Heirs of Roman Soriano vs.

CA

DOCTRINE: A person may be declared owner but hey may not be entitled to
possession.
FACTS:

Petitioner moved for the issuance of an alias writ of execution and/or writ of
possession to place them in possession of Lot No. 60052 and Lot No. 8459-B. Said
motion was held in abeyance by the land registration court until and after the case for
security of tenure with prayer for status quo, has been resolved.

ISSUES:

The property subject of this case is a parcel of land in Lingayen, Pangasinan, and
particularly described as follows:

May a winning party in a land registration case effectively eject the possessor thereof, whose
security of tenure rights are still pending determination before the DARAB? (May private
respondent oust petitioner in the land whose security of tenor rights are pending determination)

A parcel of land (Nipa with an area of 8,410 square meters; fishpond with an area of
14,000 square meters; and residential land with an area of 1,740 square meters, more
or less.

RULING + RATIO:

Originally owned by Adriano Soriano until his death, the above-described property
passed on to his heirs who leased the same to spouses David de Vera and Consuelo
Villasista for a period of fifteen (15) years beginning with Roman Soriano, one of the
children of Adriano Soriano, acting as caretaker of the property during the period of
the lease.
After executing an extra judicial settlement among themselves, the heirs of Adriano
Soriano subsequently subdivided the property into two (2) lots, Lot No. 60052 and Lot
No. 8459. Lot No. 60052 was assigned to Lourdes, Candido and the heirs of Dionisia
while Lot No. 8459 was assigned to Francisca, Librada, Elocadio and Roman. Lot No.
60052 was sold by Lourdes, Candido and the heirs of Dionisia to private respondents
while, Elocadio, Francisca and Librada sold their three-fourths shares in Lot No. 8459
also to private respodents.
On March 14, 1968, the de Vera spouses ousted Roman Soriano as caretaker and
appointed 2 people as his substitutes. Thereafter, Roman Soriano filed CAR Case No.
1724-P-68 for reinstatement and reliquidation against the de Vera spouses. The
agrarian court authorized the ejectment of Roman Soriano but on appeal, the decision
was reversed by the Court of Appeals, which decision became final and executory.
However, prior to the execution of the said decision, the parties entered into a postdecisional agreement wherein the de Vera spouses allowed Roman Soriano to sublease the property until the termination of the lease. In an Order, the post-decisional
agreement was approved by the agrarian court.

Private repspondents filed with the RTC, an application for registration of title over Lot
No. 60052 and three-fourths (3/4)pro-indiviso of Lot No. 8459. Said application for
registration was granted by the trial court.

Meanwhile, it appears that a day after the promulgation of the land registration court's
decision, Roman Soriano, filed before the RTC and against private respondents an
action for annulment of document and/or redemption, ownership and damages.
Private Respondents filed a motion to dismiss on the ground of res judicata, pendency
of another action, laches, misjoinder of parties and lack of jurisdiction, which was
denied by the trial court.

Thereafter eleven (11) years after the approval of the post-decisional agreement
between Roman Soriano and the spouses de Vera, private respondents filed with the
agrarian court a motion for execution of said post- decisional agreement which
allowed Roman Soriano to sub-lease the property. The motion prayed that private
respondents be placed in possession of the subject property, jointly with
Roman Soriano.

(A lot of remedial law motions happened like the death of Roman Soriano and
substitution of his heirsnot pertinent to property! Basta whats important was what
happened in the below paragraph!)

No. They may not oust petitioner pending determination of his security of tenure

Possession and ownership are distinct legal concepts. There is ownership when a
thing pertaining to one person is completely subjected to his will in a manner not
prohibited by law and consistent with the rights of others. Ownership confers certain
rights to the owner, among which are the right to enjoy the thing owned and the right
to exclude other persons from possession thereof. On the other hand, possession is
defined as the holding of a thing or the enjoyment of a right. Literally, to possess
means to actually and physically occupy a thing with or without right. Possession may
be had in one of two ways: possession in the concept of an owner and possession of
a holder.

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. A
judgment for ownership, therefore, does not necessarily include possession as a
necessary incident.

There is no dispute that private respondents' (petitioners below) title over the land under
litigation has been confirmed with finality. As explained above, however, such declaration
pertains only to ownership and does not automatically include possession, especially so
in the instant case where there is a third party occupying the said parcel of land, allegedly
in the concept of an agricultural tenant.
While the issue of ownership of the subject land has been laid to rest in the final judgment of the
land registration court, the right of possession thereof is, as yet, controverted. This is precisely
what is put in issue in the security of tenure case filed by petitioners (private respondents below)
before the DARAB.
It is important to note that although private respondents have been declared titled owners of the
subject land, the exercise of their rights of ownership are subject to limitations that may be
imposed by law.7 The Tenancy Act provides one such limitation. Agricultural lessees are entitled
to security of tenure and they have the right to work on their respective landholdings once the
leasehold relationship is established.
However, petitioners' status as tenant has not yet been declared by the DARAB. In keeping with
judicial order, we refrain from ruling on whether petitioners may be dispossessed of the subject
property.

