange for the high and
onerous interest which constitutes its enormous profits, is
always exposed to the contingency of receiving in pledge or
security for the loans, jewels and other articles that have
been robbed, stolen, or embezzled from their legitimate
owners; and as the owner of the pawnshop accepts the
pledging of jewelry from the first bearer who offers the same
and asks for money on it, without assuring himself whether
such bearer is or is not the owner thereof, he can not, by
such procedure, expect from the law better and more
preferential protection than the owner of the jewels or other
articles, who was deprived thereof by means of a crime and
is entitled to be excused by the courts.
Antonio Matute, the owner of another pawnshop, being
convinced that he was wrong, refrained from appealing from
the judgment wherein he was sentenced to return, without
redemption, to the plaintiffs, another jewel of great value
which had been pledged to him by the same Perello. He
undoubtedly had in mind some of the previous decisions of
this court, one of which was against himself.
By the same token, the contention that the owner may
recover the lost article of which he has been unlawfully
deprived without reimbursement of the sum received by the
embezzler from the pawnshop only after a criminal
conviction of the embezzler, is to add a requirement that is
not in the codal article and to unduly prejudice the victim of
embezzlement, as pointed out by the Court in Arenas, supra.
The civil action that the owner must resort to for the
recovery of his personal property of which he has been
unlawfully deprived as against the possessor (where the
latter refuses to honor the claim, presumably on same valid
doubts as to the genuineness of the claim) gives the
possessor every adequate protection and opportunity to
contest the owner's claim of recovery. The owner must
therein establish by competent evidence his lawful claim,
and show to the court's satisfaction his lawful ownership of
the article claimed and that he had been unlawfully
deprived thereof.

I therefore find no reason to set aside the long settled

interpretation given by our jurisprudence to article 559
(formerly article 464) of our Civil Code in accordance with its
clear and unambiguous language, as reaffirmed in the case
at bar.
Separate Opinions
TEEHANKEE, J., concurring:
I concur in the main opinion of Mr. Justice Fernando, tracing
and confirming the long settled and uniform jurisprudence
since 1905 based on the express statutory provision of
article 559 of our Civil Code (formerly article 464 of the old
Civil Code) that the owner "who has lost any movable or has
been unlawfully deprived thereof may recover it from the
person in possession of the same," the only exception
expressly provided in the codal article being that "if the
possessor of a movable lost of which the owner has been
unlawfully deprived, has acquired it in good faith at a public
sale, the owner cannot obtain its return without reimbursing
the price paid therefor." 1
Senator Tolentino's submittal in his commentaries on the
Civil Code "that the better view is to consider 'unlawfully
deprived' as limited to unlawful taking, such as theft or
robbery, and should not include disposition through abuse of
confidence. Thus, if the owner has entrusted personal
property to a bailee, such as for transportation, pledge, loan
or deposit, without transmitting ownership, and the latter
alienates it to a third person who acquires it in good faith,
the owner cannot recover it from such third person, "is, as
he himself admits, based on the express provision of the
French Code which allows the true owner of personal
property to recover it from the possessor in good faith
without reimbursement only "if it has been stolen from him."
He concedes likewise that "our Code, following the Spanish
code, uses broader language than that used in the French
code" since our Code provides that the owner who has
been "unlawfully deprived" of personal property may
recover it from the possessor without reimbursement, with
Page 240 of 404

LAW ON PROPERTY

the sole exception where the possessor acquired the article

in good faith at a public sale. 2
He thus concedes finally that "(T)here are writers who
believe that the phrase 'unlawfully deprived' in our Code
does not have the same meaning as stolen in the French
code; that it is used in the general sense, and is not used in
the specific sense of deprivation by robbery or theft. Under
this view, it extends to all cases where there has been no
valid transmission of ownership, including the case where
the proprietor has entrusted the thing to a borrower,
depositary, or lessee who has sold the same. It is believed
that the owner in such case is undoubtedly unlawfully
deprived of his property, and may recover the same from a
possessor in good faith" (citing De Buen: 2-II Colin &
Capitant 1008; 1 Bonet
234) 3 and cites the long unbroken line of decisions of the
Court of Appeals and of this Court upholding the import of
the broader language of the codal article in question.
Indeed, if our legislature had intended to narrow the scope
of the term "unlawfully deprived" to "stolen" as advocated
by Tolentino, it certainly would have adopted and used such
a narrower term rather than the broad language of article
464 of the old Spanish Civil Code with its long-established
and accepted meaning in accordance with our
jurisprudence.
Petitioner's contentions at bar had long been disposed of in
the Court's 1911 decision of Arenas vs. Raymundo, 4 per Mr.
Justice Florentino Torres, reiterating the doctrine of the
earlier cases and holding that
Even supposing that the defendant Raymundo had acted in
good faith in accepting the pledge of the jewelry in
litigation, even then he would not be entitled to retain it
until the owner thereof reimburse him for the amount
loaned to the embezzler, since the said owner of the
jewelry, the plaintiff, did not make any contract with the
pledgee, that would obligate him to pay the amount loaned
to Perello, and the trial record does not disclose any
evidence, even circumstantial, that the plaintiff Arenas
consented to or had knowledge of the pledging of her
jewelry in the pawnshop of the defendant.

For this reason, and because Concepcion Perello was not the
legitimate owner of the jewelry which she pledged to the
defendant Raymundo, for a certain sum that she received
from the latter as a loan, the contract of pledge entered into
by both, is of course, null and void, and, consequently the
jewelry so pawned can not serve as security for the
payment of the sum loaned, nor can the latter be collected
out of the value of the said jewelry.
Article 1857 of the Civil Code prescribes as one of the
essential requisites of the contracts of pledge and of
mortgage, that the thing pledged or mortgaged must belong
to the person who pledges or mortgages it. This essential
requisite for the contract of pledge between Perello and the
defendant being absent as the former was not the owner of
the jewelry given in pledge, the contract is as devoid of
value and force as if it had not been made, and as it was
executed with marked violation of an express provision of
the law, it can not confer upon the defendant any rights in
the pledged jewelry, nor impose any obligation toward him
on the part of the owner thereof, since the latter was
deprived of her possession by means of the illegal pledging
of the said jewelry, a criminal act.
Between the supposed good faith of the defendant
Raymundo and the undisputed good faith of the plaintiff
Arenas, the owner of the jewelry, neither law nor justice
permit that the latter, after being the victim of
embezzlement, should have to choose one of the two
extremes of a dilemma, both of which, without legal ground
or reason, are injurious and prejudicial to her interests and
rights, that is, she must either lose her jewelry or pay a
large sum received by the embezzler as a loan from the
defendant, when the plaintiff Arenas is not related to the
latter by any legal or contractual bond out of which legal
obligations arise.
xxx xxx xxx
The business of pawnshops, in exchange for the high and
onerous interest which constitutes its enormous profits, is
always exposed to the contingency of receiving in pledge or
security for the loans, jewels and other articles that have
Page 241 of 404

LAW ON PROPERTY

been robbed, stolen, or embezzled from their legitimate

owners; and as the owner of the pawnshop accepts the
pledging of jewelry from the first bearer who offers the same
and asks for money on it, without assuring himself whether
such bearer is or is not the owner thereof, he can not, by
such procedure, expect from the law better and more
preferential protection than the owner of the jewels or other
articles, who was deprived thereof by means of a crime and
is entitled to be excused by the courts.

G.R. No. L-4563

Antonio Matute, the owner of another pawnshop, being

convinced that he was wrong, refrained from appealing from
the judgment wherein he was sentenced to return, without
redemption, to the plaintiffs, another jewel of great value
which had been pledged to him by the same Perello. He
undoubtedly had in mind some of the previous decisions of
this court, one of which was against himself.

ARELLANO, C.J.:

By the same token, the contention that the owner may

recover the lost article of which he has been unlawfully
deprived without reimbursement of the sum received by the
embezzler from the pawnshop only after a criminal
conviction of the embezzler, is to add a requirement that is
not in the codal article and to unduly prejudice the victim of
embezzlement, as pointed out by the Court in Arenas, supra.
The civil action that the owner must resort to for the
recovery of his personal property of which he has been
unlawfully deprived as against the possessor (where the
latter refuses to honor the claim, presumably on same valid
doubts as to the genuineness of the claim) gives the
possessor every adequate protection and opportunity to
contest the owner's claim of recovery. The owner must
therein establish by competent evidence his lawful claim,
and show to the court's satisfaction his lawful ownership of
the article claimed and that he had been unlawfully
deprived thereof.
I therefore find no reason to set aside the long settled
interpretation given by our jurisprudence to article 559
(formerly article 464) of our Civil Code in accordance with its
clear and unambiguous language, as reaffirmed in the case
at bar.

January 19, 1909

THE UNITED STATES, plaintiffs-appellee,

vs.
GABINO SORIANO and GERARDO VILLALOBOS, defendantsappellants.
Jose Lopez Lizo, for appellants.
Attorney-General Villamor, for appellee.

This case being submitted to this court by virtue of the

appeals respectively interposed by the two accused, it
appears:
That Gabino Soriano appealed from the judgment of the
Court of First Instance of Occidental Negros sentencing him
as guilty of the theft of a carabao, to pay a fine of 1,875
pesetas and one-half of the costs, and in case of insolvency
to suffer subsidiary imprisonment at the rate of one day for
every 12 pesetas that he failed to pay.
And that Gerardo Villalobos in his turn appealed from that
part of the judgment which "orders the return to Candido
Montilla of the carabao in question, deposited with the said
Villalobos whose right of action against Gabino Soriano is
reserved."
As to Gabino Soriano, he appealed from the judgment
because he was charged with criminal participation in the
act; the court below considered that this participation in the
commission of the crime was that of an abettor for the
reason that he prohibited by the carabao, although it was
not proven that he was guilty as principal of the
appropriation. But in one of its findings of fact the court
below held: (1) That on the 24th of February, 1905, Gavino
Soriano obtained the registration of the carabao in the
municipality of Silay, and that on the same day he
transferred it by sale to Gerardo Villalobos for the sum of
P150; and (2) that Miguel Tionco, who was municipal
treasurer of Silay, declared that at the time of registration of
the carabao, Gabino Soriano produced an old certificate,
issued in the time of the Spanish Government, but did not
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give any particulars as to the town or the date on which the

document had been issued, and said that he returned the
said document to Soriano in order that he might attach it to
his certificate of ownership as provided in the new law. And
finally, the new law referred to by Tionco is Act No. 1147 of
the Philippine Commission, section 9 of which provides that
persons charged with the duty of branding or registering
large cattle and issuing the proper certificates, shall satisfy
themselves of the ownership of the cattle so branded or
registered. And it has been fully proven that in addition to
the original brand of the real owner Candido Montilla, the
accused, placed his own brand, that is, his initials on the
carabao in question.
Given these facts and the settled rule of this court, the fact
that a number of stolen carabaos were found in the
possession of an individual who kept them hidden away, and
that a few days prior to the recovery thereof he had altered
or modified the old marks on the animals, gives rise to the
presumption that said individual was the principal in the
crime, and not merely by an accessory, unless it be
satisfactorily proven that it was another person who stole
the carabaos. (U.S. vs. Jamero, 10 Phil. Rep., 137.) His
participation as an accessory, as found in the judgment
appealed from, can not be admitted; he must be considered
as principal in the crime as sustained by the AttorneyGeneral in this instance, therefore, he is guilty as principal in
the crime theft as defined by paragraph 3 of article 518 of
the Penal Code, applied by the court below.
But it was also found in the judgment appealed from that
Gabino Soriano had been sentenced by the same court for
the same crime of theft of carabaos in cases Nos. 131, 164,
185, 235 and 285, and was then serving sentence in three
of the cases. In this case the aggravating circumstance No.
18 of article 10, that is, that the culprit is a recidivist, should
be considered, and it is so considered in the judgment
appealed from; but then article 520 should be applied
Theft shall be punished with penalties next higher in degree
to those respectively prescribed in the two preceding
articles:
1. xxx

xxx

xxx

3. If the culprit were a recidivist two or more times.

The penalties imposed by paragraph 3 of article 518 for the
crime herein are arresto mayor in its medium degree to
presidio correccional in its minimum degree, hence the
penalties next higher are presidio correccional in its medium
degree to presidio mayor in its minimum degree. Therefore,
the medium degree of this penalty should be imposed on
him, which we determine to be five years of presidio
correccional.
With respect to the appeal of Gerardo Villalobos, it is based
on the allegation that the court below erred in ordering that
the stolen carabao be returned to its lawful owner, Candido
Montilla, without reimbursing Gerardo Villalobos for its
value, notwithstanding the fact that he was fully acquitted
and declared to be possessor and purchaser thereof, in good
faith, and holding title in accordance with Act No. 1147.
It is true that he was acquitted; for the judgment appealed
from says "A reasonable doubt as to his guilt exists in the
mind of the court" for the reason that it was not proven that
he was aware of the unlawful origin of the animal.
"Apparently, the carabao was lawfully acquired by Vilalobos,
but, notwithstanding this, the true owner, Candido Montilla,
is entitled to recover it, inasmuch as the acquisition by
Villalobos is null and void, because the supposed vendor is
not the real owner of the animal."
What does not appear to be equally certain is that the court
below held that he was a possessor and purchaser in good
faith; the only thing that the court below said is, that it does
not agree with the opinion of the defense "even admitting
that the carabao was acquired in good faith."
Had Villalobos acquired it in good faith at a public sale, he
would be entitled to reimbursement by the real owner upon
recovery by the latter, but the third purchaser in this case,
Villalobos, did not obtain the animal at a public sale, but by
private purchase from Soriano. The registration of the
purchaser and transfer in the books of a municipality does
not confer a public character upon a sale agreed to between
two individuals only, without previous publication of notice
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for general information in order that bidders may appear.

Therefore, the finding contained in the judgment impugned
on this appeal is entirely in accordance with the law, that is,
with the provision of articles 120 of the Penal Code, and 464
of the Civil Code for which reason this part of the judgment
appealed from should be affirmed.
In view of the foregoing, the said judgment is reversed as far
as concerns the penalty imposed on Gabino Soriano as an
accessory, and we hereby sentence him to five years or
presidio correccional with the accessories of article 58 of the
Penal Code and one-half of the costs of both instances; and
we affirm the said judgment as to the restoration of the
stolen carabao to its lawful owner, Candido Montilla, without
right on the part of Gerardo Villalobos to first obtain
reimbursement for the value thereof; is reserved and he is
hereby sentenced to pay one-half of the costs of this
instance.
Torres, Mapa, Johnson, Carson, Willard, and Tracey, JJ.,
concur.
G.R. No. 80298 April 26, 1990
EDCA PUBLISHING & DISTRIBUTING CORP., petitioner,
vs.
THE SPOUSES LEONOR and GERARDO SANTOS, doing
business under the name and style of "SANTOS
BOOKSTORE," and THE COURT OF APPEALS, respondents.
Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B.
Samson for petitioner.
Cendana Santos, Delmundo & Cendana for private
respondents.

CRUZ, J.:
The case before us calls for the interpretation of Article 559
of the Civil Code and raises the particular question of when
a person may be deemed to have been "unlawfully

deprived" of movable property in the hands of another. The

article runs in full as follows:
Art. 559. The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has
lost any movable or has been unlawfully deprived thereof,
may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has
been unlawfully deprived has acquired it in good faith at a
public sale, the owner cannot obtain its return without
reimbursing the price paid therefor.
The movable property in this case consists of books, which
were bought from the petitioner by an impostor who sold it
to the private respondents. Ownership of the books was
recognized in the private respondents by the Municipal Trial
Court, 1 which was sustained by the Regional Trial Court, 2
which was in turn sustained by the Court of Appeals. 3 The
petitioner asks us to declare that all these courts have erred
and should be reversed.
This case arose when on October 5, 1981, a person
identifying himself as Professor Jose Cruz placed an order by
telephone with the petitioner company for 406 books,
payable on delivery. 4 EDCA prepared the corresponding
invoice and delivered the books as ordered, for which Cruz
issued a personal check covering the purchase price of
P8,995.65. 5 On October 7, 1981, Cruz sold 120 of the
books to private respondent Leonor Santos who, after
verifying the seller's ownership from the invoice he showed
her, paid him P1,700.00. 6
Meanwhile, EDCA having become suspicious over a second
order placed by Cruz even before clearing of his first check,
made inquiries with the De la Salle College where he had
claimed to be a dean and was informed that there was no
such person in its employ. Further verification revealed that
Cruz had no more account or deposit with the Philippine
Amanah Bank, against which he had drawn the payment
check. 7 EDCA then went to the police, which set a trap and
arrested Cruz on October 7, 1981. Investigation disclosed
his real name as Tomas de la Pea and his sale of 120 of the
books he had ordered from EDCA to the private
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respondents. 8
On the night of the same date, EDCA sought the assistance
of the police in Precinct 5 at the UN Avenue, which forced
their way into the store of the private respondents and
threatened Leonor Santos with prosecution for buying stolen
property. They seized the 120 books without warrant,
loading them in a van belonging to EDCA, and thereafter
turned them over to the petitioner. 9
Protesting this high-handed action, the private respondents
sued for recovery of the books after demand for their return
was rejected by EDCA. A writ of preliminary attachment was
issued and the petitioner, after initial refusal, finally
surrendered the books to the private respondents. 10 As
previously stated, the petitioner was successively rebuffed
in the three courts below and now hopes to secure relief
from us.
To begin with, the Court expresses its disapproval of the
arbitrary action of the petitioner in taking the law into its
own hands and forcibly recovering the disputed books from
the private respondents. The circumstance that it did so
with the assistance of the police, which should have been
the first to uphold legal and peaceful processes, has
compounded the wrong even more deplorably. Questions
like the one at bar are decided not by policemen but by
judges and with the use not of brute force but of lawful
writs.
Now to the merits
It is the contention of the petitioner that the private
respondents have not established their ownership of the
disputed books because they have not even produced a
receipt to prove they had bought the stock. This is
unacceptable. Precisely, the first sentence of Article 559
provides that "the possession of movable property acquired
in good faith is equivalent to a title," thus dispensing with
further proof.
The argument that the private respondents did not acquire
the books in good faith has been dismissed by the lower
courts, and we agree. Leonor Santos first ascertained the

ownership of the books from the EDCA invoice showing that

they had been sold to Cruz, who said he was selling them for
a discount because he was in financial need. Private
respondents are in the business of buying and selling books
and often deal with hard-up sellers who urgently have to
part with their books at reduced prices. To Leonor Santos,
Cruz must have been only one of the many such sellers she
was accustomed to dealing with. It is hardly bad faith for
any one in the business of buying and selling books to buy
them at a discount and resell them for a profit.
But the real issue here is whether the petitioner has been
unlawfully deprived of the books because the check issued
by the impostor in payment therefor was dishonored.
In its extended memorandum, EDCA cites numerous cases
holding that the owner who has been unlawfully deprived of
personal property is entitled to its recovery except only
where the property was purchased at a public sale, in which
event its return is subject to reimbursement of the purchase
price. The petitioner is begging the question. It is putting the
cart before the horse. Unlike in the cases invoked, it has yet
to be established in the case at bar that EDCA has been
unlawfully deprived of the books.
The petitioner argues that it was, because the impostor
acquired no title to the books that he could have validly
transferred to the private respondents. Its reason is that as
the payment check bounced for lack of funds, there was a
failure of consideration that nullified the contract of sale
between it and Cruz.
The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject
matter and the consideration. According to the Civil Code:
Art. 1475. The contract of sale is perfected at the moment
there is a meeting of minds upon the thing which is the
object of the contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing
the form of contracts.
Page 245 of 404

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xxx xxx xxx

Art. 1477. The ownership of the thing sold shall be
transferred to the vendee upon the actual or constructive
delivery thereof.
Art. 1478. The parties may stipulate that ownership in the
thing shall not pass to the purchaser until he has fully paid
the price.
It is clear from the above provisions, particularly the last one
quoted, that ownership in the thing sold shall not pass to the
buyer until full payment of the purchase only if there is a
stipulation to that effect. Otherwise, the rule is that such
ownership shall pass from the vendor to the vendee upon
the actual or constructive delivery of the thing sold even if
the purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case
of bouncing checks. But absent the stipulation above noted,
delivery of the thing sold will effectively transfer ownership
to the buyer who can in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang, 11 the plaintiff
sold some cosmetics to Francisco Ang, who in turn sold them
to Tan Sit Bin. Asiatic not having been paid by Ang, it sued
for the recovery of the articles from Tan, who claimed he
had validly bought them from Ang, paying for the same in
cash. Finding that there was no conspiracy between Tan and
Ang to deceive Asiatic the Court of Appeals declared:
Yet the defendant invoked Article 464 12 of the Civil Code
providing, among other things that "one who has been
unlawfully deprived of personal property may recover it from
any person possessing it." We do not believe that the
plaintiff has been unlawfully deprived of the cartons of Gloco
Tonic within the scope of this legal provision. It has
voluntarily parted with them pursuant to a contract of
purchase and sale. The circumstance that the price was not
subsequently paid did not render illegal a transaction which
was valid and legal at the beginning.

In Tagatac v. Jimenez, 13 the plaintiff sold her car to Feist,

who sold it to Sanchez, who sold it to Jimenez. When the
payment check issued to Tagatac by Feist was dishonored,
the plaintiff sued to recover the vehicle from Jimenez on the
ground that she had been unlawfully deprived of it by
reason of Feist's deception. In ruling for Jimenez, the Court
of Appeals held:
The point of inquiry is whether plaintiff-appellant Trinidad C.
Tagatac has been unlawfully deprived of her car. At first
blush, it would seem that she was unlawfully deprived
thereof, considering that she was induced to part with it by
reason of the chicanery practiced on her by Warner L. Feist.
Certainly, swindling, like robbery, is an illegal method of
deprivation of property. In a manner of speaking, plaintiffappellant was "illegally deprived" of her car, for the way by
which Warner L. Feist induced her to part with it is illegal
and is punished by law. But does this "unlawful deprivation"
come within the scope of Article 559 of the New Civil Code?
xxx xxx xxx
. . . The fraud and deceit practiced by Warner L. Feist
earmarks this sale as a voidable contract (Article 1390
N.C.C.). Being a voidable contract, it is susceptible of either
ratification or annulment. If the contract is ratified, the
action to annul it is extinguished (Article 1392, N.C.C.) and
the contract is cleansed from all its defects (Article 1396,
N.C.C.); if the contract is annulled, the contracting parties
are restored to their respective situations before the
contract and mutual restitution follows as a consequence
(Article 1398, N.C.C.).
However, as long as no action is taken by the party entitled,
either that of annulment or of ratification, the contract of
sale remains valid and binding. When plaintiff-appellant
Trinidad C. Tagatac delivered the car to Feist by virtue of
said voidable contract of sale, the title to the car passed to
Feist. Of course, the title that Feist acquired was defective
and voidable. Nevertheless, at the time he sold the car to
Felix Sanchez, his title thereto had not been avoided and he
therefore conferred a good title on the latter, provided he
bought the car in good faith, for value and without notice of
the defect in Feist's title (Article 1506, N.C.C.). There being
Page 246 of 404

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no proof on record that Felix Sanchez acted in bad faith, it is

safe to assume that he acted in good faith.

Leonor Santos nevertheless demanded more proof before

deciding to buy them.

The above rulings are sound doctrine and reflect our own
interpretation of Article 559 as applied to the case before us.

It would certainly be unfair now to make the private

respondents bear the prejudice sustained by EDCA as a
result of its own negligence. We cannot see the justice in
transferring EDCA's loss to the Santoses who had acted in
good faith, and with proper care, when they bought the
books from Cruz.

Actual delivery of the books having been made, Cruz

acquired ownership over the books which he could then
validly transfer to the private respondents. The fact that he
had not yet paid for them to EDCA was a matter between
him and EDCA and did not impair the title acquired by the
private respondents to the books.
One may well imagine the adverse consequences if the
phrase "unlawfully deprived" were to be interpreted in the
manner suggested by the petitioner. A person relying on the
seller's title who buys a movable property from him would
have to surrender it to another person claiming to be the
original owner who had not yet been paid the purchase price
therefor. The buyer in the second sale would be left holding
the bag, so to speak, and would be compelled to return the
thing bought by him in good faith without even the right to
reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos
took care to ascertain first that the books belonged to Cruz
before she agreed to purchase them. The EDCA invoice Cruz
showed her assured her that the books had been paid for on
delivery. By contrast, EDCA was less than cautious in fact,
too trusting in dealing with the impostor. Although it had
never transacted with him before, it readily delivered the
books he had ordered (by telephone) and as readily
accepted his personal check in payment. It did not verify his
identity although it was easy enough to do this. It did not
wait to clear the check of this unknown drawer. Worse, it
indicated in the sales invoice issued to him, by the printed
terms thereon, that the books had been paid for on delivery,
thereby vesting ownership in the buyer.
Surely, the private respondent did not have to go beyond
that invoice to satisfy herself that the books being offered
for sale by Cruz belonged to him; yet she did. Although the
title of Cruz was presumed under Article 559 by his mere
possession of the books, these being movable property,

While we sympathize with the petitioner for its plight, it is

clear that its remedy is not against the private respondents
but against Tomas de la Pea, who has apparently caused all
this trouble. The private respondents have themselves been
unduly inconvenienced, and for merely transacting a
customary deal not really unusual in their kind of business.
It is they and not EDCA who have a right to complain.
WHEREFORE, the challenged decision is AFFIRMED and the
petition is DENIED, with costs against the petitioner.
Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur
ARTICLE 572
G.R. No. L-123

December 12, 1945

JOSEFA FABIE, petitioner,

vs.
JOSE GUTIERREZ DAVID, Judge of First Instance of Manila,
NGO BOO SOO and JUAN GREY, respondents.
Sancho Onocencio for petitioner.
Serverino B. Orlina for respondent Ngo Soo.
No appearance for other respondents.

OZAETA, J.:
The petitioner Josefa Fabie is the usufructuary of the income
of certain houses located at 372-376 Santo Cristo, Binondo,
and 950-956 Ongpin, Santa Cruz, Manila, under the ninth
clause of the will of the deceased Rosario Fabie y Grey,
which textually reads as follows:
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NOVENO. Lego a mi ahijada menor de edad, Maria Josefa

de la Paz Fabie, en usufructo vitalicio las rentas de las fincas
situadas en la Calle Santo Cristo Numeros 372 al 376 del
Disrito de Binondo, de esta Ciudad de Manila, descrita en el
Certificado Original de Titulo No. 3824; y en la Calle Ongpin,
Numeros 950 al 956 del Distrito de Santa Cruz, Manila
descrita en el Certificado Original de Titulo No. 5030,
expedidos por el Registrador de Titulos de Manila, y prohibo
enajene, hipoteque, permute o transfiera de algun modo
mientras que ella sea menor de edad. Nombro a Serafin
Fabie Macario, mi primo por linea paterna tutor de la
persona y bienes de mi ahijada menor, Maria Josefa de la
Paz Fabie.
The owner of Santo Cristo property abovementioned is the
respondent Juan Grey, while those of the Ongpin property
are other person not concern herein. Previous to September
1944 litigation arose between Josefa Fabie as plaintiff and
Juan Grey as defendant and the owner of the Ongpin
property as intervenors, involving the administration of the
houses mentioned in clause 9 of the will above quoted (civil
case No. 1659 of the Court of First Instance of Manila). That
suit was decided by the court on September 2, 1944, upon a
stipulation in writing submitted by the parties to and
approved by the court. The pertinent portions of said
stipulation read as follows:
(4) Heretofore, the rent of said properties have been
collected at times by the respective owners of the
properties, at other times by the usufructuary, and lastly by
the defendant Juan Grey as agent under a written
agreement dated March 31, 1942, between the owners of
both properties and the usufructuary.
(5) When the rents were collected by the owners, the net
amounts thereof were duly paid to the usufructuary after
the expenses for real estate taxes, repairs and insurance
premiums, including the documentary stamps, on the
properties and the expenses of collecting the rents had been
deducted, and certain amount set aside as a reserve for
contingent liabilities. When the rents were collected by the
usufructuary, she herself paid the expenses aforesaid. When
the rents are collected by the defendant Juan Grey under

the agreement of March 31, 1942, the net amounts thereof

were duly paid to the usufructuary, after deducting and
setting aside the items aforesaid, monthly, until the month
of October 1943, when the usufructuary refused to continue
with the agreement of March 31, 1942.

II. The parties hereto jointly petition the Court to render

judgment adopting the foregoing as finding of facts and
disposing that:
(8) Beginning with the month of September 1944, the
usufructuary shall collect all the rents of the both the Sto.
Cristo and the Ongpin properties.
(9) The usufructuary shall, at her own cost and expense, pay
all the real estate taxes, special assessments, and insurance
premiums, including the documentary stamps, and make all
the necessary repairs on each of the properties, promptly
when due or, in the case of repairs, when the necessary,
giving immediate, written notice to the owner or owners of
the property concerned after making such payment or
repairs. In case of default on the part of the usufructuary,
the respective owners of the properties shall have the right
to make the necessary payment, including penalties and
interest, if any, on the taxes and special assessments, and
the repairs and in that event the owner or owners shall
entitled to collect all subsequent rents of the property
concerned until the amount paid by him or them and the
expenses of collection are fully covered thereby, after which
the usufructuary shall again collect the rents in accordance
herewith.
(10) The foregoing shall be in effect during the term of the
usufruct and shall be binding on the successors and assigns
of each of the parties.
(11) Nothing herein shall be understood as affecting any
right which the respective owners of the properties have or
may have as such and which is not specifically the subject of
this stipulation.

Page 248 of 404

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In June 1945 Josefa Fabie commenced an action of unlawful

detainer against the herein respondent Ngo Boo Soo (who
says that his correct name is Ngo Soo), alleging in her
amended complaint that the defendant is occupying the
premises located at 372-376 Santo Cristo on a month-to
month rental payable in advance not latter than the 5th of
each month; that she is the administratrix and usufructuary
of said premises; "that the defendant offered to pay P300
monthly rent payable in advance not later than the 5th of
every month, beginning the month of April 1945, for the said
of premises including the one door which said defendant,
without plaintiff's consent and contrary to their agreement,
had subleased to another Chinese, but plaintiff refused,
based on the fact that the herein plaintiff very badly needs
the said house to live in, as her house was burned by the
Japanese on the occasion of the entry of the American
liberators in the City and which was located then at No. 38
Flores, Dominga, Pasay; that defendant was duly notified on
March 24 and April 14, 1945, to leave the said premises, but
he refused"; and she prayed for judgment of eviction and for
unpaid rentals.
The defendant answered alleging that he was and since
1908 had been a tenant of the premises in question, which
he was using and had always used principally as a store and
secondarily for living quarters; that he was renting it from its
owner and administrator Juan Grey; "that plaintiff is merely
the usufructuary of the income therefrom, and by
agreement between her and said owner, which is embodied
in a final judgment of the Court of First Instance of Manila,
her only right as usufructuary of the income is to receive the
whole of such income; that she has no right or authority to
eject tenants, such right being in the owner and
administrator of the house, the aforesaid Juan Grey, who has
heretofore petitioned this Court for permission to intervene
in this action; that plaintiff herein has never had possession
of said property; that defendant's lease contract with the
owner of the house is for 5-year period, with renewal option
at the end of each period, and that his present lease due to
expire on December 31, 1945 . . .; that on June 1, 1945,
defendant made a written offer to plaintiff to compromise
and settle the question of the amount of rent to be paid by
defendant . . . but said plaintiff rejected the same for no
valid reason whatever and instituted the present action; that

the reason plaintiff desires to eject defendant from the

property is that she wishes to lease the same to other
persons for a higher rent, ignoring the fact that as
usufructuary of the income of the property she has no right
to lease the property; that the defendant has subleased no
part of the house to any person whomsoever.
Juan Grey intervened in the unlawful detainer suit, alleging
in his complaint in intervention that he is the sole and
absolute owner of the premises in question; that the plaintiff
Josefa Fabie is the usufructuary of the income of said
premises; by virtue of a contract between him and the
intervenor which will expire on December 31, 1945, with the
option to renew it for another period of five years from and
after said date; that under the agreement between the
intervenor and plaintiff Josefa Fabie in civil case No. 1659 of
the Court of First Instance of Manila, which was approved by
the court and incorporated in its decision of September 2,
1944, the only right recognized in favor of Josefa Fabie as
usufructuary of the income of said premises is to receive the
rents therefrom when due; and that as usufructuary she has
no right nor authority to administer the said premises nor to
lease them nor to evict tenants, which right and authority
are vested in the intervenor as owner of the premises.
The municipal court (Judge Mariano Nable presiding) found
that under paragraph 9 of the stipulation incorporated in the
decision of the Court First Instance of Manila in civil; case
No. 1659, the plaintiff usufructuary is the administratrix of
the premises in question, and that the plaintiff had proved
her cause. Judgment was accordingly rendered ordering the
defendant Ngo Soo to vacate the premises and to pay the
rents at the rate of P137.50 a month beginning April 1,
1945. The complaint in intervention was dismissed.
Upon appeal to the Court of First Instance of Manila the
latter (thru Judge Arsenio P. Dizon) dismissed the case for
the following reason: "The main issue *** is not a mere
question of possession but precisely who is entitled to
administer the property subject matter of this case and who
should be the tenant, and the conditions of the lease. These
issues were beyond the jurisdiction of the municipal court.
This being case, this Court, as appellate court, is likewise
without jurisdiction to take cognizance of the present case."
Page 249 of 404

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A motion for reconsideration filed by the plaintiff was denied

by Judge Jose Gutierrez David, who sustained the opinion of
Judge Dizon.lawphi1.net
The present original action was instituted in this Court by
Josefa Fabie to annul the order of the dismissal and to
require to the Court of First Instance to try and decide the
case on the merits. The petitioner further prays that the
appeal of the intervenor Juan Grey be declared out of time
on the ground that he receive copy of the decision on
August 3 but did not file his notice of appeal until August 25,
1945.
1. The first question to determine is whether the action
instituted by the petitioner Josefa Fabie in the municipal
court is a purely possessory action and as such within the
jurisdiction of said court, or an action founded on property
right and therefore beyond the jurisdiction of the municipal
court. In other words, is it an action of unlawful detainer
within the purview of section 1 of Rule 72, or an action
involving the title to or the respective interests of the parties
in the property subject of the litigation?
Said section 1 of Rule 72 provides that "a landlord, vendor,
vendee, or other person against whom the possession of
any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by
virtue of any contract, express or implied, or the legal
representatives or assigns of any such landlord, vendor
vendee, or other person, may, at any time within one year
after such unlawful deprivation of withholding of possession,
bring an action in the proper inferior court against the
person or persons unlawfully withholding or depriving of
possession, or any person or persons claiming under them,
for the restitution of such possession, together with the
damages and costs."
It is admitted by the parties that the petitioner Josefa Fabie
is the usufructuary of the income of the property in question
and that the respondent Juan Grey is the owner thereof. It is
likewise admitted that by virtue of a final judgment entered
in civil case No. 1659 of the Court of First Instance of Manila
between the usufructuary and the owner, the former has the
right to collect all the rents of said property for herself with

the obligation on her part to pay all the real estate taxes,
special assessments, and insurance premiums, and make all
necessary repairs thereon, and in case default on her part
the owner shall have the right to do all those things, in
which event he shall be entitled to collect all subsequent
rents of the property concerned until the amount paid by
him and the expenses of collection are fully satisfied, after
which the usufructuary shall again collect the rents. There is
therefore no dispute as to the title to or the respective
interests of the parties in the property in question. The
naked title to the property is to admittedly in the respondent
Juan Grey, but the right to all the rents thereof, with the
obligation to pay the taxes and insurance premiums and
make the necessary repairs, is, also admittedly, vested in
the usufructuary, the petitioner Josefa Fabie, during her
lifetime. The only question between the plaintiff and the
intervenor is: Who has the right to manage or administer the
property to select the tenant and to fix the amount of the
rent? Whoever has that right has the right to the control and
possession of the property in question, regardless of the title
thereto. Therefore, the action is purely possessory and not
one in any way involving the title to the property. Indeed,
the averments and the prayer of the complaint filed in the
municipal court so indicate, and as a matter of fact the
defendant Ngo Soo does not pretend to be the owner of the
property, but on the contrary admits to be a mere tenant
thereof. We have repeatedly held that in determining
whether an action of this kind is within the original
jurisdiction of the municipal court or of the Court of First
Instance, the averments of the complaint and the character
of the relief sought are primarily to be consulted; that the
defendant in such an action cannot defeat the jurisdiction of
the justice of the peace or municipal court by setting up title
in himself; and that the factor which defeats the jurisdiction
of said court is the necessity to adjudicate the question of
title. (Mediran vs. Villanueva, 37 Phil., 752, 759; Medel vs.
Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino, 51 Phil.,
333; Supia and Batioco vs. Quintero and Ayala, 59 Phil., 312;
Lizo vs. Carandang, G.R. No. 47833, 2 Off. Gaz., 302; Aguilar
vs. Cabrera and Flameo, G.R. No. 49129.)
The Court of First Instance was evidently confused and led
to misconstrue the real issue by the complaint in
intervention of Juan Grey, who, allying himself with the
Page 250 of 404

LAW ON PROPERTY

defendant Ngo Soo, claimed that he is the administrator of

the property with the right to select the tenant and dictate
the conditions of the lease, thereby implying that it was he
and not the plaintiff Josefa Fabie who had the right to bring
the action and oust the tenant if necessary. For the guidance
of that court and to obviate such confusion in its disposal of
the case on the merits, we deem it necessary and proper to
construe the judgment entered by the Court of First Instance
of Manila in civil case No. 1659, entitled "Josefa Fabie and
Jose Carandang, plaintiffs, vs. Juan Grey, defendant, and
Nieves G. Vda. de Grey, et al., intervenors-defendants"
which judgment was pleaded by the herein respondents
Juan Grey and Ngo Soo in the municipal court. According the
decision, copy of which was submitted to this Court as
Appendix F of the petition and as Annex 1 of the answer,
there was an agreement, dated March 31, 1942, between
the usufructuary Josefa Fabie and the owner Juan Grey
whereby the latter as agent collected the rents of the
property in question and delivered the same to the
usufructuary after deducting the expenses for taxes, repairs,
insurance premiums and the expenses of collection; that in
the month of October 1943 the usufructuary refused to
continue with the said agreement of March 31, 1942, and
thereafter the said case arose between the parties, which by
stipulation approved by the court was settled among them
in the following manner: Beginning with the month of
September 1944 the usufructuary shall collect all the rents
of the property in question; shall, at her own cost and
expense, pay all the real estate taxes, special assessments,
and insurance premiums, including the documentary
stamps, and make all the necessary repairs on the property;
and in case of default on her part the owner shall the right
to do any or all of those things, in which event he shall be
entitled to collect all subsequent rents until the amounts
paid by him are fully satisfied, after which the usufructuary
shall again collect the rents. It was further stipulated by the
parties and decreed by the court that "the foregoing shall be
in effect during the term of the usufruct and shall be binding
on the successors and assigns of each of the parties."
Construing said judgment in the light of the ninth clause of
the will of the deceased Rosario Fabie y Grey, which was
quoted in the decision and by which Josefa Fabie was made
by the usufructuary during her lifetime of the income of the

property in question, we find that the said usufructuary has

the right to administer the property in question. All the acts
of administration to collect the rents for herself, and to
conserve the property by making all necessary repairs and
paying all the taxes, special assessments, and insurance
premiums thereon were by said judgment vested in the
usufructuary. The pretension of the respondent Juan Grey
that he is the administrator of the property with the right to
choose the tenants and to dictate the conditions of the lease
is contrary to both the letter and the spirit of the said clause
of the will, the stipulation of the parties, and the judgment
of the court. He cannot manage or administer the property
after all the acts of management and administration have
been vested by the court, with his consent, in the
usufructuary. He admitted that before said judgment he had
been collecting the rents as agent of the usufructuary under
an agreement with the latter. What legal justification or valid
excuse could he have to claim the right to choose the tenant
and fix the amount of the rent when under the will, the
stipulation of the parties, and the final judgment of the court
it is not he but the usufructuary who is entitled to said
rents? As long as the property is properly conserved and
insured he can have no cause for complaint, and his right in
that regard is fully protected by the terms of the stipulation
and the judgment of the court above mentioned. To permit
him to arrogate to himself the privilege to choose the
tenant, to dictate the conditions of the lease, and to sue
when the lessee fails to comply therewith, would be to place
the usufructuary entirely at his mercy. It would place her in
the absurd situation of having a certain indisputable right
without the power to protect, enforce, and fully enjoy it.
One more detail needs clarification. In her complaint for
desahucio Josefa Fabie alleges that she needs the premises
in question to live in, as her former residence was burned.
Has she the right under the will and the judgment in
question to occupy said premises herself? We think that, as
a corollary to her right to all the rent, to choose the tenant,
and to fix the amount of the rent, she necessarily has the
right to choose herself as the tenant thereof, if she wishes
to; and, as she fulfills her obligation to pay the taxes and
insure and conserve the property properly, the owner has no
legitimate cause to complain. As Judge Nable of the
municipal court said in his decision, "the pretension that the
Page 251 of 404

LAW ON PROPERTY

plaintiff, being a mere usufructuary of the rents, cannot

occupy the property, is illogical if it be taken into account
that that could not have been the intention of the testatrix."
We find that upon the pleadings, the undisputed facts, and
the law the action instituted in the municipal court by the
petitioner Josefa Fabie against the respondent Ngo Soo is
one of unlawful detainer, within the original jurisdiction of
said court, and that therefore Judges Dizon and Gutierrez
David of the Court of First Instance erred in holding
otherwise and in quashing the case upon appeal.
2. The next question to determine is the propriety of the
remedy availed of by the petitioner in this Court. Judging
from the allegations and the prayer of the petition, it is in
the nature of certiorari and mandamus, to annul the order of
dismissal and to require the Court of First Instance to try and
decide the appeal on the merits. Under section 3 of Rule 67,
when any tribunal unlawfully neglects the performance of an
act which the law specifically enjoins as a duty resulting
from an office, and there is no other plain, speedy, and
adequate remedy in the ordinary course of law, it may be
compelled by mandamus to do the act required to be done
to protect the rights of the petitioner. If, as we find, the case
before the respondent judge is one of unlawful detainer, the
law specifically requires him to hear and decide that case on
the merits, and his refusal to do so would constitute an
unlawful neglect in the performance of that duty within
section 3 of Rule 67. Taking into consideration that the law
requires that an unlawful detainer case be promptly decided
(sections 5 and 8, Rule 72),it is evident that an appeal from
the order of dismissal would not be a speedy and adequate
remedy; and under the authority of Cecilio vs. Belmonte (48
Phil., 243, 255), and Aguilar vs. Cabrera and Flameo (G.R.
No. 49129), we hold that mandamus lies in this case.
3. The contention of the petitioner that the appeal of the
intervenor Juan Grey was filed out of time is not well
founded. Although said respondent received copy of the
decision of the municipal court on August 3, 1945, according
to the petitioner (on August 6, 1945, according to the said
respondent), it appears from the sworn answer of the
respondent Ngo Soo in this case that on August 8 he filed a
motion for reconsideration, which was granted in part on

August 18. Thus, if the judgment was modified on August

18, the time for the intervenor Juan Grey to appeal
therefrom did not run until he was notified of said judgment
as modified, and since he filed his notice of appeal on
August 23, it would appear that his appeal was filed on time.
However, we observe in this connection that said appeal of
the intervenor Juan Grey, who chose not to answer the
petition herein, would be academic in view of the
conclusions we have reached above that the rights between
him as owner and Josefa Fabie as usufructuary of the
property in question have been definitely settled by final
judgment in civil case No. 1659 of the Court of First Instance
of Manila in the sense that the usufructuary has the right to
administer and possess the property in question, subject to
certain specified obligations on her part.
The orders of dismissal of the respondent Court of First
Instance, dated September 22 and October 31, 1945, in the
desahucio case (No. 71149) are set aside that court is
directed to try and decide the said case on the merits; with
the costs hereof against the respondent Ngo Soo.
Moran, C.J., Paras, Jaranilla, Feria, De Joya, Pablo, Perfecto,
Bengzon, and Briones, JJ., concur.
Separate Opinions
HILADO, J., concurring:
I concur on the sole ground that, in my opinion, the
amended complaint, dated July 12, 1945, filed by plaintiff in
the Municipal Court of Manila, expressly alleges an
agreement between her and defendant Ngo Boo Soo
regarding the leasing of the premises in question, and that
said amended complaint contains further allegations which,
together with the allegations of said agreement, under a
liberal construction (Rule 1, section 2, Rules of the Court),
would constitute a prima facie showing that the case is one
of unlawful detainer. Of course, this is only said in view of
the allegations of the amended complaint, without prejudice
to the evidence which the parties may adduce at the trial in
the merits, in view of which the court will judge whether or
not, in point of fact, the case is one of unlawful detainer.
Page 252 of 404

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ARTICLE 595
G.R. No. L-19614 March 27, 1971
JESUS M. GABOYA, as Administrator of the Estate of DON
MARIANO CUI, plaintiff-appellant,
vs.
ANTONIO MA. CUI, MERCEDES CUI-RAMAS and GIL RAMAS,
defendants-appellees, JESUS MA. CUI, JOSE MA. CUI,
SERAFIN MA. CUI, JORGE MA. CUI, ROSARIO CUI DE
ENCARNACION, PRECILLA C. VELEZ, and LOURDES C. VELEZ,
intervenors-appellants, VICTORINO REYNES, defendant-incounterclaim-appellee.
Vicente Jayme for plaintiff-appellant.
Hector L. Hofilea Candido Vasqueza and Jaime R. Nuevas
for defendants-appellees.
Jose W. Diokno for intervenors-appellants.

REYES, J.B.L., J.:

Direct appeal (before Republic Act 5440) from a decision of
the Court of First Instance of Cebu (in its Civil Case No. R1720) denying resolution of a contract of sale of lots 2312,
2313 and 2319 executed on 20 March 1946 by the late Don
Mariano Cui in favor of three of his children Antonio Ma. Cui,
Mercedes Cui de Ramas and Rosario Cui de Encarnacion, but
sentencing the first two, Antonio Cui and Mercedes; Cui, to
pay, jointly and severally (in solidum), to the Judicial
Administrator of the Estate of Mariano Cui (appellant Jesus
M. Gaboya the amount of P100,088.80, with legal interest
from the interposition of the complaint (5 November 1951),
plus P5,000.00 attorney's fees and the costs.
The antecedents of the case are stated in the previous
decision of this Supreme Court rendered on 31 July 1952, in
the case of Antonio and Mercedes Cui vs. Judge Piccio, et al.,
91 Phil. 712.

Don Mariano Cui, widower, as owner of lots Nos. 2312, 2313

and 2319 situated in the City of Cebu, with an area of 152
square meters, 144 square meters and 2,362 square
meters, respectively, or a total extension of 2,658 square
meters, on March 8, 1946, sold said three lots to three of his
children named Rosario C. de Encarnacion, Mercedes C. de
Ramas and Antonio Ma. Cui, pro indiviso for the sum of
P64,000. Because Rosario C. de Encarnacion for lack of
funds was unable to pay her corresponding share of the
purchase price, the sale to her was cancelled and the onethird of the property corresponding to her was returned to
the vendor. These three lots are commercial. The
improvements thereon were destroyed during the last
Pacific War so that at the time of the sale in 1946, there
were no buildings or any other improvements on them.
Because of the sale of these lots pro indiviso and because of
the cancellation of the sale to one of the three original
vendees, Don Mariano and his children Mercedes and
Antonio became co-owners of the whole mass in equal
portions. In the deed of sale vendor Don Mariano retained
for himself the usufruct of the property in the following
words:
"...do hereby sell, transfer, and convey to Messrs. Rosario C.
de Encarnacion, Mercedes C. de Ramas and Antonio Ma. Cui,
the above-mentioned parcel of land in equal parts, ... and
the further consideration, that I, shall enjoy the fruits and
rents of the same, as long as my natural life shall last.
Granting and conveying unto the said buyers the full rights
as owners to enjoy the constructive possession of the same,
improve, construct and erect a building in the lot, or do
whatever they believe to be proper and wise, ..."
Subsequently, a building was erected on a portion of this
mass facing Calderon street and was occupied by a Chinese
businessman for which he paid Don Mariano P600 a month
as rental. The date when the building, was constructed and
by whom do not appear in the record.
Sometime after the sale to Mercedes and Antonio the two
applied to the Rehabilitation Finance Corporation (RFC) for a
loan of P130,000 with which to construct a 12-door
commercial building presumably on a portion of the entire
parcel corresponding to their share. In order to facilitate the
Page 253 of 404

LAW ON PROPERTY

granting of the loan and inasmuch as only two of the three

co-owners applied for the loan, Don Mariano on January 7,
1947, executed an authority to mortgage (Annex U)
authorizing his two children co-owners to mortgage his
share, the pertinent portion of said authority reading thus:
"That by virtue of these presents, I hereby agree, consent
permit and authorize my said co-owners to mortgage,
pledge my share so that they may be able to construct a
house or building in the said property, provided however,
that the rents of the said land shall not be impaired and will
always be received by me."
The loan was eventually granted and was secured by a
mortgage on the three lots in question, Don Mariano being
included as one of the three mortgagors and signing the
corresponding promissory note with his two co-owners. He
did not however, join in the construction of the 12-door
commercial building as may be gathered from the "Convenio
de Asignacion de Parte' (Annex V) wherein it was agreed
among the three co-owners to assign to Don Mariano that
one-third of the whole mass facing Calderon street and on
which was erected the building already referred to as being
occupied by a Chinese businessman and for which he was
paying Don Mariano P600 a month rental. The area of this
one-third portion was fixed at 900 square meters
approximately one-third of the total area of the three lots.
The pertinent Portion of this Annex V reads as follows:
"Que como quiera que, la propiedad arriba descrita esta
actualmente hipotecada a la Rehabilitation Finance
Corporation para garantizar la construccion que mis
condueos cnotruyeron en la parte que les correponde;
"Y que como quiera que, el Sr. Don Mariano Cui, uno de los
condueos, no ha querido unirse a la construccion de dicho
edificio, y desea que la parte que le corresponda sea la 1/3
que este dando frente a la Calle Calderon."
The 12-door commercial building was eventually
constructed and the builder-owners thereof Mercedes and
Antonio received and continued to receive the rents thereof
amounting to P4,800 a month and paying therefrom the

installments due for payment on the loan to the

Rehabilitation Finance Corporation.
On March 25, 1948, two other children of Don Mariano
named Jesus and Jorge brought an action (Civil case No.
599R) in the Court of First Instance of Cebu for the purpose
of annulling the deed of sale of the three lots in question on
the ground that they belonged to the conjugal partnership of
Don Mariano and his deceased wife Antonia Perales.
Thereafter, plaintiffs Jesus and Jorge applied for the
appointment of a receiver to take charge of the lots and of
the rentals of the building. This petition was denied on
November 8, 1948.
On March 19, 1949, Rosario C. Encarnacion, that daughter of
Don Mariano who was one of the original vendees, filed a
petition to declare her father incompetent and to have a
guardian appointed for his property, in Special Proceeding
No. 481-R of the Court of First Instance of Cebu. In May 1949
the petition was granted and Don Mariano was declared
incompetent and Victorino Reynes was appointed guardian
of his property.lwph1.t Thereafter, the complaint in civil
case No. 599-R seeking to annul the deed of sale of the
three lots in favor of Mercedes and Antonio was amended so
as to include as plaintiffs not only the guardian Victorino
Reynes but also all the other children of Don Mariano.
On June 15, 1949, guardian Victorino Reynes filed a motion
in the guardianship proceedings seeking authority to collect
the rentals from the three lots in question and asking the
Court to order Antonio and Mercedes to deliver to him as
guardian all the rentals they had previously collected from
the 12-door commercial building, together with all the
papers belonging to his ward. This motion was denied by
Judge Piccio in his order of July 12, 1949. The guardian did
not appeal from this order.
On May 22, 1951, Judge Saguin rendered a decision in civil
case No. 599-R and found that the three lots in question
were not conjugal property but belonged exclusively to Don
Mariano and so upheld the sale of two-thirds of said lots to
Antonio and Mercedes. The plaintiffs appealed to the Court
of Appeals where the case is now pending.
Page 254 of 404

LAW ON PROPERTY

From the Court of Appeals the case was brought to the

Supreme Court, and the decision of Judge Saguin upholding
the validity of the sale in favor of Antonio and Mercedes Cui
was finally affirmed on 21 February 1957, in Cui vs. Cui, 100
Phil, 914.
This third case now before Us was started by the erstwhile
guardian of Don Mariano Cui (while the latter was still alive)
in order to recover P126,344.91 plus legal interest from
Antonio Cui and Mercedes Cui (Record on Appeal, pages 2-3)
apparently as fruits due to his ward by virtue of his usufruct.
The guardian's complaint was supplemented and amplified
by a 1957 complaint in intervention (duly admitted) filed by
the other compulsory heirs of Mariano Cui, who had died on
29 July 1952, some nine months after the present case was
instituted in the court below (Record on Appeal, pages 6768).
In essence, the complaint alleges that the usufructuary right
reserved in favor of Don Mariano Cui extends to and
includes the rentals of the building constructed by Antonio
Cui and Mercedes Cui on the land sold to them by their
father; that the defendants retained those rentals for
themselves; that the usufructuary rights of the vendor were
of the essence of the sale, and their violation entitled him to
rescind (or resolve) the sale. It prayed either for rescission
with accounting, or for delivery of the rentals of the building
with interests, attorneys' fees and costs (Record on Appeal,
pages 12-38).
The amended answer, while admitting the reserved usufruct
and the collection of rentals of the building by the
defendants, denied that the usufructuary rights included or
extended to the said rentals, or that such usufruct was of
the essence of the sale; that the vendor (Don Mariano Cui )
had waived and renounced the usufruct and that the
defendants vendees gave the vendor P400.00 a month by
way of aid; that the original complaint having sought
fulfillment of the contract, plaintiff can not thereafter seek
rescission; that such action is barred by res judicata (on
account of the two previous decisions of the Supreme Court
and by extinctive prescription. Defendants counterclaimed
for actual and moral damages and attorney's fees.

Plaintiffs denied the allegations in the counterclaim. .

From a consideration of the pleadings, the basic and pivotal
issue appears to be whether the usufruct reserved by the
vendor in the deed of sale, over the lots in question that
were at the time vacant and unoccupied, gave the
usufructuary the right to receive the rentals of the
commercial building constructed by the vendees with funds
borrowed from the Rehabilitation and Finance Corporation,
the loan being secured by a mortgage over the lots sold.
Similarly, if the usufruct extended to the building, whether
the failure of the vendees to pay over its rentals to the
usufructuary entitled the latter to rescind, or more properly,
resolve the contract of sale. In the third place, should the
two preceding issues be resolved affirmatively, whether the
action for rescission due to breach of the contract could still
be enforced and was not yet barred.
The court below declared that the reserved right of usufruct
in favor of the vendor did not include, nor was it intended to
include, nor was it intended to include, the rentals of the
building subsequently constructed on the vacant lots, but
that it did entitle the usufructuary to receive a reasonable
rental for the portion of the land occupied by the building,
which the Court a quo fixed at Pl,858.00 per month; and that
the rentals for the land from November, 1947, when the
building was rented, to 29 July 1952, when Don Mariano
died, amounted to P100,088.80. It also found no
preponderant evidence that the seller, Don Mariano Cui, had
ever waived his right of usufruct, as contended by the
defendants; and that the Supreme Court, in denying
reconsideration of its second (1957) decision (100 Phil. 914),
had, like the court of origin, refused to pass upon the extent
of the usufructuary rights of the seller, specially because the
present case, was already pending in the Court of First
Instance, hence no res judicata existed. No attorney's fees
were awarded to the defendants, but they were sentenced
to pay counsel fees to plaintiffs.
Both parties appealed in the decision of the court a quo.
We find no the decision appealed from. As therein pointed
out, the terms of the 1946 deed of sale of the vacant lots in
question made by the late Don Mariano Cui in favor of his
Page 255 of 404

LAW ON PROPERTY

three children, Rosario, Mercedes and Antonio Cui, in

consideration of the sum of P64,000.00 and the reserved
usufruct of the said lot in favor of the vendor, as amplified
by the deed of 7 January 1947, authorizing Mercedes, and
Antonio Cui to borrow money, with the security of a
mortgage over the entirety of the lots, in order to enable
them to construct a house or building thereon
provided, however, that the rents of said land shall not be
impaired and will always received by me.
clearly prove that the reserved usufruct in favor of the
vendor, Mariano Cui, was limited to the rentals of the land
alone. Had it been designed to include also the rents of the
buildings intended to be raised on the land, an express
provision would have been included to the effect, since in
both documents (heretofore quoted) the possibility of such
construction was clearly envisaged and mentioned.
Appellants, however, argue that the terms of the deed
constituting the usufruct are not determinative of the extent
of the right conferred; and that by law, the enjoyment of the
rents of the building subsequently erected passed to the
usufructuary, by virtue of Article 571 of the Civil Code of the
Philippines (Article 479 of the Spanish Civil Code of 1889)
prescribing that:
Art. 571. The usufructuary shall have the right to enjoy any
increase which the thing in usufruct may acquire through
accession, the servitudes established in its favor, and, in
general, all the benefits inherent therein,

Whatever is built, planted or sown on the land of another,

and the improvements or repairs made thereon, belong to
the owner of the land subject to the provisions of the
following articles.
while Article 449 states:
He who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to
indemnity. (Emphasis supplied)
Articles 447 and 445, in turn, treat of accession produced by
the landowner's building, planting and sowing "with the
materials of another" and when "the materials, plants or
seeds belong to a third person other than the landowner or
the builder, planter or sower.
Nowhere in these articles on industrial accession is there
any mention of the case of landowner building on his own
land with materials owned by himself (which is the case of
appellees Mercedes and Antonio Cui). The reason for the
omission is readily apparent: recourse to the rules of
accession are totally unnecessary and inappropriate where
the ownership of land and of the, materials used to build
thereon are concentrated on one and the same person. Even
if the law did not provide for accession the land-owner
would necessarily own the building, because he has paid for
the materials and labor used in constructing it. We deem it
unnecessary to belabor this obvious point. .

This argument is not convincing. Under the articles of the

Civil Code on industrial accession by modification on the
principal land (Articles 445 to 456 of the Civil Code) such
accession is limited either to buildings erected on the land
of another, or buildings constructed by the owner of the land
with materials owned by someone else.

There is nothing in the authorities (Manresa, Venezian,

Santamaria, and Borrell cited by appellants that specifically
deals with constructions made by a party on his own land
with his own materials, and at his own expense. The
authorities cited merely indicate the application in general
of the rules of accession. But as already stated above, the
Civil Code itself limits the cases of industrial accession to
those involving land and materials belonging to different
owners. Anyway, commentators' opinions are not binding
where not in harmony with the law itself.

Thus, Article 445, establishing the basic rule of industrial

accession, prescribes that

The author that specifically analyses the situation of the

usufructuary vis-a-vis constructions made by the landowner

inasmuch as (in the appellants' view) the building

constructed by appellees was an accession to the land.

Page 256 of 404

LAW ON PROPERTY

with his own materials is Scaevola (Codigo Civil, 2d Edition,

pages 288 to 297) ; and his conclusion after elaborate
discussion is that, at the most
(b) El nudo propietario no podra, sin el consentimiento del
usufructuario, hacer construcciones, plantaciones y
siembras en el predio objecto del usufructo; y en el caso de
que aquel lascosintiese, la utilizacion sera comun en los
frutos y productosde lo sembrado y plantado, y con respecto
a las construcciones,el usufructuario tendra derecho a la
renta que de mutuo acuerdo se fije a las mismas; en su
defecto, por la autoridad judicial (Author cit., Emphasis
supplied).
Scaevola's opinion is entirely in harmony with Article 595 of
the Civil Code of the Philippines, prescribing that
The owner may construct any works and make any
improvements of which the immovable usufruct is
susceptible, or make new plantings thereon if it be rural,
provided that such acts do not cause a diminuition in the
value of the usufruct or prejudice the right of the
usufructuary.
Note that if the income from constructions made by the
owner during the existence of the usufruct should be held to
accrue automatically to the usufructuary under Article 571,
such improvements could not diminish the value of the
usufruct nor prejudice the right of the usufructuary; and the
qualifications by Article 595 on the owner's right to build
would be redundant. The limitations set by Article 595 to the
construction rights of the naked owner of the land are
evidently premised upon the fact that such constructions
would necessarily reduce the area of the land under
usufruct, for which the latter should be indemnified. This is
precisely what the court a quo has done in sentencing the
appellee owners of the building to pay to the usufructuary a
monthly rent of P1,758.00 for the area occupied by their
building, after mature consideration of the rental values of
lands in the neighborhood.
Additional considerations against the thesis sustained by
appellants are (1) that the amount invested in the building
represents additional capital of the landowners not foresee"

when the usufruct was created; and (2) that no land-owner

would be willing to build upon vacant lots under usufruct if
the gain therefrom were to go to the usufructuary while the
depreciation of the value of the building (as distinguished
from the necessary repairs) and the amortization of its cost
would burden exclusively the owner of the land. The
unproductive situation of barren lots would thus be
prolonged for an indefinite time, to the detriment of society.
In other words, the rule that appellants advocate would
contradict the general interest and be against public policy.
Appellants urge, in support of their stand, that the loan .for
the construction of the building was obtained upon the
security of a mortgage not only upon the share of appellees
but also upon the undivided interest of Don Mariano Cui in
the lots in question. That factor is irrelevant to the
ownership of the building, because the money used for the
building was loaned exclusively to the appellees, and they
were the ones primarily responsible for its repayment. Since
the proceeds of the loan was exclusively their property, 1
the building constructed with the funds loaned is likewise
their own. A mortgagor does not become directly liable for
the payment of the loan secured by the mortgage, in the
absence of stipulation to that effect; and his subsidiary role
as guarantor does not entitle him to the ownership of the
money borrowed, for which the mortgage is mere security.
We agree with the trial court that there was no adequate
proof that the vendor, Don Mariano Cui, ever renounced his
usufruct. The alleged waiver was purely verbal, and is
supported solely by the testimony of Antonio Cui, one of the
alleged beneficiaries thereof. As a gratuitous renunciation of
a real right over immovable property that as created by
public document, the least to be expected in the regular
course of business is that the waiver should also appear in
writing. Moreover, as pointed out in the appealed decision
(Record on Appeal, page 184, et seq.), in previous pleadings
sworn to by Antonio Cui himself, in Civil Case No. 599 and
Special Proceeding 481-R of the Cebu Court of First Instance
(Exhibits "I", "J", and "20-A"), he and his sister Mercedes had
contended that Don Mariano Cui had been receiving from
them P400.00 per month as the value of his usufruct, and
never claimed that the real right had been renounced or
waived.lwph1.t The testimony of Antonio Cui on the
Page 257 of 404

LAW ON PROPERTY

alleged waiver, given after the usufructuary had been

declared incompetent and could no longer contradict him, is
obviously of negligible probative value.
Turning now to the second issue tendered by herein
appellants, that the non-compliance with the provisions
concerning the usufruct constituted sufficient ground for the
rescission (or resolution) of the sale under the tacit
resolutory condition established by Article 1191 of the Civil
Code. What has been stated previously in discussing the
import of Don Mariano's usufruct shows that the alleged
breach of contract by the appellees Antonio and Mercedes
Cui could only consist in their failure to pay to the
usufructuary the rental value of the area occupied by the
building constructed by them. But as the rental value in
question had not been ascertained or fixed either by the
parties or the court, prior to the decision of 31 October
1961, now under appeal, nor had Don Mariano Cui, or
anyone else in his behalf, made any previous demand for its
payment, the default, if any, can not be exclusively blamed
upon the defendants-appellees. Hence, the breach is not it
"so substantial and fundamental as to defeat the object of
the parties in making the agreement" 2 as to justify the
radical remedy of rescission. This Court, in Banahaw, Inc. vs.
Dejarme 55 Phil. 338, ruled that

1, page 134) that is of high persuasive value in the absence

of local adjudications on the point .
No puede estimarse que incurre en mora el obligado al pago
de cantidad mientras esta no sea liquida, y tenga aquel
conocimiento por virtud de requirimiento o reclamacion
judicial de lo que debe abonar (Sent. TS of Spain, 13 July
1904) .
Seguin tiene declarado esta sala con repeticion, no se puede
establecer que hay morosidad, ni condenar por tal razon al
abono de intereses cuando no se conoce la cantidad liquida
reclamable" (Sent. TS of Spain, 29 November 1912)
... es visto que no existiendo obligacion de entregar
cantidad hasta tanto que se liquide no puede estimarse
segun jurisprudencia, que los recurridos ineurran en mora,
por tanto que hayan de pagar intereses legales de la
cantidad que en su caso resulte (Sent, TS of Spain, 29 April
1914)

...Under the third paragraph of article 1124 3 of the Civil

Code, the court is given a discretionary power to allow a
period within which a person in default may be permitted to
perform the stipulation upon which the claim for resolution
of the contract is based. The right to resolve or rescind a
contract for non-performance of one of its stipulations is,
therefore, not absolute.

In the absence of default on the part of the defendantsvendees, Article 1592 of the Civil Code of the Philippines
that is invoked by appellants in, support of their all right to
rescind the sale, is not applicable: for said article (which is a
mere variant of the general principle embodied in Article
1191, of the same Code) presupposes default of the
purchasers in the fulfilment of their obligations. As already
noted, no such default or breach could occur before
liquidation of the usufructuary's credit; and the time for
paying such unliquidated claim can not be said to have
accrued until the decisions under appeal was rendered,
fixing the rental value of the land occupied by the building.

We have stated "the default, if any," for the reason that

without previous ascertainment of the exact amount that
the, defendants-appellees were obligated to turn over to the
usufructuary by way of reasonable rental value of the land
occupied by their building, said parties can not be
considered as having been in default (mora) for failure to
turn over such monies to the usufructuary. "Ab illiquido non
fit mora": this principle has been repeatedly declared by the
jurisprudence of Spanish Supreme Court (v. Manresa,
Commentaries to the Spanish Civil Code [5th Ed.], Vol. 8, No.

The filing of the initial complaint by Victoriano Reynes, then

guardian of the late Don Mariano in 1951, seeking to recover
P126,344.91 plus interest, did not place appellees in default,
for that complaint proceeded on the theory that the
usufructuary was entitled to all the rentals of the building
constructed by the appellees on the lot under usufruct; and
as We have ruled, that theory was not legally tenable. And
the 1957 complaint in intervention, seeking rescission of the
sale as alternative remedy, was only interposed after the
death of the usufructuary in 1952, and the consequent
Page 258 of 404

LAW ON PROPERTY

extinction of the usufruct, conformably to Article 603,

paragraph (1), of the Civil Code.
It is also urged by the appellants that the usufruct was a
condition precedent to the conveyance of ownership over
the land in question to herein appellees, and their failure to
comply with their obligations under the usufruct prevented
the vesting of title to the property in said appellees. We
need not consider this argument, since We have found that
the usufruct over the land did not entitle the usufructuary to
either the gross or the net income of the building erected by
the vendees, but only to the rental value of the portion of
the land occupied by the structure (in so far as the
usufructuary was prevented from utilizing said portion), and
that rental value was not liquidated when the complaints
were filed in the court below, hence, there was no default in
its payment. Actually, this theory of appellants fails to take
into account that Don Mariano could not retain ownership of
the land and, at the same time, be the usufructuary thereof.
His intention of the usufructuary rights in itself imports that
he was no longer its owner. For usufruct is essentially jus in
re aliena; and to be a usufructuary of one's own property is
in law a contradiction in terms, and a conceptual absurdity.
The decision (Exhibit "30") as well as the resolution of this
Court upon the motion to reconsider filed in the previous
case (100 Phil 914) refusing to adjudicate the usufructuary
rights of Don Mariano in view of the pendency of the present
litigation (Exhibit "22") amply support the trial court's
overruling of the defense of res judicata.
Summing up, We find and hold:
(1) That the usufructuary rights of the late Don Mariano Cui,
reserved in the deed of sale (Exhibit "A" herein), was over
the land alone and did not entitle him to the rents of the
building later constructed thereon by defendants Mercedes
and Antonio Cui at their own expense.
(2) That said usufructuary was entitled only to the
reasonable rental value of the land occupied by the building
aforementioned.

(3) That such rental value not having been liquidated until
the judgment under appeal was rendered, Antonio and
Mercedes Cui were not in default prior thereto, and the deed
of sale was therefore, not subject to rescission.
(4) That as found by the court below, the reasonable rental
value of the land occupied by the defendants' building
totalled P100,088.80 up to the time the usufructuary died
and the usufruct terminated.
(5) That pursuant to Articles 2208 (No. 11), 2210 and 2213
of the Civil Code, 5 the trial court had discretion to equitably
award legal interest upon said sum of P100,088.80, as well
as P5,000.00 attorney's fees, considering that defendants
Cui have enjoyed the said rental value of the land during all
those years.
WHEREFORE, finding no reversible error in the appealed
decision, the same is hereby affirmed. Costs against
appellant-intervenors, Jesus Ma. Cui, Jose Ma. Cui, Serafin
Ma. Cui, Jorge Ma. Cui, Rosario Cui de Encarnacion, Precilla
C. Velez, and Lourdes C. Velez.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Teehankee,
Barredo, Villamor and Makasiar, JJ., concur. Castro and
Fernando, JJ., took no part .
ARTICLE 614
G.R. No. L-3623

November 6, 1907

RUPERTO RELOVA, plaintiff-appellee,

vs.
ELENA LAVAREZ, ET AL., defendants-appellants.
Gabriel and Borbon, for appellants.
Julian Gerona, for appellee.

