Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12958 May 30, 1960
FAUSTINO IGNACIO, applicant-appellant,
vs.
THE DIRECTOR OF LANDS and LAUREANO VALERIANO, oppositors-
appellees.
Acting Assistant Solicitor General Pacifico P. de Castro and Solicitor
Crispin V. Bautista for appellee Director of Lands.
Benjamin H. Aquino for appellee Laureano Veleriano.
MONTEMAYOR, J.:
Faustino Ignacio is appealing the decision of the Court of First Instance
of Rizal, dismissing his application for the registration of a parcel of land.
On January 25, 1950, Ignacio filed an application for the registration of
a parcel of land (mangrove), situated in barrio Gasac, Navotas, Rizal,
with an area of 37,877 square meters. Later, he amended his
application by alleging among others that he owned the parcel applied
for by right of accretion. To the application, the Director of Lands,
Laureano Valeriano and Domingo Gutierrez filed oppositions. Gutierrez
later withdrew his opposition. The Director of Lands claimed the parcel
applied for as a portion of the public domain, for the reason that neither
the applicant nor his predecessor-in-interest possessed sufficient title
thereto, not having acquired it either by composition title from the
Spanish government or by possessory information title under the Royal
Decree of February 13, 1894, and that he had not possessed the same
openly, continuously and adversely under a bona fide claim of
ownership since July 26, 1894. In his turn, Valeriano alleged he was
holding the land by virtue of a permit granted him by the Bureau of
Fisheries, issued on January 13, 1947, and approved by the President.
It is not disputed that the land applied for adjoins a parcel owned by
the applicant which he had acquired from the Government by virtue of
a free patent title in 1936. It has also been established that the parcel
in question was formed by accretion and alluvial deposits caused by the
action of the Manila Bay which boarders it on the southwest. Applicant
Ignacio claims that he had occupied the land since 1935, planting it with
api-api trees, and that his possession thereof had been continuous,
adverse and public for a period of twenty years until said possession
was distributed by oppositor Valeriano.
On the other hand, the Director of Lands sought to prove that the parcel
is foreshore land, covered by the ebb and flow of the tide and,
therefore, formed part of the public domain.
After hearing, the trial court dismissed the application, holding that the
parcel formed part of the public domain. In his appeal, Ignacio assigns
the following errors:
I. The lower court erred in holding that the land in question, altho an
accretion to the land of the applicant-appellant, does not belong to him
but forms part of the public domain.
II. Granting that the land in question forms part of the public domain,
the lower court nevertheless erred in not declaring the same to be the
necessary for any public use or purpose and in not ordering in the
present registration proceedings.
III. The lower court erred in not holding that the land in question now
belongs to the applicant-appellant by virtue of acquisitive prescription,
the said land having ceased to be of the public domain and became the
private or patrimonial property of the State.
IV. The lower court erred in not holding that the oppositor Director of
Lands is now in estoppel from claiming the land in question as a land of
the public domain.
Appellant contends that the parcel belongs to him by the law of
accretion, having been formed by gradual deposit by action of the
1
Manila Bay, and he cites Article 457 of the New Civil Code (Article 366,
Old Civil Code), which provides that:
To the owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the current
of the waters.
The article cited is clearly inapplicable because it refers to accretion or
deposits on the banks of rivers, while the accretion in the present case
was caused by action of the Manila Bay.
Appellant next contends that Articles 1, 4 and 5 of the Law of Waters
are not applicable because they refer to accretions formed by the sea,
and that Manila Bay cannot be considered as a sea. We find said
contention untenable. A bay is a part of the sea, being a mere
indentation of the same:
Bay. — An opening into the land where the water is shut in on all sides
except at the entrance; an inlet of the sea; an arm of the sea, distinct
from a river, a bending or curbing of the shore of the sea or of a lake. 7
C.J. 1013-1014 (Cited in Francisco, Philippine Law of Waters and Water
Rights p. 6)
Moreover, this Tribunal has some cases applied the Law of Waters on
Lands bordering Manila Bay. (See the cases of Ker & Co. vs. Cauden, 6
Phil., 732, involving a parcel of land bounded on the sides by Manila
Bay, where it was held that such land formed by the action of the sea is
property of the State; Francisco vs. Government of the P.I., 28 Phil., 505,
involving a land claimed by a private person and subject to the ebb and
flow of the tides of the Manila Bay).
Then the applicant argues that granting that the land in question
formed part of the public domain, having been gained from the sea, the
trial court should have declared the same no longer necessary for any
public use or purpose, and therefore, became disposable and available
for private ownership. Article 4 of the Law of Waters of 1866 reads thus:
ART. 4. Lands added to the shores by accretions and alluvial 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 purposes of public utility, or for the establishment of
special industries, or for the coastguard service, the Government shall
declare them to be the property of the owners of the estates adjacent
thereto and as increment thereof.
Interpreting Article 4 of the Law of Waters of 1866, in the case of
Natividad vs. Director of Lands, (CA) 37 Off. Gaz., 2905, it was there held
that:
Article 4 of the Law of Waters of 1866 provides that when a portion of
the shore is no longer washed by the waters of the sea and is not
necessary for purposes of public utility, or for the establishment of
special industries, or for coastguard service, the government shall
declare it to be the property of the owners of the estates adjacent
thereto and as an increment thereof. We believe that only the
executive and possibly the legislative departments have the authority
and the power to make the declaration that any land so gained by the
sea, is not necessary for purposes of public utility, or for the
establishment of special industries, on for coast-guard service. If no
such declaration has been made by said departments, the lot in
question forms part of the public domain. (Natividad vs. Director of
Lands, supra.)
The reason for this pronouncement, according to this Tribunal in the
case of Vicente Joven y Monteverde vs. Director of Lands, 93 Phil., 134,
(cited in Velayo's Digest, VI. I, p. 52).
. . . is undoubtedly that the courts are neither primarily called upon, nor
indeed in a position to determine whether any public land are to be
used for the purposes specified in Article 4 of the Law of Waters.
Consequently, until a formal declaration on the part of the
Government, through the executive department or the Legislature, to
the effect that the land in question is no longer needed for coast guard
service, for public use or for special industries, they continue to be part
of the public domain, not available for private appropriation or
ownership.

Appellant next contends that he had acquired the parcel in question
through acquisitive prescription, having possessed the same for over
ten years. In answer, suffice it to say that land of the public domain is
not subject to ordinary prescription. In the case of Insular Government
vs. Aldecoa & Co., 19 Phil., 505 this Court said:
The occupation or material possession of any land formed upon the
shore by accretion, without previous permission from the proper
authorities, although the occupant may have held the same as owner
for seventeen years and constructed a wharf on the land, is illegal and
is a mere detainer, inasmuch as such land is outside of the sphere of
commerce; it pertains to the national domain; it is intended for public
uses and for the benefit of those who live nearby.
We deem it unnecessary to discuss the other points raised in the
appeal.
In view of the foregoing, the appealed decision is hereby affirmed, with
costs.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion,
Barrera, and Gutierrez David, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G. R. No. L-41001 September 30, 1976
MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF
THE ELKS, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and TARLAC
DEVELOPMENT CORPORATION, respondents.
No. L-41012 September 30, 1976
TARLAC DEVELOPMENT CORPORATION, petitioner,
vs.
HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO. 761,
BENEVOLENT AND PROTECTIVE ORDER OF ELKS, INC., respondents.
CASTRO, C.J.:têñ.£îhqwâ£
STATEMENT OF THE CASE AND STATEMENTOF THE FACTS
These two cases are petitions on certiorari to review the decision dated
June 30, 1975 of the Court of Appeals in CA-G.R. No. 51590-R entitled
"Tarlac Development Corporation vs. City of Manila, and Manila Lodge
No. 761, Benevolent and Protective Order of Elks, Inc.," affirming the
trial court's finding in Civil Case No. 83009 that the property subject of
the decision a quo is a "public park or plaza."
On June 26, 1905 the Philippine Commission enacted Act No. l360
which authorized the City of Manila to reclaim a portion of Manila Bay.
The reclaimed area was to form part of the Luneta extension. The Act
provided that the reclaimed area "Shall be the property of the City of
Manila" and that "the City of Manila is hereby authorized to set aside a
tract of the reclaimed land formed by the Luneta extension x x x at the
north end not to exceed five hundred feet by six hundred feet in size,
for a hotel site, and to lease the same, with the approval of the
Governor General, to a responsible person or corporation for a term
not exceed ninety-nine years."
Subsequently, the Philippine Commission passed on May 18, 1907 Act
No. 1657, amending Act No. 1360, so as to authorize the City of' Manila
either to lease or to sell the portion set aside as a hotel site.
The total area reclaimed was a little over 25 hectares. The City of Manila
applied for the registration of the reclaimed area, and on January 20,
1911, O.C.T. No. 1909 was issued in the name of the City of Manila. The
title described the registered land as "un terreno conocido con el
2
nombre de Luneta Extension, situato en el distrito de la Ermita x x x."
The registration was "subject, however to such of the incumbrances
mentioned in Article 39 of said law (Land Registration Act) as may be
subsisting" and "sujeto a las disposiciones y condiciones impuestas en
la Ley No. 1360; y sujeto tambein a los contratos de venta, celebrados
y otorgados por la Ciudad de Manila a favor del Army and Navy Club y
la Manila Lodge No. 761, Benevolent and Protective Order of Elks,
fechados respectivamente, en 29 de Diciembre de 1908 y 16 de Enero
de 1909." 1
On July 13, 1911 the City of Manila, affirming a prior sale dated January
16, 1909 cancelled 5,543.07 square meters of the reclaimed area to the
Manila Lodge No. 761, Benevolent and Protective Order of Elks of the
U.S.A. (BPOE, for short) on the basis of which TCT No. 2195 2 was issued
to the latter over the Marcela de terreno que es parte de la Luneta
Extension, Situada en el Distrito le la Ermita ... ." At the back of this title
vas annotated document 4608/T-1635, which in part reads as follows:
"que la citada Ciusdad de Manila tendra derecho a su opcion, de
recomparar la expresada propiedad para fines publicos solamete in
cualquier tiempo despues de cincuenta anos desde el 13 le Julio le 1911,
precio de la misma propiedad, mas el valor que entonces tengan las
mejoras."
For the remainder of the Luneta Extension, that is, after segregating
therefrom the portion sold to the Manila Lodge No. 761, PBOE, a new
Certificate of Title No. 2196 3 was issued on July 17, 1911 to the City of
Manila.
Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07
square meters to the Elks Club, Inc., to which was issued TCT No. 67488.
4 The registered owner, "The Elks Club, Inc.," was later changed by court
oder to "Manila Lodge No. 761, Benevolent and Protective Order of
Elks, Inc."
In January 1963 the BPOE. petitioned the Court of First Instance of
Manila, Branch IV, for the cancellation of the right of the City of Manila
to repurchase the property This petition was granted on February 15,
1963.
On November 19, 1963 the BPOE sold for the sum of P4,700,000 the
land together with all the improvements thereon to the Tarlac
Development Corporation (TDC, for short) which paid P1,700.000 as
down payment and mortgaged to the vendor the same realty to secure
the payment of the balance to be paid in quarterly installments.5 At the
time of the sale,, there was no annotation of any subsisting lien on the
title to the property. On December 12, 1963 TCT No. 73444 was issued
to TDC over the subject land still described as "UNA PARCELA DE
TERRENO, que es parte de la Luneta Extension, situada en el Distrito de
Ermita ... ."
In June 1964 the City of Manila filed with the Court of First Instance of
Manila a petition for the reannotation of its right to repurchase; the
court, after haering, issued an order, dated November 19, 1964,
directing the Register of Deeds of the City of Manila to reannotate in
toto the entry regarind the right of the City of Manila to repurchase the
property after fifty years. From this order TDC and BPOE appealed to
this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L-
24469 the trial court's order of reannotation, but reserved to TDC the
right to bring another action for the clarification of its rights.
As a consequence of such reservation, TDC filed on April 28, 1971
against the City of Manila and the Manila Lodge No. 761, BPOE, a
complaint, docketed as Civil Case No. 83009 of the Court of First
Instance of Manila, containing three causes of action and praying -
a) On the first cause of action, that the plaintiff TDC be declared
to have purchased the parcel of land now in question with the buildings
and improvements thereon from the defendant BPOE for value and in
good faith, and accordingly ordering the cancellation of Entry No.
4608/T-1635 on Transfer Certificate of Title No. 73444 in the name of
the Plaintiff;
b) On the second cause of action, ordering the defendant City of
Manila to pay the plaintiff TDC damages in the sum of note less than
one hundred thousand pesos (P100,000.00);
c) On the third cause of action, reserving to the plaintiff TDC the
right to recover from the defendant BPOE the amounts mentioned in
par. XVI of the complaint in accordance with Art. 1555 of the Civil Code,
in the remote event that the final judgment in this case should be that
the parcel of land now in question is a public park; and
d) For costs, and for such other and further relief as the Court
may deem just and equitable. 6
Therein defendant City of Manila, in its answer dated May 19, 1971,
admitted all the facts alleged in the first cause of action except the
allegation that TDC purchased said property "for value and in good
faith," but denied for lack of knowledge or information the allegations
in the second and third causes of action. As, special and affirmative
defense, the City of Manila claimed that TDC was not a purchaser in
good faith for it had actual notice of the City's right to repurchase which
was annotated at the back of the title prior to its cancellation, and that,
assuming arguendo that TDC had no notice of the right to repurchase,
it was, nevertheless, under obligation to investigate inasmuch as its title
recites that the property is a part of the Luneta extension. 7
The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971,
admitted having sold the land together with the improvements thereon
for value to therein plaintiff which was in good faith, but denied for lack
of knowledge as to their veracity the allegations under the second
cause of action. It furthermore admitted that TDC had paid the
quarterly installments until October l5, 1964 but claimed that the latter
failed without justifiable cause to pay the subsequent installments. It
also asserted that it was a seller for value in good faith without having
misrepresented or concealed tacts relative to the title on the property.
As counterclaim, Manila Lodge No. 761 (BPOE) sought to recover the
balance of the purchase price plus interest and costs. 8
On June 15, 1971 TDC answered the aforesaid counterclaim, alleging
that its refusal to make further payments was fully justified. 9
After due trial the court a quo rendered on July 14, 1972 its decision
finding the subject land to be part of the "public park or plaza" and,
therefore, part of the public domain. The court consequently declared
that the sale of the subject land by the City of Manila to Manila Lodge
No. 761, BPOE, was null and void; that plaintiff TDC was a purchaser
thereof in g faith and for value from BPOE and can enforce its rights
against the latter; and that BPOE is entitled to recover from the City of
Manila whatever consideration it had 'paid the latter. 'The dispositive
part of the decision reads: ñé+.£ªwph!1
WHEREFORE, the Court hereby declares that the parcel of land formerly
covered by Transfer Certificate of Title Nos 2195 and 67488 in the name
of BPOE and now by Transfer Certificate of Title No. 73444 in the name
of Tarlac Development Corporation is a public' park or plaza, and,
consequently, instant complaint is dimissed, without pronouncement
as to costs.
In view of the reservation made by plaintiff Tarlac Development
Corporation to recover from defendant BPOE the amounts mentioned
in paragraph XVI of the complaint in accordance with Article 1555 of
the Civil Code, the Court makes no pronouncement on this point. 10
From said decision the therein plaintiff TDC as well as the defendant
Manila Lodge No. 761, BPOE, appealed to the Court of Appeals.
In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No.
761, BPOE, avers that the trial court committed the following errors,
namely:
1. In holding that the property subject of the action is not
patrimonial property of the City of Manila; and
2. In holding that the Tarlac Development Corporation may
recover and enforce its right against the defendant BPOE. 11
The Tarlac Development Corporation, on the other hand, asserts that
the trial court erred:
(1) In finding that the property in question is or was a public park
and in consequently nullifying the sale thereof by the City of Manila to
BPOE;
3
(2) In applying the cases of Municipality of Cavite vs. Rojas, 30
Phil. 602, and Government vs. Cabangis, 53 Phil. 112, to the case at bar;
and
(3) In not holding that the plaintiff-appellant is entitled to
,recover damages from the defendant City of Manila. 12
Furthermore, TDC as appellee regarding the second assignment of error
raised by BPOE, maintained that it can recover and enforce its rigth
against BPOE in the event that the land in question is declared a public
park or part thereof. 13
In its decision promulgated on June 30, 1975, the Court of Appeals
concur ed in the findings and conclusions of the lower court upon the
ground that they are supported by he evidence and are in accordance
with law, and accordingly affirmed the lower court's judgment.
Hence, the present petitions for review on certiorari.
G.R. No. L-41001
The Manila Lodge No. 761, BPOE, contends, in its petition for review on
certiorari docketed as G.R. No. L-41001, that the Court of Appeals erred
in (1) disregarding the very enabling acts and/or statutes according to
which the subject property was, and still is, patrimonial property of the
City of Manila and could therefore be sold and/or disposed of like any
other private property; and (2) in departing from the accepted and
usual course of judicial proceedings when it simply made a general
affirmance of the court a quo's findings and conclusions without
bothering to discuss or resolve several vital points stressed by the BPOE
in its assigned errrors. 14
G.R. No. L-41012
The Tarlac Development Corporation, in its petition for review on
certiorari docketed as G.R. No. L-41012, relies on the following grounds
for the allowance of its petition:
1. that the Court of Appeals did not correctly interpret Act No.
1360, as amended by Act No. 1657, of the Philippine Commission; and
2. that the Court of Appeals has departed from the accepted
and usual course of judicial proceedings in that it did not make its own
findings but simply recited those of the lower court. 15
ISSUES AND ARGUMENTS
FIRST ISSUE
Upon the first issue, both petitioners claim that the property subject of
the action, pursuant to the provisions of Act No. 1360, as amended by
Act No. 1657, was patrimonial property of the City of Manila and not a
park or plaza.