Digest Author: Coco Navarro

RAMOS V DIRECTOR OF LANDS

Petitioner-appellant: Cornelio Ramos
Objector-appellee: The Director of Lands
Ponencia: Malcolm J.
DOCTRINE: Constructive Possession possession and cultivation of a
portion of a tract under claim of ownership of all is a constructive possession
of all, if the remainder is not in the adverse possession of another
FACTS:
1.

In 1882, Restituto Romero y Ponce gained possession over a

considerable tract of land in San Jose, Nueva Ecija. On
February 1894, he acquired a possessory information title
granted through a Royal Decree.
2. In 1907 he sold it to Cornelio Ramos (petitioner) and his wife
Ambrosia Salamanca.
3. Ramos instituted proper proceedings to have his title registered
but it was opposed by the Director of Lands and the Director of
Forestry on the grounds that:
a) Ramos had not acquired good title from the Spanish
government
b) land is partly forest land
4. Note: Only of the entire tract of land was cultivated by petitioner
ISSUES:
WON Ramos and his predecessor (Romero y Ponce) held this tract of land
under color of title
WON there is actual occupancy as prescribed by law?
PROVISIONS:
1. Maura Law
it must have been shown that the land was cultivated for six years
previously and that it was not land which pertained to the zonal
forestales
2. Public Land Law as amended by Act 1908
6.
All persons who by themselves or their predecessors and
interest have been in the open, continuous, exclusive, and notorious
possession and occupation of agricultural public lands, as defined by
said Act of Congress of July first, nineteen hundred and two, under a
bona fide claim of ownership except as against the Government, for
a period of ten years next preceding the twenty-sixth day of July,
nineteen hundred and four, except when prevented by war or force
majeure, shall be conclusively presumed to have performed all the
conditions essential to a government grant and to have received the
same, and shall be entitled to a certificate of title to such land under
the provisions of this chapter

RULING + RATIO:
1. Yes. Following the provisions in the Public Land Law, petitioner
holds the tract of land under color of title which he acquired from his
predecessor-in-interest. Furthermore, the claimant has color of title;
he acted in good faith; and he has had open, peaceable, and
notorious possession of a portion of the property, sufficient to apprise
the community and the world that the land was for his enjoyment
2. Yes. There was actual occupancy despite the fact that only of the
land is cultivated. Possession in the eyes of the law does not mean
that a man has to have his feet on every square meter of ground
before it can be said that he is in possession; in other words:
constructive possession (check doctrine)
OTHER NOTES:
On the other issue of whether the land is forest land, the answer is NO.
There is a presumption that land is agricultural in nature. Those labeled as
forests usually do not embrace lands that are only partly woodland.
Re: Remedies of the government against private claimants: Government has
the burden to prove that the land in reality is forest; the Director of Forestry
must submit clear and convincing proof that the land is not more valuable as
agricultural than for forest purposes.

Digest Author: Czargeant P.

SOMODIO vs CA
Petitioner: Nicanor Somodio
Respondent: CA, Purisima, Ayco
Ponencia:
DOCTRINE: Possession in the eyes of the law does not mean that a man has to
have his feet on every square meter of ground before it can be said that he is in
possession. It is sufficient that petitioner was able to subject the property to the action
of his will.
Petitioner's prior possession over the property, however, is not synonymous with his
right of ownership over the same.

FACTS:
1.) Jose Ortigas conveyed to Wilfredo Mabugat the possession of a residential lot
situated in General Santos City. Nicanor Somodio, contributed one-half of the
purchase price. Mabugat executed an Affidavit of Trust expressly recognizing the right
of Somodio over one-half undivided portion of the lot.
2.) Thereafter, Somodio and Mabugat partitioned the property into two portions, with
Somodio taking the western part. Petitioner took immediate possession of his portion
and planted thereon ipil-ipil trees, coconut trees and other fruit-bearing trees.
3.) Somodio began construction of a structure with a dimension of 22-by-18 feet on
his lot. His employment, however, took him to Kidapawan, North Cotabato, and he left
the unfinished structure to the case of his uncle. He would visit the property every
three months or on weekened when he had time.
4.) Somodio allowed respondent Ayco, to transfer his hut to petitioner's lot. About six
years later, petitioner demanded that Ayco vacate the premises but such demand
proved futile. Hence, petitioner filed an action for unlawful detainer with damages.
Meanwhile, another respondent Purisima entered the land and constructed a house
thereon. Four days later, petitioner filed against him a complaint for forcible entry.
5.) The trial court ruled in favor of Somodio finding that Purisima built his house
almost on the spot where Somodio's unfinished house stood thru stealth and strategy.
They also declared Somodio as the absolute owner thereof. Accordingly, the court
ordered private respondents to remove their respective houses.
6.) The CA, on the other hand, held that Somodio had not "clearly and conclusively
established physical, prior possession over the lot. Hence, this petition.