CARSON, J.:
The plaintiff is the owner of a tract of rice land in the
Province of La Laguna, which is cultivated with the aid of
water brought from the River Bangcabangca, through an
Page 259 of 404

LAW ON PROPERTY

aqueduct which passes over the land of the defendants. On

the land of the defendants there was a dam (presa) with a
small gate or aperture in its face which was used to control
the flow of the water in the aqueduct, by permitting a
greater or less quantity to escape in a drainage ditch, also
on the land of the defendants. In the month of May, 1905,
one of the defendants completely destroyed the dam and let
all the water escape by the drainage ditch, so that none
flowed on the land of the plaintiff. At the time when the dam
was destroyed the plaintiff had some five cavanes of land
prepared to plant rice, but because of the escape of the
water resulting from the destruction of the dam he was
unable to raise his crop, which was a complete failure.
Upon these facts found by the trial court, and upon the
further fact that the aqueduct and dam in question had
been in use by the plaintiff, as of right, for more than thirty
years, and that he had an easement in the land of the
defendants for the maintenance of the said aqueduct and
dam, an injunction was granted to restrain the defendants
from interfering with the plaintiff's right to the use of the
water in the aqueduct, in the manner heretofore established
by custom, and damages were awarded in favor of the
plaintiff for the loss occasioned by the failure of his rice
crop.
The defendants and appellants make the following
assignment of errors:
First. The court erred in failing to find from the evidence the
classification of the lands in question.
Second. The court erred in failing to find that the land in
question was all planted at the same time.
Third. The court erred in finding that the plaintiff's easement
for the maintenance of the dam was damaged by the
opening of the drainage ditch in the month of
May.lawphil.net
Fourth. The court erred in finding that there was a servitude
for the maintenance of the dam in question upon the land of
the defendants in favor of the land of the plaintiff.

In support of this assignment of errors counsel for the

appellants contends that the evidence adduced in the trial
establishes, first, that the plaintiff is not the owner of any
lands watered by the aqueduct of the class known as
padagat (rice lands planted in May); second, that the
plaintiff suffered no damage by the destruction of the dam,
because all the lands of plaintiff which are cultivated with
the aid of water from the aqueduct are of the class known as
binanbang (rice lands planted in August or September), and
the destruction of the dam in May and the consequent
failure of water in the aqueduct at that period did not, and
could not, damage the plaintiff or interfere with the proper
cultivation of his lands; and, third, that the evidence of
records does not establish the existence of the servitude in
the lands of the defendants in favor of the lands of the
plaintiff landowner for the maintenance of the aqueduct and
dam in question.
It will be seen that the first three of the errors assigned are
directly to the findings of fact by the trial court, wherein it is
held that the plaintiff is the owner of 5 cavanes of rice land
which were prepared for cultivation in May, 1905, and which
where rendered useless by the loss of water resulting from
the destruction of the dam. Upon this point, however, the
testimony of the plaintiff's witnesses is definite, certain, and
positive, and we can not say that the findings of the trial
court are contrary to the weight of the evidence. Counsel for
the appellants lays great stress upon the fact that some of
the plaintiff's witnesses stated that the lands of the plaintiff
situated near the aqueduct are of the class known as
binanbang (rice lands planted in August or September),
while the portion of his lands situated farther west, watered
from the bay and not from the aqueduct, is of the class
known as padagat (rice lands planted in May). These
statements, however, appear to be mere general description
of the lands of plaintiff and are in no wise inconsistent with
the positive and definite statements of the witnesses that a
portion of the lands of the plaintiff, watered by the
aqueduct, amounting 5 cavanes, was, in fact, prepared by
the plaintiff for cultivation in May; and, unlike the greater
part of the land described in the complaint, is of the class
known as padagat and not binanbang.

Page 260 of 404

LAW ON PROPERTY

The fourth assignment of error can not be maintained in the

light of the proof of record that the aqueduct and the dam
(presa) have been in existence for more than thirty years,
during which period the owner of the land in question has
always exercised the right to the reasonable use of the
water in the aqueduct for irrigation purposes. (Arts. 527 and
528, Civil Code.)
Counsel for the appellants contend that under the definition
of a servitude which appears in article 530 of the Civil Code
the existence of the servitude can not be established unless
it appears that from such servitude a benefit (beneficio)
was, or might be, derived by the plaintiff landowner; and
that since it appears from the testimony of the witnesses
that the aperture in the dam was used for the purpose of
controlling the flow of water in the aqueduct and for
preventing damage by overflow to the lowlands over which
the aqueduct runs, and since it appears that the lands of the
plaintiff are higher than the lands of the defendants,
therefore the aqueduct could never have been intended for
the supply of water to the lands of the plaintiff and neither
the dam nor the aqueduct could be of any benefit to these
lands. This contention can not be maintained in the face of
the positive testimony as to the existence of the aqueduct
and its use for many years to supply water to the lands in
question. It may be that the defendants had a right to open
the aperture in the face of the dam to prevent a destructive
overflow of water on their lands, but this would not give
them the right to stop the flow of water altogether; nor does
it tend to establish the contention of the defendants that the
plaintiff landowner is not entitled to the benefit of the
reasonable use of the water flowing in the aqueduct, since it
does not appear that such use necessarily involved
destructive overflows from the aqueduct, provided the flow
of water therein was properly regulated by the opening of
the aperture in the dam.
The judgment of the trial court authorizing the issue of the
writ and awarding damages in favor of the plaintiff for the
losses entailed by the destruction of the dam is affirmed,
with the costs of this instance against the appellants.
ARTICLE 614
G.R. No. L-42334

October 31, 1936

NORTH NEGROS SUGAR CO., plaintiff-appellant,

vs.
SERAFIN HIDALGO, defendant-appellee.
Hilado and Hilado for appellant.
Simeon Bitanga for appellee.
Ross, Lawrence, Selph and Carrascoso and DeWitt, Perkins
and Ponce Enrile as amici curi.

RECTO, J.:
On October 12, 1933, the plaintiff filed before the
Court of First Instance of Occidental Negros a complaint
praying, upon the allegations contained therein, that in an
injunction be issued, restraining the defendant from
entering or passing through the properties of the plaintiff,
specially through the "mill site" of plaintiff's sugar central.
It appears that the plaintiff is the owner of a site in
which is located its sugar central, with its factory building
and residence for its employees and laborers, known as the
"mill site." It also owns the adjoining sugar plantation known
as Hacienda "Begoa." Across its properties the plaintiff
constructed a road connecting the "mill site" with the
provincial highway. Through this road plaintiff allowed and
still allows vehicles to pass upon payment of a toll charge of
P0.15 for each truck or automobile. Pedestrians are allowed
free passage through it.
Immediately adjoining the above-mentioned "mill
site" of the plaintiff is the hacienda of Luciano Aguirre,
known as Hacienda "Sagay," where the defendant has a
billiard hall and a tuba saloon. Like other people in and
about the place, defendant used to pass through the said
road of the plaintiff, because it was his only means of access
to the Hacienda "Sagay" where he runs his billiard hall and
tuba saloon. Later on, by order of the plaintiff, every time
that the defendant passed driving his automobile with a
cargo of tuba plaintiff gatekeeper would stop him and
prevent him from passing through said road. Defendant in
such cases merely deviated from said road and continued on
Page 261 of 404

LAW ON PROPERTY

his way to Hacienda "Sagay" across the fields of Hacienda

"Begoa," likewise belonging to the plaintiff.

it shall have been proven at trial that he who seeks such a

remedy is entitled to ask for it; if he is not, his request must
be denied. (Tumacder vs. Nueva, 16 Phil., 513.)

The alleged conveyance of tuba to plaintiff's "mill

site" or the sale thereof within its property has not been
established by the evidence adduced in this case. This the
plaintiff admits in its brief (p.15). Neither is there any
evidence to show that the defendant actually created
disturbance in plaintiff's properties, including its "mill site."

The extraordinary remedy of injunction will not be

granted to prevent or remove a nuisance unless there is a
strong case of pressing necessity, and not because of a
trifling discomfort. (De Ayala vs. Barretto, 33 Phil., 538.)

Other pertinent facts will be stated in appropriate

places in this decision.

The existence of a right violated is a prerequisite to

the granting of an injunction. . . . A permanent injunction
should not be awarded except in a clear case and to prevent
irreparable injury. (32 C. J., 34-36.)

A.
First of all it may be stated that in the case at bar
the injunction applied for, constitutes, unlike the auxiliary
and subordinate remedy that it ordinarily is, the principal
remedy itself. The relief should only be granted, therefore,
after it has been established not only that the right sought
to be protected exists, but also that the acts against which
the injunction is to be directed are violative of said right.
SEC. 164. Circumstances under which a preliminary
injunction may be granted. A preliminary injunction may be
granted when it is established, in the manner herein-after
provided, to the satisfaction of the judge granting it:
1. That the plaintiff is entitled to the relief demanded and
such relief, or any part thereof, consists in restraining the
commission or continuance of the acts complained of either
for a limited period or perpetually;
2. That the commission or continuance of some act
complained of during the litigation would probably work in
justice to the plaintiff;
3. That the defendant is doing, or threatens, or is about to
do, or in procuring or suffering to be done, some act
probably in violation of the plaintiff's rights, respecting the
subject to the action, and tending to render the judgment
ineffectual. (Code of Civil Procedure.)
In order that, at the final trial of a case, an injunction
may issue perpetually prohibiting the repetition or
continuation of an act complained of, it is indispensable that

A court of chancery will not entertain a bill enforce a

mere valueless abstract right, and the court will, on its own
motion, raise the point for its own protection. (Dunnom vs.
Thomsen, 58 Ill. App., 390.)
None of these requisites is present in the instant case.
There has been a failure to establish either the existence of
a clear and positive right of the plaintiff specially calling for
judicial protection through an extraordinary writ of the kind
applied for, or that the defendant has committed or
attempts to commit any act which has endanger or tends to
endanger the existence of said right, or has injured or
threatens to injure the same.
In obtaining ex-parte a preliminary injunction in the
lower court, the plaintiff made under oath in its complaint
the following allegations, which later turned out to be
untrue, or, at least, beyond the capacity of plaintiff to prove:
3. That on sundry occasions heretofore, the defendant used
to go to the said "mill site" of the plaintiff, passing over the
latter's private roads, and there caused trouble among the
peaceful people of the place.
4. That the plaintiff, through its representatives, has
prohibited the defendant from entering its private property,
but this notwithstanding, the defendant still persists in
repeating his incursions into the said private roads and "mill
site" of the plaintiff, disturbing public order and molesting
plaintiff's employees and their families.
Page 262 of 404

LAW ON PROPERTY

The court, in its order granting the preliminary

injunction said:
Considering the said injunction and the sworn
statement of its correctness filed by plaintiff's attorneys 1
and it appearing satisfactorily that the issuance of a
preliminary injunction is in order because of the sufficiency
of the grounds alleged, upon the filing of a bond, it is
hereby, etc. . . . .
After obtaining the preliminary injunction, the plaintiff
amended its complaint by eliminating therefrom those very
allegations upon which the court granted the temporary
remedy, namely, the acts imputed to the defendant "of
causing trouble among the peaceful people of plaintiff's "mill
site," and of disturbing public order and molesting plaintiff's
employees and their families within the private roads and
the "mill site" of the plaintiff." The plaintiff doubtless
overlooked the fact that the allegation it availed of to obtain
a preliminary injunction was necessary to secure one of a
permanent character. In its new complaint, its only
grievance is that the defendant insists in passing through its
property to take tuba to the Hacienda "Sagay" (which does
not belong to the plaintiff but to Luciano Aguirre, and where
the defendant has established a legitimate business). The
amended complaint no longer alleges that the defendant
went to the "mill site" and to the private roads of the
plaintiff "to cause trouble, disturb public order and molest
plaintiff's employees and their families."
It develops, however, that neither the original
complaint nor the one amended states how and why the
mere passage of the defendant over plaintiff's estate to
convey tuba to the Hacienda "Sagay" has caused damages
to the plaintiff's property rights, requiring the unusual
intervention and prohibition thereof by the courts through
injunctive relief. The plaintiff failed not only to make any
allegation to this effect, but also to the state that the road
on its property where the defendant used to pass on his way
to the Hacienda "Sagay" was open to the public in general,
and that the plaintiff, exercising without any permit a power
exclusively lodged in the state by reason of its sovereign

capacity, required the payment of passage fees for the use

of said road.
Now, there being no contention here that the
defendant, in passing over plaintiff's estate to take tuba to
the Hacienda "Sagay," occasioned damages to such estate,
or that he sold tuba within the confines thereof, what could
have been the basis of the plaintiff's right for which the
special protection of the court is invoked, and of the illegal
act laid at defendant's door? Defendant's passage over
plaintiff's property does not, of itself, constitute an unlawful
act inasmuch as the plaintiff, of its own accord, opened the
same to the public conditioned only upon the payment of
transit fees by motor vehicles. Neither does the mere
transportation of tuba over plaintiff's estate amount to a
violation of the latter's property rights, unless the goods'
destination be at any point within the confines thereof, or
unless the said goods be sold in transit to the laborers and
employees of the plaintiff, which, as plaintiff itself admits in
his brief. (p. 15), has not been shown.
The deduction from plaintiff's evidence is, that the
real damage which it seeks to avoid does not consist in
defendant's taking tuba with him while traversing the
former's property, as there is no causal relation between the
act and any resultant damage, but in the fact that tuba is
disposed of at the Hacienda "Sagay" to which plaintiff's
laborers have access. What should, therefore, be enjoined, if
it were legally possible, is defendant's sale of tuba at the
Hacienda "Sagay," and not its conveyance across plaintiff's
estate. But if, as plaintiff concedes (brief, p. 16), the former
cannot legally enjoined, least of all can the latter be
restrained as long as the public in general is free to go
about the said property and it has not been shown that the
defendant, in passing through, it has occasioned damage
thereto or has committed any act infringing plaintiff's
property rights or has refused to pay the required road toll.
Defendant's sale of tuba at the Hacienda "Sagay" is
nothing more than the exercise of a legitimate business, and
no real damage to the third persons can arise from it as a
natural and logical consequence. The bare possibility that
plaintiff's laborers, due to the contiguity of the Hacienda
"Sagay" to its property, might come to the defendant's
Page 263 of 404

LAW ON PROPERTY

store to imbibe tuba to drunkenness, does not warrant the

conclusion that the defendant, in thus running this business,
impinges upon plaintiff's property rights and should thereby
be judicially enjoined. The damage which plaintiff seeks to
enjoin by this action does not consist, as has been
demonstrated, in defendant's maintaining a tuba store at
the Hacienda "Sagay," or in defendant's crossing its
property while taking tuba to the Hacienda "Sagay," but in
its laborers finding their way to the said hacienda in order to
buy tuba and become drunk. In other words, the act sought
to be restrained as injurious or prejudicial to plaintiff's
interests, is that committed, not by the defendant, but by
plaintiff's own laborers. Rightly and logically, the injunction
should be directed against said laborers to the end that they
should abstain from going to the Hacienda "Sagay" in order
to buy tuba and become drunk. As it would seem unusual
for the plaintiff to do this, it should at least exercise stricter
vigilance and impose rigorous discipline on its laborers by,
for instance, punishing drunkenness with expulsion.
Plaintiff's remedy lies in its own hand and should not be
looked for in the courts at the sacrifice of other interests no
less sacred and legitimate than the plaintiff's.
Where one has a right to do a thing equity has no
power to restrain him from doing it. (Dammann vs. Hydraulic
Clutch Co., 187 Pac., 1069.) Acts under the authority of the
law will not be enjoined (Bonaparte vs. Camden, etc.
Railroad Co., 3 Fed. Cas. No. 1617, Baldw., 205). Lawful
exercise of rights incidentally injuring others may not be
enjoined by injunction. (14 R. C. L., 369.) "It is . . . an
established principle that one may not be enjoined from
doing lawful acts to protect and enforce his rights of
property or of persons, . . . ." (14 R. C. L., pp. 365, 366.)
It is said that the plaintiff seeks to enjoin the
defendant, not from selling tuba at his store in the Hacienda
"Sagay," but from passing through its property to introduce
tuba to said hacienda (plaintiff's brief, p. 16.) The legal rule,
however, is that what the law does not authorize to be done
directly cannot be hone indirectly. If the plaintiff cannot
judicially enjoin the defendant from selling tuba at the
Hacienda "Sagay," neither can it obtain said injunction to
prevent him from passing over its property to transport tuba
to that place as long as the defendant is ready to pay the

transit fees required by the plaintiff and does not sell the
said goods inside the said property.
Suppose that the defendant, instead of being a tuba
vendor, is a social propagandist whose preachings, while not
subversive of the established legal order, are not acceptable
to some capitalistic organizations, say the plaintiff. Suppose
that the defendant, armed with the corresponding official
permit, should desire to go to Hacienda "Sagay" through
plaintiff's estate for the purpose of explaining to the laborers
the advantage of the latter organizing themselves into
unions, or joining existing ones, to better defend their
interests. Plaintiff learns in time of the plan and determines
to frustrate it in the belief that it would be prejudicial to its
interests for the laborers to be "unionized," while it is for its
good that the laborers be contracted under the so-called
"open shop" system. Unable to stop the holding of the
meeting because the same is not to take place on its
property may he plaintiff secure an injunction from the court
to prevent the defendant to pass through the said property
in order to reach the place of the meeting, by alleging that
the defendant entertains theories of social reform which
might poison the minds of the laborers at the expense of the
plaintiff's interests? May the latter, under the same
hypothesis, maintain that the defendant's act in passing
through its property, which is open to public use, constitute
trespass or usurpation restrainable by injunction? If the
answer to these questions is, as it must be, in the negative,
the present case is not susceptible of a different solution.
The only difference between the two cases is that in the one
supposed the dreaded damage to plaintiff's interests is of
more moment and of more lasting effect than in the case at
bar.
When a private road has been thrown open to public
use, no action for trespass is maintainable against any
person who desires to make use thereof; consequently, an
injunction suit likewise does not lie.
Private roads, except where laid out under
constitutional provisions authorizing the condemnation of
private property for a private use, are public roads in the
sense that they are open to all who see fit to use them, and
it is immaterial that the road is subject to gates and bars, or
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LAW ON PROPERTY

that it is merely a cul de sac. Being thus considered as a

public road, it necessarily follows that the owner of the land
through which the road is laid out cannot maintain an action
of trespass against any person using it; . . . (50 C. J., pp.
397, 398.)
. . . Where it is clear that the complainant does not
have the right that he claims, he is not entitled to an
injunction, either temporary or perpetual, to prevent a
violation of such supposed right. . . . An injunction will not
issue to protect a right not in esse and which may never
arise or to restrain an act which does not give rise to a
cause of action, . . . . (32 C. J., pp. 34, 35.)
B.

In its brief, plaintiff states:

In transporting the tuba which he sells in his saloon in

Hacienda "Sagay" the defendant used to pass thru the
private road of the plaintiff which connects its sugar central
with the provincial road. On this private road the plaintiff has
put up a gate under the charge of a keeper, and every time
that the defendant passed with a cargo of tuba the
gatekeeper would stop him and remind him that the tuba
was not permitted entry into the private properties of the
company, but instead of heeding this prohibition the
defendant would simply deviate from the road and continue
on his way to hacienda "Sagay" by way of the fields of
Hacienda "Begoa." which is also the private property of the
plaintiff.
It is deducible from the above statement that,
whenever the gatekeeper of the plaintiff prevented the
defendant from passing thru its so-called "private road," on
his way to the provincial road to Hacienda "Sagay," the
defendant deviated from said road and carried the tuba
across the lands of Hacienda "Begoa" leading to the
Hacienda "Sagay." The evidence discloses that the
passageway across the Hacienda "Begoa," is the same one
frequented by carabaos (s. t., 32, 36). Plaintiff intends not
only to prohibit the defendant from using the road in
question, but also from crossing the lands of the Hacienda
"Begoa," also belonging to the plaintiff, where carabaos are
allowed to roam. An act so shocking to the conscience, one
is reminded, could only have been perpetrated during the

feudal period when human rights were unmercifully

sacrificed to property rights. If an injunction should lie in the
instant case, it should be in favor of the defendant and
against the plaintiff, to enjoin the latter from obstructing the
former to pass over the road in question to convey tuba to
the Hacienda "Sagay." It is indeed strange that it is the
plaintiff and not the defendant that should have applied for
the remedy.
. . . An injunction will not be granted when good
conscience does not require it, where it will operate
oppressively or contrary to justice, where it is not
reasonable and equitable under the circumstances of the
case, or where it will tend to promote, rather than to
prevent, fraud and injustice. . . . (32 C. J., p. 33.) . . . a court
of equity may interfere by injunction to restrain a party from
enforcing a legal right against all equity and conscience. . . .
(14 R. C. L., pp. 365, 366, par. 66.) . . . The comparative
convenience or inconvenience of the parties from granting
or withholding the injunction should be considered, and
none should be granted if it would operate oppressively or
inequitably, or contrary to the real justice of the case. This
doctrine is well established. . . . (14 R. C. L., pp. 357, 358,
par. 60.)
The power of the courts to issue injunctions should be
exercised with great caution and only where the reason and
necessity therefor are clearly established; and while this rule
has been applied more frequently in the case of preliminary
and mandatory injunctions, it applies to injunctions of all
classes, and to restraining orders. . . . (32 C. J., pp. 33, 34.)
The writ of injunction will not be awarded in doubtful
or new cases not coming within well-established principles
of equity. (Bonaparte vs. Camden, etc. Railroad Co., 3 Fed.
Cas. No. 1617; Hardesty vs. Taft, 87 Am. Dec., 584.)
C.

Plaintiff's action is frivolous and baseless.

Plaintiff states in the sixth paragraph of its amended

complaint:
6. That, in addition, the plaintiff, in the exercise of it
property rights, does not want to allow the entry of the
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LAW ON PROPERTY

defendant in any part of its estate above mentioned in order

to avert any friction or ill-feeling against him.
The plaintiff, in petitioning the courts for an injunction
to avert "friction or ill-feeling" against the defendant,
invoking its sacred property rights, attempts to intrust to
them a mission at once beyond those conferred upon them
by the Constitution and the laws, and unbecoming of their
dignity and decorum.
D.
Plaintiff has not established the existence, real or
probable of the alleged damage against which the injunction
is invoked.
As has been seen, the allegations of the amended
complaint do not justify the granting of an injunction. The
said allegations only state, as the basis of plaintiff's action,
that the defendant insists in passing or "making incursions"
on plaintiff's property to take tuba to the Hacienda
"Sagay," and the plaintiff wants to avoid "friction and illfeeling against him." Such allegations do not imply the
existence, of any real damage to plaintiff's rights which
should be enjoined, and do not, therefore, constitute a legal
cause of action. On the other hand, what the plaintiff
attempted to establish by its evidence differs from the
allegations of its amended complaint. What said evidence
really discloses is not, that the plaintiff had forbidden the
defendant to convey tuba to the Hacienda "Sagay" through
plaintiff's estate, but to introduce tuba into the central or to
place tuba on its lands, or, according to Exhibit A, to
trespass illegally on plaintiff's estate. The testimony of the
gatekeeper Santiago Plagata and the accountant Ankerson
is as follows:
Q. Why did you detain him? A. Because the Central
forbids the bringing of tuba to the Central.
Q. Why does the Central prohibit the entry of tuba? A. The
Central prohibits the entry of tuba there because the
laborers, generally, buy tuba, drink it and become drunk,
and are unable to work, and sometimes they fight because
they are drunk. (S. t., p. 5.)

Q. Why did you kick them? A. Because the North Negros

Sugar Co. prohibits the placing of tuba on those lands. (S. t.,
pp. 38, 39.)
Exhibit A, the alleged letter addressed by the plaintiff
to the defendant, recites:
Mr. SERAFIN HIDALGO, Driver of Auto, License No. 10851935.
Present.
SIR: Effective this date, you are hereby forbidden to
trespass upon any of the Company's properties under
penalties of law prescribed for trespass.
NORTH INTEGROS SUGAR CO., INC,.
By: (Sgd.) Y. E. GREENFIELD
Manager
It will be noted that according to this letter, the
defendant was enjoined by the plaintiff from passing thru its
properties, whether he carried tuba or not.
Plaintiff's admission in its brief (p. 15) that it has not
been established that the defendant has brought tuba to the
"mill site," or has sold it within its property, is fatal to the
present action charging the defendant with said acts.
E.
The well-known principle of equity that "he who
comes to equity must come with clean hands" bars the
granting of the remedy applied for by the plaintiff.
It has been already stated that the plaintiff, to obtain
a preliminary injunction in this case, alleged under oath in
its original complaint facts which it knew to be false, or, at
least, unprobable, because it did not only eliminate them
from the amended complaint which it filed after the
issuance of the preliminary injunction, but it failed to
substantiate them at the trial. We refer to the following
allegations: "that the defendant used to go to the "mill site"
of the plaintiff passing through plaintiff's private roads and
there cause trouble among peaceful people of the place,"
and "that notwithstanding the prohibition of the plaintiff, the
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LAW ON PROPERTY

defendant insists in repeating his incursions into the said

private roads and "mill site" of the plaintiff, disturbing public
order and molesting plaintiff's employees and their
families."
If said allegations were true, it is evident that plaintiff
was entitled to a preliminary injunction at the
commencement of the trial, and to a permanent injunction
after the was rendered. But such is not the case, as the
subsequent theory of the plaintiff, announced in its
amended complaint, is not that the defendant "made
incursions into the "mill site" and private roads of the
plaintiff, causing trouble, disturbing public order, and
molesting plaintiff's employees and their families," but only
that the defendant, to take tuba to the Hacienda "Sagay,"
belonging to Luciano Aguirre, insisted in passing through
plaintiff's estate. From all this it follows that the plaintiff in
order to obtain a preliminary injunction, trifled with the good
faith of the lower court by knowingly making untrue
allegations on matters important and essential to its cause
of action. Consequently, it did not come to court with clean
hands.
Coming into Equity with Clean Hands. The maxim
that he who comes into equity must come with clean hands
is, of course, applicable in suits to obtain relief by injunction.
Injunction will be denied even though complainant shows
that he has a right and would otherwise be entitled to the
remedy in case it appears that he himself acted dishonestly,
fraudulently or illegal in respect to the matter in which
redress is sought, or where he has encouraged, invited or
contributed to the injury sought to be enjoined. However,
the general principle that he who comes into equity must
come with clean hands applies only to plaintiff's conduct
relation to the very matter in litigation. The want of equity
that will bar a right to equitable relief for coming into court
with unclean hands must be so directly connected with the
matter in litigation that it has affected the equitable
relations of the parties arising out of the transaction in
question. (32 C. J. pp. 67, 68.)
At this point, attention should be directed to other
facts of the case indicative of the censurable attitude which
the plaintiff has taken in connection therewith. On one

occasion, the defendant drove his automobile along the road

in question, accompanied by Antonio Dequia, headed for
the Hacienda "Sagay." As they had tuba with them, on
reaching the gate they were halted by the gatekeeper. The
defendant and his companion got off the car and unloaded
the tuba in order to follow the passageway across the lands
of the Hacienda "Begoa," through which plaintiff's carabaos
passed, until they could reach "Sagay." Thereupon, one
Ankerson, accountant and auditor of the plaintiff, arrived
and no sooner he had laid eyes on the tuba containers than
he indignantly kicked them and uttered a blasphemy to
both, spilling the contents thereof. The defendant protested
and asked Ankerson to indemnify him for the value of the
tuba which had been wasted, to which Ankerson replied that
he would make good what should be paid, and he then and
there wrote and handed over a note to the defendant for
presentation to plaintiff's cashier. The defendant presented
the note, but this claim was not paid, and instead he was
prosecuted for trespass in the justice of the peace court of
Manapla under article 281 of the Revised Penal Code. So
absurd and malicious was the charge that the court, in
acquitting the defendant, entered the following order
(Exhibit 3):
A peaceful citizen who passes through a private road
open to the public does not commit the crime of trespass.
Although the prohibition to the accused to be in a private
property should be manifest, if the latter is not fenced or
uninhabited, the mere fact that the accused is found on the
place in question, for a lawful purpose, does not constitute
the crime of trespass defined and punished under article
281 of the Revised Penal Code.
The plaintiff did not stop at this; it filed the present
action for injunction which, as has been seen, is nothing
more than the culmination of a series of affronts which the
plaintiff has perpetrated, privately and through the courts,
against the defendant.
F.
The exercise of discretion by trial courts in matters
injunctive should not be interfered with by appellate courts
except in cases of manifest abuse.

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LAW ON PROPERTY

. . . The court which is to exercise the discretion is the

trial court and not the appellate court. The action of the
court may be reviewed on appeal of error in case of a clear
abuse of discretion, but not otherwise, and ordinarily
mandamus will not lie to control such discretion. (32 C. J.,
sec. 11, p. 33.)
True, the rule has particular application to preliminary
injunctions, but the rule should not be otherwise with
respect to permanent injunctions especially where, as in this
case, the trial court, after granting the preliminary
injunction, set the same aside in its final decision on a
careful review of the evidence.
II
It is undisputed the road in question was constructed
by the plaintiff on its own land, and that it connects the
central or the "mill site" with the provincial road. We have
also the admission that the plaintiff made this road
accessible to the general public, regardless of class or group
of persons or entities. Its use has been extended to
employees and laborers of the plaintiff; and so also to all
those who have a mind to pass through it, except that, in
cases of motor vehicles, a passage fee of P0.15, each should
be paid. There is no contention here that the defendant had
refused to pay said tolls whenever he wanted to drive his
car along the road in question.
We, therefore, have the case of an easement of way
voluntarily constituted in favor of a community. Civil Code
articles 531 and 594 read:
ART. 531. Easements may also be established for the
benefit of one or more persons or of a community to whom
the encumbered estate does not belong.
xxx

xxx

xxx

ART. 594. The owner of an estate may burden it with

such easements as he may deem fit, and in such manner
and form as he may consider desirable, provided he does
not violate the law or public order.

There is nothing in the constitution of this easement

in violation of law or public order, except perhaps that the
right to open roads and charge passage fees therefor i the
State's by right of sovereignty and may not be taken over by
a private individual without the requisite permit. This,
however, would affect the right of the plaintiff to charge
tolls, but not that of the defendant or of any other person to
make use of the easement.
As may be seen from the language of article 594, in
cases of voluntary easement, the owner is given ample
liberty to establish them: "as he may deem fit, and in such
manner and form as he may consider desirable." The
plaintiff "considered it desirable" to open this road to the
public in general, without imposing any condition save the
payment of a fifteen-centavo toll by motor vehicles, and it
may not now go back on this and deny the existence of an
easement. Voluntary easements under article 594 are not
contractual in nature; they constitute the act of the owner. If
he exacts any condition, like the payment of a certain
indemnity for the use of the easement, any person who is
willing to pay it may make use of the easement. If the
contention be made that a contract is necessary, it may be
stated that a contract exits from the time all those who
desire to make use of the easement are disposed to pay the
required indemnity.
The plaintiff contends that the easement of way is
intermittent in nature and can only be acquired by virtue of
a title under article 539. The defendant, however, does not
lay claim to it by prescription. The title in this case consists
in the fact that the plaintiff has offered the use of this road
to the general public upon payment of a certain sum as
passage fee in case of motor vehicles.
The cases of Roman Catholic Archbishop of Manila vs.
Roxas (22 Phil., 450), and Cuaycong vs. Benedicto (37 Phil.,
781), are not controlling, as there the attempt was to
establish that the right to an easement of way had been
acquired by prescription. Here defendant's contention is,
that while the road in question remains open to the public,
he has a right to its use upon paying the passage fees
required by the plaintiff. Indeed the latter may close it at its
pleasure, as no period has been fixed when the easement
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LAW ON PROPERTY

was voluntarily constituted, but while the road is thrown

open, the plaintiff may not capriciously exclude the
defendant from its use.

Q. And by this road of the Central you mean the Central

"North Negros Sugar Co., Inc."? A. Yes, sir.

Furthermore, plaintiff's evidence discloses the

existence of a forcible right of way in favor of the owner and
occupants of the Hacienda "Sagay" under the Civil Code,
article 564, because, according to said evidence, those
living in Hacienda "Sagay" have no access to the provincial
road except thru the road in question. Santiago Plagata,
principal witness of the plaintiff, testified thus:

Q. By this road of the Central which you mentioned, you

mean the road where there is a gate, beginning from the
Central until the provincial road, where the gate is for the
purpose of preventing passage? A. Yes, sir, the very one.

Emerging from the provincial road, the defendant has

necessarily to pass through this private road where the gate
of which I am the keeper is situated, and then he gets to the
Central. (S. t., p. 5.)

III

Q. To go to the Hacienda "Sagay," is there any need to

cross the "mill site" of the Central? A. Yes, sir.
Q. And the property of the Central is passed in going to the
Hacienda "Sagay"? A. Yes, sir.

Q. And because of that gate, the Central collects certain

toll? A. Yes, sir. (S. t., pp. 20, 21.)

Having been devoted by the plaintiff to the use of the

public in general, upon paying the passage fees required in
the case of motor vehicles, the road in question is charged
with a public interest, and while so devoted, the plaintiff
may not establish discriminatory exceptions against any
private person.

Q. For how long have you been a watchman there? A.

Nine years to date.

When private property is affected with a public

interest, it ceases to be juris privati only; as if a man set out
a street in new building on his own land, it is now no longer
bare private interest, but is affected by a public interest.
(Lord Chief Justice Hale in his treatise "De Portibus Maris,
quoted with approval in Munn vs. Illinois, 94 U. S., 113
[1876], and in Nebbia vs. New York, 291 U. S., 502 [1934].)

Q. And during that period of nine years, can you not state if
there is any road which gives access to the Hacienda
"Sagay"? Or the Central has necessarily to be passed? A.
I cannot say because I do not go to those places.

The above language was used in the seventeenth

century, when exceptions to the individualistic regime of
ownership were scarcely recognized, and when the ideas on
its social function may be said to be in their infancy.

COURT:

Property does become clothed with a public interest

when used in a manner to make it of public consequence,
and affect the community at large. When, therefore, one
devotes his property to a use in which the public has an
interest, he, in effect, grants to the public an interest in that
use, and must submit to be controlled by the public for the
common good, to the extent of the interest he has thus
created. He may withdraw his grant by discontinuing the
use; but, so long as he maintains the use, he must submit to
the control. (Munn vs. Illinois, 94 U. S., 113; 24 Law. ed., 77.)

Q. Is there any other road? A. I am not sure whether there

is another road.

Q. But all the others, except the defendant, who go to the

Hacienda "Sagay" necessarily pass thru the Central? A.
They pass thru that road of the Central. (S. t., pp. 16, 17.)
The evidence for the defendant confirms this:
Q. To go there, thru what road did you have to pass? A.
Thru the road of the Central.

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Under our form of government the use of property

and the making of contracts are normally matters of private
and not of public concern. The general rule is that both shall
be free of governmental interference. But neither property
rights nor contract rights are absolute; nor government
cannot exist if the citizen may at will use his property to the
detriment of his fellows, or exercise his freedom of contract
to work them harm. Equally fundamental with the private
right is that of the public to regulate in the common interest.
. . . The court has repeatedly sustained curtailment of
enjoyment of private property, in the public interest. The
owner's rights may be subordinated to the needs of other
private owners whose pursuits are vital to the paramount
interests of the community. (Nebbia vs. New York, 291 U. S.,
502, 521, 525; 78 Law. ed., 940, 948.)
Whenever any business or enterprise becomes so
closely and intimately related to the public, or to any
substantial part of a community, as to make the welfare of
the public, or a substantial part thereof, dependent upon the
proper conduct of such business, it becomes the subject for
the exercise of the regulatory power of the state.
(Clarksburg Light & Heat Co. vs. Public Service Commission,
P. U. R. 1920A, 639; 84 W. Va., 638; 100 S. E., 551.)
. . . If the service is dedicated to the public or some
portion thereof, or to persons within a given area, then any
member of the public or of the given class, or any person
within the given area, may demand such service without
discrimination, and the public, or so much of it as has
occasion to be served, is entitled to the service of the utility
as a matter of right, and not of grace. . . . A corporation
becomes a public service corporation, and therefore subject
to regulation as a public utility, only when and to the extent
that the business of such corporation becomes devoted to a
public use. . . . (Stoehr vs. Natatorium Co. 200 Pac. [Idaho],
132, quoted in 18 A. L. R., 766.)
Tested by the rule laid down in Munn vs. Illinois, it
may be conceded that the state has the power to make
reasonable regulation of the charges for services rendered
by the stockyards company. Its stock yards are situated in
one of the gateways of commerce, and so located that they

furnish important facilities to all seeking transportation of

cattle. While not a common carrier, nor engaged in any
distinctively public employment, it is doing a work in which
the public has an interest, and therefore must be considered
as subject to government regulation. (Cotting vs. Godard,
183 U.S., 79; 46 Law. ed., 92.)
Business which, though not public at their inception,
may be fairly said to have risen to be such, and have
become subject in consequence to some government
regulation. They have come to hold such a peculiar relation
to the public that this is superimposed upon them. In the
language of the cases, the owner, by devoting his business
to the public use, in effect, grants the public an interest in
that use, and subjects himself to public regulation to the
extent of that interest, although the property continues to
belong to its private owner, and to be entitled to protection
accordingly. (Munn vs. Illinois, supra; Spring Valley
Waterworks vs. Schottler, 110 U. S., 347; 28 L. ed., 173; 4
Sup. Ct. Rep., 48; People vs. Budd, 117 N. Y., 1, 27; 5 L. R. A.,
559; 15 Am. St. Rep., 460; 22 N. E., 670; s. c. 143 U. S., 517;
36 L. ed., 247; 4 Inters. Com. Rep., 45; 12 Sup. Ct. Rep.,
468; Brass vs. North Dakota, 153 U. S., 391; 38 L. ed., 757; 4
Inters. Com. Rep., 670; 14 Sup. Ct. Rep., 857; Noble State
Bank vs. Haskell, 219 U. S., 104; 55 L. ed., 112; 32 L. R. A.
[N. S.], 1062; 31 Sup. Ct. Rep., 186; Ann. Cas., 1912A, 487;
German Alliance Ins. Co. vs. Lewis, 233 U.S., 389; 58 L. ed.,
1011; L. R. A. 1915C, 1189; 34 Sup. Ct. Rep., 612; VanDyke
vs. Geary, 244 U. S., 39, 47; 61 L. ed., 973, 981; 37 Sup. Ct.
Rep., 483, Block vs. Hirsh, 256 U. S., 135; 65 L. ed., 865; 16
A. L. R., 165; 41 Sup. Ct. Rep., 458.) Wolff Packing Co. vs.
Court of Industrial Relations, 262 U. S. 522; 27 A. L. R., 1280,
1286.)
Under the facts of the instant case, the road in
question is of the nature of the so-called "turnpike road" or
"toll-road." The following authorities are, therefore, in point:
""Toll" is the price of the privilege to travel over that
particular highway, and it is a quid pro quo. It rests on the
principle that he who, receives the toll does or has done
something as an equivalent to him who pays it. Every
traveler has the right to use the turnpike as any other
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LAW ON PROPERTY

highway, but he must pay the toll. (City of St. Louis vs.
Creen, 7 Mo. App., 468, 476.)
A toll road is a public highway, differing from the
ordinary public highways chiefly in this: that the cost of its
construction in the first instance is borne by individuals, or
by a corporation, having authority from the state to build it,
and, further, in the right of the public to use the road after
completion, subject only to the payment of toll. (Virginia
Caon Toll Road Co. vs. People, 45 Pac., 396, 399; 22 Colo.,
429; 37 L. R. A., 711.)
Toll roads are in a limited sense public roads, and are
highways for travel, but we do not regard them as public
roads in a just sense, since there is in them a private
proprietary right. . . . The private right which turnpike
companies possess in their roads deprives these ways in
many essential particulars of the character of public roads.
It seems to us that, strictly speaking, toll roads owned by
private corporation, constructed and maintained for the
purpose of private gain, are not public roads, although the
people have a right to freely travel them upon the payment
of the toll prescribed by law. They are, of course, public, in a
limited sense, but not in such a sense as are the public ways
under full control of the state, for public ways, in the strict
sense, are completely under legislative control. (Elliott,
Roads & S., p. 5.) (Board of Shelby County Com'rs vs.
Castetter, 33 N. E., 986, 987; 7 Ind. App., 309.)
It has been suggested during the consideration of the
case at bar that the only transportation companies with
motor vehicles who can have an interest in passing over the
said road are those which carry laborers of the central and
passengers who transact business with the plaintiff, and not
all public service motor vehicles with certificates of public
convenience, and that the only persons who may have an
interest in passing over the said road are the laborers of the
plaintiff and persons who do business with it and the
occupants of the 21 houses situated in the Hacienda
"Sagay," and not everyone for personal convenience. But
even if this were true, the plaintiff having subjected the road
in question to public use, conditioned only upon the
payment of a fifteen-centavo passage fees by motor
vehicles, such circumstance would not affect the case at all,

because what stamps a public character on a private

property, like the road in question, is not the number of
persons who may have an interest in its use, but the fact
that all those who may desire to use it may do so upon
payment of the required indemnity.
. . . The public or private character of the enterprise
does not depend, however, upon the number of persons by
whom it is used, but upon whether or not it is open to the
use and service of all members of the public who may
require it, to the extent of its capacity; and the fact that only
a limited number of persons may have occasion to use it
does not make of it a private undertaking if the public
generally has a right to such use. . . . (51 C. J., sec. 2, p. 5.)
The test is, not simply how many do actually use
them, but how many may have a free and unrestricted right
in common to use them. If it is free and common to all
citizens, then no matter whether it is or is not of great
length, for whether it leads to or from a city, village or
hamlet, or whether it is much or little used, it is a "public
road." (Heninger vs. Peery, 47 S. E., 1013, 1014; 102 Va.,
896, quoting Elliott, Roads & S., secs. 11, 192.)
The circumstance that the road in question does not
properly fall within the definition of a public utility provided
in Act No. 3108, does not divest it to this character:
. . . Whether or not a given business, industry, or
service is a public utility does not depend upon legislative
definition, but upon the nature of the business or service
rendered, and an attempt to declare a company or
enterprise to be a public utility, where it is inherently not
such, is, by virtue of the guaranties of the federal
constitution, void wherever it interferes with private rights of
property or contract. So a legislature cannot by mere fiat or
regulatory order convert a private business or enterprise
into a public utility, and the question whether or not a
particular company or service is a public utility is a judicial
one, and must be determined as such by a court of
competent jurisdiction; . . . . (51 C. J., sec. 3, p. 5.)
The road in question being a public utility, or, to be
more exact, a private property affected with a public
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interest, is not lawful to make arbitrary exceptions with

respect to its use and enjoyment.

and jurisdiction, or has failed or refused so to do. (51 C. J., p.

6.)

Duty to Serve Without Discrimination. A public

utility is obligated by the nature of its business to furnish its
service or commodity to the general public, or that part of
the public which it has undertaken to serve, without
arbitrary discrimination, and it must, to the extent of its
capacity, serve all who apply, on equal terms and without
distinction, so far as they are in the same class and similarly
situated. Accordingly, a utility must act toward all members
of the public impartially, and treat all alike; and it cannot
arbitrarily select the persons for whom it will perform its
service or furnish its commodity, nor refuse to one a favor or
privilege it has extended to another, since the term "public
utility" precludes the idea of service which is private in its
nature and is not to be obtained by the public. Such duties
arise from the public nature of a utility, and statutes
providing affirmatively therefor are merely declaratory of
the common law. (51 C. J., sec. 16, p. 7.)

The fact that a corporation does other business in

addition to rendering a public service does not prevent it
from being a public utility, and subject to regulation as such,
as to its public business. (51 C. J., p. 6.)

The circumstance that the plaintiff is not the holder of

a franchise or certificate of public convenience, or that it is a
company devoted principally to the manufacturer of sugar
and not to the business of public service or that the state
has not as yet assumed control or jurisdiction over the
operation of the road in question by the plaintiff, does not
preclude the idea that the said road is a public utility.
The touchstone of public interest in any business, its
practices and charges, clearly is not the enjoyment of any
franchise from the state. (Munn vs. Illinois [94 U. S., 113; 24
L. ed., 77, supra.) (Nebbia vs. New York, supra.)
The fact that a corporation may not have been given
power to engage in the business of a public utility is not
conclusive that it is not in fact acting as a public utility and
to be treated as such. (51 C. J., p. 5.)
The question whether or not it is such does not
necessarily depend upon whether it has submitted or
refused submit to the regulatory jurisdiction of the state, nor
upon whether or not the state has as yet assumed control

The term "public utility" sometimes is used to mean

the physical property or plant being used in the service of
the public. (51 C. J., p. 6.)
There are . . . decisions in which the incidental service
has been held to public regulation and control. (Re
Commonwealth Min. & Mill. Co. [1915; Ariz.], P. U. R., 1915B,
536; Nevada, C. & O. Teleg. & Teleph. Co. vs. Red River
Lumber Co. [1920; Cal.], P. U. R., 1920E, 625; Sandpoint
Water & Light Co. vs. Humberd Lumber Co. [1918; Idaho], P.
U. R., 1918B, 535; Public Service Commission vs. Valley
Mercantile Co. [1921; Mont.], P. U. R., 1921D, 803; Public
Service Commission vs. J. J. Rogers Co. [1918], 184 App.
Div., 705; P. U. R., 1919A, 876; 172 N. Y. Supp., 498;
Wingrove vs. Public Service Commission [1914], 74 W. Va.,
190; L. R. A. 1918A, 210; 81 S. E., 734; Chambers vs. Spruce
Lighting Co. [1918], 81 W. Va., 714; 95 S. E. 192. See also
Hoff vs. Montgomery [1916; Cal.], P. U. R., 1916D, 880; Re
Producers Warehouse [1919; Cal.], P. U. R., 1920A, 919; Ticer
vs. Phillips [1920; Cal.], P. U. R., 1920E, 582; Re Ontario
Invest. Co. [1921; Cal.], P. U. R., 1922A, 181; Bassett vs.
Francestown Water Co. [1916; N. H.], P. U. R., 1916B, 815;
Re Northern New York Power Co. [1915; N. Y., 2d Dist.], P. U.
R., 1915B, 70.) (Annotation in 18 A. L. R., 766, 767.)
The point is made that, there being no contract
between the plaintiff and the public interested in the use of
the road in question it should be understood that such use
has been by the mere tolerance of the plaintiff, and that
said property has not been constituted into a public utility.
The contention is devoid of merit.
When private property is devoted to public use in the
business of a public utility, certain reciprocal rights and
duties are raised by implication of law between the utility
and the public it undertakes to serve, and no contract
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LAW ON PROPERTY

between them is necessary to give rise thereto. . . . (51 C. J.,

sec. 12 p. 6.)
Wherefore the judgment appealed from is affirmed,
with costs to the plaintiff.
Abad Santos, J., concurs.

Separate Opinions

LAUREL, J., concurring and dissenting:

I concur in the result. I do not, however, agree to
certain conclusions and observations that are made in the
foregoing opinion.
I. I am of the opinion that no servitude of way under
the Civil Code has been created on the tenement of the
plaintiff in favor of the defendant.lwphi1.nt
Servitudes constitute legal limitations on the right of
ownership. They are considered so among the most ancient
of property rights. The early Roman Law allowed the
imposition of a servitude of way over intervening tenements
for the purpose of enabling strangers to reach the
sepulchers of their ancestors. The modern civil law,
however, has amplified the principle and invested it with a
utilitarian concept for the convenience of landowners,
particularly for the cultivation of enclosed rural estates. But
the general principles of the Roman Law regarding
servitudes, whether praedial or personal, are preserved
intact in the modern civil law, and are now commonly
applied to the "easements" of the common law. Among
these general principles which have come down to us
through the ages are (1) that servitudes are to be

considered subordinate to the right of ownership, and (2)

that, being a sort of dismemberment of the right of private
property, servitudes are never to be presumed but must be
proved to have been constituted in the manner prescribed
by law.
A servitude of way is either legal or voluntary. A
forced servitude of way constituted in the manner and under
the conditions stated in articles 564 to 570 of the Civil Code.
Paragraph 1 of article 564 provides that "The owner of a
tenement or land, surrounded by others belonging to
different owners and without access to a public highway, is
entitled to demand a right of way through the neighboring
tenements, after payment of the proper indemnity."
No legal servitude of way exists in the present case.
The defendant has not shown that his right of passage
across the tenement of the plaintiff exists by reason of
necessity growing out of the peculiar location of his
property. He does not even own the tenement where he
conducts his business. Said tenement belongs to Luciano
Aguirre who, as the owner thereof, would be the one entitled
to claim the forced servitude of way, on the hypothesis that
it is demanded by the peculiar location of the tenement. A
mere lessee can not demand the legal servitude of way (see
Manresa, Civil Code, vol. 4, 2d ed., p. 705). Moreover, it
does not appear that Luciano Aguirre or the defendant has
otherwise fulfilled the requirements of the law. (Art. 564,
Civil Code; Cuaycong vs. Benedicto, 37 Phil., 781, 797.)
Nor can it be said that a voluntary servitude of way
exists. It should be observed that a right of way is
discontinuous or intermittent as its use depends upon acts
of ma (art. 532, Civil Code; 4 Manresa, Civil Code, 2d., p.
569; Cuaycong vs. Benedicto, supra). Lacking the element
of continuity in its use, a right of way may not be acquired
by prescription but solely by title (art. 539, Civil Code). Only
continuous and apparent servitudes, like the servitude of
light and view, may be acquired by prescription (art. 537,
Civil Code). Even assuming, however, that a servitude of
way may be acquired by prescription in view of the
provisions of the present Code of Civil Procedure,
nevertheless, it can not be held that prescription exists in
the present case. The free passage over the private way
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LAW ON PROPERTY

rests on mere tolerance on the part of the plaintiff, is a

settled principle of law in this jurisdiction that acts merely
tolerated can not give rise to prescription (Cortes vs. YuTibo, 2 Phil., 24, 27; Ayala de Roxas vs. Maglonso, 8 Phil.,
745; Roman Catholic Archbishop of Manila vs. Roxas, 22
Phil., 450, 452, 453; Municipality of Nueva Caceres vs.
Director of Lands and Roman Catholic Bishop of Nueva
Caceres, 24 Phil., 485; Cuaycong vs. Benedicto, supra).
In what does the title of the plaintiff consist? By title
as a mode of acquiring servitude, the Civil Code refers to the
"juridical act" which gives birth to the servitude. "Son, pues,
titulos constitutivos de los servidumbres cualquiera que sea
su clase, la ley, la donacion, el contrato y el testamento" (4
Manresa, Civil Code, 2d ed., pp. 594, 595). Title by law is
lacking. There is neither will nor donation, for the making of
a donation and the execution of require special formalities. It
is elementary that the plaintiff, being an artificial person,
has no capacity to execute a will. In my opinion, there is no
title by contract. The act of the plaintiff in opening the
private way here involved did not constitute an offer to the
public to use said way. There being no offer, there could be
no acceptance; hence, no contract.
The plaintiff did not encumber his tenement with a
servitude of way. Property is always presumed free from any
and all encumbrances. The act of the plaintiff, performed
wholly upon its own exclusive property, should not be
construed to constitute the creation of a servitude. Servitus
in faciendo consistere nequit. "For a man should not use
that which belongs to him as if it were a service only, but as
his own property" (Law 13, title 31, third partida, quoted
with approval in Cortes vs. Yu-Tibo, 2 Phil., 24, 27).
II. The mere opening of the private way in question to
the public did not necessarily clothe it with a public interest
such as to compel the owner thereof to allow everybody to
pass thereon. Even on the hypothesis that such private way
is affected with a public interest, still, it is good law that the
owner thereof may make reasonable restrictions and
limitations on the use thereof by the general public.
Public regulation of private property under the police power
is often justified on the ground that the property so

regulated is affected with a public interest. The phrase

"affected with a public interest" was brought into
prominence by the discussion in Lord Hale's treatise De
Portibus Maris (I Hargrave's Law Tracts, 78) of more than two
centuries ago where the classic statement was made that
when private property "is affected with public interest, it
ceases to be juris privati only."
Chief Justice Taft, speaking for the Supreme Court of
the United States in Wolff Packing Co. vs. Court of Industrial
Relations (262 U. S., 522; 67 Law. ed., 1103, 1108),
enumerated as follows the business and occupations which
may be said to be clothed with a public interest:
(1) Those which are carried on under the authority of a
public grant of privileges which either expressly or impliedly
imposes the affirmative duty of rendering a public service
demanded by any member of the public. Such are the
railroads, other common carriers and public utilities.
(2) Certain occupations, regarded as exceptional, the public
interest attaching to which, recognized from earliest times,
has survived the period of arbitrary laws by Parliament or
colonial legislatures for regulating all trades and callings.
Such are those of the keepers of inns, cabs, and gristmills.
(State vs. Edwards, 86 Me., 102; 25 L. R. A., 504; 41 Am. St.
Rep., 528; 29 Atl., 947; Terminal Taxicab Co. vs. Kutz. 241 U.
S., 252, 254; 60 Law. ed., 984, 986; P. U. R. 1916D, 972; 36
Sup, Ct. Rep., 583; Ann. Cas. 1916D, 765.)
(3) Businesses which, though not public at their inception,
may be fairly said to have risen to be such, and have
become subject in consequence to some government
regulation. They have come to hold such a peculiar relation
to the public that this is superimposed upon them. In the
language of the cases, the owner, by devoting his business
to the public use, in effect grants the public an interest in
that use, and subjects himself to public regulation to the
extent of that interest, although the property continues to
belong to its private owner, and to be entitled to protection
accordingly. (Munn vs. Illinois, supra; Spring Valley
Waterworks vs. Schottler, 110 U. S., 347; 28 Law ed., 173; 4
Sup. Ct. Rep., 48; People vs. Budd, 117 N. Y., 1, 27; 5 L. R. A.,
559; 15 Am St. Rep., 460; 22 N. E., 670; s. c. 143 U. S., 517;
Page 274 of 404

LAW ON PROPERTY

36 Law ed., 247; 4 Inters. Com. Rep., 45; 12 Sup. Ct. Rep.,
468; Brass vs. North Dakota, 153 U. S., 391; 38 Law. ed.,
757; 4 Inters. Com. Rep., 670; 14 Sup. Ct. Rep., 857; Noble
State Bank vs. Haskell, 219 U. S., 104; 55 Law. ed., 112; 32
L. R. A. [N. S.], 1062; 31 Sup. Ct. Rep., 186; Ann. Cas.
1912A, 487; German Alliance Ins. Co. vs. Lewis, 233 U. S.,
389; 58 Law. ed., 1011; L. R. A. 1915C, 1189; 34 Sup. Ct.
Rep., 612; VanDyke vs. Geary, 244 U. S., 39, 47; 61 Law. ed.,
973, 981; 37 Sup. Ct. Rep., 483; Block vs. Hirsh, 256 U. S.,
135; 65 Law ed., 865; 16 A. L. R., 165; 41 Sup. Ct. Rep.,
458.)
The term "affected with a public interest" is incapable
of exact apprehension. "What circumstances shall affect
property with a public interest is not very clear." (Cooley,
Constitutional Limitations, 7th ed., p. 872.) "It requires no
especial acuteness of mind," says Willoughby in his valuable
work on the Constitution of the United States, "to see that,
in truth, no clear line of distinction can be drawn." (Vol. 3, 2d
ed., pp. 1758, 1759. See also German Alliance Ins. Co. vs.
Lewis, 233 U. S., 389; 34 Sup. Ct., 612; 58 Law. ed., 1011; L.
R. A. [1915C], 1189.)
To my mind, the road in question may not be likened
unto a turnpike or toll road in the legal sense of the term.
The right to construct and maintain a toll or turnpike road
and to collect tolls exists only by virtue of an express grant
from the legislature. (Powell vs. Sammons and Dotes, 31
Ala., 552; Blood vs. Woods, 30 P., 129; 95 Cal., 78; Volcano
Caon Road Co. vs. Placer County, 26 P., 513; 88 Cal., 634;
Truckee, and Tahoe Turnpike Road Co. vs. Campbell, 44 Cal.,
89; Virginia Canon Toll-Road Co. vs. People, 45 P., 398; 22
Colo., 429; 37 L. R. A., 711; Pike County Justices vs. Griffin,
etc., Plank Road Co., 9 Ga., 475; Wartdsworth vs. Smith, 11
Me., 278; 26 Am. D., 525; State vs, Louisiana, etc., Gravel
Road Co., 92 S. W., 153; 116 Mo. App., 175; String vs.
Camden, etc., Turnpike Co., 40 A., 774; 57 N. J. Eq., 227; In
re People, 128 N. Y. S., 29; 70 Misc., 72; Turner vs. Eslick,
240 S. W., 786; 146 Tenn., 236; Peru Turnpike Co. vs. Town of
Peru, 100 A., 679; 91 Vt., 295; L.R.A., [1917E], 559;
Ferguson vs. Board of Sup'rs of Roanoke County, 113 S.E.,
860; 133 Va., 561; Rainy Lake River Corp. vs. Rainy River
Lunber Co., 27 Ont. L., 151; 6 Dom. L. R., 401; 22 Ont. W. R.
952.) So that if there has been no state grant, there can be

no toll or turnpike road. In the case before us, the private

way has been established and is being maintained by the
plaintiff, a private entity, for its own accommodation and not
by virtue of a grant from the state.
But even if we were to assume that the private way of
the plaintiff here is property clothed with public interest, the
only inference would be that it is subject to governmental or
public regulation and control or, as some courts put it, to the
regulatory power of the state, exercised for the common
good (Fisher vs. Yangco Steamship Co., 31 Phil., 1; De Villata
vs. Stanley, 32 Phil., 541; 51 C. J., p. 9) by the legislature
(State vs. Holm, 138 Minn., 281; 164 N.W., 989), either
directly or through administrative bodies endowed with
power to that end (Atlantic Coast Line R. Co. vs. North
Carolina Corp. Comm., 206 U. S., 1; 27 S. Ct., 585; 51 Law.
ed., 933; 11 Ann. Case, 398; In Re Petition for Increase of
Street Car Fares, 179 N. C., 151; 101 E., 619).
The philosophy inseparable from the logic of the
adjudicated cases is based on the overwhelming power of
regulation possessed by the state in the public interest. A
finding, therefore, that the private way in question is
property affected with a "public interest" leads to a
recognition of the public power or regulation and no more.
The fact, for instance, that the plaintiff has opened a way to
the public and charges a fee or toll on motor vehicles for
hire may lead the legislature or the administrative
authorities to intervene and regulate and, if necessary, to
determine the reasonableness of the fee charged under its
rate-fixing authority.
Even as regards public utilities, courts have held with
unerring uniformity that the utility itself may prescribe rules
and regulations for the due and proper conduct of its
business, and the protection of itself against fraud, injury or
undue risk and liability, the only limitations being that said
rules shall be lawful and reasonable. The utility may enforce
compliance with its rules by those dealing with it and may
refuse or discontinue service to one who does not conform
to its rules. (See Thurston vs. Union Pacific R. Co., 4 Dill. [U.
S.], 321; 23 Fed. Cas. No. 14019; 13 Alb. L. J., 393; 8 Chic.
Leg. N., 323; 22 Int. Rev. Rec., 251; Brown vs. Memphis, & C.
R. Co., 5 Fed., 499; 7 Fed., 51; Gray vs. Cincinnati Southern
Page 275 of 404

LAW ON PROPERTY

R. Co., 11 Fed., 683; Hewlett vs. Western Union Tel. Co. [C.
C.], 28 Fed., 181; Bluthenthal vs. Southern Ry. Co., 84 Fed.,
920; Armstrong vs. Montgomery St. Ry. Co., 123 Ala., 233;
26 So., 349; Birmingham Ry., L. & P. Co. vs. Littleton, 201
Ala., 141; 77 So., 565, 570; Weigard vs. Alabama Power Co.,
177 So., 206; McCook vs. Nothup, 65 Ark., 225; 45 S.W.,
547; California Powder Works vs. Atlantic & P. R. Co., 113
Cal., 329; 45 Pac., 691; 36 L. R. A., 648; Southern Ry. Co. vs.
Watson, 110 Ga., 681; 36 S. E., 209; Southern Ry. Co. vs.
Howard, 111 Ga., 842; 36 S. E., 213; Macon, etc. Ry. Co. vs.
Johnson, 28 Ga., 409; Coyle vs. Southern Ry. Co., 112 Ga.,
121; 37 S. E., 163; Central of Georgia Ry. Co. vs. Motes, 117
Ga., 923; 43 S. E., 990; 62 L. R. A., 507; 97 Am. St. Rep.,
223; Southern Ry. Co. vs. Bailey, 143 Ga., 610; 85 S. E., 847,
848; L. R. A. [1915E], 1043; Railroad Commn. vs. Louisville,
etc., R. Co., 140 Ga., 817; 80 S. E., 327; L. R. A. [1915E],
902; Ann. Cas. [1915A], 1018; Huston vs. City Gas. etc., Co.,
158 Ill. App., 307; Chicago etc., R. Co. vs. Williams, 55 Ill.,
185; 8 Am. Rep., 641; Milwaukee Malt Extract Co. vs.
Chicago, etc., R. Co., 73 Iowa, 98; 34 N. W., 761; Gregory vs.
Chicago, etc., R. Co., 100 Iowa, 345; 69 N. W., 532; Pittsburg,
etc., R. Co. vs. Vandyne, 57 Ind., 576; 26 Am. Rep., 68;
Louisville, etc., R. Co. vs. Wright, 18 Ind. App., 125; 147 N.
E., 491; Cox vs. City of Cynthiana, 123 Ky., 363; 96 S. W.,
456; 29 Ky. L., 780; Louisville Tobacco Warehouse Co. vs.
Louisville Water Co., 162 Ky., 478; 172 S. W., 928; McDaniel
vs. Faubush Tel. Co., 106 S. W., 825; 32 Ky. L., 572; Day vs.
Owen, 5 Mich., 520; 72 Am. Dec., 62; Faber vs. Chicago
Great Western R. Co., 62 Minn., 433; 64 N. W., 918; 36 L. R.
A., 789; Daniel vs. North Jersey St. Ry. Co., 64 N. J. L., 603;
46 Atl., 625; State vs. Water Supply Co. of Albuquerque, 19
N. W. 36; 140 P., 1059, 1060; L. R. A. [1915A], 246; Ann. Cas.
[1916E], 1290; People vs. Babcock, 16 Hun. [N. Y.], 313;
Freedom vs. New York Cent., etc., R. Co., 24 N. Y. App. Div.
306; 48 N. Y. Sup. 584; Montgomery vs. Buffalo Ry. Co., 24 N.
Y. App. Div., 454; 48 N. Y. Sup., 849; Dowd vs. Albany Ry. Co.,
47 N.Y. App. Div., 202; 62 N.Y. Sup., 179; Peck vs. N. Y. Cent.,
etc., R. Co., 70 N. Y., 587; Texas, etc., R. Co. vs. Johnson, 2
Tex. App. Civ. Cas., sec. 185; Guthrie Gas. Co. vs. Board of
Education, 64 Okl., 157; 166 P., 128; L. R. A. [1918D], 900;
Henderson Coal Co. vs. Public Serv. Commn., 73 Pa. Super.,
45; McMillan vs. Federal St., etc., Ry. Co., 172 Pa. St., 523;
33 Atl., 560; State vs. Goss, 59 Vt., 266; 9 Atl., 829; 59 Am.
Rep., 706; Stevenson vs. West Seattle Land, etc., Co., 22

Wash., 84: 60 Pac., 51; Chicago, etc., Ry. Co. vs. Williams, 55
Ill., 185; 8 Am. Rep., 641.) That a corporation engaged in
business affected with "public interest" may prescribe
reasonable rules and charges for conducting its business is
well settled. (McDaniel vs. Faubush Telephone Co., supra.)
This is a right which exists independently of any statutory
enactment (Weigand vs. Alabama Power Co., supra).
That persons engaged in business clothed with a
"public interest" may make reasonable discriminations may,
furthermore, be illustrated by taking innkeepers as an
example. The keeper of an inn may make reasonable and
proper rules governing the conduct of his business (14 R. C.
L., p. 502). In so doing, he may refuse to receive as guests
those who do not come in a situation in which they are fit to
be received (Bonner vs. Welborn, 7 Ga., 296, 334, 337;
Bowlin vs. Lyon, 67 Ia., 536; 25 N. W., 766; 56 Am. Rep.,
355; Markham vs. Brown, 8 N. H., 523; 31 Am. Dec., 209;
State vs. Steele, 106 N. C., 766; 11 S. E. 478; 19 A. S. R.,
573; 8 L. R. A., 516; Pidgeon vs. Legge, 5 Week. Rep., 649).
He may, therefore, admit to his inn only persons of good
character and well demeaned (Clemons vs. Meadows, 123
Ky., 178; 94 S. W., 13; 124 A. S. R., 339; 6 L. R. A. [N. S.],
847; Atwater vs. Sawyer, 76 Me., 539; 49 Am. Rep., 634),
and those who are free from any contagious or infectious
disease (Jackson vs. Virginia Hot Springs Co., 213 Fed., 969).
A person who is disorderly or is of suspicious, immoral or
objectionable character may be refused admission by the
innkeeper (Markham vs. Brown, supra; Goodenow vs. Travis,
3 Johns., 427; Holden vs. Carraher, 195 Mass., 392; 81 N. E.,
261; 11 Ann. Cas., 724; State vs. Steele, supra; McHugh vs.
Schlosser, 159 Pa. St., 480; 28 Atl., 291; 39 A. S. R., 699; 23
L. R. A., 574; Nelson vs. Bodt, 180 Fed., 779; Watkins vs.
Cope, 84 N. J. L., 143; 86 Atl., 545; Fraser vs. McGibbon, 10
Ont. Week. Rep., 54; Howell vs. Jackson, 6 Car. & P., 723; Rex
vs. Ivens, 7 Car. & P., 213; Thompson vs. McKenzie, 1 K. B.,
905; 77 L. J. K. B. N. S., 605; 98 L. T. N. S., 896; 24 Times L.
Rep., 330; 72 J. P., 150; 52 Sol. Jo., 302; Goodenow vs.
Travis, 3 Jonhs., 427). And a person who, once inside the inn,
does not demean properly may be refused further service
and may be ejected, by force, if necessary (Lehnan vs.
Hines, 88 Kan., 58; 127 Pac., 612; 42 L. R. A. [N. S.], 830 and
note; Holden vs. Carraher, 195 Mass., 392; 81 N. E., 261; 11
Ann. Cas., 724 and note; De Wolf vs. Ford, 193 N. Y., 397; 86
Page 276 of 404