Arguments of Petitioners
In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that "there
appears to be some logic in the conclusion" of the Court of Appeals that
"neither Act No. 1360 nor Act No. 1657 could have meant to supply the
City of Manila the authority to sell the subject property which is located
at the south end not the north — of the reclaimed area." 16 It argues,
however, that when Act No. 1360, as amended, authorized the City of
Manila to undertake the construction of the Luneta extension by
reclaimed land from the Manila Bay, and declared that the reclaimed
land shall be the "property of the City of Manila," the State expressly
granted the ownership thereof to the City of Manila which.
consequently. could enter into transactions involving it; that upon the
issuance of O.C.T. No. 1909, there could he no doubt that the reclaimed
area owned by the City was its patrimonial property;" that the south
end of the reclaimed area could not be for public use for. as argued by
TDC a street, park or promenade can be property for public use
pursuant to Article 344 of the Spanish Civil Code only when it has
already been so constructed or laid out, and the subject land, at the
time it was sold to the Elk's Club, was neither actually constructed as a
street, park or promenade nor laid out as a street, park or promenade;"
that even assuming that the subject property was at the beginning
property of public dominion, it was subsequently converted into
patrimonial property pursuant to Art. 422 of the Civil Code, inasmuch
as it had never been used, red or utilized since it was reclaimed in 1905
for purpose other than this of an ordinary real estate for sale or lease;
that the subject property had never been intended for public use, is
further shown by the fact that it was neither included as a part of the
Luneta Park under Plan No. 30 of the National Planning Commission nor
considered a part of the Luneta National Park (now Rizal Park) by
Proclamation No. 234 dated December 19, 1955 of President Ramon
Magsaysay or by Proclamation Order No. 274 dated October 4, 1967 of
President Ferdinand E. Marcos;" 19 that, such being the case, there is
no reason why the subject property should -not be considered as having
been converted into patrimonial property, pursuant to the ruling in
Municipality vs. Roa 7 Phil. 20, inasmuch as the City of Manila has
considered it as its patrimonial property not only bringing it under the
operation of the Land Registration Act but also by disposing of it; 20 and
that to consider now the subject property as a public plaza or park
would not only impair the obligations of the parties to the contract of
sale (rated July 13, 1911, but also authorize deprivation of property
without due process of law. 21
G.R. No. L-410112
In L-41012, the petitioner TDC stresses that the principal issue is the
interpretation of Act No. 1360, as amended by. Act No. 1657 of the
Philippine Commission, 22 and avers that inasmuch as Section 6 of Act
No. 1360, as amended by Act 1657, provided that the reclamation of
the Luneta extension was to be paid for out of the funds of the City of
Manila which was authorized to borrow P350,000 "to be expended in
the construction of Luneta Extension," the reclaimed area became
"public land" belonging to the City of Manila that spent for the
reclamation, conformably to the holding in Cabangis, 23 and
consequently, said land was subject to sale and other disposition; that
the Insular Government itself considered the reclaimed Luneta
extension as patrimonial property subject to disposition as evidenced
by the fact that See. 3 of Act 1360 declared that "the land hereby
reclaimed shall be the property of the City of Manila;" that this property
cannot be property for public use for according to Article 344 of the Civil
Code, the character of property for public use can only attach to roads
and squares that have already been constructed or at least laid out as
such, which conditions did not obtain regarding the subject land, that
Sec. 5 of Act 1360 authorized the City of Manila to lease the northern
part of the reclaimed area for hotel purposes; that Act No. 1657
furthermore authorized the City of Manila to sell the same; 24 that the
express statutory authority to lease or sell the northern part of the
reclaimed area cannot be interpreted to mean that the remaining area
could not be sold inasmuch as the purpose of the statute was not
merely to confer authority to sell the northern portion but rather to
limit the city's power of disposition thereof, to wit: to prevent
disposition of the northern portion for any purpose other than for a
hotel site that the northern and southern ends of the reclaimed area
cannot be considered as extension of the Luneta for they lie beyond the
sides of the original Luneta when extended in the direction of the sea,
and that is the reason why the law authorized the sale of the northern
portion for hotel purposes, and, for the same reason, it is implied that
the southern portion could likewise be disposed of. 26
TDC argues likewise that there are several items of uncontradicted
circumstantial evidence which may serve as aids in construing the
legislative intent and which demonstrate that the subject property is
patrimonial in nature, to wit: (1) Exhibits "J" and "J-1", or Plan No. 30 of
the National Planning Commission showing the Luneta and its vicinity,
do not include the subject property as part of the Luneta Park; (2)
Exhibit "K", which is the plan of the subject property covered by TCT No.
67488 of BPOE, prepared on November 11, 1963, indicates that said
property is not a public park; (3) Exhibit "T", which is a certified copy of
Proclamation No. 234 issued on December 15, 1955 is President
Magsaysay, and Exhibit "U" which is Proclamation Order No. 273 issued
on October 4, 1967 by President Marcos, do not include the subject
property in the Luneta Park-, (4) Exhibit "W", which is the location plan
of the Luneta National Park under Proclamations Nos. 234 and 273,
further confirms that the subject property is not a public park; and (5)
Exhibit "Y", which is a copy of O.C.T. No. 7333 in the name of the United
States of America covering the land now occupied by the America
covering the land now occupied by the American Embassy, the
boundaries of which were delineated by the Philippine Legislature,
states that the said land is bounded on the northwest by properties of
4
the Army and Navy Club (Block No. 321) and the Elks Club (Block No.
321), and this circumstance shows that even the Philippine Legislature
recognized the subject property as private property of the Elks Club. 27
TDC furthermore contends that the City of Manila is estopped from
questioning the validity of the sale of the subject property that it
executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for
several reasons, namely: (1) the City's petition for the reannotation of
Entry No. 4608/T-1635 was predicated on the validity of said sale; (2)
when the property was bought by the petitioner TDC it was not a public
plaza or park as testified to by both Pedro Cojuanco, treasurer of TDC,
and the surveyor, Manuel Añoneuvo, according to whom the subject
property was from all appearances private property as it was enclosed
by fences; (3) the property in question was cadastrally surveyed and
registered as property of the Elks Club, according to Manuel Anonuevo;
(4) the property was never used as a public park, for, since the issuance
of T.C.T. No. 2165 on July 17, 1911 in the name of the Manila Lodge NO.
761, the latter used it as private property, and as early as January 16,
1909 the City of Manila had already executed a deed of sale over the
property in favor of the Manila Lodge No. 761; and (5) the City of Manila
has not presented any evidence to show that the subject property has
ever been proclaimed or used as a public park. 28
TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot apply
to the subject land, for Com. Act No. 141 took effect on December 1,
1936 and at that time the subject land was no longer part of the part of
the public domain. 29
TDC also stresses that its rights as a purchaser in good faith cannot be
disregarded, for the mere mention in the certificate of title that the lot
it purchased was "part of the Luneta extension" was not a sufficient
warning that tile title to the City of Manila was invalid; and that
although the trial court, in its decision affirmed by the Court of Appeals,
found the TDC -to has been an innocent purchaser for value, the court
disregarded the petitioner's rights as such purchaser that relied on
Torrens certificate of title. 30
The Court, continues the petitioner TDC erred in not holding that the
latter is entitled to recover from the City of Manila damages in the
amount of P100,000 caused by the City's petition for- reannotation of
its right to repurchase.
DISCUSSION AND RESOLUTION OF FIRST ISSUE
It is a cardinal rule of statutory construction that courts must give effect
to the general legislative intent that can be discovered from or is
unraveled by the four corners of the statute, 31 and in order to discover
said intent, the whole statute, and not only a particular provision
thereof, should be considered. 32 It is, therefore, necessary to analyze
all the provisions of Act No. 1360, as amended, in order to unravel the
legislative intent.
Act No. 1360 which was enacted by the Philippine Commission on June
26, 1905, as amended by Act No. 1657 enacted on May 18, 1907,
authorized the "construction of such rock and timber bulkheads or sea
walls as may be necessary for the making of an extension to the Luneta"
(Sec. 1 [a]), and the placing of the material dredged from the harbor of
Manila "inside the bulkheads constructed to inclose the Luneta
extension above referred to" (Sec. 1 [a]). It likewise provided that the
plan of Architect D. H. Burnham as "a general outline for the extension
and improvement of the Luneta in the City of Manila" be adopted; that
"the reclamation from the Bay of Manila of the land included in said
projected Luneta extension... is hereby authorized and the land thereby
reclaimed shall be the property of the City of Manila" (Sec. 3); that "the
City of Manila is hereby authorized to set aside a tract of the reclaimed
land formed by the Luneta extension authorized by this Act at the worth
end of said tract, not to exceed five hundred feet by six hundred feet in
size, for a hotel site, and to lease the same with the approval of the
Governor General, ... for a term not exceeding ninety-nine years; that
"should the Municipal Board ... deem it advisable it is hereby authorized
to advertise for sale to sell said tract of land ... ;" "that said tract shall
be used for hotel purposes as herein prescribed, and shall not be
devoted to any other purpose or object whatever;" "that should the
grantee x x x fail to maintain on said tract a first-class hotel x x x then
the title to said tract of land sold, conveyed, and transferred, and shall
not be devoted to any other purpose or object whatever;" "that should
the grantee x x x fail to maintain on said tract a first-class hotel x x x
then the title to said tract of land sold, conveyed, and transferred to the
grantee shall revert to the City of Manila, and said City of Manila shall
thereupon become entitled to immediate possession of said tract of
land" (Sec. 5); that the construction of the rock and timber bulkheads
or sea wall "shall be paid for out of the funds of the City of Manila, but
the area to be reclaimed by said proposed Luneta extension shall be
filled, without cost to the City of Manila, with material dredged from
Manila Bay at the expense of the Insular Government" (Sec. 6); and that
"the City of Manila is hereby authorized to borrow from the Insular
Government ... the sum of three hundred thousand pesos, to be
expended in the construction of Luneta extension provided for by
paragraph (a) of section one hereof" (Sec.7).
The grant made by Act No. 1360 of the reclaimed land to the City of
Manila is a grant of "public" nature, the same having been made to a
local political subdivision. Such grants have always been strictly
construed against the grantee. 33 One compelling reason given for the
strict interpretation of a public grant is that there is in such grant a
gratuitous donation of, public money or resources which results in an
unfair advantage to the grantee and for that reason, the grant should
be narrowly restricted in favor of the public. 34 This reason for strict
interpretation obtains relative to the aforesaid grant, for, although the
City of Manila was to pay for the construction of such work and timber
bulkheads or sea walls as may be necessary for the making of the Luneta
extension, the area to be reclaimed would be filled at the expense of
the Insular Government and without cost to the City of Manila, with
material dredged from Manila Bay. Hence, the letter of the statute
should be narrowed to exclude maters which if included would defeat
the policy of the legislation.
The reclaimed area, an extension to the Luneta, is declared to be
property of the City of Manila. Property, however, is either of public
ownership or of private ownership. 35 What kind of property of the City
is the reclaimed land? Is it of public ownership (dominion) or of private
ownership?
We hold that it is of public dominion, intended for public use.
Firstly, if the reclaimed area was granted to the City of Manila as its
patrimonial property, the City could, by virtue of its ownership, dispose
of the whole reclaimed area without need of authorization to do so
from the lawmaking body. Thus Article 348 of the Civil Code of Spain
provides that "ownership is the right to enjoy and dispose of a thing
without further limitations than those established by law." 36 The right
to dispose (jus disponendi) of one's property is an attribute of
ownership. Act No. 1360, as amended, however, provides by necessary
implication, that the City of Manila could not dispose of the reclaimed
area without being authorized by the lawmaking body. Thus the statute
provides that "the City of Manila is hereby authorized to set aside a
tract ... at the north end, for a hotel site, and to lease the same ... should
the municipal board ... deem it advisable, it is hereby authorized ...to
sell said tract of land ... " (Sec. 5). If the reclaimed area were patrimonial
property of the City, the latter could dispose of it without need of the
authorization provided by the statute, and the authorization to set
aside ... lease ... or sell ... given by the statute would indeed be
superfluous. To so construe the statute s to render the term
"authorize," which is repeatedly used by the statute, superfluous would
violate the elementary rule of legal hermeneutics that effect must be
given to every word, clause, and sentence of the statute and that a
statute should be so interpreted that no part thereof becomes
inoperative or superfluous. 37 To authorize means to empower, to give
a right to act. 38 Act No. 1360 furthermore qualifies the verb it
authorize" with the adverb "hereby," which means "by means of this
statue or section," Hence without the authorization expressly given by
Act No. 1360, the City of Manila could not lease or sell even the
northern portion; much less could it dispose of the whole reclaimed
area. Consequently, the reclaimed area was granted to the City of
Manila, not as its patrimonial property. At most, only the northern
portion reserved as a hotel site could be said to be patrimonial property
for, by express statutory provision it could be disposed of, and the title
thereto would revert to the City should the grantee fail to comply with
the terms provided by the statute.
TDC however, contends that the purpose of the authorization provided
in Act No. 1360 to lease or sell was really to limit the City's power of
disposition. To sustain such contention is to beg the question. If the
purpose of the law was to limit the City's power of disposition then it is
5
necessarily assumed that the City had already the power to dispose, for
if such power did not exist, how could it be limited? It was precisely Act
1360 that gave the City the power to dispose for it was hereby
authorized by lease of sale. Hence, the City of Manila had no power to
dispose of the reclaimed land had such power not been granted by Act
No. 1360, and the purpose of the authorization was to empower the
city to sell or lease the northern part and not, as TDC claims, to limit
only the power to dispose. Moreover, it is presumed that when the
lawmaking body enacted the statute, it had full knowledge of prior and
existing laws and legislation on the subject of the statute and acted in
accordance or with respect thereto. 39 If by another previous law, the
City of Manila could already dispose of the reclaimed area, which it
could do if such area were given to it as its patrimonial property, would
it then not be a superfluity for Act No. 1360 to authorize the City to
dispose of the reclaimed land? Neither has petitioner TDC pointed to
any other law that authorized the City to do so, nor have we come
across any. What we do know is that if the reclaimed land were
patrimonial property, there would be no need of giving special
authorization to the City to dispose of it. Said authorization was given
because the reclaimed land was not intended to be patrimonial
property of the City of Manila, and without the express authorization
to dispose of the northern portion, the City could not dispose of even
that part.
Secondly, the reclaimed area is an "extension to the Luneta in the City
of Manila." 40 If the reclaimed area is an extension of the Luneta, then
it is of the same nature or character as the old Luneta. Anent this
matter, it has been said that a power to extend (or continue an act or
business) cannot authorize a transaction that is totally distinct. 41 It is
not disputed that the old Luneta is a public park or plaza and it is so
considered by Section 859 of the Revised Ordinances of the City of
Manila. 42 Hence the "extension to the Luneta" must be also a public
park or plaza and for public use.
TDC, however, contends that the subject property cannot be
considered an extension of the old Luneta because it is outside of the
limits of the old Luneta when extended to the sea. This is a strained
interpretation of the term "extension," for an "extension," it has been
held, "signifies enlargement in any direction — in length, breadth, or
circumstance." 43
Thirdly, the reclaimed area was formerly a part of the manila Bay. A bay
is nothing more than an inlet of the sea. Pursuant to Article 1 of the Law
of Waters of 1866, bays, roadsteads, coast sea, inlets and shores are
parts of the national domain open to public use. These are also property
of public ownership devoted to public use, according to Article 339 of
the Civil Code of Spain.
When the shore or part of the bay is reclaimed, it does not lose its
character of being property for public use, according to Government of
the Philippine Islands vs. Cabangis. 44 The predecessor of the claimants
in this case was the owner of a big tract of land including the lots in
question. From 1896 said land began to wear away due to the action of
the waters of Manila Bay. In 1901 the lots in question became
completely submerged in water in ordinary tides. It remained in such a
state until 1912 when the Government undertook the dredging of the
Vitas estuary and dumped the Sand and - silt from estuary on the low
lands completely Submerged in water thereby gradually forming the
lots in question. Tomas Cabangis took possession thereof as soon as
they were reclaimed hence, the claimants, his successors in interest,
claimed that the lots belonged to them. The trial court found for the
claimants and the Government appealed. This Court held that when the
lots became a part of the shore. As they remained in that condition until
reclaimed by the filling done by the Government, they belonged to the
public domain. for public use .4' Hence, a part of the shore, and for that
purpose a part of the bay, did not lose its character of being for public
use after it was reclaimed.
Fourthly, Act 1360, as amended, authorized the lease or sale of the
northern portion of the reclaimed area as a hotel sites. The subject
property is not that northern portion authorized to be leased or sold;
the subject property is the southern portion. Hence, applying the rule
of expresio unius est exlusio alterius, the City of Manila was not
authorized to sell the subject property. The application of this principle
of statutory construction becomes the more imperative in the case at
bar inasmuch as not only must the public grant of the reclaimed area to
the City of Manila be, as above stated, strictly construed against the City
of Manila, but also because a grant of power to a municipal corporation,
as happens in this case where the city is author ized to lease or sell the
northern portion of the Luneta extension, is strictly limited to such as
are expressly or impliedly authorized or necessarily incidental to the
objectives of the corporation.
Fifthly, Article 344 of the Civil Code of Spain provides that to property
of public use, in provinces and in towns, comprises the provincial and
town roads, the squares streets fountains, and public waters the
promenades, and public works of general service paid for by such towns
or provinces." A park or plaza, such as the extension to the Luneta, is
undoubtedly comprised in said article.
The petitioners, however, argue that, according to said Article 344, in
order that the character of property for public use may be so attached
to a plaza, the latter must be actually constructed or at least laid out as
such, and since the subject property was not yet constructed as a plaza
or at least laid out as a plaza when it was sold by the City, it could not
be property for public use. It should be noted, however, that properties
of provinces and towns for public use are governed by the same
principles as properties of the same character belonging to the public
domain. 46 In order to be property of public domain an intention to
devote it to public use is sufficient. 47 The, petitioners' contention is
refuted by Manresa himself who said, in his comments", on Article 344,
that: ñé+.£ªwph!1
Las plazas, calles y paseos publicos correspondent sin duda aiguna
aldominio publico municipal ), porque se hallan establecidos sobre
suelo municipal y estan destinadas al uso de todos Laurent presenta
tratando de las plazas, una question relativa a si deben conceptuarse
como de dominio publico los lugares vacios libres, que se encuenttan
en los Municipios rurales ... Laurent opina contra Pioudhon que toda
vez que estan al servicio de todos pesos lugares, deben considerable
publicos y de dominion publico. Realmente, pala decidir el punto,
bastara siempre fijarse en el destino real y efectivo de los citados
lugares, y si este destino entraña un uso comun de todos, no hay duda
que son de dominio publico municipal si no patrimoniales.
It is not necessary, therefore, that a plaza be already constructed of-
laid out as a plaza in order that it be considered property for public use.
It is sufficient that it be intended to be such In the case at bar, it has
been shown that the intention of the lawmaking body in giving to the
City of Manila the extension to the Luneta was not a grant to it of
patrimonial property but a grant for public use as a plaza.
We have demonstrated ad satietatem that the Luneta extension as
intended to be property of the City of Manila for public use. But, could
not said property-later on be converted, as the petitioners contend, to
patrimonial property? It could be. But this Court has already said, in
Ignacio vs. The Director of Lands, 49 the executive and possibly the
legislation department that has the authority and the power to make
the declaration that said property, is no longer required for public use,
and until such declaration i made the property must continue to form
paint of the public domain. In the case at bar, there has been no such
explicit or unequivocal declaration It should be noted, furthermore,
anent this matter, that courts are undoubted v not. primarily called
upon, and are not in a position, to determine whether any public land
is still needed for the purposes specified in Article 4 of the Law of
Waters . 50
Having disposed of the petitioners' principal arguments relative to the
main issue, we now pass to the items of circumstantial evidence which
TDC claims may serve as aids in construing the legislative intent in the
enactment of Act No. 1360, as amended. It is noteworthy that all these
items of alleged circumstantial evidence are acts far removed in time
from the date of the enactment of Act No.1360 such that they cannot
be considered contemporaneous with its enactment. Moreover, it is
not farfetched that this mass of circumstantial evidence might have
been influenced by the antecedent series of invalid acts, to wit: the
City's having obtained over the reclaimed area OCT No. 1909 on January
20,1911; the sale made by the City of the subject property to Manila
Lodge No. 761; and the issuance to the latter of T.C.T. No. 2195. It
cannot gainsaid that if the subsequent acts constituting the
circumstantial evidence have been base on, or at least influenced, by
those antecedent invalid acts and Torrens titles S they can hardly be
indicative of the intent of the lawmaking body in enacting Act No. 1360
and its amendatory act.
6
TDC claims that Exhs. "J," "J-l" "K," "T," "U," "W" and "Y" show that the
subject property is not a park.
Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed
development" dated May 14, 1949, were prepared by the National
Urban Planning Commission of the Office of the President. It cannot be
reasonably expected that this plan for development of the Luneta
should show that the subject property occupied by the ElksClub is a
public park, for it was made 38 years after the sale to the Elks, and after
T.C.T. No. 2195 had been issued to Elks. It is to be assumed that the
Office of the President was cognizant of the Torrens title of BPOE. That
the subject property was not included as a part of the Luneta only
indicated that the National Urban Planning Commission that made the
plan knew that the subject property was occupied by Elks and that Elks
had a Torrens title thereto. But this in no way proves that the subject
property was originally intended to be patrimonial property of the City
of Manila or that the sale to Elks or that the Torrens-title of the latter is
valid.
Exhibit "K" is the "Plan of land covered by T.C.T . No ----, as prepared for
Tarlac Development Company." It was made on November 11, 1963 by
Felipe F. Cruz, private land surveyor. This surveyor is admittedly a
surveyor for TDC. 51 This plan cannot be expected to show that the
subject property is a part of the Luneta Park, for he plan was made to
show the lot that "was to be sold to petitioner." This plan must have
also assumed the existence of a valid title to the land in favor of Elks.