ISSUES: W/N Somodio is entitled to the physical or material possession of the

property (since this is only an ejectment case)

PROVISION:

Article 531 of the Civil Code: Possession is acquired by the material

occupation of a thing or the exercise of a right, or by the fact that it is subject to the
action of our will, or by the proper acts and legal formalities established for acquiring
such right.

RULING + RATIO: Somodio is entitled to the possession.

Anyone of them who can prove prior possession de facto may recover such
possession even from the owner himself. This rule holds true regardless of the
character of a party's possession, provided, that he has in his favor priority of time
which entitles him to stay on the property until he is lawfully ejected by a person
having a better right by either accion publiciana or accion reivindicatoria
Petitioner took possession of the property sometime in 1974-1976 when he cultivated
the land and started the construction of a building on the property. It is immaterial that
the building was unfinished and that he left for Kidapawan for employment reasons
and visited the property only intermittently. Possession in the eyes of the law does not
mean that a man has to have his feet on every square meter of ground before it can
be said that he is in possession. It is sufficient that petitioner was able to subject the
property to the action of his will.
Petitioner's prior possession over the property, however, is not synonymous with his
right of ownership over the same. As earlier stated, resolution of the issue of
possession is far from the resolution of the issue of ownership. Forcible entry is
merely a quieting process and never determines the actual title to an estate

DISPOSITION: WHEREFORE, the decision of the Court of Appeals is REVERSED

and SET ASIDE and that of the trial courts REINSTATED.

Lasam v. Director of Lands

Petitioner: Gabriel Lasam
Respondent: Director of Lands
Ponencia: Laurel, J.
DOCTRINE: While, therefore, "possession in the eyes of the law does not
mean that a man has to have his feet on every square meter of ground
before it can be said that he is in possession", possession under paragraph 6
of section 54 of Act No. 926, as amended by paragraph (b) of section 45 of
Act No. 2874, is not gained by mere nominal claim. The mere planting of a
sign or symbol of possession cannot justify a Magellan like claim of dominion
over an immense tract of territory.

PROVISION:
Art. 526 and Art. 538
RULING + RATIO:
1. No, he is not entitled to Parcel no. 9
-

The case shows that Exhibit L purports to be an application by

Domingo Narag to the Alcalde Mayor, in which the former stated
that he had been in possession of the land described and asked
for an informacion testifical. The application of Domingo Narag
seems to have been approved. However the applicant, Lasam,
would state that Domingo Narag had been indebted to his father
for the amount of P 1000 which Narag used for his candidacy as
Gobernadorcillo of Tugegarao, Cagayan in 1880.(It was not
mentioned but Im assuming the rights or title to the land was
used by Narag to pay the applicants father). The applicant
claims that he turned over Exhibit L to his lawyer, Vicente
Marasigan, who lost it but managed to get a certified copy of it.
Applicant Lasam contends that the 5 parcel of land mentioned in
Exhibit L is the same as Parcel no. 9 described in Exhibit K.

However the court points to certain discrepancies against the

applicants claim, stating that parcel No. 9, as indicated in the
plan, Exhibit K, is not the same parcel No. 5 described in
document Exhibit L. The court points to the discrepancies in the
boundaries particularly on the north as Exhibit L states the sitios
of Maasin and Calabbacao are the boundaries, while Exchibit K
gives the barrios of Iraga, Bauan, and Bangag. Aside from that
the court also notes the discrepancies in the land area stated in
both exhibits where Ex. L states the area to be 49 million Square
Meters (or brazas), the area in Ex. K is stated to be only
24,723,437 square meters. (Moreover the land surveyed based
on hearsay)

In conclusion the court finds that because of the lack of certainty

with regard to the particular portion of land occupied by the
applicant, the latter is not entitled to the land. The Court further
opines that the doctrine of constructive possession is the subject
to certain qualifications, and one of these is the size of the land,
which is obviously unclear in this application. (Further refer to the
doctrine)