LAW ON PROPERTY

N. E., 527; 127 A. S. R., 969; 21 L. R. A. [N. S.], 860; State vs.
Steele, supra; McHugh vs. Scholsser, supra; Chase vs.
Knabel, 46 Wash, 484; 90 Pac., 642, 12 L. R. A. [N. S.], 1155;
2 British Rul. Cas., 692). Even the exclusion of patrons on
account of the race to which they belong has been
sustained improperly, I believe, on the ground that they are
objectionable to other patrons and injure thereby the
business of the innkeeper (State vs. Steele, supra). And it
has been held that a prize fighter who had broken the laws
of various states (Nelson vs. Boldt, 180 Fed., 779; Watkins
vs. Cope, supra), or a card sharp (Watkins vs. Cope, supra),
or a person who has the habit of visiting inns with big dogs
which were an annoyance to the guests and a nuisance to
the innkeeper (Reg. vs. Rymer, L. R. 2 Q. B. Div., 136; 46 L. J.
Mag. Cas. N. S., 108 25 Week. Rep., 415; 13 Cox, C. C., 378;
35 L. T. N. S., 774) may be refused admission.
In the case at bar, it is not seriously contended that
the plaintiff, by opening the road in question, has become a
public utility. In this jurisdiction, the term "public utility" has
a technical meaning and refers to the enterprises mentioned
in section 13 of Act No. 3108, as amended by Act No. 4033.
This is admitted in the foregoing opinion. The difficulty
arises because "public utility" is confused with "public
interest."
III. The foregoing opinion, by denying the right of the
owner of the private way to impose what I consider is a
reasonable limitation upon the use of its property,
undermines the right of ownership and its incidents.
Briefly stated, the case is this: Plaintiff is the owner of a
sugar central and the premises on which it is located in
Manapla, Occidental Negros. Realizing the necessity of
constructing a private way through its property for its own
convenience and the convenience of persons who may have
dealings with it, it did open one to connect its property with
the provincial road. The way is about a kilometer in length
and terminates at the mill site of the hacienda. It was built
at the expense of the owner, without any contribution from
anyone. It is guarded by a gate keeper employed and paid
by the owner itself. It was opened not at the behest of any
public demand or necessity but primarily for the sole
convenience of the owner. The defendant, Serafin Hidalgo, is

the keeper of a tienda situated in a contiguous hacienda

belonging to Luciano Aguirre. The tienda is located almost
on the borderline of the hacienda of the plaintiff. Hidalgo in
this store sells and otherwise dispenses tuba which
intoxicates the laborers of the plaintiff, incapacitates them
for work and breaks their morale. The damage to the
plaintiff is positive and real. It is not mere "bare possibility"
as stated in the foregoing opinion. Upon these facts, the
foregoing opinion holds that the defendant can not be
prohibited by the plaintiff from using the latter's private way.
I hold otherwise. I believe that the plaintiff may prohibit the
defendant from using its private property. Stated otherwise,
the use by Hidalgo of the private way of the plaintiff may be
conditioned upon his not carrying tuba. Plaintiff may not, to
be sure, prevent the sale of tuba outside the limits of its
property. This is not pretended in this case. But because
plaintiff may not prohibit dispensation by the defendant of
the intoxicating beverage outside of its property, does it
follow that it is in duty bound to offer facility to the
defendant for the sale of tuba and the consequent
intoxication of its laborers? Is it under any obligation, moral
or legal, to do this? In other words, can plaintiff be
compelled to contribute, directly or indirectly, to the
infliction upon itself of an admittedly real and positive
damage and provide the means for its own destruction? To
ask these questions is to answer them. That you may, for
instance, hang a man because you have the physical or
legal power to do so is conceivable, but that you may not
only hang him but also compel him to hang himself is only
possible among barbarians. Such a result is not possible
even under the "Declaration of Rights of the Laboring and
Exploited People by the Third All-Russian Congress of
Soviets of Workers', Soldiers' and Peasants' Deputies." Let
me observe that social and economic equilibrium should be
maintained by striking the proper balance. One extreme is
as vicious and dangerous as the other. There is as much
danger of destruction from the devastating winds blowing
from the Caucasus and the Ural mountains as from the
infectious and hallowed breath originating from the castles
of the staggering feudal lords of Europe. Social storm is
produced one way or the other.
The inviolability of private property dates as far back
as the days long past when primitive society employed force
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to protect its collective ownership. Upon the change of the

propriety tenure from collectivism to individualism, the
consequent upon the growth of the Roman concept of
propriety, private force was substituted by state authority as
the sanctioning power of ownership. Later evolution of civil
society manifested the growth of state control power. The
Philippines finds herself engulfed in the vortex of this
modern trend of greater state control of private property.
Our Constitution, for instance, expressly authorizes the
National Assembly to determine by law the size of private
agricultural land which individuals, corporations and
associations may require and hold, subject only to rights
existing prior to the enactment of such law (Art. XII, sec. 3).
It also provides that the State, upon payment of just
compensation, may transfer to public ownership utilities and
other private enterprises to be operated by the Government
(Art. XII, sec. 1). And it permits the National Assembly to
authorize, upon payment of just compensation, the
expropriation of lands to be subdivided into small lots and
conveyed at cost to individuals (Art. XII, sec. 4). This latter
provision constitutes an extension of the power of eminent
domain. The settled principle is that private property shall
be taken only for public use (Visayan Refining Co. vs. Camus
and Paredes, 40 Phil., 550; People ex rel. Detroit & H. R. Co.
vs. Salem, 20 Mich., 452; 4 Am. Rep., 500). A provision to
this effect is found in the Bill of Rights of our Constitution
(Art. III, sec. 1, par. 2. See also Ordinance appended to the
Constitution, sec. 1, par. 12; Civil Code, art. 349; Code of
Civil Procedure, sec. 241; Adm. Code, art. 2245.) Similar
provisions are to be found in the Fifth Amendment to the
Constitution of the United States and in the constitutions of
the great majority of the states of the Union. Some state
constitutions even go to the extent of expressly prohibiting
the taking of property for private use (Alabama [1901], I, 23;
Arizona [1912], II, 17; Colorado [1876], II, 14, 15; Georgia
[1877] I, iii, par. I; Missouri [1875], II, 20; Washington [1889],
I, 16; Wyoming [1889], I, 32, 33). But whilst innovations
have been introduced to enlarge the control by the public
power of private property, the Filipino philosophy of the
inviolability of property right has tarried unaltered behind
the thin veneer of our Constitution. By providing in the Bill of
Rights that no person shall be deprived of property without
due process of law, that private property shall not be taken
for public use without just compensation, that the people

shall be secure in their possessions against unreasonable

searches and seizures, that no law impairing the obligation
of contracts shall be passed, the Filipino people, for their
own protection, stamped upon the right of private ownership
an inviolability a deep and sacred impress which can
not be easily wiped out or frittered away until it is no more.
The protection of private right, it seems to me, is a reflection
of our inherent temperament as a people, and albeit
fundamental principles must be construed in the light of
changing conditions and circumstances, the fabric with
which our social and political organizations have been
wrought or woven into a lasting whole, has remained
unaltered. And not even the principle of social justice, vital
and salutary as it is, can be invoked to annihilate property
rights.
Restrictions upon the paramount property right
lodged in the private individual arise only from the superior
right of the state, the legal rights of third persons and the
general duties resting upon the owner as law-abiding
citizen. In the language of Chief Justice Shaw in
Commonwealth vs. Alger (7 Cush. [Mass.], 53), "We think it
as a settled principle, growing out of the nature of well
ordered civil society, that every holder of property, however
absolute and unqualified may be his title, holds it under the
implied liability that his use of may be so regulated, that it
shall not be injurious to the equal enjoyment of their
property, nor injurious to the rights of the community. All
property in this commonwealth, as well that in the interior
as the bordering on tidewaters, is derived directly or
indirectly from the government, and held subject to those
general regulations, which are necessary to the common
good and general welfare. Rights of property, like all other
social and conventional rights, are subject to such
reasonable limitations in their enjoyment, as shall prevent
them from being injurious, and to such reasonable restraints
and regulations established by law, as the legislature, under
the governing and controlling power vested in them by the
Constitution, may think necessary and expedient." (See also
Mugler vs. Kansas, 123 U.S., 623; 8 Sup. Ct., 273; 31 Law
ed., 205.)
IV. From what has been said, it does not, however,
follow that plaintiff is entitled to the equitable remedy of
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injunction. In the first place, the plaintiff styled the relief it is

seeking as an "Accion Negatoria" which, under the old
Spanish procedural law and under the Roman law, consisted
in the right of a landowner to defend the free dominion of
his tenement. This action which had specific application to
servitudes has, however, been repealed by the Code of Civil
Procedure now in force. The right of the plaintiff should,
consequently, be tested by the rules governing the issuance
of the new remedy of injunction. The circumstances under
which, in accordance with the former procedural law, the
accion negatoria could properly issue, would not necessarily
justify the issuance of an injunction, as defined and provided
in the new Code (as to the other Spanish interdictos de
adquirir, de retener and de recobrar or de despojo, see
Devesa vs. Arbes, 13 Phil., 273, 279; Liongson vs. Martinez,
36 Phil., 948, 952). In the second place, injunction, being an
equitable remedy, the granting thereof is dependent upon
the sound discretion of the court (32 C. J., pp. 29-33; 14 R.
C. L., pp. 307, 308). It is only in clear cases of abuse of
discretion on the part of the trial judge that review on
appeal should be made (32 C. J., p. 33). "There is no power
the exercise of which is more delicate, which requires
greater caution, deliberation, and sound discretion, or more
dangerous in a doubtful case, than the issuing an injunction;
it is the strong arm of equity, that never ought to be
extended unless to cases of great injury where courts of law
cannot afford an adequate or commensurate remedy in
damages. The right must be clear, the injury impending or
threatened, so as to be averted only by the protecting
preventive process of injunction." (Bonaparte vs. Camden,
etc., R. Co., 3 Fed. Cas. No. 1617; Baldw., 205, 217.) In the
third place, the remedy sought here is not against the
transportation of tuba by the defendant through the
premises of the plaintiff, but the entire exclusion therefrom
of the defendant regardless of whether he carries tuba or
not. In the fourth place, the revocation of the judgment of
the court below would exclude the defendant alone from the
use of the private way while the general public will be
permitted to do so. The defendant would be excluded not
only from the use of the private premises of the plaintiff, but
also from the way left open to the public, regardless of
whether he is carrying tuba or not. The result being clearly
unjust, the extraordinary legal remedy of injunction should
not be granted. (Truly vs. Wanzer, 5 How., 141; 12 Law. ed.,

88; Irwin vs. Dixion, 9 How., 11; 13 Law ed., 25; Sands vs.
Marburg, 36 Ga., 534; 91 Am. Dec., 781; Beidenkopf vs. Des
Moines Life Ins. Co., 160 Ia., 629; 142 N. W., 434; 46 L. R. A.
[N. S.], 290; Edwards vs. Alluez Min. Co., 38 Mich., 46; 31
Am. Rep., 301; Troy, etc., R. Co. vs. Boston, etc., Ry. Co., 86
N. Y., 107; Eastman Kodak Co. vs. Warren, 108 Misc., 680;
178 N. Y. S., 14 [reversed on other grounds, 189 App. Div.,
556; 179 N. Y. S., 325, Farmer vs. St. Paul, 65 Minn., 176; 67
N. W., 990; 33 L. R. A., 199]; Marvel vs. Jonah, 81 N. J. Eq.,
369; 86 A., 968 [reversed on other grounds, 83 N. J. Eq.,
295; 90 A., 1004, L. R. A. (1915B), 206; Rogers vs. O'Brien,
153 N. Y., 357; 47 N. E., 456; Wendell vs. Conduit Mach. Co.,
74 Misc. 201; 133 N. Y. S., 758; Higgins vs. Higgins, 57 N. H.,
224; Atchinson etc., Ry. Co. vs. Meyer, 62 Kan., 696; 64 P.,
597; Cincinnati, etc. R. Co. vs. Miami, etc. Transp. Co., 1 Oh.
Cir. Ct. (N. S.), 117; Ardmore vs. Fraley, 65 Okl., 14; 162 P.,
211; Heilman vs. Lebanon, etc., St. Ry. Co., 175 Pa., 188; 34
A., 647; Messner vs. Lykens, etc., R. Co., 13 Pa. Super 429;
Mackintyre vs. Jones, 9 Pa. Super., 543; Speese vs. Schuylkill
River East Side R. Co., 10 Pa. Dist., 515].)
In closing, I cannot but condemn the action of O. P.
Ankerson, auditor of the plaintiff company, in overturning
the receptacles (balading) of tuba, which the defendant
attempted to carry through the premises of the plaintiff
company, in defiance of the latter's repeated prohibition.
Righteous indignation at the misconduct of an employee of
the plaintiff company and the damage caused the
defendant, however, should not carry us beyond the merits
of the present controversy. The protection of the property
rights of the plaintiff is one thing and the condemnation of
the acts of vandalism of an employee of the plaintiff another
thing.
Avancea, C.J., and Diaz, J., concur.
VILLAREAL, J., dissenting:
I concur with the opinion of Justice Laurel in so far as
he dissents from the opinion of Justice Recto, but I dissent
from it in so far as he concurs with opinion.
In concurring with the opinion of Justice Recto, Justice
Laurel says: "In the fourth place, the revocation of the
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judgment of the court below would exclude the defendant

alone from the use of the private way while the general
public will be permitted to do so. The defendant be excluded
not only from the use of the private premises of the plaintiff,
but also from the way left open to the public regardless of
whether he is carrying tuba or not. The result being clearly
unjust, the extraordinary legal remedy of injunction should
not be granted." The facts in this case show that said
defendant was warned several times not to pass on said
road when carrying tuba to the adjoining "Hacienda Sagay"
where he sells it to the plaintiff's workmen who become
intoxicated and unfit for work. The repeated warnings were
disregarded by the defendant, until one day the auditor of
the said plaintiff became so disgusted that he could not
refrain from stopping his car and compelling him to unload
the tuba. If the North Negros Sugar Co., Inc., as the owner of
the private road in question, has a right to regulate its use
by imposing reasonable restrictions and limitations, to
prohibit its use by the defendant who has repeatedly
disregarded the warning of its auditor, thus becoming a
persona non grata, is certainly not unjust. To force the owner
of a private road to allow the use of said road by a person
who has incurred his displeasure, if not his hatred, just
because he allows other persons to pass through it, cannot
under whatever consideration, be just. In order to avoid
taking the law into its own hands in excluding the defendant
who has become undesirable person to it, the plaintiff as a
law abiding corporation, has come to the courts to seek help
in the enforcement of its property rights. The opinion of
Justice Laurel, concurred in by Chief Justice and Justice Diaz,
while recognizing the right of said plaintiff to regulate the
use of its private road by imposing upon the users
reasonable restrictions and limitations, refuses it the remedy
it seeks to help it in preventing an undesirable person to use
its private road, leaving to it no alternative except either to
take the law into its own hands or to close the road to
everybody with the exception of those who deal with it in its
business.
I am, therefore, of the opinion that the writ of
injunction, as an auxiliary remedy, should be granted, and
the judgment of the court below should be revoked.
Imperial, J., concur.

ARTICLE 616
G.R. No. 911

March 12, 1903

MAXIMO CORTES, plaintiff-appellant,

vs.
JOSE PALANCA YU-TIBO, defendant-appellant.
Felipe G. Calderon, for appellant.
Simplicio del Rosario, for appellee.
MAPA, J.:
This suit was brought to obtain an injunction, in accordance
with the provisions of section 162 to 172 of the Code of Civil
Procedure, for the purpose of restraining the continuation of
certain buildings commenced by the defendant. The court
below issued a preliminary injunction during the trial, but,
upon, rendering final judgment, dissolved the injunction,
with the costs against the plaintiff. The latter excepted to
this judgment and assigns error:
In the trial the following facts were admitted without
contradiction:
(1) That house No. 65 Calle Rosario, this city, property of the
wife of the plaintiff, has certain windows therein, through
which it receives light and air, said windows opening on the
adjacent house, No. 63 of the same street; (2) that these
windows have been in the existence since the year 1843
and (3) that the defendant, the tenant of the said house No.
63, has commenced certain work with the view to raising
the roof of the house in such a manner that one-half of the
windows in said house No. 65 has been covered, thus
depriving the building of a large part of the air and light
formerly received through the window. In its decision the
court below practically finds the preceding facts, and further
finds that the plaintiff has not proven that he has, by any
formal act, prohibited the owner of house No. 63, from
making improvements of any kind therein at any time prior
to the complaint.
The contention of the plaintiff is that by the constant and
uninterrupted use of the windows referred to above during a
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period of fifty-nine years he acquired from prescription an

easement of light in favor of the house No. 65, and as a
servitude upon house No. 63, and, consequently, has
acquired the right to restrain the making of any
improvements in the latter house which might in any
manner be prejudicial to the enjoyment of the said
easement. He contends that the easement of light is
positive; and that therefore the period of possession for the
purposes of the acquisition of a prescriptive title is to begin
from the date on which the enjoyment of the same
commenced, or, in other words, applying the doctrine to this
case, from the time that said windows were opened with the
knowledge of the owner of the house No. 63, and without
opposition on this part.
The defendant, on the contrary, contends that the easement
is negative, and that therefore the time for the prescriptive
acquisition thereof must begin from the date on which the
owner of the dominant estate may have prohibited, by a
formal act, the owner of the servient estate from doing
something which would be lawful but for the existence of
the easement.
The court below in its decision held in the easement of light
is negative, and this ruling has been assigned by the
plaintiff as error to be corrected by this court.
A building may receive light in various manners in the
enjoyment of an easement of light, because the openings
through which the light penetrates may be made in one's
own wall, in the wall of one's neighbor, or in a party wall.
The legal doctrine applicable in either one of these cases is
different, owing to the fact that, although anyone may open
windows in his own wall, no one has a right to do so in the
wall of another without the consent of the owner, and it is
also necessary, in accordance with article 580 of the Civil
Code, to obtain the consent of the other coowner when the
opening is to be made in a party wall.
This suit deals with the first case; that is, windows opened in
a wall belonging to the wife of the plaintiff, and it is this
phase of the easement which it is necessary to consider in
this opinion.

When a person opens windows in his own building he does

nothing more than exercise an act of ownership inherent in
the right of property, which, under article 348 of the Civil
Code, empowers him to deal with his property as he may
see fit, with no limitations other than those established by
law. By reason of the fact that such an act is performed
wholly on a thing which is wholly the property of the one
opening the window, it does not in itself establish any
easement, because the property is used by its owner in the
exercise of dominion, and not as the exercise of an
easement: "For a man," says law 13, title 31, third partida,
"should not use that which belongs to him as if it were a
service only, but as his own property." Coexistent with this
right is the right of the owner of the adjacent property to
cover up such windows by building on his own land or
raising a wall contiguously to the wall in which the windows
are opened (art. 581 of the same Code), by virtue of the
reciprocity of rights which should exist between abutting
owners, and which would cease to exist if one could do what
he pleased on his property and the other could not do the
same on his. Hence it is that the use of the windows opened
in a wall of one's own property, in the absence of some
covenant or express agreement to the contrary, is regarded
as an act of mere tolerance on the part of the owner of the
abutting property (judgments of the supreme court of Spain
of the 17th of May, 1876; 10th of May, 1884; 30th of May,
1890), and does not create any right to maintain the
windows to the prejudice of the latter (judgment of the
supreme court of Spain of the 13th of June, 1877). The mere
toleration of such an act does not imply on the part of the
abutting owner a waiver of his right to freely build upon his
land as high as he may see fit, nor does it avail the owner of
the windows for the effects of possession according to
article 1942 of the Civil Code, because it is a mere
possession at will. From all this it follows that the easement
of light with respect to the openings made in one's own
edifice does not consist precisely in the fact of opening them
or using them, inasmuch as they may be covered up at any
time by the owner of the abutting property, and, as Manresa
says in his commentaries on the Civil Code, "there is no true
easement as long as the right to impede its use exists." The
easement really consists of in prohibiting or restraining the
adjacent owner from doing anything which may tend to cut
off or interrupt the light; in short, it is limited to the
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obligation of not impeding the light (ne luminibus officiatur).

The latter coincides in its effects, from this point of view,
with the obligation of refraining from increasing the height
of a building (altius non tollendi), which, although it
constitutes a special easement, has for its object, at times,
the prevention of any interruption of the light enjoyed by the
adjacent owner.
It will be readily observed that the owner of the servient
estate subject to such easement is under no obligation
whatsoever to allow anything to be done on his tenement,
nor to do anything there himself, but is simply restrained
from doing anything thereon which may tend to cut off the
light from the dominant estate, which he would undoubtedly
be entitled to do were it not for the existence of the
easement. If, then, the first condition is that which is
peculiar to positive easements, and the second condition
that which is peculiar to negative easements, according to
the definition of article 533 of the Civil Code, it is our opinion
that the easement of lights in the case of windows opened
in one's own wall is of a negative character, and, as such,
can not be acquired by prescription under article 538 of the
Civil Code, except by counting the time of possession from
the date on which the owner of the dominant estate may, by
a formal act have prohibited the owner of the servient
estate from doing something which it would be lawful from
him to do were it not for the easement.
The supreme court of Spain, in its decisions upon this
subject, has established these principles by a long line of
cases. In its judgment of May 14, 1861, the said court holds
that "the prescription of the easement of lights does not
take place unless there has been some act of opposition on
the part of the person attempting to acquire such a right
against the person attempting to obstruct its enjoyment."
The easements of light and view," says the judgment of
March 6, 1875, "because they are of a negative character,
can not be acquired by a prescriptive title, even if
continuous, or although they may have been used for more
than twenty-eight years, if the indispensable requisite for
prescription is absent, which is the prohibition on the one
part, and the consent on the other, of the freedom of the
tenement which it is sought to charge with the easement."
In its judgment of June 13, 1877, it is also held that use does

not confer the right to maintain lateral openings or windows

in one's own wall to the prejudice of the owner of the
adjacent tenement, who, being entitled to make use of the
soil and of the space above it, may, without restriction, build
on his line or increase the height of existing buildings,
unless he has been " forbidden to increase the height of his
buildings and to thus cut off the light," and such prohibition
has been consented to and the time fixed by law
subsequently expired. The court also holds that it is error to
give the mere existence or use of windows in a wall standing
wholly on the land of one proprietor the creative force of
true easement, although they may have existed from the
time immemorial. Finally, the judgments of the 12th of
November, 1899, and the 31st of May, 1890, hold that "as
this supreme court has decided, openings made in walls
standing wholly on the land of one proprietor and which
overlook the land of another exist by mere tolerance in the
absence of an agreement to the contrary, and can not be
acquired by prescription, except by computing the time from
the execution of some act of possession which tends to
deprive the owner of the tenement affected of the right to
build thereon." Various other judgments might be cited, but
we consider that those above mentioned are sufficient to
demonstrate the uniformity of the decisions upon this point.
It is true that the supreme court of Spain, in its decisions of
February 7 and May 5, 1896, has classified as positive
easements of lights which were the object of the suits in
which these decisions were rendered in cassation, and from
these it might be believed at first glance that the former
holdings of the supreme court upon this subject had been
overruled. But this is not so, as a matter of fact, inasmuch
as there is no conflict between these decisions and the
former decisions above cited.
In the first of the suits referred to, the question turned upon
two houses which had formerly belonged to the same
owner, who established a service of light on one of them for
the benefit of the other. These properties were subsequently
conveyed to two different persons, but at the time of the
separation of the property nothing was said as to the
discontinuance of the easement, nor were the windows
which constituted the visible sign thereof removed. The new
owner of the house subject to the easement endeavored to
free it from the incumbrance, notwithstanding the fact that
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the easement had been in existence for thirty-five years,

and alleged that the owner of the dominant estate had not
performed any act of opposition which might serve as a
starting point for the acquisition of a prescriptive title. The
supreme court, in deciding this case, on the 7th of February,
1896, held that the easement in this particular case was
positive, because it consisted in the active enjoyment of the
light. This doctrine is doubtless based upon article 541 of
the Code, which is of the following tenor: "The existence of
apparent sign of an easement between two tenements,
established by the owner of both of them, shall be
considered, should one be sold, as a title for the active and
passive continuance of the easement, unless, at the time of
the division of the ownership of both tenements, the
contrary should be expressed in the deed of conveyance of
either of them, or such sign is taken away before the
execution of such deed."
The word "active" used in the decision quoted in classifying
the particular enjoyment of light referred to therein,
presupposes on the part of the owner of the dominant
estate a right to such enjoyment arising, in the particular
case passed upon by that decision, from the voluntary act of
the original owner of the two houses, by which he imposed
upon one of them an easement for the benefit of the other.
It is well known that easements are established, among
other cases, by the will of the owners. (Article 536 of the
Code). It was an act which was, in fact, respected and
acquiesced in by the new owner of the servient estate, since
he purchased it without making any stipulation against the
easement existing thereon, but, on the contrary, acquiesced
in the continuance of the apparent sign thereof. As is stated
in the decision itself, "It is a principle of law that upon a
division of a tenement among various persons -- in the
absence of any mention in the contract of a mode of
enjoyment different from that to which the former owner
was accustomed -- such easements as may be necessary for
the continuation of such enjoyment are understood to
subsist." It will be seen, then, that the phrase "active
enjoyment" involves an idea directly opposed to the
enjoyment which is the result of a mere tolerance on the
part of the adjacent owner, and which, as it is not based
upon an absolute, enforceable right, may be considered as
of a merely passive character. Therefore, the decision in

question is not in conflict with the former rulings of the

supreme court of Spain upon the subject, inasmuch as it
deals with an easement of light established by the owner of
the servient estate, and which continued in force after the
estate was sold, in accordance with the special provisions of
article 541 of the Civil Code.
Nor is the other decision cited, of May 5, 1896, in conflict
with the doctrine above laid down, because it refers to
windows opened in a party wall, and not in a wall the sole
and exclusive property of the owner of the dominant
tenement, as in the cases referred to by the other decisions,
and as in the case at bar. The reason for the difference of
the doctrine in the one and the other case is that no part
owner can, without the consent of the other, make in a party
wall a window or opening of any kind, as provided by article
580 of the Civil Code. The very fact of making such openings
in such a wall might, therefore, be the basis for the
acquisition of a prescriptive title without the necessity of
any active opposition, because it always presupposes the
express or implied consent of the other part owner of the
wall, which consent, in turn, implies the voluntary waiver of
the right of such part owner to oppose the making of such
openings or windows in such a wall.
With respect to the provisions of law 15, title 31, third
partida, which the appellant largely relied upon in this oral
argument before the court, far from being contrary to it, is
entirely in accord with the doctrine of the decisions above
referred to. This law provides that "if anyone shall open a
window in the wall of his neighbor, through which the light
enters his house," by this sole fact he shall acquire a
prescriptive title to the easement of light, if the time fixed in
the same law (ten years as to those in the country and
twenty years as to absentees) expires without opposition on
the part of the owner of the wall; but, with the exception of
this case, that is to say, when the windows are not opened
in the wall of the neighbor, the law referred to requires as a
condition to the commencement of the running of the time
for the prescriptive acquisition of the easement, that "the
neighbor be prohibited from raising his house, and from
thereby interrupting the light." That is to say, he must be
prohibited from exercising his right to build upon his land,
and cover the window of the other. This prohibition, if
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consented to, serves as a starting point for the prescriptive

acquisition of the easement. It is also an indispensable
requisite, therefore, in accordance with the law of the
partidas, above mentioned, that some act of opposition be
performed, in order that an easement may be acquired with
respect to openings made in one's own wall.
For a proper understanding of this doctrine, it is well to hold
in mind that the Code of the partidas, as well as the Roman
law, clearly distinguishes two classes of easements with
respect to the lights of houses, as may be seen in law 2 of
title 31, of the third partida. One of them consists in "the
right to pierce the wall of one's neighbor to open a window
through which the light may enter one's house" (equivalent
to the so-called easement of luminum of the Romans); the
other is "the easement which one house enjoys over
another, whereby the latter can not at any time be raised to
a greater height than it had at the time the easement was
established, to the end at the light be not interrupted." (Ne
luminibus officiatur.) For the prescriptive acquisition of the
former the time must begin, as we have seen, from the
opening of the window in the neighbor's wall. As to the
second, the time commences from the date on which he was
"prevented from raising his house." Some of the judgments
which establish the doctrine above laid down were rendered
by the supreme court of Spain interpreting and applying the
above cited law 15, title 31, partida 3, and therefore they
can not in any sense be regarded as antagonistic to the law
itself.
The question as to whether the windows of the house of the
plaintiff are, or are not, so-called regulation windows, we
consider of but little importance in this case, both because
the authority of the decisions of the law of the partidas,
above cited, refers to all kinds of windows, and not to
regulation windows solely, and because the record does not
disclose, nor has the appellant even stated, the
requirements as to such regulation windows under the law
in operation prior to the Civil Code, which he asserts should
be applied and on which he relies to demonstrate that he
has acquired by prescription the easement in question. With
respect to the watershed which, according to the plaintiff,
exists over the window in question, the record does not
disclose that the same has been destroyed by the

defendant. He expressly denies it on page 7 of his brief, and

affirms (p. 8) that the tenant of the appellant's property
himself removed it, by reason of the notice served on him;
on the other hand, the judgment of the court below contains
no findings with respect to this fact, nor does it disclose the
former existence of any such watershed. Furthermore, the
opinion which we have formed with respect to this matter, in
so far as we are able to understand the merits of the case, is
that this shed was a mere accessory of the window,
apparently having no other purpose than that of protecting
it against the inclemency of the weather; this being so, we
are of opinion that it should follow the condition of the
window itself, in accordance with the legal maxim that the
accessory always follows the principal. The appellant
contends that the shed should be regarded as a projection
within the provisions of article 582 of the Code; but it is
sufficient to observe that this article speaks of windows with
direct views, balconies, or similar projections, in order to
conclude that the article does not refer to such watersheds,
which have not the slightest degree of similarity to
balconies, nor are they constructed for the purpose of
obtaining the view -- this being the subject-matter which
this article expressly purports to control -- inasmuch as such
sheds have rather the effect of limiting the scope of the
view than of increasing it.
The fact that the defendant did not cover the windows of the
other house adjacent No. 63 at the time he covered the
windows of the appellant, a fact which the latter adduces as
proof of the recognition on the part of the former of the
prescriptive acquisition of the easement of the light in favor
of that house, which, according to his statement, is under
precisely the same conditions as the house of the plaintiff,
does not necessarily imply, in our opinion, any such
recognition, as it might be the result of a mere tolerance on
the part of the defendant. Certainly the fact of his tolerating
the use by the owner of that house of such windows,
supposing the facts to be as stated, does not carry with it as
a result an obligation to exercise the same forbearance with
respect to the plaintiff; but whatever may be the legal status
of the windows in the house referred to with respect to the
house No. 63, we cannot pass upon the point, nor can we
form suppositions concerning the matter for the purpose of
drawing conclusions of any kind therefrom to support our
Page 284 of 404

LAW ON PROPERTY

opinion, for the simple reason that it is not a point at issue

in the case, and more especially because the defendant not
only denied the existence of the alleged easement of light in
favor of the house referred to, but, on the contrary, he
affirms that demand has been made that the windows in
said house be closed, as may be seen on page 8 of his brief.
The point discussed in this trial being whether the plaintiff
has acquired the easement which he seeks to enforce over
the house of which the defendant is tenant, it is evident that
the provisions of article 585 of the Civil Code can not be
invoked without taking for granted the very point at issue.
This article refers to cases in which, under any title, the right
has been acquired to have direct views, balconies, or
belvederes over contiguous property. The existence of such
a right being the very point at issue, the supposition upon
which the article rests is lacking, and it is therefore not in
point.
As a result of the opinion above expressed, we hold:
1. That the easement of light which is the object of this
litigation is of a negative character, and therefore pertains
to the class which can not be acquired by prescription as
provided by article 538 of the Civil Code, except by counting
the time of possession from the date on which the owner of
the dominant estate has, in a formal manner, forbidden the
owner of the servient estate to do an act which would be
lawful were it not for the easement.
2. That, in consequence thereof, the plaintiff, not having
executed any formal act of opposition to the right of the
owner of the house No. 63 Calle Rosario (of which the
defendant is tenant), to make therein improvements which
might obstruct the light of the house No. 65 of the same
street, the property of the wife of the appellant, at any time
prior to the complaint, as found by the court below in the
judgment assigned as error, he has not acquired, nor could
he acquire by prescription, such easement of light, no
matter how long a time have elapsed since the windows
were opened in the wall of the said house No. 65, because
the period which the law demands for such prescriptive
acquisition could not have commenced to run, the act with

which it must necessarily commence not having been

performed.
Therefore, we affirm the judgment of the court below and
condemn the appellant to the payment of all damages
caused to the plaintiff, and to the payment of the costs of
this appeal. So ordered.
Arellano, C.J., Cooper, Willard, and Ladd, JJ., concur.
Torres, J., did not sit in this case.
ON MOTION FOR A REHEARING.
The plaintiff asks for a rehearing of the decision of the court
of March 12th last upon the ground that the same contains
error:
First, because the decision holds that the window opened in
the plaintiff's own wall and watershed do not constitute the
continuous and apparent easements of prospect, light, and
ventilation, or jus projitiendi and jus spillitiendi, this ruling
being in opposition to the provisions of laws 12, 14, and 15,
title 31, third partida, and articles 530, 532, 533, 537, 538,
582, and 585 of the Civil Code.
This allegation is entirely unfounded, inasmuch as the
decision of the court contains no declaration as to whether
the windows and watershed do or do not constitute
continuous and apparent easements, or jus projitiendi and
jus spillitiendi. These questions were not drawn into issue by
the complaint, and therefore any decision thereon one way
or the other would have been mere dicta. What the court did
hold was that the easement of light, when it is sought to
claim such benefit from a window opened in one's own wall,
as does the appellant with respect to the tenement of the
defendant, belongs to the class of negative easements, and
that on hold on that account the time of possession for
prescriptive acquisition of the title thereto must be counted,
not from the time of the opening of the windows, but from
the time at which the owner thereof has executed some act
of opposition tending to deprive the owner of the servient
tenement of his right, under the law, build upon it to such
height as he might see fit in the legitimate use of his rights
Page 285 of 404

LAW ON PROPERTY

of ownership. With respect to the watershed, the court held

that the shed in question in the case is not included within
the class of projections referred to in article 582 of the Civil
Code, and certain it is that neither this article nor any of the
other provisions of law cited by the appellant in his motion
papers established any doctrine contrary to that laid down
in the decision, either with regard to the watershed or with
respect to the windows. It is not necessary to say anything
further upon this point. It is sufficient to read the text of the
laws cited to reach the conclusion that the assertion made
by the appellant in his motion papers is entirely gratuitous.

which belongs to him as if it were a service only, but as his

own property" is of general application, and does not refer
to the easements which is a property owner may establish
for the benefit of his heirs, as is erroneously believed by the
appellant. The very same law provides that easements
which "a man imposes upon his house must be for the
benefit of the tenement or thing of another, and not that of
his own tenement;" and this is because things are of service
to their owner by reason of dominion, and not in the
exercise of a right of easement. "Res sua," says a legal
maxim, "nemini jure servitutis servit."

Article 582 provides that windows with direct views,

balconies, or other similar projections opening upon the
tenement of one's neighbor are not permissible unless there
are two meters distance between the wall in which such
openings are constructed and the adjacent tenement. From
this the appellant draws the conclusion that he who opens
windows in his own wall without respecting the distance
mentioned does not exercise an act of ownership, as stated
in the decision, inasmuch as he violates an express
provisions of the law.

The provision of article 1942 of the Civil Code to the effect

that acts which are merely tolerated procedure no effect
with respect to possession is applicable as much as to the
prescription of real rights as to the prescription of the fee, it
being a glaring and self-evident error to affirm the contrary,
as does the appellant in his motion papers. Possession is the
fundamental basis of the prescription. Without it no kind of
prescription is possible, not even the extraordinary.
Consequently, if acts of mere tolerance produce no effect
with respect to possession, as that article provides, in
conformity with article 444 of the same Code, it is evident
that they can produce no effect with respect to prescription,
whether ordinary or extraordinary. This is true whether the
prescriptive acquisition be of a fee or of real rights, for the
same reason holds in one and the other case; that is, that
there has been no true possession in the legal sense of the
word. Hence, it is because the use of windows in one's own
wall is the result of a mere tolerance that the supreme court
of Spain, in its judgment of June 13, 1877, has held that
such user lacks the creative force of a true easement,
although continued from time immemorial. The citation of
article 1959 of the Civil Code and of law 21, title 29, partida
3, made by the petitioner, is therefore not in point, because
both of these provisions of law, which refer to the
extraordinary period of prescription presuppose possession
as a necessary requisite, even if without either just title or
good faith.

The conclusion reached is evidently false. The appellant

confounds the facts with the law -- an act of ownership with
the right of ownership. The owner of a thing does not cease
to be such owner because in his manner of use or
enjoyment thereof he violates some provision of law. The
acts which he performs, in our opinion, even if abusive or
contrary to law, are in a strict sense acts of ownership, acts
in the exercise of dominion, because this character is not
derived from a greater or less degree of compliance with the
provisions of law, but from the existence of the status of
owner on the part of the person who exercises such acts. In
order that the act performed by the owner of a wall in
opening windows therein be a true act of ownership it is a
matter of indifference whether or not the distance
prescribed by article 582 of the Code has been respected,
although, considered from a legal point of view, it might be
an illegal act, as not complying with the conditions imposed
by law.
The doctrine laid down by law 13, title 31, partida 3, cited in
the decision, to the effect that "a man should not use that

The second error assigned is that in the decision the court

holds that the gravamina constituted by the window and the
projection are negative easements, against the provisions of
article 533, which define them as positive, which definition,
Page 286 of 404

LAW ON PROPERTY

he adds, is supported by the judgments of the supreme

court of Spain of February 7 and May 5, 1896, cited in
paragraph 12 of the said decision, which judgments declare
that the easement resulting from a window is positive.
It is not true that article 533 of the Civil Code says that the
easement of light is positive, because it does nothing more
than give in general terms the definition of positive
easements and negative easements, without attempting to
specify whether the easement of lights pertains to the first
or to the second class. We have declared that the easement
is negative, having in mind this very definition of the Code
and the doctrine established by the judgments of the
supreme court of Spain which have been cited in our
opinion. The interpretation which the appellant attempts to
give the article of the Civil Code cited is evidently erroneous
and, consequently, the citation made by him in support of
his contention is not in point.
Our opinion of the true extent and meaning of the
judgments of the supreme court of Spain of February 7 and
May 5, 1896, has been already sufficiently explained, and it
is therefore unnecessary to go into the subject again here.
We refer to our decision with respect to what was said
therein upon this subject.
The decision of the court does not contain the declaration,
as gratuitously assumed by the appellant, that the
easement resulting from a projection is of a negative
character; nor, in fact, had we any occasion to make such a
declaration, in view of the nature of the issues raised and
discussed during the trial. What we did, indeed, hold was
that the watershed mentioned in the complaint, the purpose
of which was simply to protect the window in question from
sun and rain, was a mere accessory to that window, and
that in no case could it be considered as a projection within
the provisions of article 582 of the Civil Code, as so
erroneously contended by the appellant at the trial. We find
nothing in his motion papers which can in any way weaken
this holding.
The third error is assigned is that the court holds that the
easement of light, as negative, can not be acquired by
prescription except by counting the period of possession

from the time at which the owner of the servient tenement

has been prohibited from making improvements which
might interfere with said easement, contrary to the
provisions of law 14, title 31, partida 3, and articles 538 and
585 of the Civil Code, which establish the contrary.
This assertion is entirely destitute of foundation, inasmuch
as neither in the law of the partidas nor in the articles of the
Civil Code mentioned is to be found the doctrine which the
appellant arbitrarily seeks to deduce from them. It is
sufficient to read the text to reach the conclusion that the
assertion is wholly gratuitous.
The fourth error assigned is that the court holds that the
watershed, as being an accessory of the window, can not in
itself constitute an easement, this being contrary to the
provisions of articles 582 and 585 of the Civil Code, and law
2, title 31, partida 3, which do not make any such
distinction.
Neither of the law cited speaks expressly of watersheds. We
have held that article 582 refers solely to windows,
balconies, and other similar projections, and that the
watershed in question does not pertain to this class of
projections, our holding being based upon the reasons given
in our decision. The appellant advances no argument worthy
of serious consideration, and therefore we continue to
believe that our opinion in this matter is strictly in
accordance with the law.
The appellant has attached to his motion for a rehearing two
judgments, one rendered by the Royal Audiencia of Manila
September 6, 1877, and the other by the supreme court of
Spain on the 22d of February, 1892, and we think it well to
say a few words concerning them.
In the opinion of the appellant these judgments support the
theory contended for by him at the trial, that the easement
of lights is positive and not negative. His error in so
believing is evident, inasmuch as neither of the judgments
referred to establishes any such doctrine. On the contrary, it
appears clear, from the first of these judgments, that the
easement referred to is negative in the opinion of the court
which rendered it. This appears from the eight conclusion of
Page 287 of 404

LAW ON PROPERTY

law therein, which is literally as follows: "From the evidence

introduced by the defendant, and even from the testimony
of witnesses of the plaintiff, it has been proven that since
1828 the house in question has suffered no change or
alteration in its roof, which projects over Cosio's lot, which
constitutes the active opposition necessary in order to
acquire by prescription the right to the light." It will be seen,
then, that the latter part of the preceding transcript of the
conclusion of law days down precisely the same doctrine as
that expressed in our decision -- that active opposition is a
necessary condition for prescriptive acquisition of an
easement of light. And this also demonstrates conclusively
that the court which rendered the judgment referred to
considered the easement to be negative, inasmuch as
positive easements do not require any active opposition as a
basis for their prescriptive acquisition, such an act being
solely necessary to the prescription of negative easements.
It would appear, judging from his allegations as a whole,
that the appellant confuses positive easements with
continuous easements, and the judgments referred to, in
fact, declares in its fourth conclusion of law that the
easement of light is continuous. If these were really so the
error of the appellant would be manifest, because continuity
is not a quality exclusively peculiar to positive easements;
there are negative easements which are also continuous.
Hence if is that the Civil Code, after classifying easements,
in article 532, as continuous and discontinuous, classifies
them also as positive and negative (art. 533), thus giving to
understand that this latter classification depends upon other
characteristics entirely distinct from the continuity or
discontinuity of easements. If all continuous easements
were positive and all discontinuous easements were
negative, then the express division of easements into
positive and negative made by the Code, after establishing
the division of the same as continuous or discontinuous,
would be entirely unnecessary, as they would be entirely
merged or included in the latter classification. It is sufficient
to read the text of the Code to understand beyond the
possibility of a doubt that a negative easement may be
continuous, and that a positive easement may be
discontinuous, according to the special nature of each one.

With respect to the second judgment -- the judgment of the

supreme court of Spain of February 22, 1892 -- it is certainly
difficult to understand how the appellant could have
imagined that he had found therein the slightest ground for
his contention, inasmuch as it lays down no doctrine which
relates even inference to the subject of easements, and
simply holds, in the first of only two paragraphs in which its
conclusions are contained, that "judgments should be clear,
precise, and responsive to the complaint and the issues
properly raised at the trial;" and in the second, that "the
judgment appealed was contradictory as to the questions it
decides, because it makes certain declarations favorable to
some of the contentions in the plaintiff's complaint and then
gives judgment for the defendant, without making any
distinction." It was for this reason alone, and for no other,
that the judgment appealed was reversed and annulled. In
the judgment rendered by the same supreme court upon the
merits of the case, as a result of this decision in cassation,
no other doctrine is laid down than that "the judgment must
be that the defendant comply with those claims advanced
by the complaint to which he was consented, and that he
must be discharged as to those allegations which have been
denied by him and which have not been proved by the
plaintiff."
There is not one word on these judgments which says that
the easement of lights is positive, nor that a watershed
constitutes a true projection within the meaning attached to
this word in article 582 of the Civil Code, as has been vainly
contended by the appellant in the trial.
Therefore the appellant's motion for a rehearing of the
decision of March 12, 1903, is denied.
Arellano, C.J., Cooper, Willard and Ladd, JJ., concur.
Torres and McDonough, JJ., did not sit in this case.
ON MOTION FOR WRIT OF ERROR TO REMOVE THE CASE TO
THE SUPREME COURT OF THE UNITED STATES.
WILLARD, J.:

Page 288 of 404

LAW ON PROPERTY

The application to this court for the allowance of a writ of

error or appeal for the purpose of removing this case to the
Supreme Court of the United States is denied.

The easements in favor of other houses of the plaintiff over

other lots than No. 63 were not in controversy in this suit.
(Town of Elgin vs. Marshall, 106 U. S., 578.) So ordered.

Section 10 of the act of Congress of July 1, 1902, is as

follows:

ARTICLE 622
G.R. No. L-10619

SEC. 10. That the Supreme Court of the United States shall
have jurisdiction to review, revise, reverse, modify, or affirm
the final judgments and decrees of the Supreme Court of the
Philippine Islands in all actions, cases, causes, and
proceedings now pending therein or hereafter determined
thereby in which the Constitution or any statute, treaty, title,
right, or privilege of the United States is involved, or in
causes in which the value in controversy exceeds twentyfive thousand dollars, or in which the title or possession of
real estate exceeding in value the sum of twenty-five
thousand dollars, to be ascertained by the oath of either
party or of other competent witnesses, is involved or
brought in question; and such final judgments or decrees
may and can be reviewed, revised, reversed, modified, or
affirmed by said Supreme Court of the United States on
appeal or writ of error by the party aggrieved, in the same
manner, under the same regulations, and by the same
procedure, as far as applicable, as the final judgments and
decrees of the circuit courts of the United States.

LEOGARIO RONQUILLO, ET AL., plaintiffs-appellants,

vs.
JOSE ROCO, as Administrator of VICENTE, ROCO Y.
DOMINGUEZ ET AL., defendants-appellees.

There is no question in the case relating to the Constitution

or any statute of the United States. The evidence submitted
by the applicant shows that the value of his property over
which the litigation turns is $11,867.70, money of the United
States.
The fact that the plaintiff owns other houses in different
parts of the city as to which he claims an easement of light
similar to the one claimed in this case, that the decision in
this case destroys all of these claimed easements, and that
the value of those other houses exceeds $25,000, gold, is
not important. The test is the value of the matter in
controversy. The matter in controversy here was the
easement of light and air over the property No. 63 Calle del
Rosario and in favor of house No. 65. That easement could
not be worth more than the house itself.

February 28, 1958

Moises B. Cruz for appellants.

Vicente Roco, Jr. for appellees.
MONTEMAYOR, J.:
Involving as it does only a question of law, the present
appeal from the order of the Court of First Instance of
Camarines Sur, dated March 6, 1955, dismissing the
amended and supplemental complaint of plaintiffs on
motion of defendants that it did not state a cause of action,
was taken directly to this Court.
The facts and the issue involved in the appeal are well and
correctly stated in the appealed order, the pertinent portion
of which we are reproducing and making our own:
The amended and supplemental complaint alleged that the
plaintiffs have been in the continuous and uninterrupted use
of a road or passage way which traversed the land of the
defendants and their predecessors in interest, in going to
Igualdad Street and the market place of Naga City, from
their residential land and back, for more than 20 years; that
the defendants and the tenants of Vicente Roco, the
predecessors in interest of the said defendants have long
recognized and respected the private legal easement of
road right of way of said plaintiffs; that on May 12, 1953, the
defendants Jose Roco thru his co-defendants, Raymundo
Martinez and their men with malice aforethought and with a
view to obstructing the plaintiffs' private legal easement
over the property of the late Vicente Roco, started
constructing a chapel in the middle of the said right of way
construction actually impeded, obstructed and disturbed the
Page 289 of 404

LAW ON PROPERTY

continuous exercise of the rights of the plaintiffs over said

right of way; that on July 10, 1954 the new defendants
Natividad Roco and Gregorio Miras, Jr. with the approval of
the defendant, Jose Roco and with the help of their men and
laborers, by means of force, intimidation, and threats,
illegally and violently planted wooden posts, fenced with
barbed wire and closed hermitically the road passage way
and their right of way in question against their protests and
opposition, thereby preventing them from going to or
coming from their homes to Igualdad Street and the public
market of the City of Naga.
It is very clear from the allegations of the plaintiffs in their
amended and supplemental complaint, that they claim to
have acquired the easement of right of way over the land of
the defendants and the latter's predecessors in interest,
Vicente Roco, thru prescription by their continuous and
uninterrupted use of a narrow strip of land of the defendants
as passage way or road in going to Igualdad Street and the
public market of Naga City, from their residential land or
houses, and return.
The only question therefore to determine in this case, is
whether an easement of right of way can be acquired thru
prescription.
The dismissal was based on the ground that an easement of
right of way though it may be apparent is, nevertheless,
discontinuous or intermittent and, therefore, cannot be
acquired through prescription, but only by virtue of a title.
Under old as well as the New Civil Code, easements may be
continuous discontinuous (intermittent), apparent or nonapparent, discontinuous being those used at more or less
long intervals and which depend upon acts of man (Articles
532 and 615 of the Old and New Civil Codes, respectively).
Continuous and apparent easements are acquired either, by
title or prescription, continuous non-apparent easements
and discentinuous ones whether apparent or not, may be
acquired only by virtue of a title (Articles 537 and 539, and
620 and 622 of the Old and New Civil Codes, respectively).
Both Manresa and Sanchez Roman are of the opinion the
easement of right of way is a discontinuous one:

En cambio, las servidumbres discontinues se ejercitan por

un hecho del hombre, y precisamente por eso son y tienen
que ser discontinuas, porque es imposible fisicamente que
su uso sea incesante. Asi, la servidumbre de paso es
discontinua, porque no es posible que el hombre este
pasando continuamente por el camino, vereda o senda de
que se trate. (4 Manresa, Codigo Civil Espaol, 5th ed, p.
529).
. . . "5 Por razon de los modos de disfrutar las
servidumbres, en continuas y discontinuas (1). Las
continuas son aquelles cuyo uso es o puede ser incesante,
sin la intervencion de ningun hecho del hombre, como son
las de luces y otras de la misma especie; y las discontinuas,
las que se usan intervalos, mas o menos largos, y dependen
de actos del hombre, como las de sen senda, carrera y otras
de esta clase. (3 Sanchez Roman, Derecho Civil, p. 488).
Under the provisions of the Civil Code, old and new,
particularly the articles thereof aforecited, it would therefore
appear that the easement of right of way may not be
acquired through prescription. Even Article 1959 of the Old
Civil Code providing for prescription of ownership and other
real rights in real property, excludes therefrom the
exception established by Article 539, referring to
discontinuous easements, such as, easement of right of way.
(Bargayo vs. Camumot, 40 Phil., 857, 867).
In the case of Cuayong vs. Benedicto, 37 Phil., 781 where
the point in issue was whether or not vested rights in a right
of way can be acquired through user from time immemorial,
this Court said:
It is evident, therefore, that no vested right by user from
time immemorial had been acquired by plaintiffs at the time
the Civil Code took effect. Under that Code (Article 539) ino
discontinuous easement could be acquired by prescription in
any event.
However, in the case of Municipality of Dumangas is Bishop
of Jaro, 34 Phil., 545, this same Tribunal held that the
continued use by the public of a path over land adjoining the
Catholic church in going to and from said church through its
side door, has given the church the right to such use by
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LAW ON PROPERTY

prescription, and that because of said use by the public, an

easement of right of way over said land has been acquired
by prescription, not only by the church, but also by the
public, which without objection or protest on the part of the
owner of said land, had continually availed itself of the
easement.
The minority of which the writer of this opinion is a part,
believes that the easement of right of way may now be
acquired through prescription, at least since the introduction
into this jurisdiction of the special law on prescription
through the Old Code of Civil Procedure, Act No. 190. Said
law, particularly, Section 41 thereof, makes no distinction as
to the real rights which are subject to prescription, and there
would appear to be no valid reason, at least to the writer of
this opinion, why the continued use of a path or a road or
right of way by the party, specially by the public, for ten
years or more, not by mere tolerance of the owner of the
land, but through adverse use of it, cannot give said party a
vested right to such right of way through prescription.

of Civil Procedure took effect, the defendants interrupted the

use of the road by plaintiffs by constructing and maintaining
a toll gate on, it collecting toll from persons making use of it
with carts and continued to do so until they were enjoin by
the granting of the preliminary injunction by the trial court
in December 1912. . . (Cuayong vs. Benedicto, 37 Phil., 781,
796).
Professor Tolentino in his Commentaries and Jurisprudence
on the Civil Code, Vol. I, p. 340, would appear to be of the
opinion that under, the provision of the Code of Civil
Procedure relative to prescription, even discontinuous
easements, like the easement right of way, may be acquired
through prescription:
. . . "It is submitted that under Act No. 190, even
discontinuous servitudes can be acquired by prescription,
provided it can be shown that the servitude was actual,
open, public, continuous, under a claim of title exclusive of
any other right and adverse to all other claimants'."

The uninterrupted and continuous enjoyment of a right of

way necessary to constitute adverse possession does not
require the use thereof every day for the statutory period,
but simply the exercise of the right more or less frequently
according to the nature of the use. (17 Am. Jur. 972)

However, the opinion of the majority must prevail, and it is

held that under the present law, particularly, the provisions
of the Civil Code, old and new, unless and until the same is
changed or clarified, the easement of right of way may not
be acquired through prescription.

Even under the case of Cuaycong vs. Benedicto (supra), this

Tribunal insinuated the rule that no discontinuous easement,
like an easement of right of way, may, under Article 539 of
the Old Civil Code, be acquired, might possibly have been
changed by the provisions of the Code of Civil Procedure
relative to prescription.

In view of the foregoing, the order appealed from is hereby

affirmed. No costs.

. . . Assuming, without deciding, that this rule has been

changed by the provisions of the present Code of Civil
Procedure relating to prescription, and that since its
enactment discontinuous easement of acquired by
prescription, it is clear that this would not by avail plaintiffs.
The Code of Civil Procedure went into effect on October 1,
1901. The term of prescription for the acquisition of right in
real estate is fixed by the Code (section 41) at ten years.
The evidence shows that in February, 1911, before the
expiration of the term of ten years since the time the Code

Bengzon, Bautista Angelo, Labrador, Concepcion, Endencia,

and Felix, JJ., concur.
Padilla, J., concurs in the result.
Separate Opinions
REYES, J.B.L., J., concurring:
I would like to elaborate my reasons for concurring with the
majority in declaring the easement of right of way not
acquirable by prescription.

Page 291 of 404

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The essence of this easement ("servidumbre de paso") lies

in the power of the dominant owner to cross or traverse the
servient tenement without being prevented or disturbed by
its owner. As a servitude, it is a limitation on the servient
owner's rights of ownership, because it restricts his right to
exclude others from his property. But such limitation exists
only when the dominant owner actually crosser, or passes
over the servient estate; because when he does not, the
servient owner's right of exclusion is perfect and
undisturbed. Since the dominant owner can not be
continually and uninterruptedly crossing the servient estate,
but can do so only at intervals, the easement is necessarily
of an intermittent or discontinuous nature.

claim of title exclusive of any other right and adverse to all

other claimants. But failure to occupy or cultivate land solely
by reason of war shall not be deemed to constitute an
interruption of possession of the claimant, and his title by
prescription shall he complete, if in other regrets perfect,
notwithstanding such failure to occupy or cultivate the land
during the continuance of war.
The case of Municipality of Dumangas vs. Bishop of Jaro, 34
Phil. 541, does not, if properly analyzed, constitute authority
to hold that the easement of right of way is acquirable by
prescription or adverse possession. The Court there said:

The Code of Civil Procedure (Act 190) did not change the
situation. Observe that its section 41, in conferring
prescriptive title upon "ten years adverse possession"
qualifies it by the succeeding words "uninterruptedly
continued for ten years which is the same condition of
continuity that is exacted by the Civil Code.

The record shows that the church of the pueblo of

Dumangas was constructed in or about the year 1987; that
wall on the southeast side adjoins the building lot in
question; and that since the construction of the church there
has been a side door in this wall through which the
worshippers attending divine service enter and leave, they
having to pass over and cross the land in question. It is
therefore to be presumed that the use of said side door also
carries with it the use by faithful Catholics of the municipal
land over which they have had to pass in order to gain
access to said place of worship, and, as this use of the land
has been continuous, it is evident that the Church has
acquired a right to such use by prescription, in view of the
time that has elapsed since the church was built and
dedicated to religious worship, during which period the
municipality has not prohibited the passage over the land by
the persons who attend services customarily held in said
church.

SEC. 41. Title to Land by Prescription. Ten years actual

adverse possession by any person claiming to be the owner
for that time of any land or interest in land, uninterruptedly
continued for ten years by occupancy, descent, grants, or
otherwise, in whatever way such occupancy may have
commenced or continued, shall vest in every actual
occupant or possessor of such land a full and complete title,
saving to the persons under disabilities the rights secured
the next section. In order to constitute such title by
prescription or adverse possession, the possession by the
claimant or by the person under or through whom he claims
must have been actual, open, public, continous, under a

The record does not disclose the date when the Government
ceded to the Church the land on which the church building
was afterwards erected, nor the date of the laying out of the
adjacent square that is claimed by the municipality and on
which the side door of the church, which is used as an
entrance by the people who frequent this building, gives.
There are good grounds for presuming that in apportioning
lands at the time of the establishment of the pueblo of
Dumangas and in designating the land adjacent to the
church as a public square, this latter was impliedly
encumbered with the easement of a right of way to allow
the public to enter and leave the church a case provided

Because possession of a right consists in the enjoyment of

that right (old Civil Code, Art. 430; Art. 423, new Civil Code)
and to enjoy a right is to exercise it, it follows that the
possession (enjoyment or exercise) of a right of way is
intermittent and discontinuous. From this premise, it is
inevitable to conclude, with Manresa and Sanchez Roman,
that such easement can not be acquired by acquisitive
prescription (adverse possession) because the latter
requires that the possession be continuous or uninterrupted
(old Civil Code, Art. 1941; new Civil Code, Art. 1118).

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LAW ON PROPERTY

for by article 567 of the Civil Code for the municipality

has never erected any building or executed any work which
would have obstructed the passage and access to the side
door of the church, and the public has been enjoying the
right of way over the land in question for an almost
immemorable length of time. Therefore an easement of
right of way over said land has been acquired by
prescription, not only by the church, but also by the public
which, without objection or protest, has continually availed
itself of the easement in question. (34 Phil., pp. 545-546).
It will be seen that the ratio decidendi of that case lies in the
application of Article 567 of the old Civil Code that provides
as follows:
ART. 567. When an estate acquired by purchase, exchange,
or partition is enclosed by other estates of the vendor,
exchanger, or co-owner, the latter shall be obliged to grant
a right of way without indemnity, in the absence of an
agreement to the contrary.
Bearing in mind the provisions of the article quoted in
relation to the wording of the decision in the Dumangas
case, it can be seen that what the court had in mind is that
when the Spanish Crown apportioned the land occupied by
the Church of Dumangas, it impliedly burdened the
neighboring public square (which was also Crown property
at the time) with an easement of right of way to allow the
public to enter and leave the church, because without such
easement the grant in favor of ecclesiastical authorities
would be irrisory: what would be the use of constructing a
church if no one could enter it? Now, if there was an implied
grant of the right of way by the Spanish Crown, it was
clearly unnecessary to justify the existence of the easement
through prescriptive acquisition. Why then does the decision
repeatedly speak of prescription? Plainly, the word
"prescription" was used in the decision not in the sense of
adverse possession for ten or thirty years, but in the sense
of "immemorial usage" that under the law anterior to the
Civil Code of 1889, was one of the ways in which the
servitude of right of way could be acquired.1 This view is
confirmed by the fact that throughout the passages
hereinabove quoted, the court's decision stresses that the
people of Dumangas have been passing over the public

square to go to church since the town was founded and the

church was built, an "almost immemorable length of time."
It would seem that the term "priscription" used in said case
was merely a loose expression that is apt to mislead unless
the court's reasoning is carefully analyzed.
Since 1889, however, the Civil Code repealed the prior
legislation; and thereafter the right of way could only be
acquired by title and not by adverse possession (usucapio),
saving those servitudes already acquired before the Code
came into effect (Decisions, Supreme Court of Spain 27 Oct.
1900, 1st February 1912; 11 May 1927, and 7 January
1920).
Paras, C.J. and Reyes A., J., concur.
Footnotes
1 In fact, the Siete Partidas. (law 25, Title 31, of the Third
Partida), in treating of this servitude declared that to this
servitude by lapse of time "ha menester que aya usado
dellas tanto tiempo de que non se puedan acordar los
omes quanto ha que lo comenzaran usar".
ARTICLE 624
G.R. No. L-14652

June 30, 1960

JUAN GARGANTOS, petitioner,

vs.
TAN YANON and THE COURT OF APPEALS, respondents.
Jose T. Nery for petitioner.
Constantino P. Tadena for respondents.
GUTIERREZ DAVID, J.:
Juan Gargantos appeals by certiorari from the decision of
the Court of Appeals reversing the judgment of the Court of
First Instance of Romblon.
The record discloses that the late Francisco Sanz was the
former owner of a parcel of land containing 888 square
meters, with the buildings and improvements thereon,
Page 293 of 404

LAW ON PROPERTY

situated in the poblacion of Romblon. He subdivided the lot

into three and then sold each portion to different persons.
One portion was purchased by Guillermo Tengtio who
subsequently sold it to Vicente Uy Veza. Another portion,
with the house of strong materials thereon, was sold in 1927
to Tan Yanon, respondent herein. This house has on its
northeastern side, doors and windows over-looking the third
portion, which, together with the camarin and small building
thereon, after passing through several hands, was finally
acquired by Juan Gargantos, petitioner herein.
On April 23, 1955, Gargantos applied to the Municipal Mayor
for a permit to demolish the roofing of the old camarin. The
permit having been granted, Gargantos tore down the roof
of the camarin. On May 11, 1955, Gargantos asked the
Municipal Council of Romblon for another permit, this time in
order to construct a combined residential house and
warehouse on his lot. Tan Yanon opposed approval of this
application.
Because both the provincial fiscal and district engineer of
Romblon recommended granting of the building permit to
Gargantos, Tan Yanon filed against Gargantos an action to
restrain him from constructing a building that would prevent
plaintiff from receiving light and enjoying the view trough
the window of his house, unless such building is erected at a
distance of not less than three meters from the boundary
line between the lots of plaintiff and defendant, and to
enjoin the members of Municipal Council of Romblon from
issuing the corresponding building permit to defendant. The
case as against the members of the Municipal Council was
subsequently dismissed with concurrence of plaintiff's
council. After trial, the Court of First Instance of Romblon
rendered judgment dismissing the complaint and ordering
plaintiff to pay defendant the sum of P12,500.00 by way of
compensatory, exemplary, moral and moderate damages.
On appeal, the Court of Appeals set aside the decision of the
Court of First Instance of Romblon and enjoined defendant
from constructing his building unless "he erects the same at
a distance of not less than three meters from the boundary
line of his property, in conformity with Article 673 of the
New Civil Code."

So Juan Gargantos filed this petition for review of the

appellate Court's decision. The focal issue herein is whether
the property of respondent Tan Yanon has an easement of
light and view against the property of petitioner Gargantos.
The kernel of petitioner's argument is that respondent never
acquired any easement either by title or by prescription.
Assuredly, there is no deed establishing an easement.
Likewise, neither petitioner nor his predecessors-in-interest
have ever executed any deed whereby they recognized the
existence of the easement, nor has there been final
judgment to that effect. Invoking our decision in Cortes vs.
Yu-Tibo (2 Phil., 24), petitioner maintains that respondent
has not acquired an easement by prescription because he
has never formally forbidden petitioner from performing any
act which would be lawful without the easement, hence the
prescriptive period never started.
It is obvious, however, that Article 538, O.C.C. (now Article
621, N.C.C.) and the doctrine in the Yu-Tibo case are not
applicable herein because the two estates, that now owned
by petitioner, and that owner by respondent, were formerly
owned by just one person, Francisco Sanz. It was Sanz who
introduced improvements on both properties. On that
portion presently belonging to respondent, he constructed a
house in such a way that the northeastern side thereof
extends to the wall of the camarin on the portion now
belonging to petitioner. On said northeastern side of the
house, there are windows and doors which serve as
passages for light and view. These windows and doors were
in existence when respondent purchased the house and lot
from Sanz. The deed sale did not provide that the easement
of light and view would not be established. This then is
precisely the case covered by Article 541, O.C.C (now Article
624, N.C.C) which provides that the existence of an
apparent sign of easement between two estates,
established by the proprietor of both, shall be considered, if
one of them is alienated, as a title so that the easement will
continue actively and passively, unless at the time the
ownership of the two estate is divided, the contrary is stated
in the deed of alienation of either of them, or the sign is
made to disappear before the instrument is executed. The
existence of the doors and windows on the northeastern
side of the aforementioned house, is equivalent to a title, for
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LAW ON PROPERTY

the visible and permanent sign of an easement is the title

that characterizes its existence (Amor vs. Florentino, 74
Phil., 403). It should be noted, however, that while the law
declares that the easement is to "continue" the easement
actually arises for the first time only upon alienation of
either estate, inasmuch as before that time there is no
easement to speak of, there being but one owner of both
estates (Articles 530, O.C.C., now Articles 613, N.C.C).
We find that respondent Tan Yanon's property has an
easement of light and view against petitioner's property. By
reason of his easement petitioner cannot construct on his
land any building unless he erects it at a distance of not less
than three meters from the boundary line separating the
two estates.
Wherefore, the appealed decision is hereby affirmed with
costs against petitioner.
G.R. No. L-48384

October 11, 1943

SEVERO AMOR, petitioner,

vs.
GABRIEL FLORENTINO, ET AL., respondents.

floor. Through these windows the house receives light and

air from the lot where the camarin stands. On September 6,
1885, Maria Florentino made a will, devising the house and
the land on which it is situated to Gabriel Florentino, one of
the respondents herein, and to Jose Florentino, father of the
other respondents. In said will, the testatrix also devised the
warehouse and the lot where it is situated to Maria
Encarnancion Florentino. Upon the death of the testatrix in
1882, nothing was said or done by the devisees in regard to
the windows in question. On July 14, 1911, Maria
Encarnacion Florentino sold her lot and the warehouse
thereon to the petitioner, Severo Amor, the deed of sale
stating that the vendor had inherited the property from her
aunt, Maria Florentino. In January, 1938, petitioner
destroyed the old warehouse and started to build instead a
two-story house. On March 1st of that year, respondents
filed an action to prohibit petitioner herein from building
higher than the original structure and from executing any
work which would shut off the light and air that had for
many years been received through the four windows
referred to. The Court of First Instance found on the 15th of
the same month that the construction of the new house had
almost been completed, so the court denied the writ of
preliminary injunction.
I.