Exhibits "T" and "U" are copies of Presidential Proclamations No. 234
issued on November 15, 1955 and No. 273 issued on October 4, 1967,
respectively. The purpose of the said Proclamations was to reserve
certain parcels of land situated in the District of Ermita, City of Manila,
for park site purposes. Assuming that the subject property is not within
the boundaries of the reservation, this cannot be interpreted to mean
that the subject property was not originally intended to be for public
use or that it has ceased to be such. Conversely, had the subject
property been included in the reservation, it would mean, if it really
were private property, that the rights of the owners thereof would be
extinguished, for the reservations was "subject to private rights, if any
there be." That the subject property was not included in the reservation
only indicates that the President knew of the existence of the Torrens
titles mentioned above. The failure of the Proclamations to include the
subject property in the reservation for park site could not change the
character of the subject property as originally for public use and to form
part of the Luneta Park. What has been said here applies to Exhibits "V",
"V-1" to "V-3," and "W" which also refer to the area and location of the
reservation for the Luneta Park.
Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935,
covering the lot where now stands the American Embassy [Chancery].
It states that the property is "bounded ... on the Northwest by
properties of Army and Navy Club (Block No.321) and Elks Club (Block
No. 321)." Inasmuch as the said bounderies delineated by the Philippine
Legislature in Act No. 4269, the petitioners contend that the Legislature
recognized and conceded the existence of the Elks Club property as a
primate property (the property in question) and not as a public park or
plaza. This argument is non sequitur plain and simple Said Original
Certificate of Title cannot be considered as an incontrovertible
declaration that the Elks Club was in truth and in fact the owner of such
boundary lot. Such mention as boundary owner is not a means of
acquiring title nor can it validate a title that is null and void.
TDC finally claims that the City of Manila is estopped from questioning
the validity of the sale it executed on July 13,'1911 conconveying the
subject property to the Manila Lodge No. 761, BPOE. This contention
cannot be seriously defended in the light of the doctrine repeatedly
enunciated by this Court that the Government is never estopped by
mistakes or errors on the pan of its agents, and estoppel does not apply
to a municipal corporation to validate a contract that is prohibited by
law or its against Republic policy, and the sale of July 13, 1911 executed
by the City of Manila to Manila Lodge was certainly a contract
prohibited by law. Moreover, estoppel cannot be urged even if the City
of Manila accepted the benefits of such contract of sale and the Manila
Lodge No. 761 had performed its part of the agreement, for to apply
the doctrine of estoppel against the City of Manila in this case would be
tantamount to enabling it to do indirectly what it could not do directly.
52
The sale of the subject property executed by the City of Manila to the
Manila Lodge No. 761, BPOE, was void and inexistent for lack of subject
matter. 53 It suffered from an incurable defect that could not be ratified
either by lapse of time or by express ratification. The Manila Lodge No.
761 therefore acquired no right by virtue of the said sale. Hence to
consider now the contract inexistent as it always has seen, cannot be,
as claimed by the Manila Lodge No. 761, an impairment of the
obligations of contracts, for there was it, contemplation of law, no
contract at all.
The inexistence of said sale can be set up against anyone who asserts a
right arising from it, not only against the first vendee, the Manila Lodge
No. 761, BPOE, but also against all its suceessors, including the TDC
which are not protected the doctrine of bona fide ii purchaser without
notice, being claimed by the TDC does not apply where there is a total
absence of title in the vendor, and the good faith of the purchaser TDC
cannot create title where none exists. 55
The so-called sale of the subject property having been executed, the
restoration or restitution of what has been given is order 56
SECOND ISSUE
The second ground alleged in support of the instant petitions for review
on certiorari is that the Court of Appeals has departed from the
accepted and usual course of judicial proceedings as to call for an
exercise of the power of supervision. TDC in L-41012, argues that the
respondent Court did not make its own findings but simply recited
those of the lower court and made a general affirmance, contrary to the
requirements of the Constitution; that the respondent Court made
glaring and patent mistakes in recounting even the copied findings,
palpably showing lack of deliberate consideration of the matters
involved, as, for example, when said court said that Act No. 1657
authorized the City of Manila to set aside a portion of the reclaimed
land "formed by the Luneta Extension of- to lease or sell the same for
park purposes;" and that respondent Court. further more, did not
resolve or dispose of any of the assigned errors contrary to the mandate
of the Judiciary Act.. 57
The Manila Lodge No. 761, in L-41001, likewise alleges, as one of the
reasons warranting review, that the Court of Appeals departed from the
accepted and usual course of Judicial proceedings by simply making a
general affirmance of the court a quo findings without bothering to
resolve several vital points mentioned by the BPOE in its assigned
errors. 58
COMMENTS ON SECOND ISSUE
We have shown in our discussion of the first issue that the decision of
the trial court is fully in accordance with law. To follows that when such
decision was affirmed by the Court of Appeals, the affirmance was
likewise in accordance with law. Hence, no useful purpose will be
served in further discussing the second issue.
CONCLUSION
ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012 are
denied for lack of merit, and the decision of the Court of Appeals of June
30, 1975, is hereby affirmed, at petitioner's cost.
Makasiar, Munoz Palma and Martin, JJ., concur.1äwphï1.ñët
Teehankee, concurs in the result which is wholly consistent with the
basic rulings and jugdment of this Court in its decision of July 31, 1968.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-16351 June 30, 1964
CALAPAN LUMBER COMPANY, INC., plaintiff-appellee,
vs.
COMMUNITY SAWMILL COMPANY, ET AL., defendants-appellants.
7
Ferdinand E. Marcos for plaintiff-appellee.
Salvador H. Laurel and Exequiel S. Consulta for defendants-appellants.
PADILLA, J.:
This is an action for injunction, prohibition against defendant public
officers, compensatory, exemplary and nominal damages, attorney's
fees and costs.
All the defendants prayed in their respective answers for the dismissal
of the second amended complaint, in addition to their counterclaim.
After trial, the Court of First Instance of Oriental Mindoro rendered
judgment, the dispositive part of which reads:
WHEREFORE, this Court renders judgment:
1. Finding:
(a) That the road and bridge in question, known as the Biga-Communal-
Goob (from Km. 12.38 to 15.88) was constructed during the period from
1950 to 1952 by the plaintiff at its exclusive expense with the
knowledge and consent of the Provincial Board of Oriental Mindoro;
(b) That before actual construction of said road and bridge the
personnel of the Office of the District Engineer surveyed the lay-out of
the road to be constructed, also at the expense of the plaintiff;
(c) That before the actual construction of the road in question the
plaintiff secured and used road-right-of-way agreements (Exhs. Y, Y-1
to Y-7 and Z-AA), executed in favor of the plaintiff by the owners of the
several portions of land traversed by said road;
(d) That from the completion of the road up to the present the plaintiff
has been contributing to the repair and maintenance of the said road
such as stones, gravel, sand and lumber at its own expense;
(e) That since the completion of the road in question (to) the same has
been used by the public without any restriction with the written
consent of the plaintiff as embodied in Resolutions Nos. 222 (Exh. A)
and 119 (Exh. B), with the exception of logging and lumber concerns
who might use the road with the permission of the plaintiff;
(f) That Lao Kee (alias Lu Pong), Lee Cok Tan Hong, Tan Kian, Co Giac,
Tan Hong Chian Hian, Tan Tak Tiao, Kick Chia and the Community
Sawmill Company had used the road and bridge in question sometime
before April 6, 1953, until the issuance of the writ of preliminary
injunction of June 25, 1953, manifest bad faith;
2. Declaring:
(a) That Resolution No. 186, series of 1953, marked Exh. C, is valid
insofar as it repealed Resolution No. 222, series of 1953; marked Exh.
"A", and Resolution No. 119, series of 1953, marked Exh. B;
(b) That Resolution No. 186, series of 1953, marked Exh. C. insofar as it
declared that the road and bridge in question, public is null and void the
same being in violation of Sec. 2131 of the Revised Administrative Code;
(c) That the road and bridge in question are of private ownership
belonging to the plaintiff;
(d) That the said defendant Lao Kee (alias Lu Pong), Lee Cok, Tan Hong,
Tan Kian, Co Giac, Tan Hong, Chia Hian, Tan Tak Tiao, Kiok Chia and
Community Sawmill did not have the right to use the road and bridge in
question;
3. Ordering:
(a) That the writ of preliminary injunction issued against the Community
Sawmill Company be made permanent, perpetually restraining the said
defendants Lao Kee (alias Lu Pong), Lee Cok, Tan Hong, Tan Kian, Co
Giac, Tan Hong Chia Hian, Tan Tak Tiao, Kiok Chia and Community
Sawmill Company, their agents, attorneys, or other persons or entities
from acting on their behalf;
(b) The same defendants named in the immediately preceding
paragraph to pay jointly and severally to the plaintiff the sum of
P10,000.00 as attorney's fees and to pay the costs;
4. Absolving from the third amended complaint the defendants
Marciano Roque, Pablo Lorenzo, Isaias Fernando, Francisco Infantado,
Bernabe Jamilla and Cenon C. Laurena;
5. Dismissing all the counterclaims filed by the defendants for lack of
sufficient merits. (Civil Case No. R-542)
From the judgment thus rendered, the defendants Lao Kee (alias Lu
Pong), Lee Cok Tan Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak Tiao,
Kiok Chia, all acting under the name and style of Community Sawmill
Company, appealed to this Court. They claim that the trial court
committed the following errors:
1. The lower court erred in holding that the road in question is a private
road and that, therefore, plaintiff could legally deny its use to herein
appellants.
2. The lower court erred in ordering herein appellants to pay plaintiff
attorney's fees.
3. The lower court erred in holding that plaintiff can recover expenses
of litigation under article 2208 of the Civil Code.
4. The lower court erred in not dismissing the complaint and finding for
herein appellants on their counterclaim.
At the trial, the parties submitted to the Court a stipulation of facts
which reads:
1. That the parties agree to the existence and authenticity of the
following resolutions which were passed by the Provincial Board of
Oriental Mindoro, as follows:
(a) Resolution No. 222, Series of 1950 (Annex "A" of the Third Amended
Complaint), but not its regularity and validity, which must be proven;
(b) Resolution No. 119, Series of 1953 (Annex "B" of the Third Amended
Complaint);
(c) Resolution No. 186, Series of 1955, revoking Resolutions Nos. 222,
Series of 1950 and 119, Series of 1953, of the Provincial Board, granting
the Calapan Lumber Company the exclusive right under certain
conditions to use the Biga-Communal-Goob road for a period of twenty
(20) years, and declaring said road as a toll road.
2. That the parties agree as to the existence and authenticity of the
following official communications, indorsements and letters re the
Biga-Communal-Goob road:
(a) letter dated March 20, 1953 addressed to the Hon. Executive
Secretary, signed by Rodolfo Naguit and Joe Ong, both representatives
of the Community Sawmill Company:
(b) 1st Indorsement of Assistant Executive Secretary Lucas Madamba,
dated March 21, 1953 (Annex "C", Third Amended Complaint);
(c) 2nd Indorsement of Governor Infantado dated March 23, 1953;
(d) 3rd Indorsement of District Engineer C. C. Laurena dated March 26,
1953;
(e) 4th Indorsement of Governor Infantado dated March 28, 1953;
(f) Letter of Rodolfo G. Naguit, representative of the Community
Sawmill Company, dated May 4, 1953 and addressed to the Assistant
Executive Secretary, Office of the President;
(g) Letter of Atty. Ferdinand E. Marcos, counsel for the plaintiff
company addressed to Executive Secretary Marciano Roque, dated May
21, 1953 (Annex "F", Third Amended Complaint);
(h) 7th Indorsement of Director of Public Works, Isaias Fernando, dated
April 20, 1953 (Annex "D", Third Amended Complaint);
8
(i) 8th Indorsement of Undersecretary Vicente Orosa, dated April 25,
1953;
(j) 9th Indorsement of Executive Secretary Marciano Roque dated May
11, 1953 (Annex "E", Third Amended Complaint);
(k) 3rd Indorsement of Acting Executive Secretary Marciano Roque,
dated July 8, 1953 and the 4th Indorsement of Undersecretary Vicente
Orosa, dated July 16, 1953;
(l) 1st Indorsement of Acting Executive Secretary Marciano Roque,
dated July 17, 1953.
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 other evidence to prove their case not
covered by this stipulation of facts. 1äwphï1.ñët
xxx xxx xxx
Resolution No. 222, adopted 4 December 1950, reads:
Whereas, there is at present an unfinished provincial road in the barrio
of Viga, of the municipality of Calapan, known as the Viga-Communal-
Goob Road, the construction of which could not be undertaken by the
province due to insufficiency of funds;
Whereas, the Calapan Lumber Co., Inc., through its President, Mr. D. M.
Gotauco, in a letter addressed to the Governor of this province has
made representations to undertake the construction of said road under
certain conditions; and
Whereas, the province is willing to accede to the request of the Calapan
Lumber Co., Inc. and to give it the sole right for its use, provided that
after a period of twenty (20) years, said company shall donate to the
province the road it had constructed, provided further that during the
said period of 20 years other concerns dealing in logs and/or lumber
may use the same road upon permission granted to them by the said
Calapan Lumber Co., Inc.; and provided finally that said road is open to
all non-logging concerns or individuals during the said period of 20
years. Now, therefore, be it
RESOLVED, That the Provincial Board of Oriental Mindoro grants, as
hereby is granting, the Calapan Lumber Co., Inc. to undertake the
construction of the unfinished provincial road in the barrio of Viga,
municipality of Calapan, known as the Viga-Communal-Goob Road,
subject to the stipulations stated above; and
RESOLVED FURTHER, That copies of this resolution be furnished the
District Engineer and the Calapan Lumber Co., Inc., through its
President, Mr. D. M. Gotauco, for their information.
xxx xxx xxx
Resolution No. 119, adopted 6 April 1953, reads:
Whereas, under Resolution No. 222, series of 1950, the Provincial Board
of Oriental Mindoro under the former administration, granted the
Calapan Lumber Co., Inc. the right to undertake the construction of the
unfinished Viga-Communal-Goob provincial road the sole right for its
use, under the following conditions:
(1) That after a period of twenty (20) years, said company shall donate
to the province the road it had constructed;
(2) That during the said period of 20 years other concerns dealing in logs
and/or lumber may use the same road upon permission granted to
them by the Calapan Lumber Co.; and
(3) That said road is open to all non-logging concerns or individuals
during the said period of 20 years.
Whereas, according to the records of the Provincial Board the said
resolution has not been amended or modified up to the present, and,
therefore, the same is still in force and binding as per agreement
stipulated therein;

Whereas, this Board has received reliable information to the effect that
another certain lumber company is attempting to use, or has actually
used the same road, by allowing to pass thru it its heavy trucks and
tractors without securing any permission from the Calapan Lumber Co.,
Inc., to the detriment and prejudice of the interests of the latter lumber
company which shouldered the cost of its completion in accordance
with the rights granted to it by the province; and
Whereas, after a careful consideration of the matter this Board is of the
opinion that the right of the Calapan Lumber Co., Inc. over the said road
as stipulated in the condition set forth in the resolution must be upheld
for obvious reasons; Now, therefore, be it
RESOLVED by the Provincial Board of Oriental Mindoro to authorize, as
it hereby authorizes, the Calapan Lumber Company, Inc., to prohibit the
use of the Viga-Communal-Goob provincial road, from point Km. 12.38
up to Km. 15.88 of said road, by any other concern or company dealing
in logs and/or lumber, without the permission or consent of the said
Calapan Lumber Co., Inc. in accordance with one of the stipulations or
conditions agreed upon in Resolution No. 222, series of 1950, of the
Provincial Board; and
RESOLVED, FURTHER, That the District Engineer and the Calapan
Lumber Co., Inc. be furnished with copies of this resolution, for their
information.
xxx xxx xxx
Resolution No. 186, adopted 19 June 1953, reads:
REVOKING RESOLUTIONS NOS. 222, SERIES OF 1950, AND 119, SERIES
OF 1953, OF THE PROVINCIAL BOARD, GRANTING THE CALAPAN
LUMBER COMPANY THE EXCLUSIVE RIGHT UNDER CERTAIN
CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB PROVINCIAL ROAD
FOR A PERIOD OF TWENTY (20) YEARS.
Whereas, under Resolution No. 222, series of 1950, the Provincial Board
of Oriental Mindoro, under the former provincial administration,
granted the Calapan Lumber Co., Inc. an authority to undertake the
construction of the unfinished Viga-Goob provincial road from Point
Km. 12.38 to Km. 15.88, and the exclusive right for its use, under certain
conditions;
Whereas, on April 6, 1953, this Board passed another resolution (119)
maintaining the right of the Calapan Lumber Co., Inc. over the said road
under the conditions stipulated in the above-cited resolution No. 222,
and forthwith authorized the said company to prohibit the use of the
portion of said road constructed at its expense by any other concern or
company dealing in logs or lumber without its permission;
Whereas, in a 9th Indorsement dated May 11, 1953, the pertinent parts
of which are quoted hereunder, the Honorable, the Executive Secretary
to whom the case regarding this matter was appealed for decision, and
upon the recommendation of the Director of Public Works and with the
concurrence of the Undersecretary of Public Works and
Communications, ruled that provincial roads are considered as
properties for public use and the Provincial Board may not therefore
grant the exclusive use thereof to any private individual or entity which
would discriminate against or exclude the general public from a
reasonable use thereof, and therefore, the resolution in question
should be revoked.
In this connection, it should be stated that Provincial roads are
properties for public use and the provincial board may not grant the
exclusive use thereof to any private individual or entitle or enter into a
contract or agreement which would tend to discriminate against or
exclude the general public from a reasonable use thereof. Resolutions
Nos. 222, series of 1950, and 119, series of 1953, of the Provincial
Board, granting the Calapan Lumber Company an exclusive right to use
the said road for a period of twenty (20) year and to prohibit lumber or
logging concerns from using the road in question without the
company's permission, should therefore be revoked. In consonance
with the policy of the law, and as correctly the suggested by the Director
of Public Works and the Undersecretary of Public Works and
Communications the portion of the Viga-Communal Road from Km.
12.38 to 15.89, having a length of 3.5 kilometers, should be declared a
9
toll road in order to raise funds for its maintenance and with which to
reimburse the Calapan Lumber Company for the expenses the latter
had incurred in the construction of this portion of the road.
Whereas, in view of the said ruling, this Board has been requested to
take immediate action on the matter to declare the above-said portion
of the Viga-Communal-Goob provincial road as a toll road; and,
Whereas, according to an estimate made by the office of the District
Engineer the Calapan Lumber Company has spent for the construction
of the portion of the road in question having a length of 3.5 kilometers,
the amount of P25,000.00 more or less; Now, therefore, be it —
RESOLVED, That Resolutions Nos. 222, series of 1950, and 119, series of
1953, of the Provincial Board, which grant the Calapan Lumber Co., Inc.,
the exclusive right to use the Viga-Communal-Goob provincial road for
a period of 20 years, under certain conditions, be, and hereby are,
revoked;
RESOLVED, FURTHER, That the portion of said Viga-Communal-Goob
provincial road, from Point Km. 12.38 up to Km. 15.88 thereof, be and
hereby is, declared PROVINCIAL TOLL ROAD, under the provisions of
section 2131 of the Revised Administrative Code;
RESOLVED, FURTHERMORE, That the following toll rates to be paid by
any motor vehicle for the use of the provincial road be, and hereby are,
fixed, effective today, June 19, 1953, the proceeds from which shall be
used for the maintenance of the said road and the balance thereof for
the reimbursement to the said company for the expenses it had
incurred in the construction for said portion of the road:
For every truck, one way P1.00
For every weapon carrier, one way .60
For every jeepney .30
PROVIDED, however, that the portion of the road declared herein as
provincial toll road shall continue to be so up to and until the amount
spent by the Calapan Lumber Company for its construction shall have
been covered by reimbursement to said company; and
RESOLVED, FINALLY, That copies of this resolution be forwarded to His
Excellency, the President of the Philippines, thru the Director of Public
Works and the Honorable, the Secretary of Public Works and
Communications, Manila.
xxx xxx xxx
Resolution No. 169, adopted 21 April 1956, revoked Resolution No. 186
in so far as it declared Provincial Toll Road that part of the road invoked
in this case.