Possession as a means of acquiring ownership, while it may be

constructive, is not a mere fiction. (If he asks for a one liner doctrine
say this)
FACTS:
1. On January 24, 1930, Gabriel Lasam filed with the Court of First
Instance of Cagayan an application for the registration of 152 parcels
of land containing a total area of 24,723,436 square meters, situated
in the municipality of Solana, Province of Cagayan, described in the
plan Exhibit K attached to the application. These 152 parcels include
the parcel No. 9 here involved.
2. After the application, various parties filed for an opposition including
the Director of Lands, on the ground that the land sought to be
registered is public land. Other parties include the Narags, cousins of
the applicant, who claim that they are the owners of the subject land.
Various other parties filed for an opposition including the Director of
Forestry, homesteaders, and Mauro Antonio.
3. The lower court however rejected all the oppositions filed, declared
the applicant as the owner of Parcel No. 9 as indicated in EXHIBIT
K, and decreed the registration in his favor.
4. Many of the oppositors abandoned theirs claims, however the
Director of Lands claimed several assignments of error, hence this
petition.
ISSUE:
Whether or not the applicant Lasam, is entitled to the Parcel no.
9 on the basis of the document he presented (Exhibit L).

CHUA-BURCE v. CA
Petitioner: Cristeta Chua-Burce
Respondent: Court of Appeals and People of the Philippines
Ponencia: Quisumbing, J.

DOCTRINE: Juridical possession means a possession, which gives the transferee

the right over the thing, which the transferee may set up even against the owner.

FACTS:
1. Ramon Rocamora, the Manager (of Metropolitan Bank and Trust
Company, Calapan Branch, Oriental Mindoro) requested Fructuoso
Peaflor, Assistant Cashier, to conduct a physical bundle count of
the cash inside the vault.
2. Given that the count should amount to nearly 4M pesos, it was
discovered after the initial count that there was a shortage of fifteen
bundles of One-Hundred Pesos denominated bills (P150,000).
3. The bank initiated investigation by different parties, which all led to
the conclusion that there really was a shortage of P150,000, and that
the person primarily responsible was the banks Cash Custodian,
Cristeta Chua-Burce.
4. Since Chua-Burce was unable to explain such shortage, her service
with the bank was terminated.
5. A civil and criminal case was filed against Chua-Burce. Eventually,
the trial court rendered a decision finding Chua-Burce guilty of estafa
under Art. 315(1) (b) of the RPC. She was also held liable for the
amount of P150,000.
6. On appeal, the CA merely affirmed the trial courts decision. Hence,
this petition.
ISSUE:
WoN Chua-Burce could be convicted of estafa
PROVISION:
Art. 523 (in relation to degrees of possession)
RULING + RATIO:
NO. The first element is missing.
The elements of estafa are:
o personal property is received in trust, on commission, for
administration or under any other circumstance involving the
duty to make delivery of or return the same, even though
obligation is guaranteed by a bond
o that there is conversion or diversion of such property by the
person who has so received it or a denial on his part that he
received it
o that such was to the injury of another

o that there be demand for the return of the property

In the case at bar, the first element is absent. For such requisite
to be complied with, the offender acquires both MATERIAL and
JURIDICAL possession of the thing received.
Juridical possession means a possession which gives the
transferee a right over the thing which the transferee may set up
even against the owner.
In this case, Chua-Burce was a cash custodian primarily responsible
for the cash-in-vault. Her possession is akin to that of a bank teller.
Citing People v. Locson (bank teller) and Guzman v. CA (travelling
sales agent), the Court explains that the possession of a bank teller
was differentiated from that of an agent:
o Payment by third persons to the teller is payment to the bank
itself; the teller is a mere custodian or keeper of funds
received, and has no independent right or title to retain or
possess the same as against the bank.
o An agent, however, can assert, as against his own principal,
an independent, autonomous, right to retain money or goods
received in consequence of the agency.
Chua-Burce was a mere cash custodian and therefore had no
juridical possession over the missing funds. Hence, the first element
is absent. She cannot be convicted of the crime of estafa under
Article 315, No. 1(b) of the RPC.

PO LAM v CA (2000)
Petitioner: SPOUSES ROY PO LAM and JOSEFA ONG PO LAM
Respondent: COURT OF APPEALS and FELIX LIM now JOSE LEE
Ponencia: MELO, J.

PROVISION:
Article 526, New Civil Code
He is deemed a possessor in good faith who is not aware that there
exists in his title or mode of acquisition any flaw which invalidates it.

DOCTRINE:
While the doctrine of lis pendens is frequently spoken of as one of implied or
constructive notice, it is NOT founded on the basis of constructive notice. Its
true foundation rests, on principles of public policy and necessity.

He is deemed a possessor in bad faith who possesses in any case

contrary to the foregoing.