BOCOBO, J.:
The petitioner asks for the setting aside of the
decision of the Court of Appeals which affirmed the
judgment of the Court of First Instance of Ilocos Sur. The trial
court declared that an easement of light and view had been
established in favor of the property of the plaintiffs
(respondents herein) and ordered the petitioner to remove
within 30 days all obstruction to the windows of
respondents' house, to abstain from constructing within
three meters from the boundary line, and to pay P200.00
damages.
It appears that over 50 years ago, Maria Florentino
owned a house and a camarin or warehouse in Vigan, Ilocos
Sur. The house had and still has, on the north side, three
windows on the upper story, and a fourth one on the ground

Inasmuch as Maria Florentino died in 1892, according

to the finding of fact of the Court of Appeals, Articles 541 of
the Civil Code governs this case. The facts above recited
created the very situation provided for in said article, which
reads as follows:
(Spanish - page 406)
Art. 551. La existencia de un signo aparente de
servidumbre entre dos fincas, establecido por el propietario
de ambas, se considerara, si se enjenare una, como titulo
para que la servidumbre continue activa y pasivamente, a
no ser que, al tiempo de separarse la propiedad de las dos
fincas, se exprese lo contrario en el titulo de enajenacion de
cualquiera de ellas, o se haga desaparecer acquel signo
antes del otorgamiento de la escritura.
Page 295 of 404

LAW ON PROPERTY

Art. 541. The existence of an apparent sign of

easement between two estates, established by the
proprietor of both, shall be considered, if one of them is
alienated, as a title so that the easement will continue
actively and passively, unless at the time the ownership of
the two estates is divided, the contrary is stated in the deed
of alienation of either of them, or the sign is made to
disappear before the instrument is executed.
When the original owner, Maria Florentino, died in
1892, the ownership of the house and its lot passed to
respondents while the dominion over the camarin and its lot
was vested in Maria Encarnancion Florentino, from whom
said property was later bought by petitioner. At the time the
devisees took possession of their respective portions of the
inheritance, neither the respondents nor Maria Encarnacion
Florentino said or did anything with respect to the four
windows of the respondents' house. The respondents did not
renounce the use of the windows, either by stipulation or by
actually closing them permanently. On the contrary, they
exercised the right of receiving light and air through those
windows. Neither did the petitioner's predecessor in interest,
Maria Encarnacion Florentino, object to them or demand
that they be close. The easement was therefore created
from the time of the death of the original owner of both
estates, so when petitioner bought the land and the camarin
thereon from Maria Encarnancion Florentino, the burden of
this easement continued on the real property so acquired
because according to Article 534, "easements are
inseparable from the estate to which they actively or
passively pertain."
An incidental question that arises at this juncture is
whether or not Article 541 applies to a division of property
by succession. The affirmative has been authoritatively
declared. (Manresa, "Comentarios al Codigo Civil Espanol,"
vol. 4, p. 619; Sentence of the Supreme Tribunal of Spain,
November 17, 1911).
Petitioner assigns as an error of the Court of Appeals
the supposed failure of that tribunal to pass upon his motion
to consider certain allegedly new evidence to prove that
Maria Florentino, the original owner of the properties, died in
1885. Petitioner alleges that Maria Florentino died in 1885

and, therefore, the Law of the Partidas should be followed in

this case and not the Civil Code. However, the petitioner's
contention cannot be upheld without rejecting the finding of
fact made by the Court of Appeals, as follows:
Hebiendo pasado la propiedad de la casa de
manposteria a los demandantes, a la muerte de Maria
Florentino, ocurrida en 1892, (el demandado sostiene que
fue con anterioridad a 1889) no hay duda ninguna de que
los demandantes adquirieron la servidumbre mediante titulo
y por prescripcion (Art. 537).
We cannot review the above finding of fact by the
Court of Appeals that Maria Florentino die in 1892. The
evidentiary fact from which the Court of Appeals drew the
above finding is that Gregorio Florentino during the trial in
1938 testified to facts of his own personal knowledge, and
he was then 58 years old, having been born in 1880. If Maria
Florentino, as claimed by petitioner, had died in 1885,
Gregorio Florentino would have been only 5 years of age at
the time of Maria Florentino's death. The Court of Appeals
therefore concluded that Maria Florentino died in 1892,
when Gregorio Florentino was ten 12 years of age. We do
not believe we can disturb the finding of the Court of
Appeals, because its deductions as to the date of Maria
Florentino's death may be right or wrong, according to one's
own reasoning. In other words, its conclusion of fact from
Gregorio Florentino's testimony is not necessarily and
unavoidably mistaken. On the contrary, it is reasonable to
believe that a person 58 years old cannot remember facts of
inheritance as far back as when he was only 5 years of age.
Furthermore, the burial certificate and the
gravestone, whose copy and photograph, respectively, were
offered by petitioner in a motion for new trial filed in the
Court of Appeals, could have been discovered by petitioner
before the trial in the Court of First Instance by the exercise
of due diligence. There is no reason why this evidence could
be found when the case was already before the Court of
Appeals, but could not be found before the trial in the Court
of First Instance. It was easy, before such trial, for the
petitioner to inquire from the relatives of Maria Florentino as
to when she died. And having ascertained the date, it was
also easy to secure the burial certificate and a photograph
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LAW ON PROPERTY

of the gravestone, supposing them to be really of Maria

Florentino. The fact is, petitioner never tried to find out such
date and never tried to secure the additional evidence till
his counsel raised this issue for the first time before the
Court of Appeals. That Court was therefore died in 1885.
(Sec. 497, Act. 190). The petitioner's statement in his brief
(p. 11) that the Court of Appeals neither passed upon his
motion nor took the burial certificate and the gravestone
into account is not true, because the very words of the Court
of Appeals clearly show that the Court had in mind said
motion and evidence when the decision was signed. The
decision said: "a la muerte de Maria Florentino ocurrida en
1892 (el demandado sostiene que fue con anteriodad a
1889)" (Emphasis supplied).
Lastly, the issue as to the date of Maria Florentino's
death cannot be raised for the first time on appeal.
Petitioner did not in the trial court allege or prove this point.
He presented this issue for the first time in the Court of
Appeals. (Sec. 497, Act. 190).
Let us now consider Article 541 more closely in its
application to the easement of light and view and to the
easement not to build higher (altius non tollendi). These two
easements necessarily go together because an easement of
light and view requires that the owner of the servient estate
shall not build to a height that will obstruct the window.
They are, as it were, the two sides of the same coin. While
an easement of light and view is positive, that of altius non
tollendi is negative. Clemente de Diego states that when
article 538 speaks of the time for the commencement of
prescription for negative easements, "it refers to those
negative easements which are the result and consequence
of others that are positive, such as the easement not to
build higher, or not to construct, which is indispensable to
the easement of light." (Se refiere a aquellas servidumbres
negativas que son sucuela y consecuencia de otras
positivaas, como la de no levantar mas alto, o de no
edificar, que es imprescindible para la servidumbre de
luces.") ("Curso Elemental de Derecho Civil Espaos, Comun
y Foral," vol. 3, p. 450). This relation of these two easements
should be borned in mind in connection with the following
discussion of (1) the modes of establishing and acquiring

easements; (2) the meaning of article 541; and (3) the

doctrine in the case of Cortes vs. Yu-Tibo.
First, as to the modes of establishing and acquiring
easements. According to Article 536, easements are
established by law or by will of th owners. Acquisition of
easements is first by title or its equivalent and seconly by
prescription. What acts take the place of title? They are
mentioned in Articles 540 and 541, namely, (1) a deed of
recognition by the owner of the servient estate; (2) a final
judgment; and (3) an apparent sign between two estates,
established by the owner of both, which is the case of article
541. Sanchez Roman calls cuh apparent sign under article
541 "supletoria del titulo constitutivo de la servidumbre
(Derecho Civil, vol. 3, p. 656). The same jurist says in regard
to the ways of constituting easements:
(Spanish word - page 410)
In the Sentence of the Supreme Tribunal of Spain
dated November 7, 1911, it was held that under article 541
of the Civil Code, the visible and permanent sign of an
easement "is the title that characterizes its existence" ("es
el titulo caracteristico de su existencia.")
It will thus be seen that under article 541 the
existence of the apparent sign in the instance case, to wit,
the four windows under consideration, had for all legal
purposes the same character and effect as a title of
acquisition of the easement of light and view by the
respondents upon the death of the original owner, Maria
Florentino. Upon the establishment of that easement of light
and view, the con-comitant and concurrent easement of
altius non tollendi was also constituted, the heir of the
camarin and its lot, Maria Encarnacion Florention, not having
objected to the existence of the windows. The theory of
article 541, of making the existence of the apparent sign
equivalent to a title, when nothing to the contrary is said or
done by the two owners, is sound and correct, because as it
happens in this case, there is an implied contract between
them that the easements in question should be constituted.
Analyzing article 541 further, it sees that its wording
is not quite felicitous when it says that the easement should
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LAW ON PROPERTY

continue. Sound juridical thinking rejects such an idea

because, properly speaking, the easement is not created till
the division of the property, inasmuch as a predial or real
easement is one of the rights in another's property, or jura
in re aliena and nobdy can have an easement over his own
property, nimini sua res servit. In the instant case, therefore,
when the original owner, Maria Florentino, opened the
windows which received light and air from another lot
belonging to her, she was merely exercising her right of
dominion. Consequently, the moment of the constitution of
the easement of light and view, together with that of altius
non tollendi, as the time of the death of the original owner
of both properties. At that point, the requisite that there
must be two proprietors one of the dominant estate and
another of the servient estate was fulfilled. (Article 530,
Civil Code.)
Upon the question of the time when the easement in
article 541 is created, Manresa presents a highly interesting
theory, whether one may agree with it or not. He says:
La servidumbre encubierta, digamoslo asi, por la
unidad de dueo, se hace ostensible, se revela con toda su
verdadera importancia al separarse la propiedad de las
fincas o porciones de finca que respectivamente deben
representar el papel de predios sirviente y dominante.
The concealed easement, as it were by the oneness of
the owner, becomes visible, and is revealed in all its
importance when the ownership of the estate or portions of
the estate which respectively should play the role of
servient and dominant estates is divided.
Such a view cannot be fully accepted because before
the division of the estate there is only a service in fact but
not an easement in the strictly juridical sense between the
two buildings or parcels of land.
We come now to the case of Cortes vs. Yu-Tibo, 2 Phil.,
24 decided in 1903, Mr. Justice, later Chief Justice, Mapa
speaking for the Court. Counsel for petitioner contends that
the doctrine in that case is controlling in the present one. If
the essential facts of the two cases were the same, there is
not doubt but that the early opinion would be decisive

inasmuch as it is by its cogent reasoning one of the

landmarks in Philippine jurisprudence. However, the facts
and theories of both cases are fundamentally dissimilar.
What is more, as will presently be explained, that every
decision makes a distinction between that case and the
situation provided for in article 541. In that case, Cortes
sought an injunction to restrain Yu-Tibo from continuing the
construction of certain buildings. Cortes' wife owned a house
in Manila which had windows that had been in existence
since 1843. The defendant, who occupied a house on the
adjoining lot, commenced to raise the roof of the house in
such a manner that one-half of the windows in the house
owned by plaintiff's wife had been covered. This Court, in
affirming the judgment of the lower court which dissolved
the preliminary injunction, held that the opening of windows
through one's own wall does not in itself create an
easement, because it is merely tolerated by the owner of
the adjoining lot, who may freely build upon his land to the
extent of covering the windows, under article 581, and that
his kind of easement is negative which can be acquired
through prescription by counting the time from the date
when the owner of the dominant estate in a formal manner
forbids the owner of the servient estate from obstructing the
light, which had not been done by the plaintiff in this case.
It will thus be clear that one of the essential
differences between that case and the present is that while
the Yu-Tibo case involved acquisition of easement by
prescription, in the present action the question is the
acquisition of easement by title, or its equivalent, under
article 541. Therefore, while a formal prohibition was
necessary in the former case in order to start the period of
prescription, no such act is necessary here because the
existence of the apparent sign when Maria Florentino died
was sufficient title in itself to created the easement.
Another difference is that while in the Yu-Tibo case,
there were tow different owners of two separate houses
from the beginning, in the present case there was only one
original owner of the two structures. Each proprietor in the
Yu-Tibo case was merely exercising his rights of dominion,
while in the instant case, the existence of the apparent sign
upon the death of the original owner ipso facto burdened
the land belonging to petitioner's predecessor in interest,
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with the easements of light and view and altius non tollendi
in virtue of article 541.
The very decision in Cortes vs. Yu-Tibo distinguishes
that case from the situation foreseen in article 541. Said this
Court in that case:
It is true that the Supreme Court of Spain, in its
decisions of February 7 and May 5, 1986, has classified as
positive easements of light which were the object of the
suits in which these decisions were rendered in cassation,
and from these it might be believed at first glance, that the
former holdings of the supreme court upon this subject had
been overruled. But this is not so, as a matter of fact,
inasmuch as there is no conflict between these decisions
and the former decisions above cited.
In the first of the suits referred to, the question turned
upon two houses which had formerly belonged to the same
owner, who established a service of light on one of them for
the benefit of the other. These properties were subsequently
conveyed to two different persons, but at the time of the
separation of the property noting was said as to the
discontinuance of the easement, nor were the windows
which constituted the visible sign thereof removed. The new
owner of the house subject to the easement endeavored to
free it from the incumbrance, notwithstanding the fact that
the easement had been in existence for thirty-five years,
and alleged that the owner of the dominant estate had not
performed any act of opposition which might serve as a
starting point for the acquisition of a prescriptive title. The
supreme court, in deciding this case, on the 7th of February,
1896, held that the easement in this particular case was
positive, because it consisted in the active enjoyment of the
light. This doctrine is doubtless based upon article 541 of
the Code, which is of the following tenor: "The existence of
apparent sign of an easement between two tenements,
established by the owner of both of them, shall be
considered, should one be sold, as a title for the active and
passive continuance of the easement, unless, at the time of
the division of the ownership of both tenements, the
contrary should be expressed in the deed of conveyance of
either of them, or such sign is taken away before the
execution of such deed.'

The word "active" used in the decision quoted in

classifying the particular enjoyment of light referred to
therein, presuposes on the part of the owner of the
dominant estate a right to such enjoyment arising, in the
particular cases passed upon by that decision, from the
voluntary act of the original owner of the two houses, by
which he imposed upon one of them an easement for the
benefit of the other. It is well known that easements are
established, among other cases, by the will of the owners.
(Article 536 of the Code.) It was an act which was, in fact,
respected and acquiesced in by the new owner of the
servient estate, since he purchased it without making any
stipulation against the easement existing thereon, but, on
the contrary, acquiesced in the continuance of the apparent
sign thereof. As is stated in the decision itself, "It is a
principle of law that upon a division of a tenement among
various persons in the absence of any mention in the
contract of a mode of enjoyment different from that to which
the former owner was accustomed such easements as
may be necessary for the continuation of such enjoyment
are understood to subsist." It will be seen, then, that the
phrase "active enjoyment" involves an idea directly opposed
to the enjoyment which is the result of a mere tolerance on
the part of the adjacent owner, and which, as it is not based
upon an absolute, enforceable right, may be considered as
of a merely passive character. (2 Phil., 29-31).
Finally, the Yu-Tibo case was decided upon the theory
if the negative easement of altius non tollendi, while the
instant case is predicated on the idea of the positive
easement of light and view under article 541. On this point,
suffice it to quote from Manresa's work. He says:
Que en las servidumbres cuyo aspecto positivo
aparece enlazado al negativo, asi como al efecto de la
precripcion ha de considerarse prefente el aspecto negativo,
al efecto del art. 541 basta atender al aspecto positivo, y asi
la exitencia de huecos o ventanas entre dos fincas que
fueron de un mismo dueo es bastante para considerar
establecidas, al separarse la propiedad de esas fincas, las
servidumbres de luces o vista, y con ellas las de no edificar
on no levantar mas ato, porque sin estas no prodrian existir
aquellas.
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That in easements whose positive aspect appears tied

up with the negative aspect, just as for the purposes of
prescription the negative aspect has to be considered
preferential, so for the purposes of Article 541 it is sufficient
to view the positive aspect, and therefore the existence of
openings or windows between two estates which belonged
to the same owner is sufficient to establish, when the
ownership of these estates is divided, the easement of light
or view, and with them the easements of altius non tollendi
because without the latter, the former cannot exists.

3 in treating of the mode of constituting easements, is not

contrary to the principle that when an estate is divided
between different persons, and in the contract nothing is
said out a mode of enjoyment different from that used by
the original owner thereof, the necessary easements for said
mode of enjoyment are understood to be subsisting;
Considering that such principle and jurisprudence
have obtained a new santion, for due to them is the clear
and concrete concept of Article 541 applicable to the case . .
..

There are several decisions of the Supreme Court of

Spain which have applied Article 541. Some of them are
those of February 7, 1986; February 6, 1904; May 29, 1911;
and November 17, 1911.

Therefore, considering that Maria Florentino died in

1892, according to a finding of fact by the Court of Appeals,
there is an easement of light and view in favor of the
respondents' property under article 541 of the Civil Code.

The sentence of February 7, 1896, dealt with windows

established in one house by the original of two houses.
When he died, the two houses were adjudicated to different
heirs. The court held that there was an easement of light.

But granting, arguendo, that Maria Florentino died in

1885, as contended by petitioner, nevertheless the same
principle enunciated in article 541 of the Spanish Civil Code
was already an integral part of the Spanish law prior to the
Civil Code, the easement in question would also have to be
upheld. That the law before the Civil Code was the same as
at present is shown by the following:

Considerando que, segun lo establecido por este

Supremo Tribunal en repetidas sentencias, y consignado,
muy principalmente, en la dictada en 21 de Octubre de
1892, lo preceptuado en la ley 14, titulo 31 de la Partida 3.a,
al tratar del mode de constituirse las servidumbres, no esta
en oposicion con el pricipio mediante el que, dividida una
finca entre diversas personas, sin que en el contrato se
mencione cosa alguna acerca de un modo de
aprovenchamiento distinto del que usaba el primitivo dueo
de ella, se entieden subsistentes las servidumbres ncesarias
para que aquel pueda tener lugar.
Considerando que ese principio y jurisprudencia han
obtenido nueva sancion, puesto que a ellos obedece el
concepto claro y concreto del articulo 541 del Codigo Civil,
aplicable al caso, . . . (Ruiz, Codigo Civil, Vol. V, pp. 349350).
Considering that, according to what has been
established by this Supreme Tribunal in repeated sentences,
and principally declared in the sentence promulgated on
October 21, 1892, the provision of law 14, title 31 of Partida

1. Under Law 14, Title 31, Partida 3, this easement was

constituted by an implied contract among the heirs of Maria
Florentino.
2. Granting for the sake of argument that this easement was
not created through an implied contract according to Law
14, Title 31, Partida 3, yet that provision of the Partidas was
not inconsistent with the principle in question, so that there
was a gap in the Partidas which the Supreme Court of Spain
filled up from the Roman Law and modern civil codes, by
recognizing the existence of this kind of easement.
3. Law 17, Title 31, Partida 3 regarding the extinguishment
of an easement did not prohibit the easement in the instant
case, Therefore, we should adhere to the decisions of the
Supreme Court of Spain which maintain this easement
under the Spanish law prior to Civil Code.

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4. Other considerations show that the principle of apparent

sign as announced by the Supreme Tribunal of Spain is not
incompatible with the Partidas.
First, as to the implied contract. Law 14, Title 31,
Partida 3 provided that easements were acquired by
contract, by will and by prescription. Upon the death of the
original owner, Maria Florentino, the four windows under
consideration already existed and were visible. One of the
heirs, Maria Encarnacion Florentino, to whom the camarin
and its lot had been devised, having failed to object to the
same, knowingly consented to their continuance. Nor did
Gabriel and Jose Florentino (devisees of the house that had
the four windows) permanently close the windows. There
was consequently an implied agreement between her and
the devisees of the house with the four windows to the
effect that the service of these windows would continue,
thus creating the easement of light and view and the
concomitant easement of altius non tollendi. Hence, the
easement in question was acquired by Gabriel and Jose
Florentino through contract under Law 14, Title 31, Partida
3.
Secondly, with respect to the doctrine of the Supreme
Tribunal of Spain. In a series of decisions of that court, it was
held that Law 14, Title 31, Partida 3 was not opposed to the
easement under review. One of those decisions is that of
November 7, 1883, which held:
(Spanish word - page 418)
Other decisions of the Supreme Tribunal of Spain to
the same effect are those of September 14, 1867 and June
7, 1883. (See Scaevola, "Codigo Civil Comentado" vol. 10,
pp. 272-274.)
So that, granting for the sake of argument, that the
easement was not created through an implied contract
according to Law 14, Title 31, Partida 3, yet that provision of
the Partidas, according to decisions of the Supreme Tribunal
of Spain, was not inconsistent with the principle in question.
The problem in this case not having been foreseen in Law
14, Title 31, Partida 3, there was a gap in the old legislation,

which the Supreme Tribunal of Spain filled up from the

Roman Law and from modern Civil Codes.
The principle in question was deeply rooted in the
Roman Law. It is from the Roman Law that the Supreme
Tribunal of Spain obtained this principle, in order to solve a
question not provided for by the Partidas, whose main
source was also the Roman law. In other words, the Partidas
being silent on the point under consideration, the Supreme
Tribunal of Spain resorted to the authoritative voice of the
Roman law from which the Law of the Partidas had derived
its inspiration.
The following quotations from the Spanish version the
Roman Law Digest will prove the assertions just made:
(Spanish word - page 419)
Among the modern civil codes which contain the rule
in question are those of France, Belgium, Holland, Portugal,
Mexico and Chile. It is presumed that the Supreme Tribunal
of Spain had also in mind at least one of them when it
decided cases involving this principle before the
promulgation of the Spanish Civil Code.
When, therefore, Maria Florentino died (supposing she
died in 1885), the status of the Spanish law was in favor of
the doctrine in question. We cannot change it because it
was in full force at the time of the alleged date of Maria
Florentino's death. We cannot reject a doctrine established
by the Spanish Supreme Tribunal as an integral part of the
Spanish law before the promulgation of the Civil Code in
1889. And we know that jurisprudence in the sense of
court decisions is one of the sources of the law.
Thirdly, concerning Law 17, Title 31, Partida 3. It is
true that the eminent jurist, Manresa, is of the opinion that
"el precepto del art. 541 no solo no existia en nuestra
antigua legislacion, sino que podia deducirse claramente lo
contrario de la ley 17, tit. 31, Partida 3.a . . . ." However, a
careful reading of this provision of the Partidas reveals that
the same did not militate against the creation of an
easement by an apparent sign if nothing was said or done
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when the property is divided. Law 17, Title 31, Partida 3,

read as follows:
(spanish word - page 420-21)
This law regulates the extinguishment of an easement
by merger of the dominant and the servient estates.
Speaking of this law of the Partidas and of article 546, par. 1,
of the Civil Code, both of which refer to merger of the two
estates, Acaevola says: (p. 319, vol. 10)
But there is a world of difference between
extinguishment of an easement by merger of the two
estates and the constitution of an easement by an apparent
sign when nothing is done or said upon the division of the
property. Law 17, title 31, Partida 3, having in mind only the
modes of extinguishment, the legislator did not intend to
cover the question involved in the present case, which
refers to the creation of an easement.
What, then, are the differences between the
extinguishment of an easement by merger under Law 17,
title 31, Partida 3, and the constitution of an easement in
this case, both before and after the Civil Code went into
effect?
First, in merger under Law 17, Title 31, Partida 3,
there were from the very beginning, already two separate
estates, the dominant and the servient estates, whereas in
this case, there was only one estate.
Second, in merger under said Law 17, there were
already two owners, whereas in this case, there was only
one owner, Maria Florentino.
Third, in merger under Law 17, there was already an
easement in the legal sense, whereas in the instant case,
there was only a service between the two lots, (while Maria
Florentino was living) but there was as yet no easement
from the juridical viewpoint.
4. Other considerations prove that the principle of
apparent sign as enunciated by the Supreme Tribunal of

Spain is not inconsistent with the Partidas. These

considerations are:
1. Article 537, Civil Code, provides that continuous and
apparent easements are acquired by title, or by prescription.
However, side by side with that article is article 541 which
contemplates an easement upon division of an estate,
unless a stipulation to the contrary is agreed upon, or the
sign is destroyed. Bearing in mind that "title" includes a
contract, our view is that if Article 537 and 541 of the Civil
Code can stand together, there is no reason why Law 14,
title 31, Partida 3, whereby easements are acquired by
contract, by will and by prescription should be considered
incompatible with the easement under review.
2. Article 546, par. 1 of the Civil Code ordains that by merger
of the two estates in the same owner an easement is
extinguished. Yet, coexistent with such provision is that of
article 541 regarding the apparent sign which is a title for
the easement. If these two principles can and do stand
together under the Civil Code, the doctrine laid down by the
Supreme Tribunal of Spain before the Civil Code was in
force about the effect of an apparent sign can also stand
together with Law 17, title 31, Partida 3 declaring the
extinguishment of an easement by merger.
3. Under article 546, par. 1 of the Civil Code, merger
extinguishes an easement. So in case the estate is again
divided by purchase, etc., the easement is not, under the
Civil Code automatically revived. That is the same provision
of law 17, title 31, Partida 3, which does not reject the
principle in question, just as article 546, par. 1 of the Civil
Code does not reject article 541 about an apparent sign.
III.
Aside from the foregoing reasons that support the
easement under consideration, the same has been acquired
by respondents through prescriptions.
The easement involved in this case is of two aspects:
light and view and altius non tollendi. These two aspects
necessarily go together because an easement of light and
view prevents the owner of the sevient estate from building
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to a height that will obstruct the windows. This court in

Cortes vs. Yu-Tibo, supra, held that the easement concerned
when there is an apparent sign established by the owner of
two estates is positive. Manresa is of the same opinion,
supra. This being so, and inasmuch as the original heirs of
Maria Florentino succeeded to these two estates either in
1885 or in 1892 and as petitioner bought one of the lots in
1911, the prescriptive period under any legislation that may
be applied the Partidas, Civil Code or Code of Civil
Procedure has elapsed without the necessity of formal
prohibition on the owner of the servient estate. The
respondent's action was brought in 1938. The persons who
were present, and 20 years between absentees. (4 Manresa,
605). According to article 537 of the Civil Code, continous
and apparent easements may be acquired by prescription
for 20 years. Under sections 40 and 41 of the Code of Civil
Procedure, the period is 10 years.
IV.
The petitioner maintains that he is an innocent
purchaser for value of the lot and camarin thereon, and that
he was not bound to know the existence of the easement
because the mere opening of windows on one's own wall
does not ipso facto create an easement of light. Such
contention might perhaps be in point if the estates had not
originally belonged to the same owner, who opened the
windows. But the petitioner was in duty bound to inquire
into the significance of the windows, particularly because in
the deed of sale, it was stated that the seller had inherited
the property from her aunt, Maria Florentino. Referring to
the Sentence of the Supreme Court of Spain dated February
7, 1896, which applied Article 541, this Court in the case of
Cortes vs. Yu-Tibo already cited, said that the establishment
of the easement "was an act which was in fact respected
and acquiesced in by the new owner of the servient estate,
since he purchased it without making any stipulation against
the easement existing thereon, but on the contrary
acquiesced in the new owner of the servient estate, since he
purchased it without making any stipulation against the
easement existing thereon, but on the contrary, acquiesced
in the continuance of the apparent sign thereof." (p. 31).
Moreover, it has been held that purchasers of lands
burdened with apparent easements do not enjoy the rights

of third persons who acquire property, though the burden it

not recorded. (Sentence of the Supreme Tribunal of Spain,
April 5, 1898).
V.
Let us now discuss the case from the standpoint of
justice and public policy.
First. When Maria Encarnacion Florentino, as one of
the devisees, accepted the camarin and the lot, she could
not in fairness receive the benefit without assuming the
burden of the legacy. That burden consisted of the service in
fact during the lifetime of the original owner, which service
became a true easement upon her death.
Second. According to Scaevola, the reason for the
principle in question is that there is a tacit contract. He says
in vol. 10, p. 277:
(spanish word - page 424)
Aun hay mas: hay, en nuestro entender, no solo
presuncion de voluntad del enajenante, o sea del dueo de
las fincas que estuvieren confundidas, sino convencion,
siquiera sea tacita, entre el vendedor y al adquirente de la
finca vendida. Puesto que pudiendo estipular la no
existencia de la servidumbre, nada dicen o nada hacen,
fuerza es presumir que el segundo (comprador) acepta el
estado jurisdico creado por el primero (vendedor).
It is not just to allow Maria Encarnacion Florentino or
her successor in interest to repudiate her own undertaking,
implied, it is true, but binding nevertheless. This easement
is therefore a burden which Maria Encarnacion Florentino
and her successor in interest willingly accepted. They
cannot now murmur against any inconvenience consequent
upon their own agreement.
Third. During the construction of the new house by
the petitioner, the respondents filed an action to stop the
work. But petitioner continued the construction, so that
when the Court of First Instance was ready to pass upon the
preliminary injunction, the work had almost been finished.
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Petitioner, therefore, cannot complain if he is now ordered to

tear down part of the new structure so as not to shut off the
light from respondents' windows.

4. The petitioner was not an innocent purchaser, as he was

in duty bound to inquire into the significance of the
windows.

Fourth. When petitioner bought this lot from the

original coheir, Maria Encarnacion Florentino, the windows
on respondents' house were visible. It was petitioner's duty
to inquire into the significance of those windows. Having
failed to do so, he cannot now question the easement
against the property which he purchased.

5. Justice and public policy are on the side of the

respondents.

(spanish word - page 425)

This idea of easements can never become obsolete in
the face of modern progress. On the contrary, its need is all
the more pressing and evident, considering that this mutual
assistance and giving way among estates is demanded by
the complexities of modern conditions, such as those which
obtain in large cities where buildings, large and small, are so
close together.

Wherefore, the judgment appealed from should be

and is hereby affirmed, with costs against the petitioner. So
ordered.
Yulo, C. J., Moran Imperial, 1 and Havtiveras, 1 JJ., concur.

Separate Opinions

VI.
Recapitulating, we believe the easement of light and
view has been established in favor of the property of
respondents, for these reasons:
1. Maria Florentino having died in 1892, according to a
finding of fact of the Court of Appeals, which we cannot
review, Article 541 of the Civil Code is applicable to this
case.
2. Granting, arguendo, that Maria Florentino died in 1885,
nevertheless that same principle embodied in article 541 of
the Civil Code was already an integral part of the Spanish
law before the promulgation of the Civil Code in 1889, and
therefore, even if the instant case should be governed by
the Spanish law prior to the Civil Code, the easement in
question would also have to be upheld.
3. The easement under review has been acquired by
respondents through prescription.

OZAETA, J., dissenting:

I regret to say that the omnibus opinion of the
majority is a straddle over the baseless finding that Maria
Florentino died in 1892 and the assumption that she died in
1885. Since she could not have died twice and the date of
her demise was properly raised as an issue in this case
the equivocal position thus taken rests on no solid factual
foundation. Straddling and tottering as it is on shaky ground,
the opinion as a whole appears to me untenable and its
validity questionable. Did Maria Florentino pass away in
1892? or based on the assumption that she died in 1885 is a
mere obiter dictum; and if she died in 1885, then Part I of
the opinion based on the assumption that she died in 1892
is likewise a mere obiter dictum. Thus it is not permissible
for the Court to straddle the issue.
There is absolutely no basis in the evidence for the
finding that Maria Florentino died in 1892. Indeed in its
findings of fact the Court of Appeals made no mention of the
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LAW ON PROPERTY

date of Maria Florentino's demise, but in its conclusion of

law the year she died was incidentally mentioned in the
following manner:
. . . Habiendo pasado la propiedad de la casa de
mamposteria a los demandantes, a la muerte de Maria
Florentino, ocurrida en 1892 (el damandado sostiene que
fue con anterioridad a 1889), no hay duda ninguna de que
los demandantes adquirieron la servidumbre de luces y
vistas sobre el camarin del demandado mediante titulo y por
prescripcion (Art. 537).
The indirect statement to the effect that Maria
Florentino died in 1892 was not based on any evidence but
solely on the conjecture indulged in by counsel for the
respondents in his brief: That she must have died in the year
1892 because the respondent Gabriel Florentino testified
during the trial as to facts of his own personal knowledge,
and since he was fifty-eight years old when he testified in
1938, it must be presumed that he was at least twelve years
old when his aunt Maria Florentino died, and that therefore
the death of the latter must have occurred in the year 1892.
Such deductions were absurd on their face and the Court of
Appeals clearly committed an error of law in adopting them.
A finding of fact must be based on competent proofs not
on a mere conjecture.
The respondents themselves alleged under oath in
their original as well as in their amended complaint (but
were silent as to this in their second amended complaint)
that the death of Maria Florentino occurred in the year 1888.
No evidence was presented during the trial as to said date,
but nevertheless the trial court applied the Civil Code. The
petitioner as appellant before the Court of Appeals
contended that the Partidas and not the Civil Code was the
law applicable. It was then that respondents (appellees
below) tried to show by deduction and conjecture that Maria
Florentino must have died in 1892. To rebut that, appellant
and his attorney made inquiries as to the true date of Maria
Florentino's demise and discovered from the church record
of burials as well as from her gravestone that she died on
September 7, 1885, and was buried on the following day,
September 8, 1885. They alleged in their affidavit that they
had been unable to ascertain that date before on account of

the misleading allegation in appellees' complaint that Maria

Florentino die in 1888. A certified copy of the partida de
entierro as well as a photograph of the gravestone showing
the inscription of the date of Maria Florentino's death, were
offered by appellant in a motion for new trial filed in the
Court of Appeals on March 4, 1940; and on March 14, 1940,
the Court of Appeals ordered that said motion, together with
the exhibits accompanying it, "be attached to the record
and brought to the attention of the Court when the case is
considered on its merits." Nevertheless the Court of Appeals
either ignored or overlooked said motion and the
documentary evidence accompanying it when it considered
and decided the case on the merits. Under section 2 of Rule
55, as well as under sections 497 of Act No. 190, the court
should have considered the new evidence together with that
adduced in the trial below. Thus, I think it cannot be doubted
that Maria Florentino died on September 7, 1885, more than
four years before the Civil Code took effect.
The majority seem to feel bound by the conjecture
indulged in by the respondents and adopted by the Court of
Appeals that Maria Florentino died in 1892, considering it as
a finding of fact by the Court of Appeals. I beg to differ. A
statement of fact not based on any proof whatever should
not be accepted by this Court, especially when, as in this
case, it is indubitably shown to be contrary to the truth.
It is said that the church record of Maria Florentino's
burial and the photograph of her gravestone showing the
inscription:
D. O. M.
AQUIYACEN LOS RESTOS MOORTALES DE
D. BONIFACIO F. ANATASIO
FALLECIO EN 26 DE OCTUBRE DE 1890
Y SU ESPOSA
Da MARIA FLORENTINO
QUE MURIO
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EN 7 DE SETIEMBRE DE 1885
RECUERDO DE
Da ENCARNACION FLORENTINO
are not newly discovered evidence because they
"could have been discovered by petitioner before the trial in
the Court of First Instance by the exercise of due diligence."
I disagree again. There was no incentive on the part f the
petitioner to look for evidence of the exact date of Maria
Florentino's demise while the case was being tried in the
court below, for the respondents themselves alleged under
oath in their original and amended complaints that she died
in 1888, i.e., before the Civil Code took effect, and
introduced no evidence whatever that she died after 1889. It
was only when the respondents in their brief before the
Court of Appeals tried to show by mental acrobatism that
she must have died in 1892 in order to justify the
application of the Civil Code, that the petitioner became
interested in finding out the exact date of her death in order
to impugn that contention. Under the circumstances, I
entertain no doubt that the proofs offered may be
considered newly discovered within the purview of our
procedural law. After all, the rules of evidence are but a
means to an end to help establish the truth. To illustrate
the irrationality of applying the rules of evidence too rigidly,
let us suppose that an accused has been convicted of
murder and sentenced to death, but during the pendency of
his appeal his counsel discovers that the alleged victim is
living and in good health, and counsel offers to prove that
fact and even presents the "murdered" man in person
before the court. Should this Court reject the offer of proof
and affirm the death sentence simply because the appellant
could have discovered the existence of the alleged victim by
the exercise of due diligence? Judging from the opinion of
the majority in this case, it should. What a travesty on
justice
As a last argument on this point the majority say:
Lastly, the issue as to the date of Maria Florentino's
death cannot be raised for the first time on appeal.

Petitioner did not in the trial court allege or prove this point.
He presented this issue for the first time in the Court of
Appeals. (Sec. 497, Act. 190)
That is incorrect. Plaintiffs had the burden of proof.
They are the ones who invoke the Civil Code. It was up to
them to prove that the transaction took place after 1889.
They realized that only during the appeal and, to supply
their omission and even contradict their own sworn
allegation, they resorted to amazing deductions from the
age of one witness. So it was the respondents who
"presented this issue for the first time in the Court of
Appeals." The petitioner had the right to meet in then and
there.
Since I cannot ignore the glaring fact that Maria
Florentino died not in 1892 but in 1885, I cannot give my
assent to the application of article 541 of the Civil Code to
the controversy between the parties. I therefore regard all
the profuse discussions of the law and citations of
jurisprudence found in Part I of the majority opinion as
purely academic.
Part II of the opinion is based on the assumption that
Maria Florentino died in 1885. Here I agree with my
esteemed colleagues on the factual basis but not on the
legal conclusions.
The transitory provisions of the Civil Code, Rules I and
2, provide that "rights vested under the legislation prior to
this Code by virtue of acts which transpired while it was in
force, shall be govern by such prior legislation even if the
code should otherwise provide with respect thereto, or
should not recognize such rights"; and that "acts and
contracts executed under the prior legislation, and which are
valid in accordance therewith, shall produce all their effects
as by these rules." The prior legislation referred to, insofar
as this case is concerned, was none other than the Partidas.
How were easements acquire under the Partidas? In
three ways only: By contract, by testament, or by
prescription. (See law 14, title 31, Partida 3.) There was no
provision in the Partidas similar to article 541 of the Civil
Code regarding the creation or acquisition of an easement
Page 306 of 404

LAW ON PROPERTY

thru the establishment of an apparent sign thereof by the

owner of two estates.
In their second alternative opinion the majority say
that easement in question was constituted by an implied
contract among the heirs of Maria Florentino under law 14,
title 31, Partida 3. The law cited mentions "contract" and not
"implied contract." As a source of right or obligation,
"contract" is entirely different from "implied" contract." The
former is based upon the mutual consent of the parties,
supported by a lawful consideration, and with a definite
subject matter, as, for instance, a contract of lease (articles
1254 and 1261, Civil Code); while the latter is merely
imposed or implied by law from an act performed or
committed by one of the parties without the consent and
even against the will of the other, as, for instance, the
obligation of an embezzler to indemnify his victim and the
right of the latter to demand such indemnity. The mere fact
that one has used the property of another by tolerance or
implied consent of the latter can never give rise to an
implied contract under which the former may assert and
enforce a right to the continued use of that property against
the owner.
Next it is said: "Granting for the sake of argument that
this easement was not created through an implied contract
according to Law 14, Title 31, Partida 3, yet that provision of
the Partidas was not inconsistent with the principle in
question, so that there was a gap in the Partidas which the
Supreme Court of Spain filled up from the Roman Law and
modern codes by recognizing the existence of this kind of
easement." (The principle referred to is that embodied in
article 541 of the Civil Code.)
Under this alternative argument it is admitted that the
Partidas (the pre-Civil Code legislation) contained no
provision similar to article 541 of the Civil Code and hence it
was necessary (?) to import a principle from the Roman Law
in order to fill "a gap in the old legislation" as was done by
the Supreme Court of Spain. in the last analysis, the
alternative opinion applies to this case not the previous
legislation as required by the Civil Code transitory provision
but a principle of law imported from ancient Rome.

I disagree as to the necessity for such importation and

"filling the gap" in order to justice to the parties in this case.
Let us consider the facts: Before Maria Florentino died on
September 7, 1885, she owned a parcel of land in the
commercial center of Vigan on which were built a house and
camarin. The camarin was one story and the house two
stories high. Naturally, it was convenient for her to open
windows on that side of the house overlooking the camarin
so long as she did not decide to rebuild and raise the latter.
The pivotal question is, Did those windows constitute
an apparent sign of easement of light and view in favor of
the house and against the camarin under the legislation in
force here at that time, so that upon the subsequent division
of the two estates that sign would constitute a title of and
create such an easement? The negative answer is
inescapable because the Partidas, unlike the Civil Code,
contained no provision supporting the affirmative. But my
learned colleagues, emulating the Supreme Court of Spain in
similar cases, apply principle of the Roman Law to "fill the
gap" and justify the affirmative. The practical result of such
"filling the gap" is to give retroactive effect to article 541 of
the Civil Code, in violation of the transitory provision. The
laws of Spain did not ex propio vigore apply to the
Philippines. They had to be expressly extended here by
Royal Decrees. Witness the Civil Code, the Partidas, etc.
That being so, the opinion of the Supreme Court of Spain
could not and did not have the force of law in the
Philippines. For this reason, I cannot agree with what the
majority say that "we cannot reject a doctrine established
by the Spanish Supreme Tribunal as an integral part of the
Spanish law before the promulgation of the Civil Code in
1889." I know of no Royal Decree making such doctrine an
integral part of the Spanish law in the Philippines.
If we do not apply article 541 of the Civil Code and
we cannot apply it because Maria Florentino died in 1885
there is really a gap in the case for the respondents, but
none in the case for the petitioner. 1 Under the Partidas, or
rather in the absence of an express provision therein similar
to article 541, the petitioner should win; and since the
parties litigant herein are entitled to have their case decided
in accordance with the pre-Civil Code legislation in force in
the Philippines as provided in the transitory provisions, since
Page 307 of 404

LAW ON PROPERTY

that legislation without any "gap-filling" is in favor of the

petitioner, and since to "fill the gap" would prejudice him
and unduly favor the respondents, the Court should abstain
from so doing as a matter of law and justice.
I repeat that as a matter of law and justice the Court
should not go out of its way to "fill a gap in the Partidas" by
resorting to a principle in the Roman Law which was not a
part of the law of this country at the time the transactions
involved took place, and for which reason it could not have
been in the mind of the parties. How can we charge Maria
Florentino with knowledge of that principle of the Roman
Law, or even of the decisions of the Spanish Supreme Court,
when she constructed the windows in question? How can we
make that principle binding upon her heirs, or assume that
they acted in accordance therewith, when they took
possession of their respective hereditary portions upon her
death on September 7, 1885? Who knows but that had they
been apprised of such a principle of Roman Law and told
that it would be held binding on them they would have
closed the windows in question or made an agreement
regarding its continuance as long as the camarin was not
rebuilt?lawphil.net
It is argued that, as the Supreme Court of Spain has
held, the principle in question is not inconsistent with the
provisions of the Partidas regarding the mode of acquiring
and extinguishing easements. To that I reply: Is the Court
authorized to amend the law by adding thereto a provision
not inconsistent therewith and, what is worse, make the
amendment retroactive? The Supreme Court of Spain of the
last century apparently thought so, but as I cannot agree
with it I must disregard its voice and follow the light of my
own reason in the premises. By adopting and following the
doctrine of the Supreme Court of Spain the majority of this
Court have, I fear, established here a pernicious precedent.
Hereafter no one in this country can safely rely on our codes
and statutes as enacted by our own legislature, for the court
may at any time read into them any provision or principle of
law of any other jurisdiction even of ancient and archaic
Rome so long as such provision or principle is not
inconsistent therewith; altho, if we would stop and reflect for
a moment, we should realize that, logically and legally
speaking, any provision not included in the law must

necessarily be considered inconsistent with the legislative

will, for the legislature has not seen fir to incorporate i
therein. "That is unfair! It is absurd! No court would do that!"
you would protest. Then, I ask, "why do you do it in the
instant case?"
As a third alternative opinion (Part III) the majority
hold that the easement in question has been acquired by
respondents thru prescription. This opinion, however, is
predicated upon the assumption that the opening of the
windows in question constituted an apparent sign of the
positive easement of light and view, thus making the period
of prescription run from the date of the demise of the
original owner. But as we have seen , that assumption is
wrong because it is promised upon the improper and
unlawful application of either article 541 or its equivalent
principle derived from the Roman Law and adopted by the
Supreme Court of Spain. Without such assumption, the
period of prescription in this case commenced to run only
from January, 1938, when the petitioner began the
construction of the new house and when it is supposed the
respondents for the first time made a formal prohibition
against the petitioner's raising his building and obstructing
respondents' light and view, in accordance with the Yu-Tibo
case cited in the majority opinion. Hence I think the
prescription theory is also untenable.
"Filling the gap" is particularly unfortunate and
disastrous in the present case because as a consequence
the petitioner will be compelled to tear down a portion of his
newly built strong-material house, which in the present
emergency, for lack of building materials, he will be unable
to repair or patch up, thus not only causing him unnecessary
loss and hardship but also leaving the torn-off new building
for the public to gape at and be scandalized with. The good
Ilocanos would perhaps not be able to understand why, on
top of wanton and horrible daily destructions by bombs now
savagely going on in this war-torn world, the Court should
find it necessary to add another without any apparent
substantial or material benefit to anybody. "Verily," they
would say, "this is a made world!"
In this age of fluorescent lights and air conditioning
devices, the concommitant easements of light and view and
Page 308 of 404

LAW ON PROPERTY

altius non tollendi would seem to be only a deterrent to

economic progress and should not be considered
established except when the law applicable clearly so
justifies.
For the foregoing reasons I vote for the reversal of the
judgment appealed from.
PARAS, J., concurring:
I concur in the foregoing dissenting opinion of Mr.
Justice Ozaeta,
Footnotes
1 By special designation.
OZAETA, J., dissenting:
1

That is why respondents tried to show that Maria

Florentino lived seven years longer that she did.
ARTICLE 627
G.R. No. L-23810
December 18, 1925
CATALINO VALDERRAMA, plaintiff-appellee,
vs.
THE NORTH NEGROS SUGAR CO., INC., defendantappellant.
-------------------------G.R. No. L-23811

December 18, 1925

EMILIO RODRIGUEZ, plaintiff-appellee,

vs.
THE NORTH NEGROS SUGAR CO., INC., defendantappellant.
-------------------------G.R. No. L-23812

December 18, 1925

SANTOS URRA ET AL., plaintiffs-appellees,

vs.

THE NORTH NEGROS SUGAR CO., INC., defendantappellant.

Ross, Lawrence & Selph and Antonio T. Carrascoso, Jr.,
for appellant.
Camus & Delgado for appellees.

VILLAMOR, J.:
As appears from the record, on November 17, 1916,
several hacienda owners Manapla, Occidental Negros
entered into a contract with Miguel J. Osorio, known as
milling contract, wherein Osorio agreed to install in
Manapla a sugar central of a minimum capacity of 300
tons, for grinding and milling all the sugar cane to be
grown by the hacienda owners, who in turn bound
themselves to furnish the central with all the cane they
might produce in their estates for thirty years from the
execution of the contract, all in accordance with the
conditions specified therein.
Later on, the defendant North Negros Sugar Co., Inc.,
acquired the rights and interest of Miguel J. Osorio in the
milling contract aforesaid.
Two years thereafter, that is to say, on January 29, 1919
Catalino Valderrama (case No. 23810) and on February
1st of the same year, Emilio Rodriguez (case No. 23811)
and Santos Urra, Ignacio Benito Huarte, Adolfo Huarte
and Pedro Auzmendi (case No. 23812) made with the
appellant other milling contracts identical with the first
one of November 17, 1916, with some new conditions
which are specified in detail in the aforesaid documents
Exhibit A and 1. Santos Urra thereafter transferred to
Pedro Auzmendi, and the latter to Lorenzo Echarri, their
interest in the milling contract executed by them.
In view of the fact that the hacienda owners, who were
up to that time customers of the central, could not
furnish sufficient cane for milling, as required by the
capacity of said central, the defendant made other
milling contracts with various hacienda owners of Cadiz,
Page 309 of 404

LAW ON PROPERTY

Occidental Negros, in order to obtain sufficient cane to

sustain the central; and this gave rise to the plaintiffs
filing their complaint, alleging that the easement of way,
which each of them has established in his respective
hacienda, was only for the transportation through each
hacienda of the sugar cane of the owner thereof, while
the defendant maintains that it had the right to
transport to its central upon the railroad passing through
the haciendas of the plaintiffs, not only the sugar cane
harvested in said haciendas, but also that of the
hacienda owners of Cadiz, Occidental Negros.
The plaintiffs, in separate complaints, prayed the Court
of First Instance of Occidental Negros to pronounce
judgment, holding that the defendant had no right,
under the easement or otherwise, to cause its
locomotives and wagons to run across the estates of the
plaintiffs for the purpose of transporting sugar cane of
any agriculturist of Cadiz, Occidental Negros.
The defendant answered the amended complaints,
admitting some allegations thereof and denying others.
And as special defense, it alleged that the plaintiffs
respectively granted the defendant, for the period of
fifty years from the date of the aforesaid contracts, an
easement of way 7 meters wide upon the lands of the
plaintiffs for the construction and operation of a railroad
for the transportation of sugar cane; that said easement
of way was established without any restriction
whatsoever, as regards the ownership of the cane to be
transported over the said railroad; that said contract
was then in full force and effect and had never been
annulled or modified.
After hearing the three cases, the trial court entered one
single judgment for all of them, holding that the
defendant had no right to pass through the lands of the
plaintiffs described in their amended complaints for the
transportation of sugar cane not grown from any of the
haciendas of the plaintiffs. From this judgment, the
defendant appealed.

In view of the similarity of the facts and questions raised

in the three complaints, they will herein be considered
jointly, as was done by the trail court.
The parties agree that the only question herein involved
is as to the extent of the easement of way which the
plaintiffs have established in their respective haciendas
in favor of the defendant, and therefore it is important to
know the terms in which such easement of way was
established.
In the contract executed by the plaintiff Valderrama with
the defendant on January 29, 1919, there appears: "6th.
That in order to have the obligations herein entered into
by Mr. Valderrama duly registered, in regard to the rural
estates belonging to him and which are described
hereinafter, an easement of way 7 meter wide and for
the period of 50 years from the date hereof is hereby
created in favor of the 'North Negros Sugar Co., Inc., '
upon his property hereinafter described, at such place
as said corporation may see fit for the construction of a
railroad."
And in the contract of the plaintiff Rodriguez of February
1, 1919, there also appears" "6th. That in order to have
the obligations herein entered into by Mr. Emilio
Rodriguez duly registered, in regard to the rural estates
belongings to him which are herein described, an
easement of way 7 meters wide and for the period of 50
years from the date hereof is hereby established by said
Mr. Emilio Rodriguez in favor of the 'North Negros Sugar
Co., Inc.,' upon his estate aforementioned, at such place
as said corporation may see fit for the construction of a
railroad."
And lastly in the contract of Santos Urra and others of
February 1, 1919, there likewise appears: "7th. That in
order to have the obligations herein entered into by
Santos Urra, Ignacio Benito Huarte, Adolfo Huarte and
Pedro Auzmendi duly registered in regard to their estate
hereinafter described, an easement of way 7 meters
wide and for the period of 50 years from the date hereof
is hereby established in favor of the 'North Negros Sugar
Co., Inc.,' upon their estate hereinafter described, at
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LAW ON PROPERTY

such place as said corporation may see fit for the

construction of a railroad."lawphi1.net
As may be seen, the question raided depends upon the
interpretation to be given to the clause of the contracts
of the plaintiffs above quoted. The plaintiffs allege that
the aforesaid clause is ambiguous, and under the first
exception of section 285 of the Code of Civil Procedure,
they have the right to introduce extraneous evidence to
explain the true intent of the parties. And it is
ambiguous, according to them, because it may applied
to the transportation of the cane of the plaintiffs or other
producers, which is contrary to the intent of the
contracting parties. If the above quoted clause is
ambiguous, the plaintiffs have the right to introduce
circumstantial evidence to explain the true intent of the
parties, but it our opinion said clause is clear enough in
its terms to express what the parties have intended to
agree upon. Had the clause mentioned only an
"easement of way," there might be a doubt as to
whether or not the easement of way is for pedestrians,
horsemen or carriages. But when the clause says:
"easement of way 7 meters wide for the period of 50
years for the construction of the railroad," there can be
no doubt about what the contracting parties have
agreed upon, to wit, that the plaintiffs have created
upon their respective haciendas at a suitable place an
easement of way 7 meters wide and for a period of fifty
years, in order to enable the defendant to build and
maintain a railroad for the transportation of sugar cane
to the central. It is clear that the cane of the plaintiffs
was to be transported upon the railroad to the central;
but to limit the use of the road exclusively to the cane of
the plaintiffs and within their respective haciendas
would make the contract in question ineffective, except
as to the hacienda which is contiguous or nearest to the
central.
The object of such a milling contract, from which arises
the easement in question, is undoubtedly to obtain
mutual benefit to the procedures of sugar cane and the
corporation putting up the central. It is only by taking
this principal idea into account that it may be conceived
why the parties had come to an agreement to assume

such obligation as are set forth in the milling contract.

But the contract could not produce any benefit to the
parties, if the explanation given by the plaintiffs would
be admitted, as to their intention in creating the
aforesaid easement of way upon their respective
haciendas, that it was only in favor of their respective
haciendas. Such an explanation is inadmissible because
it is contrary to the object of the milling contract.
It is against the nature of the easement to pretend that
it was established in favor of the servient estates,
because it is a well settled rule that things serve their
owner by reason of ownership and not by reason of
easement.
This is a case of an easement for the benefit of a
corporation, voluntarily created by the plaintiffs upon
their respective estates for the construction of a railroad
connecting said estates with the central of the
defendant. Once the road is constructed, the easement
is apparent because it is continuously exposed to view
by the rails which reveal the use and enjoyment of said
easement. It is evident, as above stated, that the cane
of the plaintiffs if to be transported to the central by
means of wagons passing upon the railroad; but as the
easement was created for the benefit of the corporation,
owner of the central, it may cause its wagons to pass
upon the road as many times as it may deem fit,
according to the needs of the central. If the plaintiffs do
not produce sufficient cane to cover the capacity of the
central, it would be unjust to impose upon the defendant
corporation the burden of maintaining a central,
prohibiting it to obtain from another source sufficient
cane with which to maintain its business; this is specially
true here, because in the milling contract with the
plaintiffs, there is nothing to prohibit the defendant from
making milling contracts with other planters, and obtain
in that way all cane necessary to cover the capacity of
the central.
Another reason advanced by the appellees in support of
their theory is that by transporting upon the road,
through the servient estates, the cane of the planters of
Cadiz, it would alter the easement, making it more
Page 311 of 404

LAW ON PROPERTY

burdensome. It is true that the owner of the dominant

estate, in making on the servient estate the necessary
works for the use and preservation of the easement,
cannot alter it, nor make it more burdensome (art. 543
of the Civil Code); but this does not mean that the
defendant cannot transport in the wagons passing upon
the railroad other cane that of the plaintiffs. What is
prohibited by the legal provision above cited is that the
defendant, in excavations or building materials outside
of the area of 7 meters, because in the first case, the
easement will be altered, and in the second it would
become more burdensome. But nothing of the kind
happens when the defendant transport on the railroad,
crossing the servient estates, the cane of the planters of
Cadiz; the railroad continues to occupy the same area
on the servient estates, and the incumbrance resulting
from the easement continues to be the same, whether
the tractors traverse the line 10, 20 or 30 times a day
transporting cane for the central.lawphi1.net
Furthermore, the record shows a circumstance indicating
that at the time of the execution of the milling contracts
above referred to, there was no intention of the part of
the contracting parties to limit the use of the railroad to
the transportation of cane grown by the plaintiffs in their
respective haciendas, and that is because, while the
duration of the milling contracts is fixed at thirty years,
that of the easement is at fifty. So that if at the end of
thirty years the plaintiffs or their successors should no
longer desire to furnish canes for milling in the central of
the defendant, the latter shall still have the right to the
easement for the remaining period, but without
transporting on the railroad any cane for the central. An
interpretation of the clause in question leading to such a
result is untenable.
For the foregoing, we are of the opinion that the trial
court erred in finding that the appellant could not
transport on its railroad passing through the haciendas
of the appellees, where it has an easement of way
established in its favor, the cane grown in the haciendas
of the procedures of Cadiz, Occidental Negros, to be
milled in the central of the appellant. And, therefore, the
judgment appealed from must be reversed and the

appellant absolved, as it is hereby absolved, from the

complaint, without special pronouncement as to costs.
ARTICLE 629
G.R. No. 72837 April 17, 1989
ESTER JAVELLANA, ROLANDO DEMAFILES, CESAR
CRUZADA and ANTONIO SISON, petitioners,
vs.
HON. INTERMEDIATE APPELLATE COURT, 4th CIVIL
CASES DIVISION, MARSAL & CO., INC., and MARCELINO
FLORETE, SR., respondents.

PARAS, J.:
Before Us is a Petition for certiorari to review the
Decision 1 dated August 14,1985 promulgated by
respondent Intermediate Appellate Court in AC-G.R. C.V.
No. 03781 which set aside the decision 2 rendered by
the Regional Trial Court, 6th Judicial Region, Branch
XXVI, Iloilo City, dated December 15, 1983 in Civil Case
No. 12791.
The case at bar arose from a complaint for recovery of
damages filed by Marsal & Co., Inc. and Marcelino
Florete, Sr. (private respondents herein) against
defendants Jose C. Hernani, Ester J. Javellana, Rolando
Demafiles, Cesar Crusada and Antonio Sison for
allegedly denying plaintiffs' access to, and use of a canal
leading to plaintiffs' property and to enjoin the City
Mayor and City Engineer of Iloilo City from demolishing
the existing structures within plaintiffs property serving
as dike entrance gate to said canal situated at Barangay
Navais, Mandurriao, Iloilo City. Before the pre-trial
conference the complaint as against the City Mayor and
City Engineer, was dismissed at the instance of plaintiffs
on the ground that said defendants had agreed not to
demolish the pendency of the action.
At the pre-trial conference, on June 5,1979 the parties
stipulated:

Page 312 of 404

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... (1) that plaintiff Marsal & Co., Inc., is presently the
owner of the parcel of land adjoining the Iloilo River up
to and adjacent the lot where the L. Borres Elementary
School is located at Barangay Navais Mandurriao, Iloilo;
(2) that in 1961, when Marcelino Florete, Sr. was still the
owner of said Marsal property having acquired the same
by purchase from its former owners sometime in 1959,
there existed a main canal from the Iloilo River cutting
across said property towards the lot where the said
school is located and thru a canal that traverses the
school premises going towards Lot 2344; (3) that
sometime in July 1978, plaintiffs closed the dike
entrance of the main canal to the canal running across
the L. Borres Elementary School premises to Lot 2344;
(4) that on petition of school P.T.A. officials of Barangay
Navais, an ocular inspection of the premises was made
as a result of which a report dated November 7, 1978
was prepared and submitted by 2nd Asst. City Fiscal
Serafin Abogado; (5) that before 1971, there were no
houses standing within the school compound and
premises of L. Borres Elementary School; (6) that at
present, there are 15 to 16 houses in the said school
compound one of which is the house of the barangay
captain of Barangay Navais; (7) that some of those who
signed the petition (Exh. "7") are not residents or
occupants of the houses within the school compound;
(8) that the photograph (Exh. "A") is the aerial
photograph of the premises in question showing the
location of the L. Borres Elementary School, the
properties of the plaintiffs, the Iloilo River and the Borres
property; (9) that the plaintiffs had demolished the dike
connecting the main canal in plaintiffs' property with the
canal running thru the school premises toward 2344;
and (10) that defendant Director Jose C. Hernani had
invited plaintiff Marcelino Florete, Sr. for conference
concerning the complaint of the residents of Barangay
Navais on July 28, and 31, 1978 as per Exhs. "9" and
"10" (pp. 35-36, Rollo)
The issues as defined by the parties are:
(1) Whether or not them main canal and the canal
traversing the premises of the L. Borres Elementary
School going towards Lot 2344 existing only beginning

1961 as claimed by the plaintiffs or since time

immemorial as contended by the defendants; (2)
Whether or not it was plaintiff Marcelino Florete, Sr. who
had constructed the main canal as well as the canal
running thru the premises of the L. Borres Elementary
School to Lot 2344; (3) Whether or not the closing of the
dike entrance connecting the main canal with the canal
running thru the school premises caused the flooding of
the premises of L. Borres Elementary School and its
vicinity; (4) whether or not an easement or servitude of
water-right-of-way was constituted on the property of
the plaintiffs as servient estate in favor of the L. Borres
Elementary School land and nearby lands as dominant
estates; (5) Whether or not defendants acted in their
respective private or official capacities in dealing with
the problem related to the canals in question; (6)
Whether or not the defendant Ester Javellana had
denied plaintiffs the use of the canal running from the
main canal thru the school premises to Lot 2344 of the
plaintiffs; (7) Whether or not the demolition or closure
by plaintiffs of the entrance-dike connecting the main
canal with the canal running thru the L. Borres
Elementary School preventing the free flow of water to
and from the school premises and vicinity violates the
provisions of Presidential Decree 296; and (8) Whether
or not either party may be held liable to the other for
damages. (Rollo, pp. 35-37)
After due trial, judgment was rendered by the trial court,
the dispositive portion reading as follows:
WHEREFORE, judgment is hereby rendered dismissing
plaintiffs' complaint.
On defendants' counterclaim, the plaintiffs are hereby
ordered to restore and reopen the dike entrance
connecting the main canal with the canal running thru
the premises of L. Borres Elementary School and to
demolish any and all structures within plaintiffs' property
that impede the free flow of water to and from the Iloilo
River thru the said canals.
Further, plaintiffs Marsal & Co., Inc. and Marcelino
Florete, Sr. are hereby ordered to pay, jointly and
Page 313 of 404

LAW ON PROPERTY

severally, each of the defendants, Jose C. Hernani, Ester

J. Javellana, Rolando Demafiles, Cesar Cruzada and
Antonio Sison, the following sums, to wit: (1) P10,000.00
for moral damages and (2) P2,500.00 for exemplary
damages and (3) P2,500.00 for and as attorney's fees of
the total sum of P15,000.00 each, plus costs.
SO ORDERED.
(P. 46, Rollo)
Not satisfied with said judgment, plaintiffs appealed to
the Intermediate Appellate Court which rendered the
assailed decision, its dispositive portion stating as
follows:
WHEREFORE, finding the decision appealed from not
consistent with the facts and the law applicable, the
same is hereby set aside and another one entered1. Granting the issuance of the writ of preliminary
injunction sought in the complaint to become permanent
upon the finality of this decision;
2. Ordering the defendants-appellees to respect
plaintiffs' rights and to refrain from demolishing and/or
causing the demolition of the dikes built by plaintiff
(Florete, Sr.) on his property;
Costs de oficio.
SO ORDERED. (pp. 57-58, Rollo)
Petitioners contend that the decision of the Appellate
Court is contrary to law, its conclusions based entirely
on speculations and conjectures and there is grave
abuse of discretion in that the findings of fact are
without competent evidence to support them.
Petitioners argue that the respondent Appellate Court
erred in holding:
I

That the canal in question was built by plaintiff-appellant

purposely to make water available to its own Lot 2344.
(Decision, p. 8)
II
That the plaintiff-appellant is the one that has the right
of easement upon the lot occupied by the barrio school.
Plaintiff-appellant is thus the dominant estate and not
the L. Borres Elementary School. (Decision, p. 8)
III
That the school, in violation of the said easement,
allowed other parties to use the canal for salt production
in competition with the salt business of plaintiffappellant which is conducted in Lot 2344. (Decision, p.
8)
IV
That the canal which traverses plaintiff's property never
benefitted the school. It was only after plaintiff built the
canal starting from its fishpond up to its other property
that the school benefited from the water coming from
the river. (Decision, p. 10)
V
That aside from the plaintiff's property there is another
parcel of land which is more than adequate to provide
the drainage sought by the defendants and this is the
Borres property. (Decision, p. 10)
The petition is worthy of consideration. In the Appellate
Court's decision, it is noted that said court relied heavily
on the findings of facts of the trial court even to the
extent of quoting such findings in its decision in support
of its ruling. However, the conclusions reached by both
courts were different. Petitioners now question the
correctness of the conclusions drawn by the respondent
Court of Appeals from the proven facts enumerated by
the trial court. This determination as to the correctness
of the conclusions drawn from the pleadings is a
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LAW ON PROPERTY

question of law which this Court is authorized to pass

upon. There is no question of fact here because the facts
are admittedly proven. Said facts are reproduced
hereunder:
The Court finds from the evidence that the main canal
had been in existence long before defendant Marcelino
Florete, Sr. acquired ownership of the land thru which
the same passes from the Iloilo River up to the premises
of what is now known as the L. Borres Elementary
School. This fact was clearly brought to light by the
testimonies of at least three witnesses, including a
member of the Maranon family from whom Florete, Sr.
acquired the land, in addition to the testimony of
defendant Antonio Sison, Barangay Captain of Barangay
Navais where the subject canal is situated.
The Court, indeed, finds no reason to doubt the
testimonies of these witnesses not only because they
ring true throughout but also because the same
emanate from reliable sources who had been actual
residents of the place, having had occasions to take
their bath in the same canal and with separate
individual experiences incident thereto to relate.
Severo Maranon, a public school teacher and one of the
children of the late Buenaventura Maranon, a co-owner
of the fishpond purchased by plaintiff Florete, Sr.
testified that as early as 1948, when he was about 6
years old, he already knew the subject canal that passes
thru their fishpond at Barangay Navais from the Iloilo
River towards the premises of the school. On one
occasion in 1954, while taking a bath in this canal when
still a young boy, he nearly drowned, reasons for which
he has not forgotten the said canal.
Another witness, Ignacio Gencianeo, 75, a former
employee of the Bureau of Public Highways, testified
that when he was still single, being a resident of
Barangay Navais, he used to take a bath in the canal
near the Iloilo River which is deeper than the other
portions. He recalled an incident where a woman,
named Toribia Tajaon, while picking shells at the sides of
the dikes, fell into the canal and nearly got drowned had

he not helped her. He last took a bath in the canal in

1937 before he got employed at the Bureau of Public
Highways.
Witness Gencianeo also testified that he was then the
Barrio Captain of Navais when the Barrio School was
constructed in 1940 on the land owned by Lucas Borres.
Francisco Regacho, 56, testifying for the defendants,
declared that in 1948, his house was located beside the
canal near the Iloilo River and the land thereat was then
owned by Buenaventura Maranon. When the barrio
school was constructed in 1940, he worked filling sand
on the school site. He was able to lease the school
fishpond from 1973 to 1977. This fishpond draws its
supply of salt water from the canal coming from the
Iloilo River. He had previously worked this main canal in
1948 as part of his job in the fishpond of Buenaventura
Maranon fixing its dikes in order to make water flow
freely towards the fishpond of the Maranon family.
Witness Regacho further declared that when defendant
Marcelino Florete, Sr. became owner of this Maranon
fishpond, he was able to work on this canal where he
dug the canal deeper up to Florete's land. He testified
that during high tide the water in the canal was only
about 1/2 meter deep and there was no water during
low tide and so Florets made the canal deeper.
Regacho also testified that there are two canals within
the school premises, one going towards the land of
Florete and the other to the land of Mirasol. These two
canals met at the place where Florete closed the canal.
The canal going towards Florete's land and that to
Mirasol's land serve to empty rainwater to the Iloilo
River. He further confirmed that the school fishpond has
no other source of salt water except from the canal that
connect to the main canal that starts from the Iloilo
River.
For his part, defendant Antonio Sison, 54, testified that
he was born in Barangay Navais and has been its
barangay captain since 1954 continuously up to the
present. He first noticed the existence of the canal in
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LAW ON PROPERTY

1933 when he reached the age of reason at the age of 8

years, said canal being about 300 meters long from the
Iloilo River going towards the premises of the barrio
school and to the land now known as Lot 2344 owned by
Marcelino Florete. He also used to take a bath in this
canal when still a small boy.
Defendant Sison further declared that the brothers Pedro
and Buenaventura Maranon were then the owners of the
fishpond along which the canal runs starting from the
Iloilo River towards the school premises when the
Maranons sold the land to Florete sometime in 1959.
Florete was not the one who constructed the canal but
only made the same deeper.
This construction of Florete took place in 1961 when
Sison was also the barangay captain. He recalled
Francisco Regacho was one of those who worked in
making the canal deeper at the instance of Florete and
that no employee from the City Engineer's Office
inspected the canal during its repair undertaken by
Florete and where Alfredo Emboltorio, as the one who
managed the work in the canal.

No less than the defendants' evidence itself proved the

existence of the main canal. Thus, in his letter dated
June 26,1961 embodied in Resolution No. 715 dated June
27,1961 of the Municipal Board of the City of Iloilo (Exh.
"B") defendant Florete Sr. asked that he be allowed to
build a canal within the premises of the barrio school up
to his Lot 2344. It is not, therefore, a permit to build a
canal from the Iloilo River for otherwise, Florete would
have so stated in his said letter to the Board. This is so
because there already existed a main canal from the
Iloilo River. The canal traversing the school premises
was likewise then already existing but not so deep that
Florete wanted it constructed to be permanent. And in
making this canal deeper, he started not from the Iloilo
River but from his fishpond adjoining the school
premises towards his lot 2344, Florete testified thus:
Q. (Court) - From what point did you start?
A From our fishpond traversing the Borres Elementary
and then going to our lot. (TSN, July 5, 1979, page 22).

Defendant Sison went to see Pedro Maranon, who was

once a co-owner of the land where the main canal
passes, to request him to testify but the latter begged
off by reason of his health and old age and, instead,
executed an affidavit dated May 14, 1979 (Exh. "8")
certifying to the effect that "since before the war until
we sold the said land to Marcelino Florete, there exists a
canal from the Iloilo River cutting our property down
towards the lot where the school is located and thru a
canal that traverses the school premises. (par. 4. Exh.
"8")

Defendants presented in evidence a blueprint copy of

the Cadastral Map. B. L. No. 3 (Exh. "F") to show that no
natural waterway or creek existed in the pre that
connected the Iloilo River to the fishpond premises. But
this piece of evidence was rendered without any
probative value when plaintiffs also presented Teodoro
Simpas, Chief of the Surveys Division of the Bureau of
Lands, Region IV, who testified that creeks and esteros
are delienated in the cadastral map only if they are five
(5) or more meters wide and, even less than five (5)
meters wide, if there is continuous flow of water is to be
determined by the surveyor who made the survey.

It is thus clear from the testimonies of defendants'

witnesses that the main canal starting from the Iloilo
River and the canal traversing the premises of the L.
Borres Elem. School going toward lot 2344 existed long
before defendant Florete, Sr. acquired ownership of the
land of the Maranons and that, if at all, Florete merely
caused to be made deeper that portion traversing the
school premises.

Here, it has been duly established that the canal in

question starting from the Iloilo River is only about 3
meters wide for the first 100 meters long and then
measures about 2 meters wide until it reaches Lot 2344
with a length of about 200 meters. And it has been
shown that salt water coming from the Iloilo River flows
in the canal during high tide where the water in the
main canal reaches about one-half meter and about two
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LAW ON PROPERTY

(2) feet in the canal that traverses the school premises.

In ordinary days, no water flows in the canal that cuts a
the school premises . This explains why the canal in
question was not indicated in the cadastral map during
the 1913 survey. The canal is less than 5 meters wide
and did not have a continuous flow of water except
during high tide and during rainy season where it serves
as drainage and empties flood waters into the Iloilo
River.

Asst. Complaint & Acting Officer, Barangay City

secretariat and the 6th Indorsement (Exh. "'I") dated
November 7,1978 of 2nd Asst. City Fiscal Serafin L.
Abogado. These two officials were with the government
teams that conducted ocular inspection of the place
upon complaint of the residents therein and they
actually saw for themselves the flooded situation of the
place caused by plaintiffs' closure of the dike entrance of
subject canal.

Defendants' closure of the dike's entrance connecting

the main canal with the canal running thru the school
premises, therefore, caused the flooding of the premises
of the L. Borres Elementary School and its vicinity. This is
so because during rainy season, said canal also serves
as outlet of rain or flood waters that empties to the Iloilo
River. Witnesses Ignacio Gencianeo, Francisco Regacho,
Severo Maranon and Barangay Captain Antonio Sison
were unanimous in declaring so.

To be sure, the defendants acted in their official

capacities in dealing with the problem related to the
canals in question. It has been sufficiently established
that the school fishpond gets its supply of salt water
directly from the Iloilo River passing thru the canal that
traverses the school premises. Likewise, the residents of
the place produce salt thru the use of plastic sheets
using salt water drawn from the canal. Salt water in this
canal is fresh and clean as the tide changes from the
Iloilo River unlike in the fishpond nearby which is
stagnant and polluted and not suitable for salt- making.

In his attempt to show that the closing of the dike

entrance of the canal did not cause the flooding of the
school premises and its vicinity, plaintiffs' witnesses
Modesto Emboltorio, declared that flood in the school
fishpond immediately disappears because water recedes
to the Borres property. But it has been shown that the
adjacent Borres property is higher in elevation compared
to the school premises such that water in the school
premises cannot flow towards that area. And because
water has no other way out except thru the canal, the
school premises and its vicinity get flooded once it rains
and flood waters remain stagnant for days as shown by
the photographs exhibits "3" and "3-A" taken on August
24,1978 and Exhibits "10" and "10-A" taken on August
15, 1979. The said photographs Exhibits "l 0" and "10-A"
belied Emboltorio's testimony that there were no flood
waters in that area when he testified in Court in the
morning of August 14, 1979.
That the premises of the school and its vicinity were
flooded when it rained during the rainy season of 1978
immediately after the closing of the dike entrance of the
canal is further shown by the report (Exh. "4") dated
September 3, 1978 submitted by Carlos G. Brasileno,

The closure of the dike entrance of the canal deprived

the school fishpond as well as the residents of the place
of salt-water and placed the premises of the school and
the surrounding vicinity in danger of being flooded when
it rains so that the school officials, the defendants Ester
Javellana, as district supervisor, Cesar Cruzada as head
teacher and Rolando Demafiles as practical arts teacher
and the barangay captain, Antonio Sison only did what
were incumbent upon them to do as such school and
barangay officials when they complained to higher
authorities about the plaintiffs' closure of the canal in
question.
Indeed, there is no showing that the defendants school
officials were motivated by their own personal interests
when they complained against plaintiffs' action vis-a-vis
the canal. Their effort were all directed towards the
benefit of the school as well as for the school children
who, in one way or another, had been adversely affected
by the closure of the canal. These officials did not act
privately for themselves but for public good and public
interest. They expected no personal benefit in return.
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LAW ON PROPERTY

The same is true with the defendant barangay captain

Antonio Sison who merely complied with his duty
extending assistance to the residents of bringing their
complaint to the authorities concerned. It was his duty
to attend to the needs and problems of his barangay
and its residents. The closure of the canal did not only
deprive the residents of salt water for salt- making but
also posed danger to them as in fact, during the ensuing
rainy days in August of 1978, the place was flooded thus
endangering the health and safety of the residents
therein.
Then, too, defendant Col. Jose Hernani only did his duty
as head of the Office of Civil Defense in attending to the
complaint of the residents of the place. His office has
jurisdiction over cases of calamity, flood and the like
such that it was but proper, nay obligatory, on his part
to act on their complaint against the closure of the canal
that caused flood in Barangay Navais
The fact is that plaintiffs are without any justifiable
reason to close the canal. Defendants advanced that the
district supervisor, defendant Ester Javellana, wrote
Marcelino Florete Sr. a letter allegedly denying his use of
the canal that traverses the school premises reason for
which he closed the dike entrance and built an
underground canal on the other side of his property
going to his Lot 2344. But defendant Javellana explained
that there was no such denial. What she meant when
she wrote the letter to Marcelino Florete, Sr. was that
plaintiffs could not lay pipes underneath the canal.
Defendant Ester Javellana testified thus:
Q Could you inform the Hon. Court Mrs. Javellana what
impelled you to write Mr. Florete this letter?
A My head teacher informed that they were going to lay
or buy a 10 inch pipe in the canal which crosses the
school that canal to my office one morning Feb. 22.
Industrial Arts Teacher Mr. Rolando Demafiles and the
Head Teacher, Mr. Cesar Cruzada. They were excited.
There was already a 10 inch rubber tube running from
Iloilo River crossing to the school to the bed of Mr.