There seems to be no doubt that Resolutions Nos. 222 and 119,
adopted by the Provincial Board of Oriental Mindoro quoted above,
mere ultra vires, because sections 2067 (f) and (g) on powers of the
provinces as political bodies corporate; 2102 (g) on powers of the
provincial boards; 2106 (f) on powers of the provincial boards to be
exercised with the approval of the Department Head; and 2113 (a) on
road and bridge fund, of the Revised Administrative Code, do not
authorize the Provincial Board of Oriental Mindoro to pass and adopt
said resolutions. The contention that the Provincial Board of Oriental
Mindoro under section 2106 (g) invoked by the appellee is authorized
to pass those resolutions Nos. 222 and 199 quoted above, is untenable
because said paragraph of the section authorizes the Provincial Board
"to permit, upon favorable recommendation by the Secretary of Public
Works and Communications, and subject to such conditions as may
properly protect the public interests, the construction and
maintenance, for private use of railways, conduits, and telephone lines
across public thoroughfares, streets, roads, or other public property
and in the province: Provided, That such construction and private use
shall not prevent or obstruct the public use of such thoroughfares,
streets, roads or other public property and that the permit granted shall
at all times be subject to revocation by the Secretary of the Interior, if,
in the judgment of that official, the public interest requires it."
Consequently, Resolution No. 186 revoking the two previous
resolutions was in order.
The road known as the Viga-Communal-Goob connecting two finished
or completed parts of the provincial road, from kilometer 12.38 to
15.88, as laid out by the personnel of the office of the District Engineer
was planned or intended to be laid out and constructed by the
Provincial Government of Oriental Mindoro to complete said road. The
fact that the survey, lay-out and actual construction of the unfinished
part of the road were done at the appellee's expense, does not convert
said road after construction into a private road, for it does not appear
that the parts of the land where the road was laid out and constructed
belong to or are owned by the appellee. The evidence shows that the
owners of such parts of land ceded their parts of the land owned by
them without any consideration because of their desire to have the
road completed or to connect the ends of two completed parts of the
road. It may be conceded that the appellee built the road in question in
good faith; and such being the case, it may be argued that the appellee
is entitled to keep or have possession of the road until after it shall have
been reimbursed of the expenses it had incurred in constructing and
maintaining the road in good condition. The provisions of the Civil Code
on the right of a builder in good faith on a private land1 cannot be
invoked and applied to the road in question, because public interest is
involved and the people living in that part of the province are entitled
to use the road.
It is true that that part of the Resolution No. 186 above quoted
converting the road in question into toll road contravenes section 2131
of the Revised Administrative Code, because in the case of road the
recommendation of the Secretary of Public Works and Communications
and the authorization of the president of the Philippines had to be
secured and such recommendation and authorization had not been
obtained.
Upon the foregoing considerations, this Court is of the opinion, and so
holds, that the road involved in this case cannot be declared private
property, and for that reason the Provincial Board of Oriental Mindoro
may elect between paying the appellee the total cost of the
construction of the road together with lawful interest from the date of
actual disbursement by the appellee to the date of payment by the
Province of Oriental Mindoro within a reasonable period not to exceed
one year from the date this judgment shall become final; or upon
securing the recommendation of the Secretary of Public Works and
Communications and authorization of the President of the Philippines
to designate such road an toll road, to raise the necessary fund to
reimburse the appellee of the total cost of construction of the road,
together with lawful interest from the date of actual disbursement by
the appellee to the date of payment by the Province of Oriental
Mindoro, and the latter is ordered to refund the amount paid for tolls
by, the appellee during the enforcement of Resolution No. 186 which,
as above stated, was unauthorized. The judgment appealed from
making final the preliminary writ of injunction and ordering the
appellants to pay the appellee the sum of P10,000 as attorney's fees,
are reversed and set aside. The rest of the judgment appealed from not
inconsistent with this opinion is affirmed, without pronouncement as
to costs.
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
Parades, Regala and Makalintal, JJ., concur.
Barrera and Dizon, JJ., took no part.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L40474 August 29, 1975
CEBU OXYGEN & ACETYLENE CO., INC., petitioner,
vs.
HON. PASCUAL A. BERCILLES Presiding Judge, Branch XV, 14th Judicial
District, and JOSE L. ESPELETA, Assistant Provincial Fiscal, Province of
Cebu, representing the Solicitor General's Office and the Bureau of
Lands, respondents.
Jose Antonio R Conde for petitioner.
10
Office of the Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant
Solicitor General Octavio R. Ramirez and Trial Attorney David R. Hilario
for respondents. .
CONCEPCION, Jr., J.:
This is a petition for the review of the order of the Court of First Instance
of Cebu dismissing petitioner's application for registration of title over
a parcel of land situated in the City of Cebu.
The parcel of land sought to be registered was only a portion of M.
Borces Street, Mabolo, Cebu City. On September 23, 1968, the City
Council of Cebu, through Resolution No. 2193, approved on October 3,
1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu
City, as an abandoned road, the same not being included in the City
Development Plan. 1 Subsequently, on December 19, 1968, the City
Council of Cebu passed Resolution No. 2755, authorizing the Acting City
Mayor to sell the land through a public bidding. 2 Pursuant thereto, the
lot was awarded to the herein petitioner being the highest bidder and
on March 3, 1969, the City of Cebu, through the Acting City Mayor,
executed a deed of absolute sale to the herein petitioner for a total
consideration of P10,800.00. 3 By virtue of the aforesaid deed of
absolute sale, the petitioner filed an application with the Court of First
instance of Cebu to have its title to the land registered. 4
On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion
to dismiss the application on the ground that the property sought to be
registered being a public road intended for public use is considered part
of the public domain and therefore outside the commerce of man.
Consequently, it cannot be subject to registration by any private
individual. 5
After hearing the parties, on October 11, 1974 the trial court issued an
order dismissing the petitioner's application for registration of title. 6
Hence, the instant petition for review.
For the resolution of this case, the petitioner poses the following
questions:
(1) Does the City Charter of Cebu City (Republic Act No. 3857)
under Section 31, paragraph 34, give the City of Cebu the valid right to
declare a road as abandoned? and
(2) Does the declaration of the road, as abandoned, make it the
patrimonial property of the City of Cebu which may be the object of a
common contract?
(1) The pertinent portions of the Revised Charter of Cebu City
provides:
Section 31. Legislative Powers. Any provision of law and
executive order to the contrary notwithstanding, the City Council shall
have the following legislative powers:
xxx xxx xxx
(34) ...; to close any city road, street or alley, boulevard, avenue,
park or square. Property thus withdrawn from public servitude may be
used or conveyed for any purpose for which other real property
belonging to the City may be lawfully used or conveyed.
From the foregoing, it is undoubtedly clear that the City of Cebu is
empowered to close a city road or street. In the case of Favis vs. City of
Baguio, 7 where the power of the city Council of Baguio City to close
city streets and to vacate or withdraw the same from public use was
similarly assailed, this court said:
5. So it is, that appellant may not challenge the city council's act
of withdrawing a strip of Lapu-Lapu Street at its dead end from public
use and converting the remainder thereof into an alley. These are acts
well within the ambit of the power to close a city street. The city council,
it would seem to us, is the authority competent to determine whether
or not a certain property is still necessary for public use.
Such power to vacate a street or alley is discretionary. And the
discretion will not ordinarily be controlled or interfered with by the
courts, absent a plain case of abuse or fraud or collusion. Faithfulness
to the public trust will be presumed. So the fact that some private
interests may be served incidentally will not invalidate the vacation
ordinance.
(2) Since that portion of the city street subject of petitioner's
application for registration of title was withdrawn from public use, it
follows that such withdrawn portion becomes patrimonial property
which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that "Property of public
dominion, when no longer intended for public use or for public service,
shall form part of the patrimonial property of the State."
Besides, the Revised Charter of the City of Cebu heretofore quoted, in
very clear and unequivocal terms, states that: "Property thus
withdrawn from public servitude may be used or conveyed for any
purpose for which other real property belonging to the City may be
lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use
and its subsequent sale to the petitioner is valid. Hence, the petitioner
has a registerable title over the lot in question.
WHEREFORE, the order dated October 11, 1974, rendered by the
respondent court in Land Reg. Case No. N-948, LRC Rec. No. N-44531 is
hereby set aside, and the respondent court is hereby ordered to
proceed with the hearing of the petitioner's application for registration
of title.
SO ORDERED.
Makalintal, C.J, Fernando, Barredo and Aquino, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-16003 March 29, 1961
CESAREO PEREZ and MAMERTA ALCANTARA, plaintiffs-appellants,
vs.
VICENTE EVITE and SUSANA MANIGBAS, defendants-appellees.
Cesareo Perez and Mamerto Alcantara for plaintiffs-appellants.
Conrado Agoncillo for defendants- appellees.
BARRERA, J.:
In an action to quiet title brought by the spouses Cesareo Perez and
Mamerta Alcantara against Vicente Evite and Susana Manigbas (Civil
Case No. 643),involving a parcel of land 11 meters wide and 37 meters
long, or with a total area of 407 square meters, the Court of First
Instance of Batangas rendered judgment dated November 9, 1955, the
dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered as follows:
(1) Dismissing the complaint of the plaintiffs; and
(2) Declaring the defendants the owners of the land in question: that is,
the area measured 8.92 meters westward from he cacawate tree
standing on the northwestern corner of the land (which cacawate tree
is 35.11 meters from the edge of the land bordering' the provincial
road) by 11 meters southward to the point on the southwestern corner
which is also 35.11 meters from the edge of the land bordering the
provincial road on the east.
Without pronouncement as to costs.
On appeal by therein plaintiffs, the Court of Appeals, on March 31,
1958, affirmed the decision in toto.
11
The decision having become final, the court of origin, upon application
by the defendants, ordered its execution. The writ of execution, actually
issued on February 25, 1959, commanded the Provincial Sheriff of
Batangas "to deliver the ownership of the portion of the land in
litigation to the defendant Vicente Evite, of Rosario, Batangas, pursuant
to the terms and conditions contained in the above-quoted decision."
Plaintiffs moved to quash the aforesaid writ of ground that, as the
decision sought to be executed merely declared the defendants owners
of the property, and did not order its delivery to said parties, the writ
putting them in possession thereof was at variance with the decision
and, consequently, null and void.
This motion was denied by order of the court of February 28, 1959.
Plaintiffs then filed an urgent ex-parte motion "for clarification and/or
to declare null and void the Sheriffs execution", complaining that
notwithstanding the filing of their motion to quash, the Clerk of Court
and the Provincial Sheriff placed defendants in possession of the
property. After hearing the motion, during which the complained
officials testified and explained their actuations, the court declared the
same with legal effect and valid, and dismissed plaintiffs' motion.
This incident was followed by defendants' praying the court to declare
plaintiffs in contempt for resisting its lawful order (to deliver possession
of the land), which precipitated the issuance of an order, dated June 30,
1959, allowing defendants "to surround their property with a fence and
any act or acts by other persons or parties in including the plaintiffs to
intervene may be considered as an act of contempt."
Plaintiffs moved to set aside the above order. The same having been
denied on July 11, 1959, plaintiffs instituted the instant appeal assailing
the legality of the orders of June 30 (ordering the fencing of the lot) and
July 11, 1959 (denying their motion to set aside said previous order).
Plaintiffs-appellants, in resisting the trial court's orders upon the theory
that the adjudication of ownership does not include possession of the
property, rely upon two (2) cases decided by this Court. The first is
Talens v. Garcia (87 Phil. 173), where, after quoting Section 45 of Rule
39, the Court said:
It may be admitted that the judgment absolving defendant Talens was
in effect a declaration that the sale to him was valid. It may also be
admitted, though with Some reluctance or reservation, that it was a
declaration of ownership of the lot. But it is doubtful whether it also
included a direction to surrender it to him. Although it is true that the
owner is generally entitled to possession, it is equally true that there
may be cases where the actual possessor has some rights which must
be respected or defined. A lessee is not the owner; yet a declaration of
ownership in another person does not necessarily mean his ouster.
In the second case (Jabon, et al. v. Alo, et al., G.R. No. L-5094, decided
August 7, 1952), the following pronouncement is found:
.... In the absence of any other declaration, can we consider a mere
declaration of ownership as necessarily in eluding the profession of the
property adjudicated? We do not believe so, for ownership is different
from possession. A person may be declared owner, but he may not be
entitled to possession. The possession may be in the hands of another
either as a lessee or a tenant. A person may have improvements
thereon of which he may not be deprived without due hearing. He may
have other valid defenses to resist surrender of possession. We,
therefore, hold that a judgment for ownership, does not necessarily
include possession as a necessary incident.
It may be observed that in both decisions, this Court underscored the
possibility that the actual possessor has some rights which must be
respected and defined. It is thus evident that the pronouncement was
made having in mind cases wherein the actual possessor has a valid
right over the property enforceable even against the owner thereof. As
example, we gave the cases of tenants and lessees. However, it is our
view that the above doctrine may not be invoked in instances where no
such right may be appreciated in favor of the possessor. In the instant
case there spears in the appealed order of June 30, 1959, the specific
finding of the trial court that "the plaintiffs have not given any reason
why they are retaining the possession ID the property". (p. 57, Record
on Appeal.) This factual finding can not be reviewed in this instance as
the appeal has been taken to us directly only a question of law. (p. 72,
Record on Appeal.)
Under Section 45 of Rule 39, Rules of Court, which reads:
SEC. 45. What is deemed to have been adjudged. — That only is deemed
to have been adjudged in a former judgment which appears upon its
face to have been so adjudged, or which was actually and necessarily
included therein or necessary there to. (Emphasis supplied)
a judgment is not confined to what appears upon the face of the
decision, but also those necessarily included therein or necessary
thereto. Thus, in a land registration case 1 wherein ownership was
adjudged, we allowed the issuance of a writ of demolition (to remove
the improvements existing on the land), for being necessarily included
in the judgment. Considering that herein plaintiffs-appellants have no
other claim to possession of the property apart from their claim of
ownership which was rejected by the lower court consequently has no
right to remain thereon after such ownership was adjudged to
defendants-appellees, the delivery of possession of the land should be
considered included in the decision. Indeed it would be defeating the
ends of justice should we require that for herein appellees to obtain
possession of the property duly adjudged to be theirs, from those who
have no right to wit to court litigations anew. Thus, in the Mencias case,
supra, we said:
Apparently, respondent Judge in refusing to issue the writ of demolition
to petitioner, was of the belief that the latter has another remedy,
namely, by resorting to ordinary civil actions in the regular courts, such
as that of forcible entry and detainer, or the recovery of possession, in
which instances, said courts would then be competent to issue said
writ. Such a situation, in our opinion, could not have been intended by
the law. To require a successful litigant in a land registration case to
institute another action for the purpose of obtaining possession of the
land adjudged to him would be a cumbersome process. It would foster
unnecessary and expensive litigations and result in multiplicity of suit,
which our judicial system abhors.
xxx xxx xxx
.... Pursuant to the provision just quoted (Sec. 6, Rule 124), respondent
Judge has the power to issue all auxiliary writs, including the writ of
demolition sought by petitioner, processes and other means necessary
to carry into effect the jurisdiction conferred upon it by law in land
registration cases to issue a writ of possession to the successful litigant,
the petitioner herein. (Emphasis supplied.)
IN VIEW OF THE FOREGOING CONSIDERATIONS, the orders appealed
from are hereby affirmed, with costs against appellants. So ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes,
J.B.L., Paredes and Dizon, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-39350 October 29, 1975
CENONA OLEGO, petitioner,
vs.
HON. ALFREDO REBUENO, Judge of the Court of First Instance of
Camarines Sur, Branch IV and ATTY. PEDRO SERVANO, respondents.
AQUINO, J.:
On October 13, 1962 Pedro D. Servano, a lawyer from Naga City, filed a
complaint against Cenona Olego in the Court of First Instance of
Camarines Sur, Tigaon Branch IV. In that complaint he asked for a
declaration as to the legality of his title to a residential lot with an area
of 1,225 square meters located at Sta. Cruz street, Lagonoy, Camarines
12
Sur, supposedly covered by a tax declaration in his name (its number
was not specified).
He alleged that he acquired the lot by purchase in November, 1960; that
he and his predecessors had possessed it en concepto de dueño since
time immemorial and that after he had acquired the lot, his possession
was disturbed by Cenona Olego, who claimed to be the owner of the
lot. "thereby casting a cloud of doubt" on his title and rendering it
necessary that his title and possession" "be declared legal". He also
averred that Cenona Olego's claim of ownership caused him damages
in the sum of P300 as attorney's fees and P120 annually as rentals which
he was not able to collect because of her "unjustified claim of
ownership."
He prayed that his "title" be declared "legal," that he be adjudged as
the absolute owner of the land, entitled to its "peaceful possession,"
and that Cenona Olego be ordered to pay him the abovementioned
damages (Civil Case No. T-17).
Cenona Olego in her answer denied that Servano owned and possessed
any land located at Sta. Cruz Street, Lagonoy. She pleaded the defense
that she was the "absolute owner and lawful possessor" of the land
located at Sta. Cruz Street, Lagonoy with an area of 1,390 square
meters, covered by Tax Declaration No. 255 in the name of Santiago
Olego. (It is now covered by Tax Declaration No. 9882 in her name and
the area indicated therein is 1,090 square meters.)
She averred that if Servano's complaint referred to that land, then he
had "absolutely no right whatsoever over the land"; that he had never
possessed it nor manifested his claim of ownership; that she inherited
the land from her late father, Santiago Olego (in 1920); that she and her
predecessors had been in actual possession of the land en concepto de
dueño since time immemorial, and that Servano's claim was
"unfounded and without any legal basis". She filed a counterclaim for
P3,000 as actual and moral damages and P300 as attorney's fees.
The case was set for hearing on February 19, April 15, May 28, August
13, September 24 and November 19, 1963. The first two hearings were
postponed at Atty. Servano's instance. One postponement was made
at the instance of Cenona Olego's lawyer who was not ready for trial.
Two hearings were cancelled by agreement of the parties.
The case was set for hearing for the seventh time on January 8, 1964.
On that date the parties submitted the following compromise:
AMICABLE AGREEMENT
The parties, the plaintiff in his own behalf and the defendant
represented by her counsel Atty. Eriberto J. Fante hereby agreed to
compromise this case as follows:
That the defendant admits the allegation of the plaintiff's complaint as
to his claim of ownership of the land described therein in said complaint
and that judgment be rendered declaring the plaintiff the owner
thereof;
That the plaintiff waived his claim-for attorney's fees and all other
damages against the defendant.
WHEREFORE, it is respectfully prayed that decision be rendered in
accordance with the foregoing stipulation and without pronouncement
as to costs.
Tigaon, Camarines Sur, January 8, 1964.
(Sgd.) Right Thumbmark (Sgd.) Illegible
CENONA OLEGO PEDRO D. SERVANO
Defendant Plaintiff
Assisted by:
(Sgd.) Illigible
ERIBERTO FANTE
Counsel for the Defendant
The lower court approved the compromise in its decision of the same
date, January 8, 1964. There is a notation in the original of the decision
that copies thereof were sent by registered mail on January 11, 1964 to
plaintiff Servano and Atty. Eriberto Fante, defendant's counsel. There
are also notations in that original that Servano received copies of the
compromise agreement and the decision on January 10, 1964 while
Atty. Fante received his copies on January 16, 1964.
The record shows that there was no further proceeding in the case
more than ten years after the alleged compromise settlement was
concluded.