FACTS:
1. Lot 1557 and 1558 are prime commercial lots in Legaspi City. These
were sold by Lim Kok Chiong to Legaspi Avenue Hardware Company
(LAHCO) in the early 60s. On 1964, respondent Felix Lim, Lim Kok
Chiongs brother, filed a complaint with the CFI-Albay against his brother
and LAHCO to annul the deeds of sale on the ground that the sale
included the 3/14 pro-indiviso portion of the lots which Felix Lim had
inherited from his foster parents.
2. 1965, responded Lim filed with the Register of Deeds a notice of lis
pendens over the two lots. These were attached to the TCTs. 1969, the
trial court rendered a decision declaring LAHCO to be the absolute
owner of the two above-mentioned lots and ordered the cancellation of
the notice of lis pendens. The lis pendens on Lot 1557 was cancelled
but the one on Lot 1558 remained uncancelled.
3. On appeal, LAHCO sold the two lots to petitioners. AFTER the sale,
the lis pendens on Lot 1558 was cancelled. Old TCTs were also
cancelled and new TCTs in petitioners name were issued. CA, however,
ruled for Lim.
4. Lim then moved for a writ of execution and deed of cancellation against
petitioners. RTC denied this, because the petitioners were not parties in
the original case. Respondent filed yet another case with the RTC.
5. RTC ruled for respondent, saying that petitioners were transferees pende
lite and not parties in good faith.
6. CA also ruled for respondents, saying that the lis pendens on TCT of Lot
1558 served as notice to them that the said lot is involved in a pending
litigation. The rule that one who deals with property subject of a notice of
lis pendens cannot invoke the right of a purchaser in good faith. Also,
even if the lis pendens was cancelled on Lot 1557 at the time of the
transfer, the petitioners cannot close his eyes to facts which should put a
reasonable man on guard and claim that he acted in good faith in the
belief that there was no defect in the title of the vendor. Hence, this
petition
ISSUES:
1. WoN Petitioners are purchasers in good faith

Mistake upon a doubtful or difficult question of law may be the basis of

good faith
RULING + RATIO:
1. YES.
a. A notice of lis pendens is an announcement to the whole
world that a particular real property is in litigation, serving as
a warning that one who acquires an interest over said
property does so at his own risk, or that he gambles on the
result of the litigation over the said property. The basis of the
doctrine of lis pendens is public policy and convenience,
b. HOWEVER, to hold petitioners bound to lis pendens
existing, even if the Court had declared it cancelled, would
consider the doctrine of lis pendens as one of implied or
constructive notice.
c. Lis pendens is based upon PUBLIC POLICY and not
NOTICE. It is demanded by a necessity which can be met
and overcome in no other way. It is careless use of
language which has led judges to speak of it as notice,
because it happens to have in some instance similar
effect with notice.
d. And since the doctrine rests on public policy, not notice,
upon the cancellation of lis pendens, petitioners cannot
then be considered as having constructive notice of any
defect in the title of LAHCO as to make them transferees
pendente lite and purchasers in bad faith. To do so
would render the earlier Court ruling the cancellation a
useless act
DISPOSITION: GRANTED

STATE INVESTMENT HOMES v. CA

Petitioner: State Investment House, Inc.
Respondent: CA
Ponencia: Francisco, J.
DOCTRINE: The exception to the general rule (that a purchaser is not
required to go beyond what appears on the face of a Torrens Title) is that
where the purchaser or mortgagee has knowledge of a defect or lack of title
in his vendor, or that he was aware of sufficient facts to induce a reasonably
prudent man to inquire into the status of the title of the property in litigation.
In this case, such purchaser/mortgagor cannot simply close his eyes to such
facts and claim good faith.
FACTS:
7. A contract to sell was executed by the Spouses Canuto and Oreta,
and the Solid Homes, Inc. (SOLID) This involved a parcel of land
(Block No. 8, Lot 1, Phase 1) in Capitol Park Homes Subdivision,
Quezon City.
8. Upon signing, the spouses Oreta made a partial payment, agreeing
that the remaining balance shall be payable in monthly installments.
9. Sometime after, SOLID executed real estate mortgage contracts in
favor of State Investment Homes, Inc. (STATE) over some of its
subdivided lands. Included here is the subject lot in this case.
10. SOLID failed to comply with its mortgage obligations and so STATE
foreclosed the mortgaged properties including the subject lot.
11. The corresponding certificate of sale was issued to STATE
annotated at the back of the titles covering the said properties.
12. The spouses then filed a complaint before the HLURB against
SOLID and STATE for failure to execute the absolute deed of sale
despite full payment. Both parties appealed such decision.
13. The OAALA (Office of Appeals, Adjudication and Legal Affairs)
rendered a decision which rendered STATE to execute a Deed of
Conveyance in favor of the spouses and for SOLID to pay STATE.
14. After recourses to the HLURB and the Office of the President, a
petition for review reached the CA which merely dismissed the
appeals.
15. Hence, this petition.
16. STATE argues that persons dealing with property covered by a
Torrens Title are not required to go beyond what appears on its face.