Florete. That they intend to bury and so I accompanied

them to L. Borres Elementary School and saw for myself
that there really was a 10 inch or 8 inch rubber pipe
running across the school and was about to be buried.
Q Why? Can you explain what would be the
disadvantage if Mr. Florete bury those pipes on the canal
that traverses the school?
A The school maybe deprived of the water for their
fishpond, that is one and the second, drainage canal
which drains the school in case of flood will not be
working anymore.
Q Now, in your letter, you mentioned here and I read
quote: Please sit down with us with Mr. Borres because
this lot of the school still belongs to Mr. Borres and the
Division Office denies your right of way, my question is
what do you mean when you say that the Division Office
denied your right of way?
A I meant they cannot bury a pipe depriving the school
of the water because the land does not belong to us yet.
In other words, the land does not belong to L. Borres
Elementary School although it is supposed to be
donated by L. Borres
Q But when you wrote this letter Mrs. Witness, did you
really stop or prohibit Mr. Florete from continuing the use
of the canal?
A No sir. (TSN, Oct. 17, 1979, pp. 5-6)
Mrs. Javellana sent that letter-invitation when she came
to know that water pipes were about to be laid
underground by plaintiffs in lieu of the open canal.
Plaintiff Florete Sr., however, did not come to the
conference nor sent any word or representative. Nor did
he attend to all other subsequent invitations related to
the canal although he knew said invitations or
conference conducted by the government offices
concerned.

Page 318 of 404

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As heretofore stated, the main canal had long been in

existence even before plaintiff Marcelino Florete Sr.
acquired ownership of the fishpond of the Maranons thru
which the same passes. This canal served as passage of
salt water from Iloilo River to the school fishpond and at
the same time, as outlet and drainage canal or channel
of rainwater from the school premises and adjacent
lands that empties to the Iloilo River. An easement or
servitude of water-right of way had thus been
constituted on the property of the plaintiffs as the
servient estate in favor of the L. Borres Elementary
School land and the nearby lands as the dominant
estates.
Even on the assumption that it was plaintiff Florete Sr.
who constructed the subject canal in 1961, an easement
or servitude of water-right-of-way had nonetheless been
constituted on subject property because since then the
same had been in continuous use for no less than fifteen
(15) years by the school fishpond as well as by the
adjacent lands. A positive easement (Art 616, New Civil
Code) had thereby been created and plaintiffs have no
right to terminate it unilaterally without violating Art.
629 of the New Civil Code which provides:
Art. 629: The owner of the servient estate cannot impair,
in any manner whatsoever, the use of the servitude.
Nevertheless, if by reason of the place originally
assigned or of the manner established for the use of the
easement, the same should become very inconvenient
to the owner of the servient estate, or should prevent
him from making any important works, repairs or
improvements thereon, it may be charged at his
expense, provided he offers another place or manner
equally convenient and in such a way that no injury is
caused thereby to the owner of the dominant estate or
to those who may have a right to the use of the
easement.
Plaintiffs, however, did not recognize, much less, follow
the above-quoted law on easement. They closed the
entrance of the canal and demolished portions of the
main dike thus impairing the use of the servitude by the

dominant estate. And by so doing, plaintiffs violated not

only the law on easement but also Presidential Degree
No. 296 which enjoins any person, natural or juridical, to
demolish structures or improvements which tend to
obstruct the flow of water through rivers, creeks, esteros
and drainage channels. For this canal did not serve
merely to supply salt water to the school fishpond but
also serves as drainage charged or channel of rainwater
from adjacent lands to the Iloilo River.
Before the canal was closed, the residents had not
experienced any flood in the area or in the school
premises. It was only after the canal was closed by
plaintiffs on July 25, 1978, that the residents began to
experience flood in the school premises particularly in
the month of August every year thereafter when rainy
season comes. Rainwater from adjoining areas
accumulate at the school premises without any chance
of going out. Flood waters remain stagnant for days and
became filthy and veritable breeding place of
mosquitoes.
Plaintiffs claimed that they closed the canal because the
residents of the place threw waste matter and garbage
into the canal and so the waters therein were dirtied and
rendered totally unsanitary for human use, particularly
for salt-making. But this claim was belied by defendants'
showing that what motivated plaintiffs to close the canal
was the fact that the residents engaged in salt-making
using plastic bags and thus, somehow, competed with
plaintiffs in the production of salt in the area. At any
rate, regardless of what motivated plaintiffs into closing
the canal, the fact is that plaintiffs act ran roughshod
over the aforequoted provisions of law on easement and
transgressed Presidential Decree No. 296.
On the issue of damages, therefore, the court is of the
view and so holds that plaintiffs are liable to the
defendants for moral damages, attorney's fees and
costs of litigation. It is bad enough that plaintiffs, after
closing the canal and thus depriving the school fishpond
and residents of the place salt water from the Iloilo River
and impeding the flow of rain and flood waters from the
school premises and adjacent lands to said river during
Page 319 of 404

LAW ON PROPERTY

rainy season, unjustifiably refused and failed to heed

defendants' plea for them to reopen said canal. Worse,
plaintiffs instituted the present action against the
defendants and dragged the latter into a court suit that
occasioned upon them worries, serious anxiety, fright
and mental anguish. No doubt, the defendants were
vexed to the utmost to find themselves faced with a
court suit when what they did was only to do what was
incumbent upon them to do as public officials committed
to serve public interest and welfare. What is more, they
were forced to secure the service of a private counsel as
they were sued also in their private capacities.
It is quite evident that plaintiffs filed the present action
in bad faith to preempt whatever appropriate legal
action the authorities could take under the
circumstances aware, as they were, that no less than
the offices of the City Fiscal of Iloilo and the City
Barangay Secretariat, after conducting ocular inspection
of the place together with other government
functionaries tasked with promoting the health, safety
and welfare of the people in the area, recommended
immediate appropriate action aimed at reopening the
canal.
The damages that could be adjudged in this case are,
however, limited only to the herein defendants. It may
be that the school fishpond was damaged and the
school PTA suffered actual damages in the form of lost
income therefrom. And so with the school children and
residents of the place reason for which defendants pray
that they should be compensated. But they are not
parties to this case hence, damages could not be
awarded to them. (pp. 37-46, Rollo)
After a careful reading of the aforementioned findings of
the trial court, there is no question that the two subject
canals had been in existence long before plaintiff Florete
bought his land from the Maranons. Respondent
appellate court cannot now disown it after quoting with
approval in the body of its decision the findings of the
trial court. This brings Us to the determination of the
other issue namely: which of the two (2) estates is the
dominant or servient estate, an issue which hinges upon

the conclusion reached by the trial court that the canals

were in existence long before Florete Sr. had acquired
that property from the Maranons. It has been
established that the main canal which is traversing the
property of Florete served as the passage of salt water
from the Iloilo River to the school fishpond and at the
same time, as an outlet and drainage canal or channel
of rainwater from the school premises and adjacent
lands that empty into the Iloilo River. Even assuming
that it was plaintiff Florete Sr. who constructed the
subject canal in 1961, an easement of water-right of way
had already been constituted on the property of the
plaintiffs as the servient estate in favor of the L. Borres
Elementary School premises and the nearby lands as the
dominant estates. Private respondents thus violated Art.
629 of the Civil Code when they closed the entrance of
the canal and demolished portions of the main dike thus
impairing the use of the servitude by the dominant
estates. The findings of the trial court are amply
supported by a careful and exhaustive consideration of
all available documentary and oral evidence including
ocular inspections as it was in the best position to do so.
Its legal conclusions are likewise unassailable. In view of
the well-settled rule that this Court is not a trier of facts,
We find no plausible reason not to sustain the trial court
in its findings of fact and the legal conclusions drawn
from these findings.
WHEREFORE, premises considered, the assailed decision
of the respondent appellate court is hereby REVERSED
and SET ASIDE, and the judgment of the Regional Trial
Court in Civil Case No. 12791 is hereby REINSTATED.
ARTICLE 649-650
G.R. No. 75905 October 12, 1987
REMIGIO O. RAMOS, SR., petitioner,
vs.
GATCHALIAN REALTY, INC., EDUARDO ASPREC, and
COURT OF APPEALS, respondents.

GUTIERREZ, JR., J.:

Page 320 of 404

LAW ON PROPERTY

In this petition for review on certiorari, the petitioner

assails the decision of the Court of Appeals dated August
29, 1986 which affirmed the November 14, 1984 order
of the Regional Trial Court, Branch CXI at Pasay City
dismissing the petitioner's civil action for a right of way
with prayer for preliminary injunction.
Petitioner Ramos is the owner of a house and lot
containing an area of 901 square meters covered by
Transfer Certificate of Title No. 14927 situated at Barrio
San Dionisio, Paraaque, Metro Manila. The lot was
acquired by the petitioner from Science Rodriguez
Lombos Subdivision In the subdivision survey plan of Lot
4133-G, (LRC) PSD-172544, the lot is more particularly
described as Lot 4133-G-11 (Exhibits "1" and "1-A ").
Two road lots abut petitioner's property namely lot 4133G-12 with an area of 2,160 square meters clearly
appearing as a proposed road in the Lombos subdivision
plan and Lot 4135 of the Paraaque Cadastre now
known as Pambansa Road but more commonly referred
to as Gatchalian Avenue.
Respondents Asprec own Lot 4135. Gatchalian Avenue is
alongside Lot 4135. Respondent Gatchalian Realty was
granted the road right of way and drainage along Lot
4135 to service the Gatchalian and Asprec subdivision,
by the respondent Asprecs.
The records of this case disclose that on April 30, 1981,
a complaint for an easement of a right of way with
preliminary mandatory injunction was filed by Ramos
against the private respondents. Among the allegations
in the complaint are:
... that he (referring to the petitioner) constructed his
house at 27 Gatchalian Avenue (also known as
Pambansa Road), Paranaque, and has since resided
therein with his family from 1977 up to the present; that
during construction of the house, Gatchalian Realty, Inc.
built a 7-8, feet high concrete wall right infront of
appellant's premises, blocking his entrance/exit to
Gatchalian Road, the nearest, most convenient and
adequate entrance/exit to the public road. or highway,

formerly Sucat Road but now known as Dr. A. Santos

Avenue, Paraaque; that this house and lot is only about
100 meters from Sucat, Road passing thru Gatchalian
Avenue; that prior to this, appellant and his counsel
addressed separate request/demand letters (Exh. A and
Annex B) to defendant company to allow him to exercise
a right of way on the subject premises; that in
September 1977, a meeting/conference was held
between appellant and his counsel on one hand and Mr.
Roberto Gatchalian and counsel on the other, during
which defendant Corporation manifested its conformity
to grant appellant the requested right of way upon
payment of proper indemnity, with the request that
appellant inform defendants Asprec of their aforesaid
agreement; that consequently, appellant wrote Mr. Cleto
Asprec on September 16, 1977 (Exh. D); that with the
construction of the 7-8 feet concrete wall appellant and
his family have been constrained to pass through the
back portion of their lot bounded by other lots belonging
to different owners, which is grassy and cogonal as
temporary ingress/egress with great inconvenience and
hardship, and this becomes all the more pronounced
during the rainy season due to flood and mud (Exhs. B1, B-1-A, B-2; B-2-A, B-3, B-3-A, B-3-B and B-4); and,
lastly, that the aforesaid concrete wall is dangerously
leaning towards appellant's premises posing great
danger or hazard. (Court of Appeals Decision, p. 3, Rollo,
p. 39)
On May 20, 1981, the respondent corporation filed a
motion to dismiss on grounds of lack of cause of action
and bar by prior judgment alleging that the complaint
was merely a reproduction of that filed on October 26,
1972 in Civil Case No. 5930-P which was dismissed on
October 30, 1980 for failure to prosecute within a
reasonable length of time. Respondents Asprec later
joined the respondent company in its motion to dismiss
and adopted the grounds and arguments stated therein.
On November 20, 1981, after the petitioner had filed his
opposition to the above motions, the lower court issued
its order denying the motion to dismiss on the ground
that the order dismissing the earlier case was not an
adjudication on the merits.
Page 321 of 404

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On November 26, 1981, the petitioner filed an urgent

exparte motion for the issuance of a preliminary
mandatory injunction as well as a preliminary prohibitory
injunction. On the same day, the lower court set the
motion for hearing on December 1, 1981, later reset to
December 10, 1981, and ordered that:

If plaintiff's property referred to in the complaint is Lot

No. 4133-G-11, (LRC) Psd-229001 (sic), then a grant of a
right of way to plaintiff is not a legal necessity, because
such lot has an eating road right of way, more
particularly Lot 4133-G-12, towards Dr. Arcadio Santos
Avenue(Sukat Road);

In the meantime, pending determination of the

application on the merits and in order that the reliefs
sought therein may not be rendered moot and
academic, the defendants and all persons acting upon
their orders are hereby temporarily enjoined from
building, constructing and/or erecting a wall, fence or
any enclosure adjoining or abutting plaintiff's premises
and/or from restraining, preventing or prohibiting the
plaintiff, his family or persons residing in his premises as
well as any person/s who may have any dealing or
business with them from using, passing and/or
traversing the said Gatchalian Avenue in going to or
returning from the plaintiff's premises and in going to or
returning from Sucat Road via Gatchalian Avenue, until
further orders from this Court. (Order dated November
26,1981, Records, p. 66).

xxx xxx xxx

On December 1, 1981, Gatchalian Realty filed its answer

and averred, among others, that:
xxx xxx xxx
Defendant Corporation has never entered into a verbal
agreement with plaintiff to grant the latter a road right
of way;
xxx xxx xxx
The so-called Gatchalian Avenue or Palanyag Road is not
a public road but a private street established and
constructed by the defendant Corporation intended for
the sole and exclusive use of its residents and lot buyers
of its subdivisions, as well as of the subdivisions owned
and operated by the various naked owners of the
different portions constituting the entire length and
breadth of said street;

The opening of Gatchalian Avenue to the property of

plaintiff will unduly cause great prejudice to defendant
Corporation as it can no longer effectively regulate the
use of the said private road; ...
Assuming, though not admitting, that plaintiff may be
granted a right of way, still the reasonable
compensation for such grant would be some
P800,000.00, as such portion of Gatchalian Avenue
consists of some 2,000 square meters of prime and
valuable property which could readily command a
market value of P400.00 per square meter; moreover,
plaintiff still has to shoulder his proportionate share of
the expenses and upkeep of such street and the real
estate taxes imposed thereon. (Answer of Gatchalian
Realty, Inc., Records, pp. 81-82).
On December 2, 1981, respondent Asprec filed their
answer which basically contained the same averments
as that of the realty company.
At the hearing of the petitioner's application for issuance
of a writ of preliminary injunction to compel the private
respondents to remove the wall constructed right in
front of the petitioner's premises barring him access to
Gatchalian Avenue, both parties presented oral and
documentary evidence to support their respective
positions. After the hearing, the lower court issued the
following order:
Plaintiff is given fifteen (15) days to file a memorandum
and the defendant is given another fifteen days from
receipt thereof to file a reply, after which the case shall
Page 322 of 404

LAW ON PROPERTY

be deemed submitted for resolution. So ordered. (TSN,

December 10, 1981, p. 57)

petitioner contended that the lower court's decision

dated July 9, 1982 was an adjudication on the merits.

After compliance by both parties with the above order,

the lower court, on July 9, 1982, rendered a decision the
dispositive part of which reads:

On July 8, 1983, the lower court under a new judge by

virtue of the reorganization of the judiciary, issued an
order setting aside and vacating its previous decision
dated July 9, 1982 on the ground that the same was
"rendered prematurely as the defendants had not
presented their evidence on the main evidence."

WHEREFORE, judgment is hereby rendered in favor of

the plaintiff and against the defendants ordering the
latter to grant the former a right of way through
Palanyag Road to and from Don Arcadio Santos Avenue
and to and from his residence, upon payment by the
plaintiff to the defendants Asprecs the sum of P5,000 as
indemnity therefor and under the following terms and
conditions to wit: (1) the easement created shall be only
in favor of the plaintiff, members of his family and
person or persons dealing with them; and (2) the
opening to be created through the concrete wall
separating plaintiff's residence and Palanyag Road shall
only be three (3) meters wide and shall be provided by
an iron gate by the plaintiff all at the expense of the
plaintiff. Without pronouncement as to costs and
damages. (Rollo, p. 30)
Thereafter, the respondent company filed a motion to
set aside and/or reconsider the lower court's decision for
being premature since only the application for the writ
of injunction was heard and submitted for resolution and
not the entire case. Respondents Asprec, likewise, filed a
motion for reconsideration mainly on the ground that
the lower court's grant of a right of way through
Gatchalian Avenue in petitioner's favor would be in
derogation of the "Contract of Easement of Road Rightof-Way and of Drainage" executed between them and
Gatchalian Realty.
In his opposition to both motions, the petitioner argued
that on the basis of the transcript of steno graphic notes
taken on December 10, 1981, it was clear that both
parties submitted the entire case for resolution
inasmuch as the pieces of evidence for the injunction
and for the main case were the same and there was
nothing left to be presented. Thus, in effect, the

After the petitioner had rested his case, the respondent

company filed a motion to dismiss based on the
insufficiency of the evidence adduced by the petitioner.
An opposition to said motion, was, thereafter, filed by
the petitioner.
On November 14, 1984, the lower court, acting on the
respondent company's motion to dismiss, issued an
order with the following tenor:
WHEREFORE, finding the motion to dismiss of defendant
corporation Gatchalian Realty, Inc. to be impressed with
merit, the same is hereby granted. For insufficiency of
evidence, plaintiff's complaint is hereby dismissed,
without pronouncement as to costs. (Rollo, p. 34)
The Court of Appeals on August 29, 1986, found that the
petitioner failed to establish the existence of the preconditions in order that he could legally be entitled to an
easement of a right of way. It affirmed the lower court's
order dated November 14, 1984 in all respects, with
costs against the petitioner.
Hence, this petition which presents the following
assignment of errors:
I
PUBLIC RESPONDENT ERRED IN AFFIRMING I-IV TOTO
THE ORDER OF DISMISSAL OF THE TRIAL COURT IN ALL
RESPECTS WITH COSTS AGAINST THE PETITIONER.
II
Page 323 of 404

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PUBLIC RESPONDENT ERRED IN ITS DECISION TO THE

EFFECT THAT PETITIONER HAS NOT SUFFICIENTLY MET
THE REQUIREMENTS OF THE LAW AND IN FAILING TO
PROVE HIS RIGHT OF WAY THROUGH GATCHALIAN
AVENUE OR PALANYAG ROAD AGAINST THE
RESPONDENTS HEREIN;

Code, and it could not claim any such servitude without

first establishing the pre-conditions for its grant fixed by
Articles 649 and 650 of the Civil Code of the Philippines:

III

(2) After payment of proper indemnity (Art. 649, p. 1.

end);

PUBLIC RESPONDENT ERRED IN FAILING TO SET ASIDE

THE ORDER OF THE TRIAL COURT, AND NOT ADOPTING
THE DECISION OF THE TRIAL COURT DATED JULY 9,1982
GRANTING TO PETITIONER A RIGHT OF WAY IN THE
SUBJECT PREMISES. (Rollo, pp. 14-15)
These assigned errors center on the issue of whether or
not the petitioner has successfully shown that all the
requisites necessary for the grant of an easement of a
right of way in his favor are present.
An easement or servitude in an encumbrance imposed
upon an immovable for the benefit of another
immovable belonging to a different owner as defined in
Article 613 of the Civil Code. It is established either by
law, in which case it is called legal or by the will of the
parties, in which event it is a voluntary easement. (See
Article 619, Civil Code of the Philippines; City of Manila
vs. Entote, 57 SCRA 497, 503).

(1) That it is surrounded by other immovables and has

no adequate outlet to a public highway (Art. 649, par. 1);

(3) That the isolation was not due to the Central's own
acts (Art. 649, last par.); and
(4) That the right of way claimed is "at the point least
prejudicial to the servient estate; and insofar as
consistent with this rule, where the distance from the
dominant estate to a public highway may be the
shortest." (Art. 650).
By express provision of law, therefore, a compulsory
right of way can not be obtained unless the four
requisites enumerated are first shown to exist, and the
burden of proof to show their existence was on the
Central. (See also Angela Estate, Inc. vs. Court of First
Instance of Negros Occidental 24 SCRA 500, 510)

In the case of Bacolod-Murcia Milling Company, Inc. vs.

Capitol Subdivision Inc., et al. (17 SCRA 731, 735-6), we
held that:

On the first requisite, the petitioner contends that since

the respondent company constructed the concrete wall
blocking his ingress and egress via the Gatchalian
Avenue, the "nearest, most convenient and adequate
road" to and from a public highway, he has been
constrained to use as his "temporary" way the adjoining
lots belonging to different persons. Said way is allegedly
"bumpy and impassable especially during rainy seasons
because of flood waters, mud and tall 'talahib' grasses
thereon." Moreover, according to the petitioner, the road
right of way which the private respondents referred to as
the petitioner's alternative way to Sucat Road is not an
existing road but has remained a proposed road as
indicated in the subdivision plan of the Sobrina
Rodriguez Lombos Subdivision.

... the Central had to rely strictly on its being entitled to

a compulsory servitude of right of way, under the Civil

The petitioner's position is not impressed with merit. We

find no reason to disturb the appellate court's finding of

Since there is no agreement between the contending

parties in this case granting a right of way by one in
favor of the other, the establishment of a voluntary
easement between the petitioner and the respondent
company and/or the other private respondents is ruled
out. What is left to examine is whether or not the
petitioner is entitled to a legal or compulsory easement
of a right of way.

Page 324 of 404

LAW ON PROPERTY

fact that the petitioner failed to prove the non-existence

of an adequate outlet to the Sucat Road except through
the Gatchalian Avenue. As borne out by the records of
the case, there is a road right of way provided by the
Sabrina Rodriguez Lombos Subdivision indicated as Lot
4133-G-12 in its subdivision plan for the buyers of its
lots. The fact that said lot is still undeveloped and
causes inconvenience to the petitioner when he uses it
to reach the public highway does not bring him within
the ambit of the legal requisite. We agree with the
appellate court's observation that the petitioner should
have, first and foremost, demanded from the Sabrina
Rodriguez Lombos Subdivision the improvement and
maintenance of Lot 4133-G-12 as his road right of way
because it was from said subdivision that he acquired
his lot and not either from the Gatchalian Realty or the
respondents Asprec. To allow the petitioner access to
Sucat Road through Gatchalian Avenue inspite of a road
right of way provided by the petitioner's subdivision for
its buyers simply because Gatchalian Avenue allows
petitioner a much greater ease in going to and coming
from the main thoroughfare is to completely ignore what
jurisprudence has consistently maintained through the
years regarding an easement of a right of way, that
"mere convenience for the dominant estate is not
enough to serve as its basis. To justify the imposition of
this servitude, there must be a real, not a fictitious or
artificial, necessity for it." (See Tolentino, Civil Code of
the Philippines, Vol. II, 2nd ed., 1972, p. 371)
Considering that the petitioner has failed to prove the
existence of the first requisite as aforestated, we find it
unnecessary to discuss the rest of the preconditions for
a legal or compulsory right of way.
Once again, we apply the rule that findings of facts of
the Court of Appeals are binding on the Supreme Court
and who not be overturned when supported by the
evidence on record save in the known exceptions such
as gross misappreciation of the evidence or
misapprehension of facts. (See Community Savings and
Loan Association, Inc. vs. Court of Appeals, et al., G.R.
No. 75786 promulgated on August 31, 1987; Regalario

vs. Northwest Finance Corporation, 117 SCRA 45; Agton

vs. Court of Appeals, 113 SCRA 322).
WHEREFORE, in view of the foregoing, the petition is
hereby DISMISSED for lack of merit. The questioned
decision of the Court of Appeals is AFFIRMED.
G.R. No. 160613

February 12, 2008

APOLINARDITO C. QUINTANILLA and PERFECTA C.

QUINTANILLA, petitioners,
vs.
PEDRO ABANGAN and DARYL'S COLLECTION INTL. INC.,
respondents.
RESOLUTION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1
under Rule 45 of the Rules of Civil Procedure seeking the
reversal of the Court of Appeals (CA) Decision2 dated
April 21, 2003, which affirmed the Decision3 of the
Regional Trial Court (RTC), Branch 57 of Cebu City, dated
June 21, 2000.
This controversy flows from a case for Easement of Right
of Way filed by petitioner Apolinardito C. Quintanilla
(Apolinardito) and his mother, petitioner Perfecta C.
Quintanilla (Perfecta) against respondent Pedro Abangan
(Pedro) and respondent Daryl's Collection International,
Inc. (DARYL'S).
Sometime in the 1960s, Perfecta bought Lot No. 3771-B1-A, with an area of 2,244 square meters, located at
Inayawan, Cebu City (the dominant estate) from one
Dionisio Abasolo, who formerly owned all the properties
therein. Thereafter, Perfecta donated the dominant
estate to Apolinardito, who is now the registered owner
thereof.4 Petitioners own QC Rattan Inc., a domestic
corporation engaged in the manufacture and export of
rattan-made furniture. In the conduct of their business,
they use vans to haul and transport raw materials and
finished products. As they wanted to expand their
Page 325 of 404

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business and construct a warehouse on their property

(the dominant estate), they asked for a right of way from
Pedro sometime in April 1994.
However, it appears that Pedro, who was the owner of
Lot No. 3771-A-1, containing an area of 1,164 square
meters5 (the servient estate) and a lot near the
dominant estate, sold the same to DARYL'S on March 24,
1994,6 and thereafter, DARYL'S constructed a
warehouse over the servient estate, enclosing the same
with a concrete fence.
Petitioners, thus, sought the imposition of an easement
of right of way, six (6) meters in width, or a total area of
244 square meters, over the servient estate.
On June 21, 2000, the RTC dismissed the case for lack of
merit. The RTC held that petitioners failed to establish
that the imposition of the right of way was the least
prejudicial to the servient estate. The RTC noted that
there is already a concrete fence around the area and
that six (6) meters from the said concrete fence was a
concrete warehouse. Thus, substantial damage and
substantial reduction in area would be caused the
servient estate. Moreover, the RTC observed that
petitioners' insistence on passing through the servient
estate would make for easy and convenient access to
the main thoroughfare for their vans. Otherwise, if the
right of way were to be constituted on any of the other
surrounding properties, their vans would have to make a
turn. On this premise, the RTC opined that mere
convenience to the dominant estate was not necessarily
the basis for setting up a compulsory easement of right
of way.
Aggrieved, petitioners went to the CA on appeal.
In its Decision dated April 21, 2003, the CA affirmed the
RTC Decision, holding that the criterion of least prejudice
to the servient estate must prevail over the shortest
distance. A longer way may, thus, be established to
avoid injury to the servient tenement, such as when
there are constructions or walls which can be avoided by
a round-about way,7 as in this case. Petitioners filed a

Motion for Reconsideration,8 but the same was denied in

the CA Resolution9 dated September 24, 2003.
Hence, the instant petition based on the following
grounds:
a) IN A COMPULSORY EASEMENT OF RIGHT OF WAY, AS
SET FORTH IN THE PRECONDITIONS UNDER ARTICLES
64910 AND 65011 OF THE NEW CIVIL CODE, THE
DETERMINATION OF THE LEAST PREJUDICIAL OR LEAST
DAMAGE TO THE SERVIENT ESTATE SHOULD BE AT THE
TIME OF THE FILING OF THE ORIGINAL COMPLAINT AND
NOT AFTER THE FILING, ESPECIALLY WHEN THE OWNER
OF THE SERVIENT ESTATE IS GUILTY OF ABUSE OF
RIGHTS CONSIDERED AS THE GREATEST OF ALL
POSSIBLE WRONGS OR BAD FAITH BY CONSTRUCTING A
CONCRETE FENCE AND WAREHOUSE THEREON
THROUGH MISREPRESENTATION TO THE OFFICE OF THE
CEBU CITY BUILDING OFFICIAL THAT IT HAD GRANTED A
RIGHT OF WAY OF SIX (6) METERS TO PETITIONERS; AND
b) WHETHER OR NOT COMPLIANCE WITH THE
PRECONDITIONS SET FORTH IN ARTICLES 649 AND 650
OF THE NEW CIVIL CODE IS SUPERIOR TO THE "MERE
CONVENIENCE RULE AGAINST THE OWNER OF THE
DOMINANT ESTATE."
Petitioners claim that DARYL'S constructed the concrete
fence only after petitioners filed the case for an
Easement of Right of Way against Pedro on May 27,
1994. They submit that the criterion of least prejudice
should be applied at the time of the filing of the original
complaint; otherwise, it will be easy for the servient
estate to evade the burden by subsequently
constructing structures thereon in order to increase the
damage or prejudice.12 Moreover, they pointed out that
a Notice of Lis Pendens was annotated on Pedro's title.
Thus, petitioners aver that DARYL'S is in bad
faith and is guilty of abuse of rights as provided under
Article 1913 of the New Civil Code.14
On the other hand, DARYL'S counters that petitioners
belatedly imputed bad faith to it since petitioners' prePage 326 of 404

LAW ON PROPERTY

trial brief filed with the RTC contained no allegation of

bad faith or misrepresentation. Moreover, DARYL'S
reiterates its position that establishing a right of way
over the servient estate would cause substantial
damage, considering that a concrete fence has already
been erected thereon. Most importantly, DARYL'S
submits that petitioners can have adequate ingress to or
egress from the dominant estate by passing through
other surrounding vacant lots. Lastly,
DARYL'S points out that when Perfecta bought the
dominant estate from Dionisio Abasolo, the surrounding
lots were also owned by the latter.15
For his part, Pedro manifests that he is adopting all the
defenses invoked by DARYL'S in the belief that he is no
longer a party to the instant case as he had already sold
the servient estate to DARYL'S and a title already issued
in the latter's name.16
The instant petition lacks merit.
We hold that Apolinardito as owner of the dominant
estate together with Perfecta failed to discharge the
burden of proving the existence and concurrence of all
the requisites in order to validly claim a compulsory
right of way against respondents.17
It should be remembered that to be entitled to a legal
easement of right of way, the following requisites must
be satisfied: (1) the dominant estate is surrounded by
other immovables and has no adequate outlet to a
public highway; (2) proper indemnity has been paid; (3)
the isolation was not due to acts of the proprietor of the
dominant estate; and (4) the right of way claimed is at
the point least prejudicial to the servient estate.18
The fourth requisite is absent.
We are in full accord with the ruling of the CA when it
aptly and judiciously held, to wit:
As provided for under the provisions of Article 650 of the
New Civil Code, the easement of right of way shall be

established at the point least prejudicial to the servient

estate, and, insofar as consistent with this rule, where
the distance from the dominant estate to a public
highway may be the shortest. Where there are several
tenements surrounding the dominant estate, and the
easement may be established on any of them, the one
where the way is shortest and will cause the least
damage should be chosen. But if these two
circumstances do not concur in a single tenement, as in
the instant case, the way which will cause the least
damage should be used, even if it will not be the
shortest. The criterion of least prejudice to the servient
estate must prevail over the criterion of shortest
distance. The court is not bound to establish what is the
shortest; a longer way may be established to avoid
injury to the servient tenement, such as when there are
constructions or walls which can be avoided by a roundabout way, as in the case at bar.
As between a right of way that would demolish a fence
of strong materials to provide ingress and egress to a
public highway and another right of way which although
longer will only require a van or vehicle to make a turn,
the second alternative should be preferred. Mere
convenience for the dominant estate is not what is
required by law as the basis for setting up a compulsory
easement. Even in the face of necessity, if it can be
satisfied without imposing the easement, the same
should not be imposed.
Finally, worthy of note, is the undisputed fact that there
is already a newly opened public road barely fifty (50)
meters away from the property of appellants, which only
shows that another requirement of the law, that is, there
is no adequate outlet, has not been met to establish a
compulsory right of way.
Such pronouncement by the CA is in line with this
Court's ruling in Quimen v. Court of Appeals,19 where
we held that as between a right of way that would
demolish a store of strong materials to provide egress to
a public highway, and another right of way which,
although longer, will only require an avocado tree to be
cut down, the second alternative should be preferred.
Page 327 of 404

LAW ON PROPERTY

As a rule, findings of fact of the CA, affirming those of

the trial court, are generally final and conclusive on this
Court.20 While this Court has recognized several
exceptions21 to this rule, none of these exceptions finds
application in this case. Ergo, we find no cogent reason
and reversible error to disturb the unanimous findings of
the RTC and the CA as these are amply supported by the
law and evidence on record.
WHEREFORE, the instant Petition is DENIED for lack of
merit. The assailed Court of Appeals Decision, dated
April 21, 2003, and Resolution dated September 24,
2003 are hereby AFFIRMED. Costs against the
petitioners.
ARTICLE 651
G.R. No. 77628 March 11, 1991
TOMAS ENCARNACION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and THE
INTESTATE ESTATE OF THE LATE EUSEBIO DE SAGUN and
THE HEIRS OF THE LATE ANICETA MAGSINO VIUDA DE
SAGUN,* respondents.
Esteban M. Mendoza for petitioner.
Oscar Gozos for private respondents.

FERNAN, C.J.:p
Presented for resolution in the instant petition for review
is the not-so-usual question of whether or not petitioner
is entitled to a widening of an already existing easement
of right-of-way. Both the trial court and the Appellate
Court ruled that petitioner is not so entitled, hence the
recourse to this Court. We reverse.
The facts are undisputed.

Petitioner Tomas Encarnacion and private respondent

Heirs of the late Aniceta Magsino Viuda de Sagun are
the owners of two adjacent estates situated in Buco,
Talisay, Batangas. ** Petitioner owns the dominant
estate which has an area of 2,590 square meters and
bounded on the North by Eusebio de Sagun and
Mamerto Magsino, on the south by Taal Lake, on the
East by Felino Matienzo and on the West by Pedro
Matienzo. Private respondents co-own the 405-squaremeter servient estate which is bounded on the North by
the National Highway (Laurel-Talisay Highway), on the
South by Tomas Encarnacion, on the East by Mamerto
Magsino and on the West by Felipe de Sagun. In other
words, the servient estate stands between the dominant
estate and the national road.
Prior to 1960, when the servient estate was not yet
enclosed with a concrete fence, persons going to the
national highway just crossed the servient estate at no
particular point. However, in 1960 when private
respondents constructed a fence around the servient
estate, a roadpath measuring 25 meters long and about
a meter wide was constituted to provide access to the
highway. One-half meter width of the path was taken
from the servient estate and the other one-half meter
portion was taken from another lot owned by Mamerto
Magsino. No compensation was asked and non was
given for the portions constituting the pathway. 1
It was also about that time that petitioner started his
plant nursery business on his land where he also had his
abode. He would use said pathway as passage to the
highway for his family and for his customers.
Petitioner's plant nursery business through sheer hard
work flourished and with that, it became more and more
difficult for petitioner to haul the plants and garden soil
to and from the nursery and the highway with the use of
pushcarts. In January, 1984, petitioner was able to buy
an owner-type jeep which he could use for transporting
his plants. However, that jeep could not pass through
the roadpath and so he approached the servient estate
owners (Aniceta Vda. de Sagun and Elena Romero Vda.
de Sagun) and requested that they sell to him one and
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LAW ON PROPERTY

one-half (1 1/2) meters of their property to be added to

the existing pathway so as to allow passage for his
jeepney. To his utter consternation, his request was
turned down by the two widows and further attempts at
negotiation proved futile.
Petitioner then instituted an action before the Regional
Trial Court of Batangas, Branch 6 (Tanauan) to seek the
issuance of a writ of easement of a right of way over an
additional width of at least two (2) meters over the De
Saguns' 405-square-meter parcel of land. 2
During the trial, the attention of the lower court was
called to the existence of another exit to the highway,
only eighty (80) meters away from the dominant estate.
On December 2, 1985, the lower court rendered
judgment dismissing petitioner's complaint. It ruled:
It is clear, therefore, that plaintiff at present has two
outlets to the highway: one, through the defendants'
land on a one meter wide passageway, which is
bounded on both sides by concrete walls and second,
through the dried river bed eighty meters away. The
plaintiff has an adequate outlet to the highway through
the dried river bed where his jeep could pass.
The reasons given for his claim that the one-meter
passageway through defendants' land be widened to
two and one-half meters to allow the passage of his
jeep, destroying in the process one of the concrete
fences and decreasing defendants' already small parcel
to only about 332.5 square meters, just because it is
nearer to the highway by 25 meters compared to the
second access of 80 meters or a difference of only 65
meters and that passage through defendants' land is
more convenient for his (plaintiffs) business and family
use are not among the conditions specified by Article
649 of the Civil Code to entitle the plaintiff to a right of
way for the passage of his jeep through defendant's
land. 3
On appeal, the Court of Appeals affirmed the decision of
the trial court on January 28, 1987 and rejected
petitioner's claim for an additional easement.

In sustaining the trial court, the Court of Appeals opined

that the necessity interposed by petitioner was not
compelling enough to justify interference with the
property rights of private respondents. The Appellate
Court took into consideration the presence of a dried
river bed only eighty (80) meters away from the
dominant estate and conjectured that petitioner might
have actually driven his jeep through the river bed in
order to get to the highway, and that the only reason
why he wanted a wider easement through the De
Sagun's estate was that it was more convenient for his
business and family needs.
After evaluating the evidence presented in the case, the
Court finds that petitioner has sufficiently established
his claim for an additional easement of right of way,
contrary to the conclusions of the courts a quo.
While there is a dried river bed less than 100 meters
from the dominant tenement, that access is grossly
inadequate. Generally, the right of way may be
demanded: (1) when there is absolutely no access to a
public highway, and (2) when, even if there is one, it is
difficult or dangerous to use or is grossly insufficient. In
the present case, the river bed route is traversed by a
semi-concrete bridge and there is no ingress nor egress
from the highway. For the jeep to reach the level of the
highway, it must literally jump four (4) to five (5) meters
up. Moreover, during the rainy season, the river bed is
impassable due to the floods. Thus, it can only be used
at certain times of the year. With the inherent
disadvantages of the river bed which make passage
difficult, if not impossible, it is if there were no outlet at
all.
Where a private property has no access to a public road,
it has the right of easement over adjacent servient
estates as a matter of law. 4
With the non-availability of the dried river bed as an
alternative route to the highway, we transfer our
attention to the existing pathway which straddles the
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LAW ON PROPERTY

adjoining properties of the De Sagun heirs and Mamerto

Magsino.
The courts below have taken against petitioner his
candid admission in open court that he needed a wider
pathway for the convenience of his business and family.
(TSN, August 2, 1985, pp. 24-26). We cannot begrudge
petitioner for wanting that which is convenient. But
certainly that should not detract from the more pressing
consideration that there is a real and compelling need
for such servitude in his favor.
Article 651 of the Civil Code provides that "(t)he width of
the easement of right of way shall be that which is
sufficient for the needs of the dominant estate, and may
accordingly be changed from time to time." This is taken
to mean that under the law, it is the needs of the
dominant property which ultimately determine the width
of the passage. And these needs may vary from time to
time. When petitioner started out as a plant nursery
operator, he and his family could easily make do with a
few pushcarts to tow the plants to the national highway.
But the business grew and with it the need for the use of
modern means of conveyance or transport. Manual
hauling of plants and garden soil and use of pushcarts
have become extremely cumbersome and physically
taxing. To force petitioner to leave his jeepney in the
highway, exposed to the elements and to the risk of
theft simply because it could not pass through the
improvised pathway, is sheer pigheadedness on the part
of the servient estate and can only be counterproductive for all the people concerned. Petitioner
should not be denied a passageway wide enough to
accomodate his jeepney since that is a reasonable and
necessary aspect of the plant nursery business.
We are well aware that an additional one and one-half (1
1/2) meters in the width of the pathway will reduce the
servient estate to only about 342.5 square meters. But
petitioner has expressed willingness to exchange an
equivalent portion of his land to compensate private
respondents for their loss. Perhaps, it would be well for
respondents to take the offer of petitioner seriously. 5
But unless and until that option is considered, the law

decrees that petitioner must indemnify the owners of

the servient estate including Mamerto Magsino from
whose adjoining lot 1/2 meter was taken to constitute
the original path several years ago. Since the easement
to be established in favor of petitioner is of a continuous
and permanent nature, the indemnity shall consist of the
value of the land occupied and the amount of the
damage caused to the servient estate pursuant to
Article 649 of the Civil Code which states in part:
Art. 649. The owner, or any person who by virtue of a
real right may cultivate or use any immovable, which is
surrounded by other immovables pertaining to other
persons and without adequate outlet to a public
highway, is entitled to demand a right of way through
the neighboring estates, after payment of the proper
indemnity.
Should this easement be established in such a manner
that its use may be continuous for all the needs of the
dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied
and the amount of the damage caused to the servient
estate.
xxx xxx xxx
WHEREFORE, in conformity with the foregoing
discussion, the appealed decision of the Court of
Appeals dated January 28, 1987 is REVERSED and SET
ASIDE. Petitioner Tomas Encarnacion is hereby declared
entitled to an additional easement of right of way of
twenty-five (25) meters long by one and one-half (1 1/2)
meters wide over the servient estate or a total area of
62.5 square meters after payment of the proper
indemnity.
G.R. No. 127549 January 28, 1998
SPOUSES CESAR and RAQUEL STA. MARIA and
FLORCERFIDA STA. MARIA, petitioners,
vs.
COURT OF APPEALS, and SPOUSES ARSENIO and
ROSLYNN FAJARDO, respondents.
Page 330 of 404

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DAVIDE, JR., J.:

This is an appeal under Rule 45 of the Rules of Court
from the decision 1 of 18 December 1996 of the Court of
Appeals in CA-G.R. CV No. 48473, which affirmed with
modification the 30 June 1994 Decision 2 of Branch 19
of the Regional Trial Court of Bulacan in Civil Case No.
77-M-92 granting the private respondents a right of way
through the property of the petitioners.
The antecedent facts, as summarized by the Court of
Appeals, are as follows:
Plaintiff spouses Arsenio and Roslynn Fajardo are the
registered owners of a piece of land, Lot No. 124 of the
Obando Cadastre, containing an area of 1,043 square
meters, located at Paco, Obando, Bulacan, and covered
by Transfer Certificate Title (TCD No. T-147729 (M) of the
Registry of Deeds of Meycauayan, Bulacan (Exhibit "B",
p. 153 Orig. Rec.). They acquired said lot under a Deed
of Absolute Sale dated February 6, 1992 executed by the
vendors Pedro M. Sanchez, et al. (Annex "A", Complaint;
pp. 7-8 ibid.).
Plaintiff's aforesaid Lot 124 is surrounded by Lot 1 (Psd
45412), a fishpond (Exh. "C-5"; p. 154, ibid.), on the
northeast portion thereof; by Lot 126, owned by
Florentino Cruz, on the southeast portion; by Lot 6-a and
a portion of Lot 6-b (both Psd-297786) owned
respectively by Spouses Cesar and Raquel Sta. Maria
and Florcerfida Sta. Maria (Exhs. "C-2" and "C-3", ibid.),
on the southwest; and by Lot 122, owned by the Jacinto
family, on the northwest.
On February 17, 1992, plaintiff spouses Fajardo filed a
complaint against defendants Cesar and Raquel Sta.
Maria or Florcerfida Sta. Maria for the establishment of
an easement of right of way. Plaintiffs alleged that their
lot, Lot 124, is surrounded by properties belonging to
other persons, including those of the defendants; that
since plaintiffs have no adequate outlet to the provincial

road, an easement of a right of way passing through

either of the alternative defendants' properties which
are directly abutting the provincial road would be
plaintiffs' only convenient, direct and shortest access to
and from the provincial road; that plaintiffs'
predecessors-in-interest have been passing through the
properties of defendants in going to and from their lot;
that defendants' mother even promised plaintiffs'
predecessors-in-interest to grant the latter an easement
of right of way as she acknowledged the absence of an
access from their property to the road; and that
alternative defendants, despite plaintiffs' request for a
right of way and referral of the dispute to the barangay
officials, refused to grant them an easement. Thus,
plaintiffs prayed that an easement of right of way on the
lots of defendants be established in their favor. They
also prayed for damages, attorney's fees and costs of
suit.
Defendants, instead of filing an answer, filed a motion to
dismiss (pp. 41-45, ibid.) on the ground that the lower
court has no jurisdiction to hear the case since plaintiffs
failed to refer the matter to the barangay lupon in
accordance with Presidential Decree No. 1508. The lower
court, however, in its Order dated May 18, 1992, denied
said motion on the premise that there was substantial
compliance with the law.
On May 25, 1992, defendants filed a "Notice of Appeal"
to the Supreme Court of the questioned order of the
lower court denying their motion to dismiss, under Rule
45 of the Rules of Court (p. 54, ibid.). On June 24, 1992,
the lower court denied the notice of appeal for lack of
merit (p. 86, ibid).
In the meantime, defendants filed a petition for review
on certiorari of the lower court's Order dated May 18,
1992 (pp. 64-84, ibid.). In an Order dated July 8, 1992,
the Third Division of the Supreme Court denied said
petition for failure to comply with Revised Circular Nos.
1-88 and Circular No. 28-01 (p. 97, ibid.). Defendants'
motion for reconsideration was likewise denied with
finality on July 20, 1992 (p. 96, ibid.).
Page 331 of 404

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Consequently, defendants filed their answer to the court

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

indemnify the owners thereof in the total amount of

P3,750.00 (P1,250.00 goes to Florcerfida Sta. Maria and
P2,500.00 to Cesar Sta. Maria) and to reconstruct the
fence to be destroyed in the manner it was at the time
of the filing of this action.

The parties not having settled their dispute during the

pre-trial (p.120, Orig. Record), the court directed that an
ocular inspection be conducted of the subject property,
designating the branch clerk of court as its
commissioner. In time, an Ocular Inspection Report
dated December 3, 1992 (Exhs. "J" and "J- 1") was
submitted. After trial on the merits, the lower court
rendered the assailed decision granting plaintiffs' prayer
for an easement of right of way on defendants'
properties. 3

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

The trial court found that based on the Ocular Inspection

Report there was no other way through which the
private respondents could establish a right of way in
order to reach the provincial road except by traversing
directly the property of the petitioners. It further found
that (a) no significant structure, save for a wall or fence
about three feet high, would be adversely affected; (b)
there was sufficient vacant space of approximately 11
meters between petitioners' houses; and (c) petitioners'
property could provide the shortest route from the
provincial road to the private respondents' property.
Consequently, the trial court granted the easement
prayed for by the private respondents in a decision
dated 30 June 1994, 4 whose decretal portion reads as
follows:
WHEREFORE, premises considered the Court orders that
a right-of-way be constructed on the defendants'
property covered by TCT No. 0-6244 of about 75 sq.
meters, 25 sq. meters shall be taken from the lot of
Florcerfida Sta. Maria and 50 sq. meters from the
property of Cesar Sta. Maria to be established along
lines 1-2 of lot 6-c and along lines 3-4 of lot 6-b and to

The petitioners seasonably appealed from the

aforementioned decision to the Court of Appeals, which
docketed the case as CA-G.R. CV No. 48473.

Accordingly, in its decision 5 of 18 December 1996, the

Court of Appeals affirmed the trial court's decision, but
modified the property valuation by increasing it from
P50 to P2,000 per square meter.
The petitioners forthwith filed this petition for review on
certiorari based on the following assignment of errors:
I.
WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT
OF WAY CAN BE ESTABLISHED IN THE LIGHT OF THE
DOCTRINE LAID DOWN BY THE HON. SUPREME COURT IN
COSTABELLA CORPORATION VS. COURT OF APPEALS,
193 SCRA 333, 341 WHICH HELD THAT [FOR] THE
Page 332 of 404

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FAILURE OF PRIVATE RESPONDENTS TO SHOW THAT THE

ISOLATION OF THEIR PROPERTY WAS NOT DUE TO THEIR
PERSONAL OR THEIR PREDECESSORS-IN-INTEREST'S
OWN ACTS, THEY ARE NOT ENTITLED TO A COMPULSORY
EASEMENT OF RIGHT OF WAY.
II.
WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN
BE GRANTED TO PRIVATE RESPONDENTS WHO HAVE
TWO OTHER EXISTING PASSAGE WAYS OTHER THAN
THAT OF PETITIONERS AND AN ALTERNATIVE VACANT
LOT FRONTING THE PROVINCIAL ROAD ALSO ADJACENT
TO PRIVATE RESPONDENTS' PROPERTY, WHICH CAN BE
USED IN GOING TO AND FROM PRIVATE RESPONDENTS'
PROPERTY.
III.
RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED
IN MAKING A PORTION OF ITS STATEMENT OF FACTS
FROM ALLEGATIONS IN THE COMPLAINT AND NOT FROM
THE EVIDENCE ON RECORD.
IV.
RESPONDENT HON. COURT OF APPEALS SERIOUSLY
ERRED IN HOLDING THAT PRIVATE RESPONDENTS HAVE
NO ADEQUATE OUTLET TO A PUBLIC HIGHWAY WHICH
INFERENCE DRAWN FROM FACTS WAS MANIFESTLY
MISTAKEN. 6
The first, second, and fourth assigned errors involve
questions of fact. Settled is the rule that the jurisdiction
of this Court in cases brought before it from the Court of
Appeals via Rule 45 of the Rules of Court is limited to
reviewing errors of law. Findings of fact of the latter are
conclusive, except in the following instances: (1) when
the findings are grounded entirely on speculation,
surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd, or impossible; (3) when
there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5)
when the findings of fact are conflicting; (6) when in

making its findings the Court of Appeals went beyond

the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee; (7)
when the findings are contrary to those of the trial court;
(8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the
facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by
the respondent; and (10) when the findings of fact are
premised on the supposed absence of evidence and
contradicted by the evidence on record. 7
A perusal of the pleadings and the assailed decision of
the Court of Appeals, as well as of the decision of the
trial court, yields no ground for the application of any of
the foregoing exceptions. All told, the findings of fact of
both courts satisfied the following requirements for an
estate to be entitled to a compulsory servitude of right
of way under the Civil Code, to wit:
1. the dominant estate is surrounded by other
immovables and has no adequate outlet to a public
highway (Art. 649, par. 1);
2. there is payment of proper indemnity (Art. 649, par.
1);
3. the isolation is not due to the acts of the proprietor of
the dominant estate (Art. 649, last par.); and
4. the right of way claimed is at the point least
prejudicial to the servient estate; and insofar as
consistent with this rule, where the distance from the
dominant estate to a public highway may be the
shortest (Art. 650). 8
As to such requisites, the Court of Appeals made the
following disquisitions:
Anent the first requisite, there is no dispute that the
plaintiffs-appellees' property is surrounded by other
immovables owned by different individuals. The ocular
inspection report submitted to the lower court reveals
that:
Page 333 of 404

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The property of the plaintiffs, spouses Arsenio and

Roslynn Fajardo, is completely surrounded with adobe
fence without any point of egress and ingress to the
national road. Said plaintiffs' property containing an area
of 1,043 square meters and covered by OCT No. O-6244
of the Registry of Deeds of Bulacan was situated directly
behind defendants' property which abuts the national
road. Defendants, spouses Cesar and Racquel Sta.
Maria, are the absolute owners of the parcel of land with
an area of 537 square meters and embraced under TCT
No. T-37.762(M) situated on the left side abutting the
national road with their house thereon made of wood
and hollow blocks, while defendant Florcerfida Sta. Maria
is the absolute owner of a parcel of land with a similar
area of 537 square meters and covered by TCT No. T37.762(M) situated on the right side and likewise
abutting the national road with an impressive house
thereon of modern vintage made of strong materials. As
depicted in the rough sketch hereto attached, plaintiffs
have absolutely no means of ingress and egress to their
property as the same is completely isolated by
properties owned by other persons. On the left side is
the property of Florentino Cruz, on the right side is the
property reportedly owned by the Jacintos; and on the
front portion are properties owned by defendants. . . . .
(Ocular Inspection Report, p. 135, Orig. Rec.)
Plaintiffs-appellees' property is likewise without
adequate outlet to a public highway. The existing
passage way for people ("daang tao") at the back of
plaintiffs-appellees property leading to the provincial
road (TSN, May 17, 1993, p. 12) cannot be considered
an adequate outlet for purposes of establishing an
easement. Article 651 of the Code provides that "(t)he
width of the easement of right of way shall be that which
is sufficient for the needs of the dominant estate, and
may accordingly be changed from time to time." Thus in
the case of Larracas vs. Del Rio (37 Official Gazette
287), this Court had occasion to rule that "it is not
necessary for a person, like his neighbors, to content
himself with a footpath and deny himself the use of an
automobile. So in an age when motor cars are a vital

necessity, the dominant proprietor has a right to

demand a driveway for his automobile, and not a mere
lane or pathway" (Cited in Tolentino, ibid., p. 391).
The second requisite for the establishment of an
easement of right way, i.e., payment of indemnity, is
likewise present in this case. Plaintiff-appellee spouse
Roslynn Fajardo testified on direct examination that they
are willing to pay the corresponding damages provided
for by law if granted the right of way (TSN, November 5,
1992, p. 11).
The third requisite is that the isolation of plaintiffsappellees' property should not have been due to their
own acts. In the case under consideration, the isolation
of their lot is not due to plaintiffs' acts. The property
they purchased was already surrounded by other
immovables leaving them no adequate ingress or egress
to a public highway.
Going now to the fourth requisite of "least prejudice"
and "shortest distance," We agree with the lower court
that this twin elements have been complied with in
establishing the easement of right of way on
defendants-appellants' properties.
It has been commented upon that where there are
several tenements surrounding the dominant estate,
and the easement may be established on any of them,
the one where the way is shortest and will cause the
least damage should be chosen. But if these two
circumstances do not concur in a single tenement, the
way which will cause the least damage should be used,
even if it will not be the shortest. And if the conditions of
the various tenements are the same, all the adjoining
owners should be cited and experts utilized to determine
where the easement shall be established (Tolentino,
ibid., pp. 108-109, citing Casals Colldecarrera).
In the case at bar, the ocular inspection disclosed that
there are three options open to the plaintiffs-appellees
as a route to reach the national road, to wit:

Page 334 of 404

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(1) To traverse directly through defendants' property

which is the shortest route of approximately 20 to 25
meters away from the national road;
(2) To purchase a right of way from the adjoining
property of Florentino Cruz on the left side of their
property; and
(3) To negotiate with Jacinto family on the right side of
their property.
In all instances, no significant structures would be
adversely affected. There is sufficient vacant space
between defendants' houses of approximately 11
meters. The distance of defendant Florcerfida's house
with the adjoining adobe wall separating that of the
property of defendants Cesar and Racquel Sta. Maria is
about 4 meters, while the space between the adobe wall
and that of the latter's house is about 7 meters or a total
of 11 meters vacant space for purposes of a right of way.
On the other hand, plaintiffs may negotiate with a right
of way with Florentino Cruz on the left side of their
property although the same is quite circuitous. Lastly,
the option through the property of the Jacinto on the
right side is very circuitous and longer. The route
involves a total of about 50 yards as it has to go straight
to the right of about 35 yards and turn left of about
another 15 yards before reaching the common right of
way.
(Ocular Inspection report, pp. 135-136, ibid.)
Among the three (3) possible servient estates, it is clear
that defendants-appellants' property would afford the
shortest distance from plaintiffs-appellees' property to
the provincial road. Moreover, it is the least prejudicial
since as found by the lower court, "(i)t appears that
there would be no significant structures to be injured in
the defendants' property and the right-of-way to be
constructed thereon would be the shortest of all the
alternative routes pointed to by the defendants" (p. 4,
RTC, Decision; p. 223, ibid.).

Petitioners' reliance on Costabella Corporation v. Court

of Appeals 9 to support their first assigned error is
misplaced. In said case we reversed the decision of the
Court of Appeals granting a compulsory easement of a
right of way to the private respondents therein because
of the absence of any showing that the "private
respondents had established the existence of the four
requisites mandated by law." As to the third requisite,
we explicitly pointed out; thus: "Neither have the private
respondents been able to show that the isolation of their
property was not due to their personal or their
predecessors-in-interest's own acts." In the instant case,
the Court of Appeals have found the existence of the
requisites. The petitioners, however, insist that private
respondents' predecessors-in-interest have, through
their own acts of constructing concrete fences at the
back and on the right side of the property, isolated their
property from the public highway. The contention does
not impress because even without the fences private
respondents' property remains landlocked by
neighboring estates belonging to different owners.
Under the second and fourth assigned errors, the
petitioners try to convince us that there are two other
existing passage ways over the property of Cruz and
over that of Jacinto, as well as a "daang tao," for private
respondents' use. Our examination of the records yields
otherwise. Said lots of Cruz and Jacinto do not have
existing passage ways for the private respondents to
use. Moreover, the Ocular Inspection Report 10 reveals
that the suggested alternative ways through Cruz's or
Jacinto's properties are longer and "circuitous" than that
through petitioners' property. This is also clear from the
Sketch Plan 11 submitted by the private respondents
wherein it is readily seen that the lots of Cruz and
Jacinto are only adjacent to that of private respondents
unlike that of petitioners which is directly in front of
private respondents' property in relation to the public
highway.
Under Article 650 of the Civil Code, the easement of
right of way shall be established at the point least
prejudicial to the servient estate, and, insofar as
consistent with this rule, where the distance from the
Page 335 of 404

LAW ON PROPERTY

dominant estate to a public highway may be the

shortest. Where there are several tenements
surrounding the dominant estate, and the easement
may be established on any of them, the one where the
way is shortest and will cause the least damage should
be chosen. 12 The conditions of "least damage" and
"shortest distance" are both established in one
tenement petitioners' property.
As to the "daang tao" at the back of private
respondents' property, it must be stressed that under
Article 651 the width of the easement of right of way
shall be that which is sufficient for the needs of the
dominant estate, and may accordingly be changed from
time to time. Therefore, the needs of the dominant
estate determine the width of the easement. 13 The
needs of private respondents' property could hardly be
served by this "daang tao" located at the back and
which is bordered by a fishpond. 14
The third assigned error is without basis and is nothing
but a misreading of the challenged decision. The Court
of Appeals did not declare as established facts the
allegations of the complaint referred to by the petitioner.
It merely made a brief summary of what were alleged in
the complaint as part of its narration of the antecedents
of the case on appeal.
WHEREFORE, the instant petition for review is DENIED
and the challenged decision of the Court of Appeals is
AFFIRMED in toto.
Costs against petitioners.
* The name "Aniceta de Sagun Viuda de Magsino'' in the
original caption of the instant petition is erroneous. See
the captions in the Complaint and the subsequent
Decision of the trial court.(Original Records, pp. 1 and
103).
** The servient estate originally belonged to Eusebio de
Sagun, the son of Aniceta Magsino Vda. de Sagun. After
Eusebio's death, his widow Elena sold her share of the
estate to her mother-in-law and co-heir Aniceta. During
the pendency of the civil case for the grant of easement,

Aniceta also died leaving six children as her heirs. None

of the children resides in the estate which as of 1985 is
being administered by Aniceta's brother, Mamerto
Magsino. (Original Record, pp. 77-78; TSN, August 9,
1985, pp. 22, 30-31).
ARTICLE 669-670
G.R. No. 6076 December 29, 1911
SEVERINA and FLORA CHOCO, plaintiffs-appellants,
vs.
ISIDRO SANTAMARIA, defendant-appellant.
Manuel Torres, for plaintiffs.
Leodegario Azarraga, for defendant.

MAPA, J.:
The judgment rendered in this case in first instance is in
part as follows:
From the evidence presented at the trial, I find that the
defendants is in possession of a parcel of land on the
corner of Calles Pescadores and P. Rada, in the district of
Tondo, city of Manila, and that he was erected a house
thereon flush with the boundary line of the adjacent
property; that the plaintiffs are the owners of the land
on both sides of the defendant's house, erected as
stated, both on Calle Pescadores and Calle P. Rada; that
the defendant in the building of his house has made
several openings and windows in the walls of the house
on both sides overlooking then property of the plaintiff;
that at the time the defendant was building his house,
and the windows and the openings were being made,
the plaintiffs protested, and later on and in the year
1905 made written protest and demand on the
defendant, and the defendant received the written
protest and referred it to his counsel, who, from the
evidence, appears to have suggested an amicable and
adjustment of the matter, but the adjustment was not
made, and this action was brought.
Page 336 of 404

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It is likewise established that the entrance to the

defendant's house is in Calle Pescadores, and taking it
as the front of his house he has put a large window in its
upper story, on the balcony of said house, marked 1 on
Exhibit A, overlooking Calle P. Rada; and that this
window and its balcony do not face directly toward the
house of the plaintiffs.
There have also been constructed two windows in the
rear wall of the house of the defendant, in the first story
of the house, which are marked 8 and 9 on exhibit A,
and these windows are each 50 by 80 centimeters, and
are placed immediately under the ceiling of the first
story, and each of these windows is equally divided into
four panes.
On the right hand side of the house, entering from Calle
Pescadores, there is a window or opening in the wall of
the house in the second story, which is about 25 by 35
centimeters, and is located a little more than half way
from the floor of the ceiling of the second story and this
is subdivided into smaller panes; and on the same side
there are three windows which are marked 2, 3, and 4
on Exhibit A, located immediately under the ceiling of
the first story, and each of the three is 25 by 25
centimeters.
There are two other windows on the same side located
immediately under the ceiling, which are marked as 5
and 6 on Exhibit A and also on Exhibit C, and one of
these windows is about 35 by 67 centimeters, and the
other about 75 by 90 centimeters.
It also appears that there is wire screening over all these
openings or windows.1awphil.net
The law provides that the owner of a wall which is not a
party wall, adjoining another's estate, may make in it
windows or openings to admit light at the height of the
ceiling joist, or immediately under the ceiling, thirty
centimeters square, with an iron gate embedded in the
wall and a wire screen.

In this case the windows are in a wall not a party wall

adjoining the plaintiff's estate, and the window marked
2, 3, and 4, as appears on Exhibit A, are less than thirty
centimeters square and have a wire screen, but there
does not appear to be the iron gate embedded in the
wall.
The windows marked 5 and 6, as indicated in Exhibit A,
have a wire screen but are more than thirty centimeters
square, and have the iron grate embedded in the wall.
The window marked 7 on Exhibit A has a wire screen,
but is more than 30 centimeters square and has not the
iron grate embedded on the wall.
The windows 8 and 9, as indicated on Exhibit A, have a
wire screen but no iron grate embedded in the wall, and
are of a greater dimension than thirty centimeter
square.
The window marked One on Exhibit A is located in a
balcony which overlooks the street, while the premises
of the plaintiff may be seen from it, it is not adjoining
their estate.
The court finds that the plaintiffs are entitled to a decree
for closing all the windows or openings in the walls of
the defendant's house, as herein before described,
which directly overlook the premises of the plaintiffs, or
that in some other way the provisions of the law be
complied with so that they may remain open.
All these openings and windows can be made to comply
with the law, with the exception of that marked 7, which
is not immediately under the ceiling (techo).
Let judgment be entered in favor of the plaintiffs,
Severina and Flora Choco, and against the defendant,
Isidro Santamaria, forever prohibiting the opening of the
window marked No. 7, as hereinbefore stated, which
must be closed, and forever prohibiting the opening of
the windows and openings marked, as herein before
stated, 2, 3, 4, 5, 6, 8, and 9, which must be closed or
made to conform to the requirements of law with regard
Page 337 of 404

LAW ON PROPERTY

to dimensions and an iron grate embedded in the wall,

with the costs of the action.
The plaintiffs appealed from that judgment and allege in
their appeal in this instance:1awphil.net
1. That the lower court erred by not ordering in his
judgment the final and perpetual closing of the large
window opened in the balcony of the back part of the
appellee's house and marked No. 1 in the photographic
Exhibits A and D, on the ground that the said window is
in the balcony which overlooks Calle Padre Rada and
that, though the appellant's lot can be seen through the
window, it is not contiguous to the latter's property.

distance at all between the said window and the

plaintiffs' lot, because, as we have said, this window is
perpendicular to the boundary line of the said lot;
therefore, its opening is a manifest violation of the
provisions of article 582 of the Civil Code which reads as
follows:
Windows with direct views, or balconies or any similar
openings projecting over the estate of the neighbor, can
not be made if there is not a distance of, at least, 2
meters between the wall in which they are built and said
estate.
Neither can side nor oblique views be opened over said
property, unless there is a distance of 60 centimeters.

2. That the trial court also erred in ordering in his

judgment that the openings and windows, Nos. 2, 3, 4,
5, 6, 8, and 9, might continue open if they were fixed so
as to comply with the requirements of the law as
regards their dimensions and the placing of iron grates
embedded in the wall.

Because of the lack of the distance required by law, the

window in question must be closed, and consequently
the judgment appealed from should be modified in this
sense, as regards this window.

3. That the lower court also erred in denying the

appellant's petition for rehearing.

With respect to the second assignment of error, the

question raised by the appellants concerns the proper
interpretation of article 581 of the Civil Code which
describes as follows:itc-alf

It appears obvious to us, from the evidence, that the

window No. 1, referred to in the first assignment of
errors, is next appellants' lot. To judge from the
photographic views, Exhibits A and D, it opens on the
boundary line between the said lot and that the appellee
and is situated perpendicularly above a part of the wall
that belongs to the appellants. This opinion is
corroborated by the testimony of the defendant's
witness who took the said photographs, in so far as he
said that "a part of the window in question is in front of
the plaintiffs' property, and a person approaching the
window may clearly see the said lot." And certainly if it
is in front of this lot, it is unquestionable that it directly
overlooks the same; but even though it did not and only
a side or oblique view of the lot could be obtained from
it, it could not be kept open, since between it and the
plaintiffs' property there does not intervene the distance
required by law that of two meters in the first case,
and 60 centimeters in the second. In reality, there is no

The owner of the wall which is not a party-wall, adjoining

anothers estate, may make in it windows or openings to
admit light, at the height of the ceiling joists or
immediately under the ceiling, of the dimentions of 30
centimeters square and, in any case, with an iron grate
embedded in the wall and a wire screen.
The windows mentioned in this part of the appeal are
those indicated by Nos. 2, 3, 4, 5, 6, 8, and 9, in the
defendant's Exhibit A. They are all situated immediately
under the ceiling of the first door and are provided with
wire screens; some of them measure more and other
less than 30 centimeters square and none of them have
iron grates embedded in the wall. Owing to this last
circumstance, none of them fully comply with the
conditions required by the law; moreover, those
numbered 5, 6, 8, and 9, have the additional defect of
being greater than 30 centimeters square. The trial
Page 338 of 404

LAW ON PROPERTY

judge therefore ordered, in the judgment, that all the

aforementioned windows be closed or that they be
made to conform to the law with respect to their
dimentions and the placing of the iron grates embedded
in the wall. The appellants maintain that these windows
should have been ordered closed absolutely and finally,
and, consequently, that the option allowed the
defendant to keep them open, provided that he brought
them within the terms of the law, in contrary to the
same and, therefore, illegal.
It is alleged as a ground for such averment that none of
the ceiling joist, which is the first condition required by
law.
We understand by ceiling joist say the appellants in
a building composed of any given number of stories, the
long pieces to which are nailed the boards that form the
ceiling of the last story of the building, counting the
stories from below; and this interpretation which we give
to the words ceiling joists must be that most in harmony
with the spirit of article 581 of the code, the subject of
our examination, since immediately after them in the
same article, in explanation, are found the words or
immediately under "los techos," in order to indicate,
without the least doubt, the sole place or height where
openings or windows may be made in conformity within
the law. It is needless to say that a building, though
composed of several stories, can have but one
techo. . . .
This last assertion is incorrect. By techo is understood
that part of a construction which covers the rooms under
it and certainly forms one of the essential parts of every
story. A story is composed of earth, payment and ceiling,
the latter, that is, the ceiling, being that part of the story
that the visible to the observer situated below in the
room covered by it. (Hispano-American Encyclopedic
Dictionary, by Montaner and Simon.) Consequently,
every story has a ceiling, and not, as the appellants
maintain, the upper one alone.
Nor is their definition exact of the word joists, as it is
employed in article 581 of the Code. According to the

dictionary of the Spanish Academy, these are, in

architecture, understood to be a kind of beam laid
horizontally and serving in buildings to support others of
for bracing and connecting the parts of the structure.
Mucius Scaevola says in his Civil Code, volume 10, page
448:
The horizontal timbers that are placed upon the tops of
the uprights, that is, what are commonly called beams,
intended to serve for connection and main support of
the timbers of the different floors that separate the
stories of the building, are called joists.
According to these definitions each floor necessarily has
joists, that is, beams, since, in the last analysis they are
what support and secure the structure of the story
immediately above; therefore it is not true that there
may be joists only in the top story, as the appellants
claim by saying that they understand to be such the
long timbers to which are fastened the boards of the
ceiling at the top story of the building. On the contrary,
carefully considered, it is precisely the top story that
does not need joists, since it does not have to support
any other higher portion of the building. It has only to
support the weight of the roof, which undoubtedly much
less than that of a whole story. So that, according to
Mucius Scaevola (work cited, vol. 10, p. 487), it can not
be said that the top story has joists. And because it
certainly does not have them, is reason why the code in
said article 581 employs the phrase or immediately
under "los techos" in referring to the top story.
The author's words in expounding this theory in his
commentary on article 581 of the Civil Code are as
follows:
We said elsewhere that these (the joists) were horizontal
timbers that rest upon the tops of the uprights; they
form, then, the upper limit of the different stories of a
house; and therefore, in referring to the top story, which
can not be said to have joists, article 581 makes use of
the phrase or immediately under "los techos."