What transpired after that decade of inactivity was that on February 19,
1947 Servano filed in the lower court a "petition for contempt" against
Cenona Olego and her children, Segundo Rivero and Rosita Rivero,
wherein he alleged that he (Servano) was the prevailing party and
Cenona Olego the defeated party in the decision of January 8, 1964
which allegedly was "immediately executory"; that Cenona Olego and
her children prevented Servano from having "the peaceful use and
enjoyment" of said land; that they branded the decision as "fake" and
"not worthy of respect", and that they occupied a portion of the land
and disturbed Servano's "property rights."
Servano prayed that Cenona Olego and her children be punished for
contempt of court and ordered to pay damages to him. His petition,
which was already verified, was accompanied by his affidavit (not
incorporated in the petition)wherein he alleged that Cenona Olego and
her two children prevented him and his agents from enjoying "the
peaceful use and possession" of the said land (not merely a part
thereof). The affidavit echoed the other allegations of the petition. The
record does not show that respondents Cenona Olego and her two
children were served copies of the petition which was dated February
19, 1974 and set for hearing two days later, or on February 21.
On February 21, the scheduled date for hearing the petition for
contempt, Judge Alfredo S. Rebueno issued the following order:
When this case was called for trial this morning, the respondents did
not appear but in the afternoon they voluntarily appeared before this
Court and explained that they did not leave the property because they
believe that the property is still theirs. The Court explained to them that
by virtue of the decision of Judge Sison dated January 8, 1964 which is
based upon the amicable settlement entered into between the plaintiff
and the defendant Cenona Olego which decision is already long final
and executory they have no more right to remain in the property and
the Court is dispose(d) to give them three (3) months within which to
leave the premises with the warning that if after three (3) months they
have not complied with the order of this Court to leave the premises,
the complaint for contempt will proceed to be tried.
In the meantime, the hearing of the petition for contempt is held in
abeyance.
Copies of the order were served on Cenona Olego and her two children.
During the hearing they were not assisted by their counsel, Atty. Fante.
In fact, no copy of the petition was served on him. How Cenona Olego
and her children learned of the petition, when the record does not
show that they were served copies thereof, is not indicated in the
record. They were not given any chance to hire counsel and to answer
the petition.
On March 23, 1974 plaintiff Servano filed an ex parte motion for the
amendment of the aforementioned order. He asked that Cenona Olego
and her children, who, despite Judge Rebueno's explanation, still
persisted in not recognizing the lower court's decision and who had
threatened to injure the persons who would dispossess them of the
land, be given only fifteen days to remove their "small nipa huts." Acting
on that ex parte motion, Judge Rebueno ordered Cenona Olego and her
children to appear in court "on April 4, 1974 at 8:30 a.m. in a manner
intransferable" (sic). Subpoenas were issued to them for their
"intransferable" appearance on April 4.
On that date Cenona Olego through a new counsel, Atty. Abel G. Flores,
filed a motion to dismiss the contempt charge. The motion was based
on the grounds (a) that the amicable settlement was obtained through
fraud and misrepresentation, (b) that the execution of the judgment
was barred by the statute of limitations, and (c) that the court had lost
jurisdiction over the case.
13
It was pointed out in the motion that the judgment does not require
Cenona Olego to vacate the land or deliver its possession to Servano;
that, being illiterate, she was unaware that she had signed an amicable
settlement; that she was never furnished with copies of both the
amicable settlement and the "decision" of January 8, 1964; that she was
made to understand that what she was signing was a motion for
postponement, and that, being ignorant of the decision, she never
vacated the land and she thought that the case was still to be tried.
Atty. Flores further alleged in his motion to dismiss that Servano did
nothing to implement the decision within the ten-year period for
enforcing it; that he never occupied any portion of the land, and that
Cenona Olego came to know of the decision when she was being
charged with contempt of court. Atty. Flores contended that the lower
court had no more jurisdiction over the case in view of the expiration
of the ten-year period for enforcing its judgment.
Atty. Servano interposed an "objection" to the motion to dismiss his
"petition for contempt." He contended that the decision in his favor was
based on an agreed statement of facts as contemplated in section 2,
Rule 30 of the Rules of Court (formerly section 2, Rule 33); that
inasmuch as his ownership of the disputed land is recognized in the
compromise and decision, there was no need for a writ of execution "to
place" him "in the material possession of the land"; that he was
provoked to file the "petition for contempt" because Cenona Olego and
her children had told certain persons that the decision was "not worthy
of respect for being false"; that his "petition for contempt had never
prescribed"; that the allegation as to fraud and misrepresentation in the
rendition of the decision was "childish"; that it was hard to believe that
Cenona Olego had not known of the decision during the past ten years,
and that she was bound by that decision.
Judge Rebueno in his order of June 3, 1974 denied the motion and set
the contempt charge for hearing "in a manner intransferable" on June
15, 1974.
He reasoned out that inasmuch as Cenona Olego had not disputed the
validity of the decision on the ground of fraud or mistake during the
period of more than ten years "her right of action to impugn its validity"
had already prescribed; that the judgment which was res judicata, was
"self-executing", and that the "violation thereof may be enforced by
contempt proceedings notwithstanding that no writ of execution was
issued."
The counsel of Cenona Olego in his motion for reconsideration alleged
that no safeguards were taken when she, an illiterate party,
thumbmarked the alleged compromise and that it was possible for Atty.
Servano and Atty. Fante "to conspire with each other to commit fraud
for their mutual benefit." Judge Rebueno denied the motion.
On August 17, 1974 Cenona Olego filed the instant special civil action
of certiorari against Atty. Servano and Judge Rebueno, praying that the
orders setting the contempt charge for hearing be set aside and that
the case should be dismissed because the lower court had no more
jurisdiction over it.
Claiming to be a sickly widow over seventy years old, without means of
support and dependent on her relatives for her subsistence, she was
allowed to litigate in forma pauperis.
Atty. Fante was asked to comment on the allegations of the petition
that he and Atty. Servano on January 8, 1964 conspired to deceive
Cenona Olego and were able to make her affix her thumbmark to a
compromise on the misrepresentation that it was a motion for
postponement. Atty. Fante alleged that there was a pre-trial in the
morning of January 8, 1974; that Atty. Servano exhibited the deed of
sale for the land in question executed in his favor by Sabas Aran and the
prewar tax declarations and tax receipts in the name of Sabas Aran;
that, on the other hand, Cenona Olego was able to present a tax
declaration in her father's name; that she had allegedly not paid the
realty taxes for the said land; that the amicable settlement was arrived
at upon the suggestion of the Presiding Judge on condition that Atty.
Servano should damages, and that Cenona Olego was given a copy of
the compromise agreement. Atty. Fante denied that he conspired with
Atty. Servano to deceive Cenona Olego.
On the other hand, Atty. Servano in his comment alleged that the
decision of January 8, 1964 was "self-executory"; that Cenona Olego
delivered the possession of the lot to him, and that she and her children
later re-entered the lot.
Atty. Flores, in his reply to the comments of Attys. Fante and Servano,
alleged that the land in question was sold in 1960 to Atty. Servano by
Sabas Aran (Arrans), the uncle and guardian of Cenona Olego; that in
1956 Cenona Olego filed with the Register of Deeds of Camarines Sur a
document known as "Declaration of Ownership", wherein she affirmed
that she inherited the said lot in 1930 (or 1920) from her father,
Santiago Olego, to whom Tax Declaration No. 255 was issued; that Tax
Declaration No. 8606, which cancelled Tax Declaration No. 235, was
issued to Cenona Olego for the said lot, and that she possessed tax
receipts covering her payment of realty taxes. Atty. Flores
particularized on the circumstances constituting the fraud perpetrated
on Cenona Olego. 1
The issues are (a) whether Cenona Olego could be held in contempt of
court for not vacating the land involved in the compromise and (b)
whether the lower court's decision should be set aside on the ground
of fraud or could be enforced after the expiration of more than ten
years from the date of its finality.
We hold that Cenona Olego's failure to vacate the lot could not be the
basis of a contempt proceeding against her. The orders citing her for
contempt are oppressive, unjust and unwarranted.
In the compromise agreement and in the decision approving it, she was
not ordered to vacate the lot. It was stipulated in the compromise that
she admitted Atty. Servano's ownership of the lot and "that judgment
be rendered declaring" him to be the owner thereof. The decision
approving the compromise followed the usual pattern of judgments in
such cases: ordering the parties to comply with the terms and
stipulations of the compromise.
The rule is that an order or judgment which declares the rights of the
parties without any express command or prohibition is not one which
may be the basis of a contempt proceeding (Hammock vs. Hammock,
209 Ga. 751 S.E. 2d 15). A violation of the rights of ownership does not
constitute contempt of court, even though they have been ascertained
and declared by judgment, unless it consists in doing something that
was prohibited, or in falling to do something that was required, by the
terms of the judgment (Hotaling vs. Superior Court, 191 501, 217 Pac.
73, 29 ALR 127).
Where there is no decree or order commanding accused or anyone else
to do or refrain from doing or anything, disobedience of it is impossible
(17 C.J.S. 30). Hence, Cenona Olego could not be held guilty of contempt
of court.
With respect to the validity or enforceability of the lower court's
judgment approving the compromise, Cenona Olego raised the issue of
fraud. A compromise may be annulled on the ground of fraud and
mistake (Art. 2038, Civil Code. See Arts. 24, 1330, 1332, 1338 and 1390,
Civil Code). A judicial compromise may be set aside if fraud vitiated the
consent of a party thereof(Serrano vs. Miave, L-14678, March 31, 1965,
13 SCRA 461, 466).
The extrinsic fraud, which nullifies a compromise, likewise invalidates
the decision approving it. (As to the meaning of extrinsic fraud, see
Soriano vs. Asi, 100 Phil. 785, 788; Brady vs. Beams, 132 F. 2d 985; 49
C.J.S. 743; Crouch vs. McGaw, 138 S.W. 2d 94; Heirs of Celestino vs.
Court of Appeals, L-38690, September 12, 1975; 2 Moran's Comment
on the Rules of Court, 1970 Ed., pp. 246-247).
As to the enforceability of the lower court's decision, it should be noted
that assuming arguendo that decision is valid, it becomes necessary to
find out whether the decision includes the delivery of the possession of
the land to Atty. Servano. The decision was based on Cenona Olego's
supposed admission that Atty. Servano is the owner of the land in
question. 2
Does Cenona Olego's acknowledgment of Servano's ownership include
the obligation to deliver the possession of the land to him? The general
rule is that the adjudication of ownership does not include the
14
possession of the property (Talens vs. Garcia, 87 Phil. 173; Jabon vs. Alo,
91 Phil. 750).
The exception is that the adjudication of ownership would include the
delivery of possession if the defeated party has not shown any right to
possess the land independently of his claim of ownership which was
rejected (Perez and Alcantara vs. Evite and Manigbas, 111 Phil. 564).
But then in such a case a writ of execution would be required if the
defeated party does not surrender the possession of the property. The
owner should enforce his right to possess the land (as an incident of his
ownership) by asking for a writ of execution within five years from the
finality of the decision. Thereafter, he could enforce his right by action
within the next five years (Sec. 6, Rule 39 of the Rules of Court; Art.
1144, Civil Code).
Atty. Servano did not enforce his right to possess the land within the
ten-year period. To enforce the judgment in his favor by means of a
contempt proceeding after the expiration of the ten-year period would
be a circumvention of the statute of limitations. What the law prohibits
directly should not be allowed to be done indirectly.
Mr. Justice Antonio believes that the judgment against Cenona Olego,
which had become unenforceable by reason of prescription, is a
dormant judgment. The dormancy of a judgment destroys its legal force
and effect (Stanley C. Hanks Co. vs. Scherer, 27 ALR 2d 832). It is inert
and incapable of any effective manifestations of legal life (First National
Bank of Norton vs. E.E. Harper, 166 ALR 761). Indeed, proceedings for
the enforcement of a dormant judgment have been declared a nullity
(Berg vs. Torgerson, 100 N.W. 2d, 153, 77 29 ALR 2d 1060). Mr. Justice
Barredo concurs in that view.
Considering that the judgment against Cenona Olego is no longer
enforceable and talking into account her imputation that the
compromise, on which the said judgment was based, was vitiated by
fraud and mistake, the said judgment cannot possibly affect her
possession of the disputed land. Nor can it destroy the legal
presumption in her favor that as possessor of the land in the concept of
owner she has a just title thereto (Art 541, Civil Code).
WHEREFORE, the lower court's order of February 21 and June 3, 1974,
citing Cenona Olego for contempt of court, are set aside. The lower
court's judgment of January 8, 1964 can no longer be enforced against
Cenona Olego because it had already prescribed. Costs against
respondent Servano.
SO ORDERED.
Antonio, Concepcion, Jr. and Martin, JJ., concur.
Fernando, J, is on leave.
SECOND DIVISION
[G.R. No. 138842. October 18, 2000]
NATIVIDAD P. NAZARENO, MAXIMINO P. NAZARENO, JR., petitioners,
vs. COURT OF APPEALS, ESTATE OF MAXIMINO A. NAZARENO, SR.,
ROMEO P. NAZARENO and ELIZA NAZARENO, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision[1] of the Court
of Appeals in CA-GR CV No. 39441 dated May 29, 1998 affirming with
modifications the decision of the Regional Trial Court, Branch 107,
Quezon City, in an action for annulment of sale and damages.
The facts are as follows:
Maximino Nazareno, Sr. and Aurea Poblete were husband and wife.
Aurea died on April 15, 1970, while Maximino, Sr. died on December
18, 1980. They had five children, namely, Natividad, Romeo, Jose,
Pacifico, and Maximino, Jr. Natividad and Maximino, Jr. are the
petitioners in this case, while the estate of Maximino, Sr., Romeo, and
his wife Eliza Nazareno are the respondents.
During their marriage, Maximino Nazareno, Sr. and Aurea Poblete
acquired properties in Quezon City and in the Province of Cavite. It is
the ownership of some of these properties that is in question in this
case.
It appears that after the death of Maximino, Sr., Romeo filed an
intestate case in the Court of First Instance of Cavite, Branch XV, where
the case was docketed as Sp. Proc. No. NC-28. Upon the reorganization
of the courts in 1983, the case was transferred to the Regional Trial
Court of Naic, Cavite. Romeo was appointed administrator of his fathers
estate.
In the course of the intestate proceedings, Romeo discovered that his
parents had executed several deeds of sale conveying a number of real
properties in favor of his sister, Natividad. One of the deeds involved six
lots in Quezon City which were allegedly sold by Maximino, Sr., with the
consent of Aurea, to Natividad on January 29, 1970 for the total amount
of P47,800.00. The Deed of Absolute Sale reads as follows:
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
I, MAXIMINO A. NAZARENO, Filipino, married to Aurea Poblete-
Nazareno, of legal age and a resident of the Mun. of Naic, Prov. of
Cavite, Philippines,
-WITNESSETH-
That I am the absolute registered owner of six (6) parcels of land with
the improvements thereon situated in Quezon City, Philippines, which
parcels of land are herewith described and bounded as follows, to wit:
TRANS. CERT. OF TITLE NO. 140946
A parcel of land (Lot 3-B of the subdivision plan Psd-47404, being a
portion of Lot 3, Block D-3 described on plan Bsd-10642, G.L.R.O.
Record No.) situated in the Quirino District, Quezon City. Bounded on
the N., along line 1-2 by Lot 15, Block D-3 of plan Bsd - 10642; along line
2-3 by Lot 4, Block D-3 of plan Bsd-10642; along line 3-4 by Aurora
Boulevard (Road Lot-1, Bsd-10642); and along line 4-1 by Lot 3-D of the
subdivision plan. Beginning at a point marked 1 on plan, being S.29 deg.
26E., 1156.22 m. from B.L.L.M. 9, Quezon City,
thence N. 79 deg. 53E., 12.50 m. to point 2;
thence S. 10 deg. 07E., 40.00 m. to point 3;
thence S. 79 deg. 53W., 12.50 m. to point 4;
thence N. 10 deg. 07W., 40.00 m. to the point
of beginning; containing an area of FIVE HUNDRED (500) SQUARE
METERS. All points referred to are indicated on the plan and are marked
on the ground as follows: points 1 and 4 by P.L.S. Cyl. Conc. Mons.
bearings true; date of the original survey, April 8-July 15, 1920 and that
of the subdivision survey, March 25, 1956.
TRANS. CERT. OF TITLE NO. 132019
A parcel of land (Lot 3, Block 93 of the subdivision plan Psd-57970 being
a portion of Lot 6, Pcs-4786, G.L.R.O. Rec. No. 917) situated in Quirino
District Quezon City. Bounded on the NW., along line 1-2, by Lot 1, Block
93; on the NE., along line 2-3, by Road Lot 101; on the SE., along line 3-
4, by Road Lot 100; on the SW., along line 4-1, by Lot 4, Block 93; all of
the subdivision plan. Beginning at point marked 1 on plan, being S. 65
deg. 40 3339.92 m. from B.L.L.M. No. 1, Marikina, Rizal;
thence N. 23 deg. 28 min. E., 11.70 m. to point 2;
thence S. 66 deg. 32 min. E., 18.00 m. to point 3;
thence S. 23 deg. 28 min. W., 11.70 m. to point 4;
thence N. 66 deg. 32. min. W., 18.00 m. to the point
of beginning; containing an area of TWO HUNDRED TEN SQUARE
METERS AND SIXTY SQUARE DECIMETERS (210.60). All points referred
to are indicated on the plan and are marked on the ground by B.L. Cyl.
15
Conc. Mons. 15 x 60 cm.; bearings true; date of the original survey, Nov.
10, 1920 and Jan. 31-March 31, 1924 and that of the subdivision survey,
February 1 to September 30, 1954. Date approved - March 9, 1962.
TRANS. CERT. OF TITLE NO. 118885
A parcel of land (Lot No. 10, of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No.
917), situated in the District of Cubao, Quezon City, Island of Luzon.
Bounded on the NE., by Lot No. 4 of the consolidation and subdivision
plan; on the SE., by Lot No. 11 of the consolidation and subdivision plan;
on the SW., by Lot No. 3 of the consolidation and subdivision plan; and
on the NW., by Lot No. 9 of the consolidation and subdivision plan.
Beginning at a point marked 1 on the plan, being S. 7 deg. 26W.,
4269.90 m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 25 deg. 00E., 12.00 m. to point 2;
thence S. 64 deg. 59W., 29.99 m. to point 3;
thence N. 25 deg. 00W., 12.00 m to point 4;
thence N. 64 deg. 59E., 29.99 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360), more or less. All points referred to are indicated on the
plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60 cm.;
bearings true; declination 0 deg. 50E., date of the original survey, April
8 to July 15, 1920, and that of the consolidation and subdivision survey,
April 24 to 26, 1941.
TRANS. CERT. OF TITLE NO. 118886
A parcel of land (Lot No. 11, of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No.
917), situated in the District of Cubao, Quezon City, Island of Luzon.
Bounded on the NE., by Lot No. 4 of the consolidation and subdivision
plan; on the SE., by Lot No. 12 of the consolidation and subdivision plan;
on the SW., by Lot No. 3 of the consolidation and subdivision plan; on
the NW., by Lot No. 10 of the consolidation and subdivision plan.
Beginning at a point marked 1 on plan, being S. 79 deg. 07W., 4264.00
m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 64 deg. 59W., 29.99 m. to point 2;
thence N. 25 deg. 00W., 12.00 m. to point 3;
thence N. 64 deg. 59E., 29.99 m. to point 4;
thence S. 26 deg. 00E., 12.00 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360), more or less. All points referred to are indicated on the
plan and on the ground, are marked by P.L.S. Conc. Mons. 15 x 60 cm.;
bearings true; declination 0 deg. 50E.; date of the original survey, April
8 to July 15, 1920, and that of the consolidation and subdivision survey,
April 24 to 26, 1941.
A parcel of land (Lot No. 13 of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No.
917), situated in the District of Cubao, Quezon City, Island of Luzon.