PROVISION:
Art. 526 and Art. 538
RULING + RATIO:
1. YES
STATEs registered mortgage right over the property is
INFERIOR to that of the spouses unregistered right.
The unrecorded sale between spouses and SOLID is preferred
because if SOLID had parted with his ownership of the thing sold
then he no longer had ownership and free disposal of that things
so as to be able to mortgage it again.
Registration of mortgage is of no moment since it is understood
to be without prejudice to the better right of third parties.
2. NO.
As a general rule, when there is nothing in the certificate of title
to indicate any cloud or vice in the ownership of the property, or
any encumbrance thereon, the purchaser is NOT required to
explore further than what the Torrens Title upon its face.
EXCEPTION: where purchaser or mortgagee has knowledge of
a defect or lack of title in his vendors, or he was aware of
sufficient facts to induce a reasonably prudent man to inquire
into the status of the title of the property in litigation.
STATE knew it was dealing with SOLID which is engaged in the
business of selling subdivision lots. STATE admits of being a
financing institution, and the Court takes judicial notice of the
uniform practice of such institutions to investigate, examine, and
assess the real property offered as security for any loan
application as in this case
It is a settled rule that a purchaser or mortgagee cannot close its
eyes to facts which should put a reasonable man upon his guard,
and then claim that he acted in good faith under the belief that
there was no defect in the title of the vendor or mortgagor.
The court was correct in ruling that petitioner was NOT in good
faith; hence, it may not rely on the face of the Torrens Title
alone.

ISSUE:
1. WoN the spouses unregistered rights over the subject property are
superior to the registered mortgage rights of STATE
2. WoN STATE is a purchaser/mortgagor in good faith (if in good
faith then STATE may rely on the face of the Torrens Title alone)

DBP vs CA

Petitioner: Development Bank of the Philippines
Respondent: Court of Appeal, spouses Timoteo and Selfida Pineda
Ponente: Gonzaga-Reyes, J.

Petition: review on certiorari of a decision of the CA (who affirmed decision of
RTC)

Doctrine:
A possessor in good faith is one who is not aware that there exists in his title or
mode of acquisition any flaw, which invalidates it. Good faith is always
presumed, and upon him who alleges bad faith on the part of a possessor rests
the burden of proof.
-
It was therefore incumbent on the Piedas to prove thatDBP was
aware of the flaw in its title (i.e. the nullity of the foreclosure). This, the
spouses failed to do.

FACTS:
1. Spouses Timoteo and Selfida Pieda are the registered owners of a
land in Capiz (238,406 sqm.) covered by Homestead Patent and an
Original Cert. of Title.
2. Land was mortgaged by spouses to DBP to secure an agricultural loan
for P20,000.00.
3. Spouses Piedas failed to comply with the terms and conditions of the
mortgage. DBP extrajudicially foreclosed the land on Feb. 2, 1977.
a. DBP was the highest bidder
b. Sheriff Certificate of Sale was executed in its favour
i. It indicated: Property sold subject to a redemption
period of 5 years from date of registration (April 25,
1977)
4. After 1 year redemption period, DBP consolidated its title over the
foreclosed property (thru an Affidavit of Consolidation of Ownership)
with the Register of Deeds of Capiz
5. DBP took possession of the land and appropriated the produce thereof.
6. July 5, 1978: Ministry of Justice issued an Opinion1 which declared that
lands covered by PD No. 27 may not be the object of foreclosure
proceedings after the promulgation of said decree on Oct. 21, 1972
a. The subject land herein is one of those covered by PD 27
7. Aug. 24, 1981: Spouses Piedas offered to redeem the foreclosed
property by offering P10,000.00 as partial redemption payment
a. DBP accepted
1 Opinion No. 92, Series of 1978

8.

9.

10.

11.

12.

i. Issued an OR
ii. Sent a letter conditionally approving the offer of
redemption, the 10K considered as down payment
b. DBP sent another letter informing spouses that:
i. Pursuant to PD 27, the offer to redeem/repurchase the
land cannot be considered for the reason that the land
was tenanted
DBP sent a letter to the Acting Register of Deeds requesting to cancel
the TCT and restore the OCT in Piedas name
a. ARD said DBP should file a petition in court instead pursuant to
Sec. 108 of PD 1529
DBP petitioned for cancellation of the TCT to the CFI of Capiz
a. The foreclosure proceeding conducted on Feb 2, 1977 was
declared NULL and VOID
b. RD of Capiz ordered to cancel the TCT, and revive OCT
Piedas filed complaint against DBP because the 5-year redemption
period stated in the Sheriffs Cert. of Sale had not yet lapsed; their offer
to redeem still stands within the said period of redemption
RTC ruled in favour of the spouses Piedas saying that:
a. DBP violated the stipulation in the Sheriffs Cert. of Sale;
b. DBP should assume liability for the fruits produced from the
land
CA affirmed RTC ruling saying that DBP was in evident bad faith when
it unlawfully took possession of the property and defied what was
written on the Sheriffs Cert. of Sale
DBPs MR was denied; hence, this petition

13.