Page 339 of 404

LAW ON PROPERTY

This does not mean that the italicized phrase refers

solely and exclusively to the top story, since lower
stories also have techos, as above set forth. In our
opinion what the author cited means is that in speaking
of the top story, which has no joists, the words or article
581 of the code, at the height of the ceiling joists, fail to
apply, the phase or immediately under "los techos"
alone being thereto applicable, in distinction from the
lower stories, with regard to which both phrases are
applicable as they have at the same time joists and
techo. In referring to the lower stories either phrase
may, in connection with the other, determine the place,
which surely can be more than one, where it is
permissible to open the windows called regulation
windows, whenever in them the joists are actually joined
to or placed next to the techo which forms the top of
each of said stories. Both phrases therefore express the
same idea with reference to the lower stories.
Aside from what has been said here, the object of the
law in authorizing the opening of the windows in
question in all the stories of a building, without any
exception, is clear. Their purpose is, as article 581 itself
says, to furnish light to the rooms, and it is evident at a
glance that the rooms of the lower stories have as much
need for light as those of the top story. No good reason
exists for having one story in better condition than
another, whichever it may be, connection with this
provision of law.
The defendant is ordered to close finally and forever the
window marked No. 1 in Exhibit A, the judgment
appealed from in so far as it refers to said window being
thus modified, but affirmed in all other respects; without
special finding as to costs in this instance.
Arellano, C.J., Johnson and Carson, JJ., concur.
Separate Opinions
MORELAND, J., dissenting:

I cannot conform to a decision which, in the twentieth

century and in a civilized country, makes it an offense
for a person to put windows in his own house.
The law, if any (and I do not believe that the law invoked
covers the case), upon which the decision is based,
together with the reasons for its existence, disappeared
with the American occupation, and with the advent of
American institutions, Constitution and laws.
Moreover, it might be well be that such a law would
seriously conflict with those laws, rules and regulations
which are necessary to assure and preserve the public
health.
ARTICLE 725
JUTIC V CA 153 scra 269
ARTICLE 726
G.R. No. L-15939

January 31, 1966

ANGELES UBALDE PUIG, ET AL., plaintiffs-appellants,

vs.
ESTELLA MAGBANUA PEAFLORIDA, ET AL., defendantsappellants.
Salonga and Ordonez for the plaintiffs-appellants.
Fulgencio Vega for the defendants-appellants.
RESOLUTION
(Main opinion was promulgated on November 29, 1965).
REYES, J.B.L., J.:
Defendants-appellants Estela Magbanua Peaflorida, et
al., insist that the reservation by the donor of the right
to dispose of the property during her lifetime in the deed
of December 28, 1949 indicates that title had passed to
the donee in her lifetime, otherwise, it is argued, the
reservation would be superfluous, and they cite
American authorities in support.
This thesis would be plausible if the reservation of the
power to dispose were the only indication to be
Page 340 of 404

LAW ON PROPERTY

considered in deciding whether the donation of

December 28, 1949 was mortis causa or inter vivos. But
such is not the case. The Court in its decision took to
account not only the foregoing circumstance but also
the fact that the deceased expressly and consistently
declared her conveyance to be one of donation mortis
causa, and further forbade the registration of the deed
until after her death. All these features concordantly
indicated that the conveyance was not intended to
produce any definitive effects, nor to finally pass any
interest to the grantee, except from and after the death
of the grantor.
We see nothing in the deed itself to indicate that any
right, title or interest in the properties described was
meant to be transferred to Doa Estela Magbanua prior
to the death of the grantor, Carmen Ubalde Vda. de
Parcon. Not ownership, certainly, for the stipulation:
Que esta escritura de donacion mortis causa no se
registrara en la oficina del Registrador de Titulos de Iloilo
sino despues del fallecimiento de la Donante
necessarily meant, according to section 50 of the Land
Registration Act, that the deed in question should not
take effect as a conveyance nor bind the land until after
the death of the "donor".
Neither did the document operate to vest possession
upon Doa Estela Magbanua, in view of the express
condition that (paragraph 3) if at the date of her death
the donor had not transferred, sold, or conveyed onehalf of lot 58 of the Pototan Cadastre to other persons or
entities, the donee would be bound to pay to Caridad
Ubalde, married to Tomas Pedrola, the amount of
P600.00, and such payment was to be made on the date
the donee took possession of Lot No. 58. As the
obligation to pay the legacy to Caridad Ubalde would not
definitely arise until after the death of the donor,
because only by then would it become certain that the
"donor" could not transfer the property to someone else,
and such payment must precede the taking possession
of the property "donated", it necessarily follows that the

"donee's" taking of possession could not occur before

the death of the donor.
It being thus clear that the disposition contained in the
deed is one that produces no effect until the death of
the grantor, we are clearly faced by an act mortis causa
of the Roman and Spanish law. We thus see no need of
resorting to American authorities as to the import of the
reservation of the donor's right to dispose of the
donated property, for the Spanish authorities are very
clear on this point:
Desde el momento en que la muerte del donante es la
que determina la adquisicion o el derecho a los bienes;
desde el montento en que la disposicion puede ser
revocada voluntariamente, se salva la linea divisoria
entre unos y otros actos: la donacion equivale a un
legado; mas aun que esto: es un legado en realidad. (5
Manresa, 5th Ed., p. 107)
Ahora bien: si el mal llamado donante no solo dilata la
fecha de la ejecucion para el momento de su muerte,
sino que ademas se reserva la facultad de revocar a su
arbitrio la disposicion, entonces el acto no es valido bajo
la forma de contrato; hay en realidad una disposicion
mortis causa que exige las solemnidades del
testamento. (V Manresa, 5th Ed., p. 109) (Emphasis
supplied)
The presence of an acceptance is but a consequence of
the erroneous concept of the true nature of the juridical
act, and does not indicate that in the same is a true
donation inter vivos.
Appellant Magbanua further argues that the reserved
power of the donor to convey the donated property to
other parties during her lifetime is but a resolutory
condition (albeit a potestative one) that confirms the
passing of the title to the donee. In reality, this
argument is a veritable petitio principii; it takes for
granted what has to be proved, i.e., that some
proprietary right has passed under the terms of the
deed, which, as we have shown, is not true until the
donor has died.
Page 341 of 404

LAW ON PROPERTY

It is highly illuminating to compare the condition

imposed in the deed of donation of December 28, 1949
with that established in the contract dealt with in Taylor
vs. Uy Tieng Piao & Tau Liuan, 43 Phil. 874, invoked by
appellants.
In the alleged deed of donation of December 28, 1949,
the late Doa Carmen Ubalde imposed expressly that:
Que antes de su muerte, la Donante podra enajenar,
vender, traspasar e hipotecar a cualesquiera personas o
entidades los bienes aqui donados a favor de la
Donataria en concepto de Donacion mortis causa.
In the Taylor vs. Uy Tieng Piao case, on the other hand,
the condition read:
It is understood and agreed that should the machinery
to be installed in said factory fail, for any reason, to
arrive, in the City of Manila within the period of six (6)
months from date hereof, this contract may be cancelled
by the party of the second part at its option, such
cancellation, however, not to occur before the expiration
of such six (6) months. (pp. 874-875, cas. cit.).
In the Uy Tieng Piao case the contract could only be
cancelled after six months, so that there could be no
doubt that it was in force at least for that long, and the
optional cancellation can be viewed as a resolutory
condition (or more properly, a non-retroactive
revocatory one); but no such restriction limited the
power of the donor, Doa Carmen Ubalde, to set at
naught the alleged conveyance in favor of Doa Estela
Magbanua by conveying the property to other parties at
any time, even at the very next instant after executing
the donation, if she so chose. It requires no argument to
demonstrate that the power, as reserved in the deed,
was a power to destroy the donation at any time, and
that it meant that the transfer is not binding on the
grantor until her death made it impossible to channel
the property elsewhere. Which, in the last analysis, as
held in our main decision, signifies that the liberality is
testamentary in nature, and must appear with the

solemnities required of last wills and testaments in order

to be legally valid.
Wherefore, the motion to reconsider is denied.
ARTICLE 728-729
G.R. No. L-6600

July 30, 1954

HEIRS OF JUAN BONSATO and FELIPE BONSATO,

petitioners,
vs.
COURT OF APPEALS and JOSEFA UTEA, ET AL.,
respondents.
Benedict C. Balderrama for petitioners.
Inocencio Rosete for respondents.
REYES, J.B.L., J.:
This is a petition for review of a decision of the Court of
Appeals holding two deeds of donation executed on the
first day of December, 1939 by the late Domingo
Bonsato in favor of his brother Juan Bonsato and of his
nephew Felipe Bonsato, to be void for being donations
mortis causa accomplished without the formalities
required by law for testamentary dispositions.
The case was initiated in the Court of First Instance of
Pangasinan (Case No. 8892) on June 27, 1945, by
respondents Josefa Utea and other heirs of Domingo
Bonsato and his wife Andrea Nacario, both deceased.
Their complaint (for annulment and damages) charged
that on the first day of December, 1949, Domingo
Bonsato, then already a widower, had been induced and
deceived into signing two notarial deeds of donations
(Exhibits 1 and 2) in favor of his brother Juan Bonsato
and of his nephew Felipe Bonsato, respectively,
transferring to them several parcels of land covered by
Tax Declaration Nos. 5652, 12049, and 12052, situated
in the municipalities of Mabini and Burgos, Province of
Pangasinan, both donations having been duly accepted
in the same act and documents. Plaintiffs likewise
charged that the donations were mortis causa and void
for lack of the requisite formalities. The defendants, Juan
Page 342 of 404

LAW ON PROPERTY

Bonsato and Felipe Bonsato, answered averring that the

donations made in their favor were voluntarily executed
in consideration of past services rendered by them to
the late Domingo Bonsato; that the same were executed
freely without the use of force and violence,
misrepresentation or intimidation; and prayed for the
dismissal of the case and for damages in the sum of
P2,000.

The sole issue submitted to this Court, therefore, is the

juridical nature of the donations in question. Both deeds
(Exhs. 1 and 2) are couched in identical terms, with the
exception of the names of the donees and the number
and description of the properties donated. The principal
provisions are the following.

After trial, the Court of First Instance rendered its

decision on November 13, 1949, finding that the deeds
of donation were executed by the donor while the latter
was of sound mind, without pressure or intimidation;
that the deeds were of donation inter vivos without any
condition making their validity or efficacy dependent
upon the death of the donor; but as the properties
donated were presumptively conjugal, having been
acquired during the coverture of Domingo Bonsato and
his wife Andrea Nacario, the donations were only valid
as to an undivided one-half share in the three parcels of
land described therein.

Yo, Domingo Bonsato, viudo de Andrea Nacario, mayor

de edad, vencino y residente del municipio de Agno,
Pangasinan, I.F., por la presente declaro lo siguiente:

Thereupon the plaintiffs duly appealed to the Court of

Appeals, assigning as primary error the holding of the
court below that the donations are inter vivos;
appellants contending that they were mortis causa
donations, and invalid because they had not been
executed with the formalities required for testamentary
disposition.
A division of five of the Court of Appeals took the case
under consideration, and on January 12, 1953, the
majority rendered judgment holding the aforesaid
donations to be null and void, because they were
donations mortis causa and were executed without the
testamentary formalities prescribed by law, and ordered
the defendants-appellees Bonsato to surrender the
possession of the properties in litigation to the plaintiffsappellants. Two Justices dissented, claiming that the said
donations should be considered as donations inter vivos
and voted for the affirmance of the decision of the Court
of First Instance. The donees then sought a review by
this Court.

ESCRITURA DE DONATION

Que mi osbrino Felipe Bonsato, casado, tambien mayor

de edad, vecino de Agno, Pangasinan, I.F., en
consideracion de su largo servicio a Domingo Bonsato,
por la presente hagor y otorgo una donacion perfecta e
irrevocable consumada a favor del citado Felipe Bonsato
de dos parcelas de terreno palayero como se describe
mas abajo.
(Description omitted)
Que durante su menor de edad de mi citado sobrino
Felipe Bonsato hasta en estos dias, siempre me ha
apreciado y estimado como uno de mis hijos y siempre
ha cumplido todas mis ordenes, y por esta razon bajo su
pobriza sea movido mi sentimiento para dar una
recompensa de sus trabajos y aprecios a mi favor.
Que en este de 1939 el donante Domingo Bonsato ha
entregado a Felipe Bonsato dichos terrenos donados y
arriba citados pero de los productos mientras vive el
donante tomara la parte que corresponde como dueo y
la parte como inquilino tomara Felipe Bonsato.
Que en vista de la vejez del donante, el donatorio Felipe
Bonsato tomara posesion inmediatamente de dichos
terrenos a su favor.
Que despues de la muerte del donante entrara en vigor
dicha donancion y el donatario Felipe Bonsato tendra
todos los derechos de dichos terrenos en concepto de
dueo absoluto de la propiedad libre de toda
Page 343 of 404

LAW ON PROPERTY

responsibilidad y gravamen y pueda ejercitar su derecho

que crea conveniente.

dispositions, thus suppressing said donations as an

independent legal concept.

En Testimonio de todo lo Cual, signo la presente en

Agno, Pangasinan, I.F., hoy dia 1.0 de Diciembre, 1939.

ART. 620. Donations which are to become effective upon

the death of the donor partake of the nature of disposals
of property by will and shall be governed by the rules
established for testamentary successions.

Domingo (His thumbmark) Bonsato

Yo, Felipe Bonsato, mayor de edad, casado, Vecino de
Mabini, Pangasinan, I.F., declaro por la presente que
acepto la donacion anterior otorgado por Domingo
Bonsato a mi favor.
(Sgd.) Felipe Bonsato

Commenting on this article, Mucius Scaevola (Codigo

Civl, Vol. XI, 2 parte, pp. 573, 575 says:
No ha mucho formulabamos esta pregunta: Subsisten
las donaciones mortis causa como institucion
independiente, con propia autonomia y propio compo
jurisdiccional? La respuesta debe ser negativa.
xxx

SIGNADO Y FIRMADO EN PRESENCIA DE:

(Sgd.) Illegible
(Sgd.) Illegible
The majority of the special divisions of five of the Court
of Appeals that took cognizance of this case relied
primarily on the last paragraph, stressing the passage:
Que despues de la muerte del donante entrara en vigor
dicha donacion . . .
while the minority opinion lay emphasis on the second
paragraph, wherein the donor states that he makes
"perfect, irrevocable, and consummated donation" of the
properties to the respective donees, petitioners herein.
Strictly speaking, the issue is whether the documents in
question embody valid donations, or else legacies void
for failure to observe the formalities of wills
(testaments). Despite the widespread use of the term
"donations mortis causa," it is well-established at
present that the Civil Code of 1889, in its Art. 620, broke
away from the Roman Law tradition, and followed the
French doctrine that no one may both donate and retain
("donner at retenir ne vaut"), by merging the erstwhile
donations mortis causa with the testamentary

xxx

xxx

Las donaciones mortis causa se consevan en el Codigo

como se conserva un cuerpo fosil en las vitrinas de un
Museo. La asimilacion entre las donaciones por causa de
muerte y las transmissiones por testamento es perfecta.
Manresa, in his Commentaries (5th ed.), Vol. V. p. 83,
expresses the same opinion:
"La disposicion del articulo 620 significa, por lo tanto:
1..o, que han desaparecido las llamas antes donaciones
mortis causa por lo que el Codigo no se ocupa de ellas
en absoluto; 2.o, que toda disposicion de bienes para
despues de la muerte sigue las reglas establecidas para
la sucesion testamentaria.
And Castan, in his Derecho Civil, Vol. IV (7th Ed., 1953),
p. 176, reiterates:
(b) Subsisten hoy en nuestro derecho las donaciones
mortis causa? De lo que acabamos de decir se
desprende que las donaciones mortis causa han perdido
en el Codigo Civil su caracter distintivo y su naturaleza y
hay que considerarlos hoy como una institucion
suprimida, refundida en el legado ... . Las tesis de la
desaparcion de las donaciones mortis causa en nuestro
Codigo Civil, acusada ya precedentemente por el
Page 344 of 404

LAW ON PROPERTY

pryecto de 1851 puede decirse que constituye una

communis opinion entre nuestros expositores, incluso
los mas recientes.
We have insisted on this phase of the legal theory in
order to emphasize that the term "donations mortis
causa" as commonly employed is merely a convenient
name to designate those dispositions of property that
are void when made in the form of donations.
Did the late Domingo Bonsato make donations inter
vivos or dispositions post mortem in favor of the
petitioners herein? If the latter, then the documents
should reveal any or all of the following characteristics:
(1) Convey no title or ownership to the transferee before
the death of the transferor; or, what amounts to the
same thing, that the transferor should retain the
ownership (full or naked) and control of the property
while alive (Vidal vs. Posadas, 58 Phil., 108; Guzman vs.
Ibea, 67 Phil., 633);
(2) That before his death, the transfer should be
revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of
a reserved power in the donor to dispose of the
properties conveyed (Bautista vs. Sabiniano, G. R.
L-4326, November 18, 1952);
(3) That the transfer should be void if the transferor
should survive the transferee.
None of these characteristics is discernible in the deeds
of donation, Exhibits 1 and 2, executed by the late
Domingo Bonsato. The donor only reserved for himself,
during his lifetime, the owner's share of the fruits or
produce ("de los productos mientras viva el donante
tomara la parte que corresponde como dueo"), a
reservation that would be unnecessary if the ownership
of the donated property remained with the donor. Most
significant is the absence of stipulation that the donor
could revoke the donations; on the contrary, the deeds
expressly declare them to be "irrevocable", a quality
absolutely incompatible with the idea of conveyances

mortis causa where revocability is of the essence of the

act, to the extent that a testator can not lawfully waive
or restrict his right of revocation (Old Civil Code, Art.
737; New Civil Code, Art. 828).
It is true that the last paragraph in each donation
contains the phrase "that after the death of the donor
the aforesaid donation shall become effective" (que
despues de la muerte del donante entrara en vigor
dicha donacion"). However, said expression must be
construed together with the rest of the paragraph, and
thus taken, its meaning clearly appears to be that after
the donor's death, the donation will take effect so as to
make the donees the absolute owners of the donated
property, free from all liens and encumbrances; for it
must be remembered that the donor reserved for
himself a share of the fruits of the land donated. Such
reservation constituted a charge or encumbrance that
would disappear upon the donor's death, when full title
would become vested in the donees.
Que despues de la muerte del donante entrara en vigor
dicha donacion y el donatario Felipe Bonsato tendra
todos derechos de dichos terrenos en concepto de
dueo absoluto de la propiedad libre de toda
responsibilidad y gravamen y puede ejercitar su derecho
que crea conveniente.
Any other interpretation of this paragraph would cause it
to conflict with the irrevocability of the donation and its
consummated character, as expressed in the first part of
the deeds of donation, a conflict that should be avoided
(Civ. Code of 1889, Art. 1285; New Civil Code, Art. 1374;
Rule 123, sec. 59, Rules of Court).
Que mi sobrino FILIPINO BONSATO, casado, tambien
mayor de edad, vecino de Agno, Pangasinan, I. F., en
consideracion de su largo servicio a Domingo Bonsato,
por la presente hago y otorgo una donacion perfecta e
irrevocable consumada a favor del citado Felipe Bonsato
de dos parcelas de terreno palayero como se describe
mas abajo.

Page 345 of 404

LAW ON PROPERTY

In the cases held by this Court to be transfers mortis

causa and declared invalid for not having been executed
with the formalities of testaments, the circumstances
clearly indicated the transferor's intention to defer the
passing of title until after his death. Thus, in Cario vs.
Abaya, 70 Phil., 182, not only were the properties not to
be given until thirty days after the death of the last of
the donors, but the deed also referred to the donees as
"those who had been mentioned to inherit from us", the
verb "to inherit" clearly implying the acquisition of
property only from and after the death of the alleged
donors. In Bautista vs. Sabiniano, 49 Off. Gaz., 549; 92
Phil., 244, the alleged donor expressly reserved the right
to dispose of the properties conveyed at any time before
his death, and limited the donation "to whatever
property or properties left undisposed by me during my
lifetime", thus clearly retaining their ownership until his
death. While in David vs. Sison, 42 Off. Gaz. (Dec, 1946)
3155, the donor not only reserved for herself all the
fruits of the property allegedly conveyed, but what is
even more important, specially provided that "without
the knowledge and consent of the donor, the donated
properties could not be disposed of in any way", thereby
denying to the transferees the most essential attribute
of ownership, the power to dispose of the properties. No
similar restrictions are found in the deeds of donation
involved in this appeal.
That the conveyance was due to the affection of the
donor for the donees and the services rendered by the
latter, is of no particular significance in determining
whether the deeds Exhibits 1 and 2 constitute transfers
inter vivos or not, because a legacy may have identical
motivation. Nevertheless, the existence of such
consideration corroborates the express irrevocability of
the transfers and the absence of any reservation by the
donor of title to, or control over, the properties donated,
and reinforces the conclusion that the act was inter
vivos. Hence, it was error for the Court of Appeals to
declare that Exhibits 1 and 2 were invalid because the
formalities of testaments were not observed. Being
donations inter vivos, the solemnities required for them
were those prescribed by Article 633 of the Civil Code of
1889 (reproduced in Art. 749 of the new Code, and it is

undisputed that these were duly complied with. As the

properties involved were conjugal, the Court of First
Instance correctly decided that the donations could not
affect the half interest inherited by the respondents
Josefa Utea, et al. from the predeceased wife of the
donor.
The decision of the Court of Appeals is reversed, and
that of the Court of First Instance is revived and given
effect. Costs against respondents.
G.R. No. 125888 August 13, 1998
SPOUSES ERNESTO and EVELYN SICAD, petitioners,
vs.
COURT OF APPEALS, CATALINO VALDERRAMA, JUDY
CRISTINA M. VALDERRAMA and JESUS ANTONIO
VALDERRAMA, respondents.

NARVASA, C.J.:
The issue raised in the appeal by certiorari at bar
centers on the character of a deed of donation executed
by the late Aurora Virto DA. de Motinola of the City of
Iloilo as either inter vivos or mortis causa. That deed,
entitled "DEED OF DONATION INTER VIVOS," 1 was
executed by Montinola on December 11, 1979. It named
as donees her grandchildren, namely: Catalino
Valderrama, Judy Cristina Valderrama and Jesus Antonio
Valderrama: and treated of a parcel of land, Lot 3231 of
the Cadastral Survey of Panay, located at Brgy. Pawa,
Panay, Capiz, covered by Transfer Certificate of Title No.
T-16105 in the name of Montinola. The deed also
contained the signatures of the donees in
acknowledgment of their acceptance of the donation.
Montinola's Secretary, Gloria Salvilla, afterwards
presented the deed for recording in the Property
Registry, and the Register of Deeds cancelled TCT No. T16105 (the donor's title) and, in its place, issued TCT No.
T-16622 on February 7, 1980, in the names of the
donees. 2 Montinola however retained the owner's
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duplicate copy of the new title (No. T-16622), as well as

the property itself, until she transferred the same ten
(10) years later, on July 10, 1990, to the spouses,
Ernesto and Evelyn Sicad.

Montinola elevated the case to the Court of Appeals, her

appeal being docketed as CA-G.R. CV No. 33202. She
however died on March 10, 1993, 5 while the appeal
was pending.

On March 12, 1987, Aurora Montinola drew up a deed of

revocation of the donation, 3 and caused it to be
annotated as an adverse claim on TCT No. T-16622
(issued, as aforestated, in her grandchildren's names).
Then, on August 24, 1990, she filed a petition with the
Regional Trial Court in Roxas City for the cancellation of
said TCT No. T-16622 and the reinstatement of TCT No.
T- 16105 (in her name), the case being docketed as
Special Proceeding No. 3311. Her petition was founded
on the theory that the donation to her three (3)
grandchildren was one mortis causa which thus had to
comply with the formalities of a will; and since it had
not, the donation was void and could not effectively
serve as basis for the cancellation of TCT No. T-16105
and the issuance in its place of TCT No. T-16622.

Shortly after Montinola's demise, a "Manifestation and

Motion" dated March 31, 1993 was filed by Ernesto Sicad
and Evelyn Bofill-Sicad, herein petitioners, 6 in which
they (a) alleged that they had become the owners of the
property covered by TCT No. T-16622 in virtue of a "deed
of definite sale dated May 25, 1992" accomplished by
Montinola in their favor, which was confirmed by "an
affidavit dated November 26, 1997 also executed by the
latter, and (b) prayed that they be substituted as
appellants and allowed to prosecute the case in their
own behalf.

The donees (Montinola's grandchildren) opposed the

petition. In their opposition dated August 29, 1990, they
averred that the donation in their favor was one inter
vivos which, having fully complied with the requirements
therefor set out in Article 729 of the Civil Code, was
perfectly valid and efficacious. They also expressed
doubt about the sincerity of their grandmother's
intention to recover the donated property, since she had
not pursued the matter of its revocation after having it
annotated as an adverse claim.
The case, originally treated as a special proceeding, was
subsequently considered by the lower Court as an
ordinary civil action in view of the allegations and issues
raised in the pleadings. Pre-trial was had, followed by
trial on the merits which was concluded with the filing of
the parties' memoranda. The Trial Court then rendered
judgment on March 27, 1991, holding that the donation
was indeed one inter vivos, and dismissing Aurora
Montinola's petition for lack of merit. 4 The matter of its
revocation was not passed upon.

Another motion was subsequently presented under date

of April 7, 1993, this time by the legal heirs of Aurora
Montinola, namely: Ofelia M. de Leon, Estela M. Jaen and
Teresita M. Valderama. They declared that they were not
interested in pursuing the case, and asked that the
appeal be withdrawn. Montinola's counsel opposed the
motion.
On June 21, 1993, the Court of Appeals issued a
Resolution: (a) ordering the substitution of the persons
above mentioned Ofelia de Leon, Estela M, Jaen, and
Teresita M. Valderama as plaintiffs-appellants in place
of the late Aurora Montinola, as well as the joinder of the
spouses Ernesto and Evelyn Bofill-Sicad as additional
appellants; 7 and (b) denying the motion for the
withdrawal of the appeal.
On June 30, 1995, the Eighth Division of the Court of
Appeals promulgated its Decision on the case affirming
the judgment of the Regional Trial Court; 8 and on July
31, 1996, it denied the separate motions for
reconsideration filed by Ofelia M. de Leon, Estela M.
Jaen, and Teresita M. Valderrama, on the one hand, and
by the spouses, Ernest and Evelyn Sicad, on the other. 9

Page 347 of 404

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The Sicad Spouses have appealed to this Court; and

here, they contend that the following errors were
committed by the Appellate Tribunal, to wit:
1) ** in ruling that the donation was inter vivos and in
not giving due weight to the revocation of the donation;
and
2) ** in not ordering that the case be remanded for
further reception of evidence. 10
The Comment filed for private respondents (the donees)
under date of December 19, 1996 deals with what they
consider the "principal issue in this case ** (i.e.) whether
the donation is mortis causa or inter vivos," and sets
forth the argument that the "donor clearly intended to
effect the immediate transfer of ownership to the
donees." that the prohibition in the deed of donation
"against selling the property within ten (10) years after
the death of the donor does not indicate that the
donation is mortis causa," that the donor's "alleged act
of physically keeping the title does not suggest any
intention to defer the effectivity of the donation," that
the "payment of real property taxes is consistent with
the donor's' reservation of the right of usufruct," that the
donor's intent "is not determined by ** (her) self-serving
post-execution declarations," the "donation was never
effectively revoked," and petitioners "have waived their
right to question the proceedings in the trial court." 11
The Reply of the Sicad Spouses dated March 14, 1997
reiterates their thesis that the donation was mortis
causa, that "the provisions of the deed of donation
indicate that it was intended to take effect upon the
death of the donor," that "the circumstances
surrounding the execution of the deed, and the
subsequent actions of the donor incontrovertibly signify
the donor's intent to transfer the property only after her
death," that the donor "did not intend to give effect to
the donation," and that the procedure adopted by the
Trial Court in the case was fatally defective. 12 A
"Rejoinder" dated April 3, 1997 was then submitted by
the Valderramas, traversing the assertions of the Reply.
13

Considering the focus of the opposing parties, and their

conflicting theories, on the intention of Aurora Montinola
in executing the document entitled "Deed of Donation
Inter Vivos," it is needful to review the circumstances of
the signing of that document by Montinola, as ostensible
donor, and her grandchildren, as ostensible donees.
The evidence establishes that on December 11, 1979,
when the deed of donation prepared by Montinola's
lawyer (Atty. Treas) was read and explained by the
latter to the parties, Montinola expressed her wish that
the donation take effect only after ten (10) years from
her death, and that the deed include a prohibition on the
sale of the property for such period. Accordingly, a new
proviso was inserted in the deed reading: "however, the
donees shall not sell or encumber the properties herein
donated within 10 years after the death of the donor."
14 The actuality of the subsequent insertion of this new
proviso is apparent on the face of the instrument: the
intercalation is easily perceived and identified it was
clearly typed on a different machine, and is crammed
into the space between the penultimate paragraph of
the deed and that immediately preceding it. 15
Not only did Aurora Montinola order the insertion in the
deed of that restrictive proviso, but also, after
recordation of the deed of donation, she never stopped
treating the property as her own. She continued, as
explicity authorized in the deed itself, to possess the
property, enjoy its fruits and otherwise exercise the
rights of dominion, paying the property taxes as they fell
due all these she did until she transferred the
Property to the Sicad Spouses on July 10, 1990. She did
not give the new certificate of title to the ostensible
donees but retained it, too, until she delivered it to the
Sicads on the occasion of the sale of the property to
them. In any event, the delivery of the title to the
donees would have served no useful purpose since, as
just stated, they were prohibited to effect any sale or
encumbrance thereof for a period of ten (10) years after
the ostensible donor's decease. And consistent with
these acts denoting retention of ownership of the
property was Montinola's openly expressed view that the
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LAW ON PROPERTY

donation was ineffectual and could not be given effect

even after ten (10) years from her death. For this view
she sought to obtain judicial approval. She brought suit
on August 24, 1990 to cancel TCT No. T-16622 (issued to
her grandchildren) premised precisely on the invalidity
of the donation for failure to comply with the requisites
of testamentary dispositions. Before that, she attempted
to undo the conveyance to her grandchildren by
executing a deed of revocation of the donation on March
12, 1987, and causing annotation thereof as an adverse
claim on said TCT No. T-16622. She also exercised
indisputable acts of ownership over said property by
executing, as just stated, deeds intended to pass title
over it to third parties petitioners herein. 16
As already intimated, the real nature of a deed is to be
ascertained by both its language and the intention of
the parties as demonstrated by the circumstances
attendant upon its execution. In this respect, case law
has laid down significant parameters. Thus, in a decision
handed down in 1946, 17 this Court construed a deed
purporting to be a donation inter vivos to be in truth one
mortis causa because it stipulated (like the one now
being inquired into) "that all rents, proceeds, fruits, of
the donated properties shall remain for the exclusive
benefit and disposal of the donor, Margarita David,
during her lifetime; and that, without the knowledge and
consent of the donor, the donated properties could not
be disposed of in any way, whether by sale, mortgage,
barter, or in any other way possible," On these essential
premises, the Court said, such a donation must be
deemed one "mortis causa, because the combined
effect of the circumstances surrounding the execution of
the deed of donation and of the above-quoted clauses
thereof ** (was that) the most essential elements of
ownership the right to dispose of the donated
properties and the right to enjoy the products, profits,
possession remained with Margarita David during her
lifetime, and would accrue to the donees only after
Margarita David's death." So, too, in the case at bar, did
these rights remain with Aurora Montinola during her
lifetime, and could not pass to the donees until ten (10)
years after her death.

In another case decided in 1954 involving a similar

issue, Bonsato v. Court of Appeals, 18 this Court
emphasized that the decisive characteristics of a
donation mortis causa, which it had taken into account
in David v. Sison, were that "the donor not only reserved
for herself all the fruits of the property allegedly
conveyed, but what is even more important, specially
provided that "without the knowledge and consent of
the donor, the donated properties could not be disposed
of in any way,; thereby denying to the transferees the
most essential attribute of ownership, the power to
dispose of the properties."
A donation which purports to be one inter vivos but
withholds from the donee the right to dispose of the
donated property during the donor's lifetime is in truth
one mortis causa. In a donation mortis causa "the right
of disposition is not transferred to the donee while the
donor is still alive." 19
In the instant case, nothing of any consequence was
transferred by the deed of donation in question to
Montinola's grandchildren, the ostensible donees. They
did not get possession of the property donated. They did
not acquire the right to the fruits thereof, or any other
right of dominion over the property. More importantly,
they did not acquire the right to dispose of the property
this would accrue to them only after ten (10) years
from Montinola's death. Indeed, they never even laid
hands on the certificate of title to the same. They were
therefore simply "paper owners" of the donated
property. All these circumstances, including, to repeat,
the explicit provisions of the deed of donation
reserving the exercise of rights of ownership to the
donee and prohibiting the sale or encumbrance of the
property until ten (10) years after her death
ineluctably lead to the conclusion that the donation in
question was a donation mortis causa, contemplating a
transfer of ownership to the donees only after the
donor's demise.
The case of Alejandro v. Geraldez 20 cited by the Court
of Appeals in support of its challenged judgment is not
quite relevant. For in the deed of donation there in issue,
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LAW ON PROPERTY

there was a partial relinquishment of the right to dispose

of the property, in the event only that this became
necessary "to defray the expenses and support of the
donors." That limited right to dispose of the donated
lots, said this Court, "implies that ownership had passed
to ** (the donees) by means of the donation and **,
therefore, the donation was already effective during the
donors' lifetime. That is a characteristic of a donation
inter vivos." On the other hand, in the case at bar, the
donees were expressly prohibited to make any
disposition of any nature or for any purpose whatever
during the donor's lifetime, and until ten (10) years after
her death a prohibition which, it may be added,
makes inapplicable the ruling in Castro v. Court of
Appeals, 21 where no such prohibition was imposed,
and the donor retained only the usufruct over the
property.
The Valderramas' argument that the donation is inter
vivos in character and that the prohibition against their
disposition of the donated property is merely a condition
which, if violated, would give cause for its revocation,
begs the question. It assumes that they have the right
to make a disposition of the property, which they do not.
The argument also makes no sense, because if they had
the right to dispose of the property and did in fact
dispose of it to a third person, the revocation of the
donation they speak of would be of no utility or benefit
to the donor, since such a revocation would not
necessarily result in the restoration of the donor's
ownership and enjoyment of the property.
It is also error to suppose that the donation under review
should be deemed one inter vivos simply because
founded on considerations of love and affection. In
Alejandro v. Geraldez, supra, 22 this Court also
observed that "the fact that the donation is given in
consideration of love and affection ** is not a
characteristic of donations inter vivos (solely) because
transfers mortis causa may also be made for the same
reason." Similarly, in Bonsato v. Court of Appeals, supra,
this Court opined that the fact "that the conveyance was
due to the affection of the donor for the donees and the
services rendered by the latter, is of no particular

significance in determining whether the deeds, Exhs. "1"

and "2," constitute transfers inter vivos or not, because
a legacy may have identical motivation." 23
Finally, it is germane to advert to the legal principle in
Article 1378 of the Civil Code to the effect that in case of
doubt relative to a gratuitous contract, the construction
must be that entailing "the least transmission of rights
and
interests," 24
The donation in question, though denominated inter
vivos, is in truth one mortis causa; it is void because the
essential requisites for its validity have not been
complied with.
WHEREFORE, the Decision of the Court of Appeals in CAG.R. CV No. 33202 dated June 30, 1995 as well as the
Resolution denying reconsideration thereof, and the
Decision of the Regional Trial Court in Special Case No.
3311 are SET ASIDE. The Deed of Donation Inter Vivos
(Exh. "A") executed by Aurora Virto Vda. de Montinola on
December 11, 1979 in favor of Catalino M. Valderrama,
Judy Cristina M. Valderrama and Jesus Antonio M.
Valderrama is declared null and void. The Register of
Deeds of Roxas City is directed to cancel Transfer
Certificate of Title No. T-16622, revive and reinstate
Transfer Certificate of Title No. T-16105.
G.R. No. L-45262 July 23, 1990
RUPERTO REYES and REYNALDO C. SAN JUAN, in his
capacity as Special Administrator, petitioners,
vs.
HON. LORENZO R. MOSQUEDA, Judge of CFI, Pampanga
(Branch VII), and URSULA D. PASCUAL, respondents.
G.R. No. L-45394 July 23, 1990

PEDRO DALUSONG, petitioner,

vs
Page 350 of 404

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HON. LORENZO R. MOSQUEDA, JUDGE, BRANCH VII,

COURT OF FIRST INSTANCE OF PAMPANGA, and URSULA
D. PASCUAL, respondents.
G.R. Nos. 73241-42 July 23, 1990
OFELIA D. PARUNGAO and ROSARIO DUNCIL, petitioners,
vs.
THE HON. INTERMEDIATE APPELLATE COURT, (Third Civil
Cases Division), BENJAMIN P. REYES and OSCAR REYES,
respondents.

GUTIERREZ, JR., J.:

The instant petitions have been consolidated as they
arose from the same facts and involve similar issues. Dr.
Emilio Pascual died intestate and without issue on
November 18,1972. He was survived by his sister,
Ursula Pascual and the children of his late sisters as
follows: (1) Maria Pascual Reyes- Ruperto Reyes and Jose
Reyes; (2) Ines Pascual Reyes-Jose P. Reyes, Benito
Reyes, and Manna Reyes Manalastas; (3) Josefa Pascual
Reyes-Augusto Reyes and Benjamin Reyes; and (4)
Escolastica Pascual Dalusong (half- blood Pedro
Dalusong.
On December 3, 1973, the heirs of Dr. Pascual filed
Special Proceedings No. 73-30-M in the then Court of
First Instance of Pampanga for the administration of his
estate. Atty. Marcela Macapagal, Clerk of Court of
Branch VII was appointed special administratrix.
Macapagal was, however, replaced by Reynaldo San
Juan.
On February 12, 1976, Ursula Pascual filed a motion to
exclude some properties from the inventory of Pascual's
estate and to deliver the titles thereto to her. Ursula
alleged that Dr. Pascual during his lifetime or on
November 2, 1966 executed a "Donation Mortis Causa"
in her favor covering properties which are included in
the estate of Dr. Pascual (subject of Special Proceedings

No. 73-30-M) and therefore should be excluded from the

inventory.
On August 1, 1976; the trial court issued an order
excluding from the inventory of the estate the properties
donated to Ursula, to wit:
WHEREFORE, in view of all the foregoing discussion, let
the properties listed in paragraph 2 of the motion of
February 12, 1976 filed by Ursula D. Pascual thru
counsel be, as it is hereby ordered, excluded from the
inventory of the estate of the deceased Dr. Emilio D.
Pascual, without prejudice to its final determination in a
separate action. Special Administrator Reynaldo San
Juan is hereby ordered to return to Court the custody of
the corresponding certificates of titles of these
properties, until the issue of ownership is finally
determined in a separate action. (G.R. No. 45262, pp.
23-24)
The Order is now the subject of G.R. Nos. 45262 and
45394. On January 5, 1977, we issued a temporary
restraining order enjoining the trial court from enforcing
the August 1, 1976 Order.
Among the properties included in the "donation mortis
causa" in favor of Ursula was Lot 24, Block No. 15 of the
subdivision plan Psd-3231, located at 1109-1111 R. Papa
St., Tondo, Manila as evidenced by Transfer Certificate of
Title No. 17854. The records show that on May 15, 1969,
Emilio Pascual executed a deed of donation of real
property inter vivos over the abovementioned lot in
Manila in favor of Ofelia D. Parungao, petitioner in G.R.
Nos. 73241-42 a minor with her mother, Rosario Duncil,
accepting the gift and donation for and in her behalf.
When Parungao reached the age of majority or on
December 20, 1976, she tried to have the donation
registered. However, she found out that the certificate of
title was missing from where it was supposed to be kept,
prompting her to file a petition for reconstitution of title
with the Court of First Instance of Manila. The petition
was granted in October 1977. Parungao registered the
deed of donation with the Register of Deeds of Manila
who cancelled Transfer Certificate of Title No. 17854 and
Page 351 of 404

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issued in lieu thereof Transfer Certificate of Title No.

129092 in the name of Ofelia Parungao. She then filed a
motion for exclusion in Special Proceedings No. 73-30-M.
In the meantime, on September 23, 1976, Ursula
Pascual executed a deed of absolute sale over the Tondo
property in favor of Benjamin, Oscar, Jose and
Emmanuel, all surnamed Reyes.
On May 2, 1978, Benjamin Reyes, private respondent in
G.R. Nos. 73241-42 filed a complaint for declaration of
nullity of Transfer Certificate of Title No. 129092,
Register of Deeds of Manila and/or reconveyance of
deed of title against Ofelia Parungao and Rosario Duncil,
with the then Court of First Instance of Manila. The case
was docketed as Civil Case No. 115164.
In their answer with compulsory counterclaim Parungao
and Duncil, denied Reyes' assertion of ownership over
the Tondo property. On November 6, 1978, Ofelia
Parungao filed a complaint for recovery of possession
over the Tondo property against Benjamin Reyes and his
nephew Oscar Reyes with the Court of First Instance of
Manila. The case was docketed as Civil Case No.
119359. In her complaint, Parungao also alleged that as
early as 1973, the defendants occupied two (2) doors of
the apartment situated at the Tondo property by mere
tolerance of the previous owner, Dr. Emilio Pascual, and
later by her until April 8, 1978 when she formally
demanded that the defendants vacate the premises.
Parungao prayed that the defendants be evicted from
the premises.
The two cases were consolidated. On June 3, 1982, the
then Court of First Instance, Branch 8 rendered a joint
decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered: In Civil Case
No. 115164
1) Declaring TCT No. 129092 in the name of Ofelia
Parungao null and void; and ordering the Register of
Deeds of Manila to cancel said title and to restore, in lieu
thereof, TCT No. 17854 in the name of Emilio D. Pascual;

2) Ordering Ofelia D. Parungao to pay plaintiff Benjamin

P. Reyes the sum of Two Thousand (P2,000.00) Pesos, as
and for attorney's fees; and to pay the costs of suit
including all fees which the Register of Deeds may
prescribe for the full implementation of this decision. For
lack of merit, the counterclaim is dismissed.
In Civil Case No. 119359
1) Dismissing the complaint for want of merit; and
2) On the counterclaim, ordering Ofelia Parungao to pay
defendant defendants the sum of Two Thousand
(P2,000.00) Pesos as and for attorney's fees.'
Parungao appealed the decision to the then
Intermediate Appellate Court. The decision was,
however, affirmed, with costs against the appellant.
The Intermediate Appellate Court decision is now the
subject matter in G.R. Nos. 73241-42.
On January 29, 1986, we issued a minute resolution
denying the above petition for lack of merit. The
resolution became final and executory on March 10,
1986 and on this same day the entry of judgment was
effected. The entry of judgment was however set aside
in the resolution dated January 19, 1987 on the ground
that the January 29, 1986 resolution was not received by
the petitioners' counsel of record. The petitioner was
granted leave to file a motion for reconsideration of the
January 29, 1986 resolution.
The motion for reconsideration is now before us for
resolution petition.
The issues raised in these petitions are two-fold: (1) In
G.R. No. L-45394, petitioner Pedro Dalusong questions
the jurisdiction of the probate court to exclude the
properties donated to Ursula Pascual in its Order dated
August 1, 1976, and (2) In G.R. No. L-45262 and G.R.
Nos. 73241-42 Ruperto Reyes, Reynaldo C. San Juan, in
Page 352 of 404

LAW ON PROPERTY

his capacity as special administrator of the estate of

Emilio Pascual (petitioner in G.R. No.
L- 45262), Ofelia Parungao and Rosario Duncil
(petitioners in G.R. Nos. 7324142) question the appellate
court's finding that the "Donation Mortis Causa"
executed by Emilio Pascual in favor of his sister Ursula
Pascual was actually a Donation Inter Vivos.
We first discuss the issue on jurisdiction. The questioned
August 1, 1976 order of the then Court of First Instance
of Pampanga in S.P. Proc. No. 73-30-M categorically
stated that the exclusion from the inventory of the
estate of the deceased Dr. Emilio D. Pascual was
"without prejudice to its final determination in a
separate action." The provisional character of the
exclusion of the contested properties in the inventory as
stressed in the order is within the jurisdiction of the
probate court. This was stressed in the case of Cuizon v.
Ramolete (129 SCRA 495 [1984]) which we cited in the
case of Morales v. Court of First Instance of Cavite,
Branch V (146 SCRA 373 [1986]):
It is well-settled rule that a probate court or one in
charge of proceedings whether testate or intestate
cannot adjudicate or determine title to properties
claimed to be a part of the estate and which are equally
claimed to belong to outside parties. All that the said
court could do as regards said properties is to determine
whether they should or should not be included in the
inventory or list of properties to be administered by the
administrator. If there is no dispute, well and good; but if
there is, then the parties, the administrator, and the
opposing parties have to resort to an ordinary action for
a final determination of the conflicting claims of title
because the probate court cannot do so (Mallari v.
Mallari, 92 Phil. 694; Baquial v. Amihan, 92 Phil.
501).itc-asl
Similarly, in Valero Vda. de Rodriguez v. Court of
Appeals, (91 SCRA 540) we held that for the purpose of
determining whether a certain property should or should
not be included in the inventory, the probate court may
pass upon the title thereto but such determination is not
conclusive and is subject to the final decision in a

separate action regarding ownership which may be

instituted by the parties (3 Moran's Comments on the
Rules of Court, 1970 Edition, pages 448449 and 473;
Lachenal v. Salas,
L-42257, June 14, 1976, 71 SCRA 262, 266).
On the second issue, it may be noted that the Court of
Appeals did not pass upon the authenticity of the 1969
donation to Parungao because of its finding that the
1966 donation to Pascual was inter vivos. The
petitioners do not press the authenticity of the 1969
donation as their challenge centers on whether or not
the 1966 donation was inter vivos. However, the trial
court has a lengthy discussion reflecting adversely on
the authenticity of the 1969 donation to Parungao.
The petitioners assert that the 1966 donation was null
and void since it was not executed with the formalities
of a will. Therefore, the petitioners in G.R. No. L-45262
insist that the donated properties should revert to the
estate of Emilio Pascual while the petitioners in G.R. Nos.
73241-42 insist that the donation of real property inter
vivos in favor of Ofelia Parungao be given effect.
The subject deed of donation titled "DONATION MORTIS
CAUSA" duly notarized by a certain Cornelio M. Sigua
states:
That Dr. Emilio D. Pascual, Filipino, single, of age and
resident of Apalit, Pampanga, hereinafter called the
DONOR and Ursula D. Pascual, Filipino, single, also of
age, resident of and with postal address at Apalit,
Pampanga, hereinafter called the DONEE, have agreed,
as they do hereby agree, to the following, to wit:
That the said DONOR, Dr. Emilio D. Pascual, for and in
consideration of the love and affection which he has and
bears unto the said DONEE, as also for the personal
services rendered by the said DONEE to the said
DONOR, does hereby by these presents voluntarily GIVE,
GRANT, and DONATE MORTIS CAUSA unto the said
DONEE URSULA D. PASCUAL, her heirs and assigns, all of
my rights, title and interest, in and to the following
parcels of land with all the improvements thereon,
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situated in the Municipality of Apalit, Pampanga, and

more particularly described and Identified as follows:
xxx xxx xxx
(Enumerated herein are 41 parcels of land)
Also included in this DONATION MORTIS CAUSA are all
personal properties of the DONOR in the form of cash
money or bank deposits and insurance in his favor, and
his real properties situated in other towns of Pampanga,
such as San Simon, and in the province of Rizal, San
Francisco del Monte and in the City of Manila.
That the said donor has reserved for himself sufficient
property to maintain him for life; and that the said
DONEE does hereby ACCEPT and RECEIVE this
DONATION MORTIS CAUSA and further does express his
appreciation and gratefulness for the generosity of said
DONOR; (Rollo of G.R. No. L-45262, pp. 12-16)
xxx xxx xxx
Considering the provisions of the DONATION MORTIS
CAUSA the appellate court ruled that the deed of
donation was actually a donation inter vivos although
denominated as DONATION MORTIS CAUSA.
It is, now a settled rule that the title given to a deed of
donation is not the determinative factor which makes
the donation "inter vivos" or "mortis causa" As early as
the case of Laureta v. Manta, et al., (44 Phil. 668 [1928])
this Court ruled that the dispositions in a deed of
donation-whether "inter vivos" or "mortis causa" do not
depend on the title or term used in the deed of donation
but on the provisions stated in such deed. This Court
explained in Concepcion v. Concepcion (91 Phil. 823
[1952])
...But, it is a rule consistently followed by the courts that
it is the body of the document of donation and the
statements contained therein, and not the title that
should be considered in ascertaining the intention of the

donor. Here, the donation is entitled and called donacion

onerosa mortis causa. From the body, however, we find
that the donation was of a nature remunerative rather
than onerous. It was for past services rendered, services
which may not be considered as a debt to be paid by the
donee but services rendered to her freely and in
goodwill. The donation instead of being onerous or for a
valuable consideration, as in payment of a legal
obligation, was more of remuneratory or compensatory
nature, besides being partly motivated by affection.
We should not give too much importance or significance
to or be guided by the use of the phrase 'mortis causa in
a donation and thereby to conclude that the donation is
not one of inter vivos. In the case of De Guzman et al. v.
Ibea et al. (67 Phil. 633), this Court through Mr. Chief
Justice Avancena said that if a donation by its terms is
inter vivos, this character is not altered by the fact that
the donor styles it mortis causa.
In the case of Laureta v. Mata, et al. (44 Phil. 668), the
court held that the donation involved was inter vivos.
There, the donor Severa Magno y Laureta gave the
properties involved as
... a reward for the services which he is rendering me,
and as a token of my affection toward him and of the
fact that he stands high in my estimation, I hereby
donate 'mortis causa to said youth all the properties
described as follows:
xxx xxx xxx
I also declare that it is the condition of this donation that
the donee cannot take possession of the properties
donated before the death of the donor, and in the event
of her death the said donee shall be under obligation to
cause a mass to be held annually as a suffrage in behalf
of my sold, and also to defray the expenses of my burial
and funerals.'
It will be observed that the present case and that of
Laureta above cited are similar in that in both cases the
donation was being made as a reward for services
Page 354 of 404

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rendered and being rendered, and as a token of

affection for the donee; the phrase 'mortis causa was
used; the donee to take possession of the property
donated only after the death of the donor; the donee
was under obligation to defray the expenses incident to
the celebration of the anniversary of the donor's death,
including church fees. The donation in both cases were
duly accepted. In said case of Laureta this Court held
that the donation was in praesenti and not a gift in
futuro.
In the later case of Bonsato et al. v. Court of appeals, et
al. (95 Phil. 481 [1954]) this Court, distinguished the
characteristics of a donation inter vivos and "mortis
causa" in this wise:
Did the late Domingo Bonsato, make donations inter
vivos or dispositions post mortem in favor of the
petitioners herein? If the latter, then the documents
should reveal any or all of the following characteristics:
(1) Convey no title or ownership to the transferee before
the death of the transferor; or, what amounts to the
same thing, that the transferor should retain the
ownership (fun or naked) and control of the property
while alive (Vidal v. Posadas, 58 Phil., 108; Guzman v.
Ibea 67 Phil., 633);

property donated upon the execution of the donation? If

this is so, as reflected from the provisions contained in
the donation, then it is inter vivos; otherwise, it is
merely mortis causa, or made to take effect after death.'
(Howard v. Padilla and Court of Appeals, G.R. No. L-7064
and L-7098, April 22, 1955.
Applying the above principles to the instant petitions,
there is no doubt that the so-called DONATION MORTIS
CAUSA is really a donation inter vivos. The donation was
executed by Dr. Pascual in favor of his sister Ursula
Pascual out of love and affection as well as a recognition
of the personal services rendered by the donee to the
donor. The transfer of ownership over the properties
donated to the donee was immediate and independent
of the death of the donor. The provision as regards the
reservation of properties for the donor's subsistence in
relation to the other provisions of the deed of donation
confirms the intention of the donor to give naked
ownership of the properties to the donee immediately
after the execution of the deed of donation.
With these findings we find no need to discuss the other
arguments raised by the petitioners.
WHEREFORE, this Court hereby renders judgment as
follows:

(2) That before his death, the transfer should be

revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of
a reserved power in the donor to dispose of the
properties conveyed (Bautista v. Sabiniano, G.R. No. L4326, November 18, 1952);

1) In G.R. Nos. 45262 and 45394 the petitions are

DENIED. The Temporary Restraining Order issued on
January 5, 1977 is hereby LIFTED; and

(3) That the transfer should be void if the transferor

should survive the transferee.

G.R. No. 131953

These principles were repeated in the case of Castro v.

Court of Appeals (27 SCRA 1076 [1969]), to wit:
Whether a donation is inter vivos or mortis causa
depends upon the nature of the disposition made. 'Did
the donor intend to transfer the ownership of the

2) In G.R. Nos. 73241-42, the motion for reconsideration

is DENIED. This DENIAL is FINAL.
June 5, 2002

MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and

MERLY S. CABATINGAN, petitioners,
vs.
THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M.
BOQUIA, PERLA M. ABELLA, ESTRELLA M. CAETE,
LOURDES M. YUSON, and JULIA L. MAYOL, HEIRS OF
GENOVIVA C. NATIVIDAD namely, OSCAR C. NATIVIDAD,
Page 355 of 404

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OLGA NATIVIDAD, ODETTE NATIVIDAD, OPHELIA

NATIVIDAD, RICHARD NATIVIDAD, RAYMUND NATIVIDAD,
RICHIE NATIVIDAD, SONIA NATIVIDAD and ENCARNACION
CABATINGAN VDA. DE TRINIDAD, ALFREDO CABATINGAN
and JESUSA C. NAVADA, respondents.
AUSTRIA-MARTINEZ, J.:
Posed for resolution before the Court in this petition for
review on certiorari filed under Rule 45 of the Rules of
Court is the sole issue of whether the donations made
by the late Conchita Cabatingan are donations inter
vivos or mortis causa.
The facts of the case are as follows:
On February 17, 1992, Conchita Cabatingan executed in
favor of her brother, petitioner Nicolas Cabatingan, a
"Deed of Conditional of Donation (sic) Inter Vivos for
House and Lot" covering one-half () portion of the
former's house and lot located at Cot-cot, Liloan, Cebu.1
Four (4) other deeds of donation were subsequently
executed by Conchita Cabatingan on January 14, 1995,
bestowing upon: (a) petitioner Estela C. Maglasang, two
(2) parcels of land - one located in Cogon, Cebu (307 sq.
m.) and the other, a portion of a parcel of land in
Masbate (50,232 sq. m.); (b) petitioner Nicolas
Cabatingan, a portion of a parcel of land located in
Masbate (80,000 sq. m.); and (c) petitioner Merly S.
Cabatingan, a portion of the Masbate property (80,000
sq. m.).2 These deeds of donation contain similar
provisions, to wit:
"That for and in consideration of the love and affection
of the DONOR for the DONEE, x x x the DONOR does
hereby, by these presents, transfer, convey, by way of
donation, unto the DONEE the above-described
property, together with the buildings and all
improvements existing thereon, to become effective
upon the death of the DONOR; PROVIDED, HOWEVER,
that in the event that the DONEE should die before the
DONOR, the present donation shall be deemed
automatically rescinded and of no further force and
effect; x x x"3 (Emphasis Ours)

On May 9, 1995, Conchita Cabatingan died.

Upon learning of the existence of the foregoing
donations, respondents filed with the Regional Trial
Court of Mandaue, Branch 55, an action for Annulment
And/Or Declaration of Nullity of Deeds of Donations and
Accounting, docketed as Civil Case No. MAN-2599,
seeking the annulment of said four (4) deeds of donation
executed on January 14, 1995. Respondents allege, inter
alia, that petitioners, through their sinister machinations
and strategies and taking advantage of Conchita
Cabatingan's fragile condition, caused the execution of
the deeds of donation, and, that the documents are void
for failing to comply with the provisions of the Civil Code
regarding formalities of wills and testaments,
considering that these are donations mortis causa.4
Respondents prayed that a receiver be appointed in
order to preserve the disputed properties, and, that they
be declared as co-owners of the properties in equal
shares, together with petitioner Nicolas Cabatingan.5
Petitioners in their Amended Answer, deny respondents'
allegations contending that Conchita Cabatingan freely,
knowingly and voluntarily caused the preparation of the
instruments.6
On respondents' motion, the court a quo rendered a
partial judgment on the pleadings on December 2, 1997
in favor of respondents, with the following dispositive
portion:
"WHEREREFORE, and in consideration of all the
foregoing, judgment is hereby rendered in favor of the
plaintiffs and against the defendant and unwilling coplaintiff with regards (sic) to the four Deeds of Donation
Annexes "A", "A-1", "B" and Annex "C" which is the
subject of this partial decision by:
Declaring the four Deeds of Donation as null and void ab
initio for being a donation Mortis Causa and for failure to
comply with formal and solemn requisite under Art. 806
of the New Civil Code;
Page 356 of 404

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b) To declare the plaintiffs and defendants as well as

unwilling co-plaintiff as the heirs of the deceased
Conchita Cabatingan and therefore hereditary co-owners
of the properties subject of this partial decision, as
mandated under Art. 777 of the New Civil Code;

(1) It conveys no title or ownership to the transferee

before the death of the transferor; or what amounts to
the same thing, that the transferor should retain the
ownership (full or naked) and control of the property
while alive;

SO ORDERED."7

(2) That before his death, the transfer should be

revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of
a reserved power in the donor to dispose of the
properties conveyed;

The court a quo ruled that the donations are donations

mortis causa and therefore the four (4) deeds in
question executed on January 14, 1995 are null and void
for failure to comply with the requisites of Article 806 of
the Civil Code on solemnities of wills and testaments.8

and

Raising questions of law, petitioners elevated the court a

quo's decision to this Court,9 alleging that:

(3) That the transfer should be void if the transferor

should survive the transferee.13

"THE LOWER COURT PALPABLY DISREGARDED THE

LONG-AND-WELL-ESTABLISHED RULINGS OF THIS
HONORABLE SUPREME COURT ON THE
CHARACTERIZATION OF DONATIONS AS INTER VIVOS OR
MORTIS CAUSA AND, INSTEAD, PROCEEDED TO
INTERPRET THE DONATIONS IN QUESTION IN A MANNER
CONTRARY THERETO."10

In the present case, the nature of the donations as

mortis causa is confirmed by the fact that the donations
do not contain any clear provision that intends to pass
proprietary rights to petitioners prior to Cabatingan's
death.14 The phrase "to become effective upon the
death of the DONOR" admits of no other interpretation
but that Cabatingan did not intend to transfer the
ownership of the properties to petitioners during her
lifetime. Petitioners themselves expressly confirmed the
donations as mortis causa in the following Acceptance
and Attestation clauses, uniformly found in the subject
deeds of donation, to wit:

Petitioners insist that the donations are inter vivos

donations as these were made by the late Conchita
Cabatingan "in consideration of the love and affection of
the donor" for the donee, and there is nothing in the
deeds which indicate that the donations were made in
consideration of Cabatingan's death.11 In addition,
petitioners contend that the stipulation on rescission in
case petitioners die ahead of Cabatingan is a resolutory
condition that confirms the nature of the donation as
inter vivos.

"That the DONEE does hereby accept the foregoing

donation mortis causa under the terms and conditions
set forth therein, and avail herself of this occasion to
express her profound gratitude for the kindness and
generosity of the DONOR."

Petitioners' arguments are bereft of merit.

xxx

In a donation mortis causa, "the right of disposition is

not transferred to the donee while the donor is still
alive."12 In determining whether a donation is one of
mortis causa, the following characteristics must be
taken into account:

"SIGNED by the above-named DONOR and DONEE at the

foot of this Deed of Donation mortis causa, which
consists of two (2) pages x x x."15
That the donations were made "in consideration of the
love and affection of the donor" does not qualify the
Page 357 of 404

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donations as inter vivos because transfers mortis causa

may also be made for the same reason.16
Well in point is National Treasurer of the Phils. v. Vda. de
Meimban.17 In said case, the questioned donation
contained the provision:
"That for and in consideration of the love and affection
which the DONOR has for the DONEE, the said Donor by
these presents does hereby give, transfer, and convey
unto the DONEE, her heirs and assigns a portion of ONE
HUNDRED THOUSAND (100,000) SQUARE METERS, on
the southeastern part Pro-indiviso of the above
described property. (The portion herein donated is within
Lot 2-B of the proposed amendment Plan Subdivision of
Lots Nos. 1 and 2, Psu-109393), with all the buildings
and improvements thereon, to become effective upon
the death of the DONOR. (italics supplied.)"18

Conchita Cabatingan. As stated in Reyes v. Mosqueda,20

one of the decisive characteristics of a donation mortis
causa is that the transfer should be considered void if
the donor should survive the donee. This is exactly what
Cabatingan provided for in her donations. If she really
intended that the donation should take effect during her
lifetime and that the ownership of the properties
donated be transferred to the donee or independently
of, and not by reason of her death, she would have not
expressed such proviso in the subject
deeds.1wphi1.nt
Considering that the disputed donations are donations
mortis causa, the same partake of the nature of
testamentary provisions21 and as such, said deeds must
be executed in accordance with the requisites on
solemnities of wills and testaments under Articles 805
and 806 of the Civil Code, to wit:

Notably, the foregoing provision is similar to that

contained in the donation executed by Cabatingan. We
held in Meimban case that the donation is a mortis
causa donation, and that the above quoted provision
establishes the donor's intention to transfer the
ownership and possession of the donated property to
the donee only after the former's death. Further:

"ART. 805. Every will, other than a holographic will, must

be subscribed at the end thereof by the testator himself
or by the testator's name written by some other person
in his presence, and by his express direction, and
attested and subscribed by three or more credible
witnesses in the presence of the testator and of one
another.

"As the donation is in the nature of a mortis causa

disposition, the formalities of a will should have been
complied with under Article 728 of the Civil Code,
otherwise, the donation is void and would produce no
effect. As we have held in Alejandro v. Geraldez (78
SCRA 245,253), "If the donation is made in
contemplation of the donor's death, meaning that the
full or naked ownership of the donated properties will
pass to the donee because of the donor's death, then it
is at that time that the donation takes effect, and it is a
donation mortis causa which should be embodied in a
last will and testament. (Citing Bonsato v. Court of
Appeals, 95 Phil. 481)."19

The testator or the person requested by him to write his

name and the instrumental witnesses of the will, shall
also sign, as aforesaid, each and every page thereof,
except the last, on the left margin, and all the pages
shall be numbered correlatively in letters placed on the
upper part of each page.

We apply the above rulings to the present case. The

herein subject deeds expressly provide that the donation
shall be rescinded in case petitioners predecease

The attestation shall state the number of pages used

upon which the will is written , and the fact that the
testator signed the will and every page thereof, or
caused some other person to write his name, under his
express direction, in the presence of the instrumental
witnesses, and that the latter witnessed and signed the
will and all the pages thereof in the presence of the
testator and of one another.

Page 358 of 404

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If the attestation clause is in a language not known to

the witnesses, it shall be interpreted to them. (n)
ART. 806. Every will must be acknowledged before a
notary public by the testator and the witnesses. The
notary public shall not be required to retain a copy of
the will, or file another with the office of the Clerk of
Court. (n)"
The deeds in question although acknowledged before a
notary public of the donor and the donee, the
documents were not executed in the manner provided
for under the above-quoted provisions of law.
Thus, the trial court did not commit any reversible error
in declaring the subject deeds of donation null and void.
WHEREFORE, the petition is hereby DENIED for lack of
merit.
ARTICLE 731
G.R. No. 112127 July 17, 1995
CENTRAL PHILIPPINE UNIVERSITY, petitioner,
vs.
COURT OF APPEALS, REMEDIOS FRANCO, FRANCISCO N.
LOPEZ, CECILIA P. VDA. DE LOPEZ, REDAN LOPEZ AND
REMARENE LOPEZ, respondents.

BELLOSILLO, J.:

University [CPU]), executed a deed of donation in favor

of the latter of a parcel of land identified as Lot No.
3174-B-1 of the subdivision plan Psd-1144, then a
portion of Lot No. 3174-B, for which Transfer Certificate
of Title No. T-3910-A was issued in the name of the
donee CPU with the following annotations copied from
the deed of donation
1. The land described shall be utilized by the CPU
exclusively for the establishment and use of a medical
college with all its buildings as part of the curriculum;
2. The said college shall not sell, transfer or convey to
any third party nor in any way encumber said land;
3. The said land shall be called "RAMON LOPEZ
CAMPUS", and the said college shall be under obligation
to erect a cornerstone bearing that name. Any net
income from the land or any of its parks shall be put in a
fund to be known as the "RAMON LOPEZ CAMPUS FUND"
to be used for improvements of said campus and
erection of a building thereon. 1
On 31 May 1989, private respondents, who are the heirs
of Don Ramon Lopez, Sr., filed an action for annulment
of donation, reconveyance and damages against CPU
alleging that since 1939 up to the time the action was
filed the latter had not complied with the conditions of
the donation. Private respondents also argued that
petitioner had in fact negotiated with the National
Housing Authority (NHA) to exchange the donated
property with another land owned by the latter.

CENTRAL PHILIPPINE UNIVERSITY filed this petition for

review on certiorari of the decision of the Court of
Appeals which reversed that of the Regional Trial Court
of Iloilo City directing petitioner to reconvey to private
respondents the property donated to it by their
predecessor-in-interest.

In its answer petitioner alleged that the right of private

respondents to file the action had prescribed; that it did
not violate any of the conditions in the deed of donation
because it never used the donated property for any
other purpose than that for which it was intended; and,
that it did not sell, transfer or convey it to any third
party.

Sometime in 1939, the late Don Ramon Lopez, Sr., who

was then a member of the Board of Trustees of the
Central Philippine College (now Central Philippine

On 31 May 1991, the trial court held that petitioner

failed to comply with the conditions of the donation and
declared it null and void. The court a quo further
Page 359 of 404

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directed petitioner to execute a deed of the

reconveyance of the property in favor of the heirs of the
donor, namely, private respondents herein.
Petitioner appealed to the Court of Appeals which on 18
June 1993 ruled that the annotations at the back of
petitioner's certificate of title were resolutory conditions
breach of which should terminate the rights of the donee
thus making the donation revocable.
The appellate court also found that while the first
condition mandated petitioner to utilize the donated
property for the establishment of a medical school, the
donor did not fix a period within which the condition
must be fulfilled, hence, until a period was fixed for the
fulfillment of the condition, petitioner could not be
considered as having failed to comply with its part of the
bargain. Thus, the appellate court rendered its decision
reversing the appealed decision and remanding the case
to the court of origin for the determination of the time
within which petitioner should comply with the first
condition annotated in the certificate of title.
Petitioner now alleges that the Court of Appeals erred:
(a) in holding that the quoted annotations in the
certificate of title of petitioner are onerous obligations
and resolutory conditions of the donation which must be
fulfilled non-compliance of which would render the
donation revocable; (b) in holding that the issue of
prescription does not deserve "disquisition;" and, (c) in
remanding the case to the trial court for the fixing of the
period within which petitioner would establish a medical
college. 2
We find it difficult to sustain the petition. A clear perusal
of the conditions set forth in the deed of donation
executed by Don Ramon Lopez, Sr., gives us no
alternative but to conclude that his donation was
onerous, one executed for a valuable consideration
which is considered the equivalent of the donation itself,
e.g., when a donation imposes a burden equivalent to
the value of the donation. A gift of land to the City of
Manila requiring the latter to erect schools, construct a
children's playground and open streets on the land was

considered an onerous donation. 3 Similarly, where Don

Ramon Lopez donated the subject parcel of land to
petitioner but imposed an obligation upon the latter to
establish a medical college thereon, the donation must
be for an onerous consideration.
Under Art. 1181 of the Civil Code, on conditional
obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall
depend upon the happening of the event which
constitutes the condition. Thus, when a person donates
land to another on the condition that the latter would
build upon the land a school, the condition imposed was
not a condition precedent or a suspensive condition but
a resolutory one. 4 It is not correct to say that the
schoolhouse had to be constructed before the donation
became effective, that is, before the donee could
become the owner of the land, otherwise, it would be
invading the property rights of the donor. The donation
had to be valid before the fulfillment of the condition. 5
If there was no fulfillment or compliance with the
condition, such as what obtains in the instant case, the
donation may now be revoked and all rights which the
donee may have acquired under it shall be deemed lost
and extinguished.
The claim of petitioner that prescription bars the instant
action of private respondents is unavailing.
The condition imposed by the donor, i.e., the building of
a medical school upon the land donated, depended upon
the exclusive will of the donee as to when this condition
shall be fulfilled. When petitioner accepted the donation,
it bound itself to comply with the condition thereof.
Since the time within which the condition should be
fulfilled depended upon the exclusive will of the
petitioner, it has been held that its absolute acceptance
and the acknowledgment of its obligation provided in
the deed of donation were sufficient to prevent the
statute of limitations from barring the action of private
respondents upon the original contract which was the
deed of donation. 6

Page 360 of 404

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Moreover, the time from which the cause of action

accrued for the revocation of the donation and recovery
of the property donated cannot be specifically
determined in the instant case. A cause of action arises
when that which should have been done is not done, or
that which should not have been done is done. 7 In
cases where there is no special provision for such
computation, recourse must be had to the rule that the
period must be counted from the day on which the
corresponding action could have been instituted. It is the
legal possibility of bringing the action which determines
the starting point for the computation of the period. In
this case, the starting point begins with the expiration of
a reasonable period and opportunity for petitioner to
fulfill what has been charged upon it by the donor.
The period of time for the establishment of a medical
college and the necessary buildings and improvements
on the property cannot be quantified in a specific
number of years because of the presence of several
factors and circumstances involved in the erection of an
educational institution, such as government laws and
regulations pertaining to education, building
requirements and property restrictions which are beyond
the control of the donee.
Thus, when the obligation does not fix a period but from
its nature and circumstances it can be inferred that a
period was intended, the general rule provided in Art.
1197 of the Civil Code applies, which provides that the
courts may fix the duration thereof because the
fulfillment of the obligation itself cannot be demanded
until after the court has fixed the period for compliance
therewith and such period has arrived. 8
This general rule however cannot be applied considering
the different set of circumstances existing in the instant
case. More than a reasonable period of fifty (50) years
has already been allowed petitioner to avail of the
opportunity to comply with the condition even if it be
burdensome, to make the donation in its favor forever
valid. But, unfortunately, it failed to do so. Hence, there
is no more need to fix the duration of a term of the
obligation when such procedure would be a mere

technicality and formality and would serve no purpose

than to delay or lead to an unnecessary and expensive
multiplication of suits. 9 Moreover, under Art. 1191 of
the Civil Code, when one of the obligors cannot comply
with what is incumbent upon him, the obligee may seek
rescission and the court shall decree the same unless
there is just cause authorizing the fixing of a period. In
the absence of any just cause for the court to determine
the period of the compliance, there is no more obstacle
for the court to decree the rescission claimed.
Finally, since the questioned deed of donation herein is
basically a gratuitous one, doubts referring to incidental
circumstances of a gratuitous contract should be
resolved in favor of the least transmission of rights and
interests. 10 Records are clear and facts are undisputed
that since the execution of the deed of donation up to
the time of filing of the instant action, petitioner has
failed to comply with its obligation as donee. Petitioner
has slept on its obligation for an unreasonable length of
time. Hence, it is only just and equitable now to declare
the subject donation already ineffective and, for all
purposes, revoked so that petitioner as donee should
now return the donated property to the heirs of the
donor, private respondents herein, by means of
reconveyance.
WHEREFORE, the decision of the Regional Trial Court of
Iloilo, Br. 34, of 31 May 1991 is REINSTATED and
AFFIRMED, and the decision of the Court of Appeals of
18 June 1993 is accordingly MODIFIED. Consequently,
petitioner is directed to reconvey to private respondents
Lot No. 3174-B-1 of the subdivision plan Psd-1144
covered by Transfer Certificate of Title No. T-3910-A
within thirty (30) days from the finality of this judgment.
Costs against petitioner.
SO ORDERED.
Quiason and Kapunan, JJ., concur.