Bounded on the NE., by Lot No. 4 of the consolidation and subdivision
plan; on the SE., by Lot No. 14, of the consolidation; and subdivision
plan; on the SW., by Lot No. 3 of the consolidation and subdivision plan;
and on the NW., by Lot No. 12, of the consolidation and subdivision
plan. Beginning at the point marked 1 on plan, being S.78 deg. 48W.,
4258.20 m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 64 deg. 58W., 30.00 m. to point 2;
thence N. 25 deg. 00W., 12.00 m. to point 3;
thence N. 64 deg. 59E., 29.99 m. to point 4;
thence S.25 deg. 00E., 12.00 m. to point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360, more or less. All points referred to are indicated on the
plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60 cm.;
bearings true; declination 0 deg. 50E., date of the original survey, April
8 to July 15, 1920, and that of the consolidation and subdivision survey,
April 24 to 26, 1941.
A parcel of land (Lot No. 14, of the consolidation and subdivision plan
Pcs-988, being a portion of the consolidated Lot No. 26, Block No. 6,
Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O. Record No.
917), situated in the District of Cubao, Quezon City, Island of Luzon.
Bounded on the NE., by Lot No. 4 of the consolidation and subdivision
plan; on the SE., by Lot No. 15, of the consolidation and subdivision
plan; on the SW., by Lot No. 3 of the consolidation and subdivision plan;
and on the NW., by Lot No. 13 of the consolidation and subdivision plan.
Beginning at the point marked 1 on plan, being S.78 deg. 48W., 4258.20
m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 25 deg. 00E., 12.00 m. to point 2;
thence S. 65 deg. 00W., 30.00 m. to point 3;
thence S. 65 deg. 00W., 12.00 m. to point 4;
thence N.64 deg. 58E., 30.00 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360), more or less. All points referred to are indicated on the
plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60 cm.;
bearings true; declination 0 deg. 50E., date of the original survey, April
8 to July 15, 1920, and that of the consolidation and subdivision survey,
April 24 to 26, 1941.
That for and in consideration of the sum of FORTY THREE THOUSAND
PESOS (P43,000.00) PHILIPPINE CURRENCY, to me in hand paid by
NATIVIDAD P. NAZARENO, Filipino, single, of legal age and a resident of
the Mun. of Naic, Prov. of Cavite, Philippines, the receipt whereof is
acknowledged to my entire satisfaction, I do hereby CEDE, SELL,
TRANSFER, CONVEY and ASSIGN unto the said Natividad P. Nazareno,
her heirs, administrators and assigns, all my title, rights, interests and
participations to the abovedescribed parcels of land with the
improvements thereon, with the exception of LOT NO. 11 COVERED BY
T.C.T. NO. 118886, free of any and all liens and encumbrances; and
That for and in consideration of the sum of FOUR THOUSAND EIGHT
HUNDRED PESOS (P4,800.00) PHILIPPINE CURRENCY, to me in hand
paid by NATIVIDAD P. NAZARENO, Filipino, single, of legal age and a
resident of the Mun. of Naic, Prov. of Cavite, Philippines, the receipt
whereof is acknowledged to my entire satisfaction, I do hereby CEDE,
SELL, TRANSFER, CONVEY and ASSIGN unto the said Natividad P.
Nazareno, her heirs, administrators and assigns, all my title, rights,
interests and participations in and to Lot No. 11 covered by T.C.T. No.
118886 above-described, free of any and all liens and encumbrances,
with the understanding that the title to be issued in relation hereto shall
be separate and distinct from the title to be issued in connection with
Lots Nos. 13 and 14, although covered by the same title.
IN WITNESS WHEREOF, I have hereunto signed this deed of absolute
sale in the City of Manila, Philippines, this 29th day of January, 1970.[2]
By virtue of this deed, transfer certificates of title were issued to
Natividad, to wit: TCT No. 162738 (Lot 3-B),[3] TCT No. 162739 (Lot
3),[4] TCT No. 162735 (Lot 10),[5] TCT No. 162736 (Lot 11),[6] and TCT
No. 162737 (Lots 13 and 14),[7] all of the Register of Deeds of Quezon
City.
Among the lots covered by the above Deed of Sale is Lot 3-B which is
registered under TCT No. 140946. This lot had been occupied by Romeo,
his wife Eliza, and by Maximino, Jr. since 1969. Unknown to Romeo,
Natividad sold Lot 3-B on July 31, 1982 to Maximino, Jr.,[8] for which
reason the latter was issued TCT No. 293701 by the Register of Deeds
of Quezon City.[9]
When Romeo found out about the sale to Maximino, Jr., he and his wife
Eliza locked Maximino, Jr. out of the house. On August 4, 1983,
16
Maximino, Jr. brought an action for recovery of possession and
damages with prayer for writs of preliminary injunction and mandatory
injunction with the Regional Trial Court of Quezon City. On December
12, 1986, the trial court ruled in favor of Maximino, Jr. In CA-G.R. CV No.
12932, the Court of Appeals affirmed the decision of the trial court.[10]
On June 15, 1988, Romeo in turn filed, on behalf of the estate of
Maximino, Sr., the present case for annulment of sale with damages
against Natividad and Maximino, Jr. The case was filed in the Regional
Trial Court of Quezon City, where it was docketed as Civil Case No. 88-
58.[11] Romeo sought the declaration of nullity of the sale made on
January 29, 1970 to Natividad and that made on July 31, 1982 to
Maximino, Jr. on the ground that both sales were void for lack of
consideration.
On March 1, 1990, Natividad and Maximino, Jr. filed a third-party
complaint against the spouses Romeo and Eliza.[12] They alleged that
Lot 3, which was included in the Deed of Absolute Sale of January 29,
1970 to Natividad, had been surreptitiously appropriated by Romeo by
securing for himself a new title (TCT No. 277968) in his name.[13] They
alleged that Lot 3 is being leased by the spouses Romeo and Eliza to
third persons. They therefore sought the annulment of the transfer to
Romeo and the cancellation of his title, the eviction of Romeo and his
wife Eliza and all persons claiming rights from Lot 3, and the payment
of damages.
The issues having been joined, the case was set for trial. Romeo
presented evidence to show that Maximino and Aurea Nazareno never
intended to sell the six lots to Natividad and that Natividad was only to
hold the said lots in trust for her siblings. He presented the Deed of
Partition and Distribution dated June 28, 1962 executed by Maximino
Sr. and Aurea and duly signed by all of their children, except Jose, who
was then abroad and was represented by their mother, Aurea. By virtue
of this deed, the nine lots subject of this Deed of Partition were assigned
by raffle as follows:
1. Romeo - Lot 25-L (642 m2)
2. Natividad - Lots 23 (312 m2) and 24 (379 m2)
3. Maximino, Jr. - Lots 6 (338 m2) and 7 (338 m2)
4. Pacifico - Lots 13 (360 m2) and 14 (360 m2)
5. Jose - Lots 10 (360 m2) and 11 (360 m2)
Romeo received the title to Lot 25-L under his name,[14] while
Maximino, Jr. received Lots 6 and 7 through a Deed of Sale dated August
16, 1966 for the amount of P9,500.00.[15] Pacifico and Joses shares
were allegedly given to Natividad, who agreed to give Lots 10 and 11 to
Jose, in the event the latter came back from abroad. Natividads share,
on the other hand, was sold to third persons[16] because she allegedly
did not like the location of the two lots. But, Romeo said, the money
realized from the sale was given to Natividad.
Romeo also testified that Lot 3-B was bought for him by his father, while
Lot 3 was sold to him for P7,000.00 by his parents on July 4, 1969.[17]
However, he admitted that a document was executed by his parents
transferring six properties in Quezon City, i.e., Lots 3, 3-B, 10, 11, 13,
and 14, to Natividad.
Romeo further testified that, although the deeds of sale executed by his
parents in their favor stated that the sale was for a consideration, they
never really paid any amount for the supposed sale. The transfer was
made in this manner in order to avoid the payment of inheritance
taxes.[18] Romeo denied stealing Lot 3 from his sister but instead
claimed that the title to said lot was given to him by Natividad in 1981
after their father died.
Natividad and Maximino, Jr. claimed that the Deed of Partition and
Distribution executed in 1962 was not really carried out. Instead, in
December of 1969, their parents offered to sell to them the six lots in
Quezon City, i.e., Lots 3, 3-B, 10, 11, 13 and 14. However, it was only
Natividad who bought the six properties because she was the only one
financially able to do so. Natividad said she sold Lots 13 and 14 to Ros-
Alva Marketing Corp.[19] and Lot 3-B to Maximino, Jr. for
P175,000.00.[20] Natividad admitted that Romeo and the latters wife
were occupying Lot 3-B at that time and that she did not tell the latter
about the sale she had made to Maximino, Jr.
Natividad said that she had the title to Lot 3 but it somehow got lost.
She could not get an original copy of the said title because the records
of the Registrar of Deeds had been destroyed by fire. She claimed she
was surprised to learn that Romeo was able to obtain a title to Lot 3 in
his name.
Natividad insisted that she paid the amount stated in the Deed of
Absolute Sale dated January 29, 1970. She alleged that their parents
had sold these properties to their children instead of merely giving the
same to them in order to impose on them the value of hardwork.
Natividad accused Romeo of filing this case to harass her after Romeo
lost in the action for recovery of possession (Civil Case No. Q-39018)
which had been brought against him by Maximino, Jr. It appears that
before the case filed by Romeo could be decided, the Court of Appeals
rendered a decision in CA-GR CV No. 12932 affirming the trial courts
decision in favor of Maximino, Jr.
On August 10, 1992, the trial court rendered a decision, the dispositive
portion of which states:
WHEREFORE, judgment is hereby rendered declaring the nullity of the
Deed of Sale dated January 29, 1970. Except as to Lots 3, 3-B, 13 and 14
which had passed on to third persons, the defendant Natividad shall
hold the rest in trust for Jose Nazareno to whom the same had been
adjudicated. The Register of Deeds of Quezon City is directed to
annotate this judgment on Transfer Certificate of Titles Nos. 162735
and 162736 as a lien in the titles of Natividad P. Nazareno.
The defendants counterclaim is dismissed. Likewise, the third-party
complaint is dismissed.
The defendants are hereby directed to pay to the plaintiff jointly and
severally the sum of P30,000 as and for attorneys fees. Likewise, the
third-party plaintiff is directed to pay the third-party defendants
attorneys fees of P20,000.
All other claims by one party against the other are dismissed.
SO ORDERED.[21]
Natividad and Maximino, Jr. filed a motion for reconsideration. As a
result, on October 14, 1992 the trial court modified its decision as
follows:
WHEREFORE, the plaintiffs Partial Motion for Reconsideration is hereby
granted. The judgment dated August 10, 1992 is hereby amended, such
that the first paragraph of its dispositive portion is correspondingly
modified to read as follows:
WHEREFORE, judgment is hereby rendered declaring the nullity of the
Deeds of Sale dated January 29, 1970 and July 31, 1982.
Except as to Lots 3, 13 and 14 which had passed on to third person, the
defendant Natividad shall hold the rest OF THE PROPERTIES COVERED
BY THE DEED OF SALE DATED JANUARY 29, 1970 (LOTS 10 and 11) in
trust for Jose Nazareno to whom the same had been adjudicated.
The Register of Deeds of Quezon City is directed to annotate this
judgment on Transfer Certificates of Title No. 162735 and 162736 as a
lien on the titles of Natividad P. Nazareno.
LIKEWISE, THE SAID REGISTER OF DEEDS IS DIRECTED TO CANCEL TCT
NO. 293701 (formerly 162705) OVER LOT 3-B AND RESTORE TCT NO.
140946 IN THE NAME OF MAXIMINO NAZARENO SR. AND AUREA
POBLETE.[22]
On appeal to the Court of Appeals, the decision of the trial court was
modified in the sense that titles to Lot 3 (in the name of Romeo
Nazareno) and Lot 3-B (in the name of Maximino Nazareno, Jr.), as well
as to Lots 10 and 11 were cancelled and ordered restored to the estate
of Maximino Nazareno, Sr. The dispositive portion of the decision dated
May 29, 1998 reads:
WHEREFORE, the appeal is GRANTED. The decision and the order in
question are modified as follows:
17
1. The Deed of Absolute Sale dated 29 January 1970 and the Deed of
Absolute Sale dated 31 July 1982 are hereby declared null and void;
2. Except as to Lots 13 and 14 ownership of which has passed on to third
persons, it is hereby declared that Lots 3, 3-B, 10 and 11 shall form part
of the estate of the deceased Maximino Nazareno, Sr.;
3. The Register of Deeds of Quezon City is hereby ordered to restore
TCT No. 140946 (covering Lot 3-B), TCT No. 132019 (covering Lot 3), TCT
No. 118885 (covering Lot 10), and TCT No. 118886 (covering Lot 11).[23]
Petitioners filed a motion for reconsideration but it was denied in a
resolution dated May 27, 1999. Hence this petition.
Petitioners raise the following issues:
1. WHETHER OR NOT THE UNCORROBORATED TESTIMONY OF PRIVATE
RESPONDENT ROMEO P. NAZARENO CAN DESTROY THE FULL FAITH
AND CREDIT ACCORDED TO NOTARIZED DOCUMENTS LIKE THE DEED
OF ABSOLUTE SALE DATED JANUARY 29, 1970 (EXH. 1) EXECUTED BY
THE DECEASED SPOUSES MAXIMINO A. NAZARENO, SR. AND AUREA
POBLETE IN FAVOR OF PETITIONER NATIVIDAD P. NAZARENO.
2. WHETHER OR NOT THE RESPONDENT COURT GROSSLY
MISAPPRECIATED THE FACTS OF THE CASE WITH RESPECT TO THE
VALIDITY OF THE SAID DEED OF ABSOLUTE SALE DATED JANUARY 29,
1970 (EXH. 1) IN THE LIGHT OF THE FOLLOWING:
A) THE DOCUMENTARY EVIDENCE, ALL OF WHICH ARE NOTARIZED,
EXECUTED BY THE DECEASED SPOUSES DURING THEIR LIFETIME
INVOLVING SOME OF THEIR CONJUGAL PROPERTIES.
B) THE EXECUTION OF AN EXTRA-JUDICIAL PARTITION WITH WAIVER OF
RIGHTS AND CONFIRMATION OF SALE DATED MAY 24, 1975 (EXH. 14A)
OF THE ESTATE OF AUREA POBLETE BY THE DECEASED MAXIMINO A.
NAZARENO, SR. AND THEIR CHILDREN INVOLVING THE ONLY
REMAINING ESTATE OF AUREA POBLETE THUS IMPLIEDLY ADMITTING
THE VALIDITY OF PREVIOUS DISPOSITIONS MADE BY SAID DECEASED
SPOUSES ON THEIR CONJUGAL PROPERTIES, HALF OF WHICH WOULD
HAVE BECOME A PART OF AUREA POBLETES ESTATE UPON HER
DEMISE.
C) THE ADMISSION MADE BY MAXIMINO A. NAZARENO, SR. IN HIS
TESTIMONY IN OPEN COURT ON AUGUST 13, 1980 DURING HIS
LIFETIME IN CIVIL CASE NO. NC-712 (EXH. 81, 81B) THAT HE HAD SOLD
CERTAIN PROPERTIES IN FAVOR OF NATIVIDAD P. NAZARENO THUS
BELYING THE CLAIM OF ROMEO P. NAZARENO THAT THE DEED OF
ABSOLUTE SALE DATED JANUARY 29, 1970 IS ONE AMONG THE
DOCUMENTS EXECUTED BY THE DECEASED SPOUSES TO BE WITHOUT
CONSIDERATION.
D) THE ADMISSIONS MADE BY ROMEO P. NAZARENO HIMSELF
CONTAINED IN A FINAL DECISION OF THE RESPONDENT COURT IN CA-
GR CV NO. 12932 DATED AUGUST 31, 1992 AND AN ANNEX APPEARING
IN HIS ANSWER TO THE COMPLAINT IN CIVIL CASE NO. Q-39018 (EXH.
11-B) INVOLVING LOT 3B, ONE OF THE PROPERTIES IN QUESTION THAT
THE SAID PROPERTY IS OWNED BY PETITIONER NATIVIDAD P.
NAZARENO.
E) THE PARTIAL PROJECT OF PARTITION DATED MAY 24, 1995 WHICH
WAS APPROVED BY THE INTESTATE COURT IN SP. PROC. NO. NC-28 AND
EXECUTED IN ACCORDANCE WITH THE LATTER COURTS FINAL ORDER
DATED JULY 9, 1991 DETERMINING WHICH WERE THE REMAINING
PROPERTIES OF THE ESTATE.
3. WHETHER OR NOT THE DEED OF ABSOLUTE SALE DATED JANUARY
29, 1970 EXECUTED BY THE DECEASED SPOUSES MAXIMINO A.
NAZARENO, SR. AND AUREA POBLETE DURING THEIR LIFETIME
INVOLVING THEIR CONJUGAL PROPERTIES IS AN INDIVISIBLE
CONTRACT? AND IF SO WHETHER OR NOT UPON THEIR DEATH, THE
ESTATE OF MAXIMINO A. NAZARENO, SR. ALONE CAN SEEK THE
ANNULMENT OF SAID SALE?
4. WHETHER OR NOT THE SALE OF LOT 3 UNDER THE DEED OF
ABSOLUTE SALE DATED JANUARY 29, 1970 IN FAVOR OF PETITIONER
NATIVIDAD P. NAZARENO, IS VALID CONSIDERING THAT AS PER THE
ORDER OF THE LOWER COURT DATED NOVEMBER 21, 1990. ROMEO
NAZARENO ADMITTED THAT HE DID NOT PAY THE CONSIDERATION
STATED IN THE DEED OF ABSOLUTE SALE DATED JULY 4, 1969 EXECUTED
BY THE DECEASED SPOUSES IN HIS FAVOR (EXH. M-2).
5. WHETHER OR NOT AS A CONSEQUENCE, THE TITLE ISSUED IN THE
NAME OF ROMEO P. NAZARENO, TCT NO. 277968 (EXH. M) SHOULD BE
CANCELLED AND DECLARED NULL AND VOID AND A NEW ONE ISSUED
IN FAVOR OF NATIVIDAD P. NAZARENO PURSUANT TO THE DEED OF
ABSOLUTE SALE EXECUTED IN THE LATTERS FAVOR ON JANUARY 29,
1970 BY THE DECEASED SPOUSES.[24]
We find the petition to be without merit.
First. Petitioners argue that the lone testimony of Romeo is insufficient
to overcome the presumption of validity accorded to a notarized
document.
To begin with, the findings of fact of the Court of Appeals are conclusive
on the parties and carry even more weight when these coincide with
the factual findings of the trial court. This Court will not weigh the
evidence all over again unless there is a showing that the findings of the
lower court are totally devoid of support or are clearly erroneous so as
to constitute serious abuse of discretion.[25] The lone testimony of a
witness, if credible, is sufficient. In this case, the testimony of Romeo
that no consideration was ever paid for the sale of the six lots to
Natividad was found to be credible both by the trial court and by the
Court of Appeals and it has not been successfully rebutted by
petitioners. We, therefore, have no reason to overturn the findings by
the two courts giving credence to his testimony.
The fact that the deed of sale was notarized is not a guarantee of the
validity of its contents. As held in Suntay v. Court of Appeals:[26]
Though the notarization of the deed of sale in question vests in its favor
the presumption of regularity, it is not the intention nor the function of
the notary public to validate and make binding an instrument never, in
the first place, intended to have any binding legal effect upon the
parties thereto. The intention of the parties still and always is the
primary consideration in determining the true nature of a contract.
Second. Petitioners make capital of the fact that in C.A.-G.R. CV No.
12932, which was declared final by this Court in G.R. No. 107684, the
Court of Appeals upheld the right of Maximino, Jr. to recover possession
of Lot 3-B. In that case, the Court of Appeals held:
As shown in the preceding disquisition, Natividad P. Nazareno acquired
the property in dispute by purchase in 1970. She was issued Transfer
Certificate of Title No. 162738 of the Registry of Deeds of Quezon City.