ISSUE: W/N DBP was in bad faith when it took possession of the disputed
lot.

RULING/RATIO: SC rules in the negative finding DBPs contentions
meritorious

1. A possessor in good faith is one who is not aware that there

exists in his title or mode of acquisition any flaw, which

invalidates it. Good faith is always presumed, and upon him
who alleges bad faith on the part of a possessor rests the
burden of proof. It was therefore incumbent on the PIEDAS to
prove that DBP was aware of the flaw in its title i.e. the nullity of
the foreclosure. This, they failed to do.
2. DBPs act of consolidating its title and taking possession of the
subject property after the expiration of the period of redemption
was in accordance with law.

a. It was in consonance with Sec. 4 of the mortgage contract

between DBP and the PIEDAS where they agreed to the
appointment of DBP as receiver to take charge and to
hold possession of the mortgage property in case of
foreclosure.
b. DBPs acts cannot therefore be tainted with bad faith.
3. The right of DBP to consolidate its title and take possession of
the subject property is not affected by the PIEDAS right to
repurchase said property within five years from the date of
conveyance granted by Section 119 of CA No. 141.
a. In fact, without the act of DBP consolidating title in its
name, the PIEDAS would not be able to assert their
right to repurchase granted under the aforementioned
section.
b. Respondent PIEDAS are of the erroneous belief that
said section prohibits a purchaser of homestead land in a
foreclosure sale from consolidating his title over said
property after the one-year period to redeem said
property has expired.
c. It is also settled that the five-year period of redemption
fixed in Section 119 of the Public Land Law of homestead
sold at extrajudicial foreclosure begins to run from the
day after the expiration of the one-year period of
repurchase allowed in an extrajudicial foreclosure.
d. Thus DBPs consolidation of title did not derogate from or
impair the right of the PIEDAS to redeem the same
under C.A. No. 141.
4. Maneclang vs. Baun: when a contract of sale is void, the
possessor is entitled to keep the fruits during the period for
which it held the property in good faith. Good faith of the
possessor ceases when an action to recover possession of the
property is filed against him and he is served summons
therefore.
a. DBP was served summons on June 30, 1982.
i. that time, it was no longer in possession of the
disputed land as possession thereof was given
back to the PIEDAS after the foreclosure of DBP
was declared null and void on February 22, 1982.
b. Therefore, any income collected by DBP after it
consolidated its title and took possession of the property
on May 30, 1978 up to February 22, 1982 belongs to DBP

as a possessor in good faith since its possession was

never legally interrupted.

HELD: The instant petition for review on certiorari is GRANTED.
-
CA ruling is REVERSED.
-
DBP absolved from any liability to Timoteo and Selfida Pineda.

SAN MIGUEL CORPORATION vs COURT OF

APPEALS (1990)
Petition: Certiorari
Petitioner: San Miguel Corporation
Respondents: Court of Appeals, Director of Lands
Ponente: Fernan
DOCTRINE:
The open, continuous, exclusive, and notorious occupation of the
disputed properties for more than 30 years must be conclusively
established.
FACTS:
1. San Miguel Corporation (SMC) purchased from Perez a parcel of
land.
(P113, 084.80; Sto. Tomas, Batangas)
2. SMC filed for registration under the Land Registration Act.
3. The Solicitor-General, appearing for the Republic of the Philippines
opposed such, with the following arguments:
1. SMCs claim of ownership on a Spanish title/grant since the
prescribed 6-month period (PD 892) has elapsed.
2. Subject land of part of the public domain.
3. SMC, being a private corporation. Is disqualified to hold alienable
lands of the public domain.
4. SMC claims that the subject land is acquired through prescription by
Perez for more then 30 years. This is evidenced by tax declarations,
receipts, and Perezs uncorrobated testimony.
ISSUE:
WON the evidence presented by SMC is sufficient as to warrant
them ownership over the subject land
RULING + RATIO:
NO. Tax declarations and receipts are not conclusive evidence of
ownership or right of possession over a piece of land.

o
o

The open, continuous, exclusive, and notorious occupation of the

disputed properties for more than 30 years must be conclusively
established.
SMCs claim is based on documentary (tax declaration and receipt)
and testimonial evidence. Tax declarations and receipts are not
conclusive evidence of ownership; merely an indication of claim of
ownership.
Testimony of Perez, being uncorrobated, is simply self-serving and
hence, undeserving of any weight.

