Garcia v. Court of Appeals, G.R. No.

133140, August, 10, 1999

FACTS: A lot had been registered and sold to SPS. LUISITO & MA. LUISA MAGPAYO by Luisa’s father
Atty. Pedro Garcia along with the consent on his wife, Remedio Garcia. Subsequently, said spouses
entered the aforementioned lot into mortgage by Philippine Bank of Communications (PBCom) to
secure a loan. Consequently, spouses had failed to pay the loan upon its maturity and PBCom ordered
the mortgaged lot to be extrajudicially foreclosed and entered into auction where they were the
highest bidders. Later on the lot was issued under PBCom. PBCom then filed for a writ of possession
against Jose Garcia, Luisa Magpayo’s brother, who was currently in possession of the land. Jose
assailed that he was the true owner of the land as he inherited it from his mother Remedio Garcia and
he then filed for a suit for realty and damages. PBCom, however, averred that the land was not
among those listed in Remedio’s Intestate of Estate and was therefore not inherited by Jose. The
lower court ruled in favor of Jose and declared the subsequent mortgage of the lot null and void.
However, the decision was reversed by the Court of Appeals asserting that at the time of the transfer
and registration of the land to Magpayo, Remedio Garcia and Pedro Garcia were the true owners and
could therefore enjoy the right to dispose of such. Though Jose Garcia was in possession of the land
time after that is of no hindrance to the ownership truly belonging to the Magpayo’s who then later
on enjoyed their right to mortgage said land.

ISSUE: Whether or not The Court of Appeals erred in resolving the issues of “ownership” and
“possession”.

HELD: No, the higher court assailed that at the time of the transfer of ownership, spouses Pedro and
Remedios Garcia were the true owners of the land and had the right to dispose of such and Jose
Garcia although being in possession of the said land does not vest ownership upon him. The SC held,
“one who possesses as a mere holder acknowledges in another a superior right which he believes to
be ownership, whether his belief be right or wrong." and the records show that petitioner occupied
the property not in the concept of an owner, for his stay was merely tolerated by his parents.”
Additionally, the SC held that the petitioner’s claim of inheritance against the lot is invalidated by the
exclusion of the land in his mother’s Intestate Estate which proves that his parents at the time were
no longer owners of the land and therefore could not be inherited by petitioner.