When her parents died, her mother Aurea Poblete-Nazareno in 1970
and her father Maximino A. Nazareno, Sr. in 1980, Natividad P.
Nazareno had long been the exclusive owner of the property in
question. There was no way therefore that the aforesaid property could
belong to the estate of the spouses Maximino Nazareno, Sr. and Aurea
Poblete. The mere fact that Romeo P. Nazareno included the same
property in an inventory of the properties of the deceased Maximino A.
Nazareno, Sr. will not adversely affect the ownership of the said realty.
Appellant Romeo P. Nazarenos suspicion that his parents had entrusted
all their assets under the care and in the name of Natividad P. Nazareno,
their eldest living sister who was still single, to be divided upon their
demise to all the compulsory heirs, has not progressed beyond mere
speculation. His barefaced allegation on the point not only is without
any corroboration but is even belied by documentary evidence. The
deed of absolute sale (Exhibit B), being a public document (Rule 132,
Secs. 19 and 23, Revised Rules on Evidence), is entitled to great weight;
to contradict the same, there must be evidence that is clear, convincing
and more than merely preponderant (Yturralde vs. Aganon, 28 SCRA
407; Favor vs. Court of Appeals, 194 SCRA 308). Defendants-appellants
own conduct disproves their claim of co-ownership over the property
in question. Being themselves the owner of a ten-unit apartment
building along Stanford St., Cubao Quezon City, defendants-appellants,
in a letter of demand to vacate addressed to their tenants (Exhibits P,
P-1 and P-2) in said apartment, admitted that the house and lot located
at No. 979 Aurora Blvd., Quezon City where they were residing did not
belong to them. Also, when they applied for a permit to repair the
subject property in 1977, they stated that the property belonged to and
was registered in the name of Natividad P. Nazareno. Among the
documents submitted to support their application for a building permit
18
was a copy of TCT No. 162738 of the Registry of Deeds of Quezon City
in the name of Natividad Nazareno (Exhibit O and submarkings; tsn
March 15, 1985, pp. 4-5).[27]
To be sure, that case was for recovery of possession based on
ownership of Lot 3-B. The parties in that case were Maximino, Jr., as
plaintiff, and the spouses Romeo and Eliza, as defendants. On the other
hand, the parties in the present case for annulment of sale are the
estate of Maximino, Sr., as plaintiff, and Natividad and Maximino, Jr., as
defendants. Romeo and Eliza were named third-party defendants after
a third-party complaint was filed by Natividad and Maximino, Jr. As
already stated, however, this third-party complaint concerned Lot 3,
and not Lot 3-B.
The estate of a deceased person is a juridical entity that has a
personality of its own.[28] Though Romeo represented at one time the
estate of Maximino, Sr., the latter has a separate and distinct
personality from the former. Hence, the judgment in CA-GR CV No.
12932 regarding the ownership of Maximino, Jr. over Lot 3-B binds
Romeo and Eliza only, and not the estate of Maximino, Sr., which also
has a right to recover properties which were wrongfully disposed.
Furthermore, Natividads title was clearly not an issue in the first case.
In other words, the title to the other five lots subject of the present
deed of sale was not in issue in that case. If the first case resolved
anything, it was the ownership of Maximino, Jr. over Lot 3-B alone.
Third. Petitioners allege that, as shown by several deeds of sale
executed by Maximino, Sr. and Aurea during their lifetime, the
intention to dispose of their real properties is clear. Consequently, they
argue that the Deed of Sale of January 29, 1970 should also be deemed
valid.
This is a non-sequitur. The fact that other properties had allegedly been
sold by the spouses Maximino, Sr. and Aurea does not necessarily show
that the Deed of Sale made on January 29, 1970 is valid.
Romeo does not dispute that their parents had executed deeds of sale.
The question, however, is whether these sales were made for a
consideration. The trial court and the Court of Appeals found that the
Nazareno spouses transferred their properties to their children by
fictitious sales in order to avoid the payment of inheritance taxes.
Indeed, it was found both by the trial court and by the Court of Appeals
that Natividad had no means to pay for the six lots subject of the Deed
of Sale.
All these convince the Court that Natividad had no means to pay for all
the lots she purportedly purchased from her parents. What is more,
Romeos admission that he did not pay for the transfer to him of lots 3
and 25-L despite the considerations stated in the deed of sale is a
declaration against interest and must ring with resounding truth. The
question is, why should Natividad be treated any differently, i.e., with
consideration for the sale to her, when she is admittedly the closest to
her parents and the one staying with them and managing their affairs?
It just seems without reason. Anyway, the Court is convinced that the
questioned Deed of Sale dated January 29, 1970 (Exh. A or 1) is
simulated for lack of consideration, and therefore ineffective and
void.[29]
In affirming this ruling, the Court of Appeals said:
Facts and circumstances indicate badges of a simulated sale which
make the Deed of Absolute Sale dated 29 January 1970 void and of no
effect. In the case of Suntay vs. Court of Appeals (251 SCRA 430 [1995]),
the Supreme Court held that badges of simulation make a deed of sale
null and void since parties thereto enter into a transaction to which they
did not intend to be legally bound.
It appears that it was the practice in the Nazareno family to make
simulated transfers of ownership of real properties to their children in
order to avoid the payment of inheritance taxes. Per the testimony of
Romeo, he acquired Lot 25-L from his parents through a fictitious or
simulated sale wherein no consideration was paid by him. He even
truthfully admitted that the sale of Lot 3 to him on 04 July 1969 (Deed
of Absolute Sale, Records, Vol. II, p. 453) likewise had no consideration.
This document was signed by the spouses Max, Sr. and Aurea as
vendors while defendant-appellant Natividad signed as witness.[30]
Fourth. Petitioners argue further:
The Deed of Absolute Sale dated January 29, 1970 is an indivisible
contract founded on an indivisible obligation. As such, it being
indivisible, it can not be annulled by only one of them. And since this
suit was filed only by the estate of Maximino A. Nazareno, Sr. without
including the estate of Aurea Poblete, the present suit must fail. The
estate of Maximino A. Nazareno, Sr. can not cause its annulment while
its validity is sustained by the estate of Aurea Poblete.[31]
An obligation is indivisible when it cannot be validly performed in parts,
whatever may be the nature of the thing which is the object thereof.
The indivisibility refers to the prestation and not to the object
thereof.[32] In the present case, the Deed of Sale of January 29, 1970
supposedly conveyed the six lots to Natividad. The obligation is clearly
indivisible because the performance of the contract cannot be done in
parts, otherwise the value of what is transferred is diminished.
Petitioners are therefore mistaken in basing the indivisibility of a
contract on the number of obligors.
In any case, if petitioners only point is that the estate of Maximino, Sr.
alone cannot contest the validity of the Deed of Sale because the estate
of Aurea has not yet been settled, the argument would nonetheless be
without merit. The validity of the contract can be questioned by anyone
affected by it.[33] A void contract is inexistent from the beginning.
Hence, even if the estate of Maximino, Sr. alone contests the validity of
the sale, the outcome of the suit will bind the estate of Aurea as if no
sale took place at all.
Fifth. As to the third-party complaint concerning Lot 3, we find that this
has been passed upon by the trial court and the Court of Appeals. As
Romeo admitted, no consideration was paid by him to his parents for
the Deed of Sale. Therefore, the sale was void for having been
simulated. Natividad never acquired ownership over the property
because the Deed of Sale in her favor is also void for being without
consideration and title to Lot 3 cannot be issued in her name.
Nonetheless, it cannot be denied that Maximino, Sr. intended to give
the six Quezon City lots to Natividad. As Romeo testified, their parents
executed the Deed of Sale in favor of Natividad because the latter was
the only female and the only unmarried member of the family.[34] She
was thus entrusted with the real properties in behalf of her siblings. As
she herself admitted, she intended to convey Lots 10 and 11 to Jose in
the event the latter returned from abroad. There was thus an implied
trust constituted in her favor. Art. 1449 of the Civil Code states:
There is also an implied trust when a donation is made to a person but
it appears that although the legal estate is transmitted to the donee, he
nevertheless is either to have no beneficial interest or only a part
thereof.
There being an implied trust, the lots in question are therefore subject
to collation in accordance with Art. 1061 which states:
Every compulsory heir, who succeeds with other compulsory heirs,
must bring into the mass of the estate any property or right which he
may have received from the decedent, during the lifetime of the latter,
by way of donation, or any other gratuitous title, in order that it may be
computed in the determination of the legitime of each heir, and in the
account of the partition.
As held by the trial court, the sale of Lots 13 and 14 to Ros-Alva
Marketing, Corp. on April 20, 1979[35] will have to be upheld for Ros-
Alva Marketing is an innocent purchaser for value which relied on the
title of Natividad. The rule is settled that every person dealing with
registered land may safely rely on the correctness of the certificate of
title issued therefor and the law will in no way oblige him to go behind
the certificate to determine the condition of the property.[36]
WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur.
19
Buena, J., no part.
SECOND DIVISION
E. ROMMEL REALTY AND G.R. No. 127636
DEVELOPMENT CORPORATION, as subrogee of ANTONINA GUIDO,
MAURO CASTANEDA, MARGARITA GUIDO, GRACIANO L. AMANTE,
FELIZA GUIDO, ANTONIO AQUINO, CRISANTA GUIDO,
BUENAVENTURA B. ENRIQUEZ, CANDIDA GUIDO, JACOB ASSAD,
ESPERANZA GUIDO, ANGEL BENITO, ALFREDO GUIDO, CLARA MINDA
ANSELMO, EUFRONIA GUIDO, JOSE LORENO, PRISCILLA GUIDO VDA.
DE ESGUERRA, BENEDICTO LOPEZ, PROFETIZA GUIDO, AIDA DEL
CARMEN, BUENSUCESO GUIDO, HERMINIA VILLAREAL, CARLOS
GUIDO, AMANDA C. RIVERA, JOSE A. ROJAS AND EMILIAN M. ROJAS,*
Petitioner, Present:
PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.
STA. LUCIA REALTY DEVELOPMENT
CORPORATION,**
Respondent. Promulgated:
November 24, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CORONA, J.:
This is a petition for review on certiorari[1] of the September 19, 1996
decision[2] and November 15, 1996 resolution[3] of the Court of
Appeals in CA-G.R. SP No. 41305.
This controversy stemmed from a case decided by this Court entitled
Republic v. CA[4] which is already in its execution stage in the court of
origin. Given that the resolution of the present dispute will inevitably
take into consideration our pronouncements in said case, a brief
background is in order.
In 1979, the Republic of the Philippines, through the Solicitor General,
filed a complaint for declaration of nullity of Decree No. 6145, the
owners duplicate copy of Transfer Certificate of Title (TCT) No. 23377 in
the names of Francisco
and Hermogenes Guido[5] and all titles derived from the decree.[6] This
case was docketed as Civil Case No. 34242 of the former Court of First
Instance[7] of Rizal.[8] These documents covered a vast area of land
called Hacienda Angono located in Binangonan, Rizal.[9] The Republic
alleged that said documents were false, spurious, fabricated and never
issued by virtue of judicial proceedings for the registration of land.[10]
The trial court dismissed the complaint and declared Decree No. 6145
and TCT No. 23377 genuine and authentic.[11] This was affirmed by the
CA.[12]
In his motion for reconsideration, the Solicitor General prayed for an
alternative judgment declaring the decree and its derivative titles
authentic except with respect to such portions of the property which
were either: (1) possessed and owned by bona fide occupants who had
already acquired indefeasible titles thereto or (2) possessed and owned
by bona fide occupants and their families with lengths of possession
which
amounted to ownership.[13] This motion was denied.[14]
When elevated to us, the same prayer for alternative judgment was
presented.[15] This time, all the private respondents therein accepted
the alternative prayer of the Solicitor General.[16]
In our decision in Republic v. CA,[17] we upheld the findings of the
courts below that Decree No. 6145 and TCT No. 23377 were
authentic.[18] However, we also took into consideration the fact that
the private respondents therein unanimously accepted the alternative
prayer of the Solicitor General:

Moreover, conscious of the resulting [large-scale] dispossession and
social displacement of several hundreds of bona fide occupants and
their families which the Solicitor General pointed out, the private
respondent[s] agreed unanimously to accept the alternative prayer of
the petitioner in their joint memorandum. This agreement by private
respondents takes the form of a waiver. Though a valid and clear right
over the property exists in their [favor], they seemingly have voluntarily
abandoned the same in favor of: 1) those who possessed and actually
occupied specific portions and obtained torrens certificates of titles,
and 2) those who possessed certain specific portions for such lengths
of time as to amount to full ownership. The waiver, not being contrary
to law, morals, good customs and good policy, is valid and binding on
the private respondents.
However, with respect to the second set of possessors, whose alleged
bona fide occupancy of specific portions of the property is not
evidenced by Torrens Titles, it is imperative that their claims/occupancy
be duly proven in an appropriate proceeding.[19]
Thus, the dispositive portion of the decision read:
ACCORDINGLY, the decision of the [CA] in CA-G.R. No. 12933 is
AFFIRMED subject to the herein declared superior rights of bona fide
occupants with registered titles within the area covered by the
questioned decree and bona fide occupants therein with length of
possession which had ripened to ownership, the latter to be
determined in an appropriate proceeding.
SO ORDERED.[20]
This present petition was brought to us by petitioner E. Rommel Realty
and Development Corporation which is claiming to be the subrogee of
the rights and interests of Antonina Guido, et al.[21] Respondent Sta.
Lucia Realty and Development Corporation is the owner-developer of
Greenridge Executive Village,[22] a subdivision project located within
the land covered by TCT No. 23377. It claims to have obtained its title
from the heirs of Francisco and Honorata de la Cruz.[23]
Pursuant to our decision, the Regional Trial Court (RTC) of Pasig City,
Branch 155, issued on July 21, 1994 a writ of possession directing the
branch sheriff to place Guido, et al. in possession of portions of the
property which were not occupied either by bona fide occupants with
registered titles or bona fide occupants with lengths of possession
which had ripened to ownership and the portions occupied by
squatters.[24]
It appears that respondent was in possession of a certain parcel of
land[25] situated in front of the Greenridge Executive Village where its
main gate is located, linking the subdivision to the national
highway.[26] On February 29, 1996, a notice to vacate was served on
respondent giving it five days to vacate this parcel of land.
Consequently, on April 11, 1996, respondent filed an urgent motion to
quash the writ of possession dated July 21, 1994 claiming that it had
been a bona fide occupant and possessor of the 29,999 sq. m. lot for a
period of time which, by itself and through its predecessors-in-interest,
had already ripened into ownership.[27]
The RTC, in an order dated July 12, 1996, denied this motion, along with
the other motions filed by other entities.[28] It held that respondent
should ventilate its claim in an appropriate proceeding separate and
distinct from the case (Civil Case No. 34242) where the writ of
possession was issued.[29] It stated that its duty to execute the decision
in Republic v. CA, as the court of origin, was purely ministerial and it
could not, on mere motion of respondent, interpret or qualify such
decision. Accordingly, on July 15, 1996, a second alias writ of possession
and second notice to vacate were issued.[30]
Aggrieved, respondent filed a petition for certiorari and prohibition
with the CA. It was granted in a decision promulgated on September 19,
1996. In this ruling, it appears that the CA agreed with the RTC that the
rights of respondent had to be decided in an independent and separate
proceeding and could not simply be addressed in the proceeding for
execution.[31] However, it held that in the execution of the judgment,
20
the RTC deprived respondent of its right to present evidence in order to
prove the character of its possession of the land in dispute.[32] As a
result, the CA set aside and declared null and void the July 12, 1996
order (denying respondents urgent motion to quash the writ of
possession) and July 15, 1996 second alias writ of possession.[33]
Hence, this petition.
At its core, this controversy boils down to one main issue: whether or
not petitioner was entitled to a writ of possession of the 29,999 sq. m.
lot (hereinafter referred to as the property) possessed and claimed by
respondent.
To resolve this issue, there is a need to revisit our ruling in Republic v.
CA. As already stated, we ruled there that, as Decree No. 6145 and TCT
No. 23377 were authentic documents, Guido et al. had incontrovertible
title to the land. Nevertheless, Guido et al., through their waiver, were
also considered to have abandoned their right in favor of two sets of
occupants: (1) those who possessed and actually occupied specific
portions and obtained Torrens Certificates of Titles and (2) those who
possessed certain specific portions for such a length of time as to
amount to full ownership, to be determined in an appropriate
proceeding.[34]
Petitioner argues that it was entitled to a writ of possession because
respondent was not able to prove in appropriate proceedings that it fell
within the second set of qualified occupants. It asserts that what the
Republic v. CA decision contemplated was a final and executory
judgment declaring respondents possession to be bona fide and to have
ripened into ownership as of March 29, 1976.[35]
Respondent, on the other hand, admits that it did not yet have a
certificate of title over the property.[36] But it contends that through
its predecessors-in-interest, it had already established, in an
appropriate application for registration of title, that it was within the
second set of possessors. It claims that its predecessors-in-interest, the
heirs of de la Cruz, had instituted this application docketed as L.R.C. No.
049-B before RTC, Binangonan, Rizal, Branch 69.[37] The Land
Registration Authority submitted to the land registration court a
supplementary report dated October 10, 1992 recommending the
segregation of the lot of the heirs of de la Cruz from TCT No. M-00850
(derived from TCT No. 23377)[38] and the issuance of a new certificate
of title in their favor.[39] On March 18, 1993, the land registration court
issued a resolution[40] declaring the vested right of the heirs of de la
Cruz (whose length of possession was peaceful, notorious and in the
concept of an owner from 1940 up to the promulgation of the decision)
had ripened into ownership.[41]
We uphold the ruling of the CA that the writ of possession of the
disputed property should be nullified.
In order to execute our decision in Republic v. CA, which has long
become final and executory, petitioner, as alleged subrogee of Guido et
al., was issued a writ of possession over the land covered by TCT No.
23377. Indisputably, in upholding the authenticity of the certificate of
title, we recognized Guido, et al.s right of ownership over the land.
However, at the same time, our decision also very clearly imposed a
limitation to their right over the land. We stated that:
Though a valid and clear right over the property exists in their [favor],
they seemingly have voluntarily abandoned the same in favor of: 1)
those who possessed and actually occupied specific portions and
obtained torrens certificates of titles, and 2) those who possessed
certain specific portions for such lengths of time as to amount to full
ownership. The waiver, not being contrary to law, morals, good
customs and good policy, is valid and binding on the private
respondents.[42]
Thus, in the dispositive portion of the decision, we affirmed that TCT
No. 23377 was authentic but subject to the herein declared superior
rights of bona fide occupants with registered titles within the area
covered by the questioned decree and bona fide occupants therein with
length of possession which had ripened to ownership, the latter to be
determined in an appropriate proceeding.[43]
We agree that respondent had already proven its claim in an
appropriate proceeding. In L.R.C. No. 049-B, initiated by the heirs of de
la Cruz (the predecessors of respondent), it was shown that the
possession of applicant heirs had already ripened to ownership[44] as
of March 29, 1976.[45] This ruling inured to respondents benefit.

The records do not show that respondent ever obtained a certificate of
title over the disputed property.[46] Nevertheless, the right of
ownership of respondents predecessors-in-interest had been
recognized. As the purchaser of the property, respondent became the
owner of the property and acquired the right to exercise all the
attributes of ownership, including the right to possession (jus
possidendi).[47] Respondent, who was in actual possession of the
property before the writ of possession was implemented, possessed it
as owner of the property. It can thus rightfully assert its right of
possession which is among the bundle of rights enjoyed by an owner of
a property under Art. 428 of the New Civil Code.[48]
Hence, respondent can rightfully claim the superior rights we
acknowledged in Republic v. CA and the CA correctly nullified
petitioners writ of possession insofar as it affected the property in the
possession of respondent.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED.