DISPOSITION: Petition denied.

lower court issued a Deed of Reconveyance in favor of Carmelo and

a Deed of Sale in favor of Mayfair.

Equatorial Realty Devt. Inc. vs. Mayfair Theater,

Inc. (2001)
Petition: Certiorari
Petitioners: Equatorial Realty Devt. Inc.
Respondents: Mayfair Theater, Inc.
Ponente: Panganiban
DOCTRINE:
Ownership of the thing sold is a real right, which the buyer acquires
only upon delivery of the thing to him in any of the ways specified in
articles 1497 to 1501, or in any other manner signifying an agreement
that the possession is transferred from the vendor to the vendee.
While the execution of a public instrument of sale is recognized by law
as equivalent to the delivery of the thing sold, such constructive or
symbolic delivery, being merely presumptive, is deemed negated by the
failure of the vendee to take actual possession of the land sold.
FACTS:
5. Carmelo & Bauermann Inc. owned a parcel of land with two 2-storey
buildings constructed thereon located at CM. Recto Ave., Manila.
6.

11. In CAs resolution, Mayfair had no right to deduct the P847k as

withholding tax and was thus ordered to pay the full amount of
P11.3m to be turned over to Equatorial.
12. Equatorial questioned the legality of the CA ruling. Also, Equatorial
filed an action for the collection of a sum of money against Mayfair,
claiming payment of rentals or reasonable compensation for
Mayfairs use of the property after its lease contracts had expired.
ISSUE:
WON Equatorial was the owner of the subject property and
could thus enjoy the fruits or rentals therefrom.
RULING + RATIO:
NO. No right of ownership was transferred from Carmelo to Equatorial
in view of patent failure to deliver the property to the buyer.
o

It was leased to Mayfair Theater Inc for 20 years. It covered a

portion of the second floor and mezzanine with about 1, 610 sqm.
floor area which Mayfair used as a movie house called Maxim
Theater

7. Two years later, a second contract of lease covering another portion

of the property between Carmelo and Mayfair arose. This area was
used for the Marimar Theater.

8. Both leases contained a provision granting Mayfair a right of first

refusal to purchase the subject properties. However, within the 20
year lease term, Carmelo sold the said property to Equatorial Realty
Devt. Inc. for P11.3 million, without first being offered to Mayfair.
9. Mayfair filed for the annulment of the sale. The lower court decided in
favor of Carmelo and Equatotial. CA completely reversed and set
aside the judgment of the lower court.
10. Since Carmelo could no longer be located, Mayfair deposited the
P11.3m minus P847k as withholding tax with the clerk of court. The

Rent is a civil fruit that belongs to the owner of the property

producing it by right of accession. Ownership of the thing sold is a
real right, which the buyer acquires only upon delivery of the
thing to him in any of the ways specified in articles 1497 to 1501, or
in any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee.

This right is transferred, not by contract alone, but by

tradition or delivery. And there is said to be delivery if and
when the thing sold is placed in the control and
possession of the vendee.
It is an act by which one party parts with the title to and the
possession of the property, and the other acquires the right
to and the possession of the same. In its natural sense,
delivery means something in addition to the delivery of
property or title; it means transfer of possession.

Equatorial never took actual possession of the property sold, in

view of Mayfairs timely objection to the sale and the continued
actual possession of the property.

It has been held that the execution of a contract of sale as

a form of constructive delivery is a legal fiction. It holds
true only when there is no impediment that may prevent

the passing of the property from the hands of the vendor into
those of the vendee.
Mayfairs opposition to the transfer of the property by
way of sale to Equatorial was a legally sufficient
impediment that effectively prevented the
passing of the property into the latters hands.

The execution of a public instrument gives rise, therefore,

only to a prima facie presumption of delivery. Such
presumption is destroyed when the instrument itself
expresses or implies that delivery was not intended; or when
by other means it is shown that such delivery was not
effected, because a third person was actually in
possession of the thing. In the latter case, the sale cannot
be considered consummated.

The fact that Mayfair paid rentals to Equatorial during the

litigation should not be interpreted to mean either actual
delivery or ipso facto recognition of Equatorials title.

CA records show that Equatorial filed 2 ejectment

cases against Mayfair which Mayfair eventually won
them both.
However, to be able to maintain physical possession
of the premises while awaiting the outcome of the
mother case, it had no choice but to pay the rentals.

DISPOSITION: Petition denied.