Page 361 of 404

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Separate Opinions

DAVIDE, JR., J., dissenting:

I agree with the view in the majority opinion that the
donation in question is onerous considering the
conditions imposed by the donor on the donee which
created reciprocal obligations upon both parties. Beyond
that, I beg to disagree.
First of all, may I point out an inconsistency in the
majority opinion's description of the donation in
question. In one part, it says that the donation in
question is onerous. Thus, on page 4 it states:
We find it difficult to sustain the petition. A clear perusal
of the conditions set forth in the deed of donation
executed by Don Ramon Lopez, Sr., give us no
alternative but to conclude that his donation was
onerous, one executed for a valuable consideration
which is considered the equivalent of the donation itself,
e.g., when a donation imposes a burden equivalent to
the value of the donation . . . . (emphasis supplied)
Yet, in the last paragraph of page 8 it states that the
donation is basically a gratuitous one. The pertinent
portion thereof reads:
Finally, since the questioned deed of donation herein is
basically a gratuitous one, doubts referring to incidental
circumstances of a gratuitous contract should be
resolved in favor of the least transmission of rights and
interest . . . (emphasis supplied)

Second, the discussion on conditional obligations is

unnecessary. There is no conditional obligation to speak
of in this case. It seems that the "conditions" imposed
by the donor and as the word is used in the law of
donations is confused with "conditions" as used in the
law of obligations. In his annotation of Article 764 of the
Civil Code on Donations, Arturo M. Tolentino, citing the
well-known civilists such as Castan, Perez Gonzalez and
Alguer, and Colin & Capitant, states clearly the context
within which the term "conditions" is used in the law of
donations, to wit:
The word "conditions" in this article does not refer to
uncertain events on which the birth or extinguishment of
a juridical relation depends, but is used in the vulgar
sense of obligations or charges imposed by the donor on
the donee. It is used, not in its technical or strict legal
sense, but in its broadest sense. 1 (emphasis supplied)
Clearly then, when the law and the deed of donation
speaks of "conditions" of a donation, what are referred
to are actually the obligations, charges or burdens
imposed by the donor upon the donee and which would
characterize the donation as onerous. In the present
case, the donation is, quite obviously, onerous, but it is
more properly called a "modal donation." A modal
donation is one in which the donor imposes a prestation
upon the donee. The establishment of the medical
college as the condition of the donation in the present
case is one such prestation.
The conditions imposed by the donor Don Ramon Lopez
determines neither the existence nor the
extinguishment of the obligations of the donor and the
donee with respect to the donation. In fact, the
conditions imposed by Don Ramon Lopez upon the
donee are the very obligations of the donation to
build the medical college and use the property for the
purposes specified in the deed of donation. It is very
clear that those obligations are unconditional, the
fulfillment, performance, existence or extinguishment of
which is not dependent on any future or uncertain event
or past and unknown event, as the Civil Code would
define a conditional obligation. 2
Page 362 of 404

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Reliance on the case of Parks vs. Province of Tarlac 3 as

cited on page 5 of the majority opinion is erroneous in so
far as the latter stated that the condition in Parks is a
resolutory one and applied this to the present case. A
more careful reading of this Court's decision would
reveal that nowhere did we say, whether explicitly or
impliedly, that the donation in that case, which also has
a condition imposed to build a school and a public park
upon the property donated, is a resolutory condition. 4 It
is incorrect to say that the "conditions" of the donation
there or in the present case are resolutory conditions
because, applying Article 1181 of the Civil Code, that
would mean that upon fulfillment of the conditions, the
rights already acquired will be extinguished. Obviously,
that could not have been the intention of the parties.
What the majority opinion probably had in mind was that
the conditions are resolutory because if they are not
complied with, the rights of the donee as such will be
extinguished and the donation will be revoked. To my
mind, though, it is more accurate to state that the
conditions here are not resolutory conditions but, for the
reasons stated above, are the obligations imposed by
the donor.
Third, I cannot subscribe to the view that the provisions
of Article 1197 cannot be applied here. The
conditions/obligations imposed by the donor herein are
subject to a period. I draw this conclusion based on our
previous ruling which, although made almost 90 years
ago, still finds application in the present case. In
Barretto vs. City of Manila, 5 we said that when the
contract of donation, as the one involved therein, has no
fixed period in which the condition should be fulfilled,
the provisions of what is now Article 1197 (then Article
1128) are applicable and it is the duty of the court to fix
a suitable time for its fulfillment. Indeed, from the nature
and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was
contemplated by the donor. Don Ramon Lopez could not
have intended his property to remain idle for a long
period of time when in fact, he specifically burdened the
donee with the obligation to set up a medical college

therein and thus put his property to good use. There is a

need to fix the duration of the time within which the
conditions imposed are to be fulfilled.
It is also important to fix the duration or period for the
performance of the conditions/obligations in the
donation in resolving the petitioner's claim that
prescription has already barred the present action. I
disagree once more with the ruling of the majority that
the action of the petitioners is not barred by the statute
of limitations. There is misplaced reliance again on a
previous decision of this Court in Osmea vs. Rama. 6
That case does not speak of a deed of donation as
erroneously quoted and cited by the majority opinion. It
speaks of a contract for a sum of money where the
debtor herself imposed a condition which will determine
when she will fulfill her obligation to pay the creditor,
thus, making the fulfillment of her obligation dependent
upon her will. What we have here, however, is not a
contract for a sum of money but a donation where the
donee has not imposed any conditions on the fulfillment
of its obligations. Although it is admitted that the
fulfillment of the conditions/obligations of the present
donation may be dependent on the will of the donee as
to when it will comply therewith, this did not arise out of
a condition which the donee itself imposed. It is believed
that the donee was not meant to and does not have
absolute control over the time within which it will
perform its obligations. It must still do so within a
reasonable time. What that reasonable time is, under
the circumstances, for the courts to determine. Thus,
the mere fact that there is no time fixed as to when the
conditions of the donation are to be fulfilled does not
ipso facto mean that the statute of limitations will not
apply anymore and the action to revoke the donation
becomes imprescriptible.
Admittedly, the donation now in question is an onerous
donation and is governed by the law on contracts
(Article 733) and the case of Osmea, being one
involving a contract, may apply. But we must not lose
sight of the fact that it is still a donation for which this
Court itself applied the pertinent law to resolve
situations such as this. That the action to revoke the
Page 363 of 404

LAW ON PROPERTY

donation can still prescribe has been the

pronouncement of this Court as early as 1926 in the
case of Parks which, on this point, finds relevance in this
case. There, this Court said,
[that] this action [for the revocation of the donation] is
prescriptible, there is no doubt. There is no legal
provision which excludes this class of action from the
statute of limitations. And not only this, the law itself
recognizes the prescriptibility of the action for the
revocation of a donation, providing a special period of
[four] years for the revocation by the subsequent birth
of children [Art. 646, now Art. 763], and . . . by reason of
ingratitude. If no special period is provided for the
prescription of the action for revocation for
noncompliance of the conditions of the donation [Art.
647, now Art. 764], it is because in this respect the
donation is considered onerous and is governed by the
law of contracts and the general rules of prescription. 7
More recently, in De Luna v. Abrigo, 8 this Court
reiterated the ruling in Parks and said that:
It is true that under Article 764 of the New Civil Code,
actions for the revocation of a donation must be brought
within four (4) years from the non-compliance of the
conditions of the donation. However, it is Our opinion
that said article does not apply to onerous donations in
view of the specific provision of Article 733 providing
that onerous donations are governed by the rules on
contracts.
In the light of the above, the rules on contracts and the
general rules on prescription and not the rules on
donations are applicable in the case at bar.
The law applied in both cases is Article 1144(1). It refers
to the prescription of an action upon a written contract,
which is what the deed of an onerous donation is. The
prescriptive period is ten years from the time the cause
of action accrues, and that is, from the expiration of the
time within which the donee must comply with the
conditions/obligations of the donation. As to when this

exactly is remains to be determined, and that is for the

courts to do as reposed upon them by Article 1197.
For the reasons expressed above, I register my dissent.
Accordingly, the decision of the Court of Appeals must
be upheld, except its ruling that the conditions of the
donation are resolutory.
Padilla, J., dissents

Separate Opinions
DAVIDE, JR., J., dissenting:
I agree with the view in the majority opinion that the
donation in question is onerous considering the
conditions imposed by the donor on the donee which
created reciprocal obligations upon both parties. Beyond
that, I beg to disagree.
First of all, may I point out an inconsistency in the
majority opinion's description of the donation in
question. In one part, it says that the donation in
question is onerous. Thus, on page 4 it states:
We find it difficult to sustain the petition. A clear perusal
of the conditions set forth in the deed of donation
executed by Don Ramon Lopez, Sr., give us no
alternative but to conclude that his donation was
onerous, one executed for a valuable consideration
which is considered the equivalent of the donation itself,
e.g., when a donation imposes a burden equivalent to
the value of the donation . . . . (emphasis supplied)
Yet, in the last paragraph of page 8 it states that the
donation is basically a gratuitous one. The pertinent
portion thereof reads:
Finally, since the questioned deed of donation herein is
basically a gratuitous one, doubts referring to incidental
circumstances of a gratuitous contract should be
Page 364 of 404

LAW ON PROPERTY

resolved in favor of the least transmission of rights and

interest . . . (emphasis supplied)
Second, the discussion on conditional obligations is
unnecessary. There is no conditional obligation to speak
of in this case. It seems that the "conditions" imposed
by the donor and as the word is used in the law of
donations is confused with "conditions" as used in the
law of obligations. In his annotation of Article 764 of the
Civil Code on Donations, Arturo M. Tolentino, citing the
well-known civilists such as Castan, Perez Gonzalez and
Alguer, and Colin & Capitant, states clearly the context
within which the term "conditions" is used in the law of
donations, to wit:
The word "conditions" in this article does not refer to
uncertain events on which the birth or extinguishment of
a juridical relation depends, but is used in the vulgar
sense of obligations or charges imposed by the donor on
the donee. It is used, not in its technical or strict legal
sense, but in its broadest sense. 1 (emphasis supplied)
Clearly then, when the law and the deed of donation
speaks of "conditions" of a donation, what are referred
to are actually the obligations, charges or burdens
imposed by the donor upon the donee and which would
characterize the donation as onerous. In the present
case, the donation is, quite obviously, onerous, but it is
more properly called a "modal donation." A modal
donation is one in which the donor imposes a prestation
upon the donee. The establishment of the medical
college as the condition of the donation in the present
case is one such prestation.
The conditions imposed by the donor Don Ramon Lopez
determines neither the existence nor the
extinguishment of the obligations of the donor and the
donee with respect to the donation. In fact, the
conditions imposed by Don Ramon Lopez upon the
donee are the very obligations of the donation to
build the medical college and use the property for the
purposes specified in the deed of donation. It is very
clear that those obligations are unconditional, the
fulfillment, performance, existence or extinguishment of

which is not dependent on any future or uncertain event

or past and unknown event, as the Civil Code would
define a conditional obligation. 2
Reliance on the case of Parks vs. Province of Tarlac 3 as
cited on page 5 of the majority opinion is erroneous in so
far as the latter stated that the condition in Parks is a
resolutory one and applied this to the present case. A
more careful reading of this Court's decision would
reveal that nowhere did we say, whether explicitly or
impliedly, that the donation in that case, which also has
a condition imposed to build a school and a public park
upon the property donated, is a resolutory condition. 4 It
is incorrect to say that the "conditions" of the donation
there or in the present case are resolutory conditions
because, applying Article 1181 of the Civil Code, that
would mean that upon fulfillment of the conditions, the
rights already acquired will be extinguished. Obviously,
that could not have been the intention of the parties.
What the majority opinion probably had in mind was that
the conditions are resolutory because if they are not
complied with, the rights of the donee as such will be
extinguished and the donation will be revoked. To my
mind, though, it is more accurate to state that the
conditions here are not resolutory conditions but, for the
reasons stated above, are the obligations imposed by
the donor.
Third, I cannot subscribe to the view that the provisions
of Article 1197 cannot be applied here. The
conditions/obligations imposed by the donor herein are
subject to a period. I draw this conclusion based on our
previous ruling which, although made almost 90 years
ago, still finds application in the present case. In
Barretto vs. City of Manila, 5 we said that when the
contract of donation, as the one involved therein, has no
fixed period in which the condition should be fulfilled,
the provisions of what is now Article 1197 (then Article
1128) are applicable and it is the duty of the court to fix
a suitable time for its fulfillment. Indeed, from the nature
and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was
contemplated by the donor. Don Ramon Lopez could not
Page 365 of 404

LAW ON PROPERTY

have intended his property to remain idle for a long

period of time when in fact, he specifically burdened the
donee with the obligation to set up a medical college
therein and thus put his property to good use. There is a
need to fix the duration of the time within which the
conditions imposed are to be fulfilled.
It is also important to fix the duration or period for the
performance of the conditions/obligations in the
donation in resolving the petitioner's claim that
prescription has already barred the present action. I
disagree once more with the ruling of the majority that
the action of the petitioners is not barred by the statute
of limitations. There is misplaced reliance again on a
previous decision of this Court in Osmea vs. Rama. 6
That case does not speak of a deed of donation as
erroneously quoted and cited by the majority opinion. It
speaks of a contract for a sum of money where the
debtor herself imposed a condition which will determine
when she will fulfill her obligation to pay the creditor,
thus, making the fulfillment of her obligation dependent
upon her will. What we have here, however, is not a
contract for a sum of money but a donation where the
donee has not imposed any conditions on the fulfillment
of its obligations. Although it is admitted that the
fulfillment of the conditions/obligations of the present
donation may be dependent on the will of the donee as
to when it will comply therewith, this did not arise out of
a condition which the donee itself imposed. It is believed
that the donee was not meant to and does not have
absolute control over the time within which it will
perform its obligations. It must still do so within a
reasonable time. What that reasonable time is, under
the circumstances, for the courts to determine. Thus,
the mere fact that there is no time fixed as to when the
conditions of the donation are to be fulfilled does not
ipso facto mean that the statute of limitations will not
apply anymore and the action to revoke the donation
becomes imprescriptible.
Admittedly, the donation now in question is an onerous
donation and is governed by the law on contracts
(Article 733) and the case of Osmea, being one
involving a contract, may apply. But we must not lose

sight of the fact that it is still a donation for which this

Court itself applied the pertinent law to resolve
situations such as this. That the action to revoke the
donation can still prescribe has been the
pronouncement of this Court as early as 1926 in the
case of Parks which, on this point, finds relevance in this
case. There, this Court said,
[that] this action [for the revocation of the donation] is
prescriptible, there is no doubt. There is no legal
provision which excludes this class of action from the
statute of limitations. And not only this, the law itself
recognizes the prescriptibility of the action for the
revocation of a donation, providing a special period of
[four] years for the revocation by the subsequent birth
of children [Art. 646, now Art. 763], and . . . by reason of
ingratitude. If no special period is provided for the
prescription of the action for revocation for
noncompliance of the conditions of the donation [Art.
647, now Art. 764], it is because in this respect the
donation is considered onerous and is governed by the
law of contracts and the general rules of prescription. 7
More recently, in De Luna v. Abrigo, 8 this Court
reiterated the ruling in Parks and said that:
It is true that under Article 764 of the New Civil Code,
actions for the revocation of a donation must be brought
within four (4) years from the non-compliance of the
conditions of the donation. However, it is Our opinion
that said article does not apply to onerous donations in
view of the specific provision of Article 733 providing
that onerous donations are governed by the rules on
contracts.
In the light of the above, the rules on contracts and the
general rules on prescription and not the rules on
donations are applicable in the case at bar.
The law applied in both cases is Article 1144(1). It refers
to the prescription of an action upon a written contract,
which is what the deed of an onerous donation is. The
prescriptive period is ten years from the time the cause
of action accrues, and that is, from the expiration of the
Page 366 of 404

LAW ON PROPERTY

time within which the donee must comply with the

conditions/obligations of the donation. As to when this
exactly is remains to be determined, and that is for the
courts to do as reposed upon them by Article 1197.
For the reasons expressed above, I register my dissent.
Accordingly, the decision of the Court of Appeals must
be upheld, except its ruling that the conditions of the
donation are resolutory.
Padilla, J., dissents
G.R. No. 126444 December 4, 1998
ALFONSO QUIJADA, CRESENTE QUIJADA, REYNELDA
QUIJADA, DEMETRIO QUIJADA, ELIUTERIA QUIJADA,
EULALIO QUIJADA, and WARLITO QUIJADA, petitioners,
vs.
COURT OF APPEALS, REGALADO MONDEJAR, RODULFO
GOLORAN, ALBERTO ASIS, SEGUNDINO RAS, ERNESTO
GOLORAN, CELSO ABISO, FERNANDO BAUTISTA,
ANTONIO MACASERO, and NESTOR MAGUINSAY,
respondents.

MARTINEZ, J.:
Petitioners, as heirs of the late Trinidad Quijada, filed a
complaint against private respondents for quieting of
title, recovery of possession and ownership of parcels of
land with claim for attorney's fees and damages. The
suit was premised on the following facts found by the
court of Appeals which is materially the same as that
found by the trial court:
Plaintiffs-appellees (petitioners) are the children of the
late Trinidad Corvera Vda, de Quijada. Trinidad was one
of the heirs of the late Pedro Corvera and inherited from
the latter the two-hectare parcel of land subject of the
case, situated in the barrio of San Agustin, Talacogon,
Agusan del Sur. On April 5, 1956, Trinidad Quijada
together with her sisters Leonila Corvera Vda. de

Sequea and Paz Corvera Cabiltes and brother

Epapiadito Corvera executed a conditional deed of
donation (Exh. C) of the two-hectare parcel of land
subject of the case in favor of the Municipality of
Talacogon, the condition being that the parcel of land
shall be used solely and exclusively as part of the
campus of the proposed provincial high school in
Talacogon. Apparently, Trinidad remained in possession
of the parcel of land despite the donation. On July 29,
1962, Trinidad sold one (1) hectare of the subject parcel
of land to defendant-appellant Regalado Mondejar (Exh.
1). Subsequently, Trinidad verbally sold the remaining
one (1) hectare to defendant-appellant (respondent)
Regalado Mondejar without the benefit of a written deed
of sale and evidenced solely by receipts of payment. In
1980, the heirs of Trinidad, who at that time was already
dead, filed a complaint for forcible entry (Exh. E) against
defendant-appellant (respondent) Regalado Mondejar,
which complaint was, however, dismissed for failure to
prosecute (Exh. F). In 1987, the proposed provincial high
school having failed to materialize, the Sangguniang
Bayan of the municipality of Talacogon enacted a
resolution reverting the two (2) hectares of land donated
back to the donors (Exh. D). In the meantime,
defendant-appellant (respondent) Regalado Mondejar
sold portions of the land to defendants-appellants
(respondents) Fernando Bautista (Exh. 5), Rodolfo
Goloran (Exh. 6), Efren Guden (Exh. 7) and Ernesto
Goloran (Exh. 8).
On July 5, 1988, plaintiffs-appellees (petitioners) filed
this action against defendants-appellants (respondents).
In the complaint, plaintiffs-appellees (petitioners)
alleged that their deceased mother never sold,
conveyed, transferred or disposed of the property in
question to any person or entity much less to Regalado
Mondejar save the donation made to the Municipality of
Talacogon in 1956; that at the time of the alleged sale to
Regalado Mondejar by Trinidad Quijada, the land still
belongs to the Municipality of Talacogon, hence, the
supposed sale is null and void.
Defendants-appellants (respondents), on the other hand,
in their answer claimed that the land in dispute was sold
Page 367 of 404

LAW ON PROPERTY

to Regalado Mondejar, the one (1) hectare on July 29,

1962, and the remaining one (1) hectare on installment
basis until fully paid. As affirmative and/or special
defense, defendants-appellants (respondents) alleged
that plaintiffs action is barred by laches or has
prescribed.

5) ordering the Defendants to pay Plaintiffs, jointly and

severally, the amount of P10,000.00 representing
attorney's fees;

The court a quo rendered judgment in favor of plaintiffsappellees (petitioners): firstly because "Trinidad Quijada
had no legal title or right to sell the land to defendant
Mondejar in 1962, 1966, 1967 and 1968, the same not
being hers to dispose of because ownership belongs to
the Municipality of Talacogon (Decision, p. 4; Rollo, p.
39) and, secondly, that the deed of sale executed by
Trinidad Quijada in favor of Mondejar did not carry with it
the conformity and acquiescence of her children, more
so that she was already 63 years old at the time, and a
widow (Decision, p. 6; Rollo, p. 41)." 1

7) ordering Defendants to pay the sum of P30,000.00

representing moral damages.

The dispositive portion of the trial court's decision reads:

WHEREFORE, viewed from the above perceptions, the
scale of justice having tilted in favor of the plaintiffs,
judgment is, as it is hereby rendered:
1) ordering the Defendants to return and vacate the two
(2) hectares of land to Plaintiffs as described in Tax
Declaration No. 1209 in the name of Trinidad Quijada;
2) ordering any person acting in Defendants' behalf to
vacate and restore the peaceful possession of the land
in question to Plaintiffs;
3) ordering the cancellation of the Deed of Sale
executed by the late Trinidad Quijada in favor of
Defendant Regalado Mondejar as well as the Deeds of
Sale/Relinquishments executed by Mondejar in favor of
the other Defendants;
4) ordering Defendants to remove their improvements
constructed on the questioned lot;

6) ordering Defendants to pays the amount of P8,000.00

as expenses of litigation; and

SO ORDERED. 2
On appeal, the Court of Appeals reversed and set aside
the judgment a quo 3 ruling that the sale made by
Trinidad Quijada to respondent Mondejar was valid as
the former retained an inchoate interest on the lots by
virtue of the automatic reversion clause in the deed of
donation. 4 Thereafter, petitioners filed a motion for
reconsideration. When the CA denied their motion, 5
petitioners instituted a petition for review to this Court
arguing principally that the sale of the subject property
made by Trinidad Quijada to respondent Mondejar is
void, considering that at that time, ownership was
already transferred to the Municipality of Talacogon. On
the contrary, private respondents contend that the sale
was valid, that they are buyers in good faith, and that
petitioners' case is barred by laches. 6
We affirm the decision of the respondent court.
The donation made on April 5, 1956 by Trinidad Quijada
and her brother and sisters 7 was subject to the
condition that the donated property shall be "used solely
and exclusively as a part of the campus of the proposed
Provincial High School in Talacogon." 8 The donation
further provides that should "the proposed Provincial
High School be discontinued or if the same shall be
opened but for some reason or another, the same may
in the future be closed" the donated property shall
automatically revert to the donor. 9 Such condition, not
being contrary to law, morals, good customs, public
order or public policy was validly imposed in the
donation. 10
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When the Municipality's acceptance of the donation was

made known to the donor, the former became the new
owner of the donated property donation being a mode
of acquiring and transmitting ownership 11
notwithstanding the condition imposed by the donee.
The donation is perfected once the acceptance by the
donee is made known to the donor. 12 According,
ownership is immediately transferred to the latter and
that ownership will only revert to the donor if the
resolutory condition is not fulfilled.
In this case, that resolutory condition is the construction
of the school. It has been ruled that when a person
donates land to another on the condition that the latter
would build upon the land a school, the condition
imposed is not a condition precedent or a suspensive
condition but a resolutory one. 13 Thus, at the time of
the sales made in 1962 towards 1968, the alleged seller
(Trinidad) could not have sold the lots since she had
earlier transferred ownership thereof by virtue of the
deed of donation. So long as the resolutory condition
subsists and is capable of fulfillment, the donation
remains effective and the donee continues to be the
owner subject only to the rights of the donor or his
successors-in-interest under the deed of donation. Since
no period was imposed by the donor on when must the
donee comply with the condition, the latter remains the
owner so long as he has tried to comply with the
condition within a reasonable period. Such period,
however, became irrelevant herein when the doneeMunicipality manifested through a resolution that it
cannot comply with the condition of building a school
and the same was made known to the donor. Only then
when the non-fulfillment of the resolutory condition
was brought to the donor's knowledge that ownership
of the donated property reverted to the donor as
provided in the automatic reversion clause of the deed
of donation.
The donor may have an inchoate interest in the donated
property during the time that ownership of the land has
not reverted to her. Such inchoate interest may be the
subject of contracts including a contract of sale. In this
case, however, what the donor sold was the land itself

which she no longer owns. It would have been different

if the donor-seller sold her interests over the property
under the deed of donation which is subject to the
possibility of reversion of ownership arising from the
non-fulfillment of the resolutory condition.
As to laches, petitioners' action is not yet barred
thereby. Laches presupposes failure or neglect for an
unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have
been done earlier; 14 "it is negligence or omission to
assert a right within a reasonable time, thus, giving rise
to a presumption that the party entitled to assert it
either has abandoned or declined to assert it." 15 Its
essential elements of:
a) Conduct on the part of the defendant, or of one under
whom he claims, giving rise to the situation complained
of;
b) Delay in asserting complainant's right after he had
knowledge of the defendant's conduct and after he has
an opportunity to sue;
c) Lack of knowledge or notice on the part of the
defendant that the complainant would assert the right
on which he bases his suit; and,
d) Injury or prejudice to the defendant in the event relief
is accorded to the complainant. 16
are absent in this case. Petioners' cause of action to
quiet title commenced only when the property reverted
to the donor and/or his successors-in-interest in 1987.
Certainly, when the suit was initiated the following year,
it cannot be said that petioners had slept on their rights
for a long time. The 1960's sales made by Trinidad
Quijada cannot be the reckoning point as to when
petitioners' cause of action arose. They had no interest
over the property at that time except under the deed of
donation to which private respondents were not privy.
Moreover, petitioners had previously filed an ejectment
suit against private respondents only that it did not
prosper on a technicality.
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Be that at it may, there is one thing which militates

against the claim of petitioners. Sale, being a
consensual contract, is perfected by mere consent,
which is manifested the moment there is a meeting of
the minds 17 as to the offer and acceptance thereof on
three (3) elements: subject matter, price and terms of
payment of the price. 18 Ownership by the seller on the
thing sold at the time of the perfection of the contract of
sale is not an element for its perfection. What the law
requires is that the seller has the right to transfer
ownership at the time the thing sold is delivered. 19
Perfection per se does not transfer ownership which
occurs upon the actual or constructive delivery of the
thing sold. 20 A perfected contract of sale cannot be
challenged on the ground of non-ownership on the part
of the seller at the time of its perfection; hence, the sale
is still valid.
The consummation, however, of the perfected contract
is another matter. It occurs upon the constructive or
actual delivery of the subject matter to the buyer when
the seller or her successors-in-interest subsequently
acquires ownership thereof. Such circumstance
happened in this case when petitioners who are
Trinidad Quijada's heirs and successors-in-interest
became the owners of the subject property upon the
reversion of the ownership of the land to them.
Consequently, ownership is transferred to respondent
Mondejar and those who claim their right from him.
Article 1434 of the New Civil Code supports the ruling
that the seller's "title passes by operation of law to the
buyer." 21 This rule applies not only when the subject
matter of the contract of sale is goods, 22 but also to
other kinds of property, including real property. 23
There is also no merit in petitioners' contention that
since the lots were owned by the municipality at the
time of the sale, they were outside the commerce of
men under Article 1409 (4) of the NCC; 24 thus, the
contract involving the same is inexistent and void from
the beginning. However, nowhere in Article 1409 (4) is it
provided that the properties of a municipality, whether it
be those for public use or its patrimonial property 25

are outside the commerce of men. Besides, the lots in

this case were conditionally owned by the municipality.
To rule that the donated properties are outside the
commerce of men would render nugatory the
unchallenged reasonableness and justness of the
condition which the donor has the right to impose as
owner thereof. Moreover, the objects referred to as
outsides the commerce of man are those which cannot
be appropriated, such as the open seas and the
heavenly bodies.
With respect to the trial court's award of attorney's fees,
litigation expenses and moral damages, there is neither
factual nor legal basis thereof. Attorney's fees and
expenses of litigation cannot, following the general rule
in Article 2208 of the New Civil Code, be recovered in
this case, there being no stipulation to that effect and
the case does not fall under any of the
exceptions. 26 It cannot be said that private
respondents had compelled petitioners to litigate with
third persons. Neither can it be ruled that the former
acted in "gross and evident bad faith" in refusing to
satisfy the latter's claims considering that private
respondents were under an honest belief that they have
a legal right over the property by virtue of the deed of
sale. Moral damages cannot likewise be justified as none
of the circumstances enumerated under Articles 2219.
27 and 2220 28 of the New Civil Code concur in this
case
WHEREFORE, by virtue of the foregoing, the assailed
decision of the Court of Appeals is AFFIRMED.
ARTICLE 733
Lagazo vs CA Case Digest
LAGAZO V. CA
287 SCRA 18
FACTS: Catalina Jacob Vda. de Reyes, a widow and
grandmother of plaintiff-appellee, was awarded a 60.10square meter lot which is a portion of the Monserrat
Page 370 of 404

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Estate located in Old Sta. Mesa, Manila. The Monserrat

Estate is a public land owned by the City of Manila and
distributed for sale to bona fide tenants under its landfor-the-landless program. Catalina Jacob constructed a
house on the lot.
Shortly before she left for Canada where she is now a
permanent resident, Catalina Jacob executed a special
power of attorney in favor of her son-in-law Eduardo B.
Espaol authorizing him to execute all documents
necessary for the final adjudication of her claim as
awardee of the lot.
Due to the failure of Eduardo B. Espaol to accomplish
the purpose of the power of attorney granted to him,
Catalina Jacob revoked said authority in an instrument
executed in Canada. Simultaneous with the revocation,
Catalina Jacob executed another power of attorney of
the same tenor in favor plaintiff-appellee.
Catalina Jacob executed in Canada a Deed of Donation
over the subject lot in favor of plaintiff-appellee.
Following the donation, plaintiff-appellee checked with
the Register of Deeds and found out that the property
was in the delinquent list, so that he paid the
installments in arrears and the remaining balance on the
lot and declared the said property in the name of
Catalina Jacob.
Plaintiff-appellee thereafter sent a demand letter to
defendant-appellant asking him to vacate the premises.
A similar letter was sent by plaintiff-appellees counsel
to defendant. However, defendant-appellant refused to
vacate the premises claiming ownership thereof. Hence,
plaintiff-appellee instituted the complaint for recovery of
possession and damages against defendant-appellant.
Petitioner contends that the burdens, charges or
conditions imposed upon a donation need not be stated
on the deed of donation itself. Thus, although the deed
did not categorically impose any charge, burden or
condition to be satisfied by him, the donation was
onerous since he in fact and in reality paid for the
installments in arrears and for the remaining balance of

the lot in question. Being an onerous donation, his

acceptance thereof may be express or implied, as
provided under Art. 1320 of the Civil Code, and need not
comply with the formalities required by Art. 749 of the
same code. His payment of the arrearages and balance
and his assertion of his right of possession against
private respondent clearly indicate his acceptance of the
donation.
ISSUE:
1. Where the deed of donation did not expressly impose
any burden the expressed consideration being purely
one of liberality and generosity but the recipient
actually paid charges imposed on the property like land
taxes and installment arrearages, may the donation be
deemed onerous and thus governed by the law on
ordinary contracts?
2. Where the acceptance of a donation was made in a
separate instrument but not formally communicated to
the donor, may the donation be nonetheless considered
complete, valid and subsisting?
HELD:
1. NO. At the outset, let us differentiate between a
simple donation and an onerous one. A simple or
pure donation is one whose cause is pure liberality
(no strings attached), while an onerous donation is one
which is subject to burdens, charges or future services
equal to or more in value than the thing donated. Under
Article 733 of the Civil Code, donations with an onerous
cause shall be governed by the rules on contracts;
hence, the formalities required for a valid simple
donation are not applicable.
We rule that the donation was simple, not onerous.
Even conceding that petitioners full payment of the
purchase price of the lot might have been a burden to
him, such payment was not however imposed by the
donor as a condition for the donation.

Page 371 of 404

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It is clear that the donor did not have any intention to

burden or charge petitioner as the donee. The words in
the deed are in fact typical of a pure donation. We
agree with Respondent Court that the payments made
by petitioner were merely his voluntary acts. This much
can be gathered from his testimony in court, in which he
never even claimed that a burden or charge had been
imposed by his grandmother.
The payments even seem to have been made pursuant
to the power of attorney executed by Catalina Reyes in
favor of petitioner, her grandson, authorizing him to
execute acts necessary for the fulfillment of her
obligations. Nothing in the records shows that such acts
were meant to be a burden in the donation.
2. NO. As a pure or simple donation, the provisions of
the civil code apply. The donation, following the theory
of cognition (Article 1319, Civil Code), is perfected only
upon the moment the donor knows of the acceptance by
the donee. Furthermore, [i]f 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.
Acceptance of the donation by the donee is, therefore,
indispensable; its absence makes the donation null and
void.
ARTICLE 735
G.R. No. 82027 March 29, 1990
ROMARICO G. VITUG, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ROWENA
FAUSTINO-CORONA, respondents.
Rufino B. Javier Law Office for petitioner.
Quisumbing, Torres & Evangelista for private
respondent.

SARMIENTO, J.:
This case is a chapter in an earlier suit decided by this
Court 1 involving the probate of the two wills of the late
Dolores Luchangco Vitug, who died in New York, U. S.A.,
on November 10, 1980, naming private respondent
Rowena Faustino-Corona executrix. In our said decision,
we upheld the appointment of Nenita Alonte as cospecial administrator of Mrs. Vitug's estate with her
(Mrs. Vitug's) widower, petitioner Romarico G. Vitug,
pending probate.
On January 13, 1985, Romarico G. Vitug filed a motion
asking for authority from the probate court to sell
certain shares of stock and real properties belonging to
the estate to cover allegedly his advances to the estate
in the sum of P667,731.66, plus interests, which he
claimed were personal funds. As found by the Court of
Appeals, 2 the alleged advances consisted of
P58,147.40 spent for the payment of estate tax,
P518,834.27 as deficiency estate tax, and P90,749.99 as
"increment thereto." 3 According to Mr. Vitug, he
withdrew the sums of P518,834.27 and P90,749.99 from
savings account No. 35342-038 of the Bank of America,
Makati, Metro Manila.
On April 12, 1985, Rowena Corona opposed the motion
to sell on the ground that the same funds withdrawn
from savings account No. 35342-038 were conjugal
partnership properties and part of the estate, and
hence, there was allegedly no ground for
reimbursement. She also sought his ouster for failure to
include the sums in question for inventory and for
"concealment of funds belonging to the estate." 4
Vitug insists that the said funds are his exclusive
property having acquired the same through a
survivorship agreement executed with his late wife and
the bank on June 19, 1970. The agreement provides:
We hereby agree with each other and with the BANK OF
AMERICAN NATIONAL TRUST AND SAVINGS ASSOCIATION
(hereinafter referred to as the BANK), that all money
now or hereafter deposited by us or any or either of us
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with the BANK in our joint savings current account shall

be the property of all or both of us and shall be payable
to and collectible or withdrawable by either or any of us
during our lifetime, and after the death of either or any
of us shall belong to and be the sole property of the
survivor or survivors, and shall be payable to and
collectible or withdrawable by such survivor or survivors.
We further agree with each other and the BANK that the
receipt or check of either, any or all of us during our
lifetime, or the receipt or check of the survivor or
survivors, for any payment or withdrawal made for our
above-mentioned account shall be valid and sufficient
release and discharge of the BANK for such payment or
withdrawal. 5
The trial courts 6 upheld the validity of this agreement
and granted "the motion to sell some of the estate of
Dolores L. Vitug, the proceeds of which shall be used to
pay the personal funds of Romarico Vitug in the total
sum of P667,731.66 ... ." 7
On the other hand, the Court of Appeals, in the petition
for certiorari filed by the herein private respondent, held
that the above-quoted survivorship agreement
constitutes a conveyance mortis causa which "did not
comply with the formalities of a valid will as prescribed
by Article 805 of the Civil Code," 8 and secondly,
assuming that it is a mere donation inter vivos, it is a
prohibited donation under the provisions of Article 133
of the Civil Code. 9
The dispositive portion of the decision of the Court of
Appeals states:
WHEREFORE, the order of respondent Judge dated
November 26, 1985 (Annex II, petition) is hereby set
aside insofar as it granted private respondent's motion
to sell certain properties of the estate of Dolores L. Vitug
for reimbursement of his alleged advances to the estate,
but the same order is sustained in all other respects. In
addition, respondent Judge is directed to include
provisionally the deposits in Savings Account No. 35342038 with the Bank of America, Makati, in the inventory

of actual properties possessed by the spouses at the

time of the decedent's death. With costs against private
respondent. 10
In his petition, Vitug, the surviving spouse, assails the
appellate court's ruling on the strength of our decisions
in Rivera v. People's Bank and Trust Co. 11 and Macam
v. Gatmaitan 12 in which we sustained the validity of
"survivorship agreements" and considering them as
aleatory contracts. 13
The petition is meritorious.
The conveyance in question is not, first of all, one of
mortis causa, which should be embodied in a will. A will
has been defined as "a personal, solemn, revocable and
free act by which a capacitated person disposes of his
property and rights and declares or complies with duties
to take effect after his death." 14 In other words, the
bequest or device must pertain to the testator. 15 In
this case, the monies subject of savings account No.
35342-038 were in the nature of conjugal funds In the
case relied on, Rivera v. People's Bank and Trust Co., 16
we rejected claims that a survivorship agreement
purports to deliver one party's separate properties in
favor of the other, but simply, their joint holdings:
xxx xxx xxx
... Such conclusion is evidently predicated on the
assumption that Stephenson was the exclusive owner of
the funds-deposited in the bank, which assumption was
in turn based on the facts (1) that the account was
originally opened in the name of Stephenson alone and
(2) that Ana Rivera "served only as housemaid of the
deceased." But it not infrequently happens that a person
deposits money in the bank in the name of another; and
in the instant case it also appears that Ana Rivera
served her master for about nineteen years without
actually receiving her salary from him. The fact that
subsequently Stephenson transferred the account to the
name of himself and/or Ana Rivera and executed with
the latter the survivorship agreement in question
although there was no relation of kinship between them
Page 373 of 404

LAW ON PROPERTY

but only that of master and servant, nullifies the

assumption that Stephenson was the exclusive owner of
the bank account. In the absence, then, of clear proof to
the contrary, we must give full faith and credit to the
certificate of deposit which recites in effect that the
funds in question belonged to Edgar Stephenson and
Ana Rivera; that they were joint (and several) owners
thereof; and that either of them could withdraw any part
or the whole of said account during the lifetime of both,
and the balance, if any, upon the death of either,
belonged to the survivor. 17
xxx xxx xxx
In Macam v. Gatmaitan, 18 it was held:
xxx xxx xxx
This Court is of the opinion that Exhibit C is an aleatory
contract whereby, according to article 1790 of the Civil
Code, one of the parties or both reciprocally bind
themselves to give or do something as an equivalent for
that which the other party is to give or do in case of the
occurrence of an event which is uncertain or will happen
at an indeterminate time. As already stated, Leonarda
was the owner of the house and Juana of the Buick
automobile and most of the furniture. By virtue of
Exhibit C, Juana would become the owner of the house
in case Leonarda died first, and Leonarda would become
the owner of the automobile and the furniture if Juana
were to die first. In this manner Leonarda and Juana
reciprocally assigned their respective property to one
another conditioned upon who might die first, the time
of death determining the event upon which the
acquisition of such right by the one or the other
depended. This contract, as any other contract, is
binding upon the parties thereto. Inasmuch as Leonarda
had died before Juana, the latter thereupon acquired the
ownership of the house, in the same manner as
Leonarda would have acquired the ownership of the
automobile and of the furniture if Juana had died first.
19

There is no showing that the funds exclusively belonged

to one party, and hence it must be presumed to be
conjugal, having been acquired during the existence of
the marita. relations. 20
Neither is the survivorship agreement a donation inter
vivos, for obvious reasons, because it was to take effect
after the death of one party. Secondly, it is not a
donation between the spouses because it involved no
conveyance of a spouse's own properties to the other.
It is also our opinion that the agreement involves no
modification petition of the conjugal partnership, as held
by the Court of Appeals, 21 by "mere stipulation" 22
and that it is no "cloak" 23 to circumvent the law on
conjugal property relations. Certainly, the spouses are
not prohibited by law to invest conjugal property, say,
by way of a joint and several bank account, more
commonly denominated in banking parlance as an
"and/or" account. In the case at bar, when the spouses
Vitug opened savings account No. 35342-038, they
merely put what rightfully belonged to them in a moneymaking venture. They did not dispose of it in favor of the
other, which would have arguably been sanctionable as
a prohibited donation. And since the funds were
conjugal, it can not be said that one spouse could have
pressured the other in placing his or her deposits in the
money pool.
The validity of the contract seems debatable by reason
of its "survivor-take-all" feature, but in reality, that
contract imposed a mere obligation with a term, the
term being death. Such agreements are permitted by
the Civil Code. 24
Under Article 2010 of the Code:
ART. 2010. By an aleatory contract, one of the parties or
both reciprocally bind themselves to give or to do
something in consideration of what the other shall give
or do upon the happening of an event which is
uncertain, or which is to occur at an indeterminate time.

xxx xxx xxx

Page 374 of 404
LAW ON PROPERTY

Under the aforequoted provision, the fulfillment of an

aleatory contract depends on either the happening of an
event which is (1) "uncertain," (2) "which is to occur at
an indeterminate time." A survivorship agreement, the
sale of a sweepstake ticket, a transaction stipulating on
the value of currency, and insurance have been held to
fall under the first category, while a contract for life
annuity or pension under Article 2021, et sequentia, has
been categorized under the second. 25 In either case,
the element of risk is present. In the case at bar, the risk
was the death of one party and survivorship of the other.
However, as we have warned:
xxx xxx xxx
But although the survivorship agreement is per se not
contrary to law its operation or effect may be violative of
the law. For instance, if it be shown in a given case that
such agreement is a mere cloak to hide an inofficious
donation, to transfer property in fraud of creditors, or to
defeat the legitime of a forced heir, it may be assailed
and annulled upon such grounds. No such vice has been
imputed and established against the agreement
involved in this case. 26
xxx xxx xxx
There is no demonstration here that the survivorship
agreement had been executed for such unlawful
purposes, or, as held by the respondent court, in order
to frustrate our laws on wills, donations, and conjugal
partnership.
The conclusion is accordingly unavoidable that Mrs.
Vitug having predeceased her husband, the latter has
acquired upon her death a vested right over the
amounts under savings account No. 35342-038 of the
Bank of America. Insofar as the respondent court
ordered their inclusion in the inventory of assets left by
Mrs. Vitug, we hold that the court was in error. Being the
separate property of petitioner, it forms no more part of
the estate of the deceased.

WHEREFORE, the decision of the respondent appellate

court, dated June 29, 1987, and its resolution, dated
February 9, 1988, are SET ASIDE.
No costs.
SO ORDERED.
ARTICLE 744
G.R. No. 107132 October 8, 1999
MAXIMA HEMEDES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DOMINIUM
REALTY AND CONSTRUCTION CORPORATION, ENRIQUE
D. HEMEDES and R & B INSURANCE CORPORATION,
respondents.
G.R. No. 108472 October 8, 1999
R & B INSURANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DOMINIUM
REALTY AND CONSTRUCTION CORPORATION, ENRIQUE
D. HEMEDES and MAXIMA HEMEDES, respondents.
GONZAGA-REYES, J.:
Assailed in these petitions for review on certiorari is the
decision 1 of the eleventh division of the Court of
Appeals in CA-G.R. CV No. 22010 promulgated on
September 11, 1992 affirming in toto the decision of
Branch 24 of the Regional Trial Court of Laguna in Civil
Case No. B-1766 dated February 22, 1989, 2 and the
resolution dated December 29, 1992 denying petitioner
R & B Insurance Corporation's (R & B Insurance) motion
for reconsideration. As the factual antecedents and
issues are the same, we shall decide the petitions jointly.
The instant controversy involves a question of ownership
over an unregistered parcel of land, identified as Lot No.
6, plan Psu-111331, with an area of 21,773 square
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meters, situated in Sala, Cabuyao, Laguna. It was

originally owned by the late Jose Hemedes, father of
Maxima Hemedes and Enrique D. Hemedes. On March
22, 1947 Jose Hemedes executed a document entitled
"Donation Inter Vivos With Resolutory Conditions" 3
whereby he conveyed ownership over the subject land,
together with all its improvements, in favor of his third
wife, Justa Kauapin, subject to the following resolutory
conditions:
(a) Upon the death or remarriage of the DONEE, the title
to the property donated shall revert to any of the
children, or their heirs, of the DONOR expressly
designated by the DONEE in a public document
conveying the property to the latter; or
(b) In absence of such an express designation made by
the DONEE before her death or remarriage contained in
a public instrument as above provided, the title to the
property shall automatically revert to the legal heirs of
the DONOR in common.
Pursuant to the first condition above mentioned, Justa
Kausapin executed on September 27, 1960 a "Deed of
Conveyance of Unregistered Real Property by Reversion"
4 conveying to Maxima Hemedes the subject property
under the following terms
That the said parcel of land was donated unto me by the
said Jose Hemedes, my deceased husband, in a deed of
"DONATION INTER VIVOS WITH RESOLUTORY
CONDITIONS" executed by the donor in my favor, and
duly accepted by me on March 22, 1947, before Notary
Public Luis Bella in Cabuyao, Laguna;
That the donation is subject to the resolutory conditions
appearing in the said deed of "DONATION INTER VIVOS
WITH RESOLUTORY CONDITIONS," as follows:
(a) Upon the death or remarriage of the DONEE, the title
to the property donated shall revert to any of the
children, or their heirs, of the DONOR expressly
designated by the DONEE in a public document
conveying the property to the latter; or

(b) In absence of such an express designation made by

the DONEE before her death or remarriage contained in
a public instrument as above provided, the title to the
property shall automatically revert to the legal heirs of
the DONOR in common.
That, wherefore, in virtue of the deed of donation above
mentioned and in the exercise of my right and privilege
under the terms of the first resolutory condition therein
contained and hereinabove reproduced, and for and in
consideration of my love and affection, I do hereby by
these presents convey, transfer, and deed unto my
designee, MAXIMA HEMEDES, of legal age, married to
RAUL RODRIGUEZ, Filipino and resident of No. 15 Acacia
Road, Quezon City, who is one of the children and heirs
of my donor, JOSE HEMEDES, the ownership of, and title
to the property hereinabove described, and all rights
and interests therein by reversion under the first
resolutory condition in the above deed of donation;
Except the possession and enjoyment of the said
property which shall remain vested in me during my
lifetime, or widowhood and which upon my death or
remarriage shall also automatically revert to, and be
transferred to my designee, Maxima Hemedes.
Maxima Hemedes, through her counsel, filed an
application for registration and confirmation of title over
the subject unregistered land. Subsequently, Original
Certificate of Title (OCT) No. (0-941) 0-198 5 was issued
in the name of Maxima Hemedes married to Raul
Rodriguez by the Registry of Deeds of Laguna on June 8,
1962, with the annotation that "Justa Kausapin shall
have the usufructuary rights over the parcel of land
herein described during her lifetime or widowhood."
It is claimed by R & B Insurance that on June 2, 1964,
Maxima Hemedes and her husband Raul Rodriguez
constituted a real estate mortgage over the subject
property in its favor to serve as security for a loan which
they obtained in the amount of P6,000.00. On February
22, 1968, R & B Insurance extrajudicially foreclosed the
mortgage since Maxima Hemedes failed to pay the loan
even after it became due on August 2, 1964. The land
Page 376 of 404

LAW ON PROPERTY

was sold at a public auction on May 3, 1968 with R & B

Insurance as the highest bidder and a certificate of sale
was issued by the sheriff in its favor. Since Maxima
Hemedes failed to redeem the property within the
redemption period, R & B Insurance executed an
Affidavit of Consolidation dated March 29, 1974 and on
May 21, 1975 the Register of Deeds of Laguna cancelled
OCT No. (0-941) 0-198 and issued Transfer Certificate of
Title (TCT) No. 41985 in the name of R & B Insurance.
The annotation of usufruct in favor of Justa Kausapin was
maintained in the new title. 6
Despite the earlier conveyance of the subject land in
favor of Maxima Hemedes, Justa Kausapin executed a
"Kasunduan" on May 27, 1971 whereby she transferred
the same land to her stepson Enrique D. Hemedes,
pursuant to the resolutory condition in the deed of
donation executed in her favor by her late husband Jose
Hemedes. Enrique D. Hemedes obtained two
declarations of real property in 1972, and again, in
1974, when the assessed value of the property was
raised. Also, he has been paying the realty taxes on the
property from the time Justa Kausapin conveyed the
property to him in 1971 until 1979. In the cadastral
survey of Cabuyao, Laguna conducted from September
8, 1974 to October 10, 1974, the property was assigned
Cadastral No. 2990, Cad. 455-D, Cabuyao Cadastre, in
the name of Enrique Hemedes. Enrique Hemedes is also
the named owner of the property in the records of the
Ministry of Agrarian Reform office at Calamba, Laguna.
On February 28, 1979, Enriques D. Hemedes sold the
property to Dominium Realty and Construction
Corporation (Dominium). On April 10, 1981, Justa
Kausapin executed an affidavit affirming the conveyance
of the subject property in favor of Enrique D. Hemedes
as embodied in the "Kasunduan" dated May 27, 1971,
and at the same time denying the conveyance made to
Maxima Hemedes.
On May 14, 1981, Dominium leased the property to its
sister corporation Asia Brewery, Inc. (Asia Brewery) who,
even before the signing of the contract of lease,
constructed two warehouses made of steel and asbestos

costing about P10,000,000.00 each. Upon learning of

Asia Brewery's constructions upon the subject property,
R & B Insurance sent it a letter on March 16, 1981
informing the former of its ownership of the property as
evidenced by TCT No. 41985 issued in its favor and of its
right to appropriate the constructions since Asia Brewery
is a builder in bad faith. On March 27, 1981, a
conference was held between R & B Insurance and Asia
Brewery but they failed to arrive at an amicable
settlement.1wphi1.nt
On May 8, 1981, Maxima Hemedes also wrote a letter
addressed to Asia Brewery wherein she asserted that
she is the rightful owner of the subject property by
virtue of OCT No. (0-941) 0-198 and that, as such, she
has the right to appropriate Asia Brewery's
constructions, to demand its demolition, or to compel
Asia Brewery to purchase the land. In another letter of
the same date addressed to R & B Insurance, Maxima
Hemedes denied the execution of any real estate
mortgage in favor of the latter.
On August 27, 1981, Dominium and Enrique D. Hemedes
filed a
complaint 7 with the Court of First Instance of Binan,
Laguna for the annulment of TCT No. 41985 issued in
favor of R & B Insurance and/or the reconveyance to
Dominium of the subject property. Specifically, the
complaint alleged that Dominium was the absolute
owner of the subject property by virtue of the February
28, 1979 deed of sale executed by Enrique D. Hemedes,
who in turn obtained ownership of the land from Justa
Kausapin, as evidenced by the "Kasunduan" dated May
27, 1971. The plaintiffs asserted that Justa Kausapin
never transferred the land to Maxima Hemedes and that
Enrique D. Hemedes had no knowledge of the
registration proceedings initiated by Maxima Hemedes.
After considering the merits of the case, the trial court
rendered judgment on February 22, 1989 in favor of
plaintiffs Dominium and Enrique D. Hemedes, the
dispositive portion of which states
WHEREFORE, judgment is hereby rendered:
Page 377 of 404

LAW ON PROPERTY

(a) Declaring Transfer Certificate of Title No. 41985 of

the Register of Deeds of Laguna null and void and
ineffective;
(b) Declaring Dominium Realty and Construction
Corporation the absolute owner and possessor of the
parcel of land described in paragraph 3 of the complaint;
(c) Ordering the defendants and all persons acting for
and/or under them to respect such ownership and
possession of Dominium Realty and Construction
Corporation and to forever desist from asserting adverse
claims thereon nor disturbing such ownership and
possession; and
(d) Directing the Register of Deeds of Laguna to cancel
said Transfer Certificate of Title No. 41985 in the name
of R & B Insurance Corporation, and in lieu thereof, issue
a new transfer certificate of title in the name of
Dominium Realty and Construction Corporation. No
pronouncement as to costs and attorney's fees. 8
Both R & B Insurance and Maxima Hemedes appealed
from the trial court's decision. On September 11, 1992
the Court of Appeals affirmed the assailed decision in
toto and on December 29, 1992, it denied R & B
Insurance's motion for reconsideration. Thus, Maxima
Hemedes and R & B Insurance filed their respective
petitions for review with this Court on November 3, 1992
and February 22, 1993, respectively.
In G.R. No. 107132 9, petitioner Maxima Hemedes
makes the following assignment of errors as regards
public respondent's ruling
I
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
APPLYING ARTICLE 1332 OF THE NEW CIVIL CODE IN
DECLARING AS SPURIOUS THE DEED OF CONVEYANCE
OF UNREGISTERED REAL PROPERTY BY REVERSION
EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF PETITIONER
MAXIMA HEMEDES.

II
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING AS VOID AND OF NO LEGAL EFFECT THE
"KASUNDUAN" DATED 27 MAY 1971 EXECUTED BY JUSTA
KAUSAPIN IN FAVOR OF RESPONDENT ENRIQUE
HEMEDES AND THE SALE OF THE SUBJECT PROPERTY BY
RESPONDENT ENRIQUE HEMEDES IN FAVOR OF
RESPONDENT DOMINIUM REALTY AND CONSTRUCTION
CORPORATION.
III
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING RESPONDENTS ENRIQUE AND DOMINIUM
IN BAD FAITH.
IV
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
DECLARING THAT ORIGINAL CERTIFICATE OF TITLE NO.
(0-941) 0-198 ISSUED IN THE NAME OF PETITIONER
MAXIMA HEMEDES NULL AND VOID.
V
RESPONDENT COURT OF APPEALS ERRED IN NOT
FINDING THAT NO LOAN WAS OBTAINED BY PETITIONER
MAXIMA HEMEDES FROM RESPONDENT R & B
INSURANCE CORPORATION.
VI
RESPONDENT COURT OF APPEALS ERRED IN NOT
FINDING THAT NO REAL ESTATE MORTGAGE OVER THE
SUBJECT PROPERTY WAS EXECUTED BY PETITIONER
MAXIMA HEMEDES IN FAVOR OF RESPONDENT R & B
INSURANCE CORPORATION.
VII
RESPONDENT COURT OF APPEALS ERRED IN NOT
FINDING THAT THE VALID TITLE COVERING THE SUBJECT
Page 378 of 404

LAW ON PROPERTY

PROPERTY IS THE ORIGINAL CERTIFICATE OF TITLE NO.

(0-941) 0-198 IN THE NAME OF PETITIONER MAXIMA
HEMEDES AND NOT THE TRANSFER CERTIFICATE OF
TITLE (TCT) NO. 41985 IN THE NAME OF R & B
INSURANCE CORPORATION. 10
Meanwhile, in G.R. No. 108472 11, petitioner R & B
Insurance assigns almost the same errors, except with
regards to the real estate mortgage allegedly executed
by Maxima Hemedes in its favor. Specifically, R & B
Insurance alleges that:
I
RESPONDENT COURT ERRONEOUSLY ERRED IN APPLYING
ARTICLE 1332 OF THE CIVIL CODE.
II
RESPONDENT COURT SERIOUSLY ERRED IN GIVING
CREDENCE ON (sic) THE KASUNDUAN BY AND BETWEEN
JUSTA KAUSAPIN AND ENRIQUE NOTWITHSTANDING THE
FACT THAT JUSTA KAUSAPIN BY WAY OF A DEED OF
CONVEYANCE OF UNREGISTERED REAL PROPERTY BY
REVERSION CEDED THE SUBJECT PROPERTY TO MAXIMA
SOME ELEVEN (11) YEARS EARLIER.
III
RESPONDENT COURT SERIOUSLY ERRED IN GIVING
CREDENCE ON (sic) THE AFFIDAVIT OF REPUDIATION OF
JUSTA KAUSAPIN NOTWITHSTANDING THE FACT THAT
SHE IS A BIAS (sic) WITNESS AND EXECUTED THE SAME
SOME TWENTY-ONE (21) YEARS AFTER THE EXECUTION
OF THE DEED OF CONVEYANCE IN FAVOR OF MAXIMA.
IV
RESPONDENT COURT SERIOUSLY ERRED IN NOT FINDING
THAT THE COMPLAINT OF ENRIQUE AND DOMINIUM HAS
PRESCRIBED AND/OR THAT ENRIQUE AND DOMINIUM
WERE GUILTY OF LACHES.
V

RESPONDENT COURT SERIOUSLY ERRED IN FINDING

R & B AS A MORTGAGEE NOT IN GOOD FAITH.
VI
RESPONDENT COURT SERIOUSLY ERRED IN NOT
GRANTING THE DAMAGES PRAYED FOR BY R & B IN ITS
COUNTERCLAIM AND CROSSCLAIM. 12
The primary issue to be resolved in these consolidated
petitions is which of the two conveyances by Justa
Kausapin, the first in favor of Maxima Hemedes and the
second in favor of Enrique D. Hemedes, effectively
transferred ownership over the subject land.
The Register of Deeds of Laguna issued OCT No. (0-941)
0-198 in favor of Maxima Hemedes on the strength of
the "Deed of Conveyance of Unregistered Real Property
by Reversion" executed by Justa Kausapin. Public
respondent upheld the trial court's finding that such
deed is sham and spurious and has "no evidentiary
value under the law upon which claimant Maxima
Hemedes may anchor a valid claim of ownership over
the property." In ruling thus, it gave credence to the
April 10, 1981 affidavit executed by Justa Kausapin
repudiating such deed of conveyance in favor of Maxima
Hemedes and affirming the authenticity of the
"Kasunduan" in favor of Enrique D. Hemedes. Also, it
considered as pivotal the fact that the deed of
conveyance in favor of Maxima Hemedes was in English
and that it was not explained to Justa Kausapin,
although she could not read nor understand English;
thus, Maxima Hemedes failed to discharge her burden,
pursuant to Article 1332 of the Civil Code, to show that
the terms thereof were fully explained to Justa Kausapin.
Public respondent concluded by holding that the
registration of the property on the strength of the
spurious deed of conveyance is null and void and does
not confer any right of ownership upon Maxima
Hemedes. 13
Maxima Hemedes argues that Justa Kausapin's affidavit
should not be given any credence since she is obviously
Page 379 of 404

LAW ON PROPERTY

a biased witness as it has been shown that she is

dependent upon Enrique D. Hemedes for her daily
subsistence, and she was most probably influenced by
Enrique D. Hemedes to execute the "Kasunduan" in his
favor. She also refutes the applicability of article 1332. It
is her contention that for such a provision to be
applicable, there must be a party seeking to enforce a
contract; however, she is not enforcing the "Deed of
Conveyance of Unregistered Real Property by Reversion"
as her basis in claiming ownership, but rather her claim
is anchored upon OCT No. (0-941) 0-198 issued in her
name, which document can stand independently from
the deed of conveyance. Also, there exist various
circumstances which show that Justa Kausapin did in
fact execute and understand the deed of conveyance in
favor of Maxima Hemedes. First, the "Donation
Intervivos With Resolutory Conditions" executed by Jose
Hemedes in favor of Justa Kausapin was also in English,
but she never alleged that she did not understand such
document. Secondly, Justa Kausapin failed to prove that
it was not her thumbmark on the deed of conveyance in
favor of Maxima Hemedes and in fact, both Enrique D.
Hemedes and Dominium objected to the request of
Maxima Hemedes' counsel to obtain a specimen
thumbmark of Justa Kausapin. 14

conveyance would have easily cleared any doubts as to

whether or not the deed was forged, the records do not
show that such evidence was introduced by private
respondents and the lower court decisions do not make
mention of any comparison having been made. 16 It is
a legal presumption that evidence willfully suppressed
would be adverse if produced. 17 The failure of private
respondents to refute the due execution of the deed of
conveyance by making a comparison with Justa
Kausapin's thumbmark necessarily leads one to
conclude that she did in fact affix her thumbmark upon
the deed of donation in favor of her stepdaughter.

Public respondent's finding that the "Deed of

Conveyance of Unregistered Real Property By Reversion"
executed by Justa Kausapin in favor of Maxima Hemedes
is spurious is not supported by the factual findings in
this case. It is grounded upon the mere denial of the
same by Justa Kausapin. A party to a contract cannot
just evade compliance with his contractual obligations
by the simple expedient of denying the execution of
such contract. If, after a perfect and binding contract
has been executed between the parties, it occurs to one
of them to allege some defect therein as a reason for
annulling it, the alleged defect must be conclusively
proven, since the validity and fulfillment of contracts
cannot be left to the will of one of the contracting
parties. 15

A: Because I was in serious condition and he was the

one supporting me financially.

Moreover, public respondent's reliance upon Justa

Kausapin's repudiation of the deed of conveyance is
misplaced for there are strong indications that she is a
biased witness. The trial court found that Justa Kausapin
was dependent upon Enrique D. Hemedes for financial
assistance. 18 Justa Kausapin's own testimony attests
to this fact
Atty. Conchu:
Q: Aling Justa, can you tell the Honorable Court why you
donated this particular property to Enrique Hemedes?