THIRD DIVISION
[G.R. No. 146997. April 26, 2005]
SPOUSES GODOFREDO & DOMINICA FLANCIA, petitioners, vs. COURT
OF APPEALS & WILLIAM ONG GENATO, respondents.
DECISION
CORONA, J.:
Before us is a petition for review under Rule 45 of the Rules of Court,
seeking to set aside the October 6, 2000 decision[1] of the Court of
Appeals in CA-G.R. CV No. 56035.
The facts as outlined by the trial court[2] follow.
This is an action to declare null and void the mortgage executed by
defendant Oakland Development Resources Corp. xxx in favor of
defendant William Ong Genato over the house and lot plaintiffs spouses
Godofredo and Dominica Flancia purchased from defendant
corporation.
In the complaint, plaintiffs allege that they purchased from defendant
corporation a parcel of land known as Lot 12, Blk. 3, Phase III-A
containing an area of 128.75 square meters situated in Prater Village
Subd. II located at Brgy. Old Balara, Quezon City; that by virtue of the
contract of sale, defendant corporation authorized plaintiffs to
transport all their personal belongings to their house at the aforesaid
lot; that on December 24, 1992, plaintiffs received a copy of the
execution foreclosing [the] mortgage issued by the RTC, Branch 98
ordering defendant Sheriff Sula to sell at public auction several lots
formerly owned by defendant corporation including subject lot of
plaintiffs; that the alleged mortgage of subject lot is null and void as it
is not authorized by plaintiffs pursuant to Art. 2085 of the Civil Code
which requires that the mortgagor must be the absolute owner of the
mortgaged property; that as a consequence of the nullity of said
mortgage, the execution foreclosing [the] mortgage is likewise null and
void; that plaintiffs advised defendants to exclude subject lot from the
auction sale but the latter refused. Plaintiffs likewise prayed for
damages in the sum of P50,000.00.
Defendant William Ong Genato filed a motion to dismiss the complaint
which was opposed by the plaintiffs and denied by the Court in its Order
dated February 16, 1993.
Defendant Genato, then filed his answer averring that on May 19, 1989
co-defendant Oakland Development Resources Corporation mortgaged
to Genato two (2) parcels of land covered by TCT Nos. 356315 and
366380 as security and guaranty for the payment of a loan in the sum
of P2,000,000.00; that it appears in the complaint that the subject
parcel of land is an unsubdivided portion of the aforesaid TCT No.
366380 which covers an area of 4,334 square meters more or less; that
said real estate mortgage has been duly annotated at the back of TCT
No. 366380 on May 22, 1989; that for non-payment of the loan of
21
P2,000,000.00 defendant Genato filed an action for foreclosure of real
estate mortgage against co-defendant corporation; that after [trial], a
decision was rendered by the Regional Trial Court of Quezon City,
Branch 98 against defendant corporation which decision was affirmed
by the Honorable Court of Appeals; that the decision of the Court of
Appeals has long become final and thus, the Regional Trial Court, Brach
98 of Quezon City issued an Order dated December 7, 1992 ordering
defendant Sheriff Ernesto Sula to cause the sale at public auction of the
properties covered by TCT No. 366380 for failure of defendant
corporation to deposit in Court the money judgment within ninety (90)
days from receipt of the decision of the Court of Appeals; that plaintiffs
have no cause of action against defendant Genato; that the alleged
plaintiffs Contract to Sell does not appear to have been registered with
the Register of Deeds of Quezon City to affect defendant Genato and
the latter is thus not bound by the plaintiffs Contract to Sell; that the
registered mortgage is superior to plaintiffs alleged Contract to Sell and
it is sufficient for defendant Genato as mortgagee to know that the
subject TCT No. 366380 was clean at the time of the execution of the
mortgage contract with defendant corporation and defendant Genato
is not bound to go beyond the title to look for flaws in the mortgagors
title; that plaintiffs alleged Contract to Sell is neither a mutual promise
to buy and sell nor a Contract of Sale. Ownership is retained by the
seller, regardless of delivery and is not to pass until full payment of the
price; that defendant Genato has not received any advice from plaintiffs
to exclude the subject lot from the auction sale, and by way of
counterclaim, defendant Genato prays for P150,000.00 moral damages
and P20,000.00 for attorneys fees.
On the other hand, defendant Oakland Development Resources
Corporation likewise filed its answer and alleged that the complaint
states no cause of action; xxx Defendant corporation also prays for
attorneys fees of P20,000.00 in its counterclaim.[3]
After trial, the assisting judge[4] of the trial court rendered a decision
dated August 16, 1996, the decretal portion of which provided:
Wherefore, premises considered, judgment is hereby rendered.
1) Ordering defendant Oakland Devt. Resources Corporation to pay
plaintiffs:
a) the amount of P10,000.00 representing payment for the option to
purchase lot;
b) the amount of P140,000.00 representing the first downpayment of
the contract price;
c) the amount of P20,520.80 representing five monthly amortizations
for February, March, April, May and June 1990;
d) the amount of P3,000.00 representing amortization for November
1990; all plus legal interest from the constitution of the mortgage up to
the time the instant case was filed.
2) Ordering said defendant corporation to pay further to plaintiffs the
sum of P30,000.00 for moral damages, P10,000.00 for exemplary
damages and P20,000.00 for and as reasonable attorneys fees plus cost;
3) Dismissing defendant corporations counterclaim;
4) Dismissing defendant Genatos counterclaim.[5]
On motion for reconsideration, the regular presiding judge set aside the
judgment of the assisting judge and rendered a new one on November
27, 1996, the decretal portion of which read:
WHEREFORE, premises considered, the Motion for Reconsideration is
hereby GRANTED. The decision dated August 16, 1996 is hereby set
aside and a new one entered in favor of the plaintiffs, declaring the
subject mortgage and the foreclosure proceedings held thereunder as
null and void insofar as they affect the superior right of the plaintiffs
over the subject lot, and ordering as follows:
1. Defendant Oakland Development Resources to pay to plaintiffs the
amount of P20,000.00 for litigation-related expenses;
2. Ordering defendant Sheriff Ernesto L. Sula to desist from conducting
further proceedings in the extra-judicial foreclosure insofar as they
affect the plaintiffs, or, in the event that title has been consolidated in
the name of defendant William O. Genato, ordering said defendant to
reconvey to plaintiffs the title corresponding to Lot 12, Blk. 3, Phase III-
A of Prater Village [Subd. II], located in Old Balara, Quezon City,
containing an area of 128.75 square meters; and
3. Dismissing the counterclaims of defendants Oakland and Genato and
with costs against them.[6]
On appeal, the Court of Appeals issued the assailed order:
Wherefore, foregoing premises considered, the appeal having merit in
fact and in law is hereby GRANTED and the decision of the Trial Court
dated 27 November 1996 hereby SET ASIDE and REVERSED, and its
judgment dated August 16, 1996 REINSTATED and AFFIRMED IN TOTO.
No Costs.
SO ORDERED.[7]
Hence, this petition.
For resolution before us now are the following issues:
(1) whether or not the registered mortgage constituted over the
property was valid;
(2) whether or not the registered mortgage was superior to the contract
to sell; and
(3) whether or not the mortgagee was in good faith.
Under the Art. 2085 of the Civil Code, the essential requisites of a
contract of mortgage are: (a) that it be constituted to secure the
fulfillment of a principal obligation; (b) that the mortgagor be the
absolute owner of the thing mortgaged; and (c) that the persons
constituting the mortgage have the free disposal of their property, and
in the absence thereof, that they be legally authorized for the purpose.
All these requirements are present in this case.
FIRST ISSUE: WAS THE REGISTERED MORTGAGE VALID?
As to the first essential requisite of a mortgage, it is undisputed that the
mortgage was executed on May 15, 1989 as security for a loan obtained
by Oakland from Genato.
As to the second and third requisites, we need to discuss the difference
between a contract of sale and a contract to sell.
In a contract of sale, title to the property passes to the vendee upon the
delivery of the thing sold; in a contract to sell, ownership is, by
agreement, reserved by the vendor and is not to pass to the vendee
until full payment of the purchase price.
Otherwise stated, in a contract of sale, the vendor loses ownership over
the property and cannot recover it unless and until the contract is
resolved or rescinded; in a contract to sell, title is retained by the
vendor until full payment of the price.[8]
In the contract between petitioners and Oakland, aside from the fact
that it was denominated as a contract to sell, the intention of Oakland
not to transfer ownership to petitioners until full payment of the
purchase price was very clear. Acts of ownership over the property
were expressly withheld by Oakland from petitioner. All that was
granted to them by the occupancy permit was the right to possess it.
Specifically, the contract between Oakland and petitioners stated:
xxx xxx xxx
7. That the BUYER/S may be allowed to enter into and take possession
of the property upon issuance of Occupancy Permit by the
OWNER/DEVELOPER exclusively, although title has not yet passed to
the BUYER/S, in which case his possession shall be that of a possessor
by mere tolerance Lessee, subject to certain restrictions contained in
this deed.
xxx xxx xxx
22
13. That the BUYER/S cannot sell, mortgage, cede, transfer, assign or in
any manner alienate or dispose of, in whole or in part, the rights
acquired by and the obligations imposed on the BUYER/S by virtue of
this contract, without the express written consent of the
OWNER/DEVELOPER.
xxx xxx xxx
24. That this Contract to Sell shall not in any way [authorize] the
BUYER/S to occupy the assigned house and lot to them.[9]
xxx xxx xxx
Clearly, when the property was mortgaged to Genato in May 1989,
what was in effect between Oakland and petitioners was a contract to
sell, not a contract of sale. Oakland retained absolute ownership over
the property.
Ownership is the independent and general power of a person over a
thing for purposes recognized by law and within the limits established
thereby.[10] According to Art. 428 of the Civil Code, this means that:
The owner has the right to enjoy and dispose of a thing, without other
limitations than those established by law.
xxx xxx xxx
Aside from the jus utendi and the jus abutendi [11] inherent in the right
to enjoy the thing, the right to dispose, or the jus disponendi, is the
power of the owner to alienate, encumber, transform and even destroy
the thing owned.[12]
Because Oakland retained all the foregoing rights as owner of the
property, it was entitled absolutely to mortgage it to Genato. Hence,
the mortgage was valid.
SECOND ISSUE: WAS THE REGISTERED MORTGAGE SUPERIOR TO THE
CONTRACT TO SELL?
In their memorandum, petitioners cite our ruling in State
Investment House, Inc. v. Court of Appeals [13] to the effect that an
unregistered sale is preferred over a registered mortgage over the same
property. The citation is misplaced.
This Court in that case explained the rationale behind the rule:
The unrecorded sale between respondents-spouses and SOLID is
preferred for the reason that if the original owner xxx had parted with
his ownership of the thing sold then he no longer had ownership and
free disposal of that thing as to be able to mortgage it again.
State Investment House is completely inapplicable to the case at bar. A
contract of sale and a contract to sell are worlds apart. State Investment
House clearly pertained to a contract of sale, not to a contract to sell
which was what Oakland and petitioners had. In State Investment
House, ownership had passed completely to the buyers and therefore,
the former owner no longer had any legal right to mortgage the
property, notwithstanding the fact that the new owner-buyers had not
registered the sale. In the case before us, Oakland retained absolute
ownership over the property under the contract to sell and therefore
had every right to mortgage it.
In sum, we rule that Genatos registered mortgage was superior to
petitioners contract to sell, subject to any liabilities Oakland may have
incurred in favor of petitioners by irresponsibly mortgaging the
property to Genato despite its commitments to petitioners under their
contract to sell.
THIRD ISSUE: WAS THE MORTGAGE IN GOOD FAITH?
The third issue involves a factual matter which should not be raised in
this petition. Only questions of law may be raised in a Rule 45 petition.
This Court is not a trier of facts. The resolution of factual issues is the
function of the lower courts. We therefore adopt the factual findings of
the Court of Appeals and uphold the good faith of the mortgagee
Genato.

RELIANCE ON WHAT APPEARS IN THE TITLE
Just as an innocent purchaser for value may rightfully rely on what
appears in the certificate of title, a mortgagee has the right to rely on
what appears in the title presented to him. In the absence of anything
to arouse suspicion, he is under no obligation to look beyond the
certificate and investigate the title of the mortgagor appearing on the
face of the said certificate. [14]
We agree with the findings and conclusions of the trial court regarding
the liabilities of Oakland in its August 16, 1996 decision, as affirmed by
the Court of Appeals:
Anent [plaintiffs] prayer for damages, the Court finds that defendant
corporation is liable to return to plaintiffs all the installments/payments
made by plaintiffs consisting of the amount of P10,000.00 representing
payment for the option to purchase lot; the amount of P140,000.00
which was the first downpayment; the sum of P20,520.80 representing
five monthly amortizations for February, March, April, May and June
1990 and the amount of P3,000.00 representing amortization for
November 1990 plus legal interest from the time of the mortgage up to
the time this instant case was filed. Further, considering that defendant
corporation wantonly and fraudulently mortgaged the subject property
without regard to [plaintiffs] rights over the same, said defendant
should pay plaintiffs moral damages in the reasonable amount of
P30,000.00. xxx Furthermore, since defendant [corporations] acts have
compelled the plaintiffs to litigate and incur expenses to protect their
interest, it should likewise be adjudged to pay plaintiffs attorneys fees
of P20,000.00 under Article 2208 paragraph two (2) of the Civil
Code.[15]
WHEREFORE, the petition for review is hereby DENIED. The decision of
the Court of Appeals reinstating the August 16, 1996 decision of the trial
court is hereby AFFIRMED.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Carpio-Morales and
Garcia, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17072 October 31, 1961
CRISTINA MARCELO VDA. DE BAUTISTA, plaintiff-appellee,
vs.
BRIGIDA MARCOS, ET AL., defendants-appellants.
Aladin B. Bermudez for defendants-appellants.
Cube and Fajardo for plaintiff-appellee.
REYES, J.B.L., J.:
The main question in this appeal is whether or not a mortgagee may
foreclose a mortgage on a piece of land covered by a free patent where
the mortgage was executed before the patent was issued and is sought
to be foreclosed within five years from its issuance.
The facts of the case appear to be as follows:
On May 17, 1954, defendant Brigida Marcos obtained a loan in the
amount of P2,000 from plaintiff Cristina Marcel Vda. de Bautista and to
secure payment thereof conveyed to the latter by way of mortgage a
two (2)-hectare portion of an unregistered parcel of land situated in Sta.
Ignacia, Tarlac. The deed of mortgage, Exhibit "A", provided that it was
to last for three years, that possession of the land mortgaged was to be
turned over to the mortgagee by way of usufruct, but with no obligation
on her part to apply the harvests to the principal obligation; that said
mortgage would be released only upon payment of the principal loan
of P2,000 without any interest; and that the mortgagor promised to
defend and warrant the mortgagee's rights over the land mortgaged.
23
Subsequently, or in July, 1956, mortgagor Brigida Marcos filed in behalf
of the heirs of her deceased mother Victoriana Cainglet (who are
Brigida herself and her three sisters), an application for the issuance of
a free patent over the land in question, on the strength of the
cultivation and occupation of said land by them and their predecessor
since July, 1915. As a result, Free Patent No. V-64358 was issued to the
applicants on January 25, 1957, and on February 22, 1957, it was
registered in their names under Original Certificate of Title No. P-888 of
the office of Register of Deeds for the province of Tarlac.
Defendant Brigida Marcos' indebtedness of P2,000 to plaintiff having
remained unpaid up to 1959, the latter, on March 4, 1959, filed the
present action against Brigida and her husband (Civil Case No. 3382) in
the court below for the payment thereof, or in default of the debtors to
pay, for the foreclosure of her mortgage on the land give as security.
Defendants moved to dismiss the action, pointing out that the land in
question is covered by a free patent and could not, therefore, under the
Public Land Law, be taken within five years from the issuance of the
patent for the payment of any debts of the patentees contracted prior
to the expiration of said five-year period; but the lower court denied
the motion to dismiss on the ground that the law cited does not apply
because the mortgage sought to be foreclosed was executed before the
patent was issued. Defendants then filed their answer, reiterating the
defense invoked in their motion to dismiss, and alleging as well that the
real contract between the parties was an antichresis and not a
mortgage. Pre-trial of the case followed, after which the lower court
rendered judgment finding the mortgage valid to the extent of the
mortgagor's pro-indiviso share of 15,333 square meters in the land in
question, on the theory that the Public Land Law does not apply in this
case because the mortgage in question was executed before a patent
was issued over the land in question; that the agreement of the parties
could not be antichresis because the deed Exhibit "A" clearly shows a
mortgage with usufruct in favor of the mortgagee; and ordered the
payment of the mortgage loan of P2,000 to plaintiff or, upon
defendant's failure to do so, the foreclosure of plaintiff's mortgage on
defendant Brigida Marcos' undivided share in the land in question.
From this judgment, defendants Brigida Marcos and her husband
Osmondo Apolocio appealed to this Court.
There is merit in the appeal.
The right of plaintiff-appellee to foreclose her mortgage on the land in
question depends not so much on whether she could take said land
within the prohibitive period of five years from the issuance of
defendants' patent for the satisfaction of the indebtedness in question,
but on whether the deed of mortgage Exhibit "A" is at all valid and
enforceable, since the land mortgaged was apparently still part of the
public domain when the deed of mortgage was constituted. As it is an
essential requisite for the validity of a mortgage that the mortgagor be
the absolute owner of the thing mortgaged (Art. 2085), the mortgage
here in question is void and ineffective because at the time it was
constituted, the mortgagor was not yet the owner of the land
mortgaged and could not, for that reason, encumber the same to the
plaintiff-appellee. Nor could the subsequent acquisition by the
mortgagor of title over said land through the issuance of a free patent
validate and legalize the deed of mortgage under the doctrine of
estoppel (cf. Art. 1434, New Civil Code,1 since upon the issuance of said
patient, the land in question was thereby brought under the operation
of the Public Land Law that prohibits the taking of said land for the
satisfaction of debts contracted prior to the expiration of five years
from the date of the issuance of the patent (sec. 118, C.A. No. 141). This
prohibition should include not only debts contracted during the five-
year period immediately preceding the issuance of the patent but also
those contracted before such issuance, if the purpose and policy of the
law, which is "to preserve and keep in the family of the homesteader
that portion of public land which the State has gratuitously given to
him" (Pascua v. Talens, 45 O.G. No. 9 [Supp.] 413; De los Santos v.
Roman Catholic Church of Midsayap, G.R. L-6088, Feb. 24, 1954), is to
be upheld.
The invalidity of the mortgage Exhibit "A" does not, however, imply the
concomitant invalidity of the collate agreement in the same deed of
mortgage whereby possession of the land mortgaged was transferred
to plaintiff-appellee in usufruct, without any obligation on her part to
account for its harvests or deduct them from defendants' indebtedness
of P2,000. Defendant Brigida Marcos, who, together with her sisters,
was in possession of said land by herself and through her deceased
mother before her since 1915, had possessory rights over the same
even before title vested in her as co-owner by the issuance of the free
patent to her and her sisters, and these possessory right she could
validly transfer and convey to plaintiff-appellee, as she did in the deed
of mortgage Exhibit "A". The latter, upon the other hand, believing her
mortgagor to be the owner of the land mortgaged and not being aware
of any flaw which invalidated her mode of acquisition, was a possessor
in good faith (Art. 526, N.C.C.), and as such had the right to all the fruits
received during the entire period of her possession in good faith (Art.
544, N.C.C.). She is, therefore, entitled to the full payment of her credit
of P2,000 from defendants, without any obligation to account for the
fruits or benefits obtained by her from the land in question.

WHEREFORE, the judgment appealed from is reversed insofar as it

orders the foreclosure of the mortgage in question, but affirmed in all
other respects. Costs again defendants-appellants.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Paredes

and De Leon, JJ., concur.
Barrera, J., took no part.

24