Q: As of today, Aling Justa are you continuing to receive

any assistance from Enrique Hemedes?
A: Yes Sir.
(TSN pp. 19 and 23, November 17, 1981) 19
Even Enrique Hemedes admitted that Justa Kausapin
was dependent upon him for financial support. The
transcripts state as follows:
Atty. Mora:

Although a comparison of Justa Kausapin's thumbmark

with the thumbmark affixed upon the deed of
Page 380 of 404
LAW ON PROPERTY

Now you said that Justa Kausapin has been receiving

from you advances for food, medicine & other personal
or family needs?
E. Hemedes:
A: Yes.
Q: Was this already the practice at the time this
"Kasunduan" was executed?
A: No that was increased, no, no, after this document.
xxx xxx xxx
Q: And because of these accommodations that you have
given to Justa Kausapin; Justa Kausapin has in turn
treated you very well because she's very grateful for
that, is it not?
A: I think that's human nature.
Q: Answer me categorically, Mr. Hemedes she's very
grateful?
A: Yes she might be grateful but not very grateful.
(TSN, p. 34, June 15, 1984) 20
A witness is said to be biased when his relation to the
cause or to the parties is such that he has an incentive
to exaggerate or give false color to his statements, or to
suppress or to pervert the truth, or to state what is false.
21 At the time the present case was filed in the trial
court in 1981, Justa Kausapin was already 80 years old,
suffering from worsening physical infirmities and
completely dependent upon her stepson Enrique D.
Hemedes for support. It is apparent that Enrique D.
Hemedes could easily have influenced his aging
stepmother to donate the subject property to him. Public
respondent should not have given credence to a witness
that was obviously biased and partial to the cause of
private respondents. Although it is a well-established
rule that the matter of credibility lies within the province

of the trial court, such rule does not apply when the
witness' credibility has been put in serious doubt, such
as when there appears on the record some fact or
circumstance of weight and influence, which has been
overlooked or the significance of which has been
misinterpreted. 22
Finally, public respondent was in error when it sustained
the trial court's decision to nullify the "Deed of
Conveyance of Unregistered Real Property by Reversion"
for failure of Maxima Hemedes to comply with article
1332 of the Civil Code, which states:
When one of the parties is unable to read, or if the
contract is in a language not understood by him, and
mistake or fraud is alleged, the person enforcing the
contract must show that the terms thereof have been
fully explained to the former.
Art. 1332 was intended for the protection of a party to a
contract who is at a disadvantage due to his illiteracy,
ignorance, mental weakness or other handicap. 23 This
article contemplates a situation wherein a contract has
been entered into, but the consent of one of the parties
is vitiated by mistake or fraud committed by the other
contracting party. 24 This is apparent from the ordering
of the provisions under Book IV, Title II, Chapter 2,
section 1 of the Civil Code, from which article 1332 is
taken. Article 1330 states that
A contract where consent is given through mistake,
violence, intimidation, undue influence, or fraud is
voidable.
This is immediately followed by provisions explaining
what constitutes mistake, violence, intimidation, undue
influence, or fraud sufficient to vitiate consent. 25 In
order that mistake may invalidate consent, it should
refer to the substance of the thing which is the object of
the contract, or to those conditions which have
principally moved one or both parties to enter into the
contract. 26 Fraud, on the other hand, is present when,
through insidious words or machinations of one of the
contracting parties, the other is induced to enter into a
Page 381 of 404

LAW ON PROPERTY

contract which, without them, he would not have agreed

to. 27 Clearly, article 1332 assumes that the consent of
the contracting party imputing the mistake or fraud was
given, although vitiated, and does not cover a situation
where there is a complete absence of
consent.1wphi1.nt
In this case, Justa Kausapin disclaims any knowledge of
the "Deed of Conveyance of Unregistered Real Property
by Reversion" in favor of Maxima Hemedes. In fact, she
asserts that it was only during the hearing conducted on
December 7, 1981 before the trial court that she first
caught a glimpse of the deed of conveyance and thus,
she could not have possibly affixed her thumbmark
thereto. 28 It is private respondents' own allegations
which render article 1332 inapplicable for it is useless to
determine whether or not Justa Kausapin was induced to
execute said deed of conveyance by means of fraud
employed by Maxima Hemedes, who allegedly took
advantage of the fact that the former could not
understand English, when Justa Kausapin denies even
having seen the document before the present case was
initiated in 1981.
It has been held by this Court that ". . . mere
preponderance of evidence is not sufficient to overthrow
a certificate of a notary public to the effect that the
grantor executed a certain document and acknowledged
the fact of its execution before him. To accomplish this
result, the evidence must be so clear, strong and
convincing as to exclude all reasonable controversy as
to the falsity of the certificate, and when the evidence is
conflicting, the certificate will be
upheld." 29 In the present case, we hold that private
respondents have failed to produce clear, strong, and
convincing evidence to overcome the positive value of
the "Deed Conveyance of Unregistered Real Property by
Reversion" a notarized document. The mere denial of
its execution by the donor will not suffice for the
purpose.
In upholding the deed of conveyance in favor of Maxima
Hemedes, we must concomitantly rule that Enrique D.
Hemedes and his transferee, Dominium, did not acquire

any rights over the subject property. Justa Kausapin

sought to transfer to her stepson exactly what she had
earlier transferred to Maxima Hemedes the ownership
of the subject property pursuant to the first condition
stipulated in the deed of donation executed by her
husband. Thus, the donation in favor of Enrique D.
Hemedes is null and void for the purported object
thereof did not exist at the time of the transfer, having
already been transferred to his sister. 30 Similarly, the
sale of the subject property by Enrique D. Hemedes to
Dominium is also a nullity for the latter cannot acquire
more rights than its predecessor-in-interest and is
definitely not an innocent purchaser for value since
Enrique D. Hemedes did not present any certificate of
title upon which it relied.
The declarations of real property by Enrique D.
Hemedes, his payment of realty taxes, and his being
designated as owner of the subject property in the
cadastral survey of Cabuyao, Laguna and in the records
of the Ministry of Agrarian Reform office in Calamba,
Laguna cannot defeat a certificate of title, which is an
absolute and indefeasible evidence of ownership of the
property in favor of the person whose name appears
therein. 31 Particularly, with regard to tax declarations
and tax receipts, this Court has held on several
occasions that the same do not by themselves
conclusively prove title to land. 32
We come now to the question of whether or not R & B
Insurance should be considered an innocent purchaser
of the land in question. At the outset, we note that both
the trial court and appellate court found that Maxima
Hemedes did in fact execute a mortgage over the
subject property in favor of R & B Insurance. This finding
shall not be disturbed because, as we stated earlier, it is
a rule that the factual findings of the trial court,
especially when affirmed by the Court of Appeals, are
entitled to respect, and should not be disturbed on
appeal. 33
In holding that R & B Insurance is not a mortgagee in
good faith, public respondent stated that the fact that
the certificate of title of the subject property indicates
Page 382 of 404

LAW ON PROPERTY

upon its face that the same is subject to an

encumbrance, i.e. usufructuary rights in favor of Justa
Kausapin during her lifetime or widowhood, should have
prompted R & B Insurance to ". . . investigate further the
circumstances behind this encumbrance on the land in
dispute," but which it failed to do. Also, public
respondent considered against R & B Insurance the fact
that it made it appear in the mortgage contract that the
land was free from all liens, charges, taxes and
encumbrances. 34
R & B Insurance alleges that, contrary to public
respondent's ruling, the presence of an encumbrance on
the certificate of title is not reason for the purchaser or a
prospective mortgagee to look beyond the face of the
certificate of title. The owner of a parcel of land may still
sell the same even though such land is subject to a
usufruct; the buyer's title over the property will simply
be restricted by the rights of the usufructuary. Thus, R &
B Insurance accepted the mortgage subject to the
usufructuary rights of Justa Kausapin. Furthermore, even
assuming that R & B Insurance was legally obliged to go
beyond the title and search for any hidden defect or
inchoate right which could defeat its right thereto, it
would not have discovered anything since the mortgage
was entered into in 1964, while the "Kasunduan"
conveying the land to Enrique D. Hemedes was only
entered into in 1971 and the affidavit repudiating the
deed of conveyance in favor of Maxima Hemedes was
executed by Justa Kausapin in 1981. 35
We sustain petitioner R & B Insurance's claim that it is
entitled to the protection of a mortgagee in good faith.
It is a well-established principle that every person
dealing with registered land may safely rely on the
correctness of the certificate of title issued and the law
will in no way oblige him to go behind the certificate to
determine the condition of the property. 36 An innocent
purchaser for value 37 is one who buys the property of
another without notice that some other person has a
right to or interest in such property and pays a full and
fair price for the same at the time of such purchase or
before he has notice of the claim of another person. 38

The annotation of usufructuary rights in favor of Justa

Kausapin upon Maxima Hemedes' OCT dose not impose
upon R & B Insurance the obligation to investigate the
validity of its mortgagor's title. Usufruct gives a right to
enjoy the property of another with the obligation of
preserving its form and
substance. 39 The usufructuary is entitled to all the
natural, industrial and civil fruits of the property 40 and
may personally enjoy the thing in usufruct, lease it to
another, or alienate his right of usufruct, even by a
gratuitous title, but all the contracts he may enter into
as such usufructuary shall terminate upon the expiration
of the usufruct. 41
Clearly, only the jus utendi and jus fruendi over the
property is transferred to the usufructuary. 42 The
owner of the property maintains the jus disponendi or
the power to alienate, encumber, transform, and even
destroy the same. 43 This right is embodied in the Civil
Code, which provides that the owner of property the
usufruct of which is held by another, may alienate it,
although he cannot alter the property's form or
substance, or do anything which may be prejudicial to
the usufructuary. 44
There is no doubt that the owner may validly mortgage
the property in favor of a third person and the law
provides that, in such a case, the usufructuary shall not
be obliged to pay the debt of the mortgagor, and should
the immovable be attached or sold judicially for the
payment of the debt, the owner shall be liable to the
usufructuary for whatever the latter may lose by reason
thereof. 45
Based on the foregoing, the annotation of usufructuary
rights in favor of Justa Kausapin is not sufficient cause to
require R & B Insurance to investigate Maxima
Hemedes' title, contrary to public respondent's ruling,
for the reason that Maxima Hemedes' ownership over
the property remained unimpaired despite such
encumbrance. R & B Insurance had a right to rely on the
certificate of title and was not in bad faith in accepting
Page 383 of 404

LAW ON PROPERTY

the property as a security for the loan it extended to

Maxima Hemedes.
Even assuming in gratia argumenti that R & B Insurance
was obligated to look beyond the certificate of title and
investigate the title of its mortgagor, still, it would not
have discovered any better rights in favor of private
respondents. Enrique D. Hemedes and Dominium base
their claims to the property upon the "Kasunduan"
allegedly executed by Justa Kausapin in favor of Enrique
Hemedes. As we have already stated earlier, such
contract is a nullity as its subject matter was inexistent.
Also, the land was mortgaged to R & B Insurance as
early as 1964, while the "Kasunduan" was executed only
in 1971 and the affidavit of Justa Kausapin affirming the
conveyance in favor of Enrique D. Hemedes was
executed in 1981. Thus, even if R & B Insurance
investigated the title of Maxima Hemedes, it would not
have discovered any adverse claim to the land in
derogation of its mortgagor's title. We reiterate that at
no point in time could private respondents establish any
rights or maintain any claim over the land.
It is a well-settled principle that where innocent third
persons rely upon the correctness of a certificate of title
and acquire rights over the property, the court cannot
just disregard such rights. Otherwise, public confidence
in the certificate of title, and ultimately, the Torrens
system, would be impaired for everyone dealing with
registered property would still have to inquire at every
instance whether the title has been regularly or
irregularly issued. 46 Being an innocent mortgagee for
value, R & B Insurance validly acquired ownership over
the property, subject only to the usufructuary rights of
Justa Kausapin thereto, as this encumbrance was
properly annotated upon its certificate of title.
The factual findings of the trial court, particularly when
affirmed by the appellate court, carry great weight and
are entitled to respect on appeal, except under certain
circumstances. 47 One such circumstance that would
compel the Court to review the factual findings of the
lower courts is where the lower courts manifestly
overlooked certain relevant facts not disputed by the

parties and which, if properly considered, would justify a

different conclusion. 48 Also, it is axiomatic that the
drawing of the proper legal conclusions from such
factual findings are within the peculiar province of this
Court. 49
As regards R & B Insurance's prayer that Dominium be
ordered to demolish the warehouses or that it be
declared the owner thereof since the same were built in
bad faith, we note that such warehouses were
constructed by Asia Brewery, not by Dominium.
However, despite its being a necessary party in the
present case, the lower courts never acquired
jurisdiction over Asia Brewery, whether as a plaintiff or
defendant, and their respective decisions did not pass
upon the constructions made upon the subject property.
Courts acquire jurisdiction over a party plaintiff upon the
filing of the complaint, while jurisdiction over the person
of a party defendant is acquired upon the service of
summons in the manner required by law or by his
voluntary appearance. As a rule, if a defendant has not
been summoned, the court acquires no jurisdiction over
his person, and any personal judgment rendered against
such defendant is null and void. 50 In the present case,
since Asia Brewery is a necessary party that was not
joined in the action, any judgment rendered in this case
shall be without prejudice to its rights. 51
As to its claim for moral damages, we hold that R & B
Insurance is not entitled to the same for it has not
alleged nor proven the factual basis for the same.
Neither is it entitled to exemplary damages, which may
only be awarded if the claimant is entitled to moral,
temperate, liquidated or compensatory damages. 52 R
& B Insurance's claim for attorney's fees must also fail.
The award of attorney's fees is the exception rather than
the rule and counsel's fees are not to be awarded every
time a party wins a suit. Its award pursuant to article
2208 of the Civil Code demands factual, legal and
equitable justification and cannot be left to speculation
and conjecture. 53 Under the circumstances prevailing
in the instant case, there is no factual or legal basis for
an award of attorney's fees.
Page 384 of 404

LAW ON PROPERTY

WHEREFORE, the assailed decision of public respondent

and its resolution dated February 22, 1989 are
REVERSED. We uphold petitioner R & B Insurance's
assertion of ownership over the property in dispute, as
evidenced by TCT No. 41985, subject to the usufructuary
rights of Justa Kausapin, which encumbrance has been
properly annotated upon the said certificate of title. No
pronouncement as to costs.
SO ORDERED.
Panganiban and Purisima, JJ., concur.
Melo, J., please see dissenting opinion.
Vitug, J., please see separate (concurring) opinion.
Separate Opinions
VITUG, J., separate opinion;
I share the opinion expressed by my esteemed
colleague, Mme. Justice Minerva P. Gonzaga-Reyes, in
her ponencia.
I just would like to add that a donation would not be
legally feasible if the donor has neither ownership nor
real right that he can transmit to the donee. Unlike an
ordinary contract, a donation, under Article 712, in
relation to Article 725, of the Civil Code is also a mode of
acquiring and transmitting ownership and other real
rights by an act of liberality whereby a person disposes
gratuitously that ownership or real right in favor of
another who accepts it. It would be an inefficacious
process if the donor would have nothing to convey at
the time it is made.
Art. 744 of the Civil Code states that the "donation of
the same thing to two or more different donees shall be
governed by the provisions concerning the sale of the
same thing to two or more persons," i.e., by Article 1544
of the same Code, as if so saying that there can be a
case of "double donations" to different donees with
opposing interest. Article 744 is a new provision, having

no counterpart in the old Civil Code, that must have

been added unguardedly. Being a mode of acquiring and
transmitting ownership or other real rights, a donation
once perfected would deny the valid execution of a
subsequent inconsistent donation (unless perhaps if the
prior donation has provided a suspensive condition
which still pends when the later donation is made).
In sales, Article 1544, providing for the rules to resolve
the conflicting rights of two or more buyers, is
appropriate since the law does not prohibit but, in fact,
sanctions the perfection of a sale by a non-owner, such
as the sale of future things or a short sale, for it is only
at the consummation stage of the sale, i.e., delivery of
the thing sold, that ownership would be deemed
transmitted to the buyer. In the meanwhile, a
subsequent sale to another of the same thing by the
same seller can still be a legal possibility. This rule on
double sales finds no relevance in an ordinary donation
where the law requires the donor to have ownership of
the thing or the real right he donates at the time of its
perfection (see Article 750, Civil Code) since a donation
constitutes a mode, not just a title, in an acquisition and
transmission of ownership.
MELO, J., dissenting opinion;
I find myself unable to join the majority. The opinion
written by my esteemed colleague, Madame Justice
Minerva Gonzaga-Reyes, will have far-reaching
ramifications on settled doctrines concerning the finality
and conclusiveness of the factual findings of the trial
court in view of its unique advantage of being able to
observe at first-hand the demeanor and deportment of
witnesses, and especially when such findings of facts are
affirmed by the Court of Appeals, which is the final
arbiter of questions of fact (People vs. Edao, 64 SCRA
675 [1975]; People vs. Tala, 141 SCRA 240; People vs.
Canada and Dondoy, 144 SCRA 121 [1986]; People vs.
Clore, 184 SCRA 638 [1990]; Binalay vs. Manalo, 195
SCRA 374 [1991]; People vs. Miscala, 202 SCRA 26
[1991]; People vs. Lagrosa, 230 SCRA. 298 [1994]). All
these conditions are present in the case at bar, and I
have grave reservations about the propriety of setting
Page 385 of 404

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aside time-tested principles in favor of a finding that

hinges principally on the credibility of a single witness,
whom we are asked to disbelieve on the basis merely of
her recorded testimony without the benefit of the
advantage that the trial court had, disregarding in the
process another long-established rule that mere
relationship of a witness to a party does not discredit his
testimony in court (U.S. vs. Mante, 27 Phil 124; People
vs. Pagaduan, 37 Phil 90; People vs. Reyes, 69 SCRA 474
[1976]; People vs. Padiernos, 69 SCRA 484 [1976];
Borromeo vs. Court of Appeals, 70 SCRA 329 [1976];
People vs. Estocada, 75 SCRA 295 [1977]; People vs.
Ciria, 106 SCRA 381 [1981]; People vs. Ramo, 132 SCRA
174 [1984]; People vs. Atencio, 156 SCRA 242 [1987];
People vs. Gutierrez. Jr., 158 SCRA 614 [1988]; People
vs. Bandoquillo, 167 SCRA 549 [1988]; People vs. Suitos,
220 SCRA 419 [1993]).
The primordial issue is whether or not the "Deed of
Conveyance of Unregistered Real Property by Reversion"
dated September 27, 1960 conveying the subject
property to Maxima Hemedes is valid. If the transfer is
not valid, no title passed to her successor-in-interest, R
& B Insurance Corporation.
The Court of Appeals, confirming and summarizing the
findings of fact and law made by the trial court,
declared:
We sustain the findings of the trial court.
To begin with, the "Deed of Conveyance of Unregistered
Real Property by Reversion" was nullified by the trial
court on two (2) grounds:
First, MAXIMA failed to comply with the requirements
laid down by Article 1332 of the Civil Code. Said
provision reads:
Art. 1332. When one of the parties is unable to read, or
if the contract is in a language not understood by him,
and mistake or fraud is alleged, the person enforcing the
contract must show that the terms thereof have been
fully explained to the former.

In her testimony, MAXIMA admitted the entire document

was written in English, a language not known to Justa
Kausapin (TSN, 17 November 1981, pp. 7-8; Deposition
of Justa Kausapin). Yet, MAXIMA failed to introduce
sufficient evidence that would purportedly show that the
deed of conveyance was explained to Justa Kausapin
before the latter allegedly affixed her thumbmark. On
the contrary, she admitted having failed to translate the
deed of conveyance to Justa Kausapin because
according to her, the latter has "no voice" anyway
insofar as the property is concerned. Her testimony
reads:
Q In connection with this deed of conveyance which
has been marked as Exh. "2-Maxima," we note that this
is written in English, do you know, Mrs. Hernandez
(MAXIMA), whether this document was ever translated
to Justa Kausapin?
A Justa Kausapin has no voice because that's the
order of my father, so anyway. . .
Court Answer the question, you were only asked
whether that was translated.
A No. (TSN 26 November, 1984, pp. 36-37, Maxima
Hemedes).
Second, MAXIMA failed to repudiate the allegation of
Justa Kausapin disclaiming knowledge of her having
executed such a deed. As a matter of fact, Justa
Kausapin claimed that it was only during the hearing
conducted on 07 December 1981 that she first caught
glimpse of the deed of conveyance (TSN, 07 December
1981, pp. 22-23, ibid.) She therefore could not have
possibly affixed her thumbmark therein. In the light of
such a denial, the burden of proving that the deed of
conveyance was indeed genuine laid on MAXIMA. After
all, any party who asserts the affirmative of the issue
has the burden of presenting evidence required to
obtain a favorable judgment (Republic v. Court of
Appeals, 182 SCRA 290).1wphi1.nt
Page 386 of 404

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Instead, what was clearly established from the

deposition of Justa Kausapin is the fact that she never
executed any document donating the property to
anybody else except ENRIQUE. This can be readily
gleaned from her testimony, reading:
Q From the time, Aling Justa, that your husband Jose
Hemedes donated the property to you up to the time
you in turn donated the same to Enrique Hemedes in
1971, do you recall having executed any document
donating this particular property to anybody else?
A None, Sir. (TSN, 17 November 1981, p. 21)
(pp. 63-64, Rollo.)
There is no dispute that Justa Kausapin twice repudiated
the conveyance in favor of Maxima Hemedes. As found
by the trial court:
In an Affidavit dated April 10, 1981 executed by Justa
Kausapin before three witnesses (Exh. D-Dominium),
said affiant disowned the alleged "Deed of Conveyance
of Unregistered Real Property by Reversion" invoked by
defendant Maxima Hemedes, and expressly stated that
she never granted any right over the property to
Maxima Hemedes, whether as owner or mortgagor, that
she never allowed her to use the land as security or
collateral for a loan. In the same affidavit, Justa
Kausapin affirmed the authenticity of the "Kasunduan"
whereby she transferred ownership of the disputed land
to Enrique Hemedes, her stepson and reliable source of
assistance throughout the years that she was in need of
help. The testimony of Justa Kausapin was also taken by
deposition on November 17, December 7 and 14, 1981
and on January 14, 1982, wherein all the contending
parties were represented and had the opportunity to
cross-examine her. In her testimony (the entire
transcript of which has been submitted as Exh. KEnrique), Justa Kausapin reiterated her repudiation of
the Deed of Conveyance in favor of Maxima Hemedes
and re-affirmed the validity of the "Kasunduan" in favor
of Enrique Hemedes, as well as the subsequent sale of
the land by Enrique Hemedes to Dominium.

(pp. 83-84, Rollo.)

The majority would hold that the twin repudiations
cannot be given credence because the witness is biased
in favor of Enrique Hemedes, who, by providing support
and financial assistance to the witness before, during
and after the execution of the "Kasunduan," is said to
have influenced her into signing the same. This issue
refers to the credibility of witnesses which, as stated
earlier, is best left for determination by the trial court
(People vs. Oliano, 287 SCRA 158 [1998], citing People
vs. Pontillar, Jr., 275 SCRA 338 [1997]; People vs. Rubio,
257 SCRA 528 [1996]; People vs. Del Prado, 253 SCRA
731 [1996]). I am not prepared to substitute my
judgment for that of the trial court on the credibility of
Justa Kausapin on the basis alone of the relationship
between her and Enrique Hemedes. To reiterate, the rule
is: "Mere relationship of a witness to a party does not
discredit his testimony in court." (U.S. vs. Mante, supra;
Aznar vs. Court of Appeals, 70 SCRA 329 [1976]; People
vs. Letigio, 268 SCRA 227, 243 [1997]).
I cannot infer from the mere circumstance that Justa
Kausapin was receiving support and sustenance from
Enrique Hemedes that she had any improper motives to
testify in favor of Enrique and against Maxima. It must
be remembered that Justa Kausapin had a legal right to
such financial assistance, not only from respondent
Enrique Hemedes, but also from Maxima Hemedes, who
are both her stepchildren. If one must impute improper
motives in favor of Enrique, one could just as easily
ascribe these to Maxima. Furthermore, it must be noted
that Justa Kausapin's entitlement to support flowed from
her usufructuary rights contained in the "Donation Inter
Vivos with Resolutory Conditions" executed by her late
husband, Jose Hemedes, the common father of
petitioner Maxima and respondent Enrique Hemedes. In
supporting his stepmother, Enrique was, therefore,
merely performing a legal or contractual duty in favor of
Justa Kausapin. There was nothing improper in Justa
Kausapin's repudiation of the conveyance in favor of
Maxima, especially so if one considers the fact that the
latter did not adduce any other evidence to defeat the
Page 387 of 404

LAW ON PROPERTY

presumption that Justa Kausapin was stating the truth

when she said that she never conveyed the property to
Justa Maxima. As the trial court found:
. . . The actuation of Enrique Hemedes towards Justa
Kausapin is legally and morally justified. It must be
remembered that Justa Kausapin is the stepmother of
Enrique Hemedes; she was also the usufructuary of the
property in dispute. It is only natural and in keeping with
law and custom, or Filipino tradition, for a son to support
his mother (even if she happens to be a stepmother);
and form a legal standpoint, the naked owner Enrique
Hemedes was bound to support Justa Kausapin by way
of giving her what she was entitled to as usufructuary.
(p. 104, Rollo.)
The trial court's ruling on the invalidity of the title of
Maxima is not based solely on Justa Kausapin's
repudiation of the deed of conveyance, but likewise on
the very acts of Maxima and her transferee R & B Surety
and Insurance. The factual findings of the trial court are
to the effect that despite the alleged transfer of
ownership from Justa Kausapin to Maxima Hemedes on
September 27, 1960 and the subsequent transfer to R &
B Insurance on May 3, 1968 by way of foreclosure and
public auction sale, neither do these petitioners
exercised their rights of ownership over the disputed
property, never even asserting their supposed
ownership rights until it was too late. The following
findings of the trial court stand unassailed:
There are other indications which led this Court to
believe that neither defendant Maxima Hemedes nor
defendant R & B INSURANCE consider themselves the
owner of the property in question. Both of these
claimants never declared themselves as owners of the
property for tax purposes; much less did they pay a
single centavo in real estate taxes. The argument that
since Justa Kausapin was in possession of the property
as usufructuary she should pay the taxes contravenes
the clear provision of the Civil Code that the taxes which
may be imposed directly on the capital during the
usufruct, in this case the realty taxes, shall be at the

expense of the owner (Article 597, Civil Code). If Maxima

Hemedes and R & B INSURANCE were convinced that
they were the owners of the property, why did they not
pay taxes for the same? This attitude is not consistent
with that of an owner in good faith. The Court has noted
that the very owner of R & B INSURANCE has admitted in
her testimony that they declared the property as one of
the assets of R & B INSURANCE only in 1976, which is
eight years after they supposedly bought it at public
auction in 1968 (TSN, July 6, 1987, pp. 22-23) (Decision,
pp. 32-33).
(pp. 101-102, Rollo.)
Faced with the categorical and straightforward
repudiations of the conveyance supposedly made in her
favor, Maxima Hemedes could only gratuitously assert
otherwise, as no other testimonial or documentary
evidence was adduced in support thereof. Maxima's selfserving assertions, however, are legally infirm in view of
her admission that the deed of conveyance in her favor
was written in a language unknown to the person who
supposedly executed the same and the terms thereof
were not fully explained to the person who executed the
same. These are the facts as found by the trial court:
Questioned about the execution of the "Deed of
Conveyance of Unregistered Real Property by Reversion"
which is the basis of her claim, defendant Maxima
Hemedes admitted that the document which is in
English was not translated or explained to Justa
Kausapin before the latter supposedly affixed her
thumbmark to the document (TSN, November 26, 1984,
p. 34; TSN, December 10, 1984, p. 9). The Court has
noted from the records that the Notary Public before
whom the said document was notarized was not
presented as a wittiness by defendant Maxima
Hemedes, if only to attest to the execution of said
document by Justa Kausapin, considering that the latter
is an illiterate when it comes to documents written in
English. Maxima explained the non-translation of the
Deed of Conveyance into a language understood by
Justa Kausapin with the statement that the latter (Justa
Kausapin) "has no voice" anyway in so far as the
Page 388 of 404

LAW ON PROPERTY

property is concerned (TSN, November 26, 1984, p. 36) .

. . the Notary Public before whom the said document
was supposed to have been axknowledged was also not
presented as a witness, and there was no explanation as
to why he was not also presented. In the face of such an
admission and failure on the part of defendant Maxima
Hemedes, coupled with the straightforward repudiation
by Justa Kausapin herself of the document relied upon
by said defendant the Court finds and so concludes that
the "Deed of Conveyance of Unregistered Real Property
by Reversion" is not a credible and convincing evidence
and is of no evidentiary value under the law upon which
claimant Maxima Hemedes may anchor a valid claim of
ownership over the property subject of this action.
(pp. 91-93, Rollo.)
It is argued that private respondents failed to have the
thumbmarks of Justa Kausapin appearing on the deeds
executed in favor of Maxima and Enrique compared and
this failure may be taken as wilful suppression of
evidence that is presumed to be adverse if produced
(Rules of Court, Rule 131, Sec. 3(e). The applicability of
this rule presupposes that the suppressed evidence is
not available to the other party for production in court
(People vs. Padiernos, 69 SCRA 484 [1976]; People vs.
Silvestre, 279 SCRA 474, 495 [1997]). This is not the
case here for the same documents were available to
petitioners. In fact, the records show that counsel for
Maxima Hemedes pledged to submit the document
which will be compared with the specimen thumbmark
to be obtained from Justa Kausapin (TSN, December 7,
1981, p. 28). The records, however, do not show that
said counsel persisted in his request for comparison of
Kausapin's thumbmarks. If petitioners were convinced
that the specimen thumbprint of Justa Kausapin was of
crucial importance to their cause, they should have
insisted on presenting her as a witness and, thereupon,
obtaining her thumbprint. Their own failure to pursue
the production of the specimen thumbprint of Justa
Kausapin negated any belated claim that the said
specimen was suppressed (People vs. Tulop, citing
People vs. Pagal, 272 SCRA 443 [1998]; Commissioner of
Internal Revenue vs. Tokyo Shipping Company, Ltd., 244

SCRA 332 [1995]; citing Nicolas vs. Nicolas, 52 Phil 265

[1928] and Ang Seng Quiem vs. Te Chico, 7 Phil 541
[1907]).1wphi1.nt
The two courts below were, to my mind, most perceptive
when they held that proof of authenticity of the
thumbprint of Justa Kausapin would not render valid an
otherwise void document in light of the admission of
Maxima Hemedes that she did not explain the English
contents thereof to Justa Kausapin in a language
understood by her.
On the other hand, the validity of the conveyance to
Enrique Hemedes is amply proven by the evidence on
record. Thus, largely uncontested are the following
findings of fact of the trial court:
Enough has already been said hereinabove concerning
the claim of ownership of plaintiff Enrique. From an
overall evaluation of the facts found by the Court to be
substantiated by the evidence on record, the Court is
convinced and so holds that the three conflicting
claimants, it is party plaintiffs, Enrique Hemedes and
now DOMINIUM, who have both law and equity on their
side. Plaintiff Enrique Hemedes' title to the property in
question by virtue of the "Kasunduan" dated May 27,
1971 was confirmed twice by his grantor, Justa
Kausapin; he complied with his obligations as naked
owner by giving Justa Kausapin her usufructuary rights
in the form of financial and other assistance; he declared
his ownership of the property openly and adversely to
other claimants by recording the same in the
appropriate government agencies, namely, the
Municipal and Provincial Assessor's Office, the Ministry
of Agrarian Reform and the Bureau of Lands; he was
openly known in the community where the property is
located as the owner thereof; he paid the taxes on the
property conscientiously from the time he acquired the
same to the time he sold the same to co-plaintiff
DOMINIUM; he was in continuous possession of the
property during the said period; he paid the tenant,
Nemesio Marquez, the disturbance fee required under
the Land Reform Law.
Page 389 of 404

LAW ON PROPERTY

(pp., 102-103, Rollo.)

The Court of Appeals, therefore, did not err in holding
that since the deed of conveyance to Maxima was found
to be spurious, it necessarily follows that OCT No. (0941) 0-198 issued in her name is null and void. This is
because the registration will not invalidate a forged or
invalid document.
I, therefore, vote to dismiss the petition and to affirm the
decision appealed from.
ARTICLE 748
G.R. No. L-24983

May 20, 1968

FLORENTINO GENATO, FRANCISCO GENATO, and

GENATO COMMERCIAL CORPORATION, petitioners,
vs.
FELISA GENATO DE LORENZO, respondent.
Crispin D. Baizas and Associates for petitioners.
Carlos, Carballo and Valdez for respondent.
REYES, J.B.L., J.:
Appeal by certiorari from a judgment of the Court of
Appeals in its Case CA-G.R. No. 28052-R, that reversed
that of the Court of First Instance of Manila, ordering the
cancellation of Certificates of Stock Nos. 118 and 119 of
the Genato Commercial Corporation and the issuance of
another in lieu thereof in the name of the Administrator
of the Estate of Simona B. Vda. de Genato.
The decision under appeal states the background facts
and issues to be as follows:
The Genato Commercial Corporation is a family
corporation, founded by the spouses Vicente Genato and
Simona B. de Genato. The spouses had six children
named Francisco, Florentino, Manuel, Carmen, Felisa and
Juan all surnamed Genato. As of March 26, 1928, Simona
B. de Genato had 430 shares of stock, par value P100.00
per share, represented by share certificate No. 7 signed

by Vicente Genato, President, and Simona B. de Genato,

Secretary-Treasurer.
On December 23, 1942, a majority of the members of
the Board of Directors composed of Francisco G. Genato,
President, Simona B. Vda. de Genato, Director and
Secretary-Treasurer, and Florentino Genato, VicePresident and Director, held a meeting at 1075-1079 R.
Hidalgo, Manila, at which Florentino Genato, was elected
and designated Assistant Secretary-Treasurer of the
Corporation. The reason for said election and
designation appears in the minutes of the meeting of
the Board (Exhibit 1) which reads as follows:
MINUTES OF THE MEETING OF THE BOARD OF
DIRECTORS OF THE GENATO COMMERCIAL
CORPORATION
Held on the 23rd day of December, 1942, at 1075-1079
R. Hidalgo, Manila
There were present at the meeting the following
directors:
Simona B. Vda. de Genato
Francisco G. Genato
Florentino Genato
Absent: Carmen Genato Luz and Felisa Genato Lorenzo
Mr. Francisco G. Genato presided over the meeting and
Mr. Florentino Genato acted as Secretary and kept the
minutes of the proceedings.
Doa Simona Vda. de Genato explained that due to her
advanced age it is more convenient that Florentino
Genato, now Vice-President of the corporation, act as
Assistant Secretary-Treasurer as, as a matter of fact, he
has heretofore been acting as such, since the work is
rather strenuous. Thereupon, Doa Simona Vda. de
Genato moved, seconded by the Chairman, that:
RESOLVED, that Mr. Florentino Genato be elected and
designated Assistant Secretary-Treasurer of the
Corporation.
The above resolution was unanimously carried.
Page 390 of 404

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At this point the chairman invited the attention of the

Board that it might be advisable to reward the services
of Mr. Elpidio Villamiel by giving him a bonus of one
share of stock of the corporation out of the Treasury
stock, considering that the par value thereof is only
P100.00. On motion duly made and seconded, it was
RESOLVED, That the corporation gives as it does hereby
give and grant unto Mr. Elpidio Villamiel a bonus of one
share of stock of the par value of P100.00 out of the
Treasury stock of the corporation, for faithful services
rendered, hereby authorizing the officers of the
corporation to issue unto him the corresponding stock
certificate.
There being no further business the meeting was
adjourned.
(Sgd.) FLORENTINO GENATO
Secretary of the meeting
(Sgd.) FRANCISCO G. GENATO
Chairman of the meeting.
Four or five days thereafter, Florentino Genato as
Assistant Secretary-Treasurer cancelled share certificates
Nos. 7 and 18 and in lieu thereof issued share certificate
No. 118 for 265 shares in favor of Florentino Genato and
share certificate No. 119 for 265 shares in favor of
Francisco G. Genato.
The new share certificates were not presented in
evidence; they were merely mentioned by Florentino
Genato in the course of his testimony as a witness called
by the plaintiff later on as a witness for the defendants.
Simona B. Vda. de Genato having died shortly after
liberation, an intestate proceeding of her estate (Special
Proc. 71546, Court of First Instance, Manila) was filed.
The inventory (Exhibit D), which did not include the
shares in litigation, presented in the proceeding by
Francisco G. Genato as special administrator dated

March 1, 1946 showed that the value of the estate left

by the decedent was approximately P39,806.58.
On July 8, 1948, the Philippine Trust Company, judicial
administrator of the intestate estate, and the legal heirs
Manuel Genato, Felisa Genato de Lorenzo and Juan
Genato filed the complaint in the case at bar to recover
from the other two legal heirs, Florentino Genato and
Francisco G. Genato, the 530 shares of stock in order
that they may be included in the inventory of the
intestate estate of their deceased mother and in due
course distributed among all the surviving children of
the decedent. In their answer, the defendant Florentino
Genato and Francisco G. Genato alleged that they had
acquired the ownership of the 530 shares by simple
donation from their mother.
The trial court found that defendants Francisco G.
Genato and Florentino Genato had acquired the
ownership of the 530 shares by simple donation from
their widowed mother on December 25, 1942. From the
judgment dismissing the complaint, plaintiff Felisa
Genato de Lorenzo appealed.1vvphi1.nt
Appellant contends that there was no simple donation of
the 530 shares in litigation. We find the contention
meritorious in view of the following considerations:
(1) There is no clear, satisfactory and convincing
evidence of the alleged simple donation of the shares in
litigation having a par value of P53,000.00. Florentino
Genato, as a witness called by the plaintiffs and
subsequently as a witness for the defendants,
substantially testified that on December 25, 1942, Juan
Camus, an employee of the Corporation, came to see
him at the Royal Market located on Echague Street and
told him that his mother wanted to see him; that he
immediately left and saw his mother at the residence at
the back part of the premises of the Corporation
situated on R. Hidalgo Street; that his mother delivered
to him the two (2) share certificates Nos. 7 and 18,
already indorsed; that is, with the blank spaces of the
indorsement already filled by typewriter and her
signature already affixed at the bottom of the
Page 391 of 404

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indorsement and that his mother told him "transfer

them"; that two or three days later as Assistant
Secretary-Treasurer of the Corporation, he cancelled
share certificates Nos. 7 and 18 and issued in lieu
thereof the new share certificates No. 118 in favor of
Florentino Genato for 265 shares and No. 119 in favor of
Francisco G. Genato for 265 shares.
The indorsement appearing on the back of share
certificate No. 7 (which is identical, except as to the
number of shares, to that appearing on the back of
share certificate No. 18), with the typewritten words
filling the blank spaces indicated by underlines, reads as
follows:
For value Received, I hereby sell, assign and transfer
unto Florentino Genato and Francisco G. Genato, his
heirs, administrators and legal representatives, the
Shares of the Capital stock represented by the within
Certificate, and all rights, interests, participations and
privileges represented thereby, and do hereby
irrevocably constitute and appoint Genato Commercial
Corporation to transfer the said Stock on the books of
the within corporation with full power of substitution in
the premises.
Date December 25, 1942
(Sgd.) S. VDA. de GENATO
(Signature of Owner)
Signed in the presence of
(Sgd.) Juan Camus
Finding that there had been neither consideration for the
sale of shares nor valid donation of the same, due to
lack of proper acceptance and non-compliance with
statutory requirements, and that the appeal of
respondent Felisa Genato de Lorenzo inured to the
benefit of her other co-plaintiffs, the Court of Appeals, as
previously related, invalidated the transfer of the shares
to Florentino and Francisco Genato, and decreed that
said stock remained a part of the estate of the
transferor.

For the brief of appellants, the following errors are

assigned:
1. Respondent and respondent-appellee failed to prove
by preponderance of evidence that there was fraud
committed by petitioners in the transfer of the shares of
stock in their names.
2. There has been no showing that the transfer made by
Simona Vda. de Genato of her shares of stock to
petitioners was not made validly and regularly.
3. The evidence shows that there was a simple donation
made by Simona B. Vda. de Genato in favor of the
herein petitioners Florentino Genato and Francisco
Genato; and
4. The judgment of the lower court became final with
respect to the other plaintiffs who did not appeal
therefrom.
We find the appeal without merit.
With respect to the first two errors assigned, it is
immaterial that the evidence did not show any
fraudulent machinations on the part of appellants to
secure the consent of their mother to the transfer of the
shares, if the uncontested evidence of record showed
that the transfer was not supported by valid causa or
consideration, which in itself is a ground for invalidating
the transaction. It was so charged by the plaintiffs in the
Court of First Instance and expressly so found by the
Court of Appeals. This finding being one of fact, reached
after consideration of the evidence, is binding upon this
Court. In addition, it is confirmed by the petitioner's own
claim that their mother's shares in the corporation were
donated to them, and not sold, as recited by the
indorsement of Certificates Nos. 7 and 18 of the Genato
Commercial Corporation.
Granting that even private transactions are to be
presumed fair and regular, the presumption is only
prima facie, and must yield to evidence. By his own
Page 392 of 404

LAW ON PROPERTY

testimony, Florentino Genato showed that the

indorsement of the shares can not be taken literally, and
that it was used to disguise a different factual situation.
Hence, the presumption invoked by appellants can not
apply, since they have themselves avowed the
existence of a simulation.
The key question, therefore, is whether there has been a
valid donation as appellants claim. The Court of Appeals
concluded that there was none, and we find no reason to
overturn the opinion thus reached. Assuming, ad
arguendo, that the late Simona Vda. de Genato gave the
Certificates of Stock Nos. 7 and 18 to Florentino with
instructions to transfer the same to him and his brother,
this act did not constitute a valid manual donation in law
for lack of proper acceptance (Civ. Code of 1889, Art.
630). Incontestably, one of the two donees was not
present at the delivery, and there is no showing that he,
Francisco Genato, had authorized his brother, Florentino
to accept for both of them. As pointed out by Manresa in
his Commentaries to the Civil Code of 1889 (Vol. V, 6th
edition, pp. 131-132, 141-142), the delivery by the
donor and the acceptance by donee must be
simultaneous, and the acceptance by a person other
than the true donee must be authorized by a proper
power of attorney set forth in a public document. None
has been claimed to exist in this case.
Since by appellants' own version, the donation intended
was a joint one to both donees, one could not accept
independently of his co-donee, for there is no accretion
among donees unless expressly so provided (Art. 637) or
unless they be husband and wife.
There being neither valid donation, nor sale, the
cancellation of the original certificates of stock as well
as the issuance of new certificates in the name of
Florentino and Francisco Genato was illegal and
improper for lack of valid authority. It is a consequence
of this that the shares in question are deemed never to
have ceased to be property of their mother, Simona B.
de Genato, and must be considered still forming part of
the assets of her estate.

It is finally contended by appellants that as appellee

Felisa Genato de Lorenzo was the only one who
appealed from the decision of the Court of First Instance
upholding the transaction, her appeal can not inure to
the benefit of the other children of Simona de Genato.
This contention would be plausible if the interest of each
child or descendant had been susceptible of individual
delimitation. But as the estate of the mother is still
pending liquidation, the interest of each heir can not be
deemed independent of that of the others. As correctly
declared by the Court of Appeals, the interests of all the
heirs are so interwoven as to become inseparable, and
the appeal by one heir prevented the appealed decision
from becoming final as to the others. Hence, reversal of
the Court of First Instance decision as to one heir is
reversal as to all of them (Municipality of Orion vs.
Concha, 50 Phil. 679).1 Actually, none of the plaintiff
heirs attempted to have himself declared owner of any
portion of the shares in question. They could not do so,
since the necessities of the liquidation of their mother's
estate might require the eventual disposition of all or
part of the shares to strangers in order to meet
obligations of the estate.
PREMISES CONSIDERED, the decision of the Court of
Appeals is affirmed. Costs against petitioners-appellants.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez,
Castro and Angeles, JJ., concur.
Fernando, J., is on leave.
ARTICLE 749
G.R. No. L-69970 November 28, 1988
FELIX DANGUILAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, APOLONIA MELAD,
assisted by her husband, JOSE TAGACAY, respondents.
Pedro R. Perez, Jr. for petitioner.
Teodoro B. Mallonga for private respondent.
Page 393 of 404

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CRUZ, J.:
The subject of this dispute is the two lots owned by
Domingo Melad which is claimed by both the petitioner
and the respondent. The trial court believed the
petitioner but the respondent court, on appeal, upheld
the respondent. The case is now before us for a
resolution of the issues once and for all.
On January 29, 1962, the respondent filed a complaint
against the petitioner in the then Court of First Instance
of Cagayan for recovery of a farm lot and a residential
lot which she claimed she had purchased from Domingo
Melad in 1943 and were now being unlawfully withheld
by the defendant. 1 In his answer, the petitioner denied
the allegation and averred that he was the owner of the
said lots of which he had been in open, continuous and
adverse possession, having acquired them from
Domingo Melad in 1941 and 1943. 2 The case was
dismissed for failure to prosecute but was refiled in
1967. 3
At the trial, the plaintiff presented a deed of sale dated
December 4, 1943, purportedly signed by Domingo
Melad and duly notarized, which conveyed the said
properties to her for the sum of P80.00. 4 She said the
amount was earned by her mother as a worker at the
Tabacalera factory. She claimed to be the illegitimate
daughter of Domingo Melad, with whom she and her
mother were living when he died in 1945. She moved
out of the farm only when in 1946 Felix Danguilan
approached her and asked permission to cultivate the
land and to stay therein. She had agreed on condition
that he would deliver part of the harvest from the farm
to her, which he did from that year to 1958. The
deliveries having stopped, she then consulted the
municipal judge who advised her to file the complaint
against Danguilan. The plaintiff 's mother, her only other
witness, corroborated this testimony. 5
For his part, the defendant testified that he was the
husband of Isidra Melad, Domingo's niece, whom he and

his wife Juana Malupang had taken into their home as

their ward as they had no children of their own. He and
his wife lived with the couple in their house on the
residential lot and helped Domingo with the cultivation
of the farm. Domingo Melad signed in 1941 a private
instrument in which he gave the defendant the farm and
in 1943 another private instrument in which he also
gave him the residential lot, on the understanding that
the latter would take care of the grantor and would bury
him upon his death. 6 Danguilan presented three other
witnesses 7 to corroborate his statements and to prove
that he had been living in the land since his marriage to
Isidra and had remained in possession thereof after
Domingo Melad's death in 1945. Two of said witnesses
declared that neither the plaintiff nor her mother lived in
the land with Domingo Melad. 8
The decision of the trial court was based mainly on the
issue of possession. Weighing the evidence presented by
the parties, the judge 9 held that the defendant was
more believable and that the plaintiff's evidence was
"unpersuasive and unconvincing." It was held that the
plaintiff's own declaration that she moved out of the
property in 1946 and left it in the possession of the
defendant was contradictory to her claim of ownership.
She was also inconsistent when she testified first that
the defendant was her tenant and later in rebuttal that
he was her administrator. The decision concluded that
where there was doubt as to the ownership of the
property, the presumption was in favor of the one
actually occupying the same, which in this case was the
defendant. 10
The review by the respondent court 11 of this decision
was manifestly less than thorough. For the most part it
merely affirmed the factual findings of the trial court
except for an irrelevant modification, and it was only
toward the end that it went to and resolved what it
considered the lone decisive issue.
The respondent court held that Exhibits 2-b and 3-a, by
virtue of which Domingo Melad had conveyed the two
parcels of land to the petitioner, were null and void. The
reason was that they were donations of real property
Page 394 of 404

LAW ON PROPERTY

and as such should have been effected through a public

instrument. It then set aside the appealed decision and
declared the respondents the true and lawful owners of
the disputed property.
The said exhibits read as follows:
EXHIBIT 2-b is quoted as follows: 12
I, DOMINGO MELAD, of legal age, married, do hereby
declare in this receipt the truth of my giving to Felix
Danguilan, my agricultural land located at Barrio FuguMacusi, Penablanca, Province of Cagayan, Philippine
Islands; that this land is registered under my name; that
I hereby declare and bind myself that there is no one to
whom I will deliver this land except to him as he will be
the one responsible for me in the event that I will die
and also for all other things needed and necessary for
me, he will be responsible because of this land I am
giving to him; that it is true that I have nieces and
nephews but they are not living with us and there is no
one to whom I will give my land except to Felix
Danguilan for he lives with me and this is the length
175 m. and the width is 150 m.
IN WITNESS WHEREOF, I hereby sign my name below
and also those present in the execution of this receipt
this 14th day of September 1941.
Penablanca Cagayan, September 14, 1941.
(SGD.) DOMINGO MELAD
WITNESSES:
1. (T.M.) ISIDRO MELAD
2. (SGD.) FELIX DANGUILAN
3. (T.M.) ILLEGIBLE
EXHIBIT 3-a is quoted as follows: 13
I, DOMINGO MELAD, a resident of Centro, Penablanca,
Province of Cagayan, do hereby swear and declare the
truth that I have delivered my residential lot at Centro,
Penablanca, Cagayan, to Felix Danguilan, my son-in-law

because I have no child; that I have thought of giving

him my land because he will be the one to take care of
SHELTERING me or bury me when I die and this is why I
have thought of executing this document; that the
boundaries of this lot ison the east, Cresencio
Danguilan; on the north, Arellano Street; on the south by
Pastor Lagundi and on the west, Pablo Pelagio and the
area of this lot is 35 meters going south; width and
length beginning west to east is 40 meters.
IN WITNESS HEREOF, I hereby sign this receipt this 18th
day of December 1943.
(SGD.) DOMINGO MELAD
WITNESSES:
(SGD.) ILLEGIBLE
(SGD.) DANIEL ARAO
It is our view, considering the language of the two
instruments, that Domingo Melad did intend to donate
the properties to the petitioner, as the private
respondent contends. We do not think, however, that
the donee was moved by pure liberality. While truly
donations, the conveyances were onerous donations as
the properties were given to the petitioner in exchange
for his obligation to take care of the donee for the rest of
his life and provide for his burial. Hence, it was not
covered by the rule in Article 749 of the Civil Code
requiring donations of real properties to be effected
through a public instrument. The case at bar comes
squarely under the doctrine laid down in Manalo v. De
Mesa, 14 where the Court held:
There can be no doubt that the donation in question was
made for a valuable consideration, since the donors
made it conditional upon the donees' bearing the
expenses that might be occasioned by the death and
burial of the donor Placida Manalo, a condition and
obligation which the donee Gregorio de Mesa carried out
in his own behalf and for his wife Leoncia Manalo;
therefore, in order to determine whether or not said
donation is valid and effective it should be sufficient to
Page 395 of 404

LAW ON PROPERTY

demonstrate that, as a contract, it embraces the

conditions the law requires and is valid and effective,
although not recorded in a public instrument.
The private respondent argues that as there was no
equivalence between the value of the lands donated and
the services for which they were being exchanged, the
two transactions should be considered pure or
gratuitous donations of real rights, hence, they should
have been effected through a public instrument and not
mere private writings. However, no evidence has been
adduced to support her contention that the values
exchanged were disproportionate or unequal.
On the other hand, both the trial court and the
respondent court have affirmed the factual allegation
that the petitioner did take care of Domingo Melad and
later arranged for his burial in accordance with the
condition imposed by the donor. It is alleged and not
denied that he died when he was almost one hundred
years old, 15 which would mean that the petitioner
farmed the land practically by himself and so provided
for the donee (and his wife) during the latter part of
Domingo Melad's life. We may assume that there was a
fair exchange between the donor and the donee that
made the transaction an onerous donation.
Regarding the private respondent's claim that she had
purchased the properties by virtue of a deed of sale, the
respondent court had only the following to say: "Exhibit
'E' taken together with the documentary and oral
evidence shows that the preponderance of evidence is in
favor of the appellants." This was, we think, a rather
superficial way of resolving such a basic and important
issue.
The deed of sale was allegedly executed when the
respondent was only three years old and the
consideration was supposedly paid by her mother, Maria
Yedan from her earnings as a wage worker in a factory.
16 This was itself a suspicious circumstance, one may
well wonder why the transfer was not made to the
mother herself, who was after all the one paying for the
lands. The sale was made out in favor of Apolonia Melad

although she had been using the surname Yedan her

mother's surname, before that instrument was signed
and in fact even after she got married. 17 The averment
was also made that the contract was simulated and
prepared after Domingo Melad's death in 1945. 18 It
was also alleged that even after the supposed execution
of the said contract, the respondent considered
Domingo Melad the owner of the properties and that she
had never occupied the same. 19
Considering these serious challenges, the appellate
court could have devoted a little more time to examining
Exhibit "E" and the circumstances surrounding its
execution before pronouncing its validity in the manner
described above. While it is true that the due execution
of a public instrument is presumed, the presumption is
disputable and will yield to contradictory evidence,
which in this case was not refuted.
At any rate, even assuming the validity of the deed of
sale, the record shows that the private respondent did
not take possession of the disputed properties and
indeed waited until 1962 to file this action for recovery
of the lands from the petitioner. If she did have
possession, she transferred the same to the petitioner in
1946, by her own sworn admission, and moved out to
another lot belonging to her step-brother. 20 Her claim
that the petitioner was her tenant (later changed to
administrator) was disbelieved by the trial court, and
properly so, for its inconsistency. In short, she failed to
show that she consummated the contract of sale by
actual delivery of the properties to her and her actual
possession thereof in concept of purchaser-owner.
As was held in Garchitorena v. Almeda: 21
Since in this jurisdiction it is a fundamental and
elementary principle that ownership does not pass by
mere stipulation but only by delivery (Civil Code, Art.
1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and
the execution of a public document does not constitute
sufficient delivery where the property involved is in the
actual and adverse possession of third persons (Addison
vs. Felix, 38 Phil. 404; Masallo vs. Cesar, 39 Phil. 134), it
Page 396 of 404

LAW ON PROPERTY

becomes incontestable that even if included in the

contract, the ownership of the property in dispute did
not pass thereby to Mariano Garchitorena. Not having
become the owner for lack of delivery, Mariano
Garchitorena cannot presume to recover the property
from its present possessors. His action, therefore, is not
one of revindicacion, but one against his vendor for
specific performance of the sale to him.
In the aforecited case of Fidelity and Deposit Co. v.
Wilson, 22 Justice Mapa declared for the Court:
Therefore, in our Civil Code it is a fundamental principle
in all matters of contracts and a well- known doctrine of
law that "non mudis pactis sed traditione dominia rerum
transferuntur". In conformity with said doctrine as
established in paragraph 2 of article 609 of said code,
that "the ownership and other property rights are
acquired and transmitted by law, by gift, by testate or
intestate succession, and, in consequence of certain
contracts, by tradition". And as the logical application of
this disposition article 1095 prescribes the following: "A
creditor has the rights to the fruits of a thing from the
time the obligation to deliver it arises. However, he shall
not acquire a real right" (and the ownership is surely
such) "until the property has been delivered to him."
In accordance with such disposition and provisions the
delivery of a thing constitutes a necessary and
indispensable requisite for the purpose of acquiring the
ownership of the same by virtue of a contract. As
Manresa states in his Commentaries on the Civil Code,
volume 10, pages 339 and 340: "Our law does not admit
the doctrine of the transfer of property by mere consent
but limits the effect of the agreement to the due
execution of the contract. ... The ownership, the
property right, is only derived from the delivery of a
thing ... "
As for the argument that symbolic delivery was effected
through the deed of sale, which was a public instrument,
the Court has held:

The Code imposes upon the vendor the obligation to

deliver the thing sold. The thing is considered to be
delivered when it is placed "in the hands and possession
of the vendee." (Civil Code, art. 1462). It is true that the
same article declares that the execution of a public
instrument is equivalent to the delivery of the thing
which is the object of the contract, but, in order that this
symbolic delivery may produce the effect of tradition, it
is necessary that the vendor shall have had such control
over the thing sold that, at the moment of the sale, its
material delivery could have been made. It is not
enough to confer upon the purchaser the ownership and
the right of possession. The thing sold must be placed in
his control. When there is no impediment whatever to
prevent the thing sold passing into the tenancy of the
purchaser by the sole will of the vendor, symbolic
delivery through the execution of a public instrument is
sufficient. But if, notwithstanding the execution of the
instrument, the purchaser cannot have the enjoyment
and material tenancy of the thing and make use of it
himself or through another in his name, because such
tenancy and enjoyment are opposed by the interposition
of another will, then fiction yields to realitythe delivery
has not been effected. 23
There is no dispute that it is the petitioner and not the
private respondent who is in actual possession of the
litigated properties. Even if the respective claims of the
parties were both to be discarded as being inherently
weak, the decision should still incline in favor of the
petitioner pursuant to the doctrine announced in Santos
& Espinosa v. Estejada 24 where the Court announced:
If the claim of both the plaintiff and the defendant are
weak, judgment must be for the defendant, for the latter
being in possession is presumed to be the owner, and
cannot be obliged to show or prove a better right.
WHEREFORE, the decision of the respondent court is SET
ASIDE and that of the trial court REINSTATED, with costs
against the private respondent. It is so ordered.
Narvasa (Chairman), Gancayco, Grio-Aquino and
Medialdea, JJ., concur.
Page 397 of 404

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ARTICLE 764

document entitled "Revival of Donation Intervivos"

(Annex "B" of Petition) subject to terms and conditions
which among others, required:

G.R. No. L-57455 January 18, 1990

xxx xxx xxx

EVELYN DE LUNA, ROSALINA DE LUNA, PRUDENCIO DE

LUNA, JR., WILLARD DE LUNA, ANTONIO DE LUNA, and
JOSELITO DE LUNA, petitioners,
vs.
HON. SOFRONIO F. ABRIGO, Presiding Judge of the Court
of First Instance of Quezon, Branch IX, and LUZONIAN
UNIVERSITY FOUNDATION, INC., respondents.

3. That the DONEE shall construct at its own expense a

Chapel, a Nursery and Kindergarten School, to be named
after St. Veronica, and other constructions and
Accessories shall be constructed on the land herein
being donated strictly in accordance with the plans and
specifications prepared by the O.R. Quinto & Associates
and made part of this donation; provided that the
flooring of the Altar and parts of the Chapel shall be of
granoletic marble.

Milberto B. Zurbano for petitioners.

Joselito E. Talabong for private respondent.

MEDIALDEA, J.:
This is a petition for review on certiorari of the Order
dated July 7, 1981 of respondent judge Sofronio F. Abrigo
of the Court of First Instance of Quezon, Branch IX in
Civil Case No. 8624 dismissing the complaint of
petitioners on the ground of prescription of action.
The antecedent facts are as follows:
On January 24, 1965, Prudencio de Luna donated a
portion of 7,500 square meters of Lot No. 3707 of the
Cadastral Survey of Lucena covered by Transfer
Certificate of Title No. 1-5775 to the Luzonian Colleges,
Inc., (now Luzonian University Foundation, Inc., herein
referred to as the foundation). The donation, embodied
in a Deed of Donation Intervivos (Annex "A" of Petition)
was subject to certain terms and conditions and
provided for the automatic reversion to the donor of the
donated property in case of violation or non-compliance
(pars. 7 and 10 of Annex "A", p. 20, Rollo). The
foundation failed to comply with the conditions of the
donation. On April 9, 1971, Prudencio de Luna "revived"
the said donation in favor of the foundation, in a

4. That the construction of the Chapel, Nursery and

Kindergarten School shall start immediately and must be
at least SEVENTY (70) PER CENTUM finished by the end
of THREE (3) YEARS from the date hereof, however, the
whole project as drawn in the plans and specifications
made parts of this donation must be completed within
FIVE (5) YEARS from the date hereon, unless extensions
are granted by the DONOR in writing;
. . . . (p. 23, Rollo)
As in the original deed of donation, the "Revival of
Donation Intenrivos" also provided for the automatic
reversion to the donor of the donated area in case of
violation of the conditions thereof, couched in the
following terms:
xxx xxx xxx.
11. That violation of any of the conditions herein
provided shall cause the automatic reversion of the
donated area to the donor, his heirs, assigns and
representatives, without the need of executing any other
document for that purpose and without obligation
whatever on the part of the DONOR. (p. 24, Rollo).
The foundation, through its president, accepted the
donation in the same document, subject to all the terms
Page 398 of 404

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and conditions stated in the donation (p. 24, Rollo). The

donation was registered and annotated on April 15,
1971 in the memorandum of encumbrances as Entry No.
17939 of Transfer Certificate of Title No. T-5775 (p. 15,
Rollo).
On August 3, 1971, Prudencio de Luna and the
foundation executed a 'Deed of Segregation" (Annex "C"
of Petition) whereby the area donated which is now
known as Lot No. 3707-B of Subdivision Plan Psd-40392
was adjudicated to the foundation. As a result, transfer
certificate of title No. T-16152 was issued in the name of
the foundation. The remaining portion known as Lot No.
3707-A was retained by the donor. (p. 16, Rollo).
On September 23, 1980, herein petitioners, Evelyn,
Rosalina, Prudencio, Jr., Willard, Antonio and Joselito, all
surnamed de Luna, who claim to be the children and
only heirs of the late Prudencio de Luna who died on
August 18, 1980, filed a complaint (pp. 14-17, Rollo)
with the Regional Trial Court of Quezon alleging that the
terms and conditions of the donation were not complied
with by the foundation. Among others, it prayed for the
cancellation of the donation and the reversion of the
donated land to the heirs. The complaint was docketed
as Civil Case No. 8624.
In its answer (pp. 29-36, Rollo), respondent foundation
claimed that it had partially and substantially complied
with the conditions of the donation and that the donor
has granted the foundation an indefinite extension of
time to complete the construction of the chapel. It also
invoked the affirmative defense of prescription of action
and prayed for the dismissal of the complaint.
During the pre-trial of the case, the foundation moved
for a preliminary hearing of its affirmative defense of
prescription of action which was opposed by the
plaintiffs. After the parties have filed their respective
written motions, oppositions and memoranda, an Order
(pp., 40-43, Rollo) dated July 7, 1981 was issued
dismissing the complaint. The dispositive portion of the
Order states:

In view of the foregoing considerations, this Court finds

the motion to dismiss deemed filed by the defendant on
the ground of prescription to be well-taken and the same
is hereby GRANTED.
WHEREFORE, the instant complaint is hereby ordered
DISMISSED.
No pronouncement as to costs.
SO ORDERED. (pp. 42-43, Rollo)
No motion for reconsideration was filed by petitioners.
On July 22, 1981, petitioners brought the instant petition
for review with the following assignments of error:
I. THE LOWER COURT ERRED IN HOLDING THAT THE
DONEE'S CONSENT TO THE REVOCATION OF A
DONATION TO BE VALID MUST BE GIVEN SUBSEQUENT
TO THE EFFECTIVITY OF THE DONATION OR VIOLATION
OF (THE) ANY OF THE CONDITIONS IMPOSED THEREIN.
II. THE LOWER COURT ERRED IN TREATING THE
COMPLAINT AS ONE FOR JUDICIAL DECREE OF
REVOCATION OF THE DONATION IN QUESTION AS
CONTEMPLATED IN ARTICLE 764 OF THE CIVIL CODE OF
THE PHILIPPINES AND WHICH PRESCRIBES IN FOUR (4)
YEARS AND IN NOT CONSIDERING IT AS AN ACTION TO
ENFORCE A WRITTEN CONTRACT WHICH PRESCRIBES IN
TEN (10) YEARS AS PROVIDED IN ARTICLE 1144, HENCE,
THE LOWER COURT ERRED IN DISMISSING THE
COMPLAINT.
III. THE LOWER COURT ERRED IN NOT RENDERING
JUDGMENT ON THE MERITS BY WAY OF JUDGMENT ON
THE PLEADINGS. (pp. 1-2, Petitioner's Brief)
We gave due course to the petition on August 3, 1981
(p. 45, Rollo). After the parties' submission of their
respective briefs, the Court resolved to consider the
petition submitted for decision on January 27, 1982 (p.
62, Rollo).
Page 399 of 404

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The assailed order of the trial court stated that

revocation (of a donation) will be effective only either
upon court judgment or upon consent of the donee as
held in the case of Parks v. Province of Tarlac, No. 24190,
July 13, 1926, 49 Phil. 143. The trial court dismissed the
claim of petitioners that the stipulation in the donation
providing for revocation in case of non-compliance of
conditions in the donation is tantamount to the consent
of the donee, opining that the consent contemplated by
law should be such consent given by the donee
subsequent to the effectivity of the donation or violation
of the conditions imposed therein. The trial court further
held that, far from consenting to the revocation, the
donee claimed that it had already substantially complied
with the conditions of the donation by introducing
improvements in the property donated valued at more
than the amount of the donated land. In view thereof, a
judicial decree revoking the subject donation is
necessary. Accordingly, under Article 764 of the New
Civil Code, actions to revoke a donation on the ground of
non-compliance with any of the conditions of the
donation shall prescribe in four years counted from such
non-compliance. In the instant case, the four-year period
for filing the complaint for revocation commenced on
April 9, 1976 and expired on April 9, 1980. Since the
complaint was brought on September 23, 1980 or more
than five (5) months beyond the prescriptive period, it
was already barred by prescription.
On the other hand, petitioners argue that Article 764 of
the New Civil Code was adopted to provide a judicial
remedy in case of non-fulfillment of conditions when
revocation of the donation has not been agreed upon by
the parties. By way of contrast, when there is a
stipulation agreed upon by the parties providing for
revocation in case of non-compliance, no judicial action
is necessary. It is then petitioners' claim that the action
filed before the Court of First Instance of Quezon is not
one for revocation of the donation under Article 764 of
the New Civil Code which prescribes in four (4) years,
but one to enforce a written contract which prescribes in
ten (10) years.
The petition is impressed with merit.

From the viewpoint of motive, purpose or cause,

donations may be 1) simple, 2) remuneratory or 3)
onerous. A simple donation is one the cause of which is
pure liberality (no strings attached). A remuneratory
donation is one where the donee gives something to
reward past or future services or because of future
charges or burdens, when the value of said services,
burdens or charges is less than the value of the
donation. An onerous donation is one which is subject to
burdens, charges or future services equal (or more) in
value than that of the thing donated (Edgardo L. Paras,
Civil Code of the Philippines Annotated, 11 ed., Vol. 11,
p. 726).
It is the finding of the trial court, which is not disputed
by the parties, that the donation subject of this case is
one with an onerous cause. It was made subject to the
burden requiring the donee to construct a chapel, a
nursery and a kindergarten school in the donated
property within five years from execution of the deed of
donation.
Under the old Civil Code, it is a settled rule that
donations with an onerous cause are governed not by
the law on donations but by the rules on contracts, as
held in the cases of Carlos v. Ramil, L-6736, September
5, 1911, 20 Phil. 183, Manalo vs. de Mesa, L-9449,
February 12, 1915, 29 Phil. 495. On the matter of
prescription of actions for the revocation of onerous
donation, it was held that the general rules on
prescription applies. (Parks v. Province of Tarlac, supra.).
The same rules apply under the New Civil Code as
provided in Article 733 thereof which provides:
Art. 733. Donations with an onerous cause shall be
governed by the rules on contracts, and remuneratory
donations by the provisions of the present Title as
regards that portion which exceeds the value of the
burden imposed.
It is true that under Article 764 of the New Civil Code,
actions for the revocation of a donation must be brought
within four (4) years from the non-compliance of the
Page 400 of 404

LAW ON PROPERTY

conditions of the donation. However, it is Our opinion

that said article does not apply to onerous donations in
view of the specific provision of Article 733 providing
that onerous donations are governed by the rules on
contracts.
In the light of the above, the rules on contracts and the
general rules on prescription and not the rules on
donations are applicable in the case at bar.
Under Article 1306 of the New Civil Code, the parties to
a contract have the right "to establish such stipulations,
clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law,
morals, good customs, public order or public policy."
Paragraph 11 of the "Revival of Donation Intervivos, has
provided that "violation of any of the conditions (herein)
shall cause the automatic reversion of the donated area
to the donor, his heirs, . . ., without the need of
executing any other document for that purpose and
without obligation on the part of the DONOR". Said
stipulation not being contrary to law, morals, good
customs, public order or public policy, is valid and
binding upon the foundation who voluntarily consented
thereto.
The validity of the stipulation in the contract providing
for the automatic reversion of the donated property to
the donor upon non-compliance cannot be doubted. It is
in the nature of an agreement granting a party the right
to rescind a contract unilaterally in case of breach,
without need of going to court. Upon the happening of
the resolutory condition of non-compliance with the
conditions of the contract, the donation is automatically
revoked without need of a judicial declaration to that
effect. In the case of University of the Philippines v. de
los Angeles, L-28602, September 29, 1970, 35 SCRA
102-107, it was held:
. . . There is nothing in the law that prohibits the parties
from entering into agreement that violation of the terms
of the contract would cause cancellation thereof. even
without court intervention. In other words, it is not
always necessary for the injured party to resort to court

for rescission of the contract (Froilan v. Pan Oriental

Shipping Co., et al.,
L-11897, 31 October 1964, 12 SCRA 276).
This was reiterated in the case of Angeles v. Calasanz, L42283, March 18, 1985:
Well settled is, however, the rule that a judicial action
for the rescission of a contract is not necessary where
the contract provides that it may be revoked and
cancelled for violation of any of its terms and conditions
(Lopez v. Commissioner of Customs, 37 SCRA 327, 334,
and cases cited therein).
Resort to judicial action for rescission is obviously not
contemplated. The validity of the stipulation can not be
seriously disputed. It is in the nature of a facultative
resolutory condition which in many cases has been
upheld, by this court. (Ponce Enrile v. Court of Appeals,
29 SCRA 504)
However, in the University of the Philippines v. Angeles
case, (supra), it was held that in cases where one of the
parties contests or denies the rescission, "only the final
award of the court of competent jurisdiction can
conclusively settle whether the resolution is proper or
not." It was held, thus:
. . . since in every case, where the extrajudicial
resolution is contested, only the final award of the court
of competent jurisdiction can conclusively settle whether
the resolution was proper or not. It is in this sense that
judicial action will be necessary as without it, the
extrajudicial resolution will remain contestable and
subject to judicial invalidation, unless attack thereon
should become barred by acquiescence, estoppel or
prescription.
It is clear, however, that judicial intervention is
necessary not for purposes of obtaining a judicial
declaration rescinding a contract already deemed
rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order
to determine whether or not the recession was proper.
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The case of Parks v. Province of Tarlac, supra, relied

upon by the trial court, is not applicable in the case at
bar. While the donation involved therein was also
onerous, there was no agreement in the donation
providing for automatic rescission, thus, the need for a
judicial declaration revoking said donation.
The trial court was therefore not correct in holding that
the complaint in the case at bar is barred by prescription
under Article 764 of the New Civil Code because Article
764 does not apply to onerous donations.
As provided in the donation executed on April 9, 1971,
complaince with the terms and conditions of the
contract of donation, shall be made within five (5) years
from its execution. The complaint which was filed on
September 23, 1980 was then well within the ten (10)
year prescriptive period to enforce a written contract
(Article 1144[1], New Civil Code), counted from April 9,
1976.
Finally, considering that the allegations in the complaint
on the matter of the donee's non-compliance with the
conditions of the donation have been contested by
private respondents who claimed that improvements
more valuable than the donated property had been
introduced, a judgment on the pleadings is not proper.
Moreover, in the absence of a motion for judgment on
the pleadings, the court cannot motu proprio render
such judgment. Section 1 of Rule 19 provides: "Where an
answer fails to tender an issue, or otherwise admits the
material allegations of the adverse party's pleading, the
court may, on motion of that party, direct judgment on
such pleading." (Emphasis supplied)
ACCORDINGLY, the petition is GRANTED. Civil Case No.
8624 is hereby ordered reinstated. Respondent judge is
ordered to conduct a trial on the merits to determine the
propriety of the revocation of the subject donation.
G.R. No. 3148

February 6, 1907

ENRIQUE MA. BARRETTO, plaintiff-appellee,

vs.
THE CITY OF MANILA, defendant-appellant.
Modesto Reyes for appellant.
Antonio V. Herrero for appellee.
TRACEY, J.:
On June 16, 1885, in reply to an inquiry from the
corregidor of the city of Manila as to whether he would
sell his plat of ground facing the Malacaang Palace, in
order to assist in the improvement of the locality, the
plaintiff wrote the following letter:
MANILA, June 16, 1885.
To his excellency the CORREGIDOR OF THE CITY OF
MANILA.
SIR: In reply to your courteous communication of even
date, I have the honor to state that I am willing to
convey the land belonging to me in front of the
Malacaang Palace, corner of San Rafael and Aviles
streets, district of San Miguel, not as a sale but as a gift,
thus contributing with great pleasure to the beautifying
of that neighborhood, but I make this donation on
condition that no structures shall be erected upon the
land and that it will not be devoted to any purpose other
than the beautifying of the vicinity, and for this purpose
the city should acquire such of the adjoining land as
may be necessary to form with mine a public square
with gardens and walks.
If my offer is accepted subject to the conditions above
stated, I will turn over my title deeds to the said land
that the municipal architect may survey it and the same
be conveyed to the corporation over which you so
fittingly preside.
(Signed) E. M. BARRETTO.
In its session of the 17th of June the Ayuntamiento
passed an act reading as follows:
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Report having been made upon the purpose instituted

for the purpose of beautifying and improving the
grounds near the Malacaang Palace, the residence of
the highest authority in these Islands, together with a
letter from Enrique M. Barretto, wherein he offers to
donate a certain tract of land belonging to him in front
of the said palace on condition that it shall be devoted
to the purpose indicated in his letter, and states that in
case any buildings, be erected upon the said land he will
reclaim the ownership of the same, the municipal
council being duly informed of the said proceedings, and
after discussing the matter, resolved do gratefully thank
Mr. Barretto for his disinterested offer of this land and to
request him to forward the title deeds so that the
municipal architect may order that with the same
documents the necessary deed of conveyance may be
executed. It is further resolved that the said architect be
required to submit the necessary plans and
specifications to carry out the improvements in
question.
In consequence whereof on the 19th of the same month
the corregimiento forwarded to the plaintiff the following
communication:
MANILA, June 19, 1885.
At a regular session of the municipal council held on the
17th inst., the same was duly informed of your letter
wherein you offer to donate the tract of land belonging
to you in front of the Malacaang Palace for the purpose
of beautifying the neighborhood, on condition that it
shall not be devoted to any other purpose. The
municipal council resolved to gratefully thank you for
your offer to donate the land in question, which will
contribute to the realization of the improvement
contemplated, and for which the municipality is
indebted to you. At the same time I have the honor to
request that you forward to this office the title deeds to
your said land so that the architect may survey the
same and make a sketch of it in order that the
necessary deed of conveyance may be executed with
the restrictions indicated by you.

(Signed) JUSTO MARTIN LUNA.

TO ENRIQUE M. BARRETTO.
The plaintiff thereafter sent to the Ayuntamiento his title
deeds, and until the month of February, 1903, appears
to have had the idea that a formal transfer of the plot
had been executed by him; in fact, it had not been. The
city, however, entered into possession of the land,
building a railing separating it from the adjoining
property, and ever since that time the ground has been
used as part of the public street, increasing the width
thereof opposite the exit from the Palace and
substantially improving the appearance of the locality.
The plaintiff now brings this action to recover possession
of the land on account of the failure of the city to comply
with the conditions of the donation.
Although a formal conveyance of the property appears
to have never been made, yet the taking possession of
the land by the city upon the terms contained in the
offer and acceptance give effect to the latter. The
conditions expressed in the offer of the plaintiff were
two:
First. That no building should be erected upon the
ground; and
Second. That it should be devoted to purposes of
adornment; to which end, however, the Ayuntamiento
was required to acquire enough of the contiguous lots to
form in all a great public plaza with gardens and paths.
This last requirement is so specific and concrete that it
must have formed and an essential part of the
conditions in the mind of the donor and must have also
attracted the attention of the donee. It has never been
complied with.
It is contended by the city that its resolution and letter
of acceptance, omitting any express mention of this part
of the condition, worked an evasion of it, and that the
subsequent delivery of the plaintiff's title deeds must be
taken as an acceptance of the terms specified by the
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city in its letter, without reference to the plaintiff's first

offer. To this view we can not accede. The whole
negotiation must be taken into consideration in order to
determine what was in the minds of the parties at the
time. The plaintiff's proposition was unmistakable. If the
city designed to reject any part of it while accepting the
rest, such rejection should have been in express terms.
Not only do we fail to find any such rejection, but in the
letter of June 19 there appears to be in its concluding
words an express recognition of the terms imposed,
when it is provided that the deed of cession shall be
drawn "with the restrictions indicated by you." This is a
reference to the restrictions in the letter of the plaintiff
and operates of necessity as an acceptance of them.

Thereafter if the city desires to retain the property it

must proceed to acquire so much land as shall satisfy
the requirement of the donation.
With the other condition expressed in the plaintiff's
letter, that no building should be erected on the
property, we think the city has sufficiently complied.
The judgment of the Court of First Instance awarding the
plaintiff possession of the property is reversed, and the
cause is remanded to the Court of First Instance for
determination of the time within which the contiguous
property must be acquired by the city in order to comply
with the condition of the donation. So ordered.

The contract having fixed no period in which the

condition should be fulfilled, the provisions of article
1128 of the Civil Code are applicable and it is the duty of
the court to fix a suitable time for its fulfillment.
(Eleizegui vs. Manila Lawn Tennis Club, 2 Phil. Rep., 309.